1.1 Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Notified accounting standard issued by Companies
(Accounting Standards) Rules, 2006, as amended, and the relevant
provisions of the Companies Act, 1956. The accounting policies have
been consistently applied by the company and are consistent with those
used in the previous year.
1.2 Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/materialised
1.3 Revenue Recognition
Income and expenditure are accounted on accrual basis. Sales are
accounted net of Sales Tax .Material consumption is net of Cenvat.
Excise duty in respect of Goods manufactured other than what is in
Stock at the close of the period is accounted at the time of removal of
goods from the factory sales.
1.4 Fixed Assets and depreciation
Fixed assets are stated at cost net of CENVAT less accumulated
depreciation and impairment losses, if any.
Cost comprises the purchase price and any attributable cost of bringing
the asset to its working condition for its intended use.
Depreciation on fixed assets is provided using the straight-line method
based on useful economic life as estimated by the management or at the
rates prescribed under schedule XIV of the Companies Act, 1956.
Individual assets costing Rs. 5,000 or less are depreciated in full in
the year of purchase.
Assets acquired under Hire Purchase agreements are capitalized and
finance charges thereon are expensed over the period of agreements.
1.5 Inventory valuation
a) Finished goods are valued at lower of cost of production and net
realizable value inclusive of excise duty
b) Semi finished goods are valued at cost of raw materials and other
manufacturing cost on historical basis
c) Raw materials, components and stores and spares are valued at
1.6 Foreign Currency Transactions
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of respective transactions. Resultant gain/loss
at the time of realization/payment are recognized separately. Carrying
value of foreign currency assets and liabilities are restated at the
year end rates
1.7 Impairment of assets
Impairment in the value of Fixed Assets is recognized to the extent
that the recoverable amount of an asset is less than its carrying value
and would be charged to Profit and Loss account as prescribed by ICAI
in AS 28.
1.8 Borrowing costs
Borrowing costs that are directly attributable to the cost of
acquisition, construction, or production of a qualifying asset is
capitalized as part of that asset, other borrowing costs are recognized
as expense in the period in which they are incurred.
1.9 Employee benefits
Gratuity liability is a defined benefit obligation and is provided for
based on actuarial valuation performed in accordance with the projected
unit redit method, as at the balance sheet date.
Contributions to Provident fund, Employee pension fund and cost of
other benefits are charged to the Profit and Loss Account of the year
when the contributions to the respective funds are due. The Company has
no further obligations under the plan beyond its monthly contributions.
1.10 Segment Reporting
a) The company has identified two business segment viz Paper and Power.
Revenue and expenses have been identified to respective segments on the
basis of operating activities of the enterprises. Revenue and expenses
which related to the enterprises as a whole and are not allocable to a
segment on reasonable basis have been disclosed as unallocated revenue
b) Segment assets and liabilities represent assets and liabilities in
respective segments. Other assets and liabilities that cannot be
allocated to a segment on a reasonable basis have been disclosed as
unallocated assets and liabilities.
c) Inter segment revenue / expenditure is recognized at cost.
1.11 Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
A provision is recognised when an enterprise has a present obligation
as a result of past event; 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. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
1.13 Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity is capitalised.
Indirect expenditure incurred during construction period is capitalised
as part of the indirect construction cost to the extent to which the
expenditure is indirectly related to construction or is incidental
thereto. Other indirect expenditure incurred during the construction
period which is neither related to the construction activity nor
incidental thereto is charged to the Profit and Loss Account.
1.14 There are no amounts payable to Micro, Small and Medium
Enterprises as defined under the Micro, Small and Medium Enterprises
Development Act, 2006 based on information available with the Company.
Further, the Company has not paid any interest to any Micro, Small and
Medium Enterprises during the current year. This information has been
determined to the extent such parties have been identified on the basis
of information available with the Company and relied upon by the