Accounting Policies of Sri Chamundeswari Sugars Ltd. Company

Mar 31, 2015

A. BASIS OF PREPARATION:

2 The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("Indian GAAP").

B. VALUATION OF INVENTORIES:

Inventories of raw materials, work-in-progress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products and Scrap Stock are valued at Net realizable value.

C. FIXEDASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection charges, pre-operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under - implementation is shown under "Work-in-Progress" pending allocation to the assets.

D. INTANGIBLE ASSETS:

The payment made towards good will for cane riots is amortized over a period of 10 years in accordance with AS-26.

E. 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.

F. DEPRECIATION:

Depreciation on tangible assets is provided on the straight line method over the useful life in the manner prescribed in the Schedule II of the companies Act, 2013 effective from 1st April 2014, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of the Companies Act, 1956. Depreciation on addition to assets on sale / discernment of assets is calculated on pro-rata from the month of such addition or up to the month of such sale / discernment, as the case may be.

The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

G. INVESTMENTS:

Long term Investments are accounted at Cost. The diminution in ; value of long term investments is recognized if the decline is Other than temporary.

H. a) REVENUE RECOGNITION:

Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty and sales return. Gross turnover includes excise duty but exclude sales tax. i. Dividend income is accounted for in the year it is declared. ; ii. All other incomes are accounted for on accrual basis.

iii. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Statement of Profit and loss.

iv. Inter Segmental transfer price is not recognized.

b) EXPENDITURE RECOGNITION:

i. The Cane price is written off on the basis of determination of fair & remunerative price and agreed price if any, over and above fair & remunerative price. ii. The Excise duty appearing in the Statement of Profit and loss as an expense represents excise duty provision for difference between opening and closing stock of finished goods.

I. FOREIGN CURRENCYTRANSACTIONS:

Foreign Exchange transactions are recognized based on maturity of obligation.

J. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to statement of profit and loss. Gratuity is determined based on the actuarial valuation made by an independent actuary. For leased plant, gratuity is determined based on the demand from the lessor.

Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

K. SEGMENT REPORTING:

The segment reporting is in line with the accounting policies of the company. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by-products. Revenue and expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the company.

L. DEFERRED TAX:

Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted / substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

M. EARNING PER SHARE:

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

N. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the Accounting Standard 28.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2014

A. BASIS OF PREPARATION:

The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("India GAAP").

B. VALUATION OF INVENTORIES:

Inventories of raw materials, work-in-progress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products and Scrap Stock are valued at Net realizable value.

C. FIXED ASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection charges, pre-operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under implementation is shown under "Work-in-Progress" pending allocation to the assets.

D. INTANGIBLE ASSETS:

The payment made towards goodwill for cane ryots is amortized over a period of 10 years in accordance with AS-26.

E. 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.

F. DEPRECIATION:

Depreciation is provided under Straight Line Method at the rates /notes prescribed in Schedule XIV to the Companies Act, 1956, on revalued/original cost of assets as the case may be. The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

G. INVESTMENTS:

Long term Investments are accounted at Cost. The diminution in value of long term investments is provided if the decline is other than temporary.

H. a) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty and sales return.

i. Gross turnover includes excise duty but exclude sales tax.

ii. Dividend income is accounted for in the year it is declared.

iii. All other incomes are accounted for on accrual basis.

iv. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Statement of Profit and Loss.

v. Inter Segmental transfer price is not recognised.

b) EXPENDITURE RECOGNITION:

i. The Cane price is written off on the basis of determination of

fair & remunerative price and agreed price over and above fair & remunerative price.

ii. The Excise duty appearing in the Statement of Profit and Loss as an expense represents excise duty provision for difference between opening and closing stock of finished goods.

I. FOREIGN CURRENCY TRANSACTIONS:

Foreign Exchange transactions are recognised based on maturity of obligation.

J. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to Statement of Profit and Loss. Gratuity is determined based on the actuarial valuation made by an independent actuary .For leased plant, gratuity is determined based on the demand from the lessor.

Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

K. SEGMENT REPORTING:

The Segment Reporting is inline with the accounting policies of the company. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by-products. Revenue and Expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the company.

L. DEFERRED TAX:

Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted / substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

M. EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the Net Profit or Loss for the period attributable to Equity Shareholders by the Weighted Average Number of Equity Shares outstanding during the period.

