Accounting Policies of Ugar Sugar Works Ltd. Company

Mar 31, 2018

1. SIGNIFICANT ACCOUNTING POLICIES

(a) COMPLIANCE WITH IND AS

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.

Up to the year ended 31 March 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles in India (“Indian GAAP”), which includes standards notified under the Companies (Accounting Standards) Rules, 2014. These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016 (transition date). The details of first time adoption exemptions availed by the Company are given in Note C-3.

(b) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities (including derivative financial instruments) that are measured at fair value at the end of each reporting period. Historical cost is generally based on the fair value of the considerations given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

- Level 3 inputs are unobservable inputs for the asset or liability.

(c) CURRENT AND NON- CURRENT CLASSIFICATION

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

(d) ROUNDING OF AMOUNTS

The financial statements including notes thereon are presented in Indian Rupees (“Rupees “or “Rs.”), which is the Company’s functional and presentation currency. All amounts disclosed in the financial statements including notes thereon have been rounded off to the nearest lakhs as per the requirement of Schedule III to the Act, unless stated otherwise.

(e) USE OF ESTIMATES

In preparing the Company’s financial statements in conformity with Ind AS, the Company’s management is required to make estimates, judgements and assumptions that affect the application of accounting policies, the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period, the actual results could differ from those estimates. Difference between actual results and estimates are recognised in the period in which the results are known or materialized and if material, their effects are disclosed in the notes to the financial statements.

(f) PROPERTY, PLANT AND EQUIPMENT (PPE) AND OTHER INTANGIBLE ASSETS: Property, plant and equipment

Property, plant and equipment held for use in production or supply of goods or services or for administrative purposes are stated at cost less accumulated depreciation/amortization less accumulated impairment, if any. The cost of fixed assets comprises its purchase price / manufacturing cost (in case of self-constructed asset), net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use.

Capital work-in-progress for production, supply of administrative purposes is carried at cost less accumulated impairment loss, if any, until construction and installation are complete and the asset is ready for its intended use.

Depreciation is provided (other than on capital work-in-progress) using Written Down Value method over the estimated useful lives of assets. Depreciation on assets acquired/ purchased, sold/discarded during the year is provided on a pro-rata basis from the date of each addition till the date of sale/retirement. The estimated useful lives of assets are stated below:

The economic useful lives of assets is assessed based on a technical evaluation, taking into account the nature of assets, the estimated usage of assets, the operating conditions of the assets, past history of replacement, anticipated technological changes, maintenance history, etc. The estimated useful life is reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.

Where the cost of part of the asset is significant to the total cost of the assets and the useful life of that part is different from the useful of the remaining asset, useful life of that significant part is determined separately. Depreciation of such significant part, if any, is based on the useful life of that part.

Freehold land is not depreciated.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment, determined as the difference between the sales proceeds and the carrying amount of the asset, is recognized in the Statement of Profit or Loss.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost as of the transition date.

Intangible assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization. Amortization is recognized on straight line method over their estimated useful life of 3 years, which reflects the pattern in which the asset’s economic benefits are consumed. The estimated useful life, the amortization method and the amortization period are reviewed at the end of each reporting period, with effect of any change in estimate being accounted for on a prospective basis.

An intangible asset is derecognized on disposal or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in the profit or loss when the asset is derecognized.

For transition to Ind AS, the Company has elected to continue with the carrying value of all of intangible assets recognized as at April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as the deemed cost as of the transition date.

Investment properties

Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.

Depreciation on buildings is provided over its useful life using the written down value method as per the provisions of Schedule II to the Companies Act, 2013.

(g) LEASES

Operating Lease As a lessee

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increases.

As a lessor

Lease income from operating leases where the Company is as a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the excepted inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

(h) IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS

At the end of each reporting period, the Company reviews the carrying amounts of tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. When it is not possible to estimate the recoverable amount of individual asset, the Company estimates the recoverable amount of the cash generating unit to which an individual asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing, value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in the Statement of Profit or Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. The reversal of an impairment loss is recognized immediately in the Statement of Profit or Loss.

