Subam Papers Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

2. Significant Accounting Policies
Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted
Accounting Principles in India (‘Indian GAAP’) to comply with the Accounting Standards
specified under Section 133 of the Companies Act, 2013, read with rule 7 of the Companies
(Accounts) Rules, 2014 as applicable. The financial statements have been prepared under
the historical cost convention on accrual basis, except for certain financial instruments
which are measured at fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting period. Although these
estimates are based upon management’s best knowledge of current events and actions,
actual results could differ from these estimate

2.1 Fixed Assets

Tangible Fixed Assets is stated at acquisition cost net of accumulated depreciation and
accumulated impairment losses, if any. Cost of acquisition or construction of property, plant
and equipment comprises its purchase price including import duties and non-refundable
purchase taxes after deducting trade discounts, rebates and any directly attributable cost of
bringing the item to its working condition for its intended use.

Subsequent costs are included in the asset''s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably. All
other repairs and maintenance cost are charged to the standalone statement of profit and loss
during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference
between net disposal proceeds and the carrying value of property, plant and equipment and
are recognized in the statement of profit and loss when the same is derecognized

2.2 Capital Work-in-Progress

All project / capital related expenditure viz., civil works, machinery under erection,
construction and erection materials, pre-operating expenditure including interest net of
revenue included / attributable to the contracts of the project / as of incurred up to the date
when the asset is ready for its intended use are shown as Capital work-in-progress.

2.3 Borrowing Costs

Borrowing costs directly attributable to acquisition or construction of an asset which
necessarily take a substantial period of time to get ready for their intended use are
capitalized as part of the cost of that asset. Other borrowing costs are recognized as an
expense in the period in which they are incurred.

2.4 Depreciation

Depreciation is calculated on cost of items of the Fixed Assets less their estimated useful
values over their estimated useful lives using the straight-line method and is generally
recognized in the statement of profit &loss account. Freehold land is not depreciated.

The estimated useful lives of the Fixed Assets are as follows:

Assets Management estimate of useful life
Buildinga 30 Year

Office Equipment and Furniture 3 to 10 Years
Plant & Machinery 15 to 25 Years
Vehicles 10 Years

Depreciation method and useful lives and residual values are reviewed at each financial year
end adjusted if appropriate. The management believes that its estimates of useful lives as
given above best represent the period over which the management expects to use the assets.

2.5 Current / Non-current classification

For the purpose of Current / Non-Current classification, the Company has reckoned its
normal operating cycle as twelve months based on the nature of products and the time
between the acquisition of assets or inventories for processing and their realisation in cash
and cash equivalents.

2.6 Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets
included in each cash generating unit to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable amount of the asset is
estimated in order to determine the extent of impairment. Recoverable amount is the higher
of an asset’s net selling price and value in use. In assessing value in use, the estimated future
cash flows expected from the continuing use of the asset and from its disposal are
discounted to their present value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the asset. Reversal of
impairment loss is recognised as income in the statement of profit and loss.

2.7 Investments

Long-term investments and current maturities of long-term investments are stated at cost,
less provision for other than temporary diminution in value. Current investments, except for
current maturities of long-term investments, comprising investments in mutual funds,
government securities and bonds are stated at the lower of cost and fair value.

2.8 Revenue recognition

Revenue is measured based on the transaction price, which is the fair value of the
consideration received or receivable after netting trade discounts, volume discounts, sales
returns and Goods and Services Tax. Revenue from sale of goods is recognized upon
transfer of control of promised goods or services to customers

Income from interest is being accounted for on time proportion basis taking into account the
amount outstanding and the applicable rate of interest. In respect of other heads of income,
the company follows the practice of accounting of such income on accrual basis

Earnings from Non-Conventional Energy sources

The company has installed Off-site Solar Plant and Windmills for captive consumption of
power. The value of power so generated from the Off-site Solar Plant and Windmills are
shown separately under "Other Operating Revenues".

2.9 Taxation

Current income tax expense comprises taxes on income from operations in India Income tax
payable in India is determined in accordance with the provisions of the Income Tax Act,
1961

Deferred tax expense or benefit is recognised on timing differences being the difference
between taxable income and accounting income that originate in one period and is likely to
reverse in one or more subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or substantively enacted by the
balance sheet date

Advance taxes and provisions for current income taxes are presented in the balance sheet
after off-setting advance tax paid and income tax provision arising in the same tax
jurisdiction for relevant tax paying units and where the Company is able to and intends to
settle the asset and liability on a net basis. The Company offsets deferred tax assets and
deferred tax liabilities if it has a legally enforceable right and these relate to taxes on income
levied by the same governing taxation laws.

a) Foreign exchange transactions/translations:

i. Initial Recognition: Foreign currency transactions are reported in the reporting currency,
by applying to the foreign currency amount the exchange rate between the reporting
currency and the foreign currency at the date of transaction.

ii. Conversion: Foreign currency monetary items are retranslated using the exchange rate
prevailing at the reporting date.

iii. Exchange Differences: Exchange difference arising on long term currency monetary
items related to acquisition of a fixed asset a recapitalized and depreciated over the
remaining useful life of the asset. The exchange differences on other foreign currency
monetary items are accumulated in.

“Foreign currency monetary item translation difference account” and amortized over the
remaining life of the concerned monetary item. All other exchange differences are
recognised as income or as expense in the period in which they arise according to the
accounting standard 11 “The effects of change in Foreign exchange rates”.

