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Accounting Policies of RCI Industries & Technologies Ltd. Company

Mar 31, 2018

A. Basis of Preparation of Financial Statements

The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 (“the Act”), Companies(Indian Accounting Standards) Rules, 2015, Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act, as applicable.

Upto the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous generally accepted accounting principles (“Previous GAAP”), which includes Accounting Standards (“AS”) notified under the Companies (Accounting Standards) Rules, 2006 and prescribed under Section 133of the Companies Act, 2013, as applicable and the relevant provisions of the Companies Act, 2013 / Companies Act, 1956, as applicable. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1 April 2016. Refer Note 2.31 for the details of reconciliations from Previous GAAP.

B. Use of Estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liability as at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Although such estimates are made on a reasonable and prudent basis taking into account all available information, actual results could differ from these estimates and such differences are recognized in the period in which results are ascertained.

C. Cash Flow Statement

Cash flow statement is prepared in accordance with IndAS-7 using the indirect method to determine cash flow from operating activities.

D. Property, Plant and Equipment

Property, Plant and Equipment are stated at cost net of recoverable taxes and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the assets.

All costs, attributable to the fixed assets are capitalized. Subsequent expenditures related to an item of Tangible Asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Projects under which assets are not ready for their intended use are disclosed under Capital Work-in- Progress.

E. Employee Benefits

The amount paid/ payable on account of short term employee benefits, comprising largely of salaries & wages, short term compensated absences and annual bonus is valued on an undiscounted basis and charged to the profit and loss statement for the year.

Defined contribution plans: Fixed contribution to provident and other funds which are defined contribution schemes are absorbed in the accounts at actual cost to the company.

Defined benefit plans:

Defined benefit costs are categorized as follows:

- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);

- net interest expense or income; and

- re-measurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur.

Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss.

Gratuity: The net present value of the obligation for gratuity benefits as determined on actuarial valuation, conducted using the projected unit credit method, as adjusted for unrecognized past services cost if any, is recognized in the accounts. Actuarial gains and losses are recognized in full in the profit and loss statement for the period in which they occur.

Compensated Absences/ Leave Encashment: The Company has a scheme for compensated absences for employees, the liability other than for short term compensated absences is determined on actuarial valuation using the projected unit credit method. Actuarial gain and losses are recognized in full in the profit and loss statement for the period in which they occur.

F. Leases

Operating Leases: Lease arrangement where the risks and rewards are incidental to ownership of an asset substantially vest with the lessor are recognized as operating leases. Lease rentals under operating leases are recognized in the statement of profit and loss account on a straight-line basis.

Finance Leases: Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases.

The Company’s significant leasing arrangements are in respect of operating leases for premises that are cancelable in nature. The lease rentals under such agreements are recognised in the Statement of Profit and Loss as per the terms of the lease. Rental expense from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases, such increases are recognised in the year in which such benefits accrue.

G. Insurance Claims

Insurance claims are accounted for on the basis of claims admitted/ expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.

H. Investments

Long Term Investments are stated on the principles of historical cost convention. Long term investments made by the company include investment in wholly owned subsidiaries by way of equity and loan.

I. Inventories

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any except in case of by products which are valued at net realizable value. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their present location and condition.

J. Earnings Per Share

The Company presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.

K. Depreciation

Pursuant to Companies Act, 2013, the company has adopted the estimated useful life of the fixed assets on written down value as prescribed under Schedule II of the Companies Act, 2013 for the purpose of computation of depreciation.

L. Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable.

a) Sale of goods is recognised net of returns and trade discounts, when the risk and rewards of ownership are transferred to the customers. Sales include amounts recovered towards excise duty and exclude sales tax/value added tax/ GST. Revenue is also recognised on sale of goods in case where the delivery is kept pending at the instance of the customer, the risk and rewards are transferred and customer takes title and accepts billing as per usual payment terms.

b) Income from services rendered is recognised based on the agreements/arrangements with the concerned parties and when services are rendered.

c) Export benefits are accounted for on accrual basis.

M. Expenditure

Expenditures are account for on accrual basis and provisions are made for all known liabilities and losses.

N. Other Income

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition

O. Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transactions or that approximates the actual rate at the date of the transaction.

Monetary items denominated in foreign currencies at the yearend are restated at year end rates.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

P. Provision for Current and Deferred Tax

Tax expense comprising current tax and deferred tax are recognized in profit and loss account statement for the year.

Current tax is the amount of income tax determined to be payable in respect of taxable income as computed under the tax laws.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The effect on deferred tax assets and liabilities due to change in such assets/ liabilities as at the end of accounting period as compared to that at the beginning to the period due to a change in tax rates are recognized in the income statement for the period.

Q. Provisions, Contingent Liabilities and Contingent Assets

Provision is recognised in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Other contingent liabilities to the extent management is aware is disclosed by way of notes on financial statement.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.


Mar 31, 2016

b. Terms/rights attached to equity shares

1. The company has only one class of equity shares having a par value of Rs, 10 per share Each holder of equity shares is entitled to one vote per share.

2. The Company has not declared or paid any dividend to the shareholders at any time since inception of the company

3. The Company is listed on SME platform of Bombay stock Exchange

As per records the company including is register of shareholders members and other declaration received from shareholders regarding beneficial the above shareholding represents both legal and beneficial ownership of shares

2.7.1. Secured loans from banks

- Working capital loans are secured by hypothecation of present and further inventories and receivables

- Discounting facility from Axis Bank is secured by Bank Guarantee of Union Bank Guarantee is issued by union bank of India in the name of supplier Vedanta limited

2.33 Other notes

i) Previous year figures are regrouped and reclassified wherever necessary to conform to current year’s presentation

(ii) There were no dues outstanding to small medium and micro undertaking to the extent that such parties have been indentified from available information

ii) The company has entered into operating lease agreement for contain premises work and warehouse the lease are for a period of 1-9 years and any and may be renewed for a further period based on mutual agreement of the parties

The lease agreements provide fur an increase in the [east payments by 10-15% every one or two years

Lease payments of Rs, 19.05,311 (LY 8,26,129)have been recognized in the statement of Profit & Loss with respect (o above mentioned operating tease agreements

iv) in the opinion of the management; entrant assets, loans and advances have a value not less than whom is Stated the accounts if realized in the ordinary course of business.

* company has bacons advised that the demand is likely to The either deleted or substantially reduced and accordingly no provision is considered necessary.

"* The company has already recognized the payable amount to Suppliers in their financial statements to whom bank guarantees has been issued against procurement of material on Credit

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