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Accounting Policies of Rama Paper Mills Ltd. Company

Mar 31, 2015

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements have been prepared under the historical cost conventional basis (except for certain assets which have been revalued) in accordance with the generally accepted accounting principles.

ii) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

(2) USE OF ESTIMATES

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statement and notes thereto. Differences between actual and estimates are recognized in the period in which the results are known/ materialized.

(3) VALUATION OF INVENTORIES

-Inventories are valued at the lower of the cost and estimated net realisable value. The Basis of determining cost for various categories of Inventories are as follows:- -Raw Material, Chemicals, Fuels, Store & Spares and Packing Material. On Weighted Average/ FIFO basis.

-Finished Goods and Work in process includes Raw Material Cost, Cost of conversion and other costs in bringing the inventories to their present location and conditions.

(4) SALES

Sales are inclusive of excise duty.

(5) EXCISE DUTY

Excise Duty has been accounted for on the basis of payment made in respect goods cleared. Amount of Excise Duty deducted from sale is relatable to the sale made during the year. Amount of Cenvat credits in respect of material consumed is deducted from cost of material.

(6) FIXED ASSETS

(i) Fixed Assets are stated at cost. Cost includes installation charges and expenditure during construction period wherever applicable. (ii) All pre-operative expenditure accumulated as capital work in progress and is allocated to the relevant fixed assets on a pro-rata basis.

(7) DEPRECIATION

Depreciation on fixed assets is provided on straight-line method based on useful life of assets prescribed in Schedule II of the Companies Act, 2013 or on technical estimate made by the company.

(8) FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of transactions. Foreign Currency assets and current liabilities outstanding at the Balance Sheet date are translated at the exchange rate prevailing on that the date and the resultant gain or loss is recognized in the Statement of Profit & Loss. In cases where they relate to the acquisition / construction of fixed assets, they are adjusted to the carrying cost of fixed assets.

(9) EMPLOYEE RETIREMENT BENEFIT

i) Retirement benefit in the form of provident fund and superannuation/pension schemes whether in pursuance of any law or otherwise is accounted on accrual basis and charged to the Statement of profit & loss of the year. ii)The provision for gratuity has been made on the basis of formula prescribed for the payment of gratuity act, 1972.

(10) BORROWING COST

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of assets and up to the date, the asset is put to use. Other borrowing costs are charged to the Statement of Profit and Loss in which they are incurred.

(11) TAX ON INCOME

(a) Current Tax

Provision for Income Tax is determined in, accordance with the provisions of Income Tax Act,1961

(b) Deferred Tax

Deferred Tax is recognised on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).

(12) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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 not disclosed in the financial statement.


Mar 31, 2014

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements have been prepared under the historical cost conventional method in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 as adopted consistently by the company.

ii) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

(2) USE OF ESTIMATES

The preparation of financial statements requires management to make certain estimates and assumptions that affect the amount reported in the financial statement and notes thereto. Differences between actual and estimates are recognized in the period in which the results are known/ materialized.

(3) FIXED ASSETS

Fixed Assets are stated at cost. Cost includes installation Charges and allocated expenditure (including Finance Charges) during construction/installation period wherever applicable.

(4) DEPRECIATION

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

(5) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(6) VALUATION OF INVENTORIES

Inventories are valued at the lower of the cost and estimated net realisable value. Cost of inventories is computed on a weighted average/FIFO basis. Finished Goods and Work in process includes Raw Material Cost, Cost of conversion and other costs in bringing the inventories to their present location and conditions.

(7) FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of transactions. Foreign Currency assets and current liabilities outstanding at the Balance Sheet date are translated at the exchange rate prevailing on that the date and the resultant gain or loss is recognized in the Statement of Profit & Loss. In cases where they relate to the acquisition / construction of fixed assets, they are adjusted to the carrying cost of fixed assets.

(8) SALES & EXCISE

(a Sales are inclusive of excise duty.

(b Income from carbon credit is recognised on the delivery of the carbon credits to the customers'' account as evidenced by the receipt of confirmation of execution of delivery instructions.

(c Excise Duty has been accounted for on the basis of both payments made in respect goods cleared as also provision made for the goods lying in the bonded warehouses. Amount of Excise Duty deducted from sale is relatable to the sale made during the year and the amount recognized separately in the Statement of Profit & Loss is relatable to difference between closing stock and opening stock. Amount of Cenvat credits in respect of material consumed is deducted from cost of material.

(9) RETIREMENT BENEFIT

(i) Contribution to Provident Fund is accounted for on accrual basis.

