2.12 PROVISIONS AND CONTINGENT LIABILITIES
a) 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. When the Company expects some or all of a provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The
expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement. Provisions are not recognised
for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects
current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the
passage of time is recognised as interest expense.
b) Contingent Liability
Contingent liabilities are not provided for and if material, are disclosed by way of notes to accounts. Contingent Liability is disclosed in th
i. A present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obl
ii. A present obligation arising from the past events, when no reliable estimate is possible
iii. A possible obligation arising from the past events, unless the probability of outflow of resources is remote
2.13 EARNING PER SHARE
a) Basic Earnings Per Share
Basic Earnings Per Share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of
equity shares outstanding during the period. Earnings considered in ascertaining the company's earnings per share is the net profit for
the period after deducting preference dividends, if any, and any attributable distribution tax thereto for the period.
b) Diluted Earnings Per Share
Diluted Earnings Per Share adjusts the figures used in the determination of basic earnings per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential equity shares and the weighted average number
of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares
2.14 CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents comprise cash and deposits with banks. The Company considers all highly liquid investments with a
remaining maturity at the date of purchase of three months or less and that are readily convertible to known of cash to be cash
equivalents.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call
with financial institutions and other short term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
2.15 STATEMENT OF CASH FLOWS
Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past orfuture operating cash receipts or payments and item of income or expenses associated with
investing or financing Cash Flows. The cash flows from operating, investing and financing activities of the Company are segregated.
2.16 DIVIDEND
The Company recognises a liability for dividends to equity holders of the Company when the dividend is authorised and the dividend is
no longer at the discretion of the Company. As per the corporate laws in India, a dividend is authorised when it is approved by the
shareholders. A corresponding amount is recognised directly in equity.
2.17 ROUNDING OFF
All amounts disclosed in the financial statements and notes have been rounded off to the nearest rupees, unless otherwise stated.
2.18 EVENTS OCCURING AFTER THE REPORTING DATE
Adjusting events (that provides evidence of condition that existed at the balance sheet date) occurring after the balance sheet date are
recognized in the financial statements. Material non adjusting events (that are inductive of conditions that arose subsequent to the
balance sheet date) occurring after the balance sheet date that represents material change and commitment affecting the financial
position are disclosed in the Directors' Report.
2.19 EXCEPTIONAL ITEMS
Certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company is
such that its disclosure improves the understanding of the performance of the Company, such income or expense is classified as an
exceptional item and accordingly, disclosed in the notes accompanying to the financial statements
2.20 OPERATING CYCLE
All assets and liabilities have been classified as current or non-current as per each Company's normal operating cycle and other criteria
set out in the Schedule III to the Act
2.21 SEGMENT REPORTING
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating
decision making body in the Company to make decisions for performance assessment and resource allocation.
The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and
resource allocation to the segments.
2.22 LEASES
The company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the
right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified asset, the company assesses whether: (i) the contract involves
the use of an identified asset (ii) the company has substantially all of the economic benefits from use of the asset through
the period of the lease and (iii) the company has the right to direct the use of the asset."
a) Company as a Lessee
At lease commencement date, the company recognises a right-of-use assets and a lease liabilities on the balance sheet. The
right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liabilities,any initial direct
costs incurred by the company and any lease payments made in advance of the lease commencement date.
The company depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier
of the end of the useful life of the right-ofuse assets or the end of the lease term. The company also assesses the right-of-
use assets for impairment when such indicators exist.
At the commencement date of lease, the company measures the lease liabilities at the present value of the lease payments
to be made over the lease term, discounted using the interest rate implicit in the lease if that rate is readily available or the
company's incremental borrowing rate. The company cannot readily determine the interest rate implicit in the lease,
therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including in substance,
fixed), and payments arising from options reasonably certain to be exercised. Subsequent to initial measurement, the
liability will be reduced for payments made and increased for interest expenses. It is remeasured to reflect any
When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use asset or Statement of
profit and loss, as the case may be.
The company has elected to account for short-term leases and leases of low-value assets using the exemption given under
Ind AS 116, Leases. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straightline basis over the lease term or on another systematic basis if that
basis is more representative of the pattern of the company's benefit.
b) Company as a Lessor
Leases for which the company is a lessor classified as finance or operating lease
Lease income from operating leases where the company is a lessor is recognised in income on a straightline basis over the
lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the
excepted inflationary cost increases. The respective leased assets are included in the Balance Sheet based on their nature."
2.23 Recent accounting pronouncements issued but not made effective
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. There is no such
notification which would have been applicable from 1 April, 2024
The Company's objective for Capital Management is to maximise shareholder value, safeguard business
continuity, and support the growth of the Company. Capital includes, Equity Capital, Securities Premium and
other reserves and surplus attributable to the equity shareholders of the Company. The Company
determines the capital requirement based on annual operating plans and long term and strategic investment
and capital expenditure plans. The funding requirements are met through a mix of equity, operating cash
flows generated and debt. The operating management, supervised by the Board of Directors of the Company
regularly monitors its key gearing ratios and other financials parameters and takes corrective actions
wherever necessary. The relevant quantitative information on the aforesaid parameters are disclosed in
these financial statements.
The Company's financial risk management is an integral part of how to plan and execute its business strategies. The Company's financial risk management
policy is set by the managing board. The details of different types of risk and management policy to address these risks are listed below:
(a) Market Risk-
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The
value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market
changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and
deposits, foreign currency receivables, payables and loans and borrowings. The objective of market risk management is to avoid excessive expsoure in our
foreign currency revenues and costs.
(a)(i) Market Risk - Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows ofthe financial instruments will fluctuate because of changes in market interest rates.
Since all the borrowings are generally for short durations and fixed rate, there is no significant interest rate risks pertaining to these deposits
(a)(ii) Market Risk - Price Risk
Price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price.
