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Accounting Policies of Sree Sakthi Paper Mills Ltd. Company

Mar 31, 2015

1 Basis of accounting

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2 Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following, since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3 Government Grant

Duty Draw Back Income is recognized on accrual basis based on FOB value of exports.

4 Fixed Assets & Depreciation:

i) Tangible assets are stated at cost net of recoverable taxes, trade discounts and rebates and include amounts added on revaluation, less accumulated depreciation and impairment loss, if any. The cost of tangible assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use.

ii) Subsequent expenditures related to an item of tangible asset are added to the book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

iii) Projects under which the assets are not ready for their intended use are shown as Capital Work In Progress.

iv) Change in Accounting Policy for Depreciation pursuant to Schedule II of the Companies Act, 2013.

Due to application of Schedule II of the Companies Act, 2013 with effect from 1st April, 2014, the management has adopted the 'useful lives' as specified in the said Schedule II. The Company has used the transitional provisions of the Schedule II to adjust the impact arising from the first time application of the Schedule II. If a fixed asset has zero remaining useful life as on 1st April, 2014 (the date on which Schedule II has become effective), its carrying amount, after retaining 5% of the original cost as residual value, is charged to the opening balance of the retained earnings 'Surplus in the Statement of Profit & Loss' under 'Reserves & Surplus'. The carrying amount of fixed assets whose remaining useful life is not 'NIL' as on 1st April, 2014, is depreciated over the remaining useful life.

Accordingly, depreciation of Rs 6242638/- has been adjusted to the opening balance of the retained earnings, with the corresponding effect to the net book value of the tangible assets.

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

5 Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

6 Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

7 Foreign Currency Transactions:

Expenditure/Income in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction. Asset/Liability in respect of foreign exchange transactions outstanding as at the end of the year is restated at the exchange rate prevailing on that date.

8 Forward Contracts:

Premium or discount at the inception of forward contract is recognized as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense of the year.

9 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for Current tax is made on the basis of applicable tax laws existing in the country.

Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be availed against which such deferred tax assets can be realized.

10 Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years.

11 Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

12 Impairment of assets

Subsequent to Board's decision to close down its Duplex Board Division, Company has re-assessed the market value of assets of Chalakudy unit. Impairment is done to Plant & Machinery and building by comparing the value given by the approved valuer and carrying amount outstanding in books after providing depreciation as per the Companies Act 2013.

13 Additional Disclosures

1 Most of the balances of Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation.

2 Previous year figures have been re-cast, wherever necessary to comply with the requirements of Revised Schedule VI of The Companies Act 1956.

3 Assets, Loans and advances are in realizable state in the ordinary course of business.

4 Lease Transactions :

All assets acquired under finance lease basis are capitalized with corresponding liability recognizing the future liability on leases. The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows:

(i) Total minimum

lease payments Nil (Previous Year Nil)

(ii) Future interest

embedded in i) Nil (Previous Year Nil)

(iii) Present value of

lease payments (i-ii) Nil (Previous Year Nil)

Finance charges on lease payments amounting to (Previous Year Nil) for the year has been debited to profit and loss account under the head interest and bank charges. Lease expenses under non cancelable operating lease during the year amounts to Rs NIL (Previous Year Rs Nil)

Future minimum lease payments under non cancellable operating lease as on 31-03-2015 is as follows

Payable within One year NIL

Payable after one year

but before five years NIL


Mar 31, 2014

1 Basis of accounting

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2 Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following, since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3 Government Grant

Duty Draw Back Income is recognised on accrual basis based on FOB value of exports.

4 Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-rata basis on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of Fixed Assets has been taken at net of CENVAT availed. Depreciation on additions/deletions is calculated on a monthly pro-rata basis, month of addition is included and month of sale is excluded.

The cost of fixed assets other than those included in the specific project comprises, its purchase price including import duty and other non - refundable taxes or levies, cost directly attributable to bring the asset to its working condition for its intended use, start up and commissioning expenses on test runs and experimental production and finance cost up to the date of capitalization but excluding administration and other general overheads.

Cost of fixed assets under specific project includes all the above and directly relatable administrative and other general overheads.

5 Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

6 Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

7 Foreign Currency Transactions:

Expenditure/Income in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction. Asset/Liability in respect of foreign exchange transactions outstanding as at the end of the year is restated at the exchange rate prevailing on that date.

8 Forward Contracts:

Premium or discount at the inception of forward contract is recognised as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the year.

9 Forex Trading

a) Premium paid at the time of hedging of forex liability is accounted as expense proportionately for the reporting period.

b) Premium received for trading of option is accounted as income on the date of receipt.

c) Profit/loss on outstanding futures'' contracts are recognised at the closing rate of reporting period using MTM.

10 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for Current tax is made on the basis of applicable tax laws existing in the country.

Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be availed against which such deferred tax assets can be realised.

11 Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years.

12 Borrowing Costs

Borrowing Costs charged to Profit & Loss Account include interest on short and long term bank borrowings. Borrowing costs attributable to qualifying assets up to the date of capitalization are included in the cost of the asset.

13 Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

14 Impairment

At each Balance sheet date the management reviews the carrying amount of the assets to ascertain impairment loss, if any, to its assets and such losses are appropriately recognized in the accounts.

15 Additional Diclosures

1 Most of the balances of Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation.

2 Previous year figures have been re-cast, wherever necessary to comply with the requirements of Revised Schedule VI of The Companies Act 1956.

3 Assets, Loans and advances are in realizable state in the ordinary course of business.

4 Lease Transactions :

All assets acquired under finance lease basis are capitalized with corresponding liability recognizing the future liability on leases. The total minimum lease payments as on the balance sheet date, interest embedded in such payments and present value of lease payments are as follows :

(i) Total minimum lease payments Nil (PreviousYear Nil)

(ii) Future interest embedded in i) Nil (PreviousYear Nil)

(iii) Present value of lease payments (i-ii) Nil (Previous Year Nil)

Finance charges on lease payments amounting to (Previous Year Nil) for the year has been debited to profit and loss account under the head interest and bank charges. Lease expenses under non cancelable operating lease during the year amounts to Rs NIL(Previous Year Rs Nil)

Future minimum lease payments under non cancellable operating lease as on 31-03-2014 is as follows Payable within One year NIL Payable after one year but before five years NIL


Mar 31, 2013

1 Basis of accounting

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2 Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following, since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3 Government Grant

Duty Draw Back Income is recognised on accrual basis based on FOB value of exports.

4 Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-rata basis on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of Fixed Assets has been taken at net of CENVAT availed. Depreciation on additions/deletions is calculated on a monthly pro-rata basis, month of addition is included and month of sale is excluded.

The cost of fixed assets other than those included in the specific project comprises, its purchase price including import duty and other non – refundable taxes or levies, cost directly attributable to bring the asset to its working condition for its intended use, start up and commissioning expenses on test runs and experimental production and finance cost up to the date of capitalization but excluding administration and other general overheads.

Cost of fixed assets under specific project includes all the above and directly relatable administrative and other general overheads.

5 Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

6 Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

7 Foreign Currency Transactions:

Expenditure/Income in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction. Asset/Liability in respect of foreign exchange transactions outstanding as at the end of the year is restated at the exchange rate prevailing on that date.

8 Forward Contracts:

Premium or discount at the inception of forward contract is recognised as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognised as income or expense of the year.

9 Forex Trading

a) Premium paid at the time of hedging of forex liability is accounted as expense proportionately for the reporting period.

b) Premium received for trading of option is accounted as income on the date of receipt.

c) Profit/loss on outstanding futures'' contracts are recognised at the closing rate of reporting period using MTM.

10 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for Current tax is made on the basis of applicable tax laws existing in the country.

Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be availed against which such deferred tax assets can be realised.

11 Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years.

12 Borrowing Costs

Borrowing Costs charged to Statement of Profit & Loss include interest on short and long term bank borrowings. Borrowing costs attributable to qualifying assets up to the date of capitalization are included in the cost of the asset.

13 Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

14 Impairment

At each Balance sheet date the management reviews the carrying amount of the assets to ascertain impairment loss, if any, to its assets and such losses are appropriately recognized in the accounts.


Mar 31, 2012

1 Basis of accounting

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2 Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following, since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3 Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-rata basis on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of Fixed Assets has been taken at net of CENVAT availed. Depreciation on additions/deletions is calculated on a monthly pro-rata basis, month of addition is included and month of sale is excluded.

The cost of fixed assets other than those included in the specific project comprises, its purchase price including import duty and other non - refundable taxes or levies, cost directly attributable to bring the asset to its working condition for its intended use, start up and commissioning expenses on test runs and experimental production and finance cost up to the date of capitalization but excluding administration and other general overheads.

Cost of fixed assets under specific project includes all the above and directly relatable administrative and other general overheads.

4 Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

5 Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

6 Foreign Currency Transactions:

Expenditure/Income in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction. Asset/Liability in respect of foreign exchange transactions outstanding as at the end of the year is reinstated at the exchange rate prevailing on that date.

7 Forward Contracts:

Premium or discount at the inception of forward contracts is recognized as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense of the year.

8 Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for Current tax is made on the basis of applicable tax laws existing in the country. Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be availed against which such deferred tax assets can be realized.

9 Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years. Public issue expenses are written off over a period of 5 years from the year in which the proceeds are substantially utilized.

10 Borrowing Costs

Borrowing Costs charged to Statement of Profit & Loss include interest on short and long term bank borrowings. Borrowing costs attributable to qualifying assets up to the date of capitalization are included in the cost of the asset.

11 Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

12 Impairment

At each Balance sheet date the management reviews the carrying amount of the assets to ascertain impairment loss, if any, to its assets and such losses are appropriately recognized in the accounts.

13. Additional Disclosures

1 Most of the balances of Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation.


Mar 31, 2011

1) Basis of Accounting:

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2) Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following, since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3) Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-rata basis on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of Fixed Assets has been taken at net of CENVAT availed. Depreciation on additions/deletions is calculated on a monthly pro-rata basis, month of addition is included and month of sale is excluded.

