Notes to Accounts of Vamshi Rubber Ltd.

Mar 31, 2024

t) Provisions

Provisions for legal claims, volume discounts and returns are recognised when the company has a
present legal or constructive obligation as a result of past event, it is probable that an outflow of
resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure
required to settle the present obligation at the end of the reporting period. The discount rate used
to determine the present value is a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability. The increase in the provisions due to the
passage of time is recognized as interest expense.

u) Employee benefits

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be
settled wholly within 12 months after the end of the period in which the employees render
the related service are recognized in respect of employees’ services up to the end of the
reporting period and are measured at the amounts expected to be paid when the liabilities
are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.

(ii) Other long-term employee benefits obligations

The liabilities for earned leave and sick leave are not expected to be settled wholly within
12 months after the end of the period in which the employees render the related service.
They are therefore measured at the present value of expected future payments to be made
in respect of services provided by employees up to the end of the reporting period using
the projected unit credit method. The benefits are discounted using the market yields at the
end of the reporting period that have terms approximating to the terms of the related
obligations. Remeasurements as a result of the experience adjustments and changes in
actuarial assumptions are recognized in profit or loss.

(iii) Post-employment obligations

The Company operates the following post-employment schemes:

(a) Defined benefit plans such as gratuity; and

(b) Defined contribution plans such as provident fund.

Gratuity obligations

The liability or assets recognized in the balance sheet in respect of gratuity plans is the
present value of the defined benefit obligation at the end of the reporting period less the
fair value of plan assets. The defined benefit obligation is calculated annually by actuaries
using the projected unit credit method.

The present value of the defined benefit obligation is determined by discounting the
estimated future cash outflows by reference to market yields at the end of the reporting
period on government bonds that have terms approximating to the terms of the related
obligation.

The interest cost is calculated by applying the discount rate to the net balance of the
defined benefit obligation and the fair value of plan assets. This cost is included in
employee benefit expense in the statement of profit and loss.

Remeasurements gains and losses arising from experience adjustments and changes in
actuarial assumptions are recognized in the period in which they occur, directly in other
comprehensive income. They are included in retained earnings in the statement of
changes in equity and in the balance sheet.

Changes in the present value of the defined benefit obligation resulting from plan
amendments or curtailments are recognized immediately in profit or loss as past service
cost.

Defined contribution plans

The company pays provident fund contributions to publicly administered funds as per local
regulations. The Company has no further payment obligations once the contributions have
been paid. The contributions are accounted for as defined contribution plans and the
contributions are recognized as employee benefit expense when they are due.

(iv) Bonus plans

The Company recognizes a liability and an expense for bonuses. The Company
recognizes a provision where contractually obliged or where there is a past practice that
has created a constructive obligation.

v) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorized and no
longer at the discretion of the entity, on or before the end of the reporting period but not distributed
at the end of the reporting period.

w) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• The profit attributable to owners of the company

• By the weighted average number of equity shares outstanding during the financial
year, adjusted for bonus elements in equity shares issued during the year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the determination of basic earnings
per share to take into account:

• The after-income tax effect of interest and other financing costs associated with
dilutive potential equity shares, and

• The weighted average number of additional equity shares that would have been
outstanding assuming the conversion of all dilutive potential equity shares.

x) Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest
rupees as per the requirement of Schedule III, unless otherwise stated.

y) Contingent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized because it is not probable that
an outflow of resources will be required to settle the obligation. A contingent liability also arises in
extremely rare cases where there is a liability that cannot be recognized because it cannot be
measured reliably. The Company does not recognize a contingent liability but discloses its
existence in the financial statements.

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the parent by the
weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the parent by the weighted average
number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued
on conversion of all the dilutive potential Equity shares into Equity shares

A. Capital Management

The Company’s objective for capital management is to maximise shareholders value, safeguard business continuity and
support the growth of the Company. The Company determines the capital requirement based on annual operating plans
and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash
flows generated.

B. Financial Risk Management Framework

The Company’s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose
of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include loans,
trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk which may adversely impact the fair value of its
financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate
potential adverse effects on the financial performance of the Company.

Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in
market prices. The value of a financial instrument may change as a result of changes in the foreign currency exchange
rates and interest rates. Future specific market movements cannot be normally predicted with reasonable accuracy.

Foreign currency risk

The company operates internationally and is exposed to foreign exchange risk arising from foreign currency transactions,
primarily with respect to US$. Foreign exchange risk arises from future commercial transactions and recognised assets
and liabilities denominated in a currency that is not the functional currency (INR). The risk is measured through a forecast
of highly probable foreign currency cash flows. The objective of the company is to minimize the volatility of the INR cash
flows of highly probable forecast transactions.