For the purpose of calculating Diluted Earnings Per Share, the Net Profit or Loss for the period attributable to Equity Shareholders and the Weighted Average Number of Shares outstanding during the period are adjusted for the effects of all Dilutive Potential Equity Shares.

N. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the Accounting Standard 28.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

(iii) Rights, Preferences and Restrictions attaching to each class of Shares:

A. Equity Shares

The Company has only one class of Equity Shares having face value of Rs. 10 each. Each Shareholder is eligible for one vote per share. Final Dividend is payable when it is recommended by the Board of Directors and subject to the approval of the Members at the Annual General Meeting. In the event of liquidation, the equity shareholders will get the remaining assets after payment of all the preferential dues.

B. Redeemable Cumulative Preference Shares

The Redeemable Cumulative Preference Shares have a par value of Rs. 100 each. These shares carry a fixed cumulative dividend of 5% p.a. These Shares would be redeemable at par at the end of ten years commencing from 30.01.2006. These shares have the following preferential rights over the equity shareholders:

a) The payment of dividend at a Fixed Rate; and

b) The return of capital on winding up of the company.

These shareholders can enforce their right of getting dividend in priority over the equity shareholders.

The Preference Shareholders have no voting right except when the dividend is outstanding for a period of more than 2 years in case of cumulative preference shares. But, they have right to vote on any resolution for winding up of the company or for the reduction / repayment of capital.

Details of terms of repayment for the Term Loans and Security provided in respect of the Secured Term Loans :-

Nature of Security

From Banks

i) Term loan of Rs. 1290.33 lakhs (Rs. 2622.52 lakhs) availed by the company is secured as under :- a. Pari passu first charge on the Company''s movable and immovable assets of Sugar Division and Distillery Division situated at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka.

b. Pari passu second charge on the current assets of Sugar Division at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka.

c. Pledge of the 20,43,844 equity shares held by the Promoter group in the share capital of the Company.

d. Personal Guarantee of the Managing Director and two Directors.

Repayment Terms

The Loan is under consortium comprising of State Bank of Mysore, State Bank of Travancore, State Bank of India (erstwhile State Bank of Indore), Syndicate Bank, The Lakshmi Vilas Bank Ltd. and IDBI Ltd. Repayable in 20 Quarterly installments. Last installment falling due on April 2015.

Rate of Interest : 8% p.a.

ii) Term Loan of Rs. 1192.05 lakhs (Rs. 1688.76 lakhs) availed from Allahabad Bank is secured by pari passu first charge on the movable and immovable assets pertaining to 26 MW Co-generation Power Plant at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka and Personal Guarantee of the Managing Director and three Directors.

Repayable in 24 Quarterly installments. Last installment falling due on March 2016.

Rate of Interest : BR 2.25% p.a.

iii) Term loan of Rs. 5200.57 lakhs (Rs. Nil) availed from Allahabad Bank is secured by assignment of future receivables of Distillery division and is further secured by personal guarantee of Managing Director and three Directors. The loan is also additionally secured by a personal property of Managing Director.

Repayable in 16 Quarterly installments. Last installment falling due on June 2017. Rate of Interest : BR 4.25% p.a.

iv) Term Loan of Rs. 2231.25 lakhs (Rs. 2826.25 lakhs) is availed from The Karnataka State Co-Operative Apex Bank Ltd is secured by first charge on the Plant and Machinery in connection with Refined Sugar Unit and modernisation along with energy efficient equipment situtated at K.M. Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka and immovable property situated at Gangadhar Chetty Lay-out, Ulsoor, Bangalore and Defence Colony, HAL II Stage, Bangalore, Karnataka.

Repayable in 20 Quarterly installments. Last Installment falling due on November 2017.

Rate of Interest : 13.50% p.a.

Note: The amount repayable within twelve months is Rs. 4116.49 Lakhs (Rs. 2362.20 Lakhs), grouped under Other Current Liabilities in Note No. 10

From Others

i) Terms loan of Rs. 1925.00 Lakhs (Rs. 1925.00 Lakhs) availed from IDFC Ltd is secured by pari passu first charge on the movable and immovable assets pertaining to 26 MW Co-Generation Power Plant at K.M.Doddi, Bharathinagara, Maddur taluk, Mandya District, Karnataka Repayable in 23 Quarterly installments. Last installment falling due on October 2016.

Rate of Interest : 12.54% p.a.

ii) Term loan of Rs. Nil (Rs. 528.85 Lakhs) availed from IFCI Limited is secured on pari passu basis with other bankers as stated above in security particulars of loans under consortium .

