Accounting Policies of Jeypore Sugar Company Ltd. Company

Mar 31, 2015

1. General

The financial statements are prepared under historical cost convention on accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles in India. The financial statements are prepared to comply in all material respects with the Accounting Standards as prescribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of Companies (Accounts) Rules, 2014, the pronouncements of the Institute of Chartered Accountants of India, the relevant provisions of the Companies Act, 2013 and Companies Act, 1956 to the extent applicable and guidelines issued by the Securities and Exchange Board of India. The Accounting policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard or amendments to the provisions of any statue which requires a change in the accounting policy hitherto in use.

2. Use of Estimates

The preparation of the financial statements requires management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures relating to the contingent liabilities and commitments. Examples of such estimates include provisions for provisions for doubtful debts and advances, employee benefit plans, useful lives of fixed assets and provisions for impairment. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable.

The judgments, estimates and underlying assumptions are made with the management's best knowledge of the business environment and are reviewed on an ongoing basis. However, future results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods.

3. FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of directly attributable cost of bringing the assets to their working condition for the intended use. CENVAT/VAT availed, if any, on fixed assets is not included in the cost of such fixed assets capitalized.

4. BORROWING COSTS

Borrowing costs incurred in connection with the funds borrowed for acquisition of assets that takes necessarily substantial period of time to get ready for intended use are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

5. DEPRECIATION

Consequent to the applicability of Schedule –II of the Companies Act, 2013 w.e.f 1.4.2014, the company has computed depreciation based on the useful lives as specified in Schedule II of Companies Act, 2013 under straight line method. Accordingly the carrying amount of tangible fixed assets on 1.4.2014 is being depreciated over the remaining useful life of the assets as specified under schedule-II. The written down value of fixed assets whose lives have expired on 1.4.2014 amounting to Rs.66.95 lakhs have been adjusted against opening balance of general reserves.

6. INVESTMENTS

Investments are classified as current or non-current based on the managements intention at the time of investment. Long-term investments are stated at cost. Provision for diminution in the value of investments is made only if such decline is permanent in nature.

7. INVENTORIES

Inventories are valued as follows :

a) Finished goods are valued at lower of cost and net realizable value. Molasses, a by-product is valued at the ruling market price.

b) Raw materials and stores and spares are valued at cost. However, materials and other items which are held for use in the production of finished goods is valued at below its cost if the finished goods in which they will be incorporated are expected to be sold below its cost.

c) In respect of Work-in-progress and finished goods, cost includes all direct costs and applicable production overheads incurred in bringing such inventories to their present location and condition. Cost of finished goods includes excise duty.

d) The Additional cane price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

8. REVENUE RECOGNITION :

Revenue is recognized to the extent that it is probable that the economic benefits will fow to the company and the revenue can be reliably measured.

a) Revenue from sale of products is recognized when the risks and rewards of ownership are transferred to the buyer under the terms of the contract which usually coincide on the dispatch of goods to the customer or when they are unconditionally appropriated under the terms of sale.

b) Sales include packing charges, freight and handling charges and are stated net of trade discounts and sales tax.

c) Interest on investments and deposits is booked on a time proportion basis taking into account the amounts invested and the rate of interest.

9. RETIREMENT BENEFITS

The company provides retirement benefit in the form of provident fund and group gratuity. Contributions to the Provident Fund, a defend contribution scheme, is made at the prescribed rates to the provident fund commissioner and is charged to the Profit and Loss account. There is no other obligation other than the contribution payable.

The company's liability for group gratuity on retirement of its eligible employees is funded with LIC through an approved trust, under a defend benefit plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

Expenses on account of unutilized and unencashed leave which is unfunded is arrived at as per actuarial valuation and is accounted based on actual liability at the end of each year.

Gains/losses arrived at on actuarial valuation are charged to the Profit & Loss account immediately in each year.

10. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency Liability contracted for acquiring Fixed Assets are restated at the Foreign Exchange rates prevailing at the year end and all exchange differences arising as a result of such restatement are charged to the Profit and loss account.

ii) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual receipt/payment during the year.

iii) At each balance sheet date

- Foreign Currency monetary items are reported using the rate of exchange on that date

- Foreign Currency non-monetary items are reported using the exchange rate at which they were initially recognized.

In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortized over the term of the contract

-Exchange differences on the contract are recognized as Profit or loss in the period in which they arise.

