a. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended March 31, 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 VI doesnot impact recognition and measurement
principles followed for 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 figures in accordance with the requirements applicable in the
current year. For further details, refer note 26.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainity
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future period.
c. Tangible fixed assets
Fixed assets are stated at cost/revalued amount where applicable, less
depreciation. The cost comprises purchase price and directly
attributable cost of bringing asset to its working condition for the
intended use. Any trade discounts and rebates are deducted in arriving
at the purchase price.
Land, Building, Plant & Machinery and Capital Work in Progress were
revalued by a registered valuer as at 30th June, 1992 after considering
depreciation upto that date on the governing principle of Current
Replacement Cost and amount added on revaluation Rs. 146.12 lacs.
Revaluation reserve was adjusted against goodwill created in a prior
year on amalgamation and against sale/ surrender of land and building.
Fixed assets other than book value of land and building were
technically evaluated and on the basis of useful lives and obsolescence
Rs. 632.46 lacs was devalued and charged to the profit and loss account
for the year ended October 31, 1997.
d. Depreciation on tangible fixed assets
Depreciation has been calculated under straight line method on:
(a) Assets acquired prior to 1.5.1986 at the rates computed in the
respective years of acquisition of those assets as per section
205(2)(b) of the Companies Act, 1956.
(b) Assets acquired on or after 1.5.1986 and before 16.12.1993 on a pro
rata basis at the rates specified in Schedule XIV of the Companies
(Amendment) Act, 1988.
(c) Assets acquired on or after 16.12.1993 on a pro rata basis at the
rates specified in the notification GSR No. 756 E dated 16.12.1993 as
per the Schedule XIV of the Companies Act, 1956.
Investments are stated at cost of acquisition, inclusive of expenditure
incidental to acquisition. Long term (non trade) investments not held
for immediate sale are valued at cost less permanent diminution in
value, if any. Current investments are valued at lower of cost and
fair/ market value in aggregate; Income from investments is recognised
in the accounts in the year in which it is accrued.
Finished goods are valued at lower of cost and net realisable value.
Excise duty on finished goods is included in cost only if paid.
g. Revenue Recognition
Sale of scrap is recognized on disposal of scrap.
h. Income Taxes
Deferred tax assets as per Accounting Standard 22 has not been
recognized and carried forward in view of absence of reasonable
certainty about the sufficient future taxable income.
Minimum Alernate tax(MAT) paid in a year is charged to the statement of
profit and loss as current tax.
i. Earning per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period
adjusted for the effects of all dilutive potential equity shares .
j. Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or non
occurrence of one or more uncertain future events beyond the control of
the company or a present obligation that is not recognised because it
is not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is a liability that cannot be recognised because it
cannot be measured reliably. The company does not recognise a
contingent liability but discloses its existence in the financial
k. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand.