Accounting Policies of Karur KCP Packkagings Ltd. Company

Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 have been followed to the extent applicable in preparation of Annual Accounts. Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as on the date of the Balance Sheet and the Financial Results of the Company for the year ended on that date.

B. USE OF ESTIMATES

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

C. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. INVESTMENTS

Investments, being long-term are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in nature.

E. INVENTORIES

Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower. Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

F. LIABILITIES

Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and are disclosed by way of a note.

G. PROPOSED DIVIDEND

Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting.

H. REVENUE RECOGNITION

Revenue from Sales is recognized once the title is passed on to the buyer. Sales include excise duty, cess, and other levis. Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of five years. In respect of other income and expenses it is recognized based on the contractual rights and obligations. Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no significant uncertainty exists as to its measurability or correctibility.

I. DEPRECIATION ACCOUNTING

Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act. Depreciation on additions/deletions in respect of fixed assets are charged up to the date on which the assets is available for use / disposal.

J. FOREIGN EXCHANGE TRANSACTIONS

Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions. The amount due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be. The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

K. RESEARCH AND DEVELOPMENT

Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on Research and Development, if any, is written off in the year in which it is incurred.

L. BORROWING COSTS

In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate.

M. EARNING PER SHARE

Basic / Diluted Earning per share has been computed with reference to the Weighted Average Number of Shares.

N. EMPLOYEES BENEFITS

a. Short Term Benefits:-

Short term employees benefits are charged at the undiscounted amount to profit and loss account in the year in which the related service is rendered.

b. Defined Contribution Plan:-

Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defined Benefit Plan:-

The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India, Thanjavur.

O. CASH FLOW STATEMENT

Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and Ac- counts held with Banks.

P. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES

Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with Accounting Standard 5.

Q. SEGMENT REPORTING

The Company has identified three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses have been identified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

R. ACCOUNTING FOR TAXES ON INCOME

a. Tax expense includes current taxes and deferred taxes.

b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year.

c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected through Deferred Tax Liabilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Statement of Profit and Loss.

d. The Net effect of taxation due to:

i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and

ii. Unadjusted carry forward losses/depreciation for an year computed in accordance with the provisions of the Income Tax Act 1961, is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset, as per its tax records, the said asset is created by way of a credit to the Statement of Profit & Loss and shown as MAT Credit entitlement.

S. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

T. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the Company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgment and best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2013

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company follows accrual concept of accounting in preparing accounts. The fnancial statements have been prepared on going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 have been followed to the extent applicable in preparation of Annual Accounts. Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as on the date of the Balance Sheet and the Financial Results of the Company for the year ended on that date.

B. USE OF ESTIMATES

The preparation of fnancial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the fnancial statements and the reported amounts of revenue and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.

C. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. INVESTMENTS

Investments, being long-term are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in nature.

E. INVENTORIES

Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower. Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured fnished goods lying in factory premises is included in the valuation.

F. LIABILITIES

Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and are disclosed by way of a note.

G. PROPOSED DIVIDEND

Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting.

H. REVENUE RECOGNITION

Revenue from Sales is recognized once the title is passed on to the buyer. Sales include excise duty, cess, and other levis. Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of fve years. In respect of other income and expenses it is recognized based on the contractual rights and obligations. Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no signifcant uncertainty exists as to its measurability or correctibility.

I. DEPRECIATION ACCOUNTING

Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act.

Depreciation on additions/deletions in respect of fxed assets are charged up to the date on which the assets is available for use / disposal.

J. FOREIGN EXCHANGE TRANSACTIONS

Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions. The amount due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be. The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of proft and loss in the year in which the exchange rates change. Any proft or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

K. RESEARCH AND DEVELOPMENT

Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on Re- search and Development, if any, is written off in the year in which it is incurred.

L. BORROWING COSTS

In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate.

M. EARNING PER SHARE

Basic / Diluted Earning per share has been computed with reference to the Weighted Average Number of Shares.

N. EMPLOYEES BENEFITS

a. Short Term Benefts:- Short term employees benefts are charged at the undiscounted amount to proft and loss account in the year in which the related service is rendered.

b. Defned Contribution Plan:- Payments to defned contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defned Beneft Plan:- The Company has Defned Beneft Plan for post employment benefts in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India, Thanjavur.