11. TAXES ON INCOME

Current tax is determined as per provisions of Income Tax Act, 1961 in respect of Taxable Income for the year.

Deferred tax liability is recognized, subject to the consideration of prudence 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 assets arising on account of brought forward losses and unabsorbed depreciation as per Income-tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary differences are recognized only if there is a reasonable certainty of realization.

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligation 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 outfow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. The company does not recognize contingent liabilities but the same are disclosed in the Notes.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

13. EARNINGS 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. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue.

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. SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company, with the following additional policies for segment reporting:

(i) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market led.

(ii) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under " Unallocated Corporate Expenses".

15.IMPAIRMENT OF ASSETS

As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine :

a. The provision for impairment loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous periods.

---

Mar 31, 2014

1. General

The Company has prepared the financial statements on a going concern basis under the historical cost convention on accrual basis of accounting and in accordance with generally accepted accounting practices in India. The financial statements are prepared to comply in all material respects with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, the pronouncements of the Institute of Chartered Accountants of India and all the relevant provisions of Companies Act, 1956.

The accompanying financial statements has been presented for the year ended 31st March, 2014 along with the comparative information for 6 months financial period ended 31st March, 2013.

2. Use of Estimates

The preparation of the financial statements requires the management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures relating to the contingent liabilities and commitments. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. The judgments, estimates and underlying assumptions are made with the management''s best knowledge of the business environment and are reviewed on an ongoing basis. However, future results could differ from these estimates. Any revision to these accounting estimates is recognised prospectively in the current and future periods.

3. FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of directly attributable cost of bringing the assets to their working condition for the intended use. CENVAT/VAT availed, if any, on fixed assets is not included in the cost of such fixed assets capitalized. Interest on borrowings incurred upto the date of commissioning of assets are capitalized.

4. BORROWING COSTS

Borrowing costs incurred in connection with the funds borrowed for acquisition of assets that takes necessarily substantial period of time to get ready for intended use are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

5. DEPRECIATION

Depreciation is provided at applicable rates and at the manner provided in Schedule XIV of the Companies Act, 1956. Depreciation in respect of Plant and machinery at Co-generation unit, VVS Sugars and Distillery unit at Chagallu is written off on Straight Line Method at applicable rates prescribed in Scheduled XIV of the Companies Act, 1956. In respect of other assets, depreciation is provided under written down value method.

6. INVESTMENTS

Investments are classified as current or non-current based on the managements intention at the time of investment. Long-term investments are stated at cost. Provision for diminution in the value of investments is made only if such decline is permanent in nature.

7. INVENTORIES

Inventories are valued as follows :

a) Finished goods are valued at lower of cost and net realizable value. Molasses, a by-product is valued at the ruling market price.

b) Raw materials and stores and spares are valued at cost. However, materials and other items which are held for use in the production of finished goods is valued at below its cost if the finished goods in which they will be incorporated are expected to be sold below its cost.

c) In respect of Work-in-progress and finished goods, cost includes all direct costs and applicable production overheads incurred in bringing such inventories to their present location and condition. Cost of finished goods includes excise duty.

d) The Additional cane price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

8. REVENUE RECOGNITION :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

a) Revenue from sale of products is recognized when the risks and rewards of ownership are transferred to the buyer under the terms of the contract which usually coincide on the dispatch of goods to the customer or when they are unconditionally appropriated under the terms of sale.

b) Sales include packing charges, freight and handling charges and are stated net of trade discounts and sales tax.

c) Interest on investments and deposits is booked on a time proportion basis taking into account the amounts invested and the rate of interest.

9. RETIREMENT BENEFITS

The company provides retirement benefit in the form of provident fund and group gratuity. Contributions to the Provident Fund, a defined contribution scheme, is made at the prescribed rates to the provident fund commissioner and is charged to the Profit and Loss account. There is no other obligation other than the contribution payable.

The company''s liability for group gratuity on retirement of its eligible employees is funded with LIC through an approved trust, under a defined benefit plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

Expenses on account of unutilized and unencashed leave which is unfunded is arrived at as per actuarial valuation and is accounted based on actual liability at the end of each year.

Gains/losses arrived at on actuarial valuation are charged to the Profit and Loss account immediately in each year.

10. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency Liability contracted for acquiring Fixed Assets are restated at the Foreign Exchange rates prevailing at the year end and all exchange differences arising as a result of such restatement are charged to the Profit and Loss account.

ii) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual receipt/payment during the year.

iii) At each balance sheet date

-Foreign Currency monetary items are reported using the rate of exchange on that date -Foreign Currency non-monetary items are reported using the exchange rate at which they were initially recognized.

In respect of forward exchange contracts in the nature of hedges

-Premium or discount on the contract is amortized over the term of the contract

-Exchange differences on the contract are recognized as profit or loss in the period in which they arise.

11. TAXES ON INCOME

Current tax is determined as per provisions of Income Tax Act, 1961 in respect of Taxable Income for the year.

Deferred tax liability is recognized, subject to the consideration of prudence 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 assets arising on account of brought forward losses and unabsorbed depreciation as per Income-tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary differences are recognized only if there is a reasonable certainty of realization.

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligation 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. The company does not recognise contingent liabilities but the same are disclosed in the Notes.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised.

13. EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The weighted average numbers of equity shares outstanding during the year are adjusted for events of bonus issue.

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

14. SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company, with the following additional policies for segment reporting:

(i) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market led.

(ii) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated Corporate Expenses".

15. IMPAIRMENT OF ASSETS

As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine :

a. The provision for impairment loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous year. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

---

Mar 31, 2013

1. General

The Company has prepared the financial statements on a going concern basis under the historical cost convention on accrual basis of accounting and in accordance with generally accepted accounting practices in India. The financial statements are prepared to comply in all material respects with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, the pronouncements of the Institute of Chartered Accountants of India and all the relevant provisions of Companies Act, 1956.

The accompanying financial statements has been presented for 6 months period ended 31st March , 2013 along with the comparative information for 18 months financial period ended 30th September, 2012

2. Use of Estimates

The preparation of the financial statements requires the management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures relating to the contingent liabilities and commitments. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. The judgments, estimates and underlying assumptions are made with the management''s best knowledge of the business environment and are reviewed on an ongoing basis. However, future results could differ from these estimates. Any revision to these accounting estimates is recognised prospectively in the current and future periods.

3. FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of directly attributable cost of bringing the assets to their working condition for the intended use. CENVAT/VAT availed, if any, on fixed assets is not included in the cost of such fixed assets capitalized. Interest on borrowings incurred upto the date of commissioning of assets are capitalized.

4. BORROWING COSTS

Borrowing costs incurred in connection with the funds borrowed for acquisition of assets that takes necessarily substantial period of time to get ready for intended use are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

5. DEPRECIATION

DeDepreciation is provided at applicable rates and at the manner provided in Schedule XIV of the Companies Act, 1956. Depreciation in respect of Plant and machinery at Co-generation unit, VVS Sugars and Distillery unit at Chagallu is written off on Straight Line Method at applicable rates prescribed in Scheduled XIV of the Companies Act, 1956. In respect of other assets, depreciation is provided under written down value method.

6. INVESTMENTS

Investments are classified as current or non-current based on the managements intention at the time of investment. Long-term investments are stated at cost. Provision for diminution in the value of investments is made only if such decline is permanent in nature.

7. INVENTORIES

Inventories are valued as follows :

a) Finished goods are valued at lower of cost and net realizable value. Molasses, a by-product is valued at the ruling market price.

b) Raw materials and stores and spares are valued at cost. However, materials and other items which are held for use in the production of finished goods is valued at below its cost if the finished goods in which they will be incorporated are expected to be sold below its cost.

c) In respect of Work-in-progress and finished goods, cost includes all direct costs and applicable production overheads incurred in bringing such inventories to their present location and condition. Cost of finished goods includes excise duty.

d) The Additional cane price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

8. REVENUE RECOGNITION :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

a) Revenue from sale of products is recognized when the risks and rewards of ownership are transferred to the buyer under the terms of the contract which usually coincide on the dispatch of goods to the customer or when they are unconditionally appropriated under the terms of sale.

b) Sales include packing charges, freight and handling charges and are stated net of trade discounts and sales tax.

c) As followed consistently, the Off-season expenses relating to Sugar unit are deferred and absorbed over the duration of the ensuing crushing season.

d) Interest on investments and deposits is booked on a time proportion basis taking into account the amounts invested and the rate of interest.

9. RETIREMENT BENEFITS

The company provides retirement benefit in the form of provident fund and group gratuity. Contributions to the Provident Fund, a defined contribution scheme, is made at the prescribed rates to the provident fund commissioner and is charged to the Profit and Loss account. There is no other obligation other than the contribution payable.

