Accounting Policies of Royal Cushion Vinyl Products Ltd. Company

Mar 31, 2015

1.1 GENERAL:

The financial statements have been prepared on historical cost basis and in accordance with the applicable provisions of the Companies Act, 2013 and Accounting Standards referred therein.

1.2 REVENUE RECOGNITION:

(i) All revenue and expenses are accounted on accrual basis, except to the extent stated otherwise.

(ii) Export incentives granted by Government or other authorities to encourage exports are accounted on acceptance of the claims by the authorities and/or when there is reasonable certainty that the claims would be accepted.

1.3 USE OF ESTIMATES:

The preparation of financial statements in conformity with the generally accepted accounting principles often requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and reported amount of revenue and expenses during the reporting period. Any differences between the actual result and estimates are recognized in the period in which the results are known / materialised.

1.4 FIXED ASSETS:

Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation less accumulated depreciation and impairment loss if any. All cost including finance cost till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.5 DEPRECIATION:

(i) Depreciation is provided on Straight line method at the rates derived from useful life of assets and in the manner prescribed in Schedule II to the Companies Act, 2013

(ii) Freehold land is not amortised/depreciated.

1.6 INVENTORIES:

(i) Inventories are stated at the lower of cost or net realizable value. Cost is determined on FIFO basis and is reduced by CENVAT & VAT credits available under the respective laws. Net realizable value is determined after reducing the estimated selling cost from the estimated selling price.

(ii) The cost of work in progress and finished goods comprises direct material, direct labour, other direct cost and related production overheads. Excise duty is included in the value of the finished goods.

(iii) Stores and spares, parts and components are valued at cost or below the cost.

1.7 INVESTMENTS:

Long term investments are carried at cost. However, when there is a diminution in value other than temporary, the provision for diminution in value is made and the carrying amount of long term investments is reduced to recognise the decline. Current investments are stated at lower of cost or fair value.

1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:

Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered doubtful of recovery.

1.9 RETIREMENT BENEFITS :

(i) Company's contribution to Provident Fund and Employee's Pension Scheme, 1995 are charged to Profit & Loss statement.

(ii) For Liabilities in respect of staff gratuity, the Company had entered into an agreement with the Life Insurance Corporation of India (LIC) under group gratuity scheme and the periodical payments towards the premium on the policy is charged to the profit and loss statement. The additional liability, if any, in respect of the above arising on retirement are charges to profit and loss accounts based on valuation report.

(iii) The Company provides for the Liability at year end on account of unavailed earned leave as per the actuarial valuation.

1.10 FOREIGN CURRENCY TRANSACTIONS:

(i) A transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction

(ii) Gains or losses upon settlement of the transactions during the year are recognised in the Profit & Loss statement

(iii) Foreign Currency transactions remaining unsettled at the end of the year are revalued at the exchange rate prevailing at the end of the year except disputed liabilities & doubtful debts.

(iv) Gains or Losses arising as a result of the above are adjusted in the Profit & Loss statement

(v) Non monetary foreign currency items are carried at cost.

1.11 BORROWING COSTS:

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, up to the date, the asset is put to use. Other borrowing costs are charged to the Profit & Loss statement in the year in which they are incurred.

1.12 LEASES:

a) Operating Lease:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the Lessor is classified as operating leases. Lease payments under operating leases are recognized as an expenses on accrual basis in accordance with respective lease agreements.

b) Finance Lease:

Assets acquired under leases where Company has substantially all the risks and rewards of ownership are classified as finance lease. Assets acquired under finance lease are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attributable to activities performed by the Company are included as part of the amount recognized as an asset under the lease.

1.13 IMPAIRMENT OF ASSETS :

Where there is an indication that if any Asset is impaired, the recoverable amount, if any, is estimated and the impairment loss is recognised as an expense in the profit and loss statement to the extent carrying amount exceeds recoverable amount impairment loss recognized in earlier accounting period is reversed if there is any improvement in recoverable amount.

1.14 ACCOUNTING FOR TAXES ON INCOME:

Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets on timing differences,being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :

(i) A provision is recognized when there is a present obligation as a result of a past event,it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date & adjusted to reflect the best current estimate.

(ii) Disclosure of contingent liabilities are made when there is a possible obligation or present obligation that may, but probably will not require an outflow of resources.

(iii) Contingent asset is neither recognized nor disclosed in the financial statements.

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Mar 31, 2014

1.1 GENERAL:

The financial statements have been prepared on historical cost basis and in accordance with the applicable provisions of the Companies Act, 1956 and Accounting Standards referred therein.

1.2 REVENUE RECOGNITION:

(i) All revenue and expenses are accounted on accrual basis, except to the extent stated otherwise.

