Accounting Policies of United Textiles Ltd. Company

Mar 31, 2024

3.0 Significant Accounting Policies

3.1 Basis of Measurement

The financial statements have been prepared on accrual basis and under the historical cost convention except following
which have been measured at fair value:

• Certain financial assets and liabilities except borrowings carried at amortised cost,

• defined benefit plans - plan assets measured at fair value,

• Land under Property, plant and equipment on transition to IND AS

3.2 Property, Plant and Equipment

a) Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated impairment
losses, if any.

Subsequent costs are Included In the assets carrying amount or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the company and the cost of
the item can be measured reliably.

b) Depreciation Is provided on Written down Value Method over the remaining useful life of the assets In the manner
prescribed in Schedule II of the Companies Act, 2013.

c) The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the
difference between the sales proceeds and the carrying amount of the asset and Is recognised In the Statement of Profit
and Loss on the date of disposal or retirement.

3.3 Intangible Assets

Identifiable intangible assets are recognised:

a) when the Company controls the asset,

b) It is probable that future economic benefits attributed to the asset will flow to the Company and

c) the cost of the asset can be reliably measured.

3.4 Impairment of non-current assets

An asset Is considered as Impaired when at the date of Balance Sheet there are indications of Impairment and the carrying
amount of the asset, or where applicable the cash generating unit to which the asset belongs exceeds Its recoverable
amount [i.e. the higher of the net asset selling price and value in use).The carrying amount is reduced to the recoverable
amount and the reduction is recognized as an impairment loss in the Statement of Profit and Loss. The impairment loss
recognized in the prior accounting period Is reversed if there has been a change In the estimate of recoverable amount.
Post Impairment, depreciation is provided on the revised carrying value of the impaired asset over Its remaining useful life.

3.5 Cash and cash equivalents

Cash and cash equivalents includes Cash on hand and at bank, deposits held at call with banks, other short-term highly
liquid investments with original maturities of three months or less that are readily convertible to a known amount of cash
and are subject to en insignificant risk of changes in value and are held for the purpose of meeting short-term cash
commitments.

For the purpose of the Statement of Cash Flows, cash and cash equivalents consists of cash and short term deposits, as
defined above, net of outstanding bank overdraft as they are considered an integral part of the Company''s cash
management.

3.6 Inventories

Inventories are valued at the lower of cost and net realizable value except scrap, which is valued at net realizable value. Net
realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and th e
estimated costs necessary to make the sale. The cost of Inventories comprises of cost of purchase, cost of conversion and
other costs Incurred In bringing the Inventories to their respective present location and condition. Cost Is computed on the
weighted average basis.

3.7 Employee benefits

a) Short term employee benefits are recognized as an expense In the Statement of Profit end Loss of the year In which the
related services are rendered.

b) Leave encashment being a short term benefit Is accounted for using the Projected Unit Credit Method, on the basis of
actuarial valuations carried out by third party actuaries et each Belance Sheet date. Actuarlel gains and losses arising from
experience adjustments and changes in actuarial assumptions are charged or credited to profit and loss in the period in
which they arise.

c) Contribution to Provident Fund, a defined contribution plan. Is made In accordance with the statute, and Is recognised as
an expense in the year in which employees have rendered services.

d) The cost of providing gratuity, a defined benefit plans, is determined using the Projected Unit Credit Method, on the
basis of actuarial valuations carried out by third party actuaries at each Balance Sheet date. Actuarial gains and losses
arising from experience adjustments and changes in actuarial assumptions are charged or credited to Other Comprehensive
Income In the period In which they arise. Other costs are accounted In statement of profit and loss.

3.8 Foreign currency reinstatement and translation

[a] Functional and presentation currency

The financial statements have been presented In Indian Rupees ,whlch Is the Company''s functional and presentation
currency.

[b) Transactions and balances

The Company does not have any foreign currency transactions and therefore, exchange risk including foreign currency
sensitivity Is not applicable.

3.9 Financial instruments - Initial recognition, subsequent measurement and Impairment

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
Instrument of another entity. Financial assets and liabilities are Initially measured at fair value. Transaction cost that are
directly attributable to the acquisition or issue of financial assets or financial liabilities (Other than financial assets a nd
financial liabilities at fair value through profit and loss account} are added to or deducted from fair value measured Initial
recognition of financial asset or financial liability.

Financial Assets and liabilities are measured at amortised cost or fair value through Other Comprehensive Income or fair
value through Profit or Loss, depending on its business model for managing those financial assets and liabilities and the
assets and liabilities contractual cash flow characteristics.

Financial Assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose
objective is to hold these assets to collect contractual cash flows and the contractual terms of the financial assets give rise
on specified dates to cash flows that are solely payments of principal and interest amount outstanding.

Financial Assets at fair value through other comprehensive Income

Financial assets are measured at fair value through other comprehensive Income if these financial assets are held within a
business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments
of principal and Interest on the principal amount outstanding and selling financial assets.