The Company has no surplus for investment in debt mutual funds, deposits etc. Accordingly, company is not exposed to any price risk
(a)(iii) Market Risk - Currency Risk
The fluctuation in foreign currency exchange rates may have a potential impact on the statement of profit and loss and equity, where any transaction
references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the Company.
The companydoes nothasany asset or liability in the foreign currency. in view ofthis it is not susceptible to market currency risk arising from fluctuation in
foreign currency exchange rates.
(b) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and
arises principally from the Company's receivables from customers.
The carrying amount of Financial Assets represents the maximum credit exposure
Trade Receivables
The Company has established a credit policyunder which each new customer is analysed individuallyfor creditworthiness before the payment and delivery
terms and conditions are offered. The Company's review includes external ratings, ifthey are available, financial statements, industry information, business
intelligence and in some cases bank references.
Trade Receivables of the Company are typically unsecured ,except to the extent of the security deposits received from the customers or financial
guarantees provided by the market organizers in the business. Credit Risk is managed through credit approvals and periodic monitoring of the
creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company performs ongoing credit
evaluations of its customers' financial condition and monitors the creditworthiness of its customers to which it grants credit terms in the normal course of
business. The Company has no concentration of Credit Risk as the customer base is geographically distributed in India.
Expected credit loss for trade receivable:
The allowance for impairment ofTrade receivables is created to the extent and as and when required, based upon the expected collectability of accounts
receivables. On account of adoption of Ind AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impariment loss. For this
purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss
experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts
available in relation to defaults and delays in collection thereof
Other Financial Assets
The company maintains its Cash and Cash equivalents with banks having good reputation, good past track record and high quality credit rating and also
reviews their credit-worthiness on an on-going basis.
Expected credit loss on financial assets other than trade receivable:
The allowance for impairment ofTrade receivables is created to the extent and as and when required, based upon the expected collectabilityof accounts
receivables. On account ofadoption ofInd AS 109, the Company uses lifetime Expected Credit Loss (ECL) model for assessing the impairment loss. For this
purpose, the Company uses a provision matrix to compute the expected credit loss amount for trade receivables. Loss rates are based on actual credit loss
experience and past trends. The provision matrix takes into account external and internal credit risk factors and historical experience / current facts
available in relation to defaults and delays in collection thereof. Accordingly based on the provision matrix there is no expected credit loss to the company
and accordingly there is no provision for doubtful debts
(c) Liquidity Risk
Liquidity Risk is the risk that the Company will face in meeting its obligation associated with its financial liabilities that are settled by delivering cash or
another financial asset. The Company's approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its
liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or riskking damage to the Company's reputation.
Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements is
retained as Cash and Cash Equivalents (to the extent required).
Exposure to Liquidity Risk
The following table shows the maturity analysis of the Company's Financial Liabilities based on contractually agreed undiscounted cash flows along with its
carrying value as at the Balance Sheet Date
22 Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
The chief operating decision maker regularly monitors and reviews the operating results of the whole Company as one segment i.e.
"Polyster". Thus, as defined in Ind AS 108 'Operating Segments', the Company's entire business falls under this one operational
segment and hence the necessary information has already been disclosed in the balance sheet and the statement of profit and loss.
Further, the entire business of the Company is within India, hence there is no geographical segment.
23 In the absence of reaonsable certainty that the company will have sufficient future taxable profit against which the unused tax losses
or unused tax credits can be utilised by the entity, deferred tax assets has not been de-recognised during the year and further no
deferred tax assets has been recognised.
24 The Company has incurred losses amounting to Rs. 9.18 Lakhs and has negative cash flow from operations of Rs. 3.14 Lakhs during the
financial year ended 31 March 2024 (31 March 2023: Rs. 17.69 Lakhs and Rs. 2.64 Lakhs respectively) and as of that date, has negative
networth of Rs. 669.18 Lakhs (31 March 2023: Rs. 660.00 Lakhs). The Company has been adversely affected in the last few years due
to challenging macro business environment and change in business dynamics in the industry it operates. There is temporary shut¬
down of the business activities resulting in lower or no business turnover and operating losses.
While adverse financial ratios may cast material uncertainty, the Company under the leadership of management is confident that it
can tide over the issues successfully. This belief is reinforced by additional funds infusion by Promoters cum directors, internal
restrucutirng of the business objectives and activities, expected recovery in Economy. Under these circumstances, the ability of the
Company to continue as a going concern is dependent on its ability to meet its obligations towards its stakeholders, creditors,
employees and the Government during the interim period till the compay is able to tunraround from its current business and financial
crisis and normal operations resume thereafter. Under these circumstances, the Company remains going concern for the foreseeable
future and at least 12 months from the balance sheet date.
25 The Balances of bank borrowing, Sundry Debtors, Creditors, Deposits and Loans & Advances are accepted as appearing in the Ledger
Accounts and subject to confirmation from individual parties concerned, due adjustments, if any will be made there on. The
provisions for all known liabilities and for depreciation is adequate and not in excess of the amounts reasonably necessary.
26 Previous year's figures have been reclassified/regrouped, wherever applicable to confirm to current year's classification.
For RAK CHAMPS & CO LLP For and on behalf of the Board of Directors of
CHARTERED ACCOUNTANTS Aadi Industries Ltd
Firm Registration No. 131094W
Ramanatha Shetty Rushabh Shah Sharanabasaweshwar Hiremath
Membership No: 218600 Managing Director Independent Director
Partner DIN : 01944390 DIN : 08912844
UDIN : 24218600BKBWHA5787
Hiral Doshi Sanjay Jadhav
Mumbai, 29th May 2024 Company Secretary CFO
Membership No : A70639 PAN : AFPPJ4398Q
Mumbai, 29th May 2024
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