The loan was Fully paid during June 2013.

iii) a) Term loan of Rs. 2515.75 Lakhs (Rs. 2515.75 Lakhs) availed from Sugar Development Fund (SDF) Govt. of India (Co-gen power project loan) is secured by exclusive second charge by way of mortgage on the company''s immovable properties of sugar factory at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District,Karnataka

Repayable in 10 Half-yearly installments. Last installment falling due on March 2016 Rate of Interest : 7% p.a.

b) Term loan of Rs. 323.51 Lakhs (Rs. 323.51 Lakhs) availed from Sugar Development Fund (SDF) Govt. of India (Co-gen power project loan) is secured by exclusive second charge by way of mortgage on the company''s immovable properties of sugar factory at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District,Karnataka Repayable in 10 Half-yearly installments. Last installment falling due on November 2016.

Rate of Interest : 7% p.a.

iv) a) Term loan of Rs. 80.00 Lakhs (Rs. 80.00 Lakhs) availed from Sugar Development Fund (SDF) Govt. of India (Modernisation of Sugar Plant) is secured by exclusive Second charge on the company''s immovable properties of Sugar Factory at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka.

Repayable in 4 Yearly installments. Last installment fallen due on March 2014.

Rate of Interest : 7% p.a.

b) Term loan of Rs. 75.00 Lakhs (Rs. 75.00 Lakhs) availed from Sugar Development Fund (SDF) Govt. of India (Cane Development) is secured by exclusive Second charge on the company''s immovable properties of Sugar Factory at K.M.Doddi, Bharathinagara, Maddur Taluk, Mandya District, Karnataka.

Repayable in 4 Yearly installments. Last

installment falling due on July 2014.

Rate of Interest : 7% p.a.

v) Term loan of Rs. 1200.00 Lakhs (Rs. 2000.00 Lakhs) availed from IFCI Factors Ltd is secured by

a) Equitable Mortgage on Immovable property situated at Richmond Road, Banagalore

b) Equitable Mortgage on Managing Director''s Land & Building situated at Dr. Nanjappa Road, Coimbatore.

c) Personal Guarantee of Managing Director

Repayable in 10 Quarterly installments. Last installment falling due on July 2015.

Rate of Interest : 15% p.a.

Note: The amount repayable within twelve months is Rs. 4552.59 Lakhs (Rs. 3766.98 Lakhs), shown as current maturities of Long-term debt under Other Current Liabilities in Note no.10. The said current maturities includes overdue amount of Rs. 700.00 Lakhs and Rs. 1738.13 Lakhs payable to IDFC Ltd and SDF respectively.

Note : 35 - Disclosure as required under clause 32 of the listing agreement: There are no amount of loans/advances in the nature of loans outstanding from Subsidiaries and Associates .

Note : 36 - Disclosure pursuant to AS-28 on ''Impairment of Assets'': During the year, review has been done for carrying value of the assets for finding out the impairment, if any. The review has not revealed any impairment of assets in terms of AS-28.

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Mar 31, 2013

A. BASIS OF PREPARATION:

The accompanying Financial Statements have been prepared on a going concern basis underthe historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("India GAAP").

B. VALUATION OF INVENTORIES:

Inventories of raw materials, work-in-progress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products and Scrap Stock are valued at Net realizable value.

C. FIXED ASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection charges, pre-operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under implementation is shown under "Work-in-Progress" pending allocation to the assets.

D. INTANGIBLE ASSETS:

The payment made towards goodwill for cane ryots is amortized over a period of 10 years in accordance with AS-26.

E. 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.

F. DEPRECIATION:

Depreciation is provided under Straight Line Method at the rates / notes prescribed in Schedule XIV to the Companies Act, 1956, on revalued/original cost of assets as the case may be. The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

G. INVESTMENTS:

Long term Investments are accounted at Cost. The diminution in value of long term investments is provided if the decline is other than temporary.

H. a) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty and sales return.

i. Gross turnover includes excise duty but exclude sales tax.

ii. Dividend income is accounted for in the year it is declared.

iii. All other incomes are accounted for on accrual basis.

iv. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Statement of Profit and Loss.

v. Inter Segmental transfer price is not recognised.

b) EXPENDITURE RECOGNITION:

i. The Cane price is written off on the basis of determination of fair & remunerative price and agreed price over and above fair & remunerative price.

ii. The Excise duty appearing in the Statement of Profit and Loss as an expense represents excise duty provision for difference between opening and closing stock of finished goods.

