| NOTES ON ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2009 | ||
| 1. | Significant Accounting Policies | |
| a. | Basis of Preparation of Financial Statements | |
| These Consolidated Financial Statements have been prepared under the historical cost convention [other than for revaluation of certain fixed assets as detailed in '1(b)(ii)' and '1(b)(iv)' below] and in compliance with the applicable accounting principles in India, and the applicable accounting standards notified under section 211(3C) of the Companies Act, 1956 (the 'Act') A summary of significant accounting policies which have been applied is set out below. | ||
| b. | Fixed Assets and Depreciation | |
| i. | Fixed Assets are stated at cost of construction / acquisition [except for items mentioned in (b) (ii) below] inclusive of inward freight, non refundable duties / taxes, incidental expenses directly related to acquisition, borrowing cost, where applicable and adjustments for exchange difference referred to in Note 1(f) below. In respect of projects involving construction, related pre operational expenses form part of the value of assets capitalised. An impairment loss is recognised wherever the carrying amount of fixed assets of a cash generating unit exceeds its recoverable amount (i.e. higher of net selling price and value in use). | |
| ii. | Land, buildings and certain plant and machineries of Rayon and Transparent Paper Unit as at 31st March, 1982 and of Cement (at Basantnagar) and Spun Pipes & Foundries Units as at 31st March, 1983 are stated at valuation made by the professional valuers in 1982-83 at the then current value. Land of Bulland Buildmart Private Limited (Subsidiary Company) is stated at valuation made by professional valuer on 30th September, 2008 at lower of current replacement cost and realisable value. | |
| iii. | Capital work in progress is stated at cost [including borrowing cost, where applicable and adjustment for exchange difference referred to in Note 1 (f) below], incurred during construction / installation / pre-operative period relating to items or projects in progress. | |
| iv. | Depreciation on revalued items of fixed assets referred to in (b)(ii) above is calculated on their respective revalued amounts at rates considered applicable by the valuers on straight line method as against the methods / rates / bases which would have otherwise been adopted for the purpose of the annual accounts of the Parent Company and accordingly includes additional depreciation charge. An amount equivalent to the aforesaid additional depreciation charge is transferred to the credit of the Profit and Loss Account from Capital Reserve - Revaluation of Fixed Assets. | |
| v. | Depreciation on fixed assets acquired up to 31st March, 1983 and not covered by revaluations referred to in (b)(ii) above pertaining to Transparent Paper Division of Rayon & Transparent Paper Unit and fixed assets of Bharat General Unit (except those pertaining to Malkapur Extraction Division) is calculated under reducing balance method at applicable rates as per Schedule XIV to the Companies Act, 1956 as revised during 1993-1994. | |