O. CASH FLOW STATEMENT

Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and Accounts held with Banks.

P. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES

Signifcant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with Accounting Standard 5.

Q. SEGMENT REPORTING

The Company has identifed three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses have been identifed to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

R. ACCOUNTING FOR TAXES ON INCOME

a. Tax expense includes current taxes and deferred taxes.

b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year.

c. Deferred taxes refect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. The Tax effects of signifcant temporary differences are refected through Deferred Tax Liabilities which has been refected in the Balance Sheet and the corresponding effects of the same is given in the Proft and Loss Account

d. The Net effect of taxation due to:

i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and

ii. Unadjusted carry forward losses / depreciation for an year computed in accordance with the provisions of the Income Tax Act 1961 is accounted subject to prudence and reasonable certainty in the said year and displayed in the fnancial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specifed period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Proft & Loss Account and shown as MAT Credit entitlement.

S. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fxed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

T. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the Company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out fow of resources embodying economic benefts will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgement and best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out fow of resources. Contingent Assets are neither recognized nor disclosed in the fnancial statements.

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Mar 31, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 have been followed to the extent applicable in preparation of Annual Accounts. Appropriate Accounting Policies have been selected and applied consistently. Judgements and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the Company as on the date of the Balance Sheet and the Financial Results of the Company for the year ended on that date.

B. USE OF ESTIMATES

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

C. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

D. INVESTMENTS

Investments, being long-term are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in nature.

E. INVENTORIES

Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower. Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

F. LIABILITIES

Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and are disclosed by way of a note.

G. PROPOSED DIVIDEND

Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting.

H. REVENUE RECOGNITION

Revenue from Sales is recognized once the title is passed on to the buyer. Sales includes excise duty, Cess, and other levis. Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of five years. In respect of other income and expenses it is recognized based on the contractual rights and obligations. Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no significant uncertainty exists as to its measurability or correctibility.

I. DEPRECIATION ACCOUNTING

Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act.

Depreciation on additions/deletions in respect of fixed assets are charged up to the date on which the assets is available for use/disposal.

J. FOREIGN EXCHANGE TRANSACTIONS

Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions. The amount due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be. The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

K. RESEARCH AND DEVELOPMENT

Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on Research and Development, if any, is written off in the year in which it is incurred.

L. BORROWING COSTS

In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate.

M. EARNING PER SHARE

Basic/Diluted Earning per share has been computed with reference to the Weighted Average Number of Shares.

N. EMPLOYEES BENEFITS

a. Short Term Benefits:-

Short term employees benefits are charged at the undiscounted amount to Profit and Loss account in the year in which the related service is rendered.

b. Defined Contribution Plan:-

Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defined Benefit Plan:-

The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India, Thanjavur.

O. CASH FLOW STATEMENT

Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and Accounts held with Banks.

P. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES

Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with Accounting Standard 5.

Q. SEGMENT REPORTING

The Company has identified three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses have been identified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

R. ACCOUNTING FOR TAXES ON INCOME

a. Tax expense includes current taxes and deferred taxes.

b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year.

c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected through Deferred Tax Liabilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Profit and Loss Account.

d. The Net effect of taxation due to:

i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and

ii. Unadjusted carry forward losses/depreciation for an year computed in accordance with the provisions of the Income Tax Act 1961 is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit entitlement.

S. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

T. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the Company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgement and best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2011

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 have been followed to the extent applicable in preparation of Annual Accounts.

Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the company as on the date of the Balance Siheet and the financial results of the Company for the year ended on thai date.

2. USE OF ESTIMATES

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

3. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

4. INVESTMENTS

Investments, being long-term are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in nature.

5. INVENTORIES

Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower. Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

6. LIABILITIES

Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and are disclosed by way of a note.

7. PROPOSED DIVIDEND

Dividend proposed by Directors, if any. is provided for in the books of accounts pending approval at the Annual General Meeting.

8. REVENUE RECOGNITION

Revenue from Sales is recognized once the title is passed on to the buyer. Sales includes excise duty, Cess, VAT, Sales Tax and other levis.

Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) and Global Depository Receipts (GDR) are treated as deferred revenue expenditure and amortized over a period of five years.

In respect of other income and expenses it is recognized based on the contractual rights and obligations.

Dividend and yields due, if any. are recognized when the right to receive the payment is established unconditionally and no significant uncertainty exists as to its measurability or correctibility.

9. DEPRECIATION ACCOUNTING

Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act.

Depreciation on additions/deletions in respect of fixed assets are charged up to the date on which the assets is available for use / disposal.

10. FOREIGN EXCHANGE TRANSACTIONS

Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions.

The amount due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be

The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

11. RESEARCH AND DEVELOPMENT:

Capital Expenditure on Research and Development, if any. are capitalized and depreciated The revenue expenditure on Research and Development, if any, is written off in the year in which it is incurred.

12. BORROWING COSTS

In respect of those asset that takes necessarily a substantial period to get ready for its intended use. borrowing costs directly attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate

13. EARNING PER SHARE

Basic/Diluted Earning per share has been computed with reference to the Weighted Average number of Shares

14. EMPLOYEES BENEFITS

a. Short Term Benefits:-

Short term employees benefits are chargec at the undiscounted amount to Profit and Loss account in the year in which the related service is rendered.

b. Defined Contribution Plan:-

Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defined Benefit Plan:-

The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India,Thanjavur.

15. CASH FLOW STATEMENT

Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Eguivalents comprise Cash in Hand, and Accounts held with Banks.

16. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES

Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with Accounting Standard 5.

17. SEGMENT REPORTING

The Company has identified three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses have been identified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enter- prises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

18. ACCOUNTING FOR TAXES ON INCOME

a. Income-tax expense includes current taxes and deferred taxes.

b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year.

c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected tnrough Deferred Tax Li- abilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Profit and Loss Account.

d. The Net effect of taxation due to:

i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and

ii. Unadjusted carry forward losses/depreciation for an year computed in accordance with the provisions of the Income Tax Act 1961 is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit entitlement.

19. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

20. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its present value and are determined based on judgment and best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The Company follows accrual concept of accounting in preparing accounts. The financial statements have been prepared on going concern basis adopting historical cost and conform to the general and normally accepted accounting practices. Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 have been followed to the extent applicable in preparation of Annual Accounts.

Appropriate Accounting Policies have been selected and applied consistently. Judgments and estimates that are reasonable and prudent have been made so as to give a true and fair view of the state of affairs of the company as on the date of the Balance Sheet and the financial results of the Company for the year ended on that date.

2. USE OF ESTIMATES

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

3. FIXED ASSETS

Fixed Assets are stated at cost of acquisition including any attributable cost for bringing the assets to its working condition for its intended use less accumulated depreciation.

4. INVESTMENTS

Investments, being long-term are stated at cost. Provision for diminution in value of long term investments is made only if such a decline is other than temporary in nature.

5. INVENTORIES

Raw material, Work in Progress, Finished Goods, Waste, Stores are Valued at cost or realizable value whichever is lower. Company is adopting FIFO method in respect of all inputs. Excise Duty liability on manufactured finished goods lying in factory premises is included in the valuation.

6. LIABILITIES

Liabilities acknowledged as debts are taken into account, while contingent and disputed liabilities, if any, are not provided for and are dis- closed by way of a note.

7. PROPOSED DIVIDEND

Dividend proposed by Directors, if any, is provided for in the books of accounts pending approval at the Annual General Meeting.

8. REVENUE RECOGNITION

Revenue from Sales is recognized once the title is passed on to the buyer. Sales includes excise duty, Cess, VAT, Sales Tax and other levis. Excise duty paid on dispatches is shown separately as an item of Profit and Loss account.

Expenses incurred on account of raising of Foreign Currency Convertible Bonds Loan (FCCB) is treated as deferred revenue expenditure and amortized over a period of five years.

In respect of other income and expenses it is recognized based on the contractual rights and obligations.

Dividend and yields due, if any, are recognized when the right to receive the payment is established unconditionally and no significant uncer- tainty exists as to its measurability or correctibility.

9. DEPRECIATION ACCOUNTING

Depreciation is provided on Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act.