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily
to the Company’s long-term debt obligations with floating interest rates.

Interest rate sensitivity

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans
and borrowings affected with all other variables held constant, the Company’s profit before tax is affected through the
impact on floating rate borrowings, as follows:

Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of
creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of
customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit.
Financial instruments that are subject to concentrations of credit risk principally consist of trade receivables, investments,
cash and cash equivalents, bank deposits and other financial assets.

Significant estimates and judgements
Impairment of financial assets

The impairment provisions for financial assets disclosed above are based on assumptions about risk of default and
expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the
impairment calculation, based on the company’s past history, existing market conditions as well as forward looking
estimates at the end of each reporting period.

Liquidity Risk

Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk
management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The
Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by
continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and
liabilities. The table below summarises the maturity profile of the Company’s financial liabilities based on contractual
undiscounted payments.

Post Employment Benefit Plans

The Company has an unfunded defined benefit gratuity plan. Every employee who has completed five
years or more of service gets a gratuity on departure at 15 days’ salary (last drawn) for every completed
year of service.

The following tables summarize the components of net benefit expenses recognized in the statement of
profit and loss and the amounts recognized in the balance sheet for the respective plans.

Pursuant to the provisions of companies (Appointment and Remuneration of Managerial Personnel)
Rules, 2014, the Company does not have any employee or director, who was in receipt of remuneration
for the year under consideration exceeding one crore two lakh rupees, the information of which could
form part of the Director’s Report for the year ended 31^st March 2024.

NOTE NO. 37

The company has published Quarterly financial results in accordance with the requirements of listing
agreement with stock exchange. The recognition and measurement principle as laid down in the Ind AS
- 34 “Interim Financial Reporting” have been followed in the presentation of these results.

Additional Regulatory Information

• There is no transaction with struck off companies under section 248 or 560 of the Companies Act,
2013.

• The company owns immovable property and the title deeds of those immovable properties are held
in the name of the company.

• There are no proceedings initiated or pending against the company for holding a benami property
under the Benami Transactions (Prohibition) Act, 1988 and the Rules made thereunder.

• The company does not have any charges or satisfactions which is yet to be registered with
Registrar of Companies beyond the statutory period.

• The company has not been declared as willful defaulter by any Bank or Financial Institution or any
other lender.

• The company does not have any subsidiaries accordingly compliance related to the number of
layers prescribed u/s.2(87) does not apply.

• The Company has not advanced or loaned or invested funds to any other person or entity,
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Company (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.

• The Company has not received any fund from any person or entity, including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the
Company shall:

(a) directly or indirectly lend or invest in other persons or entities identified in any manner
whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or

(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

• The Company has not traded or invested in crypto currency or virtual currency during the financial
year.

• There is no Scheme of Arrangement that has been approved in terms of section 230 to 237 of the
Companies Act, 2013.

• There are no transactions that are not recorded in the books of account to be surrendered or
disclosed as income during the year in the tax assessments under the Income Tax Act, 1961.

• The company is not covered under section 135 of the Companies Act, 2013.

The financial statements are presented in Indian Rupee and all values are rounded off to the nearest
rupees in lakhs. Previous year figures have been regrouped or rearranged wherever if thought
necessary in confirmity with the current year groupings.

Notes to the financial statements and statement on accounting policies form an integral part of the
balance sheet and profit and loss statement.

SIGNATURES TO NOTE “1” TO “42”

VIDE OUR REPORT OF EVEN DATE FOR AND ON BEHALF OF THE BOARD

For CSVR& ASSOCIATES

CHARTERED ACCOUNTANTS (M.RAMESH REDDY)

Firm Regn. No.0012121S .... [(?( )£)) CHAIRMAN & CFO

fcfj; %# ^DIN:00025T

(CA. VENKATESH)

PARTNER (R.SURENDRA RJEDDY)

Membership No.239608 MANAGING DIRECTOR & CEO

DIN: 00294240

Place: Hyderabad

Date : 29.05.2024 (AKASH BHAGADIA)

COMPANY SECRETARY
<¦ M.No. A50559

---

Mar 31, 2015

Corporate Information:

The Company was incorporated on 24th November, 1993 in the state of United Andhra Pradesh. The Company is engaged in the business of manufacturing of Tyre Retreading Materials.

NOTE NO. 1

Excise Duty Refund Receivable Balance:

The Company has paid Rs.17.48 lakhs towards the Excise Duty on Finished Products viz., Precured Tread Rubber, Cushion Gum, Vulcanizing solution during the period 1995-96, 1996-97 against the show cause notice issued by the Central Excise Department dispute in tariff classification and computation of aggregate value of clearances. The company has filed petition before the Honb'le High court of Andhra Pradesh and Telangana and pending for final decision. The amount is treated as Excise duty refund receivable account and shown under the head "Other Non Current Assets". The management is confident that the same will be recovered.

