24. SIGNIFICANT ACCOUNTING POLICIES: A. The financial statements are brpared under the historical cost convention (except for revaluation of certain Fixed Assets), on the accounting principles of a going concern, in accordance with the applicable accounting standards notified by Companies Act, 2013 and on accrual basis. All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis. B. USE OF ESTIMATES The brparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result may some time differ from these estimates. Any revision to accounting estimates is recognized prospectively. C. FIXED ASSETS I. a) Certain Land & Buildings and Plant & Equipment were revalued from time to time and are stated at updated book values less debrciation, where applicable. b) Other assets are stated at cost less debrciation/amortisation. Cost comprises of all expenses incurred upto commissioning/putting the assets to use. II. IMPAIRMENT OF ASSETS The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to the statement of profit and loss. If at the Balance Sheet date, there is any indication that a brviously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect. D. DEbrCIATION / AMORTISATION Debrciation on Fixed Assets is provided on written down value method over the useful lives of assets as brscribed under Part C of Schedule II of the Companies Act, 2013 (hereinafter referred to as the 'Act'). E. INVESTMENTS Noncurrent investments are carried at cost less write offs, if any, for diminution other than temporary in the value of such investments, determined for each investment individually. F. VALUATION OF INVENTORIES a) (i) Stock in Trade-Immovable Properties is valued at lower of estimated market value at the time of conversion as per the expert opinion received in the matter and estimated net realisable value. (ii) Other Inventories are valued at lower of cost and estimated net realisable value. Obsolete, defective and unserviceable stocks are provided for. b) Cost of Inventories is computed on moving weighted average /FIFO basis. c) Cost of finished goods, work-in-progress and other materials includes conversion and other costs incurred in bringing the inventories to their brsent location and condition. d) Advertisement and Sales promotion materials/items are charged to revenue as and when purchased. G. REVENUE RECOGNITION a) Sale of goods is recognised when the property and all the significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales include Excise Duty and are net of Discounts / Margins (as considered appropriate by the management), Value Added Tax and Damaged & Dented stocks. Damaged & Dented stocks are accounted/ provided for as and when inspected and destroyed. b) Export sales are accounted for on the basis of the date of Bill of Lading / Mates Receipt. c) Export Benefit Claims are accounted in the year of export. H. EMPLOYEE BENEFITS (a) Contributions towards provident fund and superannuation fund are made under defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner. The superannuation fund is administered by the Trustees of the GTL Management Staff Superannuation Scheme and is funded under Group Superannuation Scheme of Life Insurance Company Limited. The Company is required to contribute a specific percentage of payroll cost towards retirement benefits. The contributions are charged to Statement of profit and loss in the respective year. (b) Leave entitlement liability is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss. (c) Gratuity liability is defined benefit plan and is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss. I. RESEARCH AND DEVELOPMENT EXPENSES Research & Development expenses of revenue nature are charged to the Statement of profit and loss and that of capital nature are shown as an addition to the respective Fixed Assets. J. TRANSLATION OF FOREIGN CURRENCY ITEMS a) Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transaction. b) Assets, liabilities and capital commitments denominated in foreign currency are restated at the rate of exchange brvailing atthe year end. c) In case of forward contracts, the brmium/discount is dealt with in the Statement of profit and loss over the period of the contracts. d) The exchange differences are adjusted to Statement of profit and loss. K. BORROWING COSTS Borrowing Costs attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of such assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of profit and loss. L. TAXATION Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable/virtual certainty that these would be realized in future. M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts. Disputed show cause notices / show cause-cum-demand notices are not considered as contingent liabilities. Contingent assets are not recognized or disclosed in the financial statements. 