(ii) Export incentives granted by Government or other authorities to encourage exports are accounted on acceptance of the claims by the authorities and/or when there is reasonable certainty that the claims would be accepted.

1.3 USE OF ESTIMATES:

The preparation of financial statements in conformity with the generally accepted accounting principles often requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and reported amount of revenue and expenses during the reporting period. Any differences between the actual result and estimates are recognized in the period in which the results are known/materialised.

1.4 FIXED ASSETS:

Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation less accumulated depreciation and impairment loss if any. All cost including finance cost till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.5 DEPRECIATION :

(i) Depreciation is provided on Straight line method at the rates and in the manner prescribed in Schedule XIV to the Company Act, 1956 except on certain Plant & Machineries which have commenced commercial production during 1992-93 and 1993-94, on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956.

(ii) Free hold land is not amortised/depreciated.

1.6 INVENTORIES:

(i) Inventories are stated at the lower of cost or net realizable value. Cost is determined on FIFO basis. and is reduced by CENVAT & VAT credits available under the respective laws. Net realizable value is determined after reducing the estimated selling cost from the estimated selling price.

(ii) The cost of work in progress and finished goods comprises direct material, direct labour, other direct cost and related production overheads. Excise duty is included in the value of the finished goods.

(iii) Stores and spares, parts and components are valued at cost or below the cost.

1.7 INVESTMENTS:

Long term investments are carried at cost. However, when there is a diminution in value other than temporary, the provision for diminution in value is made and the carrying amount of long term investments is reduced to recognise the decline. Current investments are stated at lower of cost or fair value.

1.8 PROVISION FOR DOUBTFUL DEBTS/ADVANCES:

Provision is made in accounts for doubtful debts/advances which in the opinion of the management are considered doubtful of recovery.

1.9 RETIREMENT BENEFITS:

(i) Company''s contribution to Provident Fund and Employee''s Pension Scheme, 1995 are charged to Profit & Loss statement.

(ii) For Liabilities in respect of staff gratuity, the Company had entered into an agreement with the Life Insurance Corporation of India (LIC) under group gratuity scheme and the periodical payments towards the premium on the policy is charged to the profit and loss statement. The additional liability, if any, in respect of the above arising on retirement and not covered/not funded are paid/provided and accordingly, charged to the profit and loss statement in the year of retirement/payment or otherwise.

(iii) Liability for Leave Encashment is determined based on the number of days of encashable leave to the credit of each employees as on the balance sheet date and provided in accounts on accrual basis.

1.10 FOREIGN CURRENCY TRANSACTIONS:

(i) A transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction.

(ii) Gains or losses upon settlement of the transactions during the year are recognised in the Profit & Loss statement.

(iii) Foreign Currency transactions remaining unsettled at the end of the year are revalued at the exchange rate prevailing at the end of the year except disputed liabilities & doubtful debts.

(iv) Gains or Losses arising as a result of the above are adjusted in the Profit & Loss statement.

(v) Non monetary foreign currency items are carried at cost.

1.11 BORROWING COSTS:

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, up to the date, the asset is put to use. Other borrowing costs are charged to the Profit & Loss statement in the year in which they are incurred.

1.12 LEASES:

a) Operating Lease:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the Lessor is classified as operating leases. Lease payments under operating leases are recognized as an expenses on accrual basis in accordance with respective lease agreements.

b) Finance Lease:

Assets acquired under leases where Company has substantially all the risks and rewards of ownership are classified as finance lease. Assets acquired under finance lease are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attribu-table to activities performed by the Company are included as part of the amount recognized as an asset under the lease.

1.13 IMPAIRMENT OF ASSETS:

Where there is an indication that if any Asset is impaired, the recoverable amount, if any, is estimated and the impairment loss is recognised as an expense in the profit and loss statement to the extent carrying amount exceeds recoverable amount. Impairment loss recognized in earlier accounting period is reversed if there is any improvement in recoverable amount.

1.14 ACCOUNTING FOR TAXES ON INCOME:

Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date & adjusted to reflect the best current estimate.

(ii) Disclosure of contingent liabilities are made when there is a possible obligation or present obligation that may,but probably will not require an outflow of resources.

(iii) Contingent asset is neither recognized nor disclosed in the financial statements.

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Mar 31, 2013

1.1 GENERAL :

The financial statements have been prepared on historical cost basis and in accordance with the applicable provisions of the Companies Act, 1956 and Accounting Standards referred therein.

1.2 REVENUE RECOGNITION:

(i) All revenue and expenses are accounted on accrual basis, except to the extent stated otherwise.

(ii) Export incentives granted by Government or other authorities to encourage exports are accounted on acceptance of the claims by the authorities and/or when there is reasonable certainty that the claims would be accepted.

