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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