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Accounting Policies of Shree Krishna Paper Mills & Industries Ltd. Company

Mar 31, 2015

A) BASIS OF PREPARATION

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain fixed assets which are stated at revalued amounts. GAAP comprises mandatory accounting standards as prescribed under Section 133 of the Companies Act,2013 ('Act')read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). All the Assets and Liabilities have been classified as Current and Non-Current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of activities, the Company has ascertained its operating cycle as 12 months for the purpose of Current and Non Current classification of Assets and Liabilities.

b) USE OF ESTIMATES

The preparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

c) FIXED ASSETS

(i) Recognition

Tangible Fixed Assets are stated at cost (net of duties and taxes) less accumulated depreciation except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated depreciation. All costs that are directly attributable to the acquisition and installation of fixed assets, including borrowing costs, are capitalized.

(ii) Capital Work-in-Progress

Capital Work-in-Progress is stated at cost including borrowing costs and expenditure incurred in connection with the fixed assets.

(iii) Depreciation & Amortization

Depreciation on tangible fixed assets is charged on straight line method over the useful life/remaining useful life of the asset as per Schedule II of the Companies Act 2013. Depreciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, depreciation on assets sold / discarded during the year is charged up to the date of sale / discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve. Leasehold land is amortized over a period of lease.

d) CASH & CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent only when it has a short maturity of three months or less from the date of acquisition.

e) CASH FLOW STATEMENT

The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows from operating activities are reported using the indirect method, whereby net profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.

f) INVESTMENT

Non-Current Investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

g) INVENTORIES

Inventories except scrap are valued at lower of cost and net realizable value. Scrap is valued at estimated realizable value. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of finished goods.

h) TRANSACTIONS IN FOREIGN CURRENCY

Foreign currency transactions are recorded at exchange rates prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognised in the Statement of Profit and Loss. For foreign exchange forward contracts, premium or discount arising at the inception of a forward exchange contract is amortised as expense or income over the life of the contract.

i) REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:

i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods. Sales are disclosed net of returns and applicable sales taxes.

ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.

iii. Other items of income are recognized on accrual basis.

j) EMPLOYEE BENEFITS

i) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognized as expenses in the period in which the employee renders the related service.

ii) Post-Employment Benefits

a) Defined Contribution Plans

The Company has a Defined Contribution Plan for Post Employment Benefits in the form of Provident/Family Pension Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company's contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b) Defined Benefit Plans

Funded Plan: The Company has a Defined Benefit Plan for Post Employment Benefit in the form of Gratuity, which is administered through Life Insurance Corporation of India(LIC), liability for which is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iii) Other Long Term Employee Benefits

Liability for compensated absences is provided on the basis of valuation as at the Balance Sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iv) Termination benefits are recognized as an expense as and when incurred.

v) The actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss.

k) BORROWING COST

Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, upto the date the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

l) INCOME TAXES

Tax expense for the year comprising current tax and deferred tax are considered in determining the net profit/(loss) for the year. A provision is made for current tax based on tax liability computed in accordance with relevant tax rates & tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income & accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable/virtual, as the case may be, certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

m) EARNINGS PER SHARE

The basic earnings per share ('EPS') is computed by dividing the net profit/(loss) after tax less preference dividend including dividend distribution tax attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.

Diluted EPS is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year.

n) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable value is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired.

o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Provisions

Provisions are recognised in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

(ii) Contingent Liabilities

A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

(iii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

p) LEASED ASSETS

For assets acquired under operating lease, rental payable are charged to Statement of Profit and Loss on a straight line basis over the lease term.

For assets acquired under finance lease, the assets are capitalized at lower of their respective fair value and the present value of minimum lease payment. Amortization of capitalized leased asset is computed on Straight Line Method over the useful life of the asset.






Mar 31, 2014

A) BASIS OF PREPARATION

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting except for certain classes of fixed assets which are carried at revalued amounts. These statements comply with the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, as amended and other pronouncements of the Institute of Chartered Accountants of India (''ICAI''). All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act,1956. Based on the nature of operations of the Company, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of all assets and liabilities.

b) USE OF ESTIMATES

The preparation of the financial statements is in conformity with India GAAP (Generally Accepted Accounting Principles) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements. The estimates and assumptions made and applied in preparing the financial statements are based upon management''s best knowledge of current events and actions as on the date of financial statements. However, due to uncertainties attached to the assumptions and estimates made, actual results could differ from those estimated. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) TANGIBLE FIXED ASSETS (i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of duties and taxes that are subsequently recoverable from the taxing authorities) less accumulated depreciation except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated depreciation. All costs that are directly attributable to the acquisition and installation of fixed assets are capitalized and include borrowing costs directly attributable to construction or acquisition of qualifying tangible fixed assets.

(ii) Capital Work-in-Progress

Capital Work-in-Progress is stated at cost and includes expenditure incurred in connection with the fixed assets and pending allocation on acquisition of fixed assets. Borrowing costs directly attributable to the asset are included in the cost of capital work-in-progress.

(iii) Depreciation & Amortization

Depreciation on tangible fixed assets is charged on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956. Depreciation on assets purchased/acquired during the year is charged from the date of addition/purchase of the asset. Similarly, depreciation on assets sold/discarded during the year is charged up to the date of sale/discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve. Leasehold land is amortized over a period of lease.

d) CASH & CASH EQUIVALENTS

Cash & cash equivalents for the purpose of cash flow statement comprises cash at bank and on hand and short-term investments with an original maturity of three months or less.

e) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profits/(loss) before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated.

f) INVESTMENT

Non-Current Investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

g) INVENTORIES

Inventories except scrap are valued at lower of cost and net realizable value. Scrap is valued at estimated realizable value. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.

h) TRANSACTIONS IN FOREIGN CURRENCY

i. Transactions are recorded at exchange rates prevailing on the date of transaction.

ii. Foreign Currency designated assets and liabilities are restated at the year end rates and the resultant gain or loss is taken to the Statement of Profit & Loss.

i) REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:

i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods.

ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.

iii. Other items of income are recognized on accrual basis.

j) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the Government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and related to income in equal amounts over the expected useful life of the related asset.

k) EMPLOYEE BENEFITS

i) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognized as expenses in the period in which the employee renders the related service.

ii) Post-Employment Benefits

a) Defined Contribution Plans

The Company has a Defined Contribution Plan for Post Employment Benefits in the form of Provident/Family Pension Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b) Defined Benefit Plans

Funded Plan : The Company has a Defined Benefit Plan for Post Employment Benefit in the form of Gratuity, which is administered through Life Insurance Corporation of India(LIC), liability for which is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iii) Other Long Term Employee Benefits

Liability for compensated absences is provided on the basis of valuation as at the Balance Sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iv) Termination benefits are recognized as an expense as and when incurred.

v) The actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss.

l) BORROWING COST

Borrowing costs are interest, commitment charges and other costs incurred by an enterprise in connection with Short Term/Long Term borrowing of funds. Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, upto the date the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

m) INCOME TAXES

Tax expense for the year comprising current tax and deferred tax are considered in determining the net profit/(loss) for the year. A provision is made for current tax based on tax liability computed in accordance with relevant tax rates & tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income & accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable/virtual, as the case may be, certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) EARNINGS PER SHARE

The earnings in ascertaining the Company''s EPS comprises the net profit/(loss) after tax less preference dividend including dividend distribution tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra- ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

o) IMPAIRMENT OF ASSETS

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset might be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash flows from other assets or other group of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of asset/cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to recoverable amount. Recoverable amount is higher of an asset''s or cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting period may no longer exist or may have decreased.

p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Provisions

A provision is recognized when the Company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liabilities

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount can not be made.

(iii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

q) LEASED ASSETS

Where the Company is a Lessee

Lease where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased Asset, are classified as ''Operating Leases''. Lease rentals with respect to assets taken on ''Operating Lease'' are charged to Statement of Profit and Loss on a straight line basis over the lease term.

Lease which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as ''Finance Lease''. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Amortization of capitalized leased asset is computed on Straight Line Method over the useful life of the asset.