Depreciation on additions/deletions in respect of fixed assets are charged up to the date on which the assets is available for use / disposal.

10. FOREIGN EXCHANGE TRANSACTIONS

Foreign Exchange Transactions are accounted at the exchange rates prevailing on the date of transactions.

The amount due to or from others as at the Balance Sheet date are updated at the then prevailing exchange rates and the variation is considered as income or expenditure as the case may be.

The Premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of respec- tive contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expenses for the year.

11. RESEARCH AND DEVELOPMENT:

Capital Expenditure on Research and Development, if any, are capitalized and depreciated. The revenue expenditure on Research and Development, if any, is written off in the year in which it is incurred.

12. BORROWING COSTS

In respect of those asset that takes necessarily a substantial period to get ready for its intended use, borrowing costs directly attributable are capitalized as part of the cost of the asset. In respect of funds generally borrowed and used for acquiring such assets, the borrowing costs are capitalized at capitalization rate which is determined based on the borrowing rate

13. EARNING PER SHARE

Basic/Diluted Earning per share has been computed with reference to the Weighted Average number of Shares.

14. EMPLOYEES BENEFITS

a. Short Term Benefits:-

Short term employees benefits are charged at the undiscounted amount to Profit and Loss account in the year in which the related service is rendered.

b. Defined Contribution Plan:-

Payments to defined contribution schemes are remitted to the regulatory authorities and charged as expenses as and when incurred.

c. Defined Benefit Plan:-

The Company has Defined Benefit Plan for post employment benefits in the form of Gratuity for all employees administered through trust funded with Life insurance Corporation of India,Thanjavur.

15. CASH FLOW STATEMENT

Cash Flow Statement has been prepared under Indirect Method. Cash and Cash Equivalents comprise Cash in Hand, and Accounts held with Banks.

16. NET PROFIT OR LOSS FOR THE PERIOD, PRIOR PERIOD ITEMS AND CHANGES IN ACCOUNTING POLICIES

Significant items or Extra-ordinary Items and Prior period Incomes and Expenditures, if any are accounted in accordance with Accounting Standard 5.

17. SEGMENT REPORTING

The Company has identified three business segments viz., Paper, Pager Bags and PP & FIBC Bags. Revenue and expenses have been iden- tified to respective segments on the basis of operating activities of the Enterprises. Revenue and expenses which relate to the enterprises as a whole and are not allocable to a segment on a reasonable basis has been disclosed as unallocable revenue and expenses.

18. ACCOUNTING FOR TAXES ON INCOME

a. Income-tax expense includes current taxes and deferred taxes.

b. Current tax is provided on the taxable income of the tax accounting year at the applicable rate of that year.

c. Deferred taxes reflect the impact of current year timing difference between taxable income and accounting income for the year and reversal of timing differences of earlier years. The Tax effects of significant temporary differences are reflected through Deferred Tax Li- abilities which has been reflected in the Balance Sheet and the corresponding effects of the same is given in the Profit and Loss Account.

d. The Net effect of taxation due to:

i. Income or expenditure accounted in a year and considered for taxation either in full or in part in a different year and ii. Unadjusted carry forward losses/depreciation for an year computed in accordance with the provisions of the Income Tax Act 1961 is accounted subject to prudence and reasonable certainty in the said year and displayed in the financial statements accordingly.

e. Minimum Alternative Tax (MAT), if any, credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Profit & Loss Account and shown as MAT Credit entitlement.

19. IMPAIRMENT OF ASSETS

The Company makes an assessment on the balance sheet date to determine whether there is any indication of impairment in the carrying amount of its fixed assets and on any such indication, the recoverable amounts are estimated and an impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount.

20. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Pursuant to Accounting Standard 29 Provisions Contingent Liabilities and Contingent Assets, the company recognizes provisions only when it has a present obligations a result of a past event, it is probable that an out flow of resources embodying economic benefits will be required to settle the obligation as and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to its pres- ent value and are determined based on judgment and best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect current management estimates. A disclosure of contingent liability is made where it is more likely than not, that a present obligation or possible obligation would not result in or involve an out flow of resources. Contingent Assets are neither recognized nor disclosed in the financial statements.