The company''s liability for group gratuity on retirement of its eligible employees is funded with LIC through an approved trust, under a defined benefit plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

Expenses on account of unutilized and unencashed leave which is unfunded is arrived at as per actuarial valuation and is accounted based on actual liability at the end of each year.

Gains/losses arrived at on actuarial valuation are charged to the P&L account immediately in each year.

10. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency Liability contracted for acquiring Fixed Assets are restated at the Foreign Exchange rates prevailing at the year end and all exchange differences arising as a result of such restatement are charged to the Profit and loss account.

ii) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual receipt/payment during the year.

iii) At each balance sheet date

-Foreign Currency monetary items are reported using the rate of exchange on that date

-Foreign Currency non-monetary items are reported using the exchange rate at which they were initially recognized.

In respect of forward exchange contracts in the nature of hedges

-Premium or discount on the contract is amortized over the term of the contract

-Exchange differences on the contract are recognized as profit or loss in the period in which they arise.

11. TAXES ON INCOME

Current tax is determined as per provisions of Income Tax Act, 1961 in respect of Taxable Income for the year.

Deferred tax liability is recognized, subject to the consideration of prudence 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 assets arising on account of brought forward losses and unabsorbed depreciation as per Income-tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary differences are recognized only if there is a reasonable certainty of realization.

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognized only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligation 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. The company does not recognise contingent liabilities but the same are disclosed in the Notes.

Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised.

13. EARNINGS 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. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue.

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. SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company, with the following additional policies for segment reporting:

(i) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market led.

(ii) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated Corporate Expenses".

15. IMPAIRMENT OF ASSETS

As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine :

a. The provision for impairment loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

---

Sep 30, 2012

1. General

The Company has prepared the financial statements on a going concern basis under the historical cost convention on accrual basis of accounting and in accordance with generally accepted accounting practices in India. The financial statements are prepared to comply in all material respects with the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, the pronouncements of the Institute of Chartered Accountants of India and all the relevant provisions of Companies Act, 1956.

The accompanying financial statements has been presented for 18 months period ended 30th September, 2012 along with the comparative information for financial year ended 31st March, 2011.

2. Use of Estimates

The preparation of the financial statements requires the management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosures relating to the contingent liabilities and commitments. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. The judgments, estimates and underlying assumptions are made with the management''s best knowledge of the business environment and are reviewed on an ongoing basis. However, future results could differ from these estimates. Any revision to these accounting estimates is recognised prospectively in the current and future periods.

3. FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of directly attributable cost of bringing the assets to their working condition for the intended use. CENVAT/VAT availed, if any, on fixed assets is not included in the cost of such fixed assets capitalized. Interest on borrowings incurred upto the date of commissioning of assets are capitalized.

4. BORROWING COSTS

Borrowing costs incurred in connection with the funds borrowed for acquisition of assets that takes necessarily substantial period of time to get ready for intended use are capitalized as part of cost of such assets. All other borrowing costs are charged to revenue.

5. DEPRECIATION

Depreciation is provided at applicable rates and at the manner provided in Schedule XIV of the Companies Act, 1956. Depreciation in respect of Plant and machinery at Co-generation unit, WS Sugars and Distillery unit at Chagallu is written off on Straight Line Method at applicable rates prescribed in Scheduled XIV of the Companies Act, 1956. In respect of other assets, depreciation is provided under written down value method.

6. INVESTMENTS

Investments are classified as current or non-current based on the managements intention at the time of investment. Long-term investments are stated at cost. Provision for dimunition in the value of investments is made only if such decline is permanent in nature.

7. INVENTORIES

Inventories are valued as follows :

a) Finished goods are valued at lower of cost and net realizable value. Molasses, a by-product is valued at the ruling market price.

b) Raw materials and stores and spares are valued at cost. However, materials and other items which are held for use in the production of finished goods is valued at below its cost if the finished goods in which they will be incorporated are expected to be sold below its cost.

c) In respect of Work-in-progress and finished goods, cost includes all direct costs and applicable production overheads incurred in bringing such inventories to their present location and condition. Cost of finished goods includes excise duty.

d) The Additional cane price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

8. REVENUE RECOGNITION :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

a) Revenue from sale of products is recognised when the risks and rewards of ownership are transferred to the buyer under the terms of the contract which usually coincide on the dispatch of goods to the customer or when they are unconditionally appropriated under the terms of sale.

b) Sales include packing charges, freight and handling charges and are stated net of trade discounts and sales tax.

c) As followed consistently, the Off-season expenses relating to Sugar unit are deferred and absorbed over the duration of the ensuing crushing season.

d) Interest on investments and deposits is booked on a time proportion basis taking into account the amounts invested and the rate of interest.

