Accounting Policies of Nath Industries Ltd. Company

Mar 31, 2018

A. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

a) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the company are the company''s first Ind-AS financial Statements. The financial statements have been prepared on the accrual basis under the historical cost convention. The Company has adopted all the relevant Indian Accounting Standard & prepared these financial statements to comply in all material respects with the Accounting Standards notified under section 133 of the Company’s Act, 2013, read together with rule-3 of the Companies (Indian Accounting Standard) Rules 2015 and companies (Indian Accounting Standard) amendment rule,2016 issued by Ministry of Corporate Affairs and the adoption was carried out in accordance with Ind-AS 101-First time adoption of Indian Accounting Standard. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under section 133 of the Company Act’ 2013, read with rule 7 of the Company’s (Accounts) Rule 2014 (I-GAAP) which was the previous GAAP.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

Presentation of Financial Statement:

The Balance sheet and the profit and loss account are prepared and presented in the format prescribed in the schedule-III to the companies act, 2013. The cash flow statement has been prepared and presented as per requirement of Ind-AS 7” statement of cash flow”

b) USE OF ESTIMATES:

The preparation of the financial statements in conformity with the Indian generally accepted accounting principles requires making judgments, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosures of contingent liabilities, at the end of the reporting period. Although these estimates are based on the Managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c) TANGIBLE FIXED ASSETS

i. For transition to Ind-AS carrying value of property, plant and equipment under previous GAAP as on 1^st April 17 is regarded as its deemed cost.

ii. Fixed assets are stated at cost of acquisition or construction or revalued amount whichever is applicable, net of accumulated depreciation/amortization and impairment loss.

iii. The cost comprises cost of acquisition, borrowing cost and any attributable cost of bringing the asset to the condition of its intended use. Cost also includes direct expenses incurred up to the date of capitalization/ commissioning. Any trade discounts and rebates are deducted in arriving at the purchase price.

iv. Machinery spares procured along with the plant and machinery or subsequently and whose use is expected to be irregular are capitalized separately, if cost of such spares is known and depreciated fully over the residual useful life of the related plant and machinery. If the cost of such spares is not known particularly when procured along with the mother plant, these are capitalized and depreciated along with the mother plant. The written down value (WDV) of the spares is charged as revenue expenditure in the year in which such spares are consumed. Similarly, the value of such spares procured and consumed in a particular year is charges as revenue expenditure in that year itself.

v. Subsequent expenditure related to an item of fixed asset is added back to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standards of performance.

vi. All the other expenses of existing fixed assets, including day to day repair and maintenance expenditure, are charged to the statement of profit and loss account to the period during which such expenses are incurred.

vii. Replacement of any part of the plant and machinery, which are of capital nature, are capitalized along with the main plant and machinery and cost of the replaced part is written off. In case the cost of the replaced part is not identifiable, the equal value of replacement is deducted from the existing gross block of that asset.

viii. Gains and losses arising from disposal /de-recognition of fixed assets which are carried at cost are recognized in the Statement of Profit and Loss.

ix. Tangible asset not ready for the intended use on the date of Balance Sheet are disclosed in “Capital Work- in- Progress”.

x. In case of revaluation of fixed assets, any revaluation surplus is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the statement of profit and loss, in which case the increase is recognized in the statement of profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.

xi. Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 Lakh as on 31.03.1993 and Rs. 925.77 Lakh as on 31.03.2004. The revaluation in respect of these assets are based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

Expenditure during construction/erection period is included under Capital Work-in-Progress and will be allocated to the respective fixed assets on completion of construction/erection.

