a) Basis of preparation of Financial Statements
The financial statements have been prepared in accordance with
generally accepted Accounting Standards in India and the provisions of
the Companies Act, 1956.
b) Basis of Accounting
The Company follows accrual basis of accounting unless otherwise
c) Tangible Fixed Assets
Fixed Assets (excluding Revalued Assets) are stated at cost including
cost of installation and other incidental expenses. Assets of Rs.5000/-
and below have been fully depreciated during the year of purchase.
d) Depreciation & Amortisation
Depreciation on Fixed Assets acquired after 31.08.1970 has been
calculated on straight line method under Sec. 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.
Investments are stated at cost. Provision for diminution in value of
investment is not made if they are long term in nature.
Investments, which are readily releasable and intended to be held for
not more than one year from the date of investment made are classified
as Current Investments. All investments other than long term
investments are classified as non-current investments. Current
Investments are valued at lower of Cost or Fair Value.
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
-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) Cash and Cash equivalents
Cash comprises of cash on hand, balances with banks in current accounts
and demand deposits with banks.
h) Foreign ExchangeTransaction
Transactions in foreign currencies are recognized 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.
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.
i) Contingent Assets & Liabilities
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
j) Impairment of Assets
Impairment of losses, if any is recognised in accordance with the
accounting standard issued in this regard by the Institute of Chartered
Accountants of India.
k) Segmental Reporting
The company''s operating business are organised and managed as per
location of the client. Common cost is allocated to the cost based on
the Revenue Mix. Unallocated cost is disclosed separately. The company
prepares its segment information in conformity with the accounting
policy adapted for preparing and presenting the financial statement of
the Company as a whole.
I) Earning Per Share
Basic earning per share is calculated by dividing the net profit or
Loss for the period attributable to equity shareholders.
m) Revenue Recognition
Sales are shown inclusive of excise duty and net of returns. Dividend
income is recognised when right to receive