Accounting Policies of Girdharilal Sugar & Allied Industries Ltd. Company

Mar 31, 2015

1 Corporate Information

The Company was incorporated on 27/10/1989. The Registered office of the company is situated at 45/47-A Industrial Area No.1, A.B. Road, Dewas (M.R). Post merger of Premier Industries (India) Ltd. (The Transferor Company) with our company i.e. Girdharilal Sugar & Allied Industries Ltd. (The Transferee Company) by Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 15/01/2014, the manufacturing facility of the merged entity now includes - i) A modern Dairy Plant., ii) A 250 TPD Soya Solvent Plant, iii) A 50 TPD Edible oil Refinery., iv) A Lecithin Plant, All the manufacturing facility are situated at 45/47-A Industrial Area No.1, A.B. Road, Dewas (M.P.). The Company had earlier issued shares to the Public. The shares are listed at BSE and are admitted at CDSL. The Registrar and Share Transfer Agent is Purva Sharegistry (India) Pvt. Ltd., 9 shivshakti Industrial Estate, off N.M. Joshi Marg, Lower Parel (E), Mumbai.

Basis of Accounting

These financial statements are prepared in accordance with Indian Generally Accepted Accounting principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards specified under section 133 of The Companies Act 2013 read with the rule7 of Companies (Accounts)Rules,2014 and the relevant provisions of The Companies Act 2013 as applicable. Accounting policies have been consistently applied except where a newly issued accounting standard initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

USE OF ESTIMATES

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

1 Accounting Policies

a. Fixed Assets

Fixed assets are recorded at cost (Fair Value) less depreciation. Assets acquired on lease are not reflected in the accounts and the lease rent is charged to profit & loss account as accrued.

b. Intangible Assets

All Intangible assets are measured at cost and amortized so as to reflect the pattern in which the assets economic benefits are consumed.

c. Depreciation

(i) Depreciation on tangible fixed assets has been provided on Straight Line Method as per the useful life prescribed in Schedule II to the Companies Act 2013 except in respect of plant and machinery in whose case the life of the asset has been assessed on technical basis taking into account the nature of the asset and the operating conditions the useful life has been taken 20 years.

(ii) In respect of Additions made during the year , Depreciation is charged on prorata basis from the date of addition.

d. Borrowing Cost

Borrowing cost that are attributable to the acquisition of qualifying assets are capitalized as part of the such cost till they said assets put to use. All other borrowing cost are charged to revenue.

e Impairment of Assets

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

f Investments

Long Term Investment are stated at cost/or market price whichever is lower. Provision for Diminution in value considered other then "Temporary" in nature. Dividends are accounted for as and when received.

g Inventories

The Company values its Raw Material at cost on FIFO basis. Finished goods are valued at cost or net realizable value whichever is lower and other items at cost.

h Revenue Recognition

(a) Revenue from operation includes sale of goods and processing receipts Revenues recognized only when risk and rewards incidental to ownership are transferred to customers.

(b) Revenue in respect of Insurance / Other claims, interest Commission etc. is recognized only when it is reasonably certain that ultimate collection will be made.

I Foreign Currency Transaction

Foreign currency liabilities in respect of fixed assets restated at the rates ruling at the year end. Any material exchange difference arising on such transaction are adjusted in the Cost of Assets.

j Retirement and Employee Benefits

a. Defined Contribution Plan Company's Contribution paid / payable during the year to Provident Fund ,ESIC and Labour welfare fund are charged to Profit and Loss Account There are no other obligation other than the contribution payable to the respective authorities.

b. Defined Benefit Plan Company's liabilities towards gratuity are determined on the basis of simple calculation as per the Gratuity Act and Labour Act only. Leave Encashment are determined on the basis of simple calculation.

k Income Taxes

a. Tax liabilities of the Company is estimated considering the provisions of Income Tax Act, 1961.

b. Deferred Tax is recognized subject to the tax consideration of prudence on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

I Provisions & Contingent Liabilities

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be 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.

