Provisions and contingencies Provisions

Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic

benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions
are measured at the best estimate of the expenditure required to

settle the present obligation at the Balance Sheet date.

If the effect of the time value of money is material, provisions are
discounted to reflect its present value using a current pre-tax rate
that reflects the current market assessments of the time value of
money and the risks specific to the obligation. When discounting
is used, the increase in the provision due to the passage of time
is recognised as a finance cost.

Where the Company expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate
asset but only when the reimbursement is virtually certain. The
expense relating to any provision is presented in the income
statement net of any reimbursement.

Contingencies:

Contingent liabilities
A contingent liability is:

• a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non¬
occurrence of one or more uncertain future events not
wholly within the control of the Company, or

• a present obligation that arises from past events but is not
recognised because:

- it is not probable that an outflow of resources embodying
economic benefits will be required to settle the

obligation; or

- the amount of the obligation cannot be measured with

sufficient reliability.

Contingent liabilities are not recognized but disclosed unless the

contingency is remote.

Contingent assets

A contingent asset is a possible asset that arises from past events
and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.

Contingent assets are not recognised but are disclosed when the
inflow of economic benefits is probable. When inflow is virtually
certain, an asset is recognized.

2.17 Segment Reporting

Operating segments are defined as components of an enterprise
for which discrete financial information is available that is
evaluated regularly by the chief operating decision maker, in
deciding how to allocate resources and assessing performance.

The Company is engaged in manufacture and trading of
synthetic yarn and textiles which is considered as the only
reportable business segment. The Company's Chief Operating
Decision Maker (CODM) is the Managing Director. He evaluates

the Company's performance and allocates resources based
on analysis of various performance indicators by geographical

areas only.

2.18 Related party

A related party is a person or entity that is related to the reporting
entity and it includes:

(a) A person or a close member of that person's family if
that person:

(i) has control or joint control over the reporting entity.

(ii) has significant influence over the reporting entity. or

(iii) is a member of the key management personnel of the
reporting entity or of a parent of the reporting entity.

(b) An entity is related to the reporting entity if any of the
following conditions apply:

(i) The entity and the reporting entity are members of the
same Group.

(ii) One entity is an associate or joint venture of the
other entity.

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the
other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the
benefit of Employees of either the reporting entity or an
entity related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person

identified in (a).

(vii) A person identified in (a) (i) has significant influence
over the entity or is a member of the key management
personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a Group of which it is a part,
provides key management personnel services to the
reporting entity or to the parent of the reporting entity.

Close members of the family of a person are those family

members who may be expected to influence, or be influenced by,
that person in their dealings with the entity including:

(a) that person's children, spouse or domestic partner, brother,
sister, father and mother;

(b) children of that person's spouse or domestic partner; and

(c) dependents of that person or that person's spouse or

domestic partner.

Key management personnel are those persons having authority
and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director
(whether executive or otherwise) of that entity.

Related party transactions and outstanding balances disclosed
in the financial statements are in accordance with the above

definition as per Ind AS 24.

2.19 Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash
at banks and cash on hand and short term deposits/investments

with an original maturity of three months or less from the date of
acquisition, which are subject to an insignificant risk of changes
in value. These exclude bank balances (including deposits) held
as margin money or security against borrowings, guarantees etc.
being not readily available for use by the Company.

For the purpose of the Statement of cash flows, cash and cash
equivalents consist of cash and short term deposits and exclude
items which are not available for general use as on the date of
Balance Sheet, as defined above, net of bank overdrafts which
are repayable on demand where they form an integral part of an
entity's cash management.

2.20 Dividend to equity share holders of the Company

The Company recognises a liability to make dividend distributions
to equity holders of the Company when the distribution is
authorised and the distribution is no longer at the discretion of
the Company. As per the corporate laws in India, a distribution
is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.