(ii) Gratuity under the Payment of Gratuity Act is provided for on actuarial basis.

(10) BORROWING COST

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of assets and upto the date, the asset is put to use. Other borrowing costs are charged to the Statement of Profit and Loss under the head, they are incurred.

(11) TAX ON INCOME

(a) Current Tax

Provision for Income Tax is determined in, accordance with the provisions of Income Tax Act,1961

(b) Deferred Tax

Deferred Tax is recognised on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).

(12) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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 not disclosed in the financial statement.

(i) Equity Shares :

The Equity Shareholders have:

-The right to receive dividend out of balance of net profits remaining after payment of dividend to the preference shareholders. The dividend proposed by Board of Directors is subject to approval of shareholders in the ensuing general meeting.

-The Company has only one class of Equity Shares having face value of Rs. 10/- each and each shareholder is entitled to one vote per share.

-In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets if any, after preferential payments and to have a share in surplus assets of the Company, proportionate to their individual shareholding in the paid up equity capital of the Company.

(ii) Preference Shares:-

The cumulative redeemable preference shareholders have:-

-The right to receive a fixed cumulative preferential dividend at specified rate on the paid up capital.

-The right to receive arrears of cumulative dividend, if any, whether earned or declared, at the time of redemption of the said shares, and,

-The right in a winding up to have the capital paid up on such shares and the arrears, if any, of the said preferential dividend, whether earned or declared, be paid off in priority to any payment of capital on equity shares. However, it shall not confer the right to any further participation in the profits or assets of the Company.

Terms of Redemption:- The company has preference shares having a par value of Rs. 100 per share. Resolution passed by the shareholders of the company at their annual general meeting held on 08.09.2009 to convert the Preference Shares into Equity Shares could not be given effect in absence of in-principle approval from Bombay Stock Exchange, which has been kept in abeyance due to earlier listing issues yet to resolved in SEBI for conversion of equity share application money into equity share capital.

Reconciliation of number of equity shares outstanding at the beginning and at the end of the year

(1) Term loan from Bank of Baroda is secured against hypothecation of Plant & Machinery, Land & Building (both present & future) of the Company and extension of hypothecation over stock & book debts of the company and also personal guarantee of Directors/Promoters of the Company.

From Bank of Baroda (for term loan of Rs. 3236 Lacs)

At the rate of 11.50% (Previous year 11.00% p.a.). Repayable in 27 quarterly installments of Rs. 115.57 lacs each and last installments of Rs. 115.61 lacs starting from 01.04.2013.

From Bank of Baroda (for FITL of Rs. 471 Lacs)

At the rate of 11.00%.(Previous year 11.00% p.a.). Repayable in 27 quarterly installments of Rs. 16.82 lacs each and last installments of Rs. 16.86 lacs starting from 01.04.2013.

From Bank of Baroda (for FITL of Rs. 388 Lacs)

At the rate of 11.00%.(Previous year 11.00% p.a.). Repayable in 27 quarterly installments of Rs. 13.86 lacs each and last installments of Rs. 13.78 lacs starting from 01.04.2013.

From Bank of Baroda (for WCTL of Rs. 1286 Lacs)

At the rate of 11.00%(Previous year 11.50% p.a.). Repayable in 27 quarterly installments of Rs. 45.93 lacs each and last installments of Rs. 45.89 lacs starting from 01.04.2013.

(2) Vehicles liabilities are secured by hypothecation of respective Vehicles and guaranteed by Directors of the Company.

From ICICI Bank Ltd. (for term loan of Rs 18 Lacs)

At the rate of 12%(Previous year 12.00% p.a.) . Repayable in 36 monthly installments (with interest) of Rs. 59778/- each, starting from 15.06.2011. From Bank of Baroda. (for term loan of Rs 6.40 Lacs)

At the rate of 12.25%(Previous year 12.25% p.a.). Repayable in 60 monthly installments (with interest) of Rs. 10666.67/- each, starting from 01.07.2012.

From Tata Motor Finance (for term loan of Rs. 10.53 Lacs)

At the rate of 12.24%. (Previous Year NIL). Repayable in 23 monthly installments (with interest) of Rs. 52600/- each, starting from 15.02.2014.

From Tata Motor Finance (for term loan of Rs. 10.53 Lacs)

At the rate of 12.24%. (Previous Year NIL). Repayable in 23 monthly installments (with interest) of Rs. 52600/- each, starting from 02.03.2014.

From Tata Motor Finance (for term loan of Rs. 10.53 Lacs)

At the rate of 12.24%. (Previous Year NIL). Repayable in 23 monthly installments (with interest) of Rs. 52600/- each, starting from 15.02.2014.

