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Accounting Policies of Dhampur Sugar Mills Ltd. Company

Mar 31, 2016

1) Corporate Information:

DhampurSugar Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1913.

Its shares are listed on two stock exchanges in India namely, National Stock Exchange of India Ltd. and BSE Ltd.

The company is engaged mainly in the manufacturing and selling of sugar, chemicals, ethanol and co-generation of power.

2) Significant Accounting Policies:

i. Basis of Preparation of Financial statement

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Policies in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("The 2013 Act"). The Financial Statements have been prepared on Accrual Basis on the Historical cost convention except for certain tangible fixed assets which are carried on revalued amounts.

All assets and liabilities have been classified as current and non-current as per Company''s normal Operating Cycle and other criteria set out in Schedule III to the Companies Act, 2013. The company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

ii. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires management of the company to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities)and the reported income and expenses during the year.

The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

iii. Fixed Assets and work-in-progress

Fixed assets are stated at cost, net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation, and impairment loss, if any. All costs, including financing costs attributable to construction or acquisition of fixed assets till commencement of commercial production, and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

Expenditure during construction period: Directly attributable expenditure (Including finance cost related to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation and capital assets under installation are treated as pre-operative expenses pending allocation to assets and are shown under "Capital work-in-progress". Capital Work-in-progress is stated at the amount expended up to the date of Balance Sheet for the cost of fixed assets that are not ready for their intended use.

Assets identified and technically evaluated as obsolete are retired from active use and held for disposal are stated at the lower of their net book value and estimated realizable value.

iv. Depreciation and Amortization

Depreciation on fixed assets is provided for over the useful life of assets specified in the Schedule -II of Companies Act, 2013 as under:

Depreciation on plants and buildings acquired up to 31st March 1989 and other assets acquired up to 31st March, 2014 is provided on written down value method.

Depreciation on plants and buildings acquired after 31st March 1989 and other fixed assets acquired after 31st March, 2014 is provided on straight line method.

v. Foreign Exchange Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate on the date of the transaction.

Monetary items denominated in foreign currencies at the year-end are restated at year-end rates. In case of items which are covered by forward exchange contracts, the premium or discount arising out at the inception of such contracts is amortized as income or expense over the life of the contract. Further exchange difference on such contracts i.e. difference between the exchange rate at the exchange reporting/settlement date and the exchange rate on the date of inception of contract/the last reporting date, is recognized as income/ expense for the year except that the exchange differences, including premium or discount on forward exchange contracts, arising in respect of long term borrowings or liabilities relating to the acquisition of the depreciable capital assets which are adjusted to the cost of fixed assets.

Non-monetary foreign currency items are carried at cost.

Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

vi. Inventories

Raw material, process chemicals, stores, spares and packing material are carried at weighted average cost.

Finished goods, Goods in Process and Traded goods except by-products are carried at lower of cost and net realizable value. Cost of trading goods is determined using FIFO basis. Cost of finished goods and Goods in Process comprises of raw material cost (net of realizable value of By-products), variable and fixed production overhead, which are allocated to work in progress and finished goods on full absorption cost basis.

Stock of finished farm products, molasses and bagasse are carried at estimated Net Realizable Value.

Standing cane and other crops are carried at cost.

Loose tools and instruments are carried at depreciated value.

By-products are carried at net realizable value.

vii. Excise duty

Excise duty in respect of finished goods held in stock at the end of the period except in respect of those products which are being used for captive consumption, is provided for and is included in the value of closing stock.

viii. Employees Benefits Defined contribution plan:

Company''s contributions paid/payable during the year to provident fund and pension fund are recognized in the profit and loss account.

Defined benefit plan:

Company''s liabilities toward defined benefit plans are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measure each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the profit and loss account as income or expenses. Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date or government bonds where the currency and terms of the Government are consistent with the currency and estimated of the defined benefit obligation.

Short term benefits are recognized as expense at the undiscounted amount in the Statement of the profit and loss account for the year in which the related service is rendered.