2.21 Cash Flow Statement

Statement of Cash Flows is prepared segregating the cash flows
into operating, investing and financing activities. Cash flow from
operating activities is reported using indirect method as set out
in Ind AS 7 'Statement of Cash Flows', adjusting the net profit for
the effects of:

i. changes during the period in inventories and operating
receivables and payables transactions of a non-cash nature;

ii. non-cash items such as depreciation, provisions, deferred
taxes, unrealised foreign currency gains and losses; and

iii. all other items for which the cash effects are investing or

financing cash flows.

2.22 Earnings per share

The Basic Earnings per equity share ('EPS') is computed by
dividing the net profit or loss after tax before other comprehensive
income for the year attributable to the equity shareholders of
the Company by weighted average number of equity shares
outstanding during the year. Ordinary shares that will be issued
upon the conversion of a mandatorily convertible instrument are
included in the calculation of basic earnings per share from the
date the contract is entered into. Contingently issuable shares
are treated as outstanding and are included in the calculation of
basic earnings per share only from the date when all necessary
conditions are satisfied (i.e. the events have occurred).

Diluted earnings per equity share are computed by dividing the
net profit or loss before OCI attributable to equity holders of
the Company by the weighted average number of equity shares
considered for deriving basic earnings per equity share and also
the weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity shares
(including options and warrants). The dilutive potential equity
shares are adjusted for the proceeds receivable had the equity
shares been actually issued at fair value. Dilutive potential equity
shares are deemed converted as of the beginning of the period
unless issued at a later date. Anti-dilutive effects are ignored.

2.23 Events after Reporting date

Where events occurring after the Balance Sheet date provide
evidence of conditions that existed at the end of the reporting
period, the impact of such events is adjusted within the financial
statements. Where the events are indicative of conditions that
arose after the reporting period, the amounts are not adjusted,
but are disclosed if those non-adjusting events are material.

2.24 Research and development expenditure

Research expenditure is charged to the Statement of profit
and loss. Development costs of products are also charged to
the Statement of Profit and Loss unless a product's technical
feasibility has been established, in which case such expenditure
is capitalised as an intangible asset under development. Tangible
assets used in research and development are capitalised under
respective heads.

These development costs are amortised over the estimated
useful life of the projects or the products they are incorporated
within. The amortisation of capitalised development costs begins
as soon as the related product is released to production.

2.25 Exceptional Items

An item of Income or expense which by its size, type or incidence
requires disclosure in order to improve an understanding of the
performance of the Company is treated as an exceptional item
and the same is disclosed in the financial statements.

2.26 Corporate Social Responsibility (CSR) expenditure

The Company charges its CSR expenditure during the year to the

statement of profit & loss.

2.27 Standards notified but not yet effective

Ministry of Corporate Affairs ("MCA") notifies new standards
or amendments to the existing standards under Companies
(Indian Accounting Standards) Rules as issued from time to
time. On March 31, 2023, MCA amended the Companies (Indian
Accounting Standards) Amendment Rules, 2023, as below.

Ind AS 1 -Presentation of Financial Statements - This amendment
requires the entities to disclose their material accounting policies
rather than their significant accounting policies. The effective
date for adoption of this amendment is annual periods beginning
on or after April 01, 2023. The Company has evaluated the
amendment and the impact of the amendment is insignificant in
the financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates
and Errors - This amendment has introduced a definition of
'accounting estimates' and included amendments to Ind AS 8
to help entities distinguish changes in accounting policies from
changes in accounting estimates. The effective date for adoption
of this amendment is annual periods beginning on or after April
01, 2023. The Company has evaluated the amendment and there
is no impact on its financial statements.

Ind AS 12 - Income Taxes - This amendment has narrowed the
scope of the initial recognition exemption so that it does not apply
to transactions that give rise to equal and offsetting temporary
differences. The effective date for adoption of this amendment
is annual periods beginning on or after April 01, 2023. The
Company has evaluated the amendment and there is no impact
on its financial statement.