From Tata Motor Finance (for term loan of Rs. 9.90 Lacs)

At the rate of 12.24%. (Previous Year NIL). Repayable in 18 monthly installments (with interest) of Rs. 59750/- each, starting from 26.04.2013.

(3) Term loan from IDBI Bank is secured against:-

(i) First charge on the Carbon Credits receivables of the sale of Carbon Credits in a manner satisfactory to IDBI Bank. The company to obtain NOC from Bank of Baroda (BoB) and other charge holders, if any, to perfect the security.

(ii) Unconditional and irrevocable personal guarantees of Shri Pramod Agarwal ,Managing Director and Shri Arun Goel, Executive Director of the company.

Working Capital Tacinties Trom bank oT baroda are secured by

(i) Equitable Mortgage of land bearing khasra no. 174, 43, 44/1, 43, 33, 29, 42/2 situated at Village Nagla Islam, Pargana Kiratpur,Tehsil Nazibabad ,Distt. bijnore.

(ii) Hypothecation of Plant & Machinery, stocks and book Debts of the Company all situated at Kiratpur Distt.


Mar 31, 2013

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The fi nancial statements have been prepared under the historical cost conventional method in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 as adopted consistently by the company.

ii) The Company generally follows mercantile system of accounting and recognises signifi cant items of income and expenditure on accrual basis.

(2) USE OF ESTIMATES

The preparation of fi nancial statements requires management to make certain estimates and assumptions that affect the amount reported in the fi nancial statement and notes thereto. Differences between actual and estimates are recognized in the period in which the results are known/ materialized.

(3) FIXED ASSETS

Fixed Assets are stated at cost. Cost includes installation Charges and allocated expenditure (including Finance Charges) during construction/installation period wherever applicable.

(4) DEPRECIATION

Depreciation on fi xed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956.

(5) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profi t and Loss in the year in which an asset is identifi ed as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(6) VALUATION OF INVENTORIES

Inventories are valued at the lower of the cost and estimated net realisable value. Cost of inventories is computed on a weighted average/FIFO basis. Finished Goods and Work in process includes Raw Material Cost, Cost of conversion and other costs in bringing the inventories to their present location and conditions.

(7) FOREIGN CURRENCY TRANSACTIONS

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of transactions. Foreign Currency assets and current liabilities outstanding at the Balance Sheet date are translated at the exchange rate prevailing on that the date and the resultant gain or loss is recognized in the Statement of Profi t & Loss. In cases where they relate to the acquisition / construction of fi xed assets, they are adjusted to the carrying cost of fi xed assets.

(8) SALES & EXCISE

(a) Sales are inclusive of excise duty.

(b) Income from carbon credit is recognised on the delivery of the carbon credits to the customers'' account as evidenced by the receipt of confi rmation of execution of delivery instructions.

(c) Excise Duty has been accounted for on the basis of both payments made in respect goods cleared as also provision made for the goods lying in the bonded warehouses. Amount of Excise Duty deducted from sale is relatable to the sale made during the year and the amount recognized separately in the Statement of Profi t & Loss is relatable to difference between closing stock and opening stock. Amount of Cenvat credits in respect of material consumed is deducted from cost of material.

(9) RETIREMENT BENEFIT

(i) Contribution to Provident Fund is accounted for on accrual basis.

(ii) Gratuity under the Payment of Gratuity Act is provided for on actuarial basis.

(10) BORROWING COST

Borrowing costs directly attributable to the acquisition or construction of fi xed assets are capitalised as part of the cost of assets and upto the date, the asset is put to use. Other borrowing costs are charged to the Statement of Profi t and Loss under the head, they are incurred.

(11) TAX ON INCOME

(a) Current Tax

Provision for Income Tax is determined in, accordance with the provisions of Income Tax Act,1961

(b) Deferred Tax

Deferred Tax is recognised on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).

(12) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outfl ow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized not disclosed in the fi nancial statement.


Mar 31, 2012

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements have been prepared under the historical cost conventional method in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 as adopted consistently by the company.

ii) The Company generally follows mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

(2) USE OF ESTIMATES

The preparation of financial statements requires management to make certain estimates and assumption that affect the amount reported in the financial statement and notes thereto. Differences between actual and estimates are recog- nized in the period in which the results are known/materialized.

(3) FIXED ASSETS

Fixed Assets are stated at cost. Cost includes installation Charges and allocated expenditure (including Finance Charges) during construction/installation period wherever applicable.