Compensation to employees who have opted for retirement under the "Voluntary Retirement scheme" is charged to the profit and loss account in the year of retirement.

ix. Leases

a) Leases rentals in respect of operating leases, if any, are expensed with reference to lease term, except for rentals pertaining to the period up to the date of commissioning of the assets which are capitalized.

b) Income in respect of assets given on operating lease, if any, is recognized on accrual basis with reference to lease terms.

x. Investments

Investments are either classified current or long-term based on Management''s intention at the time of acquisition:-Current investments are carried at lower of cost and net realizable value.

Long term investment is stated at cost. Provision for diminution in the value of long term investment is made only if such a decline is other than temporary.

Cost includes acquisition price and directly attributable acquisition charges such as brokerage, fee and duties.

xi. Revenue Recognition

Revenue is recognized only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from sale of goods is recognized on transfer of significant risk and reward of ownership to the customer. Revenue includes excise duty and excludes sales tax/VAT, trade discount and rebates. Interest income is recognized when no significant uncertainty as to measurability or collectability exists.

Insurance claim 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. .

Export benefits are accounted for in the year of exports based on eligibility and when there is no significant uncertainty in receiving the same.

xii. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets till commencement of commercial production and or put to use. All other borrowing costs are expensed in the period they occur.

xiii. Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits under the provision of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and Laws that are enacted or substantively enacted on the balance sheet date. The deferred tax assets is recognized and carried forward only if there is virtual certainty that the assets will be realized in future.

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which Minimum Alternate Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in the Guidance Notes issued by the Institute of Chartered Accountants of India, the said asset is created by the way of a credit to the Statement of Profit and Loss and shown as MAT credit entitlement. The company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal Income Tax during the specified period.

xiv. Impairment of Assets

The Carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/ external factor. An asset is impaired when the carrying amount of the assets exceeds the recoverable amount. Impairment is charged to the profit and loss account in the year in which an asset is identified as impaired. Impairment losses recognized in prior accounting period are reversed if there is any change in the estimate of the recoverable amount.

xv. Government Grants

Government grants are recognized where there is reasonable assurance that the condition attach to them will be complied and the grants will be received. Government grants are accounted for as under:

Government grants of the nature of promoters'' contribution are credited to the capital reserve and treated as a part of the Shareholders'' Fund.

Government grants related to specific depreciable fixed assets are adjusted with the value of assets. Government grants related to the specific non-depreciable fixed assets are credited to capital reserve.

Government grants that are receivable as compensation for expenses or losses incurred or for the purpose of giving immediate financial support are either deducted from the expenditure in case these relate to specific expenditure and in other cases, are treated as other income. These grants, if available, to the industry in general are treated as ordinary items and if available only to the company are treated as an extraordinary item and disclosed accordingly.

xvi. Provisions, Contingent Liabilities and Assets

Provisions are recognized in respect of obligation where, based on the evidence available, their existence at the balance sheet date is considered probable.

Contingent liabilities are shown by way of notes to the account in respect of obligations where, based on the evidence available their existence at the balance sheet date is considered not probable.

Contingent assets are not recognized in the financial statements.

xvii. Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, cheques on hand, balance with banks on current accounts and short term, highly liquid investments with an original maturity of three months or less and which carry insignificant risk of changes in value.

xviii. Cash Flow Statement

Cash flows are stated using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and items of incomes and expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.

xix. Earning Per Share

Basic earnings per share are computed by dividing the net profit/(loss) after tax (Including the post-tax effect of extra ordinary items, if any), attributable to the equity shareholders, by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed by dividing the net profit/(loss) after tax (Including the post-tax effect of extra ordinary items, if any), attributable to the equity shareholder, by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are determined as at the end of each period presented.

xx. Segment Reporting

Segments are identified based on dominant source and nature of risks and returns and the internal organizational and management structure. The accounting policies adopted for segment reporting are in the line with the accounting policies adopted for preparing and presenting the Financial Statements of the Company as a whole. In addition, the following specific accounting policies have been followed for segment reporting:

Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment transfers. Inter segment transfers are accounted for, based on the estimated market price in case of marketable product and cost plus markup basis in case of non-marketable product.

"3. d" - Terms/right attached to equity shares

The company has only one class of equity shares having a par value of '' 10 per share. Each holder of equity shares is entitled to one vote per share.