Capital Work in Progress has been transferred to the respective assets to the extent the construction/erection of Assets has been completed during the financial year 2017-18.

d) BORROWING COST

Borrowing cost includes interest, fees and other ancillary costs incurred in connection with the arrangement of borrowings. Borrowings cost that are directly attributable to the acquisition of or constructions of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is an asset which necessarily takes substantial period of time to get ready for intended use. All other borrowing cost are recognized in the Statement of Profit and Loss.

e) DEPRECIATION

Leasehold land-amortized over the period of 99 years Depreciation on fixed assets is calculated on a straight line basis using the rates arrived at based on the useful lives estimated by the management. The company has used the following rates to provide depreciation on its fixed assets.

f) Impairment of tangible and intangible assets:

The Company assesses at each Balance Sheet date whether there is any indication than an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life. Impairment losses for continuing operations, including impairment on inventories are recognized on the statement of profit and loss, except for the previously revalued tangible fixed asset, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in revaluation reserve up to the amount of any previous revaluation.

g) Investments

i) Recognition and Measurement

Investments which are readily realizable and intended to be held for not more than a year, from the date of acquisition, are classified at cost.

On initial recognition, all investments are measured at cost. The Cost comprises purchase price and directly attributable acquisition charges such as brokerages, fees and duties. If an investment is acquired, or partly acquired, by the issue of share or other securities, the acquisition cost is the fair market value of the securities issued. If an investment is acquired in exchange for an another asset, the acquisition is determined by the reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of investments. Investments other than long term investments being current investments are valued at cost or fair value whichever is lower, determined on an individual basis.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds, is charged to or credited to the Statement of Profit & Loss.

ii) Presentation and disclosure

Investments, which are readily realizable and intended to be held for not more than one year from balance sheet date, are classified as current investments. All other investments are classified as non-current investments

h) Inventories

i) Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on First in First out Method.

ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value which includes appropriate production overheads. Cost of finished goods includes excise duty.

iii) Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.

iv) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

i) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.

i. Sale of goods

Revenue from sale of goods is recognized when the significant risks and rewards of ownership are passed on to the customer. Sales are accounted net of returns, Sales Tax and freight. Revenue from services is recognized when services are rendered to customers. Dividend Income is accounted when the right to receive is established.

ii. Interest

Revenue from Interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.

j) Government grants and export incentives

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants will be received. Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss as a part of other operating revenues.

k) Foreign currency Transactions

i) Initial Recognition

Foreign currency transaction are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transactions.

ii) Conversion

Foreign currency monetary items are translated using the exchange rate prevailing on the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate on the date of transaction. Non-monetary items which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate on the date when such value was determined.

iii) Exchange Difference

All exchange gains and losses arising out of translation/restatement, are accounted for in the statement of profit and loss.

l) Employee Benefits

i) Defined Contribution Plan

Retirement benefits in the form of provident fund and Employees state Insurance Contribution are defined contribution scheme. The Company has no obligation, other than the contribution payable to these funds/schemes. The Company recognized contribution payable to this fund/scheme as expenditure, when an employee renders the related services. If the contribution payable to these funds/schemes for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the funds/schemes are recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment or a cash refund.

ii) Defined Benefit Plan:

The gratuity liability is determined on the basis of actuarial valuation as at year end. Provision in respect of leave encasement is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India.

iii) Leave Encashment

The company provides for leave encashment liability of its employees who are eligible for encashment of accumulated leave based on actuarial valuation of the leave encashment liability of the balance sheet date, carried out date and independent actuary.

m) Taxes on Income

i) Current Tax: Current Tax is determined as the amount of tax payable on taxable income for the years as per the provisions of Income Tax Act. 1961.

ii) Deferred Tax: Deferred Tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted on the reporting date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that the sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

n) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the period. The weighted average number of equity share outstanding during the period is adjusted for events such as bonus issues, bonus elements in a right issue, shares split and reverse share split (consolidation of share) that have changed the number of equity share outstanding, without a corresponding changes in resources.

o) Provisions and Contingent liabilities

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimates can be made on the amount of the obligation. Provisions are not discounted to their present value are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of once 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 disclose its existence in the financial statements.

p Cash and Cash equivalents

Cash comprises cash in hand and demand deposit with banks. Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and cash in hand and short-term investments with an original maturity of three months or less.

q) Loans Repayable on demand or on due date from State Bank of India are Secured Against Hypothecation of present & future stock of raw materials, Stock in process, finished goods, Stores & spare parts Book debts & Land

r) Segment Reporting

i) Primary Segment

The company is engaged in manufacturing of Paper & Labsa and Trading Activity. Management has identified reportable primary Segment & Geographic secondary Segment in accordance with Accounting Standard 108 issued by the Institute of Chartered Accountants of India. Revenue & Expenses directly attributable to segments are reported under each reportable segment. Expenses which are not directly identifiable to a specific segment have been allocated on the basis of associated revenue of the segment and manpower efforts. All other expenses which are not attributable or allocable to segment have been disclosed as un allocable expenses. Assets and liabilities that are directly attributable or allocable to segments are disclosed under each reportable segment. All other assets and liabilities are disclosed as un allocable.

ii) Secondary Segment

Geographical Revenue is allocated based on the location of the customer.

