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Accounting Policies of Empee Sugars and Chemicals Ltd. Company

Mar 31, 2015

1. Accounting Convention

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounts) Rules, 2014 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on going concern basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP require the management to make estimate and assumptions considered in the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Further the results may vary from these estimates. Differences between the actual results and the estimates are recognized in the year in which the results are known / materialized.

3. 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.

4. Revenue Recognition

All income and expenditure are accounted for on accrual basis as stated herein except in respect of such items as are specifically mentioned hereunder and in the notes.

Sales Income is accounted inclusive of excise duty and sales tax wherever applicable but net of trade discounts.

Insurance claims are accounted as and when the claims are settled

Interest due from growers for seed supplied is accounted as and when cane is received from growers.

Excise duty payable on finished goods held in stock at the end of the accounting year (except Molasses stored in pit for which duty is paid as and when molasses are let into the pit) will be accounted for at the time of clearance of these goods. The accounting treatment will have no impact on profit/losses.

Other Income - a) Interest Income is accounted at applicable coupon rates on respective investments, on time basis. b) Dividend income is accounted as and when received.

5. Fixed Assets, Depreciation / Amortization and Impairment

(i) Fixed assets are stated at cost less accumulated depreciation /amortization. Direct costs are capitalized until fixed assets are ready for use. These costs include freight, installation costs, duties and taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use.

Borrowing costs directly attributable to acquisition of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.

(ii) Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date. Cost of Work in Progress is stated at cost.

(iii) Depreciation on fixed assets is provided pro-rata using the straight-line method at the rates specified in Schedule II to the Companies Act, 2013.

(iv) The carrying amounts of assets are reviewed at each balance sheet date to ascertain impairment based on internal or external factors. Impairment is recognized if the carrying value exceeds the higher of net selling price of the assets and its value in use.

6. Investments

Invests which are long term in nature, are stated at cost. Provision is made for diminution in value if it is of nature other than temporary.

Current investments are valued at lower of cost and fair value.

7. Inventories

Inventories are stated as under:

a. Raw materials and stores & spare parts are valued at lower of cost and estimated net realizable value using FIFO Method.

b. Work in process and finished goods are valued at lower of cost and estimated net realizable value using FIFO Method.

8. Employee Benefits

(i) Defined Contribution Plan

Provident Fund

Contributions to the Regional Provident Fund Commissioner to secure retrial benefits in respect of Employees' Provident Fund and Employees' Family Fund, based on the Statutory provisions as per the Employee Provident Fund Scheme are charged to revenue.

(ii) Defined benefit Plan

Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by Reliance Life Insurance Company Ltd. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains / losses are immediately recognized in the statement of Profit and Loss.

Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date.

Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

9. Foreign Currency Transactions

Foreign Currency Transactions are accounted at the exchange rates ruling on the date of the transaction. Foreign currency monetary items as at the balance sheet date are restated at the closing exchange rates Exchange differences arising on actual payments / realizations and year-end restatements are dealt with in profit and loss account.

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract or similar instrument is amortized as expense or income over the life of the contract. Exchange differences on such contract are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation of a forward exchange contract or similar instrument is recognized as income or expenses for the year.

10. Taxation

Income Tax : Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961

Deferred Tax : Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized in there is virtual certainty that there will be sufficient future taxable income available in realize such losses. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

11. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation.

Contingent liability is disclosed for:

(i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

12. Segment Reporting

As per the Accounting Standard (AS 17) on "segment reporting", segment information has been provided under the note to consolidated financial statements.


Mar 31, 2014

1. Accounting Convention

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on going concern basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP require the management to make estimate and assumptions considered in the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Further the results may vary from these estimates. Differences between the actual results and the estimates are recognized in the year in which the results are known / materialized.

3. 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.

4. Revenue Recognition

All income and expenditure are accounted for on accrual basis as stated herein except in respect of such items as are specifically mentioned hereunder and in the notes.

Sales Income is accounted inclusive of excise duty and sales tax wherever applicable but net of trade discounts.

Insurance claims are accounted as and when the claims are settled

Interest due from growers for seed supplied is accounted as and when cane is received from growers.