The company declares and pays dividend in Indian rupees. The dividend if proposed by the Board of Directors, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the shareholders of equity shares are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

"3. e" - 33,08,960 Equity shares of Rs, 10 each and 18,01,817 8% Cumulative Redeemable Preference shares of Rs, 100 each were allotted during the year 2013-14 to the shareholders of J K Sugar Ltd pursuant to the scheme of amalgamation without payment being received in cash.

"3. f" - Right attached to Preference shares

(i) The Preference shares will constitute direct, unconditional, un-subordinated and unsecured obligations of the company and will at all times rank pari passu and without any preference among them.

(ii) No premature redemption option to the company, nor to the shareholders of Cumulative Redeemable Preference shares and no option to the shareholders to seek redemption in case of non-payment of dividend.

"3. g" - Terms of redemption of Preference shares

(i) 18,01,817 - 8% Cumulative Redeemable Preference Shares of Rs, 100 each are redeemable in 3 equal yearly installments commencing from April 01, 2014. The amount due for redemption as at 31st March, 2016 is Rs, 9 Crores, ( Rs,3 Crores).

"3B. a"- During the financial year, 15,00,000 Equity shares of Rs, 10/- each at a premium of Rs, 23/- per share has been allotted on conversion of 15,00,000 equity share warrants.

"5.a" - Nature of security

(i) Rupee term loan from bank under the Government sponsored subvention Scheme for Extending Financial Assistance to Sugar Undertakings (SEFASU), 2014 of Rs, 103.45 crores are secured by third parri passu charge on block of fixed assets of the company and personal guarantee of four directors.

(ii) Rupee term loan from bank under the Government sponsored Scheme for Extending soft loan to sugar mills of Rs, 99.09 crores are secured by third parri passu charge on block of fixed assets of the company and personal guarantee of four directors.

(iii) Rupee term loans from Sugar Development Fund are secured by exclusive second charge on all movable and immovable assets excluding current assets of the company.

(iv) All other term loans from financial institutions and banks are secured by first parri passu charge on all movable and immovable assets except book debts, stock-in-trade, raw materials, spare parts and other current assets.

(v) All the term loans are guaranteed by four directors.

"7. a" - Nature of security

Cash Credit limits from District Co-operative Banks/UPCBs'' having outstanding of Rs, 355.46 Crores as at 31st March, 2016 are secured by pledge of stocks of sugar and by parri passu third charge over the fixed assets of the company and personal guarantee of four directors.

All other Cash credit limits from banks having outstanding of Rs, 563.86 Crores as at 31st March, 2016 are secured by pledge of stocks of sugar and hypothecation of consumable stores and spare parts, chemicals, molasses etc. and by parri passu third charge over the fixed assets of the company and personal guarantee of four directors.

"8.a" Other Liabilities represents amounts payable to commercial banks in respect of agriloans facilitated by the company. The company has provided corporate guarantee in respect of such loans including interest due thereon.

* Represents interest debited by banks on loans at the close of business hours as at 31st March 2016 which has been repaid by the company on next working day


Mar 31, 2015

A Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on mercantile system ofaccounting unless otherwise specifically stated.

B Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period.

Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

C Fixed Assets

Fixed assets are stated at cost, net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation, and impairment loss, if any. All costs, including financing costs attributable to construction or acquisition of fixed assets till commencement of commercial production, and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

D Depreciation and Amortisation

a) Depreciation on fixed asstes is provided for over the useful life of assets specified in the Schedule -II of Companies Act, 2013.

b) Depreciation on Plants and buildings acquired upto 31st March,1989 and other assets acquired upto 31st March, 2014 is provided on written down value method.

c) Depreciation on Plants and buildings acquired after 31st March, 1989 and other fixed assets acquired after 31st March, 2014 is provided on straight line method

E Foreign Exchange Transactions

a) Transactions denominated in foreign currencies are recorded at the exchange rate prevaling on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of itmes which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c) Non monetary foreign currency itmes are carried at cost.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F Inventories

a) Raw material, process chemicals, stores and spares, packing material and traded goods are carried at weighted average cost.

b) Finished Goods except molasses are carried at lower of cost and net realisable value.

c) Stock of finished farm products, molasses and bagasse are carried at estimated selling price.

d) Standing cane and other crops are carried at cost.

e) Goods in process is carried at lower of cost and net realisable value.

f) Loose tools and instruments are carried at depreciated value.

g) Renewable Energy Certificate are carried at lower of cost and net realisable value.

