1. GENERAL INFORMATION

M/s PARMESHWARI SILK MILLS LIMITED company is engaged in the business of Manufacturing of woven fabrics.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESA. Accounting Conventions:

The company's financial statements have been prepared on accrual basis of accounting as applicable to going concern in accordance with generally accepted accounting principle in India, mandatory accounting standards prescribed in the Section 133 of the Companies Act 2013 Read with Rule 7 of the Companies (Accounts) Rules 2014.

All assets and liabilities have been classification as current or noncurrent as per company's normal operating cycle and other criteria set out in the Revised Schedule II of Companies Act, 2013. Based on the nature of business, the company has ascertained its operating cycle as 12 months for the purpose of current or noncurrent classification of Assets and liabilities.

B. RevenueRecognition

1. Sales Revenue is recognized on dispatch of goods, net of freight, insurance, Excise, VAT and GST.

2. Interest income is recognised on time proportion basis.

C. Fixed Assets:

Fixed assets are stated at cost of acquisition and inclusive of inward freight, duties & taxes & incidental expenses related to acquisition net of capital subsidy relating to specific fixed assets. Capital work in progress/Intangible assets under development includes cost of assets at site, advances made for acquisition of capital assets and pre operative expenditure pending allocation to fixed assets.

D. Inventory Valuation

Inventories are valued at cost or net realizable price whichever is lower except scrap at net realisable value. The cost formula used for valuation of inventories are:-

1. In respect of raw material and stores and spares have been valued at cost.

2. In respect of work in process is valued at cost of raw material plus conversion cost.

3. Finished goods are valued at cost of production.

E. Depreciation:

Depreciation has been provided on provided on Straight Line method at the rates specified in schedule II of The Companies Act, 2013. The fixed assets acquired prior to 1st April 2014 are depreciated over the revised remaining useful life of the assets based on the indicative useful life of the assets mandated by schedule II to the Companies Act, 2013.

F. Taxes on Income

Provision for Tax is made for both current and deferred taxes. Provisions for current income tax is made on the current tax rates based on assessable income. The Company provides for deferred tax based on the tax effect of timing differences resulting from the recognition of items in the financial statements and in estimating its current tax provision.

G. Employee Benefits

I. Contribution to Provident Fund and other funds are made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952.

II. Provision for leave encashment is made on the basis of leave accrued to the employees during the financial year.

III. The company has not been made Provision for gratuity.

H. Excise Duty

Excise duty is not applicable on the company.

The company is registered under Goods and Service Act 2017 and having GST No.03AAECP1070G1ZX.

I. Foreign Currency Transaction

Transactions in Foreign Currency are recorded at the rate of exchange prevailing at the date of transactions. The translation/settlement differences are recognized in the profit & Loss Account. Exchange gain on export realisation is Rs.1,55,364.71 and exchange gain on Import realisation is Rs.20,23,581.24. Net effect is Rs. 21,78,945.95 credited to Profit & loss account.

J. Impairment of Assets

As at Balance Sheet date, an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an impairment loss i.e. the amount by which the carrying amount of an asset exceed its recoverable amount is provided in the books of account.

K. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result so past event and it is probable that there will be outflow of resources. Contingent liability, which are considered significant and material by the company, are disclosed in the Notes to Accounts. Contingent Assets are neither recognised nor disclosed in financial statements.

L. Investments

There is Long term investment in shares of Harappa Textile Mills Private Limited (499800 shares of Rs. 51.10 each on book value) amounted to Rs. 25539780.00, Investment in Gold amounted to Rs. 1272000.00 and there is no current investments .

M. Borrowing Cost

Borrowing cost that are directly attributable to acquisition or construction of qualifying assets or treated as part of cost of capital assets. Other borrowing cost or treated as expenses for the period in which they are incurred.

N. Earning Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

O. Cash and Cash Equivalent

In the cash flow statement, cash and cash equivalent includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three or less.

P. Lease

a) No Exemption is Available to the Company with regards to this Accounting Standard.

b) The Company has entered into following Financial and Operating Lease during the Year under Review.

Q. Intangible Assets

Intangible assets are stated at acquisition cost, net accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on a straight-line basis over their estimated useful lives. A rebuttable presumption that the useful life of an intangible assets will not exceed ten years from the date when the asset is available for use is considered by the management. The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly.

R. Use of Estimates

The preparation of financial statements requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Example of such estimates include provision for doubtful debts, employee benefits, provision for income tax, the useful lives of depreciable fixed assets and provision for impairment.

S. Contingent Liabilities

The company has not given Bank Guarantee. As per Income Tax Portal, outstanding demand Rs.5366936.00 for the AY 2022 on which assesse has raised an appeal.

3 In the opinion of the Board of Directors, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except as expressly stated otherwise.

4. Confirmation of balances, whether in debit or credit from parties are subject to confirmation as provided by board of directors. However no proof regarding the same has been obtained at the year end. Company do have a system of periodic balance confirmations from parties.