(b) Rights, preferences and restrictions attached to Shares: Equity Shares

The Company has one class of Equity Shares referred to as Equity Shares having at par value of Rs.10/- each. Each Shareholder is entitled to one vote per share. In the event of liquidation, the equity-holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Preference Shares

The Company has one class of Preference Share referred to as Preference Shares redeemable at par value of Rs.100 each. These shares carry a fixed cummulative dividend of 4% per annum and a preferential right in respect of dividend and capital over Equity Shareholders. The Preference Shares are redeemable at par on or before March 31, 2017. In view of arrear of dividend, preference shareholders are entitled to vote on every resolution placed before the Company.

Details of Security and Terms of Repayment:

(a) Term Loans from Banks, under consortium arrangement having Bank of India as Lead Bank, are secured by first pari-passu charge on all movable and immovable property (other than current assets) of Kotputli unit both present and future, second charge on the current assets of the Company, collaterally secured by first pari-passu charges on the block assets of Bahadurgarh Unit and by personal guarantee of two Directors of the Company & Mr. B.K.Pasari who has ceased to be Director of the Company w.e.f. October 1, 2013.

(b) Term Loans are also collaterally secured by pledge of 48,20,400 (Previous Year 48,20,400) Equity Shares held by the Promoter and promoter group.

(d) Unsecured Loans are repayable on March 31, 2017. However, the Company has the option to repay these loans by giving prior notice of 30 days.


Mar 31, 2013

A) BASIS OF PREPARATION

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting except for certain classes of fixed assets which are carried at revalued amounts. These statements comply with the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules,2006, as amended and other pronouncements of the Institute of Chartered Accountants of India(''ICAI'').All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule VI to the Companies Act,1956. Based on the nature of operations of the Company, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of all assets and liabilities.

b) USE OF ESTIMATES

The preparation of the financial statements is in conformity with India GAAP (Generally Accepted Accounting Principles) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements. The estimates and assumptions made and applied in preparing the financial statements are based upon management''s best knowledge of current events and actions as on the date of financial statements. However, due to uncertainties attached to the assumptions and estimates made, actual results could differ from those estimated. Any revision to accounting estimates is recognized prospectively in current and future periods.

c) TANGIBLE FIXED ASSETS

(i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of duties and taxes that are subsequently recoverable from the taxing authorities) less accumulated depreciation except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated depreciation. All costs that are directly attributable to the acquisition and installation of fixed assets are capitalized and include borrowing costs directly attributable to construction or acquisition of qualifying tangible fixed assets.

(ii) Capital Work-in-Progress

Capital Work-in-Progress is stated at cost and includes expenditure incurred in connection with the fixed assets and pending allocation on acquisition of fixed assets. Borrowing costs directly attributable to the asset are included in the cost of capital work in progress.

(iii) Depreciation & Amortization

Depreciation on tangible fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956. Depreciation on assets purchased/acquired during the year is charged from the date of addition/purchase of the asset. Similarly, depreciation on assets sold/discarded during the year is charged up on the sale/discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve. Leasehold land is amortized over a period of lease.

d) CASH & CASH EQUIVALENTS

Cash & cash equivalents for the purpose of cash flow statement comprises cash at bank and in hand and short-term investments with an original maturity of three months or less.

e) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated.

f) INVESTMENT

Long-Term/Non-Current Investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

g) INVENTORIES

Inventories except scrap are valued at lower of cost and net realizable value. Scrap is valued at estimated realizable value. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.

h) TRANSACTIONS IN FOREIGN CURRENCY

i. Transactions are recorded at exchange rates prevailing on the date of transaction.

ii. Foreign Currency designated assets and liabilities are restated at the year end rates and the resultant gain or loss is taken to the Statement of Profit & Loss.

i) REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:

i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods.

ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.

iii. Other items of income are recognized on accrual basis.

j) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and related to income in equal amounts over the expected useful life of the related asset.

k) EMPLOYEE BENEFITS

i) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognized as expenses in the period in which the employee renders the related service.

ii) Post-Employment Benefits

a) Defined Contribution Plans

The Company has a Defined Contribution Plan for Post Employment Benefits in the form of Provident/Family Pension Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company''s contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b) Defined Benefit Plans

Funded Plan : The Company has a Defined Benefit Plan for Post Employment Benefit in the form of Gratuity, which is administered through Life Insurance Corporation of India(LIC), liability for which is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iii) Other Long Term Employee Benefits

Liability for compensated absences is provided on the basis of valuation as at the Balance Sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iv) Termination benefits are recognized as an expense as and when incurred.

v) The actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss.

l) BORROWING COST

Borrowing costs are interest, commitment charges and other costs incurred by an enterprise in connection with Short Term/Long Term borrowing of funds. Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, upto the date the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

m) TAXATION

Tax expenses for the year comprising current tax & deferred tax are considered in determining the net profit for the year. A provision is made for current tax and based on tax liability computed in accordance with relevant tax rates & tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income & accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable/virtual, as the case may be, certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) EARNINGS PER SHARE

The earnings in ascertaining the Company''s EPS comprises the net profit/(loss) after tax less preference dividend including dividend distribution tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year.

Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra- ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

o) IMPAIRMENT OF ASSETS

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset might be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash flows from other assets or other group of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of asset/ cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to recoverable amount. Recoverable amount is higher of an asset''s or cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting period may no longer exist or may have decreased.

p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Provisions

A provision is recognized when the Company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liabilities

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount can not be made.

(iii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

q) LEASED ASSETS

Where the Company is a Lessee

Lease where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased Asset, are classified as ''Operating Leases''. Lease rentals with respect to assets taken on ''Operating Lease'' are charged to Statement of Profit and Loss on a straight line basis over the lease term.

Lease which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as ''Finance Lease''. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Amortization of capitalized leased asset is computed on Straight Line Method over the useful life of the asset. Lease rentals payable is apportioned between the liability and finance charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year.


Mar 31, 2012

A) BASIS OF PREPARATION

The financial statements have been prepared and presented under the historical cost convention on the accrual basis of accounting, except for certain classes of fixed assets which are carried at revalued amounts. These statements comply with the applicable Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, as amended and other pronouncements of the Institute of Chartered Accountants of India ('ICAI'). All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the nature of operations of the Company, the Company has ascertained its operating cycle as 12 months for the purpose of current/ non-current classification of all assets and liabilities.

b) USE OF ESTIMATES

The preparation of the financial statements is in conformity with Indian GAAP (Generally Accepted Accounting Principles) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements. The estimates and assumptions made and applied in preparing the financial statements are based upon management's best knowledge of current events and actions as on the date of financial statements. However, due to uncertainties attached to the assumptions and estimates made, actual results could differ from those estimated. Any revision to accounting estimates is recognised prospectively in current and future periods.

c) TANGIBLE FIXED ASSETS (i) Recognition

Tangible Fixed Assets are stated at cost of acquisition or construction (net of duties and taxes that are subsequently recoverable from the taxing authorities) less accumulated depreciation except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated depreciation. All costs that are directly attributable to the acquisition and installation of fixed asset are capitalised and include borrowing costs directly attributable to construction or acquisition of qualifying tangible fixed assets.

(ii) Capital Work-in-Progress

Capital Work-in-Progress is stated at cost and includes expenditure incurred in connection with the fixed assets and pending allocation on acquisition of fixed assets.

(iii) Depreciation & Amortisation

Depreciation on tangible fixed assets is charged on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Depreciation on assets purchased / acquired during the year is charged from the date of addition/ purchase of the asset. Similarly, depreciation on assets sold/ discarded during the year is charged up on the sale/ discard of the assets. Depreciation on addition on account of revaluation is recouped from Revaluation Reserve. Leasehold land is amortized over a period of lease.

d) CASH & CASH EQUIVALENTS

Cash & Cash equivalents for the purpose of cash flow statement comprises cash at bank and in hand and short-term investments with an original maturity of three months or less.

e) CASH FLOW STATEMENT

Cash flows are reported using the indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated.

f) INVESTMENT

Long-term/ Non-Current Investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

g) INVENTORIES

Inventories are valued at lower of cost and net realizable value. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale.

h) TRANSACTIONS IN FOREIGN CURRENCY

i. Transactions are recorded at exchange rates prevailing on the date of the transaction. ii. Foreign Currency designated assets and liabilities are restated at the year end rates and the resultant gain or loss is taken to the Statement of Profit & Loss.

i) REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:

i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the despatch of goods.

ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.

iii. Other items of income are recognized on accrual basis.

j) GOVERNMENT GRANTS AND SUBSIDIES

Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to revenue, it is recognized as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset.

k) EMPLOYEE BENEFITS

i) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognised as expenses in the period in which the employee renders the related service.

ii) Post-Employment Benefits

a) Defined Contribution Plans

The Company has a Defined Contribution Plan for Post employment benefits in the form of Provident/Family Pension Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company's contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b) Defined Benefit Plans

Funded Plan: The Company has a defined benefit plan for Post-employment benefit in the form of Gratuity, which is administered through Life Insurance Corporation of India (LIC), liability for which is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iii) Other Long Term Employee Benefits

Liability for compensated absences is provided on the basis of valuation as at the Balance Sheet date carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is Projected Unit Credit (PUC) Method.

iv) Termination benefits are recognised as an expense as and when incurred.

v) The Actuarial gains and losses arising during the year are recognised in the Statement of Profit and Loss.

l) BORROWING COST

Borrowing costs are interest, commitment charges and other costs incurred by an enterprise in connection with Short Term/ Long Term borrowing of funds. Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, upto the date the asset is ready for its intended use. All other borrowing costs are recognized in the Statement of Profit and Loss in the year in which they are incurred.

m) TAXATION

Tax expenses for the year comprising current tax & deferred tax are considered in determining the net profit for the year. A provision is made for current tax and based on tax liability computed in accordance with relevant tax rates & tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income & accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

n) EARNINGS PER SHARE

The earnings in ascertaining the Company's EPS comprises the net profit after tax less preference dividend including dividend distribution tax and includes the post tax effect of any extraordinary items. The number of shares used in computing basic EPS is the weighted average number of shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/(loss) after tax (including the post tax effect of extra ordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period.

o) IMPAIRMENT OF ASSETS

Assessment is done at each Balance Sheet date as to whether there is any indication that a tangible asset might be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash flows from other assets or other group of assets, is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of asset/ cash generating unit is made. Assets whose carrying value exceeds their recoverable amount are written down to recoverable amount. Recoverable amount is higher of an asset's or cash generating unit's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting period may no longer exist or may have decreased.

p) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Provisions

A provision is recognized when the Company has a present obligation as a result of past event, if it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(ii) Contingent Liabilities

Contingent Liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only on the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

(iii) Contingent Assets are neither recognised nor disclosed in the financial statments.

q) LEASES

Where the Company is a Lessee

Leases where the Lessor effectively retains substantially all the risks and benefits of ownership of the Leased Asset, are classified as 'Operating Leases. Lease rentals with respect to assets taken on 'Operating Lease' are charged to Statement of Profit and Loss on a straight line basis over the lease term. Leases which effectively transfer to the Company substantially all the risks and benefits incidental to the ownership of the leased item are classified as 'Finance Lease'. Assets acquired on Finance Lease which substantially transfer all the risks and rewards of ownership to the Company are capitalized as assets by the Company at the lower of the fair value and the present value of the minimum lease payment and a liability is created for an equivalent amount. Amortization of capitalized Leased asset is computed on Straight Line Method over the useful life of the asset. Lease rentals payable is apportioned between the liability and finance charge so as to obtain a constant periodic rate of interest on the outstanding liability for each year.


Mar 31, 2010

(a) Basis of Accounnting

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis except otherwise stated. The- accounts are prepared on historical cost basis except in case of certain fixed asses which have been stated at revalued amounts, as a going concern, and are in accordance with applicable Accounting Standards in India.

(b) Fixed Assets

Fixed Assers are stated at cost Including freight & other attributable expenses net of modvat (wherever recoverable) and includes amounts added on revaluation, less accumulated depreciation.

(c) Capital Work -in Progress

Capital Work-in-Progress is started at cost and includes expenditure incurred in connection with the fixed assets and pending allocation on acquisition of fixed assets,

(d) Depreciation

Depreciation on fixed assets has. been provided according to the straight line method as per rates given in Schedule XIV of the Companies Act, 1956,

(e) Investments

Long term investments are elated at cost less provision, if any, for diminution in the value, which is other than temporary in the opinion of the management,

(f) Inventories

Inventories are valued on the following basis:

i. Inventories of Raw Materials and Stores & Spares are valued at cost, arrived at on FIFO basis, or net realizable value, whichever is lower.

ii. Stock-in-Process are valued at raw material costs,

iii. Finished Goods are valued at lower of cost or net realizable value. iv. Waste Paper is valued at lower of cost or net realizable value.