G Excise Duty

Excise duty in respect of finished goods held in stock at the end of the period except in respect of those products which are being used for captive consumption, is provided for and is included in the value of closing stock.

H Employees Benefits

a) Defined contribution plan

Company''s contributions paid/payable during the year to provident fund and pension fund are recognised in the profit and loss account.

b) Defined Benefit Plan

Company''s liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expenses. Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheetdate or Government bonds where the currency and terms of the Government are consistent with the currency and estimated terms of the defined benefit obligation.

c) Short term benefits (namely leave encashment) are provided for on accrual basis.

d) Employee seperation cost

Compensation to employee who have opted for retirement under the "Voluantary Retirement Scheme" of the company is charged to the profit and loss account in the year of retirement.

I Leases

(a) Lease rentals in respect ofoperating lease, if any,are expensed with reference to lease term,except for rentals pertaining to the period upto the date of commissioning of the assets which are capitalised.

(b) Income in respect of assets given on operating lease if any, is recognised on accrual basis with reference to lease terms.

J Investments:

a) Current investments are carried at lower of cost and net realisable value.

b) Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

K Revenue Recognition :

Revenue is recognised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from sale of goods is recognised on transfer of significant risks and rewards of ownership to the customers. Revenue includes excise duty and is net of sales tax, value added tax and applicable discounts and allowances. Dividend income is recognised when right to receive is established. Interest income is recognised when no significant uncertainty as to measurability or collectablity exists.

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.

L Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets till commencement of commercial production and/or put to use. All other borrowing costs are expensed in the period they occur.

M Provision for Current and Deferred Tax :

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realised in future.

N Impairment of Assets :

The carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment is charged to the profit and loss account in the year in which an asset is identified as imapired. Impairment losses recognised in prior accounting periods are reversed if there is any change in the estimate of the recoverable amount.

O Government Grants:

Government grants are recognised where there is reasonable assurance that the conditions attached to them will be complied and the grants will be received. Government grants are accounted for as under:

(i) Government grants of the nature of promoters'' contribution are credited to capital reserve and treated as a part of shareholders'' funds.

(ii) Government grants related to specific depreciable fixed assets are adjusted with the value of assets. Government grants related to specific non depreciable fixed assets are credited to capital reserve.

(iii) Government grants that are receivable as compensation for expenses or losses incurred or for the purpose of giving immediate financial support are either deducted from the expenditure in case these relate to specific expenditure and in other cases are treated as other income. These grants if available to the sugar industry in general are treated as ordinary items and if available only to the company are treated as an extraordinary item and disclosed accordingly.

P Provisions, Contingent Liabilities and Assets :

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable.

Contingent liabilities are shown by way of notes to the accounts in respect of obligations where, based on the evidence available their existence at the balance sheet date is considered not probable.

Contingent assets are not recognised in the financial statements.


Mar 31, 2014

A Corporate Information

Dhampur Sugar Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on two stock exchanges in India namely, National Stock Exchange of India and Bombay Stock Exchange of India. The company is engaged in the manufacturing and selling of sugar, chemicals and co-generation of power.

B Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on mercantile system of accounting unless otherwise specifically stated.

C Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

D Fixed Assets

Fixed assets are stated at cost, net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation, and impairment loss, if any. All costs, including financing costs attributable to construction or acquisition of fixed assets till commencement of commercial production, and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

E Depreciation and Amortisation

a) Depreciation on plants and buildings acquired after 31st March,1989 is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

b) Depreciation on other fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

F Foreign Exchange Transactions

a) Transactions denominated in foreign curriencies are recorded at the exchange rate prevaling on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign curriencies at the year end are restated at year end rates. In case of itmes which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c) Non monetary foreign currency itmes are carried at cost.

d) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

G Inventories

a) Raw material, process chemicals, stores and spares, packing material and traded goods are carried at weighted average cost.

b) Finished Goods except molasses are carried at lower of cost and net realisable value.

c) Stock of finished farm products, molasses and bagasse are carried at estimated selling price.

d) Standing cane and other crops are carried at cost.

e) Goods in process is carried at lower of cost and net realisable value.

f) Loose tools and instruments are carried at depreciated value.

g) Renewable Energy Certificate are carried at lower of cost and net realisable value. H Excise Duty

Excise duty in respect of finished goods held in stock at the end of the period except in respect of those products which are being used for captive consumption, is provided for and is included in the value of closing stock.

I Employees Benefits

a) Defined contribution plan

Company''s contributions paid/payable during the year to provident fund and pension fund are recognised in the profit and loss account.

b) Defined Benefit Plan

Company''s liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expenses. Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date or Government bonds where the currency and terms of the Government are consistent with the currency and estimated terms of the defined benefit obligation.

c) Short term benefits (namely leave encashment) are provided for on accrual basis.

d) Employee sepration cost

Compensation to employee who have opted for retirement under the "Voluantary Retirement Scheme" of the company is charged to the profit and loss account in the year of retirement. J Leases

(a) Lease rentals in respect of operating lease, if any, are expensed with reference to lease term, except for rentals pertaining to the period upto the date of commissioning of the assets which are capitalised.

(b) Income in respect of assets given on operating lease if any, is recognised on accrual basis with reference to lease terms. K Investments:

a) Current investments are carried at lower of cost and net realisable value.

b) Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

L Revenue Recognition :

Revenue is recognised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from sale of goods is recognised on transfer of significant risks and rewards of ownership to the customers. Revenue includes excise duty and is net of sales tax, value added tax and applicable discounts and allowances. Dividend income is recognised when right to receive is established. Interest income is recognised when no significant uncertainty as to measurability or collectablity exists.

M Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets till commencement of commercial production and/or put to use. All other borrowing costs are expensed in the period they occur.

N Provision for Current and Deferred Tax :

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realised in future.

O Impairment of Assets :

The carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment is charged to the profit and loss account in the year in which an asset is identified as imapired. Impairment losses recognised in prior accounting periods are reversed if there is any change in the estimate of the recoverable amount.

P Provisions, Contingent Liabilities and Assets :

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable.

Contingent liabilities are shown by way of notes to the accounts in respect of obligations where, based on the evidence available their existence at the balance sheet date is considered not probable.

Contingent assets are not recognised in the financial statements. "1A. d" - Terms/right attached to equity shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend if proposed by the Board of Directors, is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the shareholders of equity shares are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

"1A. e" - 33,08,960 Equity shares of Rs. 10 each and 18,01,817 8% Cumulative Redeemable Preference shares of Rs. 100 each were allotted during the year to the shareholders of J K Sugar Ltd pursuant to the scheme of amalgamation without payment being received in cash.

"1A. f" - Right attached to Preference shares

(i) The Preference shares will constitute direct, unconditional, un-subordinated and unsecured obligations of the company and will at all times rank pari passu and without any preference among them.

(ii) No premature redemption option to the company, nor to the shareholders of Cumulative Redeemable Preference shares and no option to the shareholders to seek redemption in case of non-payment of dividend. "1A. g" - Terms of redemption of Preference shares

(i) 4,13,940 - 6% Cumulative Redeemable Preference Shares of Rs. 100 each are redeemable in 3 equal yearly installments commencing from December, 2013.

(ii) 4,69,013 - 1% Cumulative Redeemable Preference Shares of Rs. 100 each are redeemable in 12 equal quarterly installments commencing from December, 2012.

(iii) 18,01,817 - 8% Cumulative Redeemable Preference Shares of Rs. 100 each are redeemable in 3 equal yearly installments commencing from April 01, 2014.

"1B. a" - Terms of share warrants issue:

1. The holder(s) of each warrant shall have an option to apply for and be allotted One equity share of Rs. 10 each at premium of Rs. 23 per share i.e. Rs. 33 per share at any time within 18 months from the date of allotment of warrant. i.e. 26th March 2014.

