Gujarat Petrosynthese Ltd. कंपली की लेखा नीति

Mar 31, 2025

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(i) Basis of preparation:

The financial statements of the Company have been prepared in accordance with the Indian Accounting
Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (“the Act”) [Companies (Indian
Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The financial statements
have been prepared on the historical cost basis except for certain financial assets and liabilities, which are
measured at fair value.

The financial statements are presented in Indian Rupees (“INR”), and all values are rounded off to the
nearest thousands, except when otherwise indicated.

(ii) Fair value measurement

The Company''s accounting policies and disclosures require the measurement of fair values for financial
assets and liabilities.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing
the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:

• Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

• Level 2- Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.

• Level 3- Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

(iii) Revenue Recognition:

Revenue is measured at the amount of consideration which the Company expects to be entitled to in
exchange for transferring distinct goods or services to a customer as specified in the contract, excluding
amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the
government). Consideration is generally due upon satisfaction of performance obligations and a receivable
is recognised when it becomes unconditional.

Revenue is recognized when all significant risk and rewards of ownership in goods are transferred to
customers and recovery of consideration from customer is probable and revenue can be estimated reliably.
Revenue is recognized net of trade discounts and indirect taxes.

Revenue from rendering services is recognized when performance of agreed contractual task is completed.
Interest income is recognized on accrual basis on time proportion basis using effective interest rate.
Dividend income is accounted when right to receive is established.

(iv) Property, Plant and Equipment:

Recognition and measurement:

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment, if
any. The cost of property, plant and equipment includes purchase price, including freight, duties, taxes and
expenses incidental to acquisition and installation. If significant parts of an item of property, plant and equipment

have different useful lives, then they are accounted for as separate items (major components) of property, plant
and equipment. Property, plant and equipment are derecognized from financial statements, either on disposal
or when no economic benefits are expected from its use or disposal. The gain or losses arising from disposal of
property, plant and equipment are recognized in the Statement of Profit and Loss in the year of occurrence.

Subsequent expenditures:

Subsequent expenditures related to an item of property, plant and equipment are added to its carrying value
only when it is probable that the future economic benefits from the asset will flow to the Company and cost can
be reliably measured. All other repair and maintenance costs are recognized in the Statement of Profit and Loss
during the year in which they are incurred.

Depreciation:

Depreciation is provided on all property, plant and equipment on straight-line method in the manner and useful
life prescribed in Schedule II of the Companies Act, 2013. Depreciation on additions/deletion is provided on pro¬
rata basis with reference to the date of addition/deletion as the case may be.

Company has adopted cost model for all class of items of Property Plant and Equipment.

(v) Intangible assets:

Intangible assets are carried at cost, net of accumulated amortization and impairment losses, if any. Cost of an
intangible asset comprises of purchase price and attributable expenditure on making the asset ready for its
intended use.

Intangible assets are amortized on the straight-line method. Technical know-how is amortized over their estimated
useful lives ranging from 5-10 years and product registration is amortized over the period of the registration
subject to a maximum of 10 years.

n intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset
is derecognized.

(vi) Impairment of Non-Financial Assets:

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be
impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The
recoverable amount is the higher of an Asset''s or Cash Generating Unit''s (CGU) fair value less costs of disposal
and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the
continuing use of an asset and from its disposal at the end of its useful life. If such recoverable amount of the
asset or cash generating unit is less than it''s carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss.
If at the Balance Sheet date there is any indication that any impairment loss recognized for an asset in prior
years may no longer exist or may have decreased, the recoverable amount is reassessed and such reversal of
impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously
charged to the Statement of Profit and Loss.

(vii) Assets taken on Lease:

Recognition & Measurement:

The Company, as a lessee, recognises a right-of-use asset and a lease liability for its leasing arrangements, if
the contract conveys the right to control the use of an identified asset.

The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset
and the Company has substantially all of the economic benefits from use of the asset and has right to direct the
use of the identified asset. The cost of the right-of-use asset shall comprise of the amount of the initial
measurement of the lease liability adjusted for any lease payments made at or before the commencement date
plus any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less any
accumulated depreciation, accumulated impairment losses, if any and adjusted for any remeasurement of the
lease liability. The right-of-use assets is depreciated using the straight-line method from the commencement
date over the shorter of lease term or useful life of right-of-use asset.

The Company measures the lease liability at the present value of the lease payments that are not paid at the
commencement date of the lease. The lease payments are discounted using the interest rate implicit in the
lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses
incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an operating expense on
a straight-line basis over the lease term.

Presentation:

Lease liability and ROU asset shall be separately presented in the Balance Sheet and lease payments shall be
classified as financing cash flows.

(viii) Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets and financial liabilities are recognized when the Company
becomes a party to the contractual provisions of the instruments.

Financial Assets

Initial recognition and measurement

The Company recognizes financial assets when it becomes a party to the contractual provisions of the instrument. All
financial assets are recognized initially at fair value plus transaction costs that are directly attributable to the acquisition
of the financial asset.

Subsequent measurement

For the purpose of subsequent measurement, the financial assets are classified as under:

i) Financial assets at amortised cost

A financial asset is measured at the amortised cost, if both the following conditions are met:

• The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows,
and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective
interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium and
fees or costs that are an integral part of the EIR. Interest income from these financial assets is included in other
income using the EIR in the Statement of Profit and Loss. The losses arising from impairment are recognized in
the Statement of Profit and Loss.

ii) Financial assets at fair value through other comprehensive income (FVTOCI)

Financial assets are classified as FVTOCI, if both of the following criteria are met:

• These assets are held within a business model whose objective is achieved both by collecting contractual
cash flows and selling the financial assets; and

• Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.

