SIGNIFICANT ACCOUNTING POLICIES FOR THE YEAR ENDED MARCH 31, 2015. 1. Basis of Preparation of Financial Statements (i) The financial statements of the Company have been brpared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (accounts) Rules, 2014. (ii) The financial statements have been brpared on an accrual basis and under the historical cost convention. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. 2. Use of Estimates The brparation of financial statement requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the results and estimates are recognized in the period in which the results are known / materialized. 3. Revenue Recognition (i) Revenue from sale of products is recognized when the risk and reward of ownership of the product is passed on to the customers, which is generally on dispatch of goods. Sales are stated exclusive of Sale/Trade tax (ii) Dividend income is recognized when the unconditional right to receive the income is established. (iii) Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists. 4. Fixed Assets Fixed Assets are stated at cost net of CENVAT, less accumulated debrciation. Cost of acquisition is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect of major projects involving construction, related br-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. To adjust the original cost of Fixed Assets acquired through foreign currency loans at the end of each financial year by any change in liability arising out of exbrssing the outstanding foreign loan at the rate of exchange brvailing at the date of Balance Sheet. 5. Debrciation In accordance with the provisions of Schedule II of the Companies Act, 2013, the Company has estimated the useful lives of fixed assets. Debrciation on tangible assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Debrciation for assets purchased / sold during a period is proportionately charged. Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use. The Management estimates the useful lives for the fixed assets. The consequential impact (after considering the provision specified in Schedule II) on the debrciation charged and on the results for the year is not material. 6. Impairment of Assets An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period as reversed if there has been a change in the estimate of recoverable amount. 7. Foreign Currency Transactions Transactions in foreign currency are recorded at the exchange rate brvailing on the date of transaction or at the rates covered by the forward contracts. The exchange differences on conversion are adjusted to: a. Cost of Fixed Assets, if the foreign currency liability relates to the fixed assets. b. Cost of Raw Material & Chemicals, if the foreign currency liability relates to these items. c. Bank charges, if the foreign currency liability relates to conversion of bank's credit facility into foreign currency. 8. Investments Long term Investments are stated at cost. Provision for diminution in the value of long-term investment is made only if such a decline is other than temporary in opinion of the management. 9. Inventories Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their brsent location and condition. Raw materials, Stores & Spares are valued at cost, determined on the basis of the weighted average method. Work-in-progress is valued at the lower of cost and net realizable value. Finished goods are valued at the lower of cost and net realizable value. Excise duty is included in the value of finished goods inventory. 10. Preliminary Expenses Preliminary expenses (including the expenses for enhancement of Authorised capital) have been amortized over a period of five years. 11. Retirement benefits Company's contributions to Provident Fund are charged to Profit & Loss Account on accrual basis. Liability for payment of Gratuity and Leave Encashment is charged to Profit & Loss Account on the basis of Actuarial valuation as at year end. 12. Borrowing Costs Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as a part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue. 13. Provision for Current Tax & Deferred Tax Provision for current tax is made, which is likely to arise on the results for the year at the current rate of tax in accordance with the provisions of the Income Tax Act,1961, Deferred tax is computed in accordance with Accounting Standard 22- "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, 14. Accounting of CENVAT Credit Cenvat credit available on raw material, chemicals, stores & spares is accounted for by booking respective material purchases, net of excise duty, similarly Cenvat Credit entitlement on Capital goods, net of excise. Both these Cenvat Credits are accumulated and shown as receivable under "Loans and Advances" for adjustments in due course against duty payable on dispatch of finished goods. 15. Provision, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 16. Corporate Social Responsibility (CSR) Expenditure The Company has opted to charge its CSR expenditure incurred during the year to the statement of profit and loss. 17. In view of giving full attention to main business activities of the Company, the Board had on 23.6.2014 approved the transaction of disposal of entire shareholding in the Subsidiary of the Company viz. Genus Prime Infra Limited (formerly Gulshan Chemfill Limited) in terms of the Share Purchase Agreement dated 01.7.2014 and subject to the provisions of SEBI Takeover Regulations 2011. Pursuant to the approval of members of the company in the 3rd annual general meeting held on 30.9.2014 and SEBI' letter no. CFD/DCR/AT/SKD/PA/4585/2015 dated February 11, 2015, Genus Prime Infra Limited and it's three subsidiaries i.e. Sansar Infrastructure Pvt. Ltd., Sunima Trading Pvt. Ltd. and Star Vanijya Pvt. Ltd. (wholly owned subsidiaries of Genus Prime Infra Limited) has ceased to be subsidiaries of the Company w.e.f. 21st April, 2015. As per the said scheme; a. All the properties, investments, assets and liabilities related to Paper & Boards, Steel and Non Power Investment undertaking/ divisions of GPIL are transferred and vested in the Company on a going concern basis with effect from 01.04.2011. b. The said transfer has been affected at the values appearing in the books of GPIL and recorded as such in the books of account of the Company. The value of assets over liabilities as on that date aggregates to Rs. 2722499996.00. In consideration of the demerger, the Company has issued and allotted 256625940 equity shares to the shareholders of GPIL in the ratio of one equity share of face value of Re.1/- each fully paid up in the Company for every one equity share of Re.1/- each fully paid up held by the shareholders of GPIL ranking pari passu with the existing equity shares of the Company save and except in relation to dividends, if any, to which they may be entitled to, as and from the Appointed Date. The New Equity Shares of the Company issued on Demerger shall, subject to completion of applicable procedures, be listed on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited and shall remain frozen in the depositories system till listing/trading permission is given by the Bombay Stock and the National Stock Exchange of India Limited. Consequent to the allotment of the new shares as per the Scheme, the Company has ceased to be the subsidiary of GPIL. Excess of net assets so recorded over the amount of share capital issued amounting to Rs. 2465874056.00 is recognized in these financial statements, and as stipulated in the Scheme, is disclosed as a free reserve with the nomenclature "Business Reconstruction Reserve". NOTE1. Financial information of Subsidiary Companies as required by first proviso to section 129 (3) read with rule 5 of companies (Accounts) rule 2014 of the Companies Act,2013 for the year ended on 31.03.2015 are separately enclosed. NOTE 2. The brvious year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary. As per our report attached For D. Khanna & Associates Chartered Accountants ICAI Firm Regn. No. 012917N For and on behalf of the Board Kailash C. Agarwal Mg. Director & CEO DIN-00895365 Himanshu Agarwal Wt. Director DIN-00065185 (Deepak Khanna) Partner Membership No. 092140 Sanjay Kr Agarwal Chief Financial Officer Ankit Agarwal Company Secretary Place : Delhi Date : May 30, 2015 |