The company produces and sales, its products in India & also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS 108 regarding segment reporting secondary segment information on geographical segment is considered on the basis of revenue generated from Domestic & Export market.

t) Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Act, 2006:

The Company has asked for confirmations from suppliers and service providers who have registered themselves under the Micro Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) However no confirmations or information was received or available with the Company as on date of signing of final accounts, Hence information about the balance of Principal amount and the Interest due thereon remaining unpaid to supplier registered under Micro, Small and Medium Enterprises as defined under the MSMED Act, 2006 is not available:

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Mar 31, 2015

A) BASIS OF ACCOUNTING AND PREPARATION OF FINANCIAL STATEMENTS:

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared theses financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014.The financial statements have been prepared on the accrual basis under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b) USE OF ESTIMATES:

The preparation of the financial statements in conformity with the Indian generally accepted accounting principles requires making judgments, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities and the disclosures of contingent liabilities, at the end of the reporting period. Although these estimates are based on the Managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c) TANGIBLE FIXED ASSETS

i. Fixed assets are stated at cost of acquisition or construction or revalued amount whichever is applicable, net of accumulated depreciation/amortization and impairment loss.

ii. The cost comprises cost of acquisition, borrowing cost and any attributable cost of bringing the asset to the condition of its intended use. Cost also includes direct expenses incurred up to the date of capitalization/ commissioning. Any trade discounts and rebates are deducted in arriving at the purchase price.

iii. Machinery spares procured along with the plant and machinery or subsequently and whose use is expected to be irregular are capitalized separately, if cost of such spares is known and depreciated fully over the residual useful life of the related plant and machinery. If the cost of such spares is not known particularly when procured along with the mother plant, these are capitalized and depreciated along with the mother plant. The written down value (WDV) of the spares is charged as revenue expenditure in the year in which such spares are consumed. Similarly, the value of such spares procured and consumed in a particular year is charges as revenue expenditure in that year itself.

iv. Subsequent expenditure related to an item of fixed asset is added back to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standards of performance.

v. All the other expenses of existing fixed assets, including day to day repair and maintenance expenditure, are charged to the statement of profit and loss account to the period during which such expenses are incurred.

vi. Replacement of any part of the plant and machinery, which are of capital nature, are capitalized along with the main plant and machinery and cost of the replaced part is written off. In case the cost of the replaced part is not identifiable, the equal value of replacement is deducted from the existing gross block of that asset.

vii. Gains and losses arising from disposal /derecognition of fixed assets which are carried at cost are recognized in the Statement of Profit and Loss.

viii. Tangible asset not ready for the intended use on the date of Balance Sheet are disclosed in "Capital Work- in- Progress".

ix. In case of revaluation of fixed assets, any revaluation surplus is credited to the revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognized in the statement of profit and loss, in which case the increase is recognized in the statement of profit and loss. A revaluation deficit is recognized in the statement of profit and loss, except to the extent that it offsets an existing surplus on the same asset recognized in the asset revaluation reserve.

x. Land, Buildings, Plant & Machinery and Furniture & Fixture were revalued for Rs. 1255.54 lacs as on 31.03.1993 and Rs. 925.77 lacs as on 31.03.2004. The revaluation in respect of these assets are based on current replacement cost by the Approved Valuer appointed for the purpose. As a result, the increased book value of such assets as above has been transferred to Revaluation Reserve in respective year.