m Contingencies and event occurring after the Balance Sheet date All the contingencies and event occurring after the balance sheet date which have a material effect on the financial position of the company are considered for preparing the financial statements.

n Lease Rent

The payments of lease rent taken on leave and license basis are recognized as expenditure in the profit and loss account on a straight line basis,

o Segment Reporting

The company identifies primary business segment based on the different risks and returns, the organization structure and the internal reporting systems The operating segments are the segments which separate financial information as available and for which operatives Profit/ Loss amount are evaluated regularly by the board of directors in deciding how to allocate resources and in assessing performance. The accounting policies adopted for segment reporting are in line with the accounting policies of the company. Segment revenue, segment results , segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segment. Inter segment revenues is accounted on the basis of transactions which are primary determined based on market/ fair value factor. Revenue expenses , assets and liabilities which relates to the company as a whole are not allocable to segment in reasonable basis have been included under "Unallocated revenue/results/assets/ liabilities".

p Cash Flow Statement

Cash flows are reported using indirect method, where by profit /(loss) before extraordinary items and tax is adjusted for the effects of transaction of non-cash nature and any deferrals or accruals of past of future cash receipts or payment. The cash flows from operating, investing and financing activities of the company are segregated based on the available information.

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Mar 31, 2014

A Fixed Assets

Fixed assets are recorded at cost (Fair Value) less depreciation. Assets acquired on lease are not reflected in the accounts and the lease rent is charged to profit & loss account as accrued.

b Intangible Assets

All Intangible assets are measured at cost and amortized so as to reflect the pattern in which the assets economic benefits are consumed.

c Depreciation

Depreciation is provided on fixed assets at straight line method in accordance with provision of schedule XIV of the Companies Act, 1956 & amendment there to.

d Borrowing Cost

Borrowing cost that are attributable to the acquisition of qualifying assets are capitalised as part of the such cost till the said assets put to use. All other borrowing cost are charged to revenue.

e Impairment of Assets

An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impair- ment loss is charged to the Profit & Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.

f Investments

Long Term Investment are stated at cost/or market price whichever is lower. Provision for Diminution in value considered other then "Temporary" in nature. Dividends are accounted for as and when received.

g Inventories

The Company values its Raw Material at cost on FIFO basis. Finished goods are valued at cost or net realisable value whichever is lower and other items at cost.

h Revenue Recognition

(a) Revenue from operation includes Sale of goods and processing receipts Revenues recognised only when risk and rewards incidental to ownership are transfered to customers.

(b) Revenue in respect of Insurance/Other claims,interest Commission etc. is recognised only when it is reasonably certain that ultimate collection will be made.

i Foreign Currency Transaction

Foreign currency liabilities in respect of fixed assets restated at the rates ruling at the year end. Any material exchange difference arising on such transaction are adjusted in the Cost of Assets.

j Retirement and Employee Benefits

a. Defined Contribution Plan Company''s Contribution paid/payable during the year to Provident Fund ,ESIC and Labour welfare fund are charged to Profit and Loss Account .There are no other obligation other than the contribution payable to the respective authorities.

b. Defined Benefit Plan Company''s liabilities towards gratuity are determined on the basis of simple calcula- tion as per the Gratuity Act and Labour Act only. Leave Encashment are determined on the basis of simple calculation.

I Income Taxes

a. Tax liabilities of the Company is estimated considering the provisions of Income Tax Act, 1961.

b. Deferred Tax is recognised subject to the tax consideration of prudence on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

m Provisions & Contingent Liabilities

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be outflow of resources.

Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

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Mar 31, 2013

A Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make esti- mates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the out- comes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

b Fixed Assets

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition, installation charges and all costs incidental thereto.

c Intangible Assets

All Intangible Assets are measured at cost and amortized so as to reflect the pattern in which the assets economic benefits are consumed.

d Depreciation

Depreciation is provided on straight line method as per the provision of the Companies Act, 1956. e Borrowing Cost

Borrowing cost ahat are attributable to the acquisition of the qualifying assets are capitalised as part of the such cost till the said assets put to use. All other borrowing cost are charged to revenue. f Impairment of Assets

An Assets is trated as impaired when carrying cost of Assets exceeds its recoverable amount. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in Prior period is reversed if there has been a change in the estimate of the recoverable amount.

g Investments

Investments are stated at cost or market price whichever is lower. Dividend is accounted for as and when received.

h Inventories

The inventory of stores are valued at cost on FIFO basis. The finished goods, stock in process and molasses are valued at lower of producton cost or net realisable value as valued and certified by the Management.

I Reven ue Recog n ition

I) Sales are recognised on passing of property and after adjusting rebates and claims.

II) Revenue in respect of interest etc. is recognised only when it is reasonably certain that the same will ultimately realised

j Foreign Currency Transaction

Foreign Currency liabilities in respect of fixed assets restated at the rates ruiling at the year end. Any material exchange differencearising on such transactionsare adjusted in the cost of the assets.

k Retirement and Employee Benefits

a. Defined Contibution Plan:

Company''s contribution paid/payable during the year to Provident Fund. ESIC and Labour Welfare Fund are charged to Profit & Loss Account. There are not other obligations other than the contribution payable to the respective authorities.

b. Defined Benefit Plan:

Company''s liabilities towards gratuity are determined on the basis of simple calculation as per the Gratuity Act and Labour Act.

I Income Taxes

a) Tax liabilities of the Company is provided considering the provisions of Income Tax Act.1961.

b) Deferred Tax is recognised subject to the tax cosideration of prudence on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

m Provisions & Contingent Liabilities

Provision involving substantial degree of estimation in deassurement are recoginsed when there is a present obligation as are sesult of past events and it is probable that there will be outflow of resources. Contingent liabilities are not recognised but are disclosed in notes. Contingent assets are neither recognised nor disclosed in the Financial Statements.

under the Gratuity Act.The company has not determined the liability as per revised AS-15 which was mandatory we. f.01.04.2007. However, additional liabilities .if aivj.wV, be provided later on.The quantum of additional liability at present is unascerta/nab/e,

ii) As the company has not seperately invested any of its liability of gratuity in any specific govt, bonds/ securities, hence the changes in assets, if any, have also not been provided / adjusted.

iii) Disclosures as required by Revised AS-15 have also not been given in view of notes (I) and (ii) above.

iv) Provision has not been made for leave encashment ben efits accrued to the employees. The same is accounted for on cash basis.least equal to the amount stated in the Balance Sheet and provision for all known liabilityhave been made and not in excess of the amount reasonably necessary.

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Mar 31, 2012

A Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based on management's best knowledge of current events and actions' uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future period.

b Fixed Assets

Fixed Assets are stated at cost less depreciation. Cost includes cost of acquisition' installation charges and all costs incidental thereto' c Intangible Assets

All Intangible Assets are measured at cost and amortized so as to reflect the pattern in which the assets economic benefits are consumed.

d Depreciation

Depreciation is provided on straight line method as per the provision of the Companies Act' 1956 and on Plant & Machinery trating it as a continuous process plant.

e Borrowing Cost

Borrowing cost ahat are attributable to the acquisition of the qualifying assets are capitalised as part of the such cost till the said assets put to use. All other borrowing cost are charged to revenue.

f Impairment of Assets

An Assets is trated as impaired when carrying cost of Assets exceeds its recoverable amount.

An impairment loss is charged to the Profit & Loss Account in the year in which an asset is dentified as impaired. The impairment loss recognised in Prior period is reversed if there has been a change in the estimate of the recoverable amount.

g Investments

Investments are stated at cost or market price whichever is lower. Dividend is accounted for as and when received' h Inventories

The Inventory of stores are valued at cost on FIFO basis. The finished goods' stock in process and molasses are valued at lower of producton cost(including interest on. Term Loan) or net realisable value as value and certified by the Management.