Excise duty payable on finished goods held in stock at the end of the accounting year (except Molasses stored in pit for which duty is paid as and when molasses are let into the pit) will be accounted for at the time of clearance of these goods. The accounting treatment will have no impact on profit/losses.

Other Income - a) Interest Income is accounted at applicable coupon rates on respective investments, on time basis. b) Dividend income is accounted as and when received.

5. Fixed Assets, Depreciation / Amortization and Impairment

(i) Fixed assets are stated at cost less accumulated depreciation /amortization. Direct costs are capitalized until fixed assets are ready for use. These costs include freight, installation costs, duties and taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use. Borrowing costs directly attributable to acquisition of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.

(ii) Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date. Cost of Work in Progress is stated at cost.

(iii) Depreciation on fixed assets is provided pro-rata using the straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956.

(iv) The carrying amounts of assets are reviewed at each balance sheet date to ascertain impairment based on internal or external factors. Impairment is recognized if the carrying value exceeds the higher of net selling price of the assets and its value in use.

6. Investments

Invests which are long term in nature, are stated at cost. Provision is made for diminution in value if it is of nature other than temporary. Current investments are valued at lower of cost and fair value.

7. Inventories

Inventories are stated as under:

a. Raw materials and stores & spare parts are valued at lower of cost and estimated net realizable value using FIFO Method.

b. Work in process and finished goods are valued at lower of cost and estimated net realizable value using FIFO Method.

8. Employee Benefits

(i) Defined Contribution Plan

Provident Fund

Contributions to the Regional Provident Fund Commissioner to secure retrial benefits in respect of Employees'' Provident Fund and Employees'' Family Fund, based on the Statutory provisions as per the Employee Provident Fund Scheme are charged to revenue.

(ii) Defined benefit Plan

Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by Reliance Life Insurance Company Ltd. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains / losses are immediately recognized in the statement of Profit and Loss.

Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date.

Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

9. Foreign Currency Transactions

Foreign Currency Transactions are accounted at the exchange rates ruling on the date of the transaction. Foreign currency monetary items as at the balance sheet date are restated at the closing exchange rates. Exchange differences arising on actual payments / realizations and yearend restatements are dealt with in profit and loss account.

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract or similar instrument is amortized as expense or income over the life of the contract. Exchange differences on such contract are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation of a forward exchange contract or similar instrument is recognized as income or expenses for the year.

10. Taxation

Income Tax : Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961

Deferred Tax : Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized in there is virtual certainty that there will be sufficient future taxable income available in realize such losses. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

11. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation.

Contingent liability is disclosed for:

(i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

12. Segment Reporting

The Company prepares its segment information in conformity with the accounting policies adopted for presenting the financial statements of the Company as whole.


Mar 31, 2013

1. Accounting Convention

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on going concern basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP require the management to make estimate and assumptions considered in the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Further the results may vary from these estimates. Differences between the actual results and the estimates are recognized in the year in which the results are known / materialized.

3. 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.

4. Revenue Recognition

All income and expenditure are accounted for on accrual basis as stated herein except in respect of such items as are specifically mentioned hereunder and in the notes.

Sales Income is accounted inclusive of excise duty and sales tax wherever applicable but net of trade discounts.

Insurance claims are accounted as and when the claims are settled

Interest due from growers for seed supplied is accounted as and when cane is received from growers.

Excise duty payable on finished goods held in stock at the end of the accounting year (except Molasses stored in pit for which duty is paid as and when molasses are let into the pit) will be accounted for at the time of clearance of these goods. The accounting treatment will have no impact on profit/losses.

Other Income

a) Interest Income is accounted at applicable coupon rates on respective investments, on time basis. b) Dividend income is accounted as and when received.

5. Fixed Assets, Depreciation / Amortization and Impairment

(i) Fixed assets are stated at cost less accumulated depreciation amortization. Direct costs are capitalized until fixed assets are ready for use. These costs include freight, installation costs, duties and taxes and other directly attributable costs incurred to bring the assets to their working condition for intended use. Borrowing costs directly attributable to acquisition of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.