NOTE NO. 2

Cash Credit facility taken from State Bank of India, Hyderabad is secured by hypothecation of Stock of Raw Materials, Work-in-Progress, Finished Goods, Stores & Spares, Book Debts, Movable (not being pledge) and Immovable Properties etc., also guaranteed by four Directors of the Company in their personal capacity

NOTE NO. 3

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs. 21,53,924/- towards deferred tax asset the year 2014-15. The major component of deferred tax asset / liability is on account of timing difference in depreciation.

NOTE NO. 4

The company has published Quarterly financial results in accordance with the requirements of listing agreement with stock exchange. The recognition and measurement principle as laid down in the Accounting Standard – 25 "Interim Financial Reporting" have been followed in the presentation of these results.

NOTE NO. 5

Useful life of various assets was revised in accordance with schedule II of the companies Act 2013. The Change in useful life resulted in the completion of useful life of certain fixed assets before 31.03.2014. The carrying amount of the assets after retaining the salvage value was transferred to the retained earnings in the current year. The amount of which is Rs.75,43,175/-

NOTE NO. 6

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paisa has been rounded off to the nearest rupee.

Notes to the financial statements and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2014

NOTE NO. 1

Contingent Liabilities not provided for:

2013-14 2012-13 Rs. (in lakhs) Rs. (in lakhs)

In respect of Bank Guarantees 86.37 20.50

In respect of Disputed Sale Tax Liability 2.86 2.86

In respect of Entry Tax – Bhopal 3.25 3.25

In respect of Corporate Guarantee to M/s. Fortune Tire Tech Limited 982.91 793.80

NOTE NO. 2

Excise Duty Refund Receivable Balance

The company has paid Rs.17.48 lakhs towards the Excise Duty on Finished Products viz., Precured Tread Rubber, Cushion Gum, Vulcanizing solution during the period 1995-96, 1996-97 against the show cause notice issued by the Central Excise Department dispute in tariff classification and computation of aggregate value of clearances. The company has filed petition before the Honb''le High court of Andhra Pradesh and pending the final decision. The amount is treated as Excise duty refund receivable account and shown under the head "Other Non Current Assets". The management is confident that the same will be recovered.

NOTE NO. 3

Cash Credit facility taken from State Bank of India, Hyderabad is secured by hypothecation of Stock of Raw Materials, Work-in-Progress, Finished Goods, Stores & Spares, Book Debts, Movable (not being pledge) and Immovable Properties etc., also guaranteed by four Directors of the Company in their personal capacity

NOTE NO. 4

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs. 10,41,989/- towards deferred tax Asset for the year 2013-14. The major component of deferred tax asset / liability is on account of timing difference in depreciation.

NOTE NO. 5

The company has published Quarterly financial results in accordance with the requirements of listing agreement with stock exchange. The recognition and measurement principle as laid down in the Accounting Standard – 25 "Interim Financial Reporting" have been followed in the presentation of these results.

NOTE NO. 6

Borrowing costs as per the Accounting Standard AS-16 are attributable to the acquisition or construction of qualifying assets are capitalized Rs. NIL as part of the cost of such assets. All other borrowing costs are charged to the profit and loss account Rs. NIL as incurred.

NOTE NO. 7

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements. Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2013

NOTE NO. 1

Excise Duty Refund Receivable Balance

The company has paid Rs.17.48 lakhs towards the Excise Duty on Finished Products viz., Precured Tread Rubber, Cushion Gum, Vulcanizing solution during the period 1995-96, 1996-97 against the show cause notice issued by the Central Excise Department dispute in tariff classification and computation of aggregate value of clearances. The company has filed petition before the Honb''le High court of Andhra Pradesh and pending the final decision. The amount is treated as Excise duty refund receivable account and shown under the head "Other Non Current Assets". The management is confident that the same will be recovered.

NOTE NO. 2

Cash Credit facility taken from State Bank of India, Hyderabad is secured by hypothecation of Stock of Raw Materials, Work-in-Progress, Finished Goods, Stores & Spares, Book Debts etc., also guaranteed by four Directors of the Company in their personal capacity

NOTE NO. 3

In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs. 9,24,981/- towards deferred tax Asset for the year 2012-13. The major component of deferred tax asset / liability is on account of timing difference in depreciation.

NOTE NO. 4

The company has published Quarterly financial results in accordance with the requirements of listing agreement with stock exchange. The recognition and measurement principle as laid down in the Accounting Standard - 25 "Interim Financial Reporting" have been followed in the presentation of these results.

