Accounting Policies of United Cotfab Ltd. Company

Mar 31, 2024

(A) Summary of Significant Accounting Policies

i) Basis of Preparation of Financial Statements

These financial statements of the company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP) and Historical Cost Convention on an accrual basis. The company has prepared these financial statements to comply in all material respects with the Accounting Standards notified under the companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 2013. The accounting policies adopted in the preparation of Financial Statements are consistent with those used in the previous year.

ii) Use of Estimates

The preparation of financial statements in conformity with the Generally Accepted Accounting Policies requires the management to make estimates and assumptions that affect the reported amount of assets and liabilities, Revenues and Expenses. Such estimation and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of the financial statements. Difference between the actual results and estimates are recognized in the period in which the results are known materialized.

iii) Investments

Investments are classified as Long Term. Long Term Investments are valued at cost less provision for diminution other than temporary, in value, if any.

iv) Employee Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered. Employee Benefits have been accounted in accordance with AS-15.

v) Borrowing Cost:

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 capitalized to the assets to the extent of amount of borrowing taken for such assets and remaining borrowing costs are considered as preoperative expense.

vi) Revenue Recognition.

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate

collection. Turnover includes sale of goods net of GST. No adjustment in turnover is done for discounts (net), Value Added Tax (VAT) and gain / loss on corresponding hedge contracts. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

vii) Taxation

Income tax expenses comprise current tax and deferred tax. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year (adjusted for 9 months).

viii) Pre-Operative Expenses.

All the Pre-operative expenses till the Commercial operations of the business are being accumulated including the expenses of operation and finance cost. And these preoperative expenses are being capitalized in the balance sheet under Tangible Assets as on a date of starting of the commercial operations as per AS-10.

ix) Tangible Fixed Assets and Capital Work In Progress

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 capitalized. Capital Work In progresses stated at cost less impairment losses if any, cost comprises of expenditures incurred in respect of capital projects under development and includes any attributable/allocable cost and other incidental expenses.

x) Valuation of Inventory :

(1) Raw Materials: At purchase cost.

(2) Finished Goods: At Cost or Net Realizable Value whichever is less

(3) Stock-in-Process: At Cost plus proportionate cost

(4) Other Material: At Cost

The inventories are as valued, verified and certified by the management of the company and are valued on FIFO Basis.