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Accounting Policies of Gujarat Petrosynthese Ltd. Company

Mar 31, 2015

A) The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting in accordance with the accounting principles generally accepted in India ('Indian GAAP') and comply with the Accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 which continue to apply under Section 133 of the Companies Act, 2013, ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014 and other relevant provisions of the Companies Act, 2013, to the extent applicable.

b) The Company generally follows the Mercantile System of accounting and recognizes significant items of the income and expenditure on accrual basis except insurance claims and refunds from Government authorities.

ii) Fixed Assets: Fixed Assets are stated at cost of acquisition including incidental expenses related to acquisition and installation.

iii) Depreciation:

a) Depreciation on tangible fixed assets is provided using the Straight Line Method based on the useful life of the assets as estimated by the management and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. The estimate of the useful life of the assets has been assessed based on technical advice which considered the nature of the asset, the usage of the asset, expected physical wear and tear, the operating conditions of the asset, anticipated technological changes, manufacturers warranties and maintenance support, etc.

b) The rates of depreciation being charged are given below

i. Jigs and moulds are charged off over a period of 3 years

ii. Factory Building 3.33%

iii. Plant & Machinery 6.33%

iv. Electrical Installation 9.50%

v. Office Equipment 19.00%

vi. Furniture & Fixtures 9.50%

vii. Computers 31.67%

viii. Vehicles 9.50%

c) Leasehold land is not amortized over the period of lease.

iv) Valuation of Inventories:

i) Raw materials and consumables are valued at lower of cost or realizable value.

ii) Processed stock is valued at estimated cost.

iii) Finished goods

a) Manufactured Goods: Manufactured finished goods are valued at lower of absorption cost or Market Value.

b) Trading Goods: Finished goods purchased for re-sale is valued at cost of purchase.

v) Investments: Investments which are Long Term in nature are stated at the Cost of acquisition with provision where necessary for diminution, other than temporary in the value of investments.

vi) Foreign Exchange Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of such transactions.

vii) Retirement benefits:

a) The liability of gratuity to the employees is covered under the Group Gratuity scheme with the Life Insurance Corporation of India. The annual premium is debited to Profit and Loss Account.

b) The liability of superannuation benefit to the Chairman & Managing Director and the Executive Directors is covered under the Superannuation Scheme with the Life Insurance Corporation of India. The amount paid is debited to the Profit and Loss Account.

c) The liability of leave encashment of employees is covered with LIC. The Premium paid is debited to Profit & Loss Account.

viii) Taxes on Income:

a) Current Tax: Provision for Income Tax is determined in accordance with Provisions of Income Tax Act, 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing difference being difference between taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent period(s).

ix) Insurance: Insurance claims are accounted on cash basis.

x) Stores, spares & Consumables:

i) Stores and spares are charged to revenue in the year of purchase.

ii) Consumables are charged to revenue on actual consumption basis.

xi) Research and Development: Research and Development Costs (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

xii) Cenvat Benefit: Cenvat benefit is accounted on duty paid materials when credit is given in excise records by debit to Excise Duty Deposit Account. The amount of Cenvat benefit availed is treated as Deposit of Excise Duty and appropriated against excise duty payment.

xiii) Miscellaneous Expenditure:

Preliminary and Public issue expenses are written off over a period of ten years and are charged on a pro-rata basis for the period of operation.


Mar 31, 2014

I) Basis of Accounting:

a) Financial statements are based on historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956. These historical costs are not adjusted to reflect the impact of changing value in the purchasing power of money.

b) The Company generally follows the Mercantile System of accounting and recognizes significant items of the income and expenditure on accrual basis except insurance claims and refunds from Government authorities.

ii) Fixed Assets: Fixed Assets are stated at cost of acquisition including incidental expenses related to acquisition and installation.

iii) Depreciation:

a) The Company follows the Straight Line Method of depreciation.

b) Depreciation on assets is provided at the rates as specified in Schedule XIV of the Companies Act, 1956. Jigs and moulds are charged off over a period of 3 years

c) The revised rates specified in Schedule XIV of the Companies Act, 1956 vide notification No. GSR 756 (E) dated 16-12-1993 of the Department of Company Affairs, Government Of India, New Delhi are adopted only for the additions made from 16-12-1993

d) Leasehold land is not amortized over the period of lease.

iv) Valuation Of Inventories:

i) Raw materials and consumables are valued at lower of cost or realizable value.

ii) Processed stock is valued at estimated cost.

iii) Finished goods

a) Manufactured Goods: Manufactured finished goods are valued at lower of absorption cost or Market Value.

