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Accounting Policies of Aurangabad Paper Mills Ltd. Company

Mar 31, 2015

(a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial Statements have been prepared and presented under the historical cost convention, in accordance with the accounting principles generally accepted in India and in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 2013.

(b) USE OF ESTIMATES:

The preparation of Financial Statements in conformity with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities and the disclosure of contingent liabilities on the date of Financial Statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

(c) REVENUE RECOGNITION:

a. Sales are accounted on dispatch of products to customers.

b. Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(d) FIXED ASSETS AND DEPRECIATION:

a) Premium on leasehold land is amortized over the period of lease.

b) Depreciation is provided on Fixed Assets as under:

i) In respect of Buildings and Plant & Machinery - on straight line basis in accordance with Section 133 of the Companies Act, 2013, at the rates specified in Schedule II to the Companies Act, 2013.

ii) In respect of all other Fixed Assets - on written down value basis in accordance with Section 133 of the Companies Act, 2013, at the rates specified in Schedule II to the Companies Act, 2013.

iii) In respect of additions to/deletions from the Fixed Assets on pro-rata basis with reference to the date of addition/deletion of the Asset.

Fixed Assets are stated at cost less Depreciation/Amortization. The Depreciation shown in Fixed Assets Schedule has been provided up to Financial Year ending on 31st March, 2000. In subsequent Financial Years- 1st April, 2000 till 31st March, 2015 no depreciation has been provided.

(e) INVENTORIES:

Stock of stores, spares, packing materials, coal, color and chemicals and raw materials are valued after considering deterioration of quality and damage of raw materials, color, chemicals, stores & spares, packing materials and coal have been written off on estimated basis. Finished goods are valued at lower of cost or net realizable value

(f) BORROWING COSTS:

Interests and other borrowing costs attributable to qualifying Assets are allocated as part of the cost of construction / development of such assets. Such allocation is suspended during extended periods in which active development is interrupted and, no costs are allocated once all such activities are substantially completed. Other borrowing costs are charged to the Profit and Loss Account.

(g) TAXATION:

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for Current Tax is made on the basis of the assessable income at the tax rate applicable to the relevant Assessment Year.

The Deferred Tax Asset and Deferred Tax Liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization as per Accounting Standard 22 " Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India.

(h) IMPAIRMENT OF ASSETS:

The carrying amount of Assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the Assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an Asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate of the recoverable amount.

(I) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a) A provision is recognized, if as a result of past event, the Company has a present legal obligation that can be measured reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b) A disclosure for Contingent Liability is made when there is possible obligation or a present obligation that may, but probably will not, require outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow is remote, no provision or disclosure is made.

c) Contingent Assets are neither recognized nor disclosed in the Financial Statements.

(j) LEASED ASSETS:

Rentals and all other expenses in respect of Leased Assets are treated as revenue expenditure.

(k) TREATMENT OF EXPENDITURE DURING CONSTRUCTION /EXPANSION PERIOD:

a. Expenditure during construction / expansion period are included under capital work in progress and the same is allocated to the respective Fixed Assets on the completion of construction/trial run period.

b. Interest on borrowing for financing the acquisition of new Fixed Assets is capitalized till the completion of the project.


Mar 31, 2014

(a) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The Financial Statements have been prepared and presented under the historical cost convention, in accordance with the accounting principles generally accepted in India and in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 1956 / Companies Act, 2013 ("new Act").The Company has not sold substantial part of the fixed assets during the year so the Balance Sheet has been prepared on going concern concept.

(b) USE OF ESTIMATES:

The preparation of Financial Statements in conformity with the generally accepted accounting principles requires the Management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities and the disclosure of contingent liabilities on the date of Financial Statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

(c) REVENUE RECOGNITION:

a. Sales are accounted on dispatch of products to customers.

b. Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

(d) FIXED ASSETS AND DEPRECIATION:

a) Premium on Leasehold land is amortized over the period of lease.

b) Depreciation is provided on Fixed Assets as under:

i) In respect of Buildings and Plants Machinery-on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956 / Section 133 of the New Act, at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by Notification No.GSR 756(E)dt.16.12.1993 of the Dept. of Company Affairs.

ii) In respect of all other Fixed Assets - on written down value basis in accordance with Section 205(2)(a)of the Companies Act, 1956 / Section 133 of the New Act at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by the Notification.

iii) In respect of additions to/deletions from the Fixed Assets on pro-rata basis with reference to the date of addition / deletion of the Asset.