(g) Transactions in Foreign Currency

a) Transactions are recorded at exchange tates prevaling on the date of the transaction.

b) foreign Currency designated assets, liabilities including fixed assets are restated at the year end rates and the resultant gain or loss is taken to Profit & Loss Account.

(h) Borrowing Costs

Borrowing Costs relating to acquisitions/construction of qualifying assets are capitalized until the tone all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(I) Custom Duty

Custom Duty on imported materials is accounted for as and when the liability arises.

(j) Revenue Recognition

Revenue is recognized only when ft can be reliably measured and it is reasonable to expect ultimate collection:

i. Sales are disclosed net of sales tax/ vat and sales returns.

ii. Interest income from parties, insurance claim, excise and other claims / refunds are recognized when there is a reasonable certainty or ultimate collection on the ground of prudence,

iii. Grants and subsidies are recognized when there is reasonable, certainty that the grant/subsidy will be received and all the attaching conditions will be complied with.

(k) Employee Benefits

i) Short Term Employee Benefits -

All employee bencfits fallinng due wholly within twelve months of rendering the sen-ices are classified as short term employee benefits which include benefits like salary, wages, and performance incentives, and are recognised as expenses in the period in which the employee renders the related services.

ii) Post Employment Plans:

a) Defined Contribution Plans:

The Company has Defined Contribution Plans for post employment benefits in the form of Provident Fund tor all employees which is administered by- Regional Provident Fund Commissioner. Provident Fund is classified as defined contribution plan as the Company has no further obligation beyond making the contributions, The Companys contributions to Defined Contribution Plans is charged to Profit & Loss Account as and when incurred.

b) Defined Benefit Plan:

Funded Plan: The Company has a defined benefit plan for post employment benefit in the form of Gratuity which is administered through life insarance Corporation of India (LIC). liability for the above defined benefit plan is provided on the basis of valuation as at the Balance Sheet date, carried out by an independent actuary. The .actuarial method used at measuring she liability is the Projected Unit Credit (PUC) Method.

c) Other long Term Employee Benefit:

liability for compensated absences is provided on the basis of valuation as at the Balance sheet date carried out by an independent actuary, The Actuarial valuation method used for measuring the liability is Projected Unit Credit Method.

iii) Termination benefits are recognized as an expense as and when incurred.

iv) the actuarial gains and losses arising during the year are recognized in the Profit and Loss Account.

(l) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized in the accounts in respect of present possible obligations, the amount of which can be reliably estimated. Contingent liabilities are disclosed in respect of possible obligations that arise from past events bur their existence is confimed by the occurrence or non - occurrence of one or more uncertain future events not wholly within the controls of the Company.

Contingent liabilities not admitted by the Company are not provided for in the accounts but are disclosed by way of Notes in NOTES ON ACCOUNTS. Contingent Assets are neither recognized nor disclosed in the financialstatements,

(m)Earning per Share

The earning in ascertaining the Companys EPS comprises the net profit/loss after tax and includes the post tax effect of any extraordinary items. The number of equity shares used in computing basic EPS is the weighted average number of equity shares outstanding during the year,

(n) Taxation

Income Tax comprises currant tax and deterred tax. Cunrent tax is the amount of payable as determined in accofdance with the provisions of Income Tax Act, 1961, A procision is made for deterred Tax for all timing difference arising between taxable income ami income at currently enacted or substantially enacted tax rates. Deferred tax assets are recognised only if there isreasonable certainty that they will be realised and are reviewed for the appropriatness of their respective carrying values at each Balance Sheet date.

(o) Impairment of assets

At each Balance Sheet date, the Company assessed whether there is any indication that any assets may foe impaired. If arty such indication exists, the Company estimates the recoverable amount. if the carrying amount of the assets exceeds the recoverable amount, an impairment loss is recognised in the accounts to the extent the carrying amount exceeds the recoverable amount,

 
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