b) Trading Goods: Finished goods purchased for re-sale is valued at cost of purchase.

v) Investments: Investments which are Long Term in nature are stated at the Cost of acquisition with provision where necessary for diminution, other than temporary in the value of investments.

vi) Foreign Exchange Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of such transactions.

vii) Retirement benefits:

a) The liability of gratuity to the employees is covered under the Group Gratuity scheme with the Life Insurance Corporation of India. The annual premium is debited to Profit and Loss Account.

b) The liability of superannuation benefit to the Chairman & Managing Director and the Executive Directors is covered under the Superannuation Scheme with the Life Insurance Corporation of India. The amount paid is debited to the Profit and Loss Account.

c) The liability of leave encashment of employees is covered with LIC. The Premium paid is debited to Profit & Loss Account.

viii) Taxes on Income:

a) Current Tax: Provision for Income Tax is determined in accordance with Provisions of Income Tax Act, 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing difference being difference between taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent period(s).

ix) Insurance: Insurance claims are accounted on cash basis.

x) Stores, spares & Consumables:

i) Stores and spares are charged to revenue in the year of purchase.

ii) Consumables are charged to revenue on actual consumption basis.

xi) Research and Development: Research and Development Costs (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

xii) Cenvat Benefit: Cenvat benefit is accounted on duty paid materials when credit is given in excise records by debit to Excise Duty Deposit Account. The amount of Cenvat benefit availed is treated as Deposit of Excise Duty and appropriated against excise duty payment.

xiii) Miscellaneous Expenditure:

Preliminary and Public issue expenses are written off over a period of ten years and are charged on a pro- rata basis for the period of operation.


Mar 31, 2012

I) Basis of Accounting:

a) Financial statements are based on historical cost convention in accordance with the generally accepted accounting principles in Indiarid theprovisions of the Companies Act, 1956. These historical costs are not adjusted to reflect the impact of changing value in the purchasing power of money.

b) The Company generally follows the Mercantile System of accounting and recognizes significant items of the income and expenditure on accrual basis except insurance claims refunds from Government authorities

ii) Fixed Assets: Fixed Assets are stated at cost of acquisition including incidental expenses related to acquisition and installation

iii)Depreciation:

a) The Company follows the Straight Line Method of depreciation.

b) Depreciation on assets is provided at the rates as specified in Schedule XIV of the Companies Act, 1956. Jigs and moulds are charged off over a period of 3 years

c) The revised rates specified in Schedule XIV of the Companies Act, 1956 vide notification No. GSR 756 (E) dated 16-12-1993 of the Department of Company Affairs, Government Of India, New Delhi are adopted only for the additions made from 16-12-1993

d) Leasehold land is not amortized over the period of lease.

iv) Valuation Of Inventories:

i) Raw materials and consumables are valued at lower of cost or realizable value.

ii) Processed stock is valued at estimated cost.

iii) Finished goods -

a) Manufactured Goods: Manufactured finished goods are valued at lower of absorption cost or Market Value.

b) Trading Goods: Finished goods purchased for re-sale is valued at cost of purchase.'

v) Investments: Investments which are Long Term in nature are stated at the Cost of acquisition with provision where necessary for diminution, other than temporary in the value of investments.

vi) Foreign Exchange Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of such transactions.

vii) Retirement benefits:

a) The liability Of gratuity to the employees is covered under the Group Gratuity scheme with the Life Insurance Corporation of India. The annual premium is debited to Profit and Loss Account.

b) The liability of superannuation benefit to the Chairman & Managing Director and the Executive Directors is covered under the Superannuation Scheme with the Life Insurance Corporation of India. The amount paid is debited to the Profit and Loss Account.

c) The liability of leave encashment of employees is covered with LIC. The Premium paid is debited to Profit & Loss Account.

ix) Taxes on Income:

a) Current Tax: Provision for Income Tax is determined in accordance with Provisions of income Tax Act, 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing difference being difference between taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent period(s).

x) Insurance: Insurance claims are accounted oh cash basis.

xi) Stores, spares & Consumables:

i) Stores and spares are charged to revenue in the year of purchase.

ii) Consumables are charged to revenue on actual consumption basis.

xii) Research and Development: Research and Development Costs (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

xiv) Cenvat Benefit: Cenvat benefit is accounted on duty paid materials when credit is given in excise records by debit to Excise Duty Deposit Account. The amount of Cenvat benefit availed is treated as Deposit of Excise Duty and appropriated against excise duty payment.

xv) Miscellaneous Expenditure:

Preliminary and Public issue expenses are written off over a period of ten years and are charged on a pro- rata.basis for Jhe pefiod.ofcoperatiqn.