Capital Work in Progress has been transferred to the respective assets to the extent the construction/erection of Assets has been completed during the financial year 2014-15.

d) BORROWING COST

Borrowing cost includes interest, fees and other ancillary costs incurred in connection with the arrangement of borrowings. Borrowings cost that are directly attributable to the acquisition of or constructions of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is an asset which necessarily takes substantial period of time to get ready for intended use. All other borrowing cost are recognized in the Statement of Profit and Loss.

e) DEPRECIATION

Leasehold land-amortized over the period of 99 years

Depreciation on fixed assets is calculated on a straight line basis using the rates arrived at based on the useful lives estimated by the management. The company has used the following rates to provide depreciation on its fixed assets.

f) Impairment of tangible and intangible assets :

The Company assesses at each Balance Sheet date whether there is any indication than an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Impairment losses for continuing operations, including impairment on inventories are recognized on the statement of profit and loss, except for the previously revalued tangible fixed asset, where the revaluation was taken to revaluation reserve. In this case, the impairment is also recognized in revaluation reserve up to the amount of any previous revaluation.

g) Investments

i) Recognition and Measurement

Investments which are readily realizable and intended to be held for not more than a year, from the date of acquisition, are classified at cost.

On initial recognition, all investments are measured at cost. The Cost comprises purchase price and directly attributable acquisition charges such as brokerages, fees and duties. If an investment is acquired, or partly acquired, by the issue of share or other securities, the acquisition cost is the fair market value of the securities issued. If an investment is acquired in exchange for an another asset, the acquisition is determined by the reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

However, provision for diminution in value of investments is made to recognize a decline, other than temporary, in the value of investments. Investments other than long term investments being current investments are valued at cost or fair value whichever is lower, determined on an individual basis.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds, is charged to or credited to the Statement of Profit & Loss.

ii) Presentation and disclosure

Investments, which are readily realizable and intended to be held for not more than one year from balance sheet date, are classified as current investments. All other investments are classified as non-current investments

h) Inventories

i) Raw materials, components, stores and spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on First in First Out Method

ii) Work-in-progress and finished goods are valued at lower of cost and net realizable value which includes appropriate production overheads. Cost of finished goods includes excise duty.

iii) Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on a weighted average basis.

iv) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

j) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and revenue can be reliably measured The following specific recognition criteria must also be met before revenue is recognized.

i. Sale of goods

Revenue from sale of goods is recognized when the significant risks and rewards of ownership are passed on to the customer. Sales are accounted net of Excise Duty, returns, Sales Tax and freight. Revenue from services is recognized when services are rendered to customers. Dividend Income is accounted when the right to receive is established.

ii. Interest

Revenue from Interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

k) Government grants and export incentives

Government grants are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and the grants will be received. Government grants related to revenue are recognized on a systematic basis in the Statement of Profit and Loss as a part of other operating revenues.

l) Foreign currency Transactions

i) Initial Recognition

Foreign currency transaction are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency on the date of the transactions.

ii) Conversion

Foreign currency monetary items are translated using the exchange rate prevailing on the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate on the date of transaction. Non-monetary items which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate on the date when such value was determined.

iii) Exchange Difference

All exchange gains and losses arising out of translation/restatement, are accounted for in the statement of profit and loss.

Earnings in Foreign Exchange :

Receipt - Against Export Goods Rs. 204.89 Lacs

Expenditure in foreign currency :

Purchase of Imported Raw Materials Rs. 3012.09 Lacs Purchase of Imported Stores Rs. 1.11 Lacs

m) Employee Benefits

i) Defined Contribution Plan

Retirement benefits in the form of provident fund and Employees state Insurance Contribution are defined contribution scheme. The Company has no obligation, other than the contribution payable to these funds/schemes. The Company recognized contribution payable to this fund/scheme as expenditure, when an employee renders the related services. If the contribution payable to these funds/schemes for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the funds/schemes are recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre payment will lead to, for example, a reduction in future payment or a cash refund.

ii) Defined Benefit Plan:

The gratuity liability is determined on the basis of actuarial valuation as at year end. Provision in respect of leave encasement is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India. n) Taxes on Income

i) Current Tax: Current Tax is determined as the amount of tax payable on taxable income for the years as per the provisions

of Income Tax Act. 1961.

