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Accounting Policies of Pioneer Distilleries Ltd. Company

Mar 31, 2016

16. Notes to Accounts

Statement of Significant Accounting Policies

A. Basis of preparation of Financial Statements

The Financial Statements of the Company are prepared under historical cost convention on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 2013.

B. Fixed Assets

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned. Interest on borrowings attributable to qualifying assets are capitalized and included in the cost of fixed assets as appropriate.

C. Depreciation:

Depreciation is provided on the Straight Line Method applying the useful lives prescribed in Schedule II to the Companies Act, 2013.

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1,2014, the Company has realigned the remaining useful life of its tangible fixed assets in accordance with the provisions prescribed under Schedule II to the Act. Consequently, in case of tangible fixed assets which have completed their useful life, the carrying value (net of residual value) as at April 1, 2014 amounting to Rs 1183 Lacs has been adjusted to “Surplus/(Deficit) in the Statement of Profit and Loss” and in case of other tangible fixed assets the carrying value (net of residual value) is being depreciated over the revised remaining useful lives. Accordingly, the depreciation and amortization expense for the previous Year ended March 31, 2015 is higher by Rs.1232.56 Lacs.

D. Revenue Recognition:

Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated inclusive of excise duty, but are net of trade discount and sales tax where ever applicable.

E. Inventories:

Inventories are valued at lower of cost and net realizable value. The costs are in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate portion of manufacturing overheads costs, as applicable. Excise duty payable on stocks in bond is added to the cost.

F. Employee Retirement Benefit:

i. Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss.

ii. Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary based on projected unit credit method at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

iii. Leave entitlement: Leave entitlement cost which is recognized as a liability at the present value of the defined benefit obligation at the balance sheet date on actual valuation.

G Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

H Earnings/(Loss) per Share (EPS)

Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

I. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions, other than employee benefits are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

J. Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on accounts.

K. Expenditure

Expenses are net of taxes recoverable, where applicable.

L. Borrowing Costs

Borrowing costs incurred for the acquisition of qualifying assets are recognized as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

M. Government Grants:

Government Grant related to revenue are recognized in the statement of Profit and Loss on a systematic basis over the period to which they are incurred.

N. Leases

Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

O. Impairment

Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts.

Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

The Company’s pending litigations comprise of claims against the Company and proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.


Mar 31, 2015

A. Basis of preparation of Financial Statements :

The Financial Statements of the Company are prepared under historical cost convention on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 2013.

B. Fixed Assets :

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned. Interest on borrowings attributable to qualifying assets are capitalized and included in the cost of fixed assets as appropriate.

C. Depreciation:

Depreciation is provided on the Straight Line Method applying the useful lives prescribed in Schedule II to the Companies Act, 2013.

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1,2014, the Company has realigned the remaining useful life of its tangible fixed assets in accordance with the provisions prescribed under Schedule II to the Act. Consequently, in case of tangible fixed assets which have completed their useful life, the carrying value (net of residual value) as at April 1, 2014 amounting to Rs 1183 Lacs has been adjusted to "Surplus/(Deficit) in the Statement of Profit and Loss" and in case of other tangible fixed assets the carrying value (net of residual value) is being depreciated over the revised remaining useful lives. Accordingly, the depreciation and amortization expense for the quarter and Year ended March 31, 2015 is higher by Rs.313.25 Lacs and Rs.1232.56 Lacs, respectively.

D. Revenue Recognition:

Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated inclusive of excise duty, but are net of trade discount and sales tax where ever applicable.

E. Inventories:

Inventories are valued at lower of cost and net realizable value. The costs are in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate portion of manufacturing overheads costs, as applicable. Excise duty payable on stocks in bond is added to the cost.

F. Employee Retirement Benefit:

i. Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss .

ii. Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary based on projected unit credit method at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

iii. Leave entitlement: Leave entitlement cost which is recognized as a liability at the present value of the defined benefit obligation at the balance sheet date on actual valuation.

G. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

H. Earnings/(Loss) per Share (EPS)

Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

I. Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions, other than employee benefits are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

J. Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on accounts.

K. Expenditure

Expenses are net of taxes recoverable, where applicable.

L. Borrowing Costs

Borrowing costs incurred for the acquisition of qualifying assets are recognized as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

M. Government Grants:

Government Grant related to revenue are recognized in the statement of Profit and Loss on a systematic basis over the period to which they are incurred.

N. Leases

Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis.

O. Impairment

Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts.

Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.


Mar 31, 2014

A. Basis of preparation of Financial Statements :

The Financial Statements of the Company are prepared under historical cost convention on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 1956.

B. Fixed Assets :

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned. Interest on borrowings attributable to qualifying assets are capitalised and included in the cost of fixed assetsias appropriate.

C. Depreciation:

Depreciation is provided on the Straight Line Method at rates prescribed in Schedule XIV to the Companies Act, 1956 except the following, which are based on management''s estimate of useful life of the assets concerned.

(i) Computers and Vehicles over a period of three and five years respectively.

(ii) In respect of certain items of Plant and Machinery for which separate rates are prescribed in Schedule XIV for continuous process plant, depreciation is provided for the full year on continuous process plant basis.

D. Revenue Recognition:

Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated inclusive of I excise duty, but are net of trade discount and sales tax where ever applicable.

E. Inventories:

Inventories are valued at lower of cost and net realisable value. The costs are in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate portion of manufacturing overheads costs, as applicable. Excise duty payable on stocks in bond is added to the cost.

F. Employee Retirement Benefit:

i. Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss.

ii. Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary based on projected unit credit method at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

iii. Leave entitlement: Leave entitlement cost which is recognized as a liability at the present value of the defined benefit obligation at the balance sheet date on actual valuation.

G. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

H. Earnings/(Loss) per Share (EPS)

Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

I. Provisions:

A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions, other than employee benefits are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

J. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on accounts.

K. Expenditure:

Expenses are net of taxes recoverable, where applicable.

L. Borrowing Costs:

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

M. Government Grants:

Government Grant related to revenue are recognised in the statement of Profit and Loss on a systematic basis over the period to which they are incurred.

N. Leases:

Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis

O. Impairment:

Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts.

Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.


Mar 31, 2013

A Basis of preparation of Financial Statements:

The Financial Statements of the Company are prepared under historical cost convention on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 1956.

B. Fixed Assets:

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned. Interest on borrowings attributable to qualifying assets are capitalised and included in the cost of fixed assets as appropriate.

C. Depreciation:

Depreciation is provided on the Straight Line Method at rates prescribed in Schedule XIV to the Companies Act, 1956 except the following, which are based on management''s estimate of useful life of the assets concerned.

(i) Computers and Vehicles over a period of three and five years respectively.

(ii) In respect of certain items of Plant and Machinery for which separate rates are prescribed in Schedule XIV for continuous process plant, depreciation is provided for the full year on continuous process plant basis.

D. Revenue Recognition:

Revenue from sale of goods is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated inclusive of excise duty, but are net of trade discount and sales tax wherever applicable.

E. Inventories:

Inventories are valued at lower of cost and net realisable value . The costs are, in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate portion of manufacturing overheads costs, as applicable. Excise duty payable on stocks in bond is added to the cost.

F. Employee Retirement Benefit:

i. Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the statement of profit and loss.

ii. Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary based on projected unit credit method at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Statement of Profit and Loss as income or expense.

iii. Leave entitlement: Leave entitlement cost which is recognized as a liability at the present value of the defined benefit obligation at the balance sheet date on actual valuation.

G. Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognised on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised.

H. Earnings/(Loss) per Share (EPS):

Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

I. Provisions:

A provision is recognised when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions,other than employee benefits are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

J. Contingencies:

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on accounts.

