United Polyfab Gujarat Ltd. कंपली की लेखा नीति

Mar 31, 2025

1. Corporate Information

UNITED POLYFAB GUJARAT LIMITED (the company) is a public limited company and incorporated under the provision
of Company''s Act, 2013. The company is engaged in the manufacturing of Processed Yarn at Timba, Daskroi. The
company caters to wide domestic market and is engaged in export of yarn via third party.

2. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention and on accrual basis, in accordance with
the generally accepted accounting principles (Indian GAAP) and the provisions of the Companies Act, 2013. The
company has prepared these financial statements to comply in all material respects with the Indian accounting
standards notified under section 133 of the Company Act, 2013, read together with paragraph 7m of the Companies
(Account) Rules 2014.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Use of Estimates

The preparation of financial statements 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 are recognized in the period
in which the results are known/ materialized.

Inventories

Items of inventories are measured at method given below after providing for obsolescence, if any Cost of
inventories comprises of cost of purchase and all costs incurred in bringing them to their respective present
location and condition.

Cost has been determined as under:

1. Raw Material at cost (on FIFO basis)

2. Finished Goods - at cost or Net Realizable Value whichever is lower.

3. Stock in process- Raw material cost and proportionate conversion cost

4. Stores, Spares and other trading goods on weighted average cost basis.

c. Cash Flow Statement

Company has prepared Cash Flow Statement under indirect method as per Indian Accounting Standard -7.

d. Depreciation on Fixed Assets

Depreciation on fixed assets is provided on Straight Line Method(SLM) at the rates and in the manner prescribed in
Schedule II to the Companies Act, 2013.

e. TangibleFixed Assets:

Fixed Assets except Factory Building are stated at cost net of GST and Factory Building are stated at cost plus GST, less
accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of
commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate
variations attributable to the fixed assets are transferred to the Statement Profit & Loss Account.

Subsequently expenditure related to an item of fixed assets added to its book value only if it increases the future
benefits from the existing asset beyond its previously assessed standard of performance. All other expenses of existing
fixed assets, including day to day repair and maintenance expenses and cost of parts replaced are charged to the
statement of Profit and Loss accounts for the period during which such expenses are incurred.

f. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the
fair value of consideration received or receivable, taking into account contractually defined terms of payment
inclusive of Excise Duty and net of GST returns, trade allowances, rebates, taxes and amounts collected on behalf
of third parties and Government.

Sale of Goods: Revenue from the sale of goods is recognized when the goods are delivered and the titles have
passed, at which time all the following conditions are satisfied:

• The company has transferred to the buyer the significant risks and rewards of the ownership of the goods;

• The company retains neither continuing managerial involvement to degree usually associated with
ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the company; and the
costs incurred or to be incurred in respect of the transaction can be measured reliably

Interest Income: Interest income is accrued on a time basis, by reference to the principle outstanding and at the
effective interest rate applicable.

g. Employee Benefits

Short-Term Employee Benefits:

The undiscounted amount of short-term employee benefits expected to be paid in

Exchange for the services rendered by employees are recognised as an expense during the period when the employees
render the services.

Post-Employee Benefits:

Defined Contribution Plans: The Company recognizes contribution payable to the provident fund scheme as an
expense, when an employee renders the related service. The measurement of the contribution is done as Provident
Fund and Miscellaneous Act, 1952.

Defined Benefit Plans: The Company pays gratuity to the employees who have completed five years of service with
the Company at the time of resignation/ superannuation. The gratuity is paid @15 days basic salary for every
completed year of service as per the Payment of Gratuity Act, 1972. The gratuity liability amount is not contributed to
any approved gratuity fund formed exclusively for gratuity payment to the employees. The liability in respect of
gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over
the period during which the benefit is expected to be derived from employees'' services. Remeasurement gains and
losses arising from adjustments and changes in actuarial assumptions are recognised in the period in which they occur
in Other Comprehensive Income.

h. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of
the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its
intended use. All other borrowing costs are charged to Profit and Loss account.