(ii) Capital Work in Progress comprises outstanding advances paid to acquire fixed assets and the cost of fixed assets that are not yet ready for their intended use at the Balance Sheet date. Cost of Work in Progress is stated at cost.

(iii) Depreciation on fixed assets is provided pro-rata using the straight-line method at the rates specified in Schedule XIV to the Companies Act, 1956.

(iv) The carrying amounts of assets are reviewed at each balance sheet date to ascertain impairment based on internal or external factors. Impairment is recognized if the carrying value exceeds the higher of net selling price of the assets and its value in use.

6. Investments

Investments which are long term in nature, are stated at cost. Provision is made for diminution in value if it is of nature other than temporary.

Current investments are valued at lower of cost and fair value.

7. Inventories

Inventories are stated as under:

a. Raw materials and stores & spare parts are valued at lower of cost and estimated net realizable value using FIFO Method.

b. Work in process and finished goods are valued at lower of cost and estimated net realizable value using FIFO Method.

8. Employee Benefits

(i) Defined Contribution Plan

Provident Fund

Contributions to the Regional Provident Fund Commissioner to secure retrial benefits in respect of Employees Provident Fund and Employees Family Fund, based on the Statutory provisions as per the Employee Provident Fund Scheme are charged to revenue.

(ii) Defined benefit Plan

Gratuity

The Company makes annual contribution to a Gratuity Fund administered by trustees and managed by Reliance Life Insurance Company Ltd. The Company accounts its liability for future gratuity benefits based on actuarial valuation, as at the Balance Sheet date, determined every year using the Projected Unit Credit method. Actuarial gains / losses are immediately recognized in the statement of Profit and Loss.

Long Term Compensated Absences

The liability for long term compensated absences carried forward on the Balance Sheet date is provided for based on an actuarial valuation using the Projected Unit Credit method, as at the Balance Sheet date.

Short Term Employee Benefits

Short term employee benefits includes short term compensated absences which is recognized based on the eligible leave at credit on the Balance Sheet date, and the estimated cost is based on the terms of the employment contract.

9. Foreign Currency Transactions

Foreign Currency Transactions are accounted at the exchange rates ruling on the date of the transaction. Foreign currency monetary items as at the balance sheet date are restated at the closing exchange rates. Exchange differences arising on actual payments / realizations and year-end restatements are dealt with in profit and loss account.

The Company enters into forward exchange contracts and other instruments that are in substance a forward exchange contract to hedge its risks associated with foreign currency fluctuations. The premium or discount arising at the inception of a forward exchange contract or similar instrument is amortized as expense or income over the life of the contract. Exchange differences on such contract are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation of a forward exchange contract or similar instrument is recognized as income or expenses for the year.

10. Taxation

Income Tax : Current tax is the amount of tax payable on the taxable income for the year and is determined in accordance with the provisions of the Income Tax Act, 1961

Deferred Tax : Deferred tax is recognized, on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward losses are recognized in there is virtual certainty that there will be sufficient future taxable income available in realize such losses. Other deferred tax assets are recognized if there is reasonable certainty that there will be sufficient future taxable income available to realize such assets.

11. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized only when the Company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation.

Contingent liability is disclosed for:

(i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

(ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

12. Segment Reporting

As per the Accounting Standard (AS 17) on segment reporting, segment information has been provided under the note to consolidated financial statements.


Mar 31, 2010

1. Basis of Accounting

Financial statements are prepared and presented under the historical cost convention and in accordance with the applicable accounting standards to the extent possible.

2. Revenue Recognition

Income from Operations is recognized in the Profit & Loss Account on accrual basis as stated herein except in respect of such items as are specifically mentioned hereunder and in the notes.

a. Sales income is accounted inclusive of excise duty and sales tax wherever applicable but net of trade discounts.

b. Insurance claims are accounted as and when the claims are settled.

c. Interest due from growers for seed supplied is accounted as and when cane is received from growers.

d. Excise Duty payable on finished goods held in stock at the end of the accounting year (except Molasses stored in pit for which duty is paid as and when molasses are let into the pit) will be accounted for at the time of clearance of these goods. The accounting treatment will have no impact on profit/losses

3. Fixed Assets and Depreciation/Amortization

3.1. Fixed Assets:- These assets are stated at their original cost of acquisition (including expenditure for the acquisition and/or installation) less accumulated depreciation.