K. Expenditure:

Expenses are net of taxes recoverable, where applicable.

L. Borrowing Costs:

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

M. Government Grants:

Government grants in the nature of Promoters contribution are credited to Capital Reserve.

N. Leases:

Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the lessor, are classified as operating leases. Lease rentals are charged to the Statement of Profit and Loss on accrual basis

O. Impairment:

Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts.

Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.


Mar 31, 2012

A. Basis of preparation of Financial Statements

The Financial Statements of the Company are prepared under historical cost convention on accrual basis, in accordance with the Generally Accepted Accounting Principles (GAAP) in India, the Accounting Standards as specified in the Companies (Accounting Standard) Rules 2006, and the relevant provisions of the Companies Act, 1956.

B. Fixed Assets

Fixed assets are stated at their original cost of acquisition and subsequent improvements thereto including taxes, duties, freight and other incidental expenses related to acquisition and installation of the assets concerned. Interest on borrowings attributable to relevant assets are capitalized and included in the cost of fixed assets as appropriate.

C. Depreciation:

Depreciation is provided on the Straight Line Method at rates prescribed in Schedule XIV to the Companies Act, 1956.

In respect of certain items of Plant and Machinery for which separate rates are prescribed in Schedule XIV for continuous process plant, depreciation is provided for the full year on continuous process plant basis.

D. Revenue Recognition:

Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated exclusive of excise duty, sales tax, transport pass fee and export pass fee.

E Inventories:

Inventories are valued at lower of cost and net realizable value except for Raw Material and Stores and Spares, which are valued at cost. The costs are, in general, ascertained under Weighted Average Method. Finished goods and Work-in-Progress include appropriate portion of manufacturing overheads costs, as applicable.

F. Employee Retirement Benefit:

i Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the profit and loss account.

ii. Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary based on projected unit credit method at the balance sheet date. Actuarial Gains and Losses comprise experience adjustments and the effect of changes in the actuarial assumptions and are recognized immediately in the Profit and Loss Account as income or expense.

iii. Leave encashment: Leave encashment cost which is recognized as a liability at the present value of the defined benefit obligation at the balance sheet date on actual valuation.

G Taxes on Income:

Provision for income tax comprises current taxes and deferred taxes. Current tax is determined as the amount of tax payable in respect of taxable income for the period.

Deferred tax is recognized on timing differences between the accounting income and the taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable/ virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

H. Earnings per Share (EPS)

Basic EPS is arrived at based on Net Profit after Taxation available to equity shareholders to the weighted average number of equity shares outstanding during the year. The Diluted EPS is calculated on the same basis as Basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.

I Provisions

A provision is recognized when an enterprise has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.

Provisions are not discounted to their present value and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.

J. Contingencies

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and, to the extent not provided for, are disclosed by way of notes on accounts.

K. Expenditure

Expenses are net of taxes recoverable, where applicable.

L. Borrowing Costs

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of cost of such assets when it is considered probable that they will result in future economic benefits to the Company while other borrowing costs are expensed in the period in which they are incurred.

M Government Grants:

Government grants in the nature of Promoters contribution are credited to Capital Reserve and other Grants are credited to the Profit and Loss account.

N. Leases

Assets acquired on leases, where a significant portion of the risk and rewards of ownership are retained by the less or, are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis.

O. Impairment

Impairment loss, if any, is provided to the extent the carrying amounts of assets exceed their recoverable amounts.

Recoverable amount is higher of the net selling price of an asset and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.


Mar 31, 2011

A) Basis of preparation of financial statements: The accompanying financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis and in compliance with the requirements of the Companies Act, 1956 and as per the guidelines issued by the Securities and Exchange Board of India.

b) Fixed Assets: Fixed Assets are stated at cost less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use. The cost of fixed assets included taxes duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized as required by Accounting Standard (AS – 16) issued by the Institute of Chartered Accountants of India.

