1.1 Basis of accounting and preparation of financial statements
The company maintains its accounts on accrual basis following
historical cost convention, in accordance with the Indian Generally
Accepted Accounting Principles. Management makes estimates and technical
and other assumptions regarding the amounts of incomes and expenses,
assets and liabilities and disclosure of contingencies, in accordance
with Generally Accepted Accounting Principles in India in the
preparation of the financial statements. Difference between the actual
results and estimates are recognized in the period in which they are
1.2 During the year ended 31st March, 2012 the revised Schedule VI
notified under the Companies Act, 1956 has become applicable to the
company, for preparation and presentation of its financial statements.
The adoption of revised schedule does not impact recognition and
measurement principles followed for the preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The company has also
reclassified the previous year figu es in accordance with the
requirements applicable in the current year.
1.3 Fixed Assets
Land and Leasehold Land, Factory Building, Hotel Building and Plant &
Machinery have been shown as revalued by the approved Value on
31/03/2002 thereby increase in such assets in Gross Block by Rs.
19,56,71,129. Other fixed assets are recorded at cost of acquisition,
net of modal and VAT credit or cost of construction including directly
attributable costs reduced by accumulated depreciation Land on
leasehold basis is included in the schedule of fixed assets.
i Depreciation has been charged on the Straight Line Method in
accordance with the rates specified under Schedule XTV to the Companies
ii Depreciation on assets added during the year has been provided on
iii Depreciation on revaluation amount of fixed assets is adjusted by
transferring the equivalent amount
from Revaluation Reserve Account.
Raw Material, Work in Process, stores and spares, food and beverages
are valaed at cost on FIFO method. Finished Goous and Goods on
Consignment are valued at cost or reusable value whichever is lower.
Wastage and scrap are valued at Realisable Market Value.
1.6 Revenue recognition Sale of goods
Sales are accounted net of returns and discounts and is accounted at
the point of despatch of material to the customers. In the Hotel
Division receipts from room rent are net of disocunt but inclusive of
luxury tax and service charge. In case of food and beverage sales are
accounted net of complimetary and discount but inclusive of service
charge and vat.
1.7 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.9 Cash flow statement Cash flows are reported using the indirect
method, whereby profit / (loss) before extraordinary items and tax is
adjusted for the effects of transactions of non-cash nature and any
deferrals or accruals of past or future cash receipts or payments. The
cash flows from operating, investing and financing activities of the
Company are segregated based on the available information.
1.10 Foreign currency transactions and translations
There were no foreign currency transactions.
1.11 Investments Investments are stated at cost.
1.12 Employee/Retirement benefits Defined contribution plans
The Company''s contribution to provident fund and pension fund are
considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution
required to be made.
Defined benefit plans
Gratuity is accounted for on actual payment basis. No provision for
gratuity on acturial basis is made
and hence its effect on profit or loss cannot be ascertianed.
1.13 Borrowing costs
Borrowing costs include interest, amortization of ancillary costs
incurred. Costs in connection with the borrowing of funds to the extent
not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the loan
Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset upto the date of
capitalization of such asset is added to the cost of the assets.
1.14 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organization and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit/loss amounts are evaluated regularly by the executive Management
in deciding how to allocate resources and in assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of their relationship to the operating
activities of the segment. Revenue, expenses, assets and liabilities
which relate to the Company as a whole and are not allocable to
segments on reasonable basis have been included under unallocated
revenue / expenses / assets / liabilities.
1.15 Taxes on Income Current Tax
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Deferred tax is calculated at the rates and laws that have been enacted
or substantially enacted as of the balance sheet date and is recognized
on timing differences that originate in one period and are capable
of reversal in one or more subsequent period. Deferred tax assets,
subject to consideration of prudence are recognised and carried forward
only to the extent that they can be realised.
Minimum Alternate Tax (MAT) Minimum alternate Tax paid in accordance
with the tax laws, which give rise to the future economic benefits in
the form of adjustment to future incoem tax liability, is considered as
an asset in the balance sheet when it is probable that future economic
benefit associated with it will flow to the company and the asset can
be measured reliably.
1.16 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post fax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares.
1.17 Research and development expenses
Revenue expenditure pertaining to research is charged to the Statement
of Profit and Loss. Development costs of products are also charged to
the Statement of Profit and Loss unless a product''s technological
feasibility has been established, in which case such expenditure is
capitalised. The amount capitalised comprises expenditure that can be
directly attributed or allocated on a reasonable and consistent basis
to creating, producing and making the asset ready for its intended use.
Fixed assets utilised for research and development are capitalised and
depreciated in accordance with the policies stated for Tangible Fixed
Assets and Intangible Assets.
1.18 Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
1.19 Insurance claims
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
1.20 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.