9. RETIREMENT BENEFITS

The company provides retirement benefit in the form of provident fund and group gratuity. Contributions to the Provident Fund, a defined contribution scheme, is made at the prescribed rates to the provident fund commissioner and is charged to the Profit and Loss account. There is no other obligation other than the contribution payable. ''

The company''s liability for group gratuity on retirement of its eligible employees is funded with LIC through an approved trust, under a defined benefit plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss account in the year in which the employee has rendered service.

Expenses on account of unutilized and unencashed leave which is unfunded is arrived at as per actuarial valuation and is accounted based on actual liability at the end of each year.

Gains/losses arrived at on actuarial valuation are charged to the Profit and Loss account immediately in each year.

10. FOREIGN CURRENCY TRANSACTIONS

i) Foreign Currency Liability contracted for acquiring Fixed Assets are restated at the Foreign Exchange rates prevailing at the year end and all exchange differences arising as a result of such restatement are charged to the Profit and loss account.

ii) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual receipt/payment during the year.

iii) At each balance sheet date

- Foreign Currency monetary items are reported using the rate of exchange on that date.

- Foreign Currency non-monetary items are reported using the exchange rate at which they were initially recognized.

In respect of forward exchange contracts in the nature of hedges.

- Premium or discount on the contract is amortized over the term of the contract.

- Exchange differences on the contract are recognized as profit or loss in the period in which they arise.

11. TAXES ON INCOME

Current tax is determined as per provisions of Income Tax Act, 1961 in respect of Taxable Income for the year.

Deferred tax liability is recognized, subject to the consideration of prudence 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 assets arising on account of brought forward losses and unabsorbed depreciation as per Income-tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary differences are recognized only if there is a reasonable certainty of realization.

12. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of obligation can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liability is disclosed for (i) Possible obligation 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. The company does not recognise contingent liabilities but the same are disclosed in the Notes.

Contingent assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

13. EARNINGS 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. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue.

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. SEGMENT REPORTING

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company, with the following additional policies for segment reporting:

(i) Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market led.

(ii) Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Revenue and expenses, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated Corporate Expenses".

15. IMPAIRMENT OF ASSETS

As at each balance sheet date, the carrying amount of assets is tested for impairment so as to determine:

a. The provision for impairment loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous periods.

Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

---

Mar 31, 2011

1. GENERAL:

Financial statements are prepared under the historical cost convention and in accordance with the generally accepted accounting practices.

2. FIXED ASSETS:

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, incidental expenses relating to the cost of acquisition, and the cost of installation/erection as applicable and interest on borrowings till date of the commissioning of the Assets.

MODVAT availed, if any during the year on fixed assets is reduced from the cost of such fixed assets capitalised during the year.

3. BORROWING COSTS :

Borrowing costs that are directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale are capitalized as part of cost of such assets. Other borrowing costs are recognized as an expense in the period in which they are incurred.

4. DEPRECIATION :

Depreciation is written off in accordance with the provisions of schedule XIV of the Companies Act, 1956, read with Circular No. 1 of 1986 dated 21-5-1986 issued by the Company Law Board. Depreciation in respect of Plant & Machinery at Cogeneration unit, WS Sugars, Chagallu and Distillery Division at Chagallu is written off under straight-line method and in respect of all other assets under written down value method.

Intangibles arising on acquisition of Chagallu Distillery are written off over a period of 10 years.

5. INVENTORIES:

a) Finished goods are valued at lower of cost or market value, product wise.

b) Molasses, a by-product, is valued at the ruling market price.

c) Work-in-progress, Raw materials, Stores and Spares, Materials in transit are valued at cost except where net realizable value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than book values, they are valued at replacement cost.

d) Scrap is valued at estimated realizable price.

e) Agricultural produce is valued at market price.

f) The Additional Cane Price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

6. INVESTMENTS:

Investments unless otherwise stated are long term holdings and are stated at cost. Income from dividend if any thereon is accounted for accrual.

