135 / 172
133
Notes
to the Consolidated Financial Statements
Note 1 Significant Accounting Policies
(continued)
4. Other significant Accounting Policies
4.1 Basis of preparation:
The Consolidated Financial Statements have been prepared in accordance with the Generally Accepted
Accounting Principles in India under the historical cost convention on accrual basis except for certain
buildings which are being carried at fair valued amounts. Pursuant to Section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting
or any addendum thereto are prescribed by Central Government in consultation and recommendation
of the National Financial Reporting Authority, the existing Accounting Standards notified under the
Companies Act, 1956 will continue to apply. The Ministry of Corporate Affairs (MCA) has notified
the Companies (Accounting Standards) Amendment Rules, 2016 vide its notification dated March 30,
2016. The said notification read with Rule 3(2) of the Companies (Accounting Standards) Rules, 2006 is
applicable to accounting period commencing on or after the date of notification i.e. 1 April 2016.
Consequently, the Consolidated Financial Statements have been prepared to comply in all material
aspects with the Accounting Standard notified under Section 211(3C) of the Companies Act, 1956,
Companies (Accounting Standards) Rules, 2006, as amended and other relevant provisions of the
Companies Act, 2013. The Accounting Policies which have been applied consistently, except where a
newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard
required a change in the Accounting Policy hitherto in use, are set out below.
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 III to the Companies Act, 2013. 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.
4.2 Use of estimates:
The preparation of the Consolidated Financial Statements in conformity with Generally Accepted
Accounting Principles requires the Management to make assumptions and estimates 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 on the date of the
Consolidated Financial Statements by the Management, which may differ from future revisions and
actual results in subsequent periods. Differences are adjusted in subsequent periods as they occur.
4.3 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) Spares specific to a machinery are carried at cost and allocated over the useful life of the asset.
iv) 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.
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.
vi) The plantation destroyed due to calamity, disease or any other reasons weather capitalised as
fixed asset or being carried under ‘Capital work-in-progress’ are charged off to Statement of
Profit and Loss.