NOTE NO. 5

Borrowing costs as per the Accounting Standard AS-16 are attributable to the acquisition or construction of qualifying assets are capitalized Rs. 1,45,647/- as part of the cost of such assets. All other borrowing costs are charged to the profit and loss account Rs.2,63,068/- as incurred.

NOTE NO. 6

Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements. Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2012

NOTE NO.1 Current Year Previous Year Rs. in Lakhs Rs. in Lakhs

a) Contingent Liabilities not provided for:

a. Bank Guarantees 1.50 1.50

b. Disputed Sales Liability 20.96 20.96

NOTE NO. 2

a) Excise Duty Refund Receivable

The company has paid Rs. 17.48 lakhs towards the Excise Duty on Finished Products viz., Precured Tread Rubber, Cushion Gum, Vulcanising solution during the period 1995-96,1996-97 against the show cause notice issued by the Central Excise Department dispute in tariff classification and computation of aggregate value of clearances. The company has filed petition before the Honb'le High court of Andhra Pradesh and pending for final decision. The amount is treated as Excise duty refund receivable account and shown under the head "other non current assets". The management is confident that the same will be recovered.

NOTE NO. 3

a) SECURED LOANS:

i. LONG TERM LOAN

From State Bank of India, Commercial Branch, Bank Street, Koti, Hyderabad is secured by First Charge by deposit of title deeds of the immovable properties and by creation of equitable mortgage on additional properties and guaranteed by four directors of the company in their personal capacity. ii. SHORT TERM LOANS

From State Bank of India, Hyderabad is secured by hypothecation of Stock of Raw Materials, Work-in- Progress, Finished Goods, Stores & Spares, Book Debts etc., also guaranteed by four Directors of the Company in their personal capacity.

NOTE NO. 4

Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

NOTE N0.5

compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs. 8,19,735/- towards deferred tax liability the year 2011 - 12. The major component of deferred tax asset / liability is on account of timing difference in depreciation.

NOTE N0.6

The company has published Quarterly financial results in accordance with the requirements of listing agreement with stock exchange. The recognition and measurement principle as laid down in the Accounting Standard - 25 "Interim Financial Reporting" have been followed in the presentation of these results,.

NOTE N0.7

Borrowing costs as per the Accounting Standard AS-16 are attributable to the acquisition or construction of qualifying assets are capitalized Rs. 1,79,833/- as part of the cost of such assets. All other borrowing costs are charged to the profit and loss account Rs.11,89,125/- as incurred.

NOTE N0.8

These financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year figures have been regrouped wherever if thought necessary in conformity with the current year groupings. Paise have been rounded off to the nearest rupee.

Notes to the financial statements, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss statement.

---

Mar 31, 2010

Current Year Previous Year

Rs. Rs.

a) Contingent Liabilities not provided for:

Bank Guarantees issued 1,50,000 1,50,000

b) SECURED LOANS:

i. LONG TERM LOAN

From State Bank of India, Commercial Branch, Bank Street, Koti, Hyderabad is secured by First Charge by deposit of title deeds of the immovable properties by creation of equitable mortgage on additional properties and guaranteed by four directors of the company in their personal capacity.

ii. SHORT TERM LOANS

From State Bank of India, Hyderabad is secured by hypothecation of Stock of Raw Materials, Work-in-Progress, Finished Goods, Stores & Spares, Book Debts etc., also guaranteed by four Directors of the Company in their personal capacity.

d) Number of Employees who were in receipt of Rs.24,00,000 or more per annum or Rs.2,00,000 or more per month if employed for a part of the year.

i) @ Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the information available with the Company and the required disclosures are given below:

j) In compliance with the Accounting Standard "AS-22 Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the company has recognized Rs.10,17,488/- towards deferred tax liability for the year 2009-10. The major components of deferred tax asset / liability is on account of timing difference in depreciation.

k) Quarterly financial results are published in accordance with the requirements of listing agreement with stock exchange. The recognition and measurement principle as laid down in the Accounting Standard - 25 "Interim Financial Reporting" have been followed in the presentation of these results.

e) Borrowing costs as per the Accounting Standard AS-16 are attributable to the acquisition or construction of qualifying assets are capitalized Rs. 3, 37,151/- as part of the cost of such assets. All other borrowing costs are charged to the profit and loss account Rs.24,99,451/- as incurred.

f) Paise have been rounded off to the nearest rupee.

g) Previous year figures have been regrouped wherever necessary.

Notes, Schedules, Cash Flow Statement and statement on accounting policies form an integral part of the balance sheet and profit and loss account.