1.  BASIS OF PRESENTATION:
 
 The company prepares its accounts on accrual basis following the
 historical cost convention and on the basis of going concern in
 compliance with the provisions of Section 211 (3C) and the other
 relevant provisions of the Companies Act, 1956.
 
 2.  USE OF ESTIMATES:
 
 The preparation of financial statements requires the use of estimates
 and assumptions to be made that affect the reported amount of assets,
 liabilities and disclosure of contingent liabilities on the date of
 financial statements and the reported amount of revenues and expenses
 during the reporting period. Difference between the actual results and
 estimates are recognised in the period in which the results are known /
 materialised.
 
 3.  FIXED ASSETS:
 
 Fixed assets are capitalised at cost of acquisition including directly
 attributable costs such as freight, insurance and specific installation
 charges for bringing the assets to their working condition for intended
 use.
 
 Emergency machinery spares of irregular use and critical insurance
 machinery spares are capitalised as part of plant & machinery.
 
 Pre-operative expenditure incurred upto the date of commencement of
 commercial production is capitalized as part of fixed assets.
 
 4.  INVESTMENTS:
 
 Long-term investments are stated at cost after providing for diminution
 in value where in the opinion of the management such diminution is not
 temporary in nature.
 
 5.  DEPRECIATION:
 
 Depreciation is provided for on Straight Line Method at the rates and
 in the manner specified in Schedule XIV of the Companies Act, 1956
 except in respect of computers (including accessories and peripherals),
 which are depreciated fully in the year of addition. Depreciation on
 other additions/deletions is provided pro-rata from/ upto the month of
 addition/deletion.
 
 Emergency machinery spares of irregular use and critical insurance
 spares are depreciated over the balance useful life of the parent
 asset.
 
 6.  INVENTORY VALUATION:
 
 Inventories are valued at lower of cost or net realizable value except
 in case of scrap which is taken at net realizable value. Cost for
 various items of inventory is determined as under:
 
 a.  Raw materials (including those 
     in transit)                      : Purchase cost including 
                                        incidental expenses on FIFO basis.
 
 b.  Chemicals, Packing material, 
     other Stores                     : Purchase cost including 
                                        incidental expenses on weighted
     and spares (including those
     in transit)                        average basis.
 
 c.  Work-in-process                  : At raw material cost including 
                                        proportionate production 
                                        overheads.
 
 d.  Finished goods
 
 i)  Sugar                            : At raw material cost including
                                        proportionate production
                                        overheads.
 
 ii) Molasses                         : At average net realisable price.
 
 iii) Industrial Alcohol              : At value of molasses as
                                        determined above plus 
                                        proportionate production 
                                        overheads in distillery.
 
 iv)  Traded goods                    : Purchase cost including 
                                        incidental expenses on FIFO basis.
 
 
 7.  REVENUE RECOGNITION:
 
 Sales includes excise duty and is accounted for upon dispatch of goods
 from the factory. Gross sales and net sales are disclosed separately in
 Profit & Loss account. Income from carbon credit is accounted for in
 respect of projects registered with UNFCCC only on issuance of Carbon
 Emission Reductions (CERs). These CERs are valued based on the
 prevailing rates as on the balance sheet date. Insurance and other
 claims are accounted for as and when admitted by the appropriate
 authorities in view of uncertainty involved in ascertainment of final
 claim.
 
 8.  CONTINGENCIES AND EVENTS OCCURING AFTER THE BALANCE SHEET DATE:
 
 Events occurring after the date of the Balance sheet, which provide
 further evidence of conditions that existed at the Balance Sheet date
 or that arose subsequently, are considered up to the date of approval of
 accounts by the Board of Directors, where material.
 
 9.  GOVERNMENT GRANTS:
 
 Grants relating to specific fixed assets are deducted from the
 original cost of specified assets.
 
 10.  RETIREMENT BENEFITS:
 
 a) Provident Fund
 
 Companies contribution to provident fund, being in the nature of defined
 contribution plan, are being charged to profit & loss account in the
 period during which services are rendered by employees.
 
 b) Gratuity & Leave Encashment
 
 Provision for gratuity and leave encashment in the nature of defined
 benefit obligation is considered on the basis of revised AS-15 on
 actuarial valuation using projected unit credit method. The discount
 rate and other financial assumptions are based on the parameters
 defined in the accounting standard.
 
 11.  EXCISE DUTY:
 
 Excise duty in respect of finished goods (including molasses) is
 accounted for at the end of period and is included in the value of
 closing stock as per ''Guidance Note on Accounting Treatment of Excise
 Duty'' issued by the Institute of Chartered Accountants of India.
 
 12.  INTANGIBLE ASSETS:
 
 Items of expenditure that meet the recognition criteria as mentioned in
 Accounting Standard are classified as intangible assets and are
 amortized over the period of economic benefits not exceeding ten years.
 
 13.  BORROWING COSTS:
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalized as part of cost of
 such assets. A qualifying asset is an asset that necessarily requires a
 substantial period of time to get ready for its intended use or sale.
 All other borrowing costs are recognized as an expense in the period in
 which they are incurred.
 
 14.  FOREIGN CURRENCY TRANSACTIONS:
 
 Transactions denominated in foreign currency are accounted for at the
 exchange rate prevailing on the date of transaction. Exchange
 differences arising on account of forward contract are dealt with in
 the Profit & Loss account over the period of the contracts. Monetary
 assets and liabilities relating to foreign currency transactions are
 converted at the year end rate or at forward contract rate, as
 applicable. Gains or losses arising on cross currency forex swap
 transactions are accounted for over the period of contract.
 
 15.  TAXES ON INCOME:
 
 Tax on income for the current period is determined on the basis of
 taxable income & tax credits computed in accordance with the provisions
 of the Income Tax Act 1961, and based on expected outcome of
 assessments/ appeals.
 
 Deferred Tax is recognized on timing differences between the accounting
 income and the taxable income for the year and reversal/adjustment of
 earlier year deferred tax assets / liabilities which are quantified
 using the tax rates and laws enacted or substantively enacted as on the
 Balance Sheet date.
 
 Deferred tax assets on account of unabsorbed losses and depreciation
 are recognized and carried forward to the extent that there is a
 virtual certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.
 Deferred tax assets are reassessed at each Balance Sheet date.
 
 16.  IMPAIRMENT:
 
 Where the recoverable amount of the fixed asset is lower than its
 carrying amount, a provision is made for the impairment loss. Post
 impairment, depreciation is provided for on the revised carrying value
 of the asset over its remaining useful life. The impairment loss
 recognized in prior accounting period is reversed if there is a
 favourable change in the estimate of recoverable amount.
 
 17.  PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:
 
 Contingent liabilities, if material, are disclosed by way of notes,
 contingent assets are not recognized or disclosed in the financial
 statements. A provision is recognized when an enterprise has a present
 obligation as a result of past event(s) and it is probable that an
 outflow of resources embodying economic benefits will be required to
 settle the obligation(s), in respect of which a reliable estimate can
 be made for the amount of obligation.