a) The Financial Statements are prepared in accordance with generally
accepted accounting principles and as per the requirements of the
Companies Act, 1956.
b) The accrual basis of accounting is followed unless otherwise stated.
c) Fixed Assets (excluding Revalued Assets) are stated at cost
including cost of installation and other incidental expenses. Assets of
Rs. 5,000/- and below have been fully depreciated during the year of
d) Depreciation on Fixed Assets, acquired after 31.08.1970 has been
calculated on Straight Line Method under Section 205(2)(b) of the
Companies Act, 1956 while other assets have been depreciated on Written
Down Value Method under Section 205(2)(a) of the said Act.
e) Investments are stated at cost. Temporary diminution in the value of
investments have not been provided for as they are long term in nature.
f) Inventories are valued on FIFO basis as under:-
i) Stores, Spares & Others : At cost exclusive of CENVAT receivable
ii) Finished Goods : At lower of cost or market value
iii) Stock-in-Process :
-Sugar and Molasses : at lower of estimated cost or realisable value
-Planted Trees, having maturity of above 18 months, are taken at
estimated realisable value
g) The liability for Gratuity and leave encashment have been provided
with Annual Contribution to the Life Insurance Corporation of India
under its Group Gratuity-cum- Life Assurance Scheme/Group Leave
h) Sales are shown inclusive of excise duty and net of returns. i)
Foreign Exchange Transactions :
i) Transactions in foreign currencies are recognised at the prevailing
exchange rates on the transaction dates. Realised gains and losses on
settlement of foreign currency transactions are recognised in the
Profit & Loss Account. Foreign currency monetary items at the year-end
are reported at the year-end exchange rate, and the resultant exchange
difference is recognised in the Profit & Loss Account. ii) In respect
of transactions covered by Forward Exchange Contracts, the difference
between the contract rate and spot rate on the date of transaction is
amortised over the life of contract. j) The expenses incurred on
Sugarcane and on Trees are accumulated under the caption Standing
Sugarcane and Planted Trees (excluding Planted Trees having maturity
of over 18 months) respectively and charged to Profit & Loss Account in
the year of harvesting. k) Excise Duty under expenditure, represents
payments made/to be made during the year on goods cleared/to be
I) Borrowing Cost: Borrowing costs in relation to a qualifying asset
and capitalised as part of the cost of a qualifying asset when it is
probable that they will result in future economic benefits to the
enterprise and the costs can be measured reliably. Other borrowing
costs are recognised as an expense in the period in which they are
m) The loss is understated by an amount of Rs. 5,96,190/- on account of
rent of Red Cross Place in the Profit & Loss Account since the matter
is sub judice.
n) Impairment of losses, if any, are recognised in accordance with the
accounting standard issued in this regard by the Institute of Chartered
Accountants of India.
o) Taxation : Provision for tax is made on the taxable income for the
year in accordance with the applicable provisions of the Income Tax
Act, 1961. Deferred tax is recognised subject to consideration of
prudence in respect of deferred tax assets, 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
p) Provisions are recognised in respect of obligations where, based on
the evidence available, their existence at the Balance Sheet date.
Contingent Liabilities are shown by way of Notes to the Accounts in
respect of obligations where, based on the evidence available, their
existence at the Balance Sheet date is considered not probable.
Contingent assets are neither recognised nor disclosed in the financial
q) Payment for services where service tax is charged and credit for the
same is taken as accounted net of service tax.