(xiv) Provisions & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation (legal or constructive) as a result of a
past event and it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Provision for Decommissioning Liability:
The Company records a provision for decommissioning costs towards site restoration activity. Decommissioning
costs are provided at the present value of future expenditure using a current pre-tax rate expected to be incurred
to fulfil decommissioning obligations and are recognised as part of the cost of the underlying assets. Any
change in the present value of the expenditure, other than unwinding of discount on the provision, is reflected as
adjustment to the provision and the corresponding asset. The change in the provision due to the unwinding of
discount is recognised in the Statement of Profit and Loss.
Disclosure:
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of
which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company or a present obligation that arises from past events where it is either not
probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount
cannot be made.
(xv) Earnings per share
Basic earnings per share is calculated by dividing the net profit / (loss) for the year attributable to the equity
shareholders by weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit / (loss) for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted for
the effects of all dilutive potential equity shares.equity shareholders and the weighted average number of shares
outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later
date.
(xvi) Dividend
Dividend to the equity shareholders is recognized as a liability in the Company's financial statements in the
period in which the dividend is approved by the shareholders.
(xvii) Foreign Exchange Transactions
Foreign currency transactions are accounted for at the exchange rates prevailing on the date of such transactions
where these are not covered by forward contracts. Liabilities in foreign currencies as on the date of balance
sheet are converted at the exchange rate prevailing on that date.
2. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements in conformity with Ind AS requires management to make judgments,
estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosures
of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in
future periods.
Estimates and underlying assumptions are reviewed at each reporting date. Any revision to accounting estimates
and assumptions are recognised prospectively i.e. recognised in the period in which the estimate is revised and
future periods affected.
i. Recognition and measurement of defined benefit obligations
The cost of defined benefit plans and the present value of the defined benefit obligation are based on
actuarial valuations using the projected unit credit method. An actuarial valuation involves making various
assumptions that may differ from actual developments in the future. These include the determination of
discount rate, future salary increase and mortality rates. Due to the complexities involved in the valuation
and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting date.
ii. Fair value measurement of financial instruments
When the fair values of the financial assets and liabilities recorded in the balance sheet cannot be measured
based on the quoted market prices in active markets, their fair value is measured using valuation techniques.
The inputs to these models are taken from the observable market, where possible, but where this is not
feasible, a review of judgement is required in establishing fair values. Changes in assumptions relating to
these assumptions could affect the fair value of financial instruments.
iii. Deferred taxes
Deferred tax is recorded on temporary differences between tax bases of assets and liabilities and their
carrying amounts, at the rates that have been enacted or substantively enacted at the reporting date. The
ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during
the periods in which those temporary differences and the tax loss carry forwards become deductible. The
Company considers the expected reversal of deferred tax liabilities and projected future taxable income in
making this assessment. The amount of deferred tax assets considered realizable, however, could be
reduced in the near term if estimates of future taxable income during the carry forward periods are reduced.
CAPITAL RESERVE
Pertains to share application money forfeited in the case where remaining amount was not paid. This can be utilised
in accordance with the provisions of the Act.
SECURITIES PREMIUM RESERVE
Securities premium is used to record the premium on issue of shares. The reserve can be utilised in accordance
with the provisions of the Act.
GENERAL RESERVE
General Reserve represents amounts transferred from Retained Earnings in earlier years as per the requirments of
the erstwhile Companies Act, 1956. The reserve can be utilised in accordance with the provisions of the Act.
Declaration of dividend out of such reserve shall not be made except in accordance with the rules prescribed in this
behalf under the Act.
CAPITAL RESERVE PURSUANT TO BUSINESS COMBINATION
Capital Reserve is a result of Business Combination pursuant to the Scheme of merger by absorption of Gujrat
Polybutenes Private limited ("GPPL") (Transferor company) with Gujarat Petrosynthese Limited (Transferee company)
under section 230 to 232 and other applicable provision of the Companies Act, 2013 vide order dated 20th April,
2022 and 29th September, 2022 of National Company Law Tribunal Mumbai Bench and Bengaluru Bench and
represents the difference between the Net Assets of GPPL as on the appointed date i.e. 1st July, 2020 and Investment
26 EARNINGS PER SHARE
EARNINGS PER SHARE (EPS) is calculated by dividing the profit / (loss) attributable to the equity share
holders by weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit / (loss) for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period is adjusted for
the effects of all dilutive potential equity shares, except when the results would be anti-dilutive.