7. SALES :

a) Sales are inclusive of Excise Duty recovered and net of discounts and rebates.

b) Sales tax collected from customers and remitted to the authorities is not reflected in the Profit & Loss Account. On completion of the sales tax assessments, the net liability, if any, payable by the company, is charged to the Profit and Loss Account.

8. EMPLOYEE BENEFITS:

a) Company's contributions to Employee's Provident fund and Employee State Insurance are made under a Defined Contribution Plan, and are accounted for at actual cost in the year of accrual.

b) The company's liability to gratuity on retirement of its eligible employees is funded with the Life Insurance Corporation of India through an approved trust, under a Defined Benefit Plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Accountant in the year in which the employee has rendered service.

c) Expense on account of unutilized unencashed leave is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

d) Gains losses arrived at in the above actuarial valuations are charged to the Profit and Loss account immediately in each year.

9. FOREIGN EXCHANGE TRANSACTIONS:

a) Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the transaction, and adjusted appropriately to capital or revenue, with the difference in the rate of exchange arising on actual receipt/payment during the year.

b) At each Balance Sheet date

- foreign currency monetary items are reported using the rate of exchange on that date

- foreign currency non-monetary items are reported using the exchange rate at which they were initially recognized

c) In respect of forward exchange contracts in the nature of hedges

- Premium or discount on the contract is amortized over the term of the contract,

- Exchange differences on the contract are recognized as profit or loss in the period in which they arise

10. IMPAIRMENT OF ASSETS

At the date of each Balance Sheet, the company evaluates internally, indications of the impairment if any, to the carrying amount of its fixed and other assets. If any indication does exist, the recoverable amount is estimated at the higher of the realizable value and value in use, as considered appropriate. If the estimated realizable value is less than the carrying amount, an impairment loss is recognized.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

11. CONTINGENT LIABILITIES

Contingent liabilities are not recognized in the accounts, but are disclosed after a careful evaluation of the concerned facts and legal issues involved.

12. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation as per tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

---

Mar 31, 2010

1. GENERAL:

Financial statements are prepared under the historicafcost convention and in accordance with the generally accepted accounting practices.

2. FIXED ASSETS :

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, incidental expenses relating to the cost of acquisition, and the cost of installation/erection as applicable and interest on borrowings till date of the commissioning of the Assets.

MODVAT availed, if any during the year on fixed assets is reduced from the cost of such fixed assets capitalised during the year.

3. BORROWING COSTS :

Borrowing costs that are directly attributable to the acquisition, construction or production of assets that necessarily take a substantial period of time to get ready for their intended use or sale are capitalized as part of cost of such assets. Other borrowing costs are recognized as an expense in the period in which they are incurred.

4. DEPRECIATION :

Depreciation is written off in accordance with the provisions of schedule XIV of the Companies Act, 1956, read with Circular No.1 of 1986 dated 21-5-1986 issued by the Company Law Board. Depreciation in respect of Plant & Machinery at Cogeneration unit, WS Sugars, Chagallu and Distillery Division at Chagallu is written off under straight-line method and in respect of all other assets under written down value method.

Intangibles arising on acquisition of Chagallu Distillery are written off over a period of 10 years.

Intangible arising on amalgamation of Sri Rama Distilleries Limited is written off over the period of 5 years.

5. INVENTORIES:

a) Finished goods are valued at lower of cost or market value, product wise.

b) Molasses, a by-product, is valued at the ruling market price.

c) Work-in-progress, Raw materials, Stores and Spares, Materials in transit are valued at cost except where net realizable value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than book values, they are valued at replacement cost.

d) Scrap is valued at estimated realizable price.

e) Agricultural produce is valued at market price.

f) The Additional Cane Price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

6. INVESTMENTS:

Investments unless otherwise stated are long term holdings and are stated at cost. Income from dividend if any thereon is accounted for accrual.

7. SALES:

a) Sales are inclusive of Excise Duty recovered and net of discounts and rebates.

b) Sales tax collected from customers and remitted to the authorities is not reflected in the Profit & Loss Account. On completion of the sales tax assessments, the net liability, if any, payable by the company, is charged to the Profit & Loss Account.