1.3 USE OF ESTIMATES:

The preparation of financial statements in conformity with the generally accepted accounting principles often requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and reported amount of revenue and expenses during the reporting period. Any differences between the actual result and estimates are recognized in the period in which the results are known / materialised.

1.4 FIXED ASSETS :

(i) Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation less accumulated depreciation and impairment loss if any. All cost including finance cost till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.5 DEPRECIATION:

(i) Depreciation is provided on Straight line method at the rates and in the manner prescribed in Schedule XIV to the Company Act, 1956 except on certain Plant & Machineries which have commenced commercial production during 1992-93 and 1993-94, on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

(ii) Freehold land is not amortised/depreciated.

1.6 INVENTORIES:

(i) Inventories are stated at the lower of cost or net realizable value. Cost is determined on FIFO basis, and is reduced by CENVAT & VAT credits available under the respective laws.Net realizable value is determined after reducing the estimated selling cost from the estimated selling price.

(ii) The cost of work in progress and finished goods comprises direct material, direct labour, other direct cost and related production overheads. Excise duty is included in the value of the finished goods.

(iii) Stores and spares, parts and components are valued at cost or below the cost.

1.7 INVESTMENTS:

Long term investments are carried at cost. However, when there is a diminution in value other than temporary, the provision for diminution in value is made and the carrying amount of long term investments is reduced to recognise the decline. Current investments are stated at lower of cost or fair value.

1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:

Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered doubtful of recovery.

1.9 RETIREMENT BENEFITS :

(i) Company''s contribution to Provident Fund and Employee''s Pension Scheme, 1995 are charged to Profit & Loss statement.

(ii) For Liabilities in respect of staff gratuity, the Company had entered into an agreement with the Life Insurance Corporation of India (LIC) under group gratuity scheme and the periodical payments towards the premium on the policy is charged to the profit and loss statement. The additional liability, if any, in respect of the above arising on retirement and not covered/not funded are paid / provided and accordingly, charged to the profit and loss statement in the year of retirement/payment or otherwise.

(iii) Liability for Leave Encashment is determined based on the number of days of encashable leave to the credit of each employees as on the balance sheet date and provided in accounts on accrual basis.

1.10 FOREIGN CURRENCY TRANSACTIONS:

(i) A transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction

(ii) Gains or losses upon settlement of the transactions during the year are recognised in the Profit & Loss statement

(iii) Foreign Currency transactions remaining unsettled at the end of the year are revalued at the exchange rate prevailing at the end of the year except disputed liabilities & doubtful debts.

(iv) Gains or Losses arising as a result of the above are adjusted in the Profit & Loss statement

(v) Non monetary foreign currency items are carried at cost.

1.11 BORROWING COSTS:

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, up to the date, the asset is put to use. Other borrowing costs are charged to the Profit & Loss statement in the year in which they are incurred.

1.12 LEASES:

a) Operating Lease :

Lease of assets under which all the risk and rewards of ownership are effectively retained by the Lessor is classified as operating leases. Lease payments under operating leases are recognized as an expenses on accrual basis in accordance with respective lease agreements.

b) Finance Lease:

Assets acquired under leases where Company has substantially all the risks and rewards of ownership are classified as finance lease.

Assets acquired under finance lease are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attributable to activities performed by the Company are included as part of the amount recognized as an asset under the lease.

1.13 IMPAIRMENT OF ASSETS:

Where there is an indication that if any Asset is impaired, the recoverable amount, if any, is estimated and the impairment loss is recognised as an expense in the profit and loss statement to the extent carrying amount exceeds recoverable amount. Impairment loss recognized in earlier accounting period is reversed if there is any improvement in recoverable amount.

1.14 ACCOUNTING FOR TAXES ON INCOME:

Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.15 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.Provsion is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date & adjusted to reflect the best current estimate.

(ii) Disclosure of contingent liabilities are made when there is a possible obligation or present obligation that may, but probably will not require an outflow of resources.

(iii) Contingent asset is neither recognized nor disclosed in the financial statements.

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Mar 31, 2012

1.1 GENERAL:

The financial statements have been prepared on historical cost basis and in accordance with the applicable provisions of the Companies Act, 1956 and Accounting Standards referred therein.

1.2 REVENUE RECOGNITION:

(i) All revenue and expenses are accounted on accrual basis, except to the extent stated otherwise.

(ii) Export incentives granted by Government or other authorities to encourage exports are accounted on acceptance of the claims by the authorities and/or when there is reasonable certainty that the claims would be accepted.