ii) Deferred Tax: Deferred Tax is recognized on timing difference between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted on the reporting date. Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty that the sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.

o) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity share outstanding during the period. The weighted average number of equity share outstanding during the period is adjusted for events such as bonus issues, bonus elements in a right issue, shares split and reverse share split (consolidation of share) that have changed the number of equity share outstanding, without a corresponding changes in resources.

p) Provisions and Contingent liabilities

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and reliable estimates can be made on the amount of the obligation. Provisions are not discounted to their present value are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of once 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 disclose its existence in the financial statements.

q) Cash and Cash equivalents

Cash comprises cash in hand and demand deposit with banks. Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and cash in hand and short-term investments with an original maturity of three months or less.

r) Segment reporting

The Company has identified one reportable business segment i.e Manufacturing and Trading of Paper in this year. The accounting policies adopted for segment reporting are in conformity with the accounting policies of the company. Geographical reportable segment.

The company produces and sales, its products in India & also Export the same directly or indirectly to overseas countries. The overseas sales operations are managed by its office located in India. For the purpose of AS 17 regarding segment reporting secondary segment formation on geographical segment is considered on the basis of revenue generated from Domestic & Export market.

s) Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

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Mar 31, 2014

I. BASIS OF ACCOUNTING: The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with Accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India, under the Companies (Accounting Standards) rules 2006 and relevant provisions of the Companies Act, 1956.

ii. USE OF ESTIMATES: The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and the disclosures relating to contingent assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates.

iii. INVENTORIES: Inventories are valued at the lower of cost (net of cenvat where applicable) and net realizable value. Cost includes cost of purchase, cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. The method of determination of cost of various categories of inventory are as follows:

a) Raw Materials and Chemicals: - On First in First Out Method.

b) Finished goods and Work in Progress:- Weighted average cost of Production, which includes appropriate production overheads or Net Realizable Value which ever is lower.

c) Stores & Spare and packaging material: - Weighted average method.

iv. FIXED ASSETS AND DEPRECIATION: Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any. All costs including finance cost till commencement of commercial production attributable to the fixed assets are capitalized. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances" under Long Term Loans and Advances. Cost of fixed assets not ready to use before such date are disclosed under "Capital Work- in- Progress".

Fixed assets are depreciated pro rata to the period of use, based on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

No Depreciation has been charged on the assets, which have been fully depreciated. Depreciation on the revalued portion of the fixed assets is charged to Revaluation Reserve Account.

v. IMPAIRMENT OF ASSETS: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the profit & loss account when an asset is identified as impaired. Reversal of impairment loss recognized in prior periods is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the assets over its remaining useful life.

vi. RESEARCH AND DEVELOPMENT: Expenditure incurred on research and development activities is expensed. R & D expenses with respect to Fixed assets is capitalized.

vii. REVENUE RECOGNITION: Revenue is recognized only when it can be readily measured and it is reasonable to expect ultimate collection. Sales are accounted net of Excise Duty, returns, Sales Tax and freight. Revenue from services is recognized when services are services are rendered to customers. Interest income is recognized using time proportion method except interest received from G.E.B. Deposit which is recognized on receipt basis. Dividend Income is accounted when the right to receive is established.

viii. FOREIGN EXCHANGE TRANSACTION: Transactions in foreign currencies are accounted at the exchange rates prevailing on the date of the transactions and the realized exchange loss/gain are dealt with in the Profit & Loss Account. Monetary assets and liabilities denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and the exchange/gain loss is suitably dealt with in the Profit & Loss Account.

ix. INVESTMENTS: Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost of acquisition. Provision for diminution is made when such diminution is considered other than temporary in nature. Valuation is determined on the basis of each category of investments. There are no investments held by the company as on 31st March 2014

x. EMPLOYEE BENEFITS :

DEFINED CONTRIBUTION PLAN: Fixed contributions to Provident Fund and Employees State Insurance are recognized in the accounts at actual cost to the company.