I Revenue Recognition

i) Sales are recognised on passing of property and after adjusting rebates and claims.

ii) Revenue in respect of interest etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

j Foreign Currency Transaction

Foreign Currency liabilities in respect of fixed assets restated at the rates ruiling at the year end. Any material exchange difference arising on such transactions are adjusted in the cost of the assets' k Retirement and Employee Benefits

a. Defined Contriibution Plan:

Company's contribution paid/payable during the year to Provident Fund. ESIC and Labour Welfare Fund are charged to Profit & Loss Account. There are not other obligations other than the contribution payable to the respective authorities.

b. Defined Banefit Plan:

Company's liabilities towards gratuity are determined on the basis of simple calculation as per the Gratuity Act and Labour Act. Only. Leave encashment are accounted on payment basis.

1 Income Taxes

a) Tax liabilities of the Company is estimated considering the provisions of Income Tax Act.1961.

b) Deferred Tax is recognised subject to the tax cosideration of prudence on timing difference' being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period.

m Provisions & Contingent Liabilities

Provision involving substantial degree of estimation in deassurement are recoginsed when there is a present obligation as are sesult of past events and it is probable that there will be outflow of resources. Contingent liabilities are not recognised but are disclosed in notes. Contingent assets are neither recognised nor disclosed in the Financial Statements.

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Mar 31, 2010

1) GENERAL ACCOUNTING PRINCIPAL :-

The financial statement are prepared under historical cost conventions on accrual basis and are in accordance with the requirements of the Companies Act, 1956 and generally complying with the mandatory accounting standards in force. Various accounting policies are applied and followed consistently except as otherwise stated.

2) FIXED ASSETS AND DEPRECIATION :-

Fixed assets are stated at cost less depreciation. Cost includes cost of acquisition, installation charges and all costs incidental thereto. Depreciation is provided on straight line method as per the provision of the Companies Act, 1956 and on Plant & Machinery treating it as a continuous process plant.

3) INTANGIBLE ASSETS:-

All Intangible Assets are measured at cost and amortized so as to reflect the pattern in which the assets economic benefits are consumed.

4) INVENTORIES :-

The inventory of stores are valued at cost on FIFO basis. The finished goods, stock in process and molasses are valued at lower of production cost (including Interest on Term Loan) or net realisable value, as valued and certified by the Management.

5) SALES :-

Sales are recognized on passing of property and after adjusting rebate and claims.

6) EXCISE DUTY:-

Excise duty in respect of sugar produced is accounted at the time of removal from factory.

7) EMPLOYEES BENEFITS

a. Defined Contribution Plan:

Companys contribution paid/payable during the year to Provident Fund, ESIC and Labour Welfare Fund are charged to Profit & Loss Account. There are no other obligations other than the contribution payable to the respective authorities.

b. Defined Benefit Plan .

Companys liabilities towards gratuity are determined on the basis of simple calculation as per the Gratuity Act and Labour Act only. Leave encashment are accounted on payment basis.

8) PRELIMINARY EXPENSES :-

Preliminary, share issue and cane development expenses are amortised over a period of 10 years.

9) TAXATION :-

a) Tax liabilities of the Company is estimated considering the provisions of Income Tax Act, 1961.

b) Deferred Tax is recognised subject to the tax consideration of prudence on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent period

10) PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :-

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as are result of past events and it is probable that there will be outflow of resources. Contingent liabilities are not recognised but are disclosed in notes. Contingent assets are neither recognised nor disclosed in the Financial State- ments.

11) BORROWING COST :-

Borrowing cost that are attributable to the acquisition of qualifying assets are capitalised as part of the such cost till the said assets put to use. All other borrowing cost are charged to revenue.

12) IMPAIRMENT OF ASSETS :-

An Assets is treated as impaired when carrying cost of Assets exceeds its recoverable amount. An impairment loss is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The Impairment loss recognised in Prior period is reversed if there has been a change in the estimate of the recoverable amount.