(4) DEPRECIATION

Depreciation on fixed assets is provided on straight-line method at the rates and in the manner prescribed in schedule XIV of the Companies Act 1956,

(5) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value, An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(6) VALUATION OF INVENTORIES

Inventories are valued at the lower of the cost and estimated net realisable value, Cost of inventories is computed on a weighted average/FIFO basis, Finished Goods and Work in process includes Raw Material Cost. Cost of conversion and other costs in bringing the inventories to their present location and conditions.

(7) Foreign Currency Transactions

Foreign Currency transactions are accounted at the exchange rates prevailing on the date of transactions. Foreign Currency assets and current liabilities outstanding at the Balance Sheet date are translated at the exchange rate prevailing on that the date and the resultant gain or loss is recognized in the Statement of Profit & Loss. In cases where they relate to the acquisition/construction of fixed assets, they are adjusted to the carrying cost of fixed assets.

(8) SALES & EXCISE

(a) Sales are inclusive of excise duty.

(b) Income from carbon credit is recognised on the delivery of the carbon credits to the customers' account as evidenced by the receipt of confirmation of execution of delivery instructions.

(c) Excise Duty has been accounted for on the basis of both payments made in respect goods cleared as also provision made for the goods lying in the bonded warehouses. Amount of Excise Duty deducted from sale is relatable to the sale made during the year and the amount recognized separately in the Statement of Profit & Loss is relatable to difference between closing stock and opening stock. Amount of Cenvat credits in respect of material consumed is deducted from cost of material.

(9) RETIREMENT BENEFIT

(i) Contribution to Provident Fund is accounted for on accrual basis.

(ii) Gratuity under the Payment of Gratuity Act is provided for on actuarial basis.

(10) BORROWING COST

Borrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of assets and upto the date, the asset is put to use. Other borrowing costs are charged to the Statement of Profit and Loss under the head, they are incurred.

(11) TAX ON INCOME

(a) Current Tax Provision for Income Tax is determined in, accordance with the provisions of Income Tax Act, 1961

(b) Deferred Tax Deferred Tax is recognised on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s)

(12) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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, 2011

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

i) The financial statements have been prepared under the historical cost conventional method in accordance with the generally accepted accounting principles and provisions of the Companies Act, 1956 as adopted consistently by the company.

it) The Company generally follows mercantile system of accounting and recognises significant Items of income and expenditure on accrual basis.

B. FIXED ASSETS

Fixed Assets are stated at coat, Cost includes Installation Charges and allocated expenditure (Including Finance Charges) during construction/installation period wherever applicable.

C. DEPRECIATION

Depreciation on fixed assets is provided on straight-line method at the rates and In the manner prescribed in schedule XIV of the Companies Act 1956.

D. IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The inpayment ioss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

E. VALUATION OF INVENTORIES

Inventories are vaiued at the lower of the cost and estimated net realisable value- Cost of inventories & computed on a weighted average/FIFO basis. Finished Goods and Work in Process includes Raw Material Cost, Cost of conversion and other costs in bringing the inventories to their present location and conditions.

F. SALES

a) Sales are inclusive of excise duty.

b) Income from carbon credit is recognised on the delivery of the carbon credits to the customers' account as evidenced by the receipt of confirmation of execution of delivery instructions.

G. EXCISE DUTY

Excise Duty has been accounted for on the basis of both payments made in respect of goods cleared as also provision made for the goods lying in the bonded warehouses. Amount of Excise Duty deducted from sate is relatable to the sale made during the year and the amount recognized separately in the statement of Profit & loss Account Is relatabte to difference between closing stock and opening stock, Amount of Cenvat credits in respect of material consumed is deducted from cost of material.

H. RETIREMENT BENEFIT

(i) Contribution to Provident Fund is accounted for on accrual basis.

ii) Gratuity under the Payment of Gratuity Act is provided for on actuarial basis.

I. INSURANCE CLAIMS

Insurance Claim is acccounted for on receipt basis.

J. BORROWING COST

Sorrowing costs directly attributable to the acquisition or construction of fixed assets are capitalised as part of the cost of assets and upto the date, the asset is put to use, Other borrowing costs are charged to She profit and loss account under the head, they are incurred.

K. TAX ON INCOME

(a) Current Tax

Provision tor Income Tax is determined in, accordance with the provision of Income Tax Act, 1961.

(b) Deferred Tax

Deferred Tax ts recognised on timing differences being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period(s).

L. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provision involving substantial degree of estimation in measurement are recognized when there is a present obligation as a 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

 
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