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Accounting Policies of Vamshi Rubber Ltd. Company

Mar 31, 2015

A) Basis of Preparation of Financial Statements:

i) The financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis, the applicable accounting standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 2013.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported period. Differences between the actual results and estimates are recognised in the period in which the results are known or materialized.

c) Fixed Assets:

Fixed Assets are stated at acquisition cost (net of Cenvat if any) including directly attributable cost bringing them to their respective working conditions for their intended use less accumulated depreciation. All costs, including financing / borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

d) Revenue Recognition:

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

e) Government Grants and Subsidies:

Grants and subsidies from the government are recognized where there is reasonable assurance that (i) the Company will comply with the conditions attached to them and (ii) the grant/subsidy will be received.

f) Depreciation:

Pursuant to the enactment of the Companies Act, 2013 ('the act'), the company has complied with Part C of the Schedule II of the Companies Act, 2013 except the useful lives of Plant & Machinery, Computers & Software and Non-Factory Building. The same were reviewed by the management to reflect periods over which these assets are expected to be used. The details of estimate useful lives of these assets are given below:

g) Inventories:

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

h) Foreign Currency Transactions:

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

Forward contracts for hedging: The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract is amortized as expense over the life of the contract.

i) Investments:

Investments made by the company are primarily of long term nature and are valued at cost. Provision will be made for decline, other than temporary, in the value of investments.

j) 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 intended use. All other borrowing cost is charged to revenue.

k) Employee Benefits:

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to statement of profit and loss account every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

Ex-gratia is at the discretion of the management and is charged to statement of profit and loss account

l) Earnings per Share:

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

m) Taxes on Income

- The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

n) Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2014

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

c) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortized as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

Exgratia: is at the discretion of the management and is charged to statement of profit and loss account..

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

- The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

- Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

l) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statement.


Mar 31, 2013

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognized on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Modvat / cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

C) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

Sale of Precured Tread Rubber

Revenue is recognized when significant risks and rewards of ownership of goods have passed to the buyer and is disclosed including Excise Duty and Sales tax and excluding returns, as applicable.

Interest

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

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortized as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company.

Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

I) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements are prepared under the historical cost convention in accordance with the generally accepted accounting principles in India, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and relevant presentational requirements of the Companies Act, 1956.

ii) Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

iii) All income and expenditure items having material bearing on the financial statements are recognised on accrual basis.

b) FIXED ASSETS

Fixed Assets are stated at acquisition cost (Net of Cenvat, if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated depreciation. All costs, including financing/borrowing cost till commencement of commercial production attributable to the fixed assets have been capitalized.

c) REVENUE RECOGNITION

All revenue income and expenditure are recognized on accrual concept of accounting.

d) DEPRECIATION

Depreciation on fixed assets has been provided on straight-line method at the rates specified in Schedule XIV of the Companies Act, 1956 on pro-rata basis.

e) INVENTORIES

Inventories are valued at lower of cost or net realizable value. Cost is determined using FIFO method.

f) FOREIGN CURRENCY TRANSACTIONS

Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the time of the transaction.

Forward contracts for hedging: The company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts reduces the risk or cost to the company and the company does not use the foreign exchange forward contracts for speculation purposes.

The premium arising at the inception of such a forward exchange contract be amortised as expense over the life of the contract.

g) INVESTMENTS

Investments made by the company are primarily of long term nature and are value at cost. Provision will be made for decline, other than temporary, in the value of investments.

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 intended use. All other borrowing cost are charged to revenue.

i) EMPLOYEE BENEFITS

Gratuity: Liability towards gratuity is provided on the basis of actuarial valuation made by an independent actuary.

Provident Fund: Contributions paid to the prescribed authority are charged to revenue every year.

Leave Encashment: is at the discretion of the management and is charged to revenue in the year of payment.

j) EARNING PER SHARE

The Company reports its Earnings per Share (EPS) in accordance with Accounting Standard 20 issued by the Institute of Chartered Accountants of India.

k) TAXES ON INCOME

The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the company. Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates / laws that have been enacted or substantively enacted by the Balance Sheet date.

l) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.