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.

c) Depreciation: Depreciation on fixed assets is provided using the straight-line method based on the useful life of the assets as estimated by Management. Depreciation for assets purchased/ sold during the period is proportionately charged.

d) Revenue Recognition: Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated exclusive of excise duty, sales tax, transport pass fee and export pass fee

e) Expenditure: Purchases of Raw Material (Molasses) does not include excise duty, VAT, but inclusive of central sales tax, transportation charges and other incidental expenses. Provisions are made for all known losses and liabilities.

f) Inventories: Inventories are valued at the lower of cost and net realizable vale. Cost of inventories comprises all cost of purchase, cost of conversions, and other costs incurred in bringing the inventories to their present location and condition.

The methods of determining cost of various categories of inventories are as follows:

a) Raw Materials : At Cost

b) Finished Goods : Net realizable value

c) Stores & Spares : At Cost

d) Work-in-process : Cost of Raw Material Plus proportionate overheads

h) Employee Retirement Benefit:

i) Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the profit and loss account.

ii) Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary at the balance sheet date, are charged to profit and loss account except full time directors. In case of full time directors, gratuity liability is provided as per agreed terms.

iii) Leave encashment: Leave encashment cost which is a defined benefit is accrued on actual valuation at the balance sheet date.

I) Income Tax:

Income Taxes are computed using the tax effect accounting method, where taxes are accrued in the same period the related revenue and expenses arise. A provision is made for income tax annually based on the tax liability computed after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

The differences that result between the profits offered for income taxes and the profit as per the financial statements are identified and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on prevailing enacted regulations of the Indian Income Tax Act, 1961. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized.


Mar 31, 2010

A) Basis of preparation of financial statements : The accompanying financial statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis and in compliance with the requirements of the Companies Act, 1956 and as per the guidelines issued by the Securities and Exchange Board of India.

b) Fixed Assets : Fixed Assets are stated at cost less accumulated depreciation. Direct costs are capitalized until fixed assets are ready for use. The cost of fixed assets included taxes duties, freight and other incidental expenses related to the acquisition and installation of the respective assets.

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized as required by Accounting Standard (AS - 16) issued by the Institute of Chartered Accountants of India.

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.

c) Depreciation : Depreciation on fixed assets is provided using the straight-line method based on the useful life of the assets as estimated by Management. Depreciation for assets purchased/ sold during the period is proportionately charged.

d) Revenue Recognition : Revenue from sale of good is recognized when significant risks and rewards in respect of ownership of products are transferred to the customers. Revenue from product sales is stated exclusive of excise duty, sales tax, transport pass fee and export pass fee.

e) Expenditure : Purchases of Raw Material (Molasses) does not include excise duty, VAT, but inclusive of central sales tax, transportation charges and other incidental expenses. Provisions are made for all known losses and liabilities.

f) Inventories : Inventories are valued at the lower of cost and net realizable vale. Cost of inventories comprises all cost of purchase, cost of conversions, and other costs incurred in bringing the inventories to their present location and condition.

The methods of determining cost of various categories of inventories are as follows:

a) Raw Materials : Weighted average method.

b) Finished Goods : FIFO and appropriate share of production overheads

(Cost of ENA includes Excise Duty Liability)

c) Stores & Spares : At Cost

d) Work-in-process : Cost of Raw Material Plus proportionate overheads

g) Miscellaneous expenditure: Preliminary and Pre-Operative expenditure is being written off over a period of ten years..

h) Employee Retirement Benefit:

i) Provident Fund: Contributions payable to the recognized provident fund, which is a defined contribution scheme, is charged to the profit and loss account.

ii) Gratuity: Contribution payable to an approved gratuity fund (a defined benefit plan), determined by an independent actuary at the balance sheet date, are charged to profit and loss account. ^

iii) Leave encashment: Leave encashment cost which is a defined benefit is accrued on actual valuation at the balance sheet date.