Fixed Assets are stated at cost less depreciation/amortization. The Depreciation shown in Fixed Assets Schedule has been provided up to Financial Year ending on 31st March, 2000. In subsequent Financial Years- 1st April, 2000 till 31st March, 2014 no depreciation has been provided.

(e) INVENTORIES:

Stock of stores, spares, packing materials, coal, color and Chemicals and raw materials are valued after considering deterioration of quality and damage of raw materials, color & chemicals stores & spares, packing materials and coal have been written off on estimated basis. Finished goods are valued at lower of cost or net realizable value.

(f) BORROWING COSTS:

Interests and other borrowing costs attributable to qualifying assets are allocated as part of the cost of construction / development of such assets. Such allocation is suspended during extended periods in which active development is interrupted and, no costs are allocated once all such activities are substantially complete. Other borrowing costs are charged to the Profit and Loss Account.

(g) TAXATION:

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant Assessment Year. The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization as per Accounting Standard 22 " Accounting for taxes on Income" issued by the Institute of Chartered Accountants of India.

(h) IMPAIRMENT OF ASSETS:

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate of the recoverable amount.

(i) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

a) A provision is recognized, if as a result of past event, the Company has a present legal obligation that can be measured reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b) A disclosure for Contingent Liability is made when there is possible obligation or a present obligation that may, but probably will not, required outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow is remote, no provision or disclosure is made.

c) Contingent assets are neither recognized nor disclosed in the Financial Statements.

(j) LEASED ASSETS:

Rentals and all other expenses in respect of leased assets are treated as revenue expenditure.

(k) TREATMENT OF EXPENDITURE DURING CONSTRUCTION /EXPANSION PERIOD:

a. Expenditure during construction / expansion period are included under capital work in progress and the same is allocated to the respective Fixed Assets on the completion of construction/trial run period.

b. Interest on borrowing for financing the acquisition of new fixed assets is capitalized till the completion of the project.


Mar 31, 2012

1) Basis of Preparation of Financial Statements:

The financial statements have been prepared and presented under the historical cost convention, in accordance with the accounting principles generally accepted in india and in accordance with the applicable Accounting Standards, Guidance Notes and the relevant provisions of the Companies Act, 1956.

2) Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known / materialized.

3) Revenue Recognition:

a) Sales are accounted on dispatch of products to customers.

b) Revenues / Incomes and Costs / Expenditure are generally accounted on accrual, as they are earned or incurred.

4) Fixed Assets and Depreciation:

a) Premium on Leasehold land is amortized over the period of lease.

b) Depreciation is provided on Fixed Assets as under:

i) In respect of Buildings and Plant & Machinery - on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by Notification No. GSR 756(E) dt. 16.12.1993 of the Dept. of Company Affairs.

ii) In respect of all other Fixed Assets - on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956 at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by the notification.

iii) In respect of additions to/deletions from the Fixed Assets on pro-rata basis with reference to the date of addition deletion of the Asset.

Fixed assets are stated at cost less depreciation/ amortization. The depreciation shown in Fixed Assets Schedule has been provided up to Financial Year ending on 31st March, 2000. In subsequent Financial Years - 1st April, 2000 till 31st March, 2012 no depreciation has been provided.

5) Inventories:

Stock of stores, spares, packing materials, coal, color and chemicals and raw materials are valued after considering deterioration of quality and damage of raw materials, color & chemicals stores & spares, packing materials and coal have been written off on estimated basis. Finished goods are valued at lower of cost or net realizable value.

6) Borrowing Costs:

Interests and other borrowing costs attributable to qualifying assets are allocated as part of the cost of construction / development of such assets. Such allocation is suspended during extended periods in which active development is interrupted and, no costs are allocated once all such activities are substantially complete. Other borrowing costs are charged to the Profit and Loss Account.

7) Taxation:

Income tax expense comprises Current Tax and Deferred Tax charge or credit. Provision for current tax is made on the basis of the assessable income at the tax rate applicable to the relevant assessment year.

The deferred tax asset and deferred tax liability is calculated by applying tax rate and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognized, only if there is a virtual certainty of its realization, supported by convincing evidence. At each Balance Sheet date, the carrying amounts of deferred tax assets are reviewed to reassure realization as per Accounting Standard 22 "Accounting for taxes on Income" issued by the institute of chartered accountants of india.