Fair value movements are recognised in the other comprehensive income (OCI), except for the recognition
of impairment gains or losses, interest income and foreign exchange gains or losses which are recognised
in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised
in OCI is reclassified from equity to Profit or Loss and recognised in other income/(loss).

iii) Financial assets at fair value through profit or loss (FVTPL)

Financial assets that do not meet the criteria for amortized cost or FVTOCI are measured at fair value through
profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or
loss and is recognized in profit or loss and presented net in the Statement of Profit and Loss within other income
in the period in which it arises.

iv) Equity instruments

All equity instruments are measured at fair value. Equity instruments which are for trading are classified as
FVTPL. All other equity instruments are measured at fair value through other comprehensive income (FVTOCI).
The classification is made on initial recognition and is irrevocable.

Where the Company''s management has elected to present fair value gains and losses on equity instruments in
other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or
loss. Dividends from such investments are recognized in profit and loss when the Company''s right to receive
payments is established.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized
in the Statement of Profit and Loss.

Impairment of financial assets

The Company applies ‘simplified approach'' for recognition of impairment loss on financial assets for loans, deposits
and trade receivables.

The application of simplified approach does not require the company to track changes in credit risk. Rather, it recognizes
impairment loss allowance based on lifetime Expected Credit Loss at each reporting date, right from its initial recognition.

De-recognition

A financial asset is derecognized when:

• the rights to receive cash flows from the assets have expired or

• the Company has transferred substantially all the risk and rewards of the asset, or

• the Company has neither transferred nor retained substantially all the risk and rewards of the asset, but has
transferred control of the asset.

Financial Liabilities

• Initial recognition and measurement

Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. All Financial Liabilities are recognised at fair value and in case of borrowings, net of directly attributable
cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

• Subsequent measurement

Financial liabilities are subsequently carried at amortised cost using the effective interest rate (EIR) method. For
trade and other payables maturing within operating cycle, the carrying amounts approximate the fair value due
to short maturity of these instruments. Amortised cost is calculated by taking into account any discount or
premium on acquisition and transaction costs. The EIR amortization is included as finance costs in the Statement
of Profit and Loss.

• Derecognition

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged,
cancelled or have expired. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of a new liability. The
difference in the respective carrying amounts is recognized in the Statement of Profit and Loss.

• Offseting financial instruments

Financial assets and financial liabilities are offset and the net amount is reflected in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis, to realize the assets and settle the liabilities simultaneously.

(ix) Inventories:

Raw Materials and consumables are valued at cost on First in First out (FIFO) basis or net realizable value
whichever is lower. Raw material and consumables are not written down below cost if the finished products in
which they will be incorporated are expected to be sold at or above cost. Cost includes the fair value of consideration
paid including duties and taxes (other than those refundable), inward freight, and other expenditure directly
attributable to the purchase. Trade discounts and rebates are deducted in determining the cost of purchase.

Work in progress is valued at cost basis or net realizable value whichever is lower. They are not written down
below cost if the finished products are expected to be sold at or above cost.

Finished goods are valued at lower of cost or net realizable value. The cost is computed on specific identification
basis

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

Consumables are charged to revenue in the year of purchase.

(x) Taxes:

The tax expense comprises current and deferred tax. Tax is recognized in the Statement of Profit and Loss
except to the extent that it relates to items recognized directly in equity or in OCI.

i. Current Tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax
rates enacted or substantially enacted at the reporting date.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the
recognized amounts and there is an intention to settle the asset and the liability on a net basis.

ii. Deferred Tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities
for financial reporting purpose and the amount used for taxation purposes.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets
are recognized for unused tax losses, unused tax credits and deductible temporary differences to the
extent that it is probable that future taxable profits will be available against which those deductible temporary
differences can be utilised. The carrying amount of deferred tax asset is reviewed at each reporting date
and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow
all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in
which the liability is settled or the asset realized, based on tax rates that have been enacted or substantively
enacted by the end of the reporting period.

Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off
assets against liabilities representing current tax and where the deferred tax assets and the deferred tax
liabilities relate to taxes on income levied by the same governing taxation laws.

(xi) 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 recognized as an expense during the period when the employees render the services.

Defined contribution plans:

The Company''s contribution to Provident Fund, Pension, Superannuation and Employees State Insurance
Contribution are considered as defined contribution plans, as the Company does not carry any further obligations
apart from the contribution made to the respective fund/scheme and are charged as an expense based on the
amount of contribution required to be made.

If the contribution payable to the scheme for service received before the balance sheet date exceeds the
contribution already paid, the deficit payable to the scheme is recognised as a liability. If the contribution already
paid exceeds the contribution due for services received before the balance sheet date, then excess is recognised
as an asset to the extent that the pre-payment will lead to a reduction in future payment or a cash refund

Defined benefit plans:

The liability recognized in the balance sheet in respect of defined benefit plans is the present value of the
defined benefit obligation at the end of the reporting period.

The liability of gratuity to the employees is covered under the Group Gratuity scheme with the Life Insurance
Corporation of India. The annual service cost on basis of valuation received from LIC, the amount is paid to LIC
of India and debited to Profit and Loss Account.

Long Term Compensated Absences

The liability of leave encashment of employees is covered with LIC. On basis of Actuarial Valuations, the present
value of liability is accounted and paid to the LIC of India.

(xii) Finance Costs:

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are
regarded as an adjustment to the interest cost.

Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are captialised
as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to
get ready for its intended use.

Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognized as expense in the period in which these are incurred.

(xiii) Cash and Cash Equivalents:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, demand deposit and
short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

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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.

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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.

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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.

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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.