Mar 31, 2010

I) Basis of Accounting:

a) Financial statements are based on historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956. These historical costs are not adjusted to reflect the impact of changing value in the purchasing power of money.

b) The Company generally follows the Mercantile System of accounting and recognizes significant items of the income and expenditure on accrual basis except insurance claims and refunds from Government authorities.

ii) Fixed Assets: Fixed Assets are stated at cost of acquisition including incidental expenses related to acquisition and installation.

iii) Depreciation:

a) The Company follows the Straight Line Method of depreciation.

b) Depreciation on assets is provided at the rates as specified in Schedule XIV of the Companies Act, 1956. Jigs and moulds are charged off over a period of 3 years

c) The revised rates specified in Schedule XIV of the Companies Act, 1956 vide notification No. GSR 756 (E) dated 16-12-1993 of the Department of Company Affairs, Government Of India, New Delhi are adopted only for the additions made from 16-12-1993

d) Leasehold land is not amortized over the period of lease.

iv) Treatment of Expenditure during construction period:

Expenditure incurred during the construction period has been allocated to the respective fixed assets on pro-rata basis.

v) Valuation Of Inventories:

i) Raw materials and consumables are valued at lower of cost or realizable value.

ii) Processed stock is valued at estimated cost.

iii) Finished goods

a) Manufactured Goods: Manufactured finished goods are valued at lower of absorption cost or Market Value.

b) Trading Goods: Finished goods purchased for re-sale is valued at cost of purchase.

vi) Demerger: With effect from 01.04.2005 the Company has converted the polybutene division into a 100% subsidiary - Gujarat Polybutenes Pvt. Ltd.(GPPL) and transferred the Assets and Liabilities to the Division for a consideration of Rs.22,290,719/- for which it has received equity shares in GPPL.

Since most of the business operations of the polybutene business (GPPL) continue to be carried on from the GPL corpdrate office in Mumbai due to logistical and operational convenience, the common expenses have been shared in the ratio of 15% to Gujarat Petrosynthese and 85% to Gujarat Polybutenes Pvt.Ud, which interalia is based on estimated usage of facilities by the respective business entities. An amount of Rs 96 lacs has been charged for managerial and technical services rendered by GPL to GPPL which is included in other income.

vi) Investments: Investments which are Long Term in nature are stated at the Cost of acquisition with provision where necessary for diminution, other than temporary in the value of investments.

vii) Foreign Exchange Transactions:

Transactions in foreign currency are recorded at the exchange rates prevailing on the date of such transactions.

viii) Retirement benefits:

a) The liability of gratuity to the employees is covered under the Group Gratuity scheme with the Life Insurance Corporation of India. The annual premium is debited to Profit and Loss Account.

b) The liability of superannuation benefit to the Chairman & Managing Director and the Executive Directors is covered under the Superannuation Scheme with the Life Insurance Corporation of India. The amount paid is debited to the Profit and Loss Account.

c) The liability of leave encashment of employees is covered with LIC. The Premium paid is debited to Profit & Loss Account.

ix) Taxes on Income:

a) Current Tax: Provision for Income Tax is determined in accordance with Provisions of Income Tax Act, 1961.

b) Deferred Tax Provision: Deferred Tax is recognized on timing difference being difference between taxable incomes and accounting income that originated in one period and are capable of reversal in one or more subsequent period(s).

x) Insurance: Insurance claims are accounted on cash basis.

xi) Stores, spares & Consumables:

i) Stores and spares are charged to revenue in the year of purchase.

ii) Consumables are charged to revenue on actual consumption basis.

xii) Research and Development: Research and Development Costs (other than cost of fixed assets acquired) are charged as expenses in the year in which they are incurred.

xili) Cenvat Benefit: Cenvat benefit is accounted on duty paid materials when credit is given in excise records by debit to Excise Duty Deposit Account. The amount of Cenvat benefit availed is treated as Deposit of Excise Duty and appropriated against excise duty payment.Excise duty collected on sales in included in turnover and corresponding payments are expresed. Un-availed credits in the Excise Duty Deposit account are accounted as current assets.

xiv) Lease:

Assets acquired under finance lease are recognized at the fair value of the leased assets at inception. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge for the year is debited to Profit & Loss Account.

xv) Miscellaneous Expenditure:

Preliminary and Public issue expenses are written off over a period of ten years and are charged on a prorata basis for the period of operation.

 
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