T.—SIGNIFICANT ACCOUNTING POLICIES & NOTES ON ACCOUNTS- 1.1 Basis of Preparation of Financial Statements The Financial Statements have been brpared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant disclosure requirements of the Companies Act, 2013 under historical cost convention and on the basis of going concern. Accounting policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting principles followed by the company. 1.2 Fixed Assets Fixed Assets are stated at acquisition cost (net of modvat/cenvat if any) including directly attributable cost of bringing them to their respective working conditions for the intended use less accumulated debrciation. Assets acquired on Hire Purchase are stated at their cash values. The cost of acquisition in respect of fixed assets pertaining to amalgamated company (Gulshan Sugars & Chemicals Ltd) as on appointed date i.e. April 1, 2007 is the value at which these were standing in the books of transferor (GSCL) Company. 1.3 Debrciation Debrciation on fixed Assets is provided to the extent of debrciable amount on Written Down Value Method as specified in Part C of Schedule II of Companies Act 2013. Debrciation is provided on useful life of the assets as technically assessed. 1.4 Impairment The Management periodically assesses, using external and internal sources, whether there is an indication that an asset may be impaired. An impairment loss is recognized wherever the carrying value of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset's net selling price and value in use, which means the brsent value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. 1.5 Inventory Valuation The company has valued its inventory on "cost or net realizable value whichever is lower" basis and is in compliance with the Accounting Standard-2 issued by ICAI . However, stock-in-process has been valued on estimated cost. Further, the valuation of inventory is inclusive of Excise Duty component wherever applicable as required u/s 145A of the Income Tax Act, 1961. 1.6 Consumption of Raw Materials, Stores, Fuels, Chemicals, Consumables & Packing are accounted for after reckoning the Closing Stock of respective items as ascertained by the Company's experts at the end of the year from the total of the Opening Stock and purchases. 1.7 Revenue Recognition The Company follows mercantile system of accounting where all the Income and Expenditure items having material bearing on the financial statements are recognized on accrual basis. 1.8 Foreign Currency Transactions (i) Transactions denominated in foreign currencies are normally recorded at the exchange rate brvailing at the time of the transaction. (ii) Any income or expense on account of exchange difference either on settlement or on transaction is recognized in the Profit & Loss Account except in the case of long term liabilities, where they related to acquisition of fixed assets in which case they are adjusted to the carrying cost of such assets and corresponding effect of long term liabilities. 1.9 Retirement Benefits The retirement benefits such as Contribution to Provident Fund, Leave encashment etc. are accounted for on accrual basis and the payment and provision for Gratuity is made on the basis of actuarial valuation done by life Insurance Corporation of India. 1.10 Excise Duty Excise Duty is recognized at the point of Production and the value of finished goods lying in the factory as well as at depots are inclusive of Excise Duty. Other inventories are also inclusive of Excise Duty Component wherever applicable. 1.11 Turnover Turnover include sale of goods, excise duty, trade/sales tax and other recoverable expenses. 1.12 Borrowing Costs Borrowing cost that is attributable to the acquisition or construction of qualifying asset is capitalized as part of the cost of such asset. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue. 1.13 Provision for Current & Deferred Tax The provision for Current Tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. The deferred tax liability as per Accounting Standard (AS-22) resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or subsequently enacted as on the Balance Sheet date. The deferred tax Asset/credit is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future. 1.14 Investments The Investments being long-term investments are valued at cost, after providing for any diminution in value, if such diminution is of a permanent nature. 1.15 The interest accrued and due on secured and unsecured loans have been paid on due dates. Therefore, the amount outstanding is Nil and has not been disclosed under respective heads. 1. The brvious figure has been re-arranged and/or regrouped wherever necessary, to conform the current year classification. 2. Contingent Liabilities in respect of: i) Corporate guarantee (in the form of counter guarantee) extended to Gujarat Industrial Development Corporation (GIDC) for Rs. 7,39,000./- (Previous year Rs. 7,39,000/-) on account of Bharuch Eco Infrastructure Limited, for proportionate share of financial assistance pertaining to the company extended to GIDC by Industrial Development Finance Corporation (IDFC) for laying the common pipe line for treated water from industrial units. ii) Bank guarantees for Rs. 3,75,58,867/- in favour of Government Departments and others. iii) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 1993.10 lacs. 3. In compliance to the Accounting Standard-11, the Foreign Currency Term Loan of USD 70,24,705 outstanding at the end ol year for acquisition of fixed assets has been increased by Rs. 1,81,93,985/- on account of loss in foreign exchange rate difference as at 31-3-2015. 4. In compliance to the Accounting Standard-22 on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India (ICAI), Deferred Tax Asset of Rs. 81,99,849/- (Previous Year Rs. 2,11,70,831/- Deferred Tax liability) has been provided as at 31st March 2015 and the same has been charged to the Profit & Loss account of the Company. This pertains to the timing difference in Debrciation on Assets as per books of accounts and WDV as per Income Tax Act. The Deferred Tax Liability has been calculated by applying tax rate that have been enacted and applicable as on the Balance Sheet date. No Liability has been computed in respect of difference considered to be of permanent nature. 5. Disclosure of Related Party transactions as per Accounting Standard 18 issued by ICAI : (a) Name of related party and nature of related party relationship where control exist (i) Holding Company : Nil (ii) Subsidiary Company : Nil 6. The Company Operates in Chemicals Industry and there are not reportable segments. In terms of our separate report of even date For SHAHID & ASSOCIATES Chartered Accountants (Firm Registration No : 002140-C) (MOHD. SHAHID) Partner Membership No. 070408 DR. C. K. JAIN Chairman & Managing Director DIN : 00062221 ASHWANI KUMAR VATS Whole Time Director and CEO DIN : 00062413 RAJESH AGRAWAL Chief Financial Officer NISHA GUPTA Company Secretary Date : 30th May, 2015 Place : Delhi |
