We have audited the accompanying financial statements of M/s. ROYAL CUSHION VINYL PRODUCTS LIMITED ('the
Company'), which comprise the balance sheet as at 31 March, 2025, the statement of profit and loss including other
comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to
the financial statements a summary of significant accounting policies and other explanatory information hereinafter referred
to as "the financial statements").
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial
statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true
and fair view in conformity with the accounting principles generally accepted in India, including Indian Accounting
Standards("Ind AS") specified u/s 133 of the Act, of the state of affairs of the Company as at 31 March, 2025 and its
profit(financial performance including other comprehensive income, changes in equity) and its cash flows and the changes
in equity for the year ended on that date.
Basis for Opinion:
We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10)
of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of
the Financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued
by the Institute of Chartered Accountants of India (ICAI) together with the independence requirements that are relevant to our audit
of the financial statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other ethical
responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
Material Uncertainty Related to Going Concern
We draw your attention to Note 46 of the financial statements, which indicates that the Company's net worth has got eroded
as of March 31, 2025 and the Company's current liabilities exceeded its current assets. Our report is not modified in respect
of this matter. These events and conditions indicated a significant doubt on the Company's ability to continue as a going
concern on the balance sheet date. The Management has plans to meet the financial obligations in the foreseeable future
out of the cash flows from operations by way of execution of pipeline of orders in hand, future business plans funded and
non - fund-based facilities, realization of trade receivables and financial assets, infusion/arrangement of funds by the
Promotors. The Management believes that the Company will continue as a going concern and there by realize its assets and
discharges its liabilities in the normal course of its business. Having regards to the above, the standalone financial statements
for the year ended March 31, 2025 have been prepared on the basis that the Company will continue as a going concern.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined
the matters described below to be the key audit matters to be communicated in our report.
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Key Audit Report
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How was the matter addressed in our audit
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Revenue Recognition
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Our audit procedures, among other things, included the
following:
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Revenue is recognized upon transfer of control of
promised goods to customers in an amount that reflects
the consideration which the Company expects to receive
in exchange for those goods. Revenue is measured based
on transaction price, which is the consideration, adjusted
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• Considered the appropriateness of the Company's
accounting policies regarding revenue recognition
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for rebates, discounts and incentives as also estimated
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•
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Testing controls, automated and manual, around
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sales returns.
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dispatches/deliveries/shipments inventory
reconciliations and process of confirmation of
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Revenue is one of the key profit drivers and therefore,
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receivable balances, testing for cut-offs and
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accounting of revenue is considered as a key audit matter.
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analytical review procedures.
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[Refer Note 2(a) to the financial statements]
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•
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Assessed the disclosures in accordance with the
requirements of Ind AS 115 on "Revenue from
Contracts with Customers".
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Valuation of inventories
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Our audit procedures, among other things, included the
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The Company has complex product manufacturing
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following.
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process and thus, the overhead absorption over each
process is quite complex and more particularly, to have
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•
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Evaluated the appropriateness of the basis applied
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the basis of absorption. The Company has worked out the
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to arrive at the overhead absorption rate;
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overhead absorption cost rate based on the consumption
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•
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Examined the workings of the absorption of over
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of electricity and other utility resources of each process
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heads to arrive at the cost of inventories.
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and apply the same for all other overheads.
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•
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Our audit methodology involves process adopted to
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Due to significance of arriving at the overhead absorption
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ascertain and evaluate the methods used are
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rate for the valuation of inventories, it is considered to be
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reasonable and absorbs overheads in an
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a key audit matter.
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appropriate & logical manner.
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•
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Assessed the disclosures in accordance with the
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[Refer Note 2(d) to the financial statements]
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requirements of Ind AS 2 on "Inventories".
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Government Grant
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Our audit procedures, among other things, included the
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As described in Note 48 of the financial statements, the
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following.
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Company has recognized an amount of ^736.51 Lakhs
under "Other Income” during the quarter ending March
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Obtaining and evaluating the relevant
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31, 2025, relating to government incentives under the
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correspondence and representations that indicate
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"Special Incentive to Pioneer Unit 1990-95" scheme. This
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progress toward receipt of the incentive.