(i) INVENTORIES

Inventories are valued as follows:

Raw materials, stores and spares, Material in transit, packing materials, crops in progress and Petroleum products Valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on Moving Weighted Average basis.

Cost comprises costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Molasses, molasses in process, own bagasse and scrap are valued at net realisable value.

Finished goods

Valued at lower of cost and net realizable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods excludes excise duty. Excise duty is provided on manufacture of goods, which are not exempt from the payment of duty.

Work-in-process

Valued at lower of cost up to estimated stage of process and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

By-products

By-products are valued at net realisable value. Inter-unit transfers of by- products also include the cost of transportation, duties, etc.

(j) 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, regardless of when the payment is being made. 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, sales returns.

Based on Ind AS 18, the Company has assumed that recovery of excise duty flows to the Company on its own account. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the Company on its own account, revenue includes excise duty.

However, sales tax/ value added tax (VAT) and Goods and Service Tax (GST) is not received by the Company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.

Revenue from sale of power is recognised when the units generated are transmitted to the pooling station, in accordance with the terms and conditions of the power purchase agreement entered into by the Company with the purchasing parties.

Income from services is recognised as they are rendered (based on agreement/arrangement with the concerned customers).

Revenue in respect of insurance / other claims, interest, subsidy, incentive, etc. is recognized only when it is reasonably certain that the ultimate collection will be made.

Interest income

Interest income from debt instruments is recognised using the effective interest rate method.

Dividends

Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established.

(k) INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Investments in subsidiaries, joint ventures and associates are recognised at cost as per Ind AS 27. Except where investments accounted for at cost shall be accounted for in accordance with Ind AS 105, Non-current Assets Held for Sale and Discontinued Operations, when they are classified as held for sale.

(l) GOVERNMENT GRANTS AND ASSISTANCE

Grants from the government are recognised at their fair value where there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions.

Government grants relating to the purchase of property, plant and equipment are reduced from the gross book value of property, plant and equipment.

(m) FOREIGN CURRENCIES

The financial statements are presented in Indian rupees, which is the functional currency of the Company.

Transactions in currencies other than the Company’s functional currency are recognized at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the closing exchange rate prevailing as at the reporting date. Non-monetary assets and liabilities denominated in a foreign currency are translated using the exchange rate prevailing at the date of initial recognition (in case measured at historical cost) or at the rate prevailing at the date when the fair value is determined (in case measured at fair value).

Foreign exchange differences are recognized in profit or loss in the period in which they arise except for exchange difference on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest cost on those foreign currency borrowings.

(n) INVESTMENTS

The Company has measured its investments at Cost except for following:

(i) Investments in Mutual Fund are valued at fair market value using NAV as on 31st March 2018.

(ii) Investment in Preference shares of Synergy Green Industries Ltd is valued at fair market value using discounted cash flows.

(o) EMPLOYEE BENEFITS

Short Term Employee Benefits

Short-term employee benefits are recognised as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Other Long Term Employee Benefits

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave for availment as well as encashment subject to the rules. As per the regular past practice followed by the employees, it is not expected that the entire accumulated leave shall be encashed or availed by the employees during the next twelve months and accordingly the benefit is treated as long-term defined benefit. The liability is provided for based on the number of days of unutilised leave at the Balance Sheet date on the basis of an independent actuarial valuation.

Post Employment Benefits

(i) Defined Contribution Plans

The eligible employees of the Company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The Company is maintaining separate trust for Provident Fund and recognises such contributions made to the trust as expense of the year in which the liability is incurred.

(ii) Defined Benefit Plans

The Company has an obligation towards Gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The plan is managed by a trust and the fund is invested with Life Insurance Corporation of India under its Group Gratuity Scheme. The Company makes annual contributions to Gratuity Fund and the Company recognises the liability for Gratuity benefits payable in future based on an independent actuarial valuation.

(p) BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(q) INCOME TAX

The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are accepted to apply when the related deferred and income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.

Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

(r) PROVISIONS AND CONTINGENT LIABILITIES

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.