8) Impairment of Assets:

The carrying amount of assets is reviewed at each Balance Sheet date. If there is any indication of impairment based on internal/external factors, i.e. when the carrying amount of the assets exceeds the recoverable amount, an impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed or reduced if there has been a favorable change in the estimate of the recoverable amount.

9) Provisions, Contingent Liabilities and Contingent Assets:

a) A provision is recognized, if as a result of past event, the Company has a present legal obligation that can be measured reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. Where no reliable estimate can be made, a disclosure is made as contingent liability.

b) A disclosure for Contingent Liability is made when there is possible obligation or a present obligation that may, but probably will not, required outflow of resources. Where there is a possible obligation or present obligation where likelihood of outflow is remote, no provision or disclosure is made.

c) Contingent assets are neither recognized nor disclosed in the financial statements.

10) Leased Assets:

Rentals and all other expenses in respect of leased assets are treated as revenue expenditure.

11) Treatment of Expenditere During Construction /Expansion Period:

a) Expenditure during construction / expansion period are included under capital work in progress and the same is allocated to the respective fixed assets on the completion of construction/trial run period.

b) Interest on borrowing for financing the acquisition of new fixed assets is capitalized till the completion of the project.

1. Since the plant was not in operation during the year:

i. No depreciation has been provided on Fixed Assets. (Previous year - NIL).

ii. No provision for Income Tax has been made for the Current Financial Year due to carried forward of losses and accumulated Depreciation and as per the provisions of Section 115JB (Minimum Alternate Tax) of Income Tax Act, 1961 as applicable to Profit of Sick Industrial Company.

iii. Deferred tax liability:

In accordance with Accounting Standard 22 "Accounting for taxes on Income" (AS 22) issued by the Institute of Chartered Accountants of India, deferred tax assets and liability should be recognized for all timing differences in accordance with said standards. However, considering the present financial position and requirement of the Accounting Standard regarding certainty/virtual certainty, the same is not provided for as an asset (net). However, the same will be reassessed at a subsequent Balance Sheet date and will be accounted for in the year of certainty/virtual certainty in accordance with the aforesaid Accounting Standard.


Mar 31, 2010

I. Basis Of Accounting :

(a) The Company follows the Mercantile System of accounting and recognizes income and expenditure on accrual basis.

(b) Financial statements are based on historical cost. The costs are not adjusted to reflect the impact of the changing value in the purchasing power of money.

II: Fixed Assets :

Fixed Assets are stated at cost less depreciation / amortization. The Depreciation shown in Fixed Assests Schedule has been provided upto Financial Year ending on 31st March, 2000. In subsequent Financial Year 1st April, 2000 till 31" March, 2010 no depreciation has been provided.

III. Depreciation:

(a) Premium on Leasehold land is amortised over the period of lease.

(b) Depreciation is provided on Fixed Assets as under:

i) In respect of Buildings and Plant & Machinery - on straight line basis in accordance with Section 205(2)(b) of the Companies Act, 1956, at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by Notification No.GSR 756(E)dt.16.12.1993 of the Dept. of Company Affairs.

ii) In respect of all other Fixed Assets - on written down value basis in accordance with Section 205(2)(a) of the Companies Act, 1956 at the rates specified in Schedule XIV to the Companies Act, 1956, as revised by the notification.

iii) In respect of additions to / deletions from the Fixed Assets on pro-rata basis with reference to the date of addition deletion of the Asset.

IV. Inventories:

Stock of stores, spares, packing materials, coal, colour & Chemicals and raw materials are valued after considering deterioration of quality and damage of raw materials, colour & chemicals stores & spares, packing materials and coal have been written off on estimates basis. Finished goods are valued at lower of cost or net realizable value.

V. Gratuity:

Annual contribution towards the gratuity liability is funded with Life Insurance Corporation of India in accordance with Gratuity Scheme.

VI. Leased Assets :

Rentals and all other expenses in respect of leased assets are treated as revenue expenditure.

VII. Treatment of expenditure during construction / expansion period:

(a) Expenditure during construction / expansion period are included under capital work in progress and the same is allocated to the respective. Fixed Assets on the completion of construction / trial run period.

(b) Interest on borrowing for financing the acquisition of new fixed assets is capitalised till the completion of the project.

VIII. Sales, Raw materials consumed, Actual production, value of Imports, Expenditures on Foreign currency, value of Raw materials, Spares and other consumables and Managerial Remuneration are nil.

 
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