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Mar 31, 2024

1. Corporate Information

UNITED POLYFAB GUJARAT LIMITED (the company) is a private limited company and incorporated under the provision of Company’s Act, 2013. The company is engaged in the manufacturing of Processed Yam at Timba, Daskroi. The company caters to wide domestic market and is engaged in export of yarn via third party.

2. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention and on accrual basis, in accordance with the generally accepted accounting principles (Indian GAAP) and the provisions of the Companies Act, 2013. The company has prepared these financial statements to comply in all material respects with the Indian accounting standards notified under section 133 of the Company Act, 2013, read together with paragraph 7m of the Companies (Account) Rules 2014.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

2.1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Use of Estimates

The preparation of financial statements 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 are recognized in the period in which the results are known/ materialized.

b. Inventories

Items of inventories are measured at method given below after providing for obsolescence, if any Cost of inventories comprises of cost of purchase and all costs incurred in bringing them to their respective present location and condition.

Cost has been determined as under:

1. Raw Material at cost (on FIFO basis)

2. Finished Goods - at cost or Net Realizable Value whichever is lower.

3. Stock in process- Raw material cost and proportionate conversion cost

4. Stores, Spares and other trading goods on weighted average cost basis.

c. Cash Flow Statement

Company has prepared Cash Flow Statement under indirect method as per Indian Accounting Standard -7.

d. Depreciation on Fixed Assets

Depreciation on fixed assets is provided on Straight Line Method (SLM) at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013.

e. Tangible Fixed Assets:

Fixed Assets except Factory Building are stated at cost net of GST and Factory Building are stated at cost plus GST, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are transferred to the Statement Profit & Loss Account.

Subsequently expenditure related to an item of fixed assets added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses of existing fixed assets, including day to day repair and maintenance expenses and cost of parts replaced are charged to the statement of Profit and Loss accounts for the period during which such expenses are incurred.

f. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when payment is being made. Revenue is measured at the fair value of consideration received or receivable, taking into account contractually defined terms of payment inclusive of Excise Duty and net of GST returns, trade allowances, rebates, taxes and amounts collected on behalf of third parties and Government.

Sale of Goods: Revenue from the sale of goods is recognized when the goods are delivered and the titles have passed, at which time all the following conditions are satisfied:

• The company has transferred to the buyer the significant risks and rewards of the ownership of the goods;

• The company retains neither continuing managerial involvement to degree usually associated with ownership nor effective control over the goods sold;

• The amount of revenue can be measured reliably;

• It is probable that the economic benefits associated with the transaction will flow to the company; and the costs incurred or to be incurred in respect of the transaction can be measured reliably

Interest Income: Interest income is accrued on a time basis, by reference to the principle outstanding and at the effective interest rate applicable.

g. Employee Benefits Short-Term Employee Benefits:

The undiscounted amount of short-term employee benefits expected to be paid in Exchange for the services rendered by employees are recognised as an expense during the period when the employees render the services.

Post-Employee Benefits:

Defined Contribution Plans: The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service. The measurement of the contribution is done as Provident Fund and Miscallenous Act, 1952.

Defined Benefit Plans: The Company pays gratuity to the employees who have completed five years of service with the Company at the time of resignation/ superannuation. The gratuity is paid @15 days basic salary for every completed year of service as per the Payment of Gratuity Act, 1972. The gratuity liability amount is not contributed to any approved gratuity fund formed exclusively for gratuity payment to the employees. The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees’ services. Remeasurement gains and losses arising from adjustments and changes in actuarial assumptions are recognised in the period in which they occur in Other Comprehensive Income.

h. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.

i. Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.

