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 the case of:

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 obligation;

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 EARNINGPER 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 or future 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.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial
statements to evaluate changes in liabilities arising from financing activities, including both changes arising
from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and
closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure
requirementThe Company is evaluating the requirements of the amendment and the effect on the financial
statements is being evaluated.

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 OCCURINGAFTER 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 determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use
the asset or assets, even if that right is not explicitly specified in an arrangement.

a) Company as a Lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance
lease.

Finance leases are capitalised at the commencement of the lease at the inception date fair value of the
leased property or, if lower, at the present value of the minimum lease payments. Lease payments are
apportioned between finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs

in the Statement of Profit and Loss, unless they are directly attributable to qualifying assets, in which
case they are capitalized in accordance with the Company’s general policy on the borrowing costs.
Contingent rentals are recognised as expenses in the periods in which they are incurred.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable
certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated
over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a
straight-line basis over the lease term.

b) Company as a Lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of
an asset are classified as operating leases. Rental income from operating lease is recognised on a
straight-line basis over the term of the relevant lease.

Leases are classified as Finance leases when substantially all of the risks and rewards of ownership
transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded
as receivables at the Company’s net investment in the leases. Finance lease income is allocated to
accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding
in respect of the lease.

2.23 RECENTACCOUNTINGPRONOUNCEMENTS

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, 2023.

Nature and Purpose of the Reserves
Capital Reserve

Capital reserve is created on account of forfeiture of share capital in earlier years.

Securities Premium

Security premium account is created when shares are issue at premium. A company may utilise the security premium
reserve account as per the requirements of Companies Act.

General Reserve

The Company has transferred a portion of Net Profits of the Company before declaring Dividends to General Reserve
pursuant to the earlier provision of The Companies Act, 1956. Mandatory transfer to General Reserve, is not required
under the Companies Act, 2013.

NOTE 22: CAPITAL MANAGEMENT

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.

Carrying amounts of Loans, Trade Receivables, Cash and Cash Equivalents, Other Bank Balances, Other Financial
Assets, Borrowings, Trade Payables and Other Financial Liabilities as at March 31, 2024 and March 31, 2023
approximate the fair value.

NOTE 24: FINANCIAL RISK MANAGEMENT AND POLICIES

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 of the financial instruments will fluctuate
because of changes in market interest rates. The company’s exposure to the risk of changes in market interest
rates primarily to the Company’s fixed deposits. Since all these are generally for short durations, there is no
significant interest rate risks pertaining to these deposits

Exposure / sensitivity to interest rate risk

Company has NIL exposure to interest rate risk since it does not have any interest bearing borrowings.

(a) (ii) Market Risk - Price Risk

The Company has no surplus for investment in debt mutual funds, deposits etc. The Company does make
deposit with the banks to provide security against its bank borrowings whenever required. Deposit is made in
fixed rate instrument. In view of this it is not susceptible to market price risk, arising from changes in interest
rates or market yields which may impact the return and value of the investments.

(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 company does not has any
asset or liability in the foreign currency. in view of this 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 policy under which each new customer is analysed individually for
creditworthiness before the payment and delivery terms and conditions are offered. The Company’s review includes
external ratings, if they 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 of Trade 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 and Bank deposits 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 of Trade 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 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

Notes

1 Company has reduced its liabilities which results in increase in current asset ratio.

2 Company has made good amount of profit as compared to loss during the previous year, this results in favourable
return on equity ratio during the year under consideration.

3 Company has made good amount of profit as compared to loss during the previous year, this results in favourable
return on equity ratio during the year under consideration.

** Said ratios have been not been calculated since company turnover is NIL
# Said ratios are not applicable to the Industry in which Company operates
% Company does not have any investments

29. 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. “Fabrics & Garment”. 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.

30. 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, no deferred tax assets has been recognised.

31. The Balances of 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.

32. Figures in brackets indicate previous year's figures. Previous year’s figures have been regrouped, rearranged
and reclassified wherever necessary to conform with this year’s classification.

CORPORATE INFORMATION - 1

MATERIALACCOUNTING POLICIES - 2

NOTES ON ACCOUNTS - 3-32

As per our report attached For and on behalf of the Board of Directors

For RAK CHAMPS & CO LLP For HARIA EXPORTS LTD.

CHARTERED ACCOUNTANTS

Firm Reg. No. 131094W

BIMAL HARIA UTSAV MARU

Director Director

DIN : 00585299 DIN : 07752233

RAMANATHA SHETTY

PARTNER Amruta Rikame

Membership No. 218600 Company Secretary

UDIN : 24218600BKBWHC9099 ACS-49337

Mumbai, 30th May, 2024 Mumbai, 30th May, 2024