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Accounting Policies of Gujarat Borosil Ltd. Company

Mar 31, 2015

1.1 BASIS OF ACCOUNTING:

The financial statements have been prepared as a going concern under Historical Cost convention, in accordance with the notified accounting standards by Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 2013 as adopted consistently by the Company.

1.2 REVENUE RECOGNITION:

Revenue from sale of goods is recognised when significant risk and rewards of ownership of the goods have passed to the buyer. Revenue from operations includes sales of goods, services, scrap, excise duty and service tax but excludes sales tax/ value added tax. Dividend Income is recognised when right to receive the payment is established by the balance sheet date. Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable. Commission is recognised on an accrual basis in accordance with the terms of relevant agreement.

1.3 USE OF ESTIMATES:

The preparation of financial statements 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 actual results and estimates are recognised in the period in which the results are known/ materialised.

1.4 FIXED ASSETS:

Fixed Assets are stated at cost of acquisition or construction net of cenvat and value added tax credits and includes amounts added on revaluation, less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production are capitalized.

1.5 DEPRECIATION:

Depreciation on fixed assets has been provided on straight line method at the rates and in the manner prescribed in Schedule II to the Companies Act, 2013. Depreciation on adjustments on account of foreign currency fluctuation is being calculated on residual life of respective fixed assets. Depreciation on rollers for the patterned glass production has been charged at SLM rate over useful running life.

1.6 INVESTMENTS:

Current investments are carried at lower of cost and market value/NAV, computed individually. Long term investments are carried at cost. Provision for diminution in the value of Long term investments is made only if such decline is other than temporary in the opinion of the management.

1.7 INVENTORIES:

Inventories of raw materials, work in progress and Finished goods are stated at the lower of cost or net realisable value. Cost of inventories comprise of all cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition. Cullet is valued at net realisable value. Stores, spares and Loose tools are valued at cost reduced for obsolete and slow moving items. Cost is calculated on the weighted average method. Cost of work in progress and finished goods is determined on absorption costing method.

1.8 EMPLOYEE BENEFITS:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss for the year in which the related service is rendered.

ii) Post employment and other long term employee benefits are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of profit and loss.

iii) Compensated absences are accounted similar to the short term employee benefits.

iv) Retirement benefits in the form of Provident Fund are in defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the contribution to the respective funds are due. There are no other obligations other than the contribution payable to the fund.

1.9 FOREIGN CURRENCY TRANSACTIONS:

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing at the date of transaction.

ii) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of any items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of contract is recognised as exchange difference and the premium paid on forward contracts has been recognised over the life of the contract.

iii) Non monetary foreign currency items are carried at cost.

1.10 EXPORT INCENTIVES:

i) The benefit in respect of credit in Duty Entitlement Pass Book scheme/Focus product scheme, is recognised as and when right to receive are established as per the terms of scheme.

ii) The benefits in respect of Advance License taken by the Company are accounted for proportionate to the Exports made based on entitlement.

1.11 IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the statement of profit and loss 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 change in the estimate of recoverable amount.

1.12 DERIVATIVE TRANSACTIONS:

In respect of derivative contract, premium paid, provision for losses on re-statement and gains/losses on settlement are recognized along with underlying transaction and charged to the statement of profit and loss.

1.13 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

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 an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognised nor disclosed in the financial statements.

1.14 PROVISION FOR CURRENT AND DEFERRED TAX:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act,1961. Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognised and carried forward only to the extent that there is a reasonable certainty that the assets will be realized in future. In the case of unabsorbed depreciation and carry forward tax losses, all deferred tax asset are recognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. The carrying amount of deferred tax assets are reviewed at each balance sheet date for their appropriateness. Deferred Tax Assets and Deferred Tax Liabilities are off set if legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxes on income levied by same governing taxation laws. Minimum Alternative Tax (MAT) is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by The Institute of Chartered Accountants of India(ICAI), the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.

1.15 EXCISE DUTY:

Excise Duty has been accounted on the basis of both payments made in respect of goods cleared as also provision made for goods lying in bonded warehouses.

1.16 BORROWING COST:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. 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.

1.17 LEASES:

Lease rentals are expensed with reference to lease terms and other considerations.

* Face value reduced From Rs. 10/- to Rs 5/- per share as per approval of shareholders in the EGM held on 14th February,2003.

** i) The preference shares have the priority in case of payment of dividend and in case of winding up that of repayment of Capital and arrears of dividend.

ii) Dividend on Preference Share Capital is in arrear from 17.03.2012 to 31.03.2015 amounting to Rs. 2463.20 Lacs (Previous Year Rs. 1653.20 Lacs)

iii) These shares are redeemable not later than 7 years from the date of issue i.e. 17th March 2012 but the Company has option to redeem it any time by giving two months notice in writing.


Mar 31, 2013

I. Fixed Assets are recorded at cost of acquisition (Net of Cenvat) inclusive of related expenses thereon towards putting the assets in to use.

2 (i) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

(ii) All monetary foreign currency assets/liabilities are translated at the rates prevailing on the date of balance sheet.

(iii) The exchange difference between the rates prevailing on the date of transaction and on the date of settlement as also on translation of monetary items at the end of the year (other than those relating to long term foreign currency monetary items)is recognized as income or expense, as the case may be.

(iv) Exchange Rate differences relating to long term foreign currency monetary items, to the extent they are used for financing the acquisition of fixed assets are added to or subtracted from the cost of such fixed assets and amortized over the residual life of the respective fixed assets.

