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Accounting Policies of Speciality Papers Ltd. Company

Mar 31, 2015

A) Basis of preparation of financial statements:

i) The accompanying financial statements are prepared under the historical cost convention and in accordance with generally accepted accounting principles in India to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act 2013. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

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

b) Fixed Assets / Depreciation:

Fixed assets are stated at their original cost of acquisition or construction, less accumulated depreciation. Cost includes all costs other than refundable duties and taxes incurred to bring the assets to their present condition and location.

Depreciation on Fixed Assets is provided on depreciable value of assets using straight line method on the basis of useful life specified in Schedule II to the Companies Act, 2013.

Assets costing less than Rs.5000 are depreciated at 100%. Additions and deletions to fixed assets during the year are depreciated, pro-rata, over the period they have been put to use during the Year.

c) Investments:

Investments are classified in accordance with the requirements of Schedule VI (Revised) and the disclosure requirements in Accounting Standard 13 on Accounting for Investments. Current investments are stated at the lower of cost and fair value. Long investments are staled at Provision is made to recognize a decline, other than temporary, in the value of Non-current investments. Any reduction in the carrying amount of investments and any reversals of such reductions are charged or credited to the profit and loss account.

d) Inventories:

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realizable value after providing for obsolescence and other losses, as required. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

e) Revenue recognition:

Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer and there is reasonable certainty of realization / ultimate collection, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

f) Income Taxes:

Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting tor laws on Income. Income taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

The tax effect of the timing differences that result between taxable'income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

g) Borrowing costs :

Borrowing costs include interest; amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when development activity on the qualifying assets is interrupted.

h) Earnings Per Share :

The company reports basic and diluted earnings per share in accordance with Accounting Standard 20-Earnings per Share, issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year. Diluted earnings per share where applicable is computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

i) Provisions and Contingencies :

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect a reliable estimate can be made. These are disclosed by way of notes to the balance sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the year- end. till the finalization of accounts and have material effect on the position stated in the balance sheet.

J) Payment made to Auditors :

2014-15 2013-14

As Statutory Auditor 15,000 35.000

As Tax Auditor 15.000

For Other matters

TOTAL 15,000 50,000


Mar 31, 2014

A) Basis of preparation of financial statements:

i) The accompanying financial statements are prepared under the historical cost* convention and in accordance with generally accepted accounting principles in India to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

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

b) Fixed Assets / Depreciation:

Fixed assets are stated at their original cost of acquisition or construction, less accumulated depreciation. Cost includes all costs other than refundable duties and taxes incurred to bring the assets to their present condition and location.

Depreciation is provided on written down value method as prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing less than Rs.5000 are depreciated at 100%. Additions and deletions to fixed assets during the year are depreciated, pro-rata, over the period they have been put to use during the year.

c) Investments:

Investments are classified in accordance with the requirements of Schedule VI and the disclosure requirements in Accounting Standard 13 on Accounting for Investments. Current investments are stated at the lower of cost and fair value. Long Term investments are stated at cost. Provision is made to recognize a decline, other than temporary, in the value of Non-current investments. Any reduction in the carrying amount of investments and any reversals of such reductions are charged or credited to the profit and loss account.

d) Inventories :

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realizable value after providing for obsolescence and other losses, as required.Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

e) Revenue recognition:

Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer and there is reasonable certainty of realization / ultimate collection, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

f) Income Taxes :

Income taxes are accounted for in accordance with Accounting Standard 22 on Accounting for taxes on Income. Income taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax * regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

g) Borrowing costs :

Borrowing costs include interest; amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

h) Earnings Per Share :

The company reports basic and diluted earnings per share in accordance with Accounting Standard 20 -Earnings per Share, issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year. Diluted earnings per share where applicable is computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

i) Provisions and Contingencies :

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. These are disclosed by way of notes to the balance sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the year- end, till the finalization of accounts and have material effect on the position stated in the balance sheet

J) Payment made to Auditors :

2013-14 2012-13

As Statutory Auditor 35,000 35,000

As Tax Auditor 15,000 15,000

For Other matters

TOTAL 50,000 50,000


Mar 31, 2013

A) Basis of preparation of financial statements:

i) The accompanying financial statements are prepared under the historical cost convention and in accordance with generally accepted accounting principles in India to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

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

b) Fixed Assets / Depreciation:

Fixed assets are stated at their original cost of acquisition or construction, less accumulated depreciation,. Cost includes all costs other than refundable duties and taxes incurred to bring the assets to their present condition and location.

Depreciation is provided on written down value method as prescribed in Schedule XIV to the Companies Act, 1956.