25. NOTES TO FINANCIAL STATEMENTS : 2) Land & Buildings and Plant & Equipment were revalued as on 30th June, 1980, 30th June, 1984, 30th June, 1986 (only Land and Buildings), 30th June, 1988 and 31st March,1993. The total increase as a result of these revaluations was transferred to Revaluation Reserve in the respective years. All the above stated revaluations were carried out by an external approved valuer on the basis of market/replacement value of similar assets, using standard indices and after considering the obsolescence and age of individual assets. The revalued amounts, net of withdrawals, of Rs. 14,66,98,190 for Land & Buildings and Rs. 64,35,94,544 for Plant & Equipment (Previous Year Rs. 14,66,98,190 and Rs. 64,35,94,544 respectively) remain substituted for the historical costs in the gross block of Fixed Assets (Refer Note 8 of the Standalone financial Statements). 3) (a) In the opinion of the management, assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. (b) The Accounts of certain Trade Receivables, Trade Payables, Non-operative Banks / Lenders and Loans & Advances are however, subject to formal confirmations / reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year's financial statements. 4) Other Liabilities includes Rs. 3,07,90,749 (Previous Year Rs. 3,07,90,749) on account of income tax refund received pertaining to earlier years as the disputed matters are yet to be decided. 7) The Company as a part of development activities of Realty Division :- (a) The Company had entered into Memorandum of Understanding (MOU) in December, 2009 with M/s Sheth Developers Pvt. Ltd. and Suraksha Realty Ltd. (Developers) and had received advances in earlier years aggregating to Rs. 1,32,00,00,000 (Previous Year Rs. 1,32,00,00,000) to jointly develop its Vile Parle property. However, the aforesaid parties have disputed and not paid balance payment which was due in March, 2011 as per the said MOU / final demand notice to the Developers. One of the minority shareholder of the Company filed a suit in the City Civil Court, Mumbai, challenging the MOU entered into by the Company with the Developers. The Court vide its Order dated 26.04.2011 granted ad-interim stay in respect of operation of the MOU. Title deeds of the property are held in Escrow Account with the Solicitor till the completion of obligations specified in the MOU. The Company has submitted MDRS to the Operating Agency (OA) appointed by BIFR sought for refunding above advances and also the advances of Rs. 40,75,00,000 received from a strategic investor against Vile Parle Property along with interest, if any as decided by BIFR by selling the said property. (Reference is invited to Note no. 25[1.1 b(iii)] about the Hon'ble Subrme Court's Order for not to encumber or in any way alienate the property). The Hon'ble High Court Gujarat at Ahmadabad vide it's order dated 05-05-2015 restrained the Company from transferring its Vile Parle property pursuant to a petition filed by a group of minority shareholders. (b) The Company had entered into a development agreement in September, 2007 and supplemental agreement in October, 2008 & March, 2014 with a developer to jointly develop its Hyderabad property. During the year, the Company has received an interest free security deposit Rs. NIL (Previous year Rs. 4,00,00,000), balance as on March 31, 2015 Rs. 9,00,00,000 (Previous Year Rs. 9,00,00,000). Further the plan approval of the project is pending because of environmental clearance from the concerned authority, the application for the same has already been filed and the approval is expected shortly, however other approvals are already obtained. (c) The Company gave advances aggregating to Rs. 1,83,18,77,637 (Previous Year Rs. 1,83,07,23,882) to Golden Realty and Infrastructure Limited (a subsidiary of the Company) which in turn has utilized to acquire certain development rights in a plot of land situated in Delhi for Joint Development pursuant to Development Agreement in this regard. 10) The Company has brpared the financial statements on a going concern basis as the Management is hopeful to turn around business performance and expects favourable decision by the Hon'ble Subrme Court and Hon'ble Gujarat High Court, which would expedite the finalization of the MDRS, enabling the Company, inert-alia, for early disposal of its surplus properties. 20) As per Accounting Standards (AS) 17 "Segment Reporting", segment information has been provided in the notes to Consolidated Financial Statements. 21) The Previous Year's figures have been rearranged, reinstated and/or regrouped wherever necessary to conform to the Current Year's brsentation. Signatures to Notes 1 to 25 As per our attached Report of even date For LODHA & CO. _ . Chartered Accountants Firm Registration No. 301051E R. P. Baradiya Partner Membership No. 44101 For and on behalf of the Board A. K. Joshi Managing Director DIN : 00379820 Bharat B. Merchant Director DIN : 00300384 Manoj Kumar Srivastava Company Secretary Place: Mumbai Date : May 25, 2015 |