8. EMPLOYEE BENEFITS:

a) Companys contributions to Employees Provident fund and Employee State Insurance are made under a Defined Contribution Plan, and are accounted for at actual cost in the year of accrual.

b) The companys liability to gratuity on retirement of its eligible employees is funded with the Life Insurance Corporation of India through an approved trust, under a Defined Benefit Plan. The incremental expense thereon for each year is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which the employee has rendered service.

c) Expense on account of unutilized unencashed leave is arrived at as per actuarial valuation and is recognized and charged to the Profit and Loss Account in the year in which employee has rendered services in lieu of such leave.

d) Gains losses arrived at in the above actuarial valuations are charged to the profit and loss account immediately in each year.

e) Expenses under Voluntary Retirement Scheme are amortised over a period of five years (however before 31 * March, 2010).

f) Short term Employee Benefits like Salaries, Wages, Bonus etc are accounted for at cost in the year in which the employee renders service.

10. IMPAIRMENT OF ASSETS

At the date of each Balance Sheet, the company evaluates internally, indications of the impairment if any, to the carrying amount of its fixed and other assets. If any indication does exist, the recoverable amount is estimated at the higher of the realizable value and value in use, as considered appropriate. If the estimated realizable value is less than the carrying amount, an impairment loss is recognized.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

11. CONTINGENT LIABILITIES

Contingent liabilities are not recognized in the accounts, but are disclosed after a careful evaluation of the concerned facts and legal issues involved.

12. TAXATION

Provision is made for income tax liability estimated to arise on the results for the year at the current rate of tax in accordance with the Income Tax Act, 1961.

Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax.

Deferred tax assets arising on account of brought forward losses and unabsorbed depreciation as per tax laws are recognized only when there is virtual certainty supported by convincing evidence that such assets will be realized. Deferred tax assets arising on other temporary timing differences are recognized only if there is a reasonable certainty of realization.

---

Mar 31, 2000

1. GENERAL:

Financial statements are prepared under the historical cost convention and in accordance with the generally accepted accounting practices.

2. FIXED ASSETS :

Fixed Assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, incidental expenses relating to the cost of acquisition, and the cost of installation/erection as applicable and interest on borrowings till date of the commissioning of the Assets.

Part of the Companys lands at Rayagada units were revalued at their market values as on 31.3.97 by an approved valuer and the said assets are stated at the revalued amounts as on 31.3.1997.

3. MODVAT ON CAPITAL GOODS:

Modvat availed, if any during the year on fixed assets is reduced from the cost of such fixed assets capitalised during the year.

4. DEPRECIATION :

Depreciation is written off in accordance with the provisions of schedule XIV of the Companies Act, 1956, read with Circular No. 1 of 1986 dated 21.5.1986 issued by the Company Law Board. Depreciation in respect of Plant & Machinery at Ramakrishna Maize Products and second unit of VVS Sugars.Chagallu is written off under straight-line method and in respect of all other assets under written down value method.

5. INVENTORIES:

a) Finished goods are valued at lower of cost or market value, productwise.

b) Molasses, a by-product, is valued at estimated realisable rates.

c) Work-in-progress, Raw materials, Stores and Spares, Materials in transit are valued at cost except where net realisable value of the finished goods they are used in is less than the cost of finished goods and in such an event, if the replacement cost of such materials etc., is less than book values, they are valued at replacement cost. Until the immediate proceeding years these items of inventories were valued at cost. See note no. 7 about the change in this policy, during the year.

d) Scrap is valued at estimated realisable price.

e) Agricultural produce is valued at market price.

6. The Additional Cane Price payable for a season on the basis of "L" factor will be accounted for in the year in which the "L" factor is announced by the Central Government.

7. INVESTMENTS :

Investments unless otherwise stated are long term holdings and are stated at cost. Income from dividend if any thereon is accounted for accrual.

8. SALES:

a) Sales are inclusive of Excise duty recovered and net of discounts and rebates.

b) Sales tax collected from customers and remitted to the authorities is not reflected in the Profit & Loss account. On completion of the sales tax assessments, the net liability, if any, payable by the company, is charged to the Profit & Loss account.

9. RETIREMENT BENEFITS :

a) The periodical contributions made to concerned authorities towards Provident Fund & ESI are charged to Revenue, on accrual.

b) Provision for Gratuity is made, based on actuarial valuation.

c) Provision is made in the accounts for the liability towards unencashed leave wages on the basis as if all the eligible employees retire on the date of the Balance Sheet.

10. PROPOSED DIVIDENDS :

Provision is made in the accounts for dividends as recommended by the Board of Directors and tax on distributed profits, pending approval of the shareholders at the Annual General Meeting.