2. Application money of Rs. 8.25 per warrant shall be adjusted against the price payable subsequently for acquiring by exercising the option. Application money of Rs. 8.25 per warrant shall be forfeited if the option to acquire shares is not exercised.

3. The Equity shares issued and allotted upon exercise of option will be fully paid and will rank pari-passu with the existing equity shares.

"3.a" - Nature of security

Term loans (excise) from banks of Rs. 109.53 crores under the Government sponsored subvention scheme for extending Financial assistance to Sugar Undertakings, 2014 (SEFASU, 2014) will be secured by third parri passu charge on all movable and immovable asstes of the company and guarantee of promoters directors. Term loans from bank of Rs. 1.25 crores are secured by subservient sixth charge on all movable and immovable assets of the company.

Term loans from Sugar Development Fund are secured by exclusive second charge on all movable and immovable assets excluding current assets of the company. All other term loans from financial institutions and banks (Zero coupon loans) are secured by first parri passu charge on all movable and immovable assets except book debts, stock-in-trade, raw materials, spare parts and other assets and personal guarantee of promoters directors.

"6.a" - Nature of security

All Cash credit limits from banks other than District Co-operative Banks of Rs. 467.38 Crores are secured by pledge of stocks of sugar and hypothecation of consumable stores and spare parts, chemicals, molasses etc. and by parri passu third charge over the fixed assets of the company and personal guarantee of promoter directors.

Cash credit accounts from District Co-operatice Banks of Rs. 96.09 Crores are secured by pledge of stocks of sugar. Rupee loans from banks of Rs. 49.76 Crores are secured by pledge of stock of sugar and personal guarantee of promoter directors and Rs. 30 Crores by subservient charge on Fixed assets & Current Assets of the company. "9. A." - Revaluation of Tangible Assets:

The Company has revalued the land of its "Meerganj Unit" as on 07.10.2013 on the basis of replacement value, valued by an independent certified valuer. Accordingly a sum of Rs. 35.69 Crores (included as addition of land in Note No. -9) being the excess of the current replacement value of Rs. 42.22 Crores over the existing book value of Rs. 6.53 Crores has been credited to revaluation reserve.


Mar 31, 2013

A Corpoarte Information

Dhampur sugar Mills Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on two stock exchanges in India. The company is engaged in the manufacturing and selling of sugar, chemicals and co-generation of power.

B Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention on mercantile system of accounting unless otherwise specifically stated.

C Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reported period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

D Fixed Assets

Fixed assets are stated at cost, net of recoverable taxes and includes amount added on revaluation, less accumulated depreciation, and impairment loss, if any. All costs, including financing costs attributable to construction or acquisition of fixed assets till commencement of commercial production,net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalised.

E Depreciation and Amortisation

a) Depreciation on plants and buildings acquired after 31st March,1989 is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

b) Depreciation on other fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

F Foreign Exchange Transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the closing rate.

The difference in translation of long term monetary assets and liabilities and realised gains and losses on such foreign exchange transactions are recognised in the respective capital asset. In respect of transactions covered by forward exchange contracts, the difference between contract rate and the rate on the date of transaction is charged to the profit and loss account over the period of the contract.

G Inventories

a) Raw material at cost and finished goods including in transit (except molasses) are carried at lower of cost and net realisable value.

b) Stock of finished farm products, molasses and bagasse are carried at estimated selling price.

c) Packing materials, stores, spares, standing cane and other crops are carried at cost.

d) Goods in process/work in progress is carried at estimated cost.

e) Loose tools and instruments are carried at depreciated value.

H Excise Duty

Excise duty in respect of finished goods held in stock except in respect of those products which are being used for captive consumption, has been accounted for at the end of the period and is included in the value of closing stock.

I Employees Benefits

a) Defined contribution plan

Company''s contributions paid/payable during the year to provident fund and pension fund are recognised in the profit and loss account.

b) Defined Benefit Plan

Company''s liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expenses. Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the balance sheet date or Government bonds where the currency and terms of the Government are consistent with the currency and estimated terms of the defined benefit obligation.

c) Short term benefits (namely leave encashment) are provided for on accrual basis.

d) Employee sepration cost

Compensation to employee who have opted for retirement under the "Voluantary Retirement Scheme" of the company is charged to the profit and loss account in the year of retirement.