(s) FINANCIAL INSTRUMENTS

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or liabilities on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Financial assets

Classification and subsequent measurement

Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

Impairment

The Company applies the expected credit loss model for recognizing impairment loss on financial assets measured at amortized cost, other contractual right to receive cash or other financial assets or other financial assets not designated at fair value through profit or loss. The loss allowance for a financial instrument is equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition.

For trade receivables or any contractual right to receive cash or another financial assets that results from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses wherever it experiences. The Company has used a practical expedient permitted by Ind AS 109 and determines the expected credit loss allowance based on a provision matrix which takes into account historical credit loss experience and adjusted for forward looking information.

De-recognition

The Company derecognizes financial asset when the contractual right to the cash flows from the asset expires, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for the amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of the transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

On de-recognition of a financial asset, the difference between the asset’s carrying amount and the sum of consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income, if any, is recognized in the Statement of Profit or Loss if such gain or loss would have otherwise been recognized in profit or loss on disposal of the financial asset.

Financial liabilities Classification

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Subsequent measurement

Financial liabilities (that are not held for trading or not designated at fair value through profit or loss) are measured at amortized cost at the end of subsequent accounting periods. The carrying amounts of financial liabilities that are subsequently measured at amortized cost are determined based in the effective interest method, if material.

Effective interest method is a method of calculating amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees, transaction costs and other premiums or discounts) through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Foreign exchange gains and losses

Financial liabilities denominated in a foreign currency and are measured at amortized cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortized cost of the instruments and are recognized in the Statement of Profit or Loss.

The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. For financial liabilities that are measured at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognized in the Statement of Profit and Loss.

De-recognition

Financial liabilities are derecognized when, and only when, the obligations are discharged, cancelled or have expired. An exchange with a lender of a debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability derecognized and the consideration paid or payable is recognized in the Statement of Profit or Loss.

(t) NON-CURRENT ASSETS HELD FOR SALE

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated or amortised while they are classified as held for sale.

(u) DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.

(v) CASH AND CASH EQUIVALENTS

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, bank overdraft, deposits held at call with financial institutions, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(W) EARNINGS PER SHARE

The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting Standard 33 "Earnings per Share". Basic EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profit or loss attributable to ordinary equity holders of the parent entity by weighted average number of equity shares outstanding during the year as adjusted for the effects of the effects of all dilutive potential ordinary shares dilutive potential equity shares (except where the results are anti-dilutive).

(x) SEGMENT REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.

The accounting policies adopted for segment reporting are in line with the accounting policies adopted by 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, Expenses, Assets and Liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

(iii) Gains/losses from transactions in commodity futures, which are ultimately settled net, with/without taking delivery, are recorded as ‘Other revenues’ under the Sugar segment.

(iv) Revenue, Expenses, Assets and Liabilities, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under “Unallocated”.

(y) RESEARCH AND DEVELOPMENT

Expenditure on Research and Development is considered as cost for valuation of inventory and expenditure related to capital asset is grouped with property plant and equipment under appropriate head and depreciation is provided at the applicable rate.

(z) SUBSIDIES RECEIVED

Subsidies received towards specific fixed assets are reduced from gross book value of the concerned fixed assets. Subsidies received relating to revenue expenditure is deducted from related expense.

(aa) CONSOLIDATION OF ACCOUNTS

Ugar Theatre Pvt. Ltd. is an associate company. However, The Company has no control over the management or over the operations of Ugar Theatre Pvt. Ltd. and hence consolidation of accounts as per the provisions of Ind AS 110 and other relevant provisions of the Companies Act, is not considered necessary.

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Mar 31, 2015

I. Fixed Assets

a. Tangible Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

b. Intangible Assets (Computer Software) are recorded at the consideration paid for acquisition.

ii. Depreciation & Amortisation

a. Depreciation on Tangible Assets is provided on "Written Down Value" Method:

* As per the provisions of Schedule XIV to the Companies Act, 1956, till 31-03-2014 and

* As per the provisions of Schedule II to the Companies Act, 2013, from 01-04-2014.