Financial assets at fair value through profit or loss

Financial assets are measured at fair value through profit or loss unless It is measured at amortised cost or at fair value
through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of
financial assets and liability at fair value thorough profit or loss are immediately recognised In profit or loss.

Financial Liabilities

Financial liabilities including Interest bearing loans and borrowlnp and trade payables are subsequently measured at
amortised cost using the effective interest rate method (EIR) except those designated in an effective hedging relationship.

Amortised cost Is calculated by taking Into account any discount or premium on acquisition and fee or costs that are an
integral part of the EIR. The EIR amortisation is Included in finance costs in the Statement of Profit and Loss.

3.10 Borrowing costs

Borrowing costs specifically relating to the acquisition or construction of qualifying assets that necessarily takes a
substantial period of time to get ready for Its Intended use are capitalized (net of Income on temporarily deployment of
funds) as part of the cost of such assets .Borrowing costs consist of interest and other costs that the Company incurs in
connection with the borrowing of funds.

For general borrowing used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for
capitalization Is determined by applying a capitalization rate to the expenditures on that asset. The capitalization rate Is the
weighted average of the borrowing costs applicable to the borrowlnp of the Company that are outstanding during the
period, other than borrowinp made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing
costs capitalized during a period does not exceed the amount of borrowing cost Incurred during that period.

All other borrowing costs are expensed in the period in which they occur.

3.11 Taxation

Income tax expense represents the sum of current and deferred tax (including MAT). Tax is recognised in the Statement of
Profit and Loss, except to the extent that it relates to Items recognised directly In equity or other comprehensive income, I n
such cases the tax Is also recognised directly In equity or In other comprehensive Income. Any subsequent change In direct
tax on items initially recognised in equity or other comprehensive income is also recognised in equity or other
comprehensive Income, such change could be for change in tax rate.

Current tax provision Is computed for Income calculated after considering allowances and exemptions under the provisions
of the applicable Income Tax Laws. Current tax assets and current tax liabilities are off set, and presented as net.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance sheet and
the corresponding tax bases used In the computation of taxable profit and are accounted for using the liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally
recognised for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is
probable that future taxable profits will be available against which those deductible temporary differences, carry forward
tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates.
Deferred tax assets and deferred tax liabilities are off set, and presented as net.

The carrying amount of deferred tax assets Is reviewed at each balance sheet date and reduced to the extent that It Is no
longer probable that sufficient taxable profits will be available against which the temporary differences can be utilised.

Minimum Alternative Tax (MAT) Is applicable to the Company. Credit of MAT Is recognised as an asset only when and to the
extent there Is convincing evidence that the Company will pay normal Income tax during the specified period, l.e., the
period for which MAT credit is allowed to be carried forward. In the year in which the MAT credit becomes eligible to be
recognised as an asset, the said asset is created by way of a credit to the profit and lossaccount and shown as MAT credit
entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT
credit entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal
income tax during the specified period.

3.12 Revenue recognition and other income
Sale of Goods

Revenue is recognized at the fair value of consideration received or receivable and represents the net Invoice value of
goods supplied to third parties after deducting discounts, volume rebates and outgoing sales tax and are recognized either
on delivery or on transfer of significant risk and rewards of ownership of the goods. Material returned/ rejected is
accounted for in the year of return/ rejection.

Interest

Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate
applicable.

3.13 Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders
(after deducting preference dividends and attributable taxes) by the weighted average number of equity shares
outstanding during the year. Partly paid equity shares are treated as a fraction of an equity share to the extent that they
were entided to participate in dividends relative to a fully paid equity share during the reporting year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all
dilutive potential equity shares. If any.

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Mar 31, 2014

I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical cost convention as a going concern.

b) The Company follows the mercantile system of Accounting and recognises Income and Expenditure on Accrual basis. Accounting policies not specifically referred to otherwise are consistent and in consonance with the generally accepted accounting principles.

ii) SALES

Sales are inclusive of excise duty, if any. However, goods produced after 7th July, 2004 is exempt from excise duty.

iii) FIXED ASSETS AND DEPRECIATION

a) VALUATION OF FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of all incidental expenses related thereto.

b) DEPRECIATION

Depreciation on all fixed assets have been provided on pro-rata basis on Written Down Value Method and at the rates specified in Schedule XIV of the Companies Act, 1956.

iv) INVENTORIES

The method of inventories valuation has been adopted as follows:- Raw Material, Stores and spares, finished goods is valued at lower of cost or net realisable value. Cost is determined on FIFO basis. Work in Process is valued at estimated cost or net realisable value whichever is lower. Cotton Waste is valued at estimated net realisable value. Finished goods and Work in Progress includes cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

v) INVESTMENTS

Long Term Investments are stated at cost. In case there is permanent diminution in the value of investments, provision for the same is made in the accounts.