The cost of fixed assets other than those included in the specific project comprises, its purchase price including import duty and other non - refundable taxes or levies, cost directly attributable to bring the asset to its working condition for its intended use, start up and commissioning expenses on test runs and experimental production and finance cost up to the date of capitalization but excluding administration and other general overheads.

Cost of fixed assets under specific project includes all the above and directly relatable administrative and other general overheads.

4) Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

5) Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value, whichever is lower, under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct expenses. Stock- in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

6) Foreign Currency Transactions: Expenditure/Income in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of transaction. Asset/Liability in respect of foreign exchange transactions outstanding as at the end of the year is restated at the exchange rate prevailing on that date.

7) Forward Contracts:

Premium or discount at the inception of forward contracts is recognised as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense of the year.

8) Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for Current tax is made on the basis of applicable tax laws existing in the country.

Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that sufficient future taxable income will be availed against which such deferred tax assets can be realised.

9) Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years. Public issue expenses are written off over a period of 5 years from the year in which the proceeds are substantially utilized.

10) Borrowing Costs.

Borrowing Costs charged to Profit & Loss Account include interest on short and long term bank borrowings. Borrowing costs attributable to qualifying assets up to the date of capitalization are included in the cost of the asset.

11) Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

12) Impairment

At each Balance sheet date the management reviews the carrying amount of the assets to ascertain impairment loss, if any, to its assets and such losses are appropriately recognized in the accounts.


Mar 31, 2010

1. Basis of Accounting:

The accounts of the Company are prepared under the historical cost convention on accrual basis as a going concern.

2. Revenue Recognition:

Items of income and expenditure are recognized on accrual basis except for the following since it is not possible to ascertain with reasonable accuracy the quantum to be provided in respect of:

a. Interest & delayed payment charges on overdue bills pending as on Balance Sheet date.

b. The additional liability, if any, arising at the time of assessment of tax / duty.

c. Insurance and Other claims.

3. Fixed Assets & Depreciation:

Depreciation on fixed assets is provided on pro-rata basis on straight-line method at the rates prescribed under Schedule XIV of the Companies Act, 1956. Cost of Fixed Assets has been taken at net of CENVAT availed. Depreciation on additions/deletions is calculated on a monthly pro-rata basis, month of addition is included and month of sale is excluded.

The cost of fixed assets other than those included in the specific project comprises, its purchase price including import duty and other non - refundable taxes or levies, cost directly attributable to bring the asset to its working condition for its intended use, start up and commissioning expenses on test runs and experimental production and finance cost up to the date of capitalization but excluding administration and other general overheads.

Cost of fixed assets under specific project includes all the above and directly relatable administrative and other general overheads.

4. Investments:

Long term Investments are stated at cost less provision for decline in value other than temporary. Current investments are stated at lower of cost and fair market value on category of investment basis.

5. Inventory:

Inventory of raw materials and consumables are valued at cost or net realizable value whichever is lower under FIFO Method. Finished Goods are valued at cost or net realizable value whichever is lower. Cost for the purposes of valuation of finished goods includes cost of material, labour and other direct overheads. Stock-in-process is valued at raw material cost plus proportionate direct cost, wherever applicable.

6. Foreign Currency Transactions:

Expenditure in foreign currency is converted into Indian rupees at the rate of exchange prevailing on the date of the remittance. Liability in respect of foreign exchange transactions outstanding as at the end of the year is restated at the exchange rate prevailing on that date.

7. Forward Contracts:

Premium or discount arising at the inception of forward contracts is recognized as expense or income over the period of contract. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense of the year.

8. Deferred tax/Income tax:

Deferred tax is accounted for, by computing the tax effect of timing differences between taxable income and accounting income.

Provision for current tax is made on the basis of applicable tax laws existing in the country.

Minimum Alternative Tax and its credit are accounted based on the Guidance notes issued by the Institute of Chartered Accountants of India.

Deferred tax assets are recognized and carried forward to the extent that there is reasonable certainly that suffifient future taxable income will be availed against which such deferred tax assets can be realised.

9. Intangible Assets:

Intangible asset, viz, computer software is stated at cost of acquisition less accumulated amortization. Computer software is amortized over a period of 5 Years. Public issue expenses are written off over a period of 5 years from the year in which the proceeds are substantially utilized.

10. Borrowing Costs.

Borrowing Costs charged to Profit & Loss Account include interest on short and long term bank borrowings. Borrowing costs attributable to qualifying assets up to the date of capitalization are included in the cost of the asset.

11.Others:

i) Contingent Liabilities are not provided for and are disclosed in notes to the accounts.

ii) Gratuity and leave encashment liability is worked out based on actuarial valuation as at the end of the year.

12. Impairment

At each of the Balance sheet date the management reviews the carrying amount of the assets to ascertain impairment, if any, to its assets and such losses are appropriately recognized in accounts.

 
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