I. FOREIGN CURRENCY TRANSACTIONS:

Foreign Exchange transactions are recognised based on maturity of obligation.

J. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to Statement of Profit and Loss. Gratuity is determined based on the actuarial valuation made by an independent actuary .For leased plant, gratuity is determined based on the demand from the lessor.

Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

K. SEGMENT REPORTING:

The Segment Reporting is inline with the accounting policies of the company. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by-products. Revenue and Expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the company.

L. DEFERREDTAX:

Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted / substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

M. EARNING PER SHARE:

Basic Earnings Per Share is calculated by dividing the Net Profit or Loss for the period attributable to Equity Shareholders by the Weighted Average Number of Equity Shares outstanding during the period.

For the purpose of calculating diluted Earnings Per Share, the net profit or loss for the period attributable to Equity Shareholders and the Weighted Average Number of Shares outstanding during the period are adjusted for the effects of all Dilutive Potential Equity Shares.

N. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the Accounting Standard 28.

O. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nordisclosed in the financial statements.

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Mar 31, 2012

A. BASIS OF PREPARATION:

The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("India GAAP").

B. VALUATION OF INVENTORIES:

Inventories of raw materials, work-in-progress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products and Scrap Stock are valued at Net realizable value.

C. FIXED ASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection charges, pre-operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under implementation is shown under "Work-in-Progress" pending allocation to the assets.

D. INTANGIBLE ASSETS:

The payment made towards goodwill for cane ryots is amortized over a period of 10 years in accordance with AS-26.

E. 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.

F. DEPRECIATION:

Depreciation is provided under Straight Line Method at the rates /notes prescribed in Schedule XIV to the Companies Act, 1956, on revalued/original cost of assets as the case may be. The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

G. INVESTMENTS:

Long term Investments are accounted at Cost. The diminution in value of long term investments is provided if the decline is other than temporary.

H.a) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty and sales return.

i. Gross turnover includes excise duty but exclude sales tax.

ii. Dividend income is accounted for in the year it is declared.

iii. All other incomes are accounted for on accrual basis.

iv. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Profit and loss account.

v. Inter Segmental transfer price is not recognised,

b) EXPENDITURE RECOGNITION:

i. The Cane price is written off on the basis of determination of fair & remunerative price and agreed price over and above fair & remunerative price.

ii. The Excise duty appearing in the Statement of Profit and Loss as an income represents excise duty provision for difference between opening and closing stock of finished goods.

I. FOREIGN CURRENCY TRANSACTIONS:

Foreign Exchange transactions are recognised based on maturity of obligation.

J. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to Statement of Profit and Loss. Gratuity is determined based on the actuarial valuation made by an independent actuary. For leased plant, gratuity is determined based on the demand from the lessor.

Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

K. SEGMENT REPORTING:

The segment reporting is inline with the accounting policies of theCompany. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by-products. Revenue and expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the Company.

L. DEFERRED TAX:

Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted / substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

M. EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding duringthe period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

N. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the AccountingStandard28.

O. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS: Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2011

1. BASIS OF PREPARATION:

The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("India GAAP").

2. VALUATION OF INVENTORIES:

Inventories of raw materials, work-in-progress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products are valued at Net realizable value.

3. FIXED ASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection charges, pre-operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under implementation is shown under "Work- in-Progress" pending allocation to the assets.

4. INTANGIBLE ASSETS:

The payment made towards goodwill for cane ryots is amortized over a period of 10 years in accordance with AS-26.

5. 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.

6. DEPRECIATION:

Depreciation is provided under Straight Line Method at the rates /notes prescribed in Schedule XIV to the Companies Act, 1956, on revalued/original cost of assets as the case may be. The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

7. INVESTMENT

Long term Investments are accounted at Cost. The diminution, if any, in value of long term investments is provided if such decline is other than temporary.

8. a) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty, sales return.

i. Gross turnover includes excise duty but exclude sales tax.

ii. Dividend income is accounted for in the year it is declared.

iii. All other incomes are accounted for on accrual basis.

iv. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Profit and loss account.

b) EXPENDITURE RECOGNITION:

i. The Cane price is written off on the basis of deter- mination of Fair & Remunerative Price and agreed price over and above Fair & Remunerative Price.

ii. The Excise duty appearing in the Profit and loss account as an income represents excise duty provision for difference between opening and closing stock of finished goods.

