Accounting Policies of Spunweb Nonwoven Ltd. Company

Mar 31, 2024

2 SIGNIFICANT ACCOUNTING POLICIES
a Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India
(''Indian GAAP'') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, as
applicable. The financial statements have been prepared under the historical cost convention on accrual basis, except for
certain financial instruments which are measured at fair value.

b Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and
assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Difference between the actual results and
estimates made are recognized in the period in which the results are materialized.

c Property, Plant and Equipment

All Property, plant & equipment are stated at cost of acquisition less accumulated depreciation and impairment losses, if any.

Cost comprises of the purchase price and any other attributable cost of bringing the assets to its working condition for its
intended use..

d Earning Per Share

BaBasic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary
items, if any) by the weighted

average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /

(loss) after tax (including the post

tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any
attributable taxes) relating to

the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings
per share and the weighted

average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed

to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary
operations. Potential dilutive equity

shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive
potential equity shares are

adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the
outstanding shares). Dilutive potential

equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive
equity shares are adjusted for

e Depreciation and amortization

Depreciation on property, plant & equipment has been provided using the straight-line method in the manner and at the rates
prescribed by Schedule II of the Act. Depreciation on addition/deletion of Property, plant & equipment made during the year is
provided on pro-rata basis from / up to the date of each addition / deletion

f Impairment of assets

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit
to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the higher of an
asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the
continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that.
reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of impairment
is recognised as income in the statement of profit and loss.

g Investment

Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising
investments in mutual funds, government securities and bonds are stated at the lower of cost and fair value.

h Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis.
Purchased goods in transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value. Stores
and spare parts are carried at lower of cost and net realisable value. Finished goods produced or purchased by the Company
are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a proportion of
manufacturing overheads.

i Cash and cash equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are
subject to an insignificant risk of change in value and having original maturities of three months or less from the date of
purchase, to be cash equivalents.

j Export Incentive

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the
same.

k Operating Cycle:

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their
realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of
classification of its assets and liabilities as current and noncurrent.

I Revenue recognition

Revenue from sales is recognised when the significant risks and rewards of ownership of the goods are transferred to the
customers. Sales are net of sales returns and trade discounts. Installation and commissioning income is recognised when the
service is rendered. Interest income is recognised on a time proportion basis. Dividend income is accounted when the right to
receive the same is established.

m Employee Benefits

Post-employment benefit plans

Contributions to defined contribution retirement benefit schemes are recognised as expense when employees have rendered
services entitling them to such benefits.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognised in full in the
statement of profit and loss for the period in which they occur. Past service cost is recognised immediately to the extent that
the benefits are already vested, or amortised on a straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit
obligation as adjusted for unrecognised past service cost, and as reduced by the fair value of scheme assets. Any asset
resulting from this calculation is limited to the present value of available refunds and reductions in future contributions to the
scheme.

Other employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by
employees is recognised during the period when the employee renders the service. These benefits include compensated
absences such as paid annual leave, overseas social security contributions and performance incentives.

Compensated absences which are not expected to occur within twelve months after the end of the period in which the
employee renders the related services are recognised as an actuarially determined liability at the present value of the defined
benefit obligation at the balance sheet date.

Others

The company has obtained a valuation report for Gratuity Benefits from Kapadia Global Actuaries, as required under AS 15.

Based on this report, the company has recognized INR 16.66 lakhs as Gratuity Expense for the current financial year. The
discount rate used for the valuation of employee benefits is 7.20% per annum, with a salary growth rate assumed at 7.00% per
annum.

n Borrowing Cost

Borrowing costs directly attributable to the acquisition,construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other
borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds

However, during the financial year 2023-24, the company did not incur any borrowing costs for building qualifying assets
o Segment Reporting

The Company operates in a single primary business segment . Hence, there are no reportable segment as per AS 17 Segment
Reporting

p Foreign currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign
currency monetary assets and liabilities other than net investments in non-integral foreign operations are translated at the
exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the statement of profit
and loss. Exchange difference arising on a monetary item that, in substance, forms part of an enterprise''s net investments in a
non-integral foreign operation are accumulated in a foreign currency translation reserve.

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or
that approximate of the actual rate at the date of transaction.

Monetary items denominated in foreign currencies at the year-end are restated at year end rates. In case of items which are
covered by forward exchange contracts, the difference between the year-end rate and rate on the date of the contract is
recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contracts.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit
and Loss statement except in case of long-term liabilities, where they relate to acquisition of fixed assets, in which case they -
are adjusted to the carrying costs of such assets

q Taxation

Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income
tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to
foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which gives rise to future economic benefits in
the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company
will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in the balance sheet when
the asset can be measured reliably and it is probable that the future economic benefit associated with it will fructify.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and
accounting income that originate in one period and is likely to reverse in one or more subsequent periods. Deferred tax assets
and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance
sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid
and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is able to
and intends to settle the asset and liability on a net basis.

The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to taxes
on income levied by the same governing taxation laws.

r Cash flows

The cash flow statement is prepared using the "Indirect method" set out in Accounting Standard 3 "Cash Flow Statements" and
presents the cash flows by operating, investing and financing activities of the Company. Cash and cash equivalents presented
in the cash flow statement consist of cash on hand and unencumbered, highly liquid bank balances