DEFINED BENEFIT PLAN: The gratuity liability is determined on the basis of actuarial valuation as at year end. Provision in respect of leave encashment is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India.

xi. TAXATION :

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Provisions of MAT u/s 115 JB are not applicable to the company as per the appealate order by the Department in past years.

b. Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

xii. SEGMENT REPORTING :

(a) The accounting policies adopted for segment reporting are in line with the accounting policies of the company.

(b) Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise a whole and are not allocable to segments on a reasonable basis, have been included under unallocated expenses.

xiii. PROVISIONS, CONTINGENT LIABLITIES AND CONTINGENT ASSETS :

Provisions 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 outflow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2013

I. BASIS OF ACCOUNTING: The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with Accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India, under the Companies (Accounting Standards) rules 2006 and relevant provisions of the Companies Act, 1956.

ii. USE OF ESTIMATES: The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and the disclosures relating to contingent assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates.

iii. INVENTORIES: Inventories are valued at the lower of cost (net of cenvat where applicable) and net realizable value. Cost includes cost of purchase, cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. The method of determination of cost of various categories of inventory are as follows:

a) Raw Materials and Chemicals: - On First in First Out Method. b Finished goods and Work in Progress:- Weighted average cost of Production, which includes appropriate production overheads or Net Realizable Value which ever is lower. c) Stores & Spare and packaging material :- Weighted average method.

iv. FIXED ASSETS AND DEPRECIATION: Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any. All costs including finance cost till commencement of commercial production attributable to the fixed assets are capitalized Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances” under Long Term Loans and Advances. Cost of fixed assets not ready to use before such date are disclosed under "Capital Work- in- Progress”.

Fixed assets are depreciated pro rata to the period of use, based on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

No Depreciation has been charged on the assets, which have been fully depreciated. Depreciation on the revalued portion of the fixed assets is charged to Revaluation Reserve Account.

v. IMPAIRMENT OF ASSETS: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the profit & loss account when an asset is identified as impaired. Reversal of impairment loss recognized in prior periods is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the assets over its remaining useful life.

vi. RESEARCH AND DEVELOPMENT: Expenditure incurred on research and development activities is expensed. R & D expenses with respect to Fixed assets is capitalized.

vii. REVENUE RECOGNITION: Revenue is recognized only when it can be readily measured and it is reasonable to expect ultimate collection. Sales are accounted net of Excise Duty, returns, Sales Tax and freight. Revenue from services is recognized when services are rendered to customers. Interest income is recognized using timeproportion method except interest received from G.E.B. Deposit which is recognized on receipt basis Dividend Income is accounted when the right to receive is established.

viii. FOREIGN EXCHANGE TRANSACTION: Transactions in foreign currencies are accounted at the exchange rates prevailing on the date of the transactions and the realized exchange loss/gain are dealt with in the Profit & Loss Account. Monetary assets and liabilities denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and the exchange/gain loss is suitably dealt with in the Profit & Loss Account.

ix. INVESTMENTS: Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost of acquisition. Provision for diminution is made when such diminution is considered other than temporary in nature. Valuation is determined on the basis of each category of investments. There are no investments held by the company as on 31st March 2013

x. EMPLOYEE BENEFITS :

DEFINED CONTRIBUTION PLAN: Fixed contributions to Provident Fund and Employees State Insurance are recognized in the accounts at actual cost to the company.

DEFINED BENEFIT PLAN: The gratuity liability is determined on the basis of actuarial valuation as at year end. Provision in respect of leave encashment is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India.

xi. TAXATION :

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961. Provisions of MAT u/s 115 JB are not applicable to the company as per the appealate order by the Department in past years.

b. Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

xii. SEGMENT REPORTING :

(a) The accounting policies adopted for segment reporting are in line with the accounting policies of the company.