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recognition follows renewed correspondence, meetings,
and deliberations with Government of Gujarat officials,
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•
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Assessing the Company's accounting policy and its
compliance with the applicable financial reporting
framework for government grants/incentives.
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indicating a reasonable certainty of receipt of the pending
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Evaluating management's assessment of
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claims.
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"reasonable certainty" and the basis for recognition.
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The Company had earlier recognized ^1,210.39 Lakhs in
previous years, of which ^909.08 Lakhs was received. Due
to delays and non-receipt of the remaining amount, the
Company had ceased recognition of further income in
earlier periods. However, based on recent developments
and supporting documentation indicating progress in
recovery, the Company has recognized ^736.51 Lakhs in
FY 2024-2025.
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Reviewing historical patterns of incentive receipts
and related documentation.
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We considered this a key audit matter due to:
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• The significant management judgment involved
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in assessing the certainty of receipt;
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• The historical delays in receipt of incentive
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amounts;
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• The materiality of the amount recognized; and
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• The risk of overstatement of income if the
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recognition criteria under the applicable
financial reporting framework are not
appropriately met.
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Information Other than the Financial statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the other information. The other information
comprises the information included in the Management Discussion and Analysis, Board's Report including annexure to
Board's Report and Shareholder's Information, but does not include the financial statements and our auditor's report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated.
Once we receive and read the Director's report, if we conclude that there is a material misstatement therein, we are required
to communicate the matter to those charged with governance under SA 720 'The Auditor's responsibilities Relating to Other
Information'.
Responsibilities of Management and Those Charged with the Governance for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the
Act") with respect to preparation and presentation of these Financial Statements of these financial statements that give a
true and fair view of the financial position, financial performance including other comprehensive income, cash flows
statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (IND AS) prescribed under Section 133 of the Act, read with Rule 7 of the
Companies Indian Accounting Standards) Rules, 2015, as amended.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have
been used for the purpose of preparation of the Financial Statements by the Directors of the Company, as aforesaid.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance.
Auditor's Responsibilities for the Audit of the Financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SA's will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism
throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on
whether the Company has adequate internal financial controls system in place and the operating effectiveness of such
controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on
the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. However, future events or conditions may cause the Company to cease to continue as a
going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it
probable that the economic decisions of a reasonably knowledgeable user of the financial statements may be influenced. We
consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the
results of our work; and (ii) to evaluate the effect of any identified misstatements in the financial statements.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2020, issued by the Central Government of India in term of sub¬
section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A" a statement on the matters specified in
the paragraphs 3 and 4 of the Order, to the extent applicable.
(A) As required by section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books;
(c) The balance sheet, the statement of profit and loss and the statement of cash flow dealt with by this Report are in
agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the Indian Accounting Standards specified under Section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) On the basis of the written representations received from the directors as on 31 March, 2025 taken on record by the
Board of Directors, none of the directors are disqualified as on 31 March, 2025 from being appointed as a director in terms
of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in "Annexure A". Our report expresses an unmodified opinion on
the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting.
(g) With respect to other matter to be included in the Auditor's Report in accordance with the requirement of section 197(16)
of the Act, as amended in our opinion and according to the information and explanations given to us, the remuneration paid
by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given
to us:
i. The Company has disclosed the impact of pending litigation on its financial position in financial statements—Refer Note 39
to the financial statements.
ii. The Company did not have any long-term contract including derivative contract for which there are any material
foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the
Company.
iv. (a) The Management has represented that, to the best of it's knowledge and belief, no funds have been advanced or loaned
or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in
any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, 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 provide any guarantee, security or the
like on behalf of the Ultimate Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either
individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether,
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 provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has
come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as
provided under (a) and (b) above, contain any material misstatement.
(v) The Board of Directors of the Company have not proposed any dividend for the year and therefore provisions of rule
11(f) are not applicable.
(vi) Based on our examination, which included test checks, the Company has used accounting software systems for
maintaining its books of account for the financial year ended March 31, 2025 which have the feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software
systems. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered
with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.
2 As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government in terms of
Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.
For MANEK & ASSOCIATES
Chartered Accountants
Firm's registration number: 0126679W
(MITTUL DALAL)
Mumbai Partner
Dated: 4th June, 2025 Membership number.172676
UDIN :- 25172676BMJLPD4263
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