NOTES FORMING PART OF THE FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED 31ST MARCH, 2016 1 Corporate information The Company is in the business of manufacture and sale of Calcined Petroleum Coke in its manufacturing facilities at Goa, Paradeep and Bilaspur. 2 Significant accounting policies a Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards brscribed under section 133 the Companies Act, 2013, read with Rule 7 of the Companies Accounting Rules, 2014) and the relevant provisions of the Companies Act (“the 2013 Act”)/Companies Act, 1956 (“the 1956 Act”) 2013 as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. b Use of estimates The brparation of financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and estimates are recognized in the periods in which the results are known / materialized. c Inventories Inventories are valued at the lower of cost (net of CENVAT where applicable) and the net realisable value. Cost includes cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. In respect of raw materials, cost is determined on specific identification method, while cost of stores and spares is determined on First-in First-out basis. Finished goods include all direct costs, apportionment of production overheads and excise duty. d Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. e Fixed assets (Tangible / Intangible) Fixed assets are stated at historical cost (net of CENVAT wherever applicable) less accumulated debrciation / amortisation and impairment losses, if any. Cost comprises of direct cost, related taxes, duties, freight and attributable finance costs till such assets are ready for its intended use. Capital work-in-progress: Projects under which assets are not ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest. f Debrciation and amortisation Debrciation is provided on the straight-line method as per the useful life brscribed in Schedule II to the Companies Act, 2013 except in respect of following categories of assets, in whose case the useful life of the assets has been assessed by the Management as under. Mobile phones – One year. Leasehold land is amortised over the period of the lease. Cost of plot development on leasehold land is amortised over the estimated period of utility. Assets costing less than Rs.5,000 each are fully debrciated in the year of acquisition. Debrciation on additions and deletions during the year are charged on prorata basis. Intangible assets are amortised over their estimated useful life on straight line basis. g Revenue recognition Revenue from sale of goods, net of trade discounts and sales returns, is recognised on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods as per the terms of contracts. Sales include excise duty but exclude sales tax and value added tax. Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established. h Foreign currency transactions Foreign currency transactions entered into by the Company are accounted at the exchange rates brvailing on the date of transaction. Foreign currency monetary assets and liabilities outstanding at the balance sheet date are restated at the year end rates. Exchange differences arising on settlement / restatement are charged to the Statement of Profit and Loss. Transactions in foreign currencies entered into by the Company’s integral foreign operations are accounted at the exchange rates brvailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction. Foreign currency monetary items of the Company’s integral foreign operations outstanding at the balance sheet date are restated at the year-end rates. Non-monetary items of the Company’s integral foreign operations are carried at historical cost. Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company’s integral foreign operations are recognised as income or expenses in the Statement of Profit and Loss. Premium or discount arising at the inception of forward exchange contracts are amortised over the period of the contract. Exchange differences on such contracts are recognised in the Statement of Profit and Loss in the reporting period in which the exchange rate changes. i Investments Long term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. j Employee Benefits Short term employee benefits The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of short term compensated absences is accounted as under: (a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur. Long term employee benefits i) Defined contribution plans Superannuation: Fixed contributions to the superannuation fund, which is administered by Life Insurance Corporation of India and ICICI Prudential Life Insurance Company Limited, are charged to the Statement of Profit and Loss as an expense based on the amount of contribution required to be made and when services are rendered by the employees. Provident Fund: The Company contributes to a government administered provident/pension fund. In respect of Goa unit, contributions up to 30.11.2015 were made to the Company’s Employees Providend Fund Trust in accordance with the Trust rules. Goa unit has surrended the Employees Providend Fund Trust to Government administered Providend Fund as at 31.12.2015.The fixed contributions to these funds are charged to the Statement of Profit and Loss. ii) Defined benefit plans Gratuity: The Company offers its employees defined benefit plans in the form of gratuity scheme. The gratuity scheme provides a lump sum payment to vested employees, at retirement or termination of employment. The plan covers all employees as statutorily required under Payment of Gratuity Act, 1972. The Company contributes funds to Life Insurance Corporation of India and ICICI Prudential Life Insurance Company Limited, which is irrevocable. Commitments are actuarially determined at each balance sheet date. The actuarial valuation is done based on the “Projected Unit Credit” method. Actuarial gains and losses are charged to the Statement of Profit and Loss under the head “Contribution to Provident and other Funds”. iii) Compensated absences The employees of the Company are entitled to encashment of unavailed leave. The employees can carry forward a portion of the unutilized leave and receive cash compensation at retirement or termination of employment. The Company contributes fund to Life Insurance Corporation of India, which is irrevocable. The Company records an obligation for encashment of unavailed leave in the period in which the employee renders the services, based on an actuarial valuation at the balance sheet date carried out by an independent actuary less the fair value of the plan assets. Actuarial gain or loss is recognized in the Statement of Profit and Loss. k Borrowing costs Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset are added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. l Earnings per share Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. The number of equity shares are adjusted for share splits and bonus shares, as appropriate. m Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences arising between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the balance sheet date. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only if there is a virtual certainty that they will be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each balance sheet date for their realisability. n Impairment of assets The carrying values of assets / cash generating units are reviewed at each balance sheet date for any indication of impairment based on internal / external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and book value of the assets. In assessing the impairment, the recoverable amount of each cash generating unit acertained from the valuation carried out by the independent Government approved valuer and compared with the book value of the assets at the year end to ascertain the impairment of each cash generating unit. o Provision, contingent liabilities and contingent assets Provisions are recognized when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reasonable estimate can be made. Contingent liability is disclosed for (i) possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) brsent obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are neither recognized nor disclosed in the financial statements. p Operating Cycle Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current. 1. There are no amounts due and payable to Investor Education and Protection Fund as on Balance Sheet date. 2 The Company’s wholly owned step down subsidiary company “Goa Carbon (Cangzhou) Company Limited” China (the “China Company) had obtained a business licence to set up a plant in Cangzhou, Hebei Province, the People’s Republic of China, with an annual capacity to manufacture 3,00,000 MT of Calcined Petroleum Coke. The Company had invested USD 3.48 million (Rs.1,938.62 lacs) in its wholly owned subsidiary “GCL Global Resources SGP Pte Limited” Singapore (the “Singapore Company”) which is the holding company of the China Company. The Singapore Company had in turn invested this money in 3,329,983 Equity Shares of USD 1 each to the authorised capital of the China Company for the purpose of setting up of the plant in China. Pursuant to the decision taken by “Cangzhou Economic Development Zone, China” to cancel the land allotted to the step down subsidiary company “Goa Carbon (Cangzhou) Company Limited” (China Company) on the ground that the proposed plant falls under “high energy consuming industries” as well as “heavy polluting enterprise”, the Company has been compelled to withdraw the proposed project to be set up in China. Consequently the China Company has been liquidated on 08.01.2016. The diminution in the carrying value of investments in the immediate subsidiary company which has invested in the China Company had already been provided for in the books during the Financial Year 2014-15. 43 Previous year’s figures have been regrouped wherever necessary, to conform with the current year’s disclosures. For and on behalf of the Board of Directors Shrinivas V. Dempo Jagmohan J. Chhabra K. Balaraman P. S. Mantri Chairman Executive Director Chief Financial Officer Company Secretary DIN: 00043413 DIN: 01007714 Place : Panaji, Goa date : 12th April, 2016 |