(b) Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise a whole and are not allocable to segments on a reasonable basis, have been included under unallocated expenses.

xiii. PROVISIONS, CONTINGENT LIABLITIES AND CONTINGENT ASSETS :

Provisions 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 outflow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2012

I. BASIS OF ACCOUNTING: The financial statements are prepared under the historical cost convention on the accrual basis of accounting and in accordance with Accounting principles generally accepted in India and comply with the accounting standards notified by the Central Government of India, under the Companies (Accounting Standards) rules 2006 and relevant provisions of the Companies Act, 1956.

ii. USE OF ESTIMATES: The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities and the disclosures relating to contingent assets and liabilities as on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates.

iii. INVENTORIES: Inventories are valued at the lower of cost (net of cenvat where applicable) and net realizable value. Cost includes cost of purchase, cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. The method of determination of cost of various categories of inventory are as follows:

a) Raw Materials and Chemicals: – On First in First Out Method.

b) Finished goods and Work in Progress:- Weighted average cost of Production, which includes appropriate production overheads or Net Realizable Value which ever is lower.

c) Stores & Spare and packaging material :- Weighted average method.

iv. FIXED ASSETS AND DEPRECIATION: Fixed assets are stated at cost net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation and impairment loss, if any. All costs including finance cost till commencement of commercial production attributable to the fixed assets are capitalized. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances" under Long Term Loans and Advances. Cost of fixed assets not ready to use before such date are disclosed under "Capital Work-in-Progress".

Fixed assets are depreciated pro rata to the period of use, based on straight line method at the rates prescribed under Schedule XIV of the Companies Act, 1956.

No Depreciation has been charged on the assets, which have been fully depreciated. Depreciation on the revalued portion of the fixed assets is charged to Revaluation Reserve Account.

v. IMPAIRMENT OF ASSETS: An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the profit & loss account when an asset is identified as impaired. Reversal of impairment loss recognized in prior periods is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the assets over its remaining useful life.

vi. RESEARCH AND DEVELOPMENT: Revenue expenditure incurred on research and development activities is expensed. Fixed assets, relating to research and development are capitalized and depreciation provided there on.

vii. REVENUE RECOGNITION: Revenue is recognized only when it can be readily measured and it is reasonable to expect ultimate collection. Sales are accounted net of Excise Duty, returns, Sales Tax and freight. Revenue from services is recognized when services are services are rendered to customers. Interest income is recognized using time proportion method except interest received from G.E.B. Deposit which is recognized on receipt basis. Dividend Income is accounted when the right to receive is established.

viii.FOREIGN EXCHANGE TRANSACTION: Transactions in foreign currencies are accounted at the exchange rates prevailing on the date of the transactions and the realized exchange loss/gain are dealt with in the Profit & Loss Account. Monetary assets and liabilities denominated in foreign currency are restated at the rates of exchange as on the Balance Sheet date and the exchange/gain loss is suitably dealt with in the Profit & Loss Account.

ix. INVESTMENTS: Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current Investments are stated at lower of cost and fair value. Long term investments are stated at cost of acquisition. Provision for diminution is made when such diminution is considered other than temporary in nature. Valuation is determined on the basis of each category of investments.

x. EMPLOYEE BENEFITS :

DEFINED CONTRIBUTION PLAN: Fixed contributions to Provident Fund and Employees State Insurance are recognized in the accounts at actual cost to the company.

DEFINED BENEFIT PLAN: The gratuity liability is determined on the basis of actuarial valuation as at year end. Provision in respect of leave encashment is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India.

xi. TAXATION :

a. Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

b. Deferred tax is calculated at the rates and laws that have been enacted or substantively enacted as of the Balance Sheet date and is recognized on timing difference that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets, subject to consideration of prudence, are recognized and carried forward only to the extent that there is a virtual certainty that the asset will be realized in future.

xii. SEGMENT REPORTING :

(a) The accounting policies adopted for segment reporting are in line with the accounting policies of the company.

(b) Revenue and expenses are identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the enterprise a whole and are not allocable to segments on a reasonable basis, have been included under unallocated expenses.

xiii. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provisions 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 outflow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2010

I. BASIS OF PREPARATION OF FINANCIAL STATEMENT

The financial statements have been prepared primarily on the historical cost convention and in accordance with the mandatory accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Company Act, 1956

II. METHOD OF ACCOUNTING:

Accounts are maintained on accrual basis. Claims / Refunds not ascertainable with reasonable certainty are accounted for on settlement basis.

III. FIXED ASSETS:

Fixed assets are shown at cost adjusted by revaluation of certain assets less depreciation. Cost comprises the purchase price and other attributable expenses and net of Cenvat / Value Added Tax.

