A) Basis of Preparation:
The financial statements of Gujarat Natural Resources Limited (the
Company) have been prepared under the historical cost convention on
accrual basis of accounting in accordance with the Indian Generally
Accepted Accounting Principles (GAAP) and mandatory accounting
standards as specified in the Companies (Accounting Standards) Rules,
2006, to the extent applicable and relevant provisions of the Companies
All assets and liabilities have been classified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of product and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current -non current classification of assets
B) Fixed Assets:
(i) Fixed Assets:
Fixed Assets are stated at cost of acquisition less accumulated
depreciation. All costs, including financing cost till commencement of
commercial production are capitalised/ to be capitalised.
Depreciation on fixed assets is charged on the Straight Line Method at
the rates prescribed in Schedule XIV to the Companies Act, 1956.
C) Borrowing Costs:
Borrowing cost attributable to acquisition, construction or production
of qualifying assets are capitalised as part of the cost of that asset,
till the asset is ready for use. Other borrowing costs are recognized
as an expense in the period in which these are incurred.
Investments are valued at cost.
E) Revenue Recognition:
All income and expenditure items having material bearing on the
financial statements are recognised on accrual basis.
Sales and Purchase of Commodity are mainly executed on MCX
F) Employee Benefits (AS -15):
As informed to us and explained to us there are no employees who are
eligible for such benefits and hence not applicable
G) Foreign Exchange Transactions (AS-11):
This accounting standard is not applicable
H) Amortization of Miscellaneous Expenditure:
Preliminary expenses and Pre-operative expenses has not been amortized.
I) Deferred tax
Deferred Tax charge or credit reflects the tax effects of timing
differences between accounting Income and taxable income for the
period. The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognized using the tax rates
that have been enacted or substantially enacted by the Balance Sheet
date as per the Accounting Standard - 22.
In view of negligible difference in taxable profit and book profit, the
impact of deferred tax assets/ liability is not considered.
J) Impairment of assets:
An assets is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to the
Profit and Loss Account in the year in which assets is identified as
impaired. The impairment loss recognized in prior accounting period is
reversed if there has been change in the estimate of recoverable
K) Prior Period Adjustment :
Expenses and income pertaining to earlier/previous years are accounted
as prior period items.
L) Earning Per Share:
Disclosure is made in the Profit and Loss Account as per the
requirements of the standard.
M) Consolidated financial statements
Consolidated financial statements of the Company and its subsidiaries
N) Provisions, Contingent Liabilities and Contingent Assts:
The Company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of that obligation.
Contingent Liabilities which are considered significant and material by
the company are disclosed in the Notes to Accounts. Contingent Assets
are neither recognized nor disclosed.