1. CORPORATE INFORMATION

Maxwell Industries Limited ('Company') was incorporated on 14th January, 1991. The Company's Identification No. is L18101MH1991PLC059804. The Company is a leading Manufacturer, Marketing and Distribution of Men's, Women's inner wears and Socks under brand name VIP, Frenchie and Feelings. The Company's Equity Shares are listed on BSE Limited (BSE) and National Stock Exchange Limited (NSE).

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of accounting and brparation of financial statements

These financial statement have been brpared in accordance with the generally accepted accounting principal in India under the historical cost convention on accrual basis, pursuant to section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounting) Rule, 2014, till the standard of accounting or addendum thereto are brscribed by the Central Government in consultation and recommendation of the National Financial Reporting Authority, existing Accounting Standard notified under Companies Act, 1956 shall continue to apply. Consequently, these financial statement have been brpared to comply in all aspect with the accounting standards notified under section 211(3C) of the Companies Act, 1956 (Companies Accounting Standard) Rules, 2006, as amended and other relevant provisions of the Companies Act, 2013.

b) Use of estimates

The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

c) Inventories

i) Cost of Inventories has been computed to include all Cost of Purchases. Cost of Conversion and other costs incurred in bringing the inventories to their brsent location.

ii) Raw materials and components, Stores and Spares are valued at cost. The cost are ascertained using the weighed average method, except incase of slow moving and obsolete material, at lower of cost or estimated realizable value.

iii) Work-in-progress and finished goods are valued at lower of cost or realizable value include appropriate proportion of overheads and where applicable excise duty.

iv) Scrap is valued at estimated realizable value.

v) Goods in transit are stated at actual cost up to the Balance Sheet.

d) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

e) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

f) Fixed Assets, Debrciation and Amortization

i) Fixed assets are valued at cost of acquisition/construction (including expenses /interest on borrowings, directlyattributable to such asset, during construction period). Cost of acquisition is inclusive of freight, insurance, duties net of credits under CENVATscheme, levies and all incidentals attributable to bringing the asset to its working condition.

ii) Debrciation is provided on straight line method at the rates and in the manner specified in Schedule II to the Companies Act, 2013. Some of the Assets are debrciated 100% in the year of acquisition itself depending upon the useful life of the assets as estimated by the management.

Item of value less than Rs. 5,000/- each are debrciated at 100% in the year of acquisition. Intangible assets are amortized on a straight line basis based on useful life of the assets.

iii) Assets subject to impairment, on the asset's revised carrying amount, over its remaining useful life.

g) Revenue recognition

Sales are recognized, net of returns and trade discounts/rebates, incentives on sales on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

h) Other income

i) Income from Interest is recognized in the year in which it is accrued and stated at gross of tax deducted at source.

ii) Rental income from hiring of facilities is accounted in accordance with the terms and conditions agreed with the customer.

iii) Dividend is recognized when the right to receive the dividend is unconditionally established on the Balance Sheet date.

i) Foreign currency transactions and translations

i) Initial recognition

Transactions in foreign currencies are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ii) Conversion

Foreign currency monetary items are reported using the closing rate. Non- monetary items are reported using the exchange rate at the date of transaction.

In respect of transactions covered by forward exchange contracts brmium or discount being the difference between the forward rate and the exchange rate on the date of the transaction is recognized as income or expense over the life of the contract.

iii) Exchange difference

Transactions not covered by forward contracts and outstanding at year end are translated at exchange rates brvailing at the year end and the profit / loss so determined is recognized in the Profit and Loss Account.

j) Export incentives

Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

k) Investments

Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long term investments. Long term investments are stated at cost less provision for diminution other that temporary, if any in the value of such investments. Current investments are valued at lower of cost or market value.

l) Retirement and other Employee benefits

Retirement benefits to employees are provided for by payments to Gratuity, Superannuation and Provident Funds Retirement benefit in the form of provident fund /pension schemes are charged to Profit and Loss account of the year when the contributions to the respective funds are due.

i) Gratuity Plan

The company has taken an insurance policy under the group gratuity scheme with Life Insurance Corporation of India to cover the gratuity liability of the employees of the company. The Liability for gratuity is provided for on the basis of actuarial valuation done at the end of the financial year.

ii) Leave Encashment Liability for leave encashment is provided for on actuarial valuation done at the end of financial year.

m) Borrowing costs

Borrowing costs that are attributable to the acquisition of qualifying assets are capitalized as part of the cost of such assets to the extent they relate to the period till such assets are ready to put to use. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to Profit and Loss account. Borrowing cost comprises of interest and other cost incurred in connection with borrowing of funds.

n) Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit/loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

o) Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognized on timing differences being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years. Deferred tax assets and liabilities are computed on the timing differences applying the tax rates enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against such deferred tax assets can be realized.

Current and deferred tax relating to items directly recognized in equity are recognized in equity and not in the Statement of Profit and Loss.

p) Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their brsent value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

q) Provisions and contingencies

A provision is recognized when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

r) Service tax input credit

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.