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111
Notes
to the Consolidated Financial Statements
NOTE 1 SIGNIFICANT ACCOUNTING POLICIES
(contd)
4 Other Significant Accounting Policies
4.1 Convention:
These Consolidated Financial Statements have been prepared on accrual basis and under historical cost
convention and in compliance, in all material aspects, with the generally accepted accounting principles
in India. Consequent to the clarification issued by the Ministry of Corporate Affairs, Government of India
vide General Circular 08 | 2014 dated April 04, 2014, these Financial Statements have been prepared in
accordance with the relevant provisions | schedules | rules of the Companies Act, 1956, which
inter alia
include the applicable Accounting Standards notified under Section 211 (3C).
A summary of applicable Accounting Policies which have been applied consistently, are set out below.
4.2 Basis of Preparation:
All the assets and liabilities have been classified as current or non-current as per the normal operating
cycle of the Company and other criteria set out in Schedule VI to the Companies Act, 1956. Based on the
nature of products and the time between the acquisition of assets for processing and their realisation in
cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose
of current and non-current classification of assets and liabilities.
4.3 Use of Estimates:
The preparation of the Consolidated Financial Statements in conformity with generally accepted accounting
principles requires the Management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent liabilities at the date of the Consolidated Financial
Statements and the results of operations during the reporting period. These estimates are based on the
evaluation of the relevant facts and circumstances as of the date of the Consolidated Financial Statements
by the Management, which may differ from future revisions and actual results in subsequent period.
Differences are adjusted in subsequent periods as they occur.
4.4 Fixed Assets:
a) Tangible Assets:
i) Fixed assets other than (ii) and (iii) below are carried at cost of acquisition | construction including
incidental expenses directly attributable to the acquisition | construction activity, as the case may
be, less accumulated depreciation, amortisation and impairment as necessary.
ii) Assets received free of cost on premature cancellation of a lease agreement are valued at fair
value, by credit to capital reserve less accumulated depreciation and impairment as necessary.
iii) Freehold land, leasehold land at Panoli and certain business premises have been revalued as per
the report of approved valuer.
iv) Spares specific to a machinery are carried at cost and allocated over the useful life of the asset.
v) Expenditure incurred on cultivation of plantations up to the date, they become capable of
bearing fruit are accumulated under ‘Capital work-in-progress’ and then capitalised as a fixed
asset to be depreciated over their estimated economic life.
b) Intangible Assets:
Computer software includes enterprise resource planning project and other cost relating to software
which provides significant future economic benefit. Costs comprise license fees and cost of system
integration services.
4.5 Depreciation and Amortisation Expenses:
Depreciation:
Depreciation on building and plant and equipment is being provided on ‘Straight Line Method’ and on all