1.3 USE OF ESTIMATES:

The preparation of financial statements in conformity with the generally accepted accounting principles often requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities on the date of the financial statements and reported amount of revenue and expenses during the reporting period. Any differences between the actual result and estimates are recognized in the period in which the results are known / materialised.

1.4 FIXED ASSETS:

(i) Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation less accumulated depreciation and impairment loss if any. All cost including finance cost till commencement of commercial production, net changes on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

1.5 DEPRECIATION:

(i) Depreciation is provided on Straight line method at the rates and in the manner prescribed in Schedule XIV to the Company Act, 1956 except on certain Plant & Machineries which have commenced commercial production during 1992-93 and 1993-94, on which depreciation has been provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956.

(ii) Freehold land is not amortised/depreciated.

1.6 INVENTORIES:

(i) Inventories are stated at the lower of cost or net realizable value. Cost is determined on FIFO basis. and is reduced by CENVAT & VAT credits available under the respective laws.Net realizable value is determined after reducing the estimated selling cost from the estimated selling price.

(ii) The cost of work in progress and finished goods comprises direct material, direct labour, other direct cost and related production overheads. Excise duty is included in the value of the finished goods inventory.

(iii) Raw Materials, stores and spares, parts and components are valued at cost or below the cost.

1.7 INVESTMENTS:

Long term investments are carried at cost. However, when there is a diminution in value other than temporary, the provision for diminution in value is made and the carrying amount of long term investments is reduced to recognise the decline.Current investments are stated at lower of cost or fair value.

1.8 PROVISION FOR DOUBTFUL DEBTS / ADVANCES:

Provision is made in accounts for doubtful debts / advances which in the opinion of the management are considered doubtful of recovery.

1.9 RETIREMENT BENEFITS:

(i) Company's contribution to Provident Fund and Employee's Pension Scheme, 1995 are charged to Profit & Loss Account.

(ii) For Liabilities in respect of staff gratuity,the Company had entered into an agreement with the Life Insurance Corporation of India (LIC) under group gratuity scheme and the periodical payments towards the premium on the policy is charged to the profit and loss account.The additional liability, if any, in respect of the above arising on retirement and not covered/not funded are paid / provided and accordingly, charged to the profit and loss account in the year of retirement/payment or otherwise.

(iii) Liability for Leave Encashment is determined based on the number of days of encashable leave to the credit of each employees as on the balance sheet date and provided in accounts on accrual basis.

1.10 FOREIGN CURRENCY TRANSACTIONS:

(i) A transaction in foreign currency is recorded at the exchange rate prevailing on the date of the transaction

(ii) Gains or losses upon settlement of the transactions during the year are recognised in the Profit & Loss Account

(iii) Foreign Currency transactions remaining unsettled at the end of the year are revalued at the exchange rate prevailing at the end of the year except disputed liabilities & doubtful debts.

(iv) Gains or Losses arising as a result of the above are adjusted in the Profit & Loss Account.

(v) Non monetary foreign currency items are carried at cost.

1.11 BORROWING COSTS:

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of the assets, up to the date, the asset is put to use. Other borrowing costs are charged to the Profit & Loss Account in the year in which they are incurred.

1.12 LEASES:

a) Operating Lease:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the Lessor is classified as operating leases.Lease payments under operating leases are recognized as an expenses on accrual basis in accordance with respective lease agreements.

b) Finance Lease:

Assets acquired under leases where Company has substantially all the risks and rewards of ownership are classified as finance lease.

Assets acquired under finance lease are capitalized and corresponding lease liability is recorded at an amount equal to the fair value of the leased asset at the inception of the lease. Initial costs incurred in connection with the specific leasing activities directly attributable to activities performed by the Company are included as part of the amount recognized as an asset under the lease.

1.13 DEFERRED REVENUE EXPENDITURE:

One time significant expenditure, the benefit of which is likely to accrue over a longer period as per the management's judgment is treated as deferred revenue expenditure and written off within a period of not exceeding five years including year of incurrence of expenditure.

1.14 IMPAIRMENT OF ASSETS:

Where there is an indication that if any Asset is impaired, the recoverable amount, if any, is estimated and the impairment loss is recognised as an expense in the profit and loss account to the extent carrying amount exceeds recoverable amount. Impairment loss recognized in earlier accounting period is reversed if there is any improvement in recoverable amount.

1.15 ACCOUNTING FOR TAXES ON INCOME:

Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.16 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

(i) A provision is recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation in respect of which reliable estimate can be made.Provsion is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the year end date. These are reviewed at each year end date & adjusted to reflect the best current estimate.

(ii) Disclosure of contingent liabilities are made when there is a possible obligation or present obligation that may, but probably will not require an outflow of resources.

(iii) Contingent asset is neither recognized nor disclosed in the financial statements.