Consequently, with effect from 01-04-2014;

i. the carrying value of assets is now depreciated over their remaining useful lives,

ii. where the remaining useful life of an asset is Nil as on 01-04-2014, carrying value has been adjusted against opening reserves amounting to Rs. 37.43 lakh (net of tax), in accordance with transitional provision of Schedule II.

iii. on account of above change, depreciation expense for the year ended 31-03-2015 is lower by Rs. 888.74 lakh.

b. Intangible Assets are amortised over a period of three years.

iii. Impairment of Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, the Company estimates the asset's recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset's recoverable amount. A previously recognised impairment loss is changed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised.

iv. Investments

Non-current Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

v. Valuation of Inventories

a. Stores and Spares, Raw Material, Purchased Bagasse, Sugar in Process, Crops in progress, Petroleum Products and Finished Goods are valued at cost or net realisable value, whichever is less. Cost is arrived at on Weighted Average Method.

Cost comprises costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

b. Molasses, Molasses in process, Own Bagasse and Scrap are valued at net realisable value.

vi. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

vii. Employee Benefits

Short term compensated absence benefits (both vesting and non-vesting) are accounted for on the basis of the actual valuation of the leave entitlement as on the balance sheet date.

The actuarial valuations in respect of post-employment defined plans and long term employee benefit as at the balance sheet date are measured using Project Unit Credit Method.

a. Short term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, wages, bonus and short term compensated absences, leave travel allowance, etc. are recognised in the period in which the employee renders the related service.

b. Post Employment Benefits:

i. Defined Contribution Plans

The Company's superannuation scheme and pension scheme are defined contribution plans. The contribution paid / payable under the scheme is recognised during the period in which the employee renders related service.

ii. Defined Benefit Plans

The employees' gratuity fund scheme and provident fund scheme managed by a Trust are the Company's defined benefit plans. The present value of the obligation under such defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined plans, is based on the market yields on Government Securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss.

in case of funded plans, the fair value of the plan's assets is reduced from the gross obligation under the defined benefit plans, to recognise the obligation on the net basis

Gains or losses on curtailment or settlement of any defined benefit plan are recognised when the curtailment or settlement occurs. Past service cost is recognised as expenses on a straight line basis over the average period until the benefits become vested.

The Company pays contribution to a recognised provident fund trust in respect of all locations. The guidance note on implementing AS-15, Employees Benefits (Revised 2006) as issued by the Institute of Chartered Accountants of India (ICAI) states that provident funds set up by employer, which requires interest shortfall to be met by the employer, needs to be treated as a defined benefit plan. In the absence of clear guidelines on the issue of actuarial valuation related to interest shortfall to be made good by the employer, the Company's actuary have expressed their inability to reliably measure the provident fund liability of the Company's recognised provident fund. Accordingly, the Company is unable to exhibit the related disclosures.

iii. Long Term Employee Benefit

The obligation for long term employee benefits such as long term compensated absences is recognised in the same manner as in the case of defined benefit plans as mentioned in note 11 (b) above.

Accumulated leaves that are expected to be utilised within the next twelve months are treated as short term employee benefits.

viii. Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, incentive, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

ix. Foreign Currency Transactions

a. All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted to Profit & Loss Account.

b. In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

x. Subsidies Received

a. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

b. Subsidies received relating to revenue expenditure are deducted from related expense.

xi. Borrowing Costs

a. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

b. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

xii. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be substantively enacted by the Balance Sheet date.

xiii. Earnings per share

a. Basic Earnings per share

For the purpose of calculating basic earnings per share, the net profit or loss for the period attributable to equity shareholders after deducting any attributable tax thereto for the period is divided by weighted number of equity shares outstanding during the period.

b. Diluted Earnings per share

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.

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Mar 31, 2014

1. Fixed Assets

a. Tangible Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

b. Intangible Assets (Computer Software) are recorded at the consideration paid for acquisition.

2. Depreciation & Amortisation

a. Depreciation on Tangible Assets is provided on "Written Down Value" Method, as per the provisions of Schedule XIV to the Companies Act, 1956.

b. Intangible Assets are amortised over a period of three years.