9. FOREIGN CURRENCY TRANSACTIONS:

Foreign currency transactions are accounted at the exchange rate ruling on the date of the transactions. Foreign currency monetary items as at the date of Balance sheet are restated using the closing exchange rate or at the rate that is likely to be realized from/received to disburse.

10. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to profit and loss account. Gratuity is determined based on the actuarial valuation made by an independent actuary .For leased plant, gratuity is determined based on the demand from the lessor.

Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

11. SEGMENT REPORTING

The segment reporting is inline with the accounting policies of the company. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by- products. Revenue and expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the company.

12. DEFERRED TAX

Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted / substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

13. EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

14. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the Accounting Standard 28.

15. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

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Mar 31, 2010

1. BASIS OF PREPARATION:

The accompanying Financial Statements have been prepared on a going concern basis under the historical cost convention on the accrual basis of accounting in conformity with Generally Accepted Accounting Principles in India ("India GAAP").

2. VALUATION OF INVENTORIES:

Inventories of raw materials, work-inprogress, stores, finished products and stock-in-trade are valued at the lower of cost and net realizable value. Cost is ascertained on seasonal weighted average for sugar and yearly average for distillery products and stores. By-products are valued at Net realizable value.

3. FIXED ASSETS:

a) Fixed Assets are shown at cost/re-valued figures, less accumulated depreciation. Fixed assets added during the year are valued at cost net of CENVAT but includes all direct expenses like freight, erection chargs, pre operative expenses and borrowing costs.

b) Expenditure including borrowing cost incurred on projects under implementation is shown under "Work-in-Progress" pending allocation to the assets.

4. INTANGIBLE ASSETS:

The payment made towards goodwill for cane ryots is amortized over a period of 10 years in accordance with AS-26.

5. 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.

6. DEPRECIATION:

Depreciation is provided under Straight Line Method at the rates/notes prescribed in Schedule XIV to the Companies Act, 1956, on revalued/original cost of assets as the case may be. The additional depreciation relating to increased value of revalued assets is adjusted against Revaluation Reserve.

7. Long term Investments are accounted at Cost. The diminution, if any, in value of long term investments is provided if such decline is other than temporary.

8. a) REVENUE RECOGNITION:

Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts, excise duty, sales return.

i. Gross turnover includes excise duty but exclude sales tax.

ii. Dividend income is accounted for in the year it is declared.

iii. All other incomes are accounted for on accrual basis.

iv. The Excise duty on sale of finished goods is deducted from the turnover to arrive at the net sales as shown in the Profit and Loss account. v. Inter segmental transfer price is not recognised. b) Expenditure Recognition:

i) The Cane price is written off on the basis of determination of statutory price and agreed price over and above statutory price.

ii) The Excise duty appearing in the Profit and loss account as an expenditure represents excise duty provision for difference between opening and closing stock of finished goods.

9. FOREIGH CURRENCY TRANSACTIONS:

Foreign currency transaction are accounted at the exchange rate ruling on the date of the transactions. Foreign currency monetary items as at the date of Balance sheet are restated using the closing exchange rate or at the rate that is likely to be realized from/received to disburse.

10. RETIREMENT BENEFITS:

Contribution payable by the Company towards Provident fund, Gratuity, Employees State Insurance and Superannuation fund for the year are charged to profit and loss account. Gratuity is determined based on the actuarial valuation made by an independent actuary. For leased plant, gratuity is determined based on the demand from the lessor. Provision for liability in respect of Leave encashment benefits are made based on actuarial valuation made by an independent actuary.

11. The segment reporting is inline with the accounting policies of the company. Inter segment transactions have been accounted for based on the price which has been arrived at considering cost for utilities and net realizable value for by-products. Revenue and expenses that are directly identifiable with or allocable to segments are considered for determining the segment results. Segment assets and liabilities include those directly identifiable with the respective segments. Business segments are identified on the basis of the nature of products, the risk/return profile of the individual business, the organizational structure and the internal reporting system of the company.

12. Deferred tax is recognized on timing difference between accounting income and the taxable income for the period and reversal of timing differences of earlier periods and quantified using the tax rates and laws that have been enacted/ substantively enacted as at the balance sheet date. The deferred tax assets are recognized and carried forward to the extent that there is reasonable certainty that these would be realized in future.

13. EARNING PER SHARE:

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholder and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

14. IMPAIRMENT OF ASSETS:

Impairment, if any, is recognized in accordance with the Accounting Standard 28.

15. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision is recognized only when there is a present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.