3.2. Depreciation on Fixed assets has been provided on straight-line method at rates prescribed under Schedule XIV to the Companies Act, 1956 as amended by notification dated 15.12.93 issued hereunder and is provided in the accounts or shown as a note. Depreciation on addition to fixed assets during the year is reckoned on a pro rata basis with reference to the month in which the fixed assets are put to use or commissioned.

4 Impairment of Fixed Assets

Wherever events of changes in circumstances indicate that the carrying value of fixed assets may be impaired, the Company subjects such assets to a test of recoverability, based on discounted cash flows expected from use or disposal thereof. If the assets are impaired, the Company recognizes as impairment loss as the difference between the carrying value and fair value less costs to sell. None of the Companys fixed assets are considered impaired as on the Balance Sheet date.

5 Capital Work in Progress

Capital work in progress is stated at cost and includes advance on account of Capital Equipment paid to the suppliers.

6. Foreign Currency Transaction

Foreign exchange transactions are recorded at the exchange rates prevailing at the time of transaction. Assets and liabilities expressed in foreign currencies (to the extent not covered against exchange fluctuations) are translated into Indian Rupees at the exchange rate prevailing at the Balance Sheet date and any loss or gain arising there from has been included in Finance Charges as per the provision of Accounting Standard 16 and 11 issued by The Institute of Chartered Accountants of India.

7. Prior Period and Extra Ordinary Items

Prior Period and Extra Ordinary Items having material impact on the financial affairs of the Company are disclosed.

8. Retirement and Other Benefits

8.1. The company accounts gratuity liability accounted as and when gratuity is paid to the employees.

8.2. Contribution to Provident Fund is made as per provisions of Employees Provident fund and Miscellaneous Provisions Act, 1952 and charges to Profit and Loss Account and disclosed separately.

8.3. Liability for leave encashment is provided as and when the leave encashment is paid to the employees.

9. Income Tax

The Income Tax liability is provided in accordance with the provisions of the Income tax Act 1961.

Deferred tax is recognized, subject to consideration of prudence, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

10. Segment Reporting

A. Business Segments:

Based on the guiding principles given in Accounting Standard AS-17 "Segment Reporting" issued by the Institute of Chartered Accountants of India, the Companys business segments include Sugar and Industrial Alcohol Plant (IAP).

B. Segment accounting policies:

In addition to the significant accounting policies applicable to the business segments as given in notes, the accounting policies in relation to segment accounting are as under:

a) Segment revenue and expenses:

Common revenue and expenses of segments are allocated amongst them on a reasonable basis. All other segment revenue and expenses are directly attributable to the segments.

b) Segment assets and liabilities:

Segment assets include all operating assets used by a segment and consist principally of operating cash, debtors, inventories and fixed assets, net of allowances and provisions, which are reported as direct offsets in the balance sheet. Segment liabilities include all operating liabilities and consist principally of creditors and accrued liabilities. Segment assets and liabilities do not include deferred income taxes, Share Capital, Loans, Investments, Miscellaneous Expenditure and Profit and Loss Appropriate Account. While most of the assets / liabilities can be directly attributed to the individual segments, the carrying amount of certain assets / liabilities pertaining to both segments are allocated to the segments on a reasonable basis.

11. Earning Per Share

The Company reports basic and diluted earnings per equity share in accordance with Accounting Standard - 20 Earnings per Share, issued by the Institute of Chartered Accountants of India. Earnings per equity share have been computed by dividing net profit after tax attributable to equity share holders by the weighted average number of equity share outstanding during the year. Diluted earnings during the year adjusted for effects of all dilutive potential equity shares per equity share is computed using the weighted average number of equity share and dilutive potential equity shares outstanding during the year.

12. Miscellaneous Expenditure

Miscellaneous Expenditure represents discount on issue of shares made during the year 2000- 2001.

 
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