Deferred tax resulting from “timing difference” between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

j. Provisions

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the Balance sheet date. These are reviewed at each reporting date and adjusted to reflect the current best estimates.

k. Earnings per Share

Basic earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity

shares outstanding during the year adjusted for bonus element in equity share. Diluted earnings per share adjust the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.

l. Segment reporting

A) Primary Business Segments:

The Company’s Operations currently comprise of one segment i.e. manufacturing of textiles.

B) Secondary Business Segments:

• The company operate its business at single a place and the function of company is such that the company cannot be classified into segments as per IND AS 108.

m. Contingent Liability:

Disclosure of contingent liability is made when there 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 where it is either not probable that an outflow of resources embodying economic benefits will be required to settle or a reliable estimate of amount cannot be made.

n. Financial Instruments h. Financial Assets

A. Initial Recognition and Measurement

All Financial Assets are initially recognised at fair value. Transaction costs that are directly attributable to the acquisition or issue of Financial Assets, which are not at Fair Value Through Profit or Loss, are adjusted to the fair value on initial recognition. Purchase and sale of Financial Assets are recognised using trade date accounting. However, trade receivables that do not contain a significant financing component are measured at transaction price.

B. Subsequent Measurement

a) Financial Assets measured at Amortised Cost (AC)

A Financial Asset is measured at Amortised Cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the Financial Asset give rise to cash flows on specified dates that represent solely payments of principal and interest on the principal amount outstanding.

b) Financial Assets measured at Fair Value Through Other Comprehensive Income (FVTOCI)

A Financial Asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling Financial Assets and the contractual terms of the Financial Asset give rise on specified dates to cash flows that represents solely payments of principal and interest on the principal amount outstanding.

c) Financial Assets measured at Fair Value Through Profit or Loss (FVTPL)

A Financial Asset which is not classified in any of the above categories are measured at FVTPL. Financial assets are reclassified subsequent to their recognition, if the Company changes its business model for managing those financial assets. Changes in business model are made and applied prospectively from the reclassification date following the changes in business model in accordance with principles laid down under Ind AS 109 -Financial Instruments.

C. Investment in Subsidiaries, Associates and Joint Ventures

The Company has accounted for its investments in Subsidiaries, associates and joint venture at cost less impairment loss (if any).

D. Other Equity Investments

All other equity investments are measured at fair value, with value changes recognised in Statement of Profit and Loss, except for those equity investments for which the Company has elected to present the value changes in ‘Other Comprehensive Income’. However, dividend on such equity investments are recognised in Statement of Profit and loss when the Company’s right to receive payment is established.

E. Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss’ (ECL) model, for evaluating impairment of Financial Assets other than those measured at Fair Value Through Profit and Loss (FVTPL), limited to measurement trade receivables. Expected Credit Losses are measured through a loss allowance at an amount:

• equal to 20 % of those receivables who are outstanding beyond 180 days (limited to within 365 days) of the bill date;

• equal to 50 % of those receivables who are outstanding beyond 365 days (limited to within 720 days) of the bill date;

• equal to 100% of those receivables who are outstanding beyond 720 days (expected credit losses that result from all possible default events over the life of the financial instrument).

For Trade Receivables the Company applies ‘simplified approach’ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward-looking estimates are analysed.

ii. Financial Liabilities

A. Initial Recognition and Measurement

All Financial Liabilities are recognised at fair value and in case of borrowings, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

B. Subsequent Measurement

Financial Liabilities are carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

iii. Derecognition of Financial Instruments

The Company derecognises a Financial Asset when the contractual rights to the cash flows from the Financial Asset expire or it transfers the Financial Asset and the transfer qualifies for derecognition under Ind AS 109. A Financial liability (or a part of a Financial liability) is derecognised from the Company’s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

iv. Offsetting

Financial Assets and Financial Liabilities are offset and the net amount is presented in the balance sheet when, and only when, the Company has a legally enforceable right to set off the amount and it intends, either to settle them on a net basis or to realise the asset and settle the liability simultaneously.