IV. DEPRECIATION ON FIXED ASSETS:

(a) The Company follows the straight-line method of charging depreciation on all its fixed assets. The depreciation has been provided in the manner and the rates prescribed in Schedule XIV to the

Companies Act, 1956 on all the assets.

(b) No Depreciation has been charged on the assets, which have been fully depreciated.

(c) Depreciation on the revalued portion of the fixed assets is charged to Revaluation Reserve Account.

V. INVENTORIES :

Inventories are valued at lower of cost and net realizable value. The method of arriving at cost of various categories of inventories is as below:

(a) Raw Material - First in First out method.

(b) Stores & Spares and Packaging Material - Weighted Average Method.

(c) Finished goods and work-in progress - Weighted average cost of production which comprises direct material costs and appropriate overheads.

VI. SUNDRY DEBTORS, CREDITORS AND ADVANCES:

Specific debts and advances identified as irrecoverable or doubtful are written off or provided for respectively.

VII. FOREIGN EXCHANGE TRANSACTIONS :

Transactions made during the year in foreign currency are recorded at the exchange rate prevailing at the time of transaction. Assets and Liabilities related to foreign currency transactions remaining unsettled at the year end are translated at the contract rates, when covered by forward cover contracts and at year end rate in other cases. Realised gains and losses on foreign exchange transactions other than those relating to fixed assets are recognized in the profit and loss account. Gain / loss on transaction of long term liabilities incurred to acquire fixed assets is treated as an adjustment to the carrying cost of fixed assets

VIII.REVENUE RECOGNITION :

(a) Sale of goods is recognized at the point of dispatch of finished goods to customers. Sales include amount recovered towards excise duty.

(b) Income from service is recognized at the time of rendering the services.

IX. IMPAIRMENT OF ASSETS :

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the profit & loss account when an asset is identified as impaired. Reversal of impairment loss recognized in prior periods is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased. Post impairment, depreciation is provided on the revised carrying value of the assets over its remaining useful life.

X. BORROWING COST :

Borrowing cost is charged to Profit & Loss Account except cost of borrowing for acquisition of qualifying assets which is capitalized till the date of commercial use of asset.

XI. LEASES :

Lease rentals in respect of assets given on finance lease are accounted for in reference to lease terms.

XII. INTANGIBLE ASSETS :

Intangible Assets are being recognized if the future economic benefits attributable to the assets are expected to flow to the company and the cost of the assets can be measured reliably

XIII.RETIREMENT BENEFITS :

Retirement benefits to employees are provided for by means of gratuity, leave encashment and provident fund.

(a) The gratuity liability is determined on the basis of actuarial valuation as at year end.

(b) Provision in respect of leave encashment is made based on the basis of actual leave balance of employees at the end of the Year in accordance with Accounting Standard-15 on "Accounting for retirement Benefits in the financial statement of Employer" as issued by the Institute of Chartered Accountants of India.

(c) Contribution to Provident fund & Pension scheme are charged to Profit & Loss Account when due.

IV.TAXES ON INCOME:

Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized subject to the consideration of prudence in respect of deferred tax assets, on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or subsequent periods.

XV. SEGMENT REPORTING:

a) Primary Segment Reporting (Business Segment)

The Company has identified two reportable business segment

i) Manufacturing and Trading of Paper

ii) Trading in Chemical

Taking into account nature of the products and services, the differing risk and returns. Revenue and expenses related to enterprise as a whole and are not allocable to a segment has been disclosed as un allocable. Investments tax, related assets and other assets and liabilities that cannot be allocated to a segment have been disclosed as un-allocable.

(b) Geographical reportable segment

The company produces and sales, its products in India & also Export the same directly or indirectly to overseas countries. The overseas sales operation are managed by its office located in India. For the purpose of AS 17 regarding segment reporting secondary segment information on geographical segment is considered on the basis of revenue generated from Domestic & Export market.

Due to Complexities of the operation & recording system of the company, assets other than debtors have not been apportioned segment wise, since the same are used interchangeably between the segments.

XVI. CONTINGENT LIABILITY:

Provisions 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.