vi) RETIREMENT BENEFITS

Liability in respect of retirement benefits is provided and / or funded and charged to profit and loss account as follows:- a) Provident/Family Pension as a percentage, of salary/ wages for eligible employees. b) Gratuity is accounted for on accrual basis, on the basis of actuarial valuation.

vii) TAXATION

a) Provision is made for income-tax liability estimated to arise on the results for the year at the current rate of tax in accordance with Income- Tax Act, 1961.

b) Deferred tax is accounted at the current rate of tax to the extent of temporary timing differences that originates in one year and are capable of reversal in one or more subsequent years. However, no deferred tax asset is created where there is no virtual certainty as to the sufficient future taxable profit.

viii) CONTINGENT LIABILITIES

Contingent Liabilities are not provided for in the accounts and are disclosed by way of note.

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Mar 31, 2012

I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS

a) The financial statements are prepared under the historical cost convention as a going concern.

b) The Company follows the mercantile system of Accounting and recognizes Income & Expenditure on Accrual basis. Accounting policies not specifically referred to otherwise are consistent and in consonance with the generally accepted accounting principles.

ii) SALES

Sales are inclusive of excise duty, if any. However, goods produced after la July, 2004 is exempt from excise duty.

iii) FIXED ASSETS AND DEPRECIATION

a) VALUATION OF FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of all incidental expenses related thereto.

b) DEPRECIATION

Depreciation on all fixed assets have been provided on pro-rata basis on Written Down Value Method and at the rates specified in Schedule XIV of the Companies Act, 1956.

iv) INVENTORIES

The method of inventories valuation has been adopted as follows:- Raw Material, Stores and spares, finished goods is valued at lower of cost or net realisable value. Cost is determined on FIFO basis. Work in Process is valued at estimated cost or net realisable value whichever is lower. Cotton W aste is valued at estimated net realisable value. Finished goods and Work in Progress includes cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

v) INVESTMENTS

Long Term Investments are stated at cost. In case there is permanent diminution in the value of investments, provision for the same is made in the accounts.

vi) RETIREMENT BENEFITS Liability in respect of retirement benefits is provided and / or funded and charged to profit and loss account as follows:-

a) Provident/Family Pension as a percentage, of salary/ wages for eligible employees.

b) Gratuity is accounted for on accrual basis, on the basis of actuarial valuation. vii) TAXATION

(a) Provision is made for income-tax liability estimated to arise on the results for the year at the current rate of tax in accordance with Income- Tax Act, 1961.

(b) No Deferred tax assets has been created in view of the virtual certainty supported by enhancing evidence that sufficient taxable income will be available in the next year against which the deferred assets can be realized.

viii) CONTINGENT LIABILITIES

Contingent Liabilities are not provided for in the accounts and are disclosed by way of note.

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Mar 31, 2010

I) a) The financial statements are prepared under the historical cost convention as a going concern.

b) The Company follows the mercantile system of Accounting and recognizes Income & Expenditure on Accrual basis. Accounting policies not specifically referred to otherwise are consistent and in consonance with the generally accepted accounting principles.

ii) SALES

Sales are inclusive of excise duty, if any. However, goods produced after 7th July,2004 is exempt from excise duty.

iii) FIXED ASSETS AND DEPRECIATION

a) VALUATION OF FIXED ASSETS

Fixed assets are stated at cost of acquisition inclusive of all incidental expenses related thereto.

b) DEPRECIATION

Depreciation on all fixed assets have been provided on pro-rata basis for the period of use on Straight Line Method and at the rates specified in Schedule XIV of the Companies Act, 1956.

iv) INVENTORIES

The method of inventories valuation has been adopted as follows:-

Raw Material, Stores and spares, finished goods is valued at lower of cost or net realisable value. Cost is determined on FIFO basis.

Work in Process is valued at estimated cost or net realisable value whichever is lower.

Cotton Waste is valued at estimated net realisable value.

Finished goods and Work in Progress includes cost of conversion and other overheads incurred in bringing the inventories to their present location and condition.

v) INVESTMENTS

Long Term Investments are stated at cost. In case there is permanent diminution in the value of investments, provision for the same is made in the accounts.

vi) RETIREMENT BENEFITS

Liability in respect of retirement benefits is provided and / or funded and charged to profit and loss account as follows:-

a) Provident/Family Pension as a percentage, of salary/ wages for eligible employees.

b) Gratuity is accounted for on accrual basis, on the basis of actuarial valuation.

vii) TAXATION

(a) Provision is made for income-tax liability estimated to arise on the results for the year at the current rate of tax in accordance with Income- Tax Act, 1961.

(b) No Deferred tax assets has been created in view of the virtual certainty supported by enhancing evidence that sufficient taxable income will be available in the next year against which the deferred assets can be realized.

viii) CONTINGENT LIABILITIES

Contingent Liabilities are not provided for in the accounts and are disclosed by way of note.