3. Impairment of Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, the Company estimates the asset''s recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s recoverable amount. A previously recognised impairment loss is changed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

4. Investments

Non-current Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

5. Valuation of Inventories

a. Stores and Spares, Raw Material, Purchased Bagasse, Sugar in Process, Crops in progress, Petroleum Products and Finished Goods are valued at cost or net realisable value, whichever is less. Cost is generally arrived at on Weighted Average Method.

b. Molasses, Molasses in process, Own Bagasse and Scrap are valued at net realisable value.

6. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

7. Retirement Benefits

Retirement benefits have been recognised in accordance with AS-15 (revised 2005) and accordingly,

a. liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

b. liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates;

c. gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

8. Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

9. Foreign Currency Transactions

a. All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted to Profit & Loss Account.

b. In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

10. Subsidies Received

a. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

b. Subsidies received relating to revenue expenditure are deducted from related expense.

11. Borrowing Costs

a. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred

during the period of acquisition or construction, are capitalised as part of the cost of the asset.

b. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

12. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be substantively enacted by the Balance Sheet date.

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Mar 31, 2013

1. Fixed Assets

a. Tangible Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and inst allation and commissioning) less accumulated depreciation.

b. Intangible Assets (Compu ter Software ) are recorded at the consideration paid for acquisition.

2. Depreciation & Amortisation

a. Depreciation on Tangible Assets is provided on "Written Down Value" Method, as per the provisions of Schedule XIV to the Companies Act, 1956.

b. Intangible Assets are amortised over a period of three years.

3. Impairment of Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, the Company estimates the asset''s recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. After impairment, depreciation is provided on the revised carryin g amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset''s recoverable amount. A previously recognised impairment loss is changed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognised.

4. Investments

Non-current Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

5. Valuation of Inventories

a. Stores and Spares, Raw Material, Purchased Bagasse, Sugar in Process, Crops in progress, Petroleum Products and Finished Goods are valued at cost or net realisable value, whichever is less. Cost is generally arrived at on Weighted Average Method.

b. Molasses, Molasses in process, Own Bagasse and Scrap are valued at net realisable value.

6. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

7. Retirement Benefits

Retirement benefits have been recognised in accordan ce with AS-15 (revised 2005) and accordingly,

a. liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

b. liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates;

c. gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

8. Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonabl y certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

9. Foreign Currency Transactions

a. All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are a djusted to Profit & Loss Account.

b. In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

10. Subsidies Received

a. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

b. Subsidies received relating to revenue expenditure are deducted from related expense.

11. Borrowing Costs

a. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

b. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

12. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Ta x is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be substantively enacted by the Balance Sheet date.

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Mar 31, 2012

1. Presentation and disclosure of financial statements

The revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company from the accounting year ended 31-03-2012, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has reclassified the previous year’s figures in accordance with the requirements applicable to current year.

2. Fixed Assets

a. Tangible Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

b. Intangible Assets (Computer Software) are recorded at the consideration paid for acquisition.

3. Depreciation & Amortisation

a. Depreciation on Tangible Assets is provided on “Written Down Value” Method, as per the provisions of Schedule XIV to the CompaniesAct, 1956.

b. Intangible Assets are amortised over a period of three years.

4. Impairment of Assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If an indication exists, the Company estimates the asset’s recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the asset’s recoverable amount. A previously recognised impairment loss is changed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised.

5. Investments

Non-current Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

6. Valuation of Inventories

a. Stores and Spares, Raw Material, Purchased Bagasse, Sugar in Process, Crops in progress, Petroleum Products and Finished Goods are valued at cost or net realisable value, whichever is less. Cost is generally arrived at on WeightedAverage Method.

b. Molasses, Molasses in process, Own Bagasse and Scrap are valued at net realisable value.

7. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

8. Retirement Benefits

Retirement benefits have been recognised in accordance withAS-15 (revised 2005) and accordingly,

a. liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

b. liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates;

c. gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

9. Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

10. Foreign Currency Transactions

a. All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted to Profit & Loss Account.

b. In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

11. Subsidies Received

a. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

b. Subsidies received relating to revenue expenditure are deducted from related expense.

12. Borrowing Costs

a. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

b. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

13. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be subsequently enacted.