Assets costing less than Rs.5000 are depreciated at 100%. Additions and deletions to fixed assets during the year are depreciated, pro-rata, over the period they have been put to use during the year.

c) Investments:

Investments are classified in accordance with the requirements of Schedule VI and the disclosure requirements in Accounting Standard 13 on Accounting for Investments. Current investments are stated at the lower of cost and fair value. Long Term investments are stated at cost Provision is made to recognize a decline, other than temporary, in the value of Non-current investments. Any reduction in the carrying amount of investments and any reversals of such reductions are charged or credited to the profit and loss account.

d) Inventories:

Inventories are valued at the lower of cost (on FIFO / weighted average basis) and the net realizable value after providing for obsolescence and other losses, as required. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

e) Revenue recognition:

Sales are recognized, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer and there is reasonable certainty of realization / ultimate collection, which generally coincides with the delivery of goods to customers. Sales include excise duty but exclude sales tax and value added tax.

f) Income Taxes:

Income taxes are accounted for In accordance with Accounting Standard 22 on Accounting for taxes on Income. Income taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the revenue authorities, using applicable tax rates and laws.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

g) Borrowing costs :

Borrowing costs include interest; amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

The company reports basic and diluted earnings per share in accordance with Accounting Standard 20 - Earnings per Share, issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year. Diluted earnings per share where applicable is computed by dividing the net profit or loss for the year by the weighted average number of Equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti- dilutive.

I) Provisions and Contingencies :

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. These are disclosed by way of notes to the balance sheet. Provision is made in the accounts in respect of those liabilities which are likely to materialize after the year- end, till the finalization of accounts and have material effect on the position slated in the balance sheet

J) Payment made Auditors

2012-13 2011-12

As Statutory Auditor 35,000 50,000

As Tax Auditor 15,000 -

For Other matters -

TOTAL 50,000 50,000


Mar 31, 2009

(A) I BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared and presented under the historical cost convention, in accordance with the generally accepted accounting principles and comply with accounting standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956.

(B) REVENUE RECOGNITION :

Income and expenditure are recognized and accounted for on accrual basis, except in case of significant uncertainties.

Export incentives are accounted on receipts basis.

IC) INVESTMENTS:

Current investments are valued at lower of cost or market value. Long term investments are stated at cost.

(D) SALES"

Sales are accounted net of Excise duty, Cess, Sales Tax, Rebate and Sales Returns. Export Sales are recognized at foreign exchange rates prevailing on the dates of bills of lading.

(E) INVENTORY:

The mode of valuing closing stock (as certified by the Directors) is as under:

Raw Materials, Stores and Spares, Coal and Diesel are valued at cost on first in first out basis.

Work in progress is valued at estimated cost i.e. cost of raw materials and proportionate amount of operating expenditure upto the stage of completion.

Finished goods are valued at cost or net realizable value whichever is lower.

(F) I DEPRECIATION

Depreciation on fixed assets has been provided on Straight Line Method as per the rates prescribed in Schedule XIV (as amended) of the Companies Act, 1956. Depreciation has been charged on additions during the year on pro-rata basis, from the date on which the asset was put to use.

(G) FOREIGN CURRENCY TRANSACTION :

Transactions of Foreign Currencies are recorded at the exchange rates prevailing on the date of transactions.

Receivable/ payable in foreign currencies are translated at the exchange rate ruling at the year end date and the resultant gain or loss is charged to profit and loss account.

Liability of Loans in foreign currency is converted at the year end exchange rate. The resultant gains or loss is charged to profit and loss Account.

(H) RETIREMENT BENEFIT":

Contribution to Provident Fund / Employee Pension Fund is accounted on accrual basis.

Gratuity liability is determined and accounted for on the basis of actuarial valuation done at the end of the year.

Leave encashment benefits of the employees are accounted on accrual basis. On the basis of actuarial valuation.

(I) TAXATION":

Provision for current year tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act,1961.

Deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates as applicable as per the current assessment year.

Deferred tax assets arising from timing differences are recognized to the extent there is virtual certainty that these would be realized in future.

(J) MISCELLANEOUS EXPENDITURE":

Expenses incurred for issue of shares through private placement are being written off in five equal annual installments.

PART II: NOTES FORMING PART OF THE ACCOUNTS:

1. I CONTINGENT LIABILITIES NOT PROVIDED FOR":

(a). ESI, Interest & Penalty Rs. 1.02 Lacs (Previous year Rs 1.02 Lacs). (b). TDS Penalty of Rs.0.10/- lacs (Previous year Rs. NIL)

(c). Income TDS demand of Rs 1,327,983/- for AY 2006-07 and Rs. 948,178/- for A.Y.2007-08 has been raised on the Company out of which an-amount of Rs/ 971,000/- has been paid for which the Company has preferred appeals.

(d). Penalty under Gujarat VAT Act Rs.0.20 Lacs (Previous Year Rs. NIL)

(e). The Company received notice from The Registrar of Companies,,Gujarat., in the matter of not holding the Annual General Meeting of the Company for the year 2008 on or before 30.09.2008 and not filing annual returns of accounts for the year ending 31st March2008. The Company has filed an application for compounding the offens and the likely cost of the application will be approximately Rs.75000/-.

(f). The Contingent liabilities towards Letter of Credit issued to various Suppliers against materials is Rs.3,96,30,392/-.

 
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