J Leases

a) In respect of assets taken on lease upto 31.03.2001 and in respect of operating lease taken there after, if any, lease rentals are expensed with reference to lease term, except for rentals pertaining to the period upto the date of commissioning of the assets which are capitalised.

b) Income in respect of assets given on lease if any, is recognised on accrual basis with reference to lease terms.

K Investments:

a) Current investments are carried at lower of cost and quoted/fair value.

b) Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

L Revenue Recognition :

Revenue is recognised only when it can be reliably measured and is reasonable to expect ultimate collection. Revenue from sale of goods is recognised on transfer of significant risks and rewards of ownership to the customers. Revenue includes excise duty and is net of sales tax, value added tax and applicable discounts and allowances. Dividend income is recognised when right to receive is established. Interest income is recognised when no significant uncertainty as to measurability or collectablity exists.

M Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets till commencement of commercial production and/or put to use. All other borrowing costs are expensed in the period they occur.

N Provision for Current and Deferred Tax :

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realised in future.

O Impairment of Assets :

The carrying amount of assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment is charged to the profit and loss account in the year in which an asset is identified as imapired. Impairment losses recognised in prior accounting periods are reversed if there is any change in the estimate of the recoverable amount.

P Provisions, Contingent Liabilities and Assets :

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the balance sheet date is considered probable.

Contingent liabilities are shown by way of notes to the accounts in respect of obligations where, based on the evidence available their existence at the balance sheet date is considered not probable.

Contingent assets are not recognised in the financial statements.


Mar 31, 2011

A. Basis of Preparation of Financial Statements

The financial statements nave been prepared under the historical cost convention on mercantile system of accounting unless otherwise specifically stated.

B. Fixed Assets

(a) Fixed assets are stated at cost, net of CENVAT and/or at revalued price, less accumulated depreciation, all costs, including financing costs relating to borrowed funds attributable to construction or acquisition of fixed assets till commencement of commercial production and/or put to use.

(b) Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realisable value.

C. Depreciation

a) Depreciation on plants and buildings acquired after 31st March,1989 is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

b) Depreciation on other fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

D. Foreign Exchange Transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the dosing rate.

The difference in translation of long term monetary assets and liabilities and realised gains and losses on such foreign exchange transactions are recognised in the respective capital asset in respect of transactions covered by forward exchange contracts, the difference between contract rate and the rate on the date of transaction is charged to the Profit and Loss Account over the period of the contract

E. Inventories

a) flaw material at cost and finished goods including in transit (except molasses) are carried at lower of cost and net realisable value.

b) Stock of finished farm products, molasses and bagasse are carried at estimated selling price.

c) Packing materials, stores, spares, standing cane and other crops are carried at cost

d) Goodsin process/work in progress is carried at estimated cost.

e) Loose tools and instruments are carried at depreciated value.

F. Excise Duty

Excise duty in respect of finished goods held in stock except in respect of those products which are being used for captive consumption, has been accounted for at the end of the period and is Included in the value of closing stock.

G. Employees Benefits

a) Defined Contribution Plan

Companys contributions paid/payable during the year to provident fund and pension fund are recognised in the Profit and Loss Account

b) Defined Benefit Plan

Comparys liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognised immediately in the profit and loss account as income or

expenses. Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date or government bonds where the currency and terms of the government are consistent with the currency and estimated terms of the defined benefit obligation.

c) Short term benefits (namely leave encashment) are provided for on accrual basis.

H. Leases

a) In respect of assets taken on lease upto 31.03.2001 and in respect of operating lease taken there after, if any, lease rentals are expensed with reference to lease term, except for rentals pertaining to the period upto the date of commissioning of the assets which are capitalised.

b) Income in respect of assets given on lease if any, is recognised on accrual basis with reference to lease terms.

I. Investments:

a) Current investments are stated at lower of cost or fair market value.

b) Long term investments are stated at cost less provision for diminution and written-off.