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Mar 31, 2011

A. Fixed Assets and Intangible Assets

1. Fixed Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

2. Intangible Assets are recorded at the consideration paid for acquisition.

B. Depreciation and Amortisation

1. Depreciation on Fixed Assets is provided on "Written Down Value" Method, as per the provisions of Schedule XIV to the Companies Act, 1956.

2. Computer Software (Intangible Asset) is amortised over a period of three years.

C. Investments

Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

D. Valuation of Inventories

Category of Inventory Basis of valuation

1. Stores and Spares, Raw Material (other than Molasses), Purchased Bagasse, Molasses in process, Sugar in Process, Crops in progress, Petroleum Products and Finished Goods

At cost or net realisable value, whichever is less. Cost is generally arrived at on Weighted Average Method.

2 Molasses, Own Bagasse and Scrap

At net realisable value.

E. Retirement Benefits

Retirement benefits have been recognized in accordance with AS-15 (revised 2005) and accordingly,

a. liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

b. liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates.

c. gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

F . Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

G . Foreign Currency Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted to Profit & Loss Account.

In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

H. Subsidies Received

1. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

2. Subsidies received relating to revenue expenditure are deducted from related expense.

I. Borrowing Costs

1. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

2. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

J. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be subsequently enacted.

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Mar 31, 2010

A. Fixed Assets and Intangible Assets

1. Fixed Assets are carried at cost of acquisition or construction (inclusive of freight, duties, taxes and expenses related to acquisition and installation and commissioning) less accumulated depreciation.

2. Intangible Assets are recorded at the consideration paid for acquisition.

B. Depreciation and Amortisation.

1. Depreciation on Fixed Assets is provided on "Written Down Value" Method, as per the provisions of Schedule XIV to the Companies Act, 1956.

2. Computer Software (Intangible Asset) is amortised over a period of three years.

C. Investments

Investments are carried at cost of acquisition. A provision for diminution is made to recognise decline other than temporary, in the value of investments.

D. Valuation of Inventories

Category of Inventory Basis of valuation

1. Stores and Spares, Raw Material (other than At cost or net realisable value, whichever Molasses), Purchased Bagasse, Molasses in is less. Cost is generally arrived at on process, Sugar in Process, Crops in progress, Weighted Average Method. Petroleum Products and Finished Goods

2 Molasses, Own Bagasse and Scrap At net realisable value.

E. Research and Development

Revenue Expenditure on Research and Development is charged off as an expense in the year in which incurred and the Capital Expenditure is grouped with fixed assets under appropriate heads and depreciation is provided at the applicable rates.

F. Retirement Benefits

Retirement benefits have been recognized in accordance with AS-15 (revised in 2005) and accordingly,

a. liability for balance of leave as on the last date of the year is fully provided on actuarial basis;

b. liability on account of retirement benefits such as provident fund and superannuation fund are administered through separate funds. Contributions to provident fund and superannuation fund are accounted for at respective specified rates.

c. gratuity is accounted on the basis of actuarial valuation and funded through a trust, which has taken out a policy with Life Insurance Corporation of India.

G. Revenue Recognition

a. Revenue in respect of insurance / other claims, interest, subsidy, Carbon Emission Reduction Units, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.

b. Sales Value is inclusive of Excise Duty and net of sales tax, where applicable.

H. Foreign Currency Transactions

All foreign currency transactions are accounted for at the rates prevailing on the date of the transaction. The exchange differences on settlement / conversion are adjusted to Profit & Loss Account.

In respect of amount payable in foreign currency covered by forward contracts, the premium is recognised over the period of contract.

I. Subsidies Received

1. Subsidies received towards fixed assets are reduced from gross book value of the concerned fixed assets.

2. Subsidies received relating to revenue expenditure are deducted from related expense.

J. Borrowing Costs

1. Borrowing costs that are attributable to acquisition, construction or erection of qualifying assets incurred during the period of acquisition or construction, are capitalised as part of the cost of the asset.

2. Other borrowing costs are recognised as expenditure in the period in which they are incurred.

K. Taxation

Tax on income for the current period is made in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognised on timing differences between the accounting income and the taxable income for the period. The tax effect is calculated on the accumulated timing differences at the end of the accounting period based on the prevailing enacted regulations or those that may be subsequently enacted.