2.10 Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on
a FIFO basis Work-in-progress is carried at the cost. Stores and spare parts are carried at
cost. Finished goods produced or purchased by the Company are carried at lower of cost and
net realisable value. Cost includes direct material and labor cost and a proportion of
manufacturing overheads

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Mar 31, 2024

2. Significant Accounting Policies
Basis of Preparation

These financial statements have been prepared in accordance with the Generally Accepted Accounting
Principles in India (‘Indian GAAP’) to comply with the Accounting Standards specified under Section
133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014 as applicable.
The financial statements have been prepared under the historical cost convention on accrual basis, except
for certain financial instruments which are measured at fair value.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are based upon management’s best
knowledge of current events and actions, actual results could differ from these estimates.

Change in Depreciation Method

During the year ended 31st March 2024, the company revised the estimated useful life of its machinery
from the rates specified in Schedule II of the Companies Act, 2013, to management''s estimated useful life.
This change was based on a detailed review of the machinery''s usage and technological advancements.

The impact of this change on the financial statements for the year is as follows:

- Increase in profit before tax by ?553.74 Lacs due to lower depreciation expense.

- Decrease in depreciation expense by ?553.74 Lacs.

The effect of the change on future periods is impracticable to determine at this time.

2.1 Fixed Assets

Tangible Fixed Assets is stated at acquisition cost net of accumulated depreciation and accumulated
impairment losses, if any. Cost of acquisition or construction of property, plant and equipment comprises
its purchase price including import duties and non-refundable purchase taxes after deducting trade
discounts, rebates and any directly attributable cost of bringing the item to its working condition for its
intended use.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably. All other repairs and maintenance cost
are charged to the standalone statement of profit and loss during the period in which they are incurred.

Gains or losses that arise on disposal or retirement of an asset are measured as the difference between net
disposal proceeds and the carrying value of property, plant and equipment and are recognized in the
statement of profit and loss when the same is derecognized.

22 Capital Work-in-Progress

All project / capital related expenditure viz., civil works, machinery under erection, construction and
erection materials, pre-operating expenditure including interest net of revenue included / attributable to
the contracts of the project / as of incurred up to the date when the asset is ready for its intended use are
shown as Capital work-in-progress.

23 Borrowing Costs

Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a
substantial period of time to get ready for their intended use are capitalized as part of the cost of that asset.
Other borrowing costs are recognized as an expense in the period in which they are incurred.

2.4 Depreciation

Depreciation is calculated on cost of items of the Fixed Assets less their estimated useful values over their
estimated useful lives using the straight-line method and is generally recognized in the statement of profit
and loss account. Freehold land is not depreciated.

Depreciation method and useful lives and residual values are reviewed at each financial year end adjusted
if appropriate. The management believes that its estimates of useful lives as given above best represent
the period over which the management expects to use the assets.

2.5 Current / Non-current classification

For the purpose of Current / Non-Current classification, the Company has reckoned its normal operating
cycle as twelve months based on the nature of products and the time between the acquisition of assets or
inventories for processing and their realisation in cash and cash equivalents.

2.6 Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each
cash generating unit to determine whether there is any indication that those assets were impaired. If any

such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of
impairment. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing
value in use, the estimated future cash flows expected from the continuing use of the asset and from its
disposal are discounted to their present value using a pre-tax discount rate that reflects the current market
assessments of time value of money and the risks specific to the asset. Reversal of impairment loss is
recognised as income in the statement of profit and loss.

2.7 Investments

Long-term investments and current maturities of long-term investments are stated at cost, less provision
for other than temporary diminution in value. Current investments, except for current maturities of long¬
term investments, comprising investments in mutual funds, government securities and bonds are stated at
the lower of cost and fair value.

2.8 Revenue recognition

Revenue is measured based on the transaction price, which is the fair value of the consideration received
or receivable after netting trade discounts, volume discounts, sales returns and Goods and Services Tax.
Revenue from sale of goods is recognized upon transfer of control of promised goods or services to
customers.

Income from interest is being accounted for on time proportion basis taking into account the amount
outstanding and the applicable rate of interest. In respect of other heads of income, the company follows
the practice of accounting of such income on accrual basis.

Earnings from Non-Conventional Energy sources

The company has installed Off-site Solar Plant and Windmills for captive consumption of power. The
value of power so generated from the Off-site Solar Plant and Windmills are shown separately under
"Other Operating Revenues".

2.9 Taxation

Current income tax expense comprises taxes on income from operations in India Income tax payable in
India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences being the difference between taxable
income and accounting income that originate in one period and is likely to reverse in one or more
subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that
have been enacted or substantively enacted by the balance sheet date.

Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting
advance tax paid and income tax provision arising in the same tax jurisdiction for relevant tax paying
units and where the Company is able to and intends to settle the asset and liability on a net basis. The
Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and
these relate to taxes on income levied by the same governing taxation laws.

i. Initial Recognition: Foreign currency transactions are reported in the reporting currency, by applying
to the foreign currency amount the exchange rate between the reporting currency and the foreign
currency at the date of transaction.

ii. Conversion: Foreign currency monetary items are retranslated using the exchange rate prevailing at
the reporting date.

iii. Exchange Differences: Exchange difference arising on long term currency monetary items related
to acquisition of a fixed asset a recapitalized and depreciated over the remaining useful life of the
asset. The exchange differences on other foreign currency monetary items are accumulated in.

“Foreign currency monetary item translation difference account” and amortized over the remaining life
of the concerned monetary item. All other exchange differences are recognised as income or as expense
in the period in which they arise according to the accounting standard 11 “The effects of change in Foreign
exchange rates”.

2.10 Inventories

Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a FIFO basis
Work-in-progress is carried at the cost. Stores and spare parts are carried at cost. Finished goods produced
or purchased by the Company are carried at lower of cost and net realisable value. Cost includes direct
material and labor cost and a proportion of manufacturing overheads.