J. Interest Revenue:

Revenue arising from the use by others of enterprise resources yielding interest and dividends etc. are recognised when no significant uncertainty as to measurability or collectability exists.

K. Provision for Current and Deferred Tax:

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet Date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realised in future.

L. Impairment of Assets:

The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Impairment losses recognised in prior accounting periods are reversed if there is any change in the estimate of the recoverable amount.

M. Provisions, Contingent Liabilities and Assets:

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable.

Contingent liabilities are shown by way of notes to the accounts in respect of obligations where, based on the evidence available their existence at the Balance Sheet date is considered not probable.


Sep 30, 2009

A. Basis of Preparation of Financial Statements

The financial statements have been prepared under the historical cost convention, on mercantile system of accounting unless otherwise specifically stated.

B. Fixed assets

(a) Fixed assets are stated at cost, net of CENVAT and/or at revalued price, less accumulated depreciation, all costs, including financing costs relating to borrowed funds attributable to construction or acquisition of fixed assets till commencement of commercial production and/or put to use.

(b) Assets identified and evaluated technically as obsolete and held for disposal are stated at their estimated net realisable value.

C. Depreciation

a) Depreciation on plants and buildings acquired after 31st March,1989 is provided on straight line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

b) Depreciation on other fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

D. Foreign exchange transactions

Monetary assets and liabilities related to foreign currency transactions remaining unsettled at the end of the year are translated at the closing rate. The difference in translation of long term monetary assets and liabilities and realised gains and losses on such foreign exchange transactions are recognised in the respective capital asset. In respect of transactions covered by forward exchange contracts, the difference between contract rate and the rate on the date of transaction is charged to the Profit and Loss Account over the period of the contract.

E. Inventories

a) Raw material at cost and finished goods including in transit (except molasses) are carried at lower of cost and net realisable value.

b) Stock of finished farm products, molasses and bagasse are carried at estimated selling price.

c) Packing materials, stores, spares, standing cane and other crops are carried at cost.

d) Goods in process/work in progress is carried at estimated cost.

e) Loose tools and instruments are carried at depreciated value.

F. Excise duty

Excise duty in respect of finished goods held in stock except in respect of those products which are being used for captive consumption, has been accounted for at the end of the period and is included in the value of closing stock.

G. Employees benefits

a) Defined Contribution Plan

Companys contributions paid/payable during the year to Provident Fund, Superannuation Fund and ESIC are recognised in the profit and loss account.

b) Defined Benefit Plan

Companys liabilities towards gratuity are determined using the projected unit credit method which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognised immediately in the profit and loss account as income or expenses.

Obligation measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet Date or government bonds where the currency and terms of the government are consistent with the currency and estimated terms of the defined benefit obligation.

c) Short term benefits (namely leave encashment) are provided for on accrual basis.

H. Leases

a) In respect of assets taken on lease upto 31.03.2001 and in respect of operating lease taken there after lease rental are expensed with reference to lease term, except for rentals pertaining to the period upto the date of commissioning of the assets which are capitalised.

b) Income in respect of assets given on lease if any, is recognised on accrual basis with reference to lease terms.

I. Investments

a) Current investments are stated at lower of cost or fair market value.

b) Long term investments are stated at cost less provision for diminution and written-off.

J. Interest Revenue

Revenue arising from the use by others of enterprise resources yielding interest and dividends etc. are recognised when no significant uncertainty as to measurability or collectability exists.

K. Provision for Current and Deferred Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Deferred tax resulting from timing differences between taxable income and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the Balance Sheet Date. The deferred tax assets is recognised and carried forward only to the extent that there is virtual certainty that the assets will be realised in future.

L. Impairment of Assets :

The carrying amount of assets are reviewed at each Balance Sheet Date, if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Impairment losses recognised in prior accounting periods are reversed if there is any change in the estimate of the recoverable amount.

M. Provisions, Contingent Liabilities and Assets

Provisions are recognised in respect of obligations where, based on the evidence available, their existence at the Balance Sheet Date is considered probable. Contingent liabilities are shown by way of notes to the accounts in respect of obligations where, based on the evidence available their existence at the Balance Sheet Date is considered not probable. Contingent assets are not recognised in the accounts.

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