c) Risk management framework
The Company's principal financial liabilities include borrowing, trade and other payables. The Company's
principal financial assets include loans, trade receivable, cash and cash equivalents and others. The Company
also holds FVTPL investments. The Company is exposed to credit risk,liquidity risk and market risk. The
Company’s senior managment oversees the management of these risks. The Company's senior management
provides assurance that the Company's financial risk activities are governed by appropriate policies and
procedures and that financial risks are identifed, measured and managed in accordance with the Company's
policies and risk objectives.
d) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
i) Credit Risk
ii) Liquidity Risk
iii) Market Risk
i) Credit Risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the Company's receivables from
customers and loans given to related parties and others
The carrying amount of following financial assets represents the maximum credit exposure:
Trade receivables
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of each
customer. To manage, this, the Company periodically assesses the financial reliability of customers ,
taking into account the financial condition and ageing of account receivables.
No impairment is observed on the carrying value of trade receivables.
Other Financial Assets
Credit risk from balances with banks, loans, investments is managed by Company's finance department.
Investments of surplus funds are made only with approved counterparties.
ii) Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s
approach to managing liquidity is to ensure as far as possible that it will have sufficient liquidity to meet
its liabilities when they are due, under both normal and stressed condition, without incurring unacceptable
losses or risking damage to the Company’s reputation.
The Management monitors rolling forecasts of the Company's liquidity position on the basis of expected
cash flows.The Company’s objective is to maintain a balance between continuity of funding and flexibility
through the use of surplus funds, bank loans.
iii) Market Risk
Market risk is the risk that changes in market prices such as foreign exchange rates, interest rates and
commodity prices which will affect the Company’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market exposures within acceptable
parameters, while optimising the return.
Currency risk
Currency risk is not material, as the Company's primary business activities are within India and does not have
any exposure in foreign currency.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. The Company's exposure to risk of changes in market interest
rate is not material as the Company borrowing from banks are very minimal
Commodity price risk
The company is exposed to fluctuation in prices of its inputs. To offset the effect of changes in prices of
inputs, the company has a process to revise its selling price accordingly.
28. CAPITAL MANAGEMENT
The Company manages its capital to ensure that it will be able to continue as going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the
Company consists of net debt and the total equity of the Company. For this purpose, net debt is defined as
total borrowings less cash and cash equivalents.
In absence of information from LIC regarding quantification for different components of changes in defined
benefit obligation and fund assets, disclosures pertaining to movement in defined benefit obligation and fair
value of Plan Assets is not provided. Also, No actuarial gain / loss is recognised separately in Other
Comprehensive Income in absence of information.
30. Related party disclosure
(i) List of Related Parties as required by Ind AS-24 “Related Party Disclosures” are given below:
31. Contingent Liabilities
The Transferor company had received Income Tax Assessment order for A.Y. 2014-15. The loss claimed as per
Return of Income (ROI) of INR 2,02,07,941/- has been reduced due to disallowance of depreciation of INR 33,32,341/
- and addition on account of non reconciliation of interest of INR 23,81,548/-. Therefore, loss has been reduced to
INR 1,44,94,052/-. Since, Final figure is loss determined, no demand of tax is raised. The penalty proceedings have
been completed u/s 271(1)( c) of the IT Act levying penalty of INR 19,42,150/-. The part payment of INR 10,91,420/
- is made against penalty demand till decision of appeal. The said company has belatedly filed an appeal against
the said assessment order and the order levying Penalty. No provision is made for the said liability.
There is an income tax demand of INR 7,80,790/- (excluding interest) in respect of the Income Tax Assessment u/
s 143(3) for AY 2017-18 against which the Company has already preferred an appeal before the Hon’ble Commissioner
of Income Tax [CIT(A)]. This demand has already been adjusted against the refund of subsequent years. The said
matter is pending for adjudication before the CIT(A). No provision is made for this liability.
32 The Segment Reporting as required by IND AS-108 "Operating Segments" is not reported as the Company is
operating only in one segment.
33 There are no transactions and balances with companies struck off under Section 248 of the Companies Act,
2013 or Section 560 of Companies Act, 1956.
34 Previous year figures have been regrouped , reclassified and restated as per Ind AS and Schedule III of
Companies Act, 2013
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