3. a) Depreciation on all the fixed assets has been calculated at the SLM rates prescribed in Schedule XIV of the Companies Act , 1956 as per notification dated 16-12-1993 and on adjustments on account of foreign currency fluctuation is being calculated on residual life of respective fixed assets.

b) Depreciation on rollers for the patterned glass production has been charged at SLM rate over useful running life.

4. Income and Expenses are accounted for on accrual basis except interest on delayed payments which is accounted on receipt basis.

5. Investments are classified into current and long term investments. Current investments are stated at lower of cost and fair market value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investment.

6. (A) Inventories: are valued as under

Raw Materials - At Cost or net realisable value whichever is lower.

Own Cullet - At Cost or net realisable value whichever is lower.

Stores and Spare Parts - At Cost or net realisable value whichever is lower.

Work in Progress - At Cost or net realisable value whichever is lower.

Finished Goods - At Cost or net realisable value whichever is lower.

Traded Goods - At Cost or net realisable value whichever is lower.

(B) Cost Formula Used : -Weighted average or specific identification as applicable.

Due allowance is estimated and made for defective and Obsolete items wherever necessary.

7. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. 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 recoverable amount.

8. (i) Sales are net of Sales tax, return and quantity discounts .

(ii) Sale of Goods is recognized when significant risks and rewards of ownership have passed to the buyer.

9. Cenvat on Raw Materials / Stores is credited to respective purchase account on accrual basis. Accordingly, inventory is valued at net of Cenvat benefits.

10. Liability in respect of gratuity & leave encashment to employees is actuarially assessed as at the Balance Sheet date and the incremental /decremental liability arising on such valuation is provided for. Projected Unit Credit Method used as Stipulated in AS-15 (Revised 2005) to determine the plan Liability as on Valuation date and current Service Cost.

II. Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets ready for its intended use are capitalised.

12. 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 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.

13. Lease rentals are expensed with reference to lease terms and other considerations.


Mar 31, 2012

Not Available


Mar 31, 2011

1. Fixed assets are recorded at cost of acquisition (Net of Modvat) inclusive of related expenses thereon towards putting the assets into use.

2. Foreign Currency Assets and liabilities are converted at the rate prevailing on the last day of the accounting year and transactions completed during the year are accounted for at the then ruling rate.

3. Depreciation on all the fixed assets has been calculated at the SLM rates prescribed in Schedule XIV of the Companies Act, 1956 as per notification dated 16-12-1993 and on adjustments on account of foreign currency fluctuation is being calculated on residual life of respective fixed assets.

4. Income and Expenses are accounted for on accrual basis except interest on delayed payments which is accounted on receipt basis.

5. Investments are classified into current and long term investments. Current investments are stated at lower of cost and fair market value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investment.

6. Inventories: are valued as under

Raw Materials -AtCost

Own Cullet - At Cost or net realisable value whichever is lower.

Stores and Spare Parts - At Cost

Work in Progress - At Cost

Finished Goods - At Cost or net realisable value whichever is lower.

Traded Goods - At Cost or net realisable value whichever is lower.

7. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. 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 recoverable amount.

8. Sales are net of Sales tax, claims/returns, discounts & breakages.

9. Modvat on Raw Materials/Stores is credited to respective purchase account on accrual basis. Accordingly, inventory is valued at net of Modvat benefits.

10. Liability in respect of gratuity & leave encashment to employees is actuarially assessed as at the Balance Sheet date and the incremental/decremental liability arising on such valuation is provided for.

11. Interest and other costs in connection with the borrowing of the funds to the extent related/attributed to the acquisition/construction of qualifying fixed assets ready for its intended use are capitalised.

12. 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 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.

13. Lease rentals are expensed with reference to lease terms and other considerations.


Mar 31, 2010

1. Fixed assets are recorded at cost of acquisition (Net of Modvat) inclusive of related expenses thereon towards putting the assets into use.

2. Foreign Currency Assets and liabilities are converted at the rate prevailing on the last day of the accounting year and transactions completed during the year-are accounted for at the then ruling rate.

3. Depreciation on all the fixed assets has been calculated at the SLM rates prescribed in Schedule XIV of the Companies Act, 1956-as per notification dated 16-12-1993 and on adjustments on account of foreign currency fluctuation is being calculated on residual life of respective fixed assets.

4. Income and Expenses are accounted for on accrual basis except interest on delayed payments which is accounted on receipt basis.

5. Investments are classified into current and long term investments. Current investments are stated at lower of cost and fair market value. Long term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investment.

6. Inventories: are valued as under

Raw Materials - At Cost OwnCullet - At Cost or net realisable value whichever is lower. Stores and Spare Parts -At Cost Work in Progress - At Cost Finished Goods - At Cost or net realisable value whichever is lower. Traded Goods - At Cost or net realisable value whichever is lower.

7. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. 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 recoverable amount.

8. Sales are net of Sales tax, claims / returns, discounts & breakages.

9. Modvat on Raw Materials / Stores is credited to respective purchase account on accrual basis. Accordingly, inventory is valued at net of Modvat benefits. -

10. Liability in respect of gratuityS leave encashment to employees is actuarially assessed as at tne Balance Sheet date and the incremental /decremental liability arising on such valuation is provided for.

11. Interest and otherx;osts in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets ready for its intended use are capitalised;

12. 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 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.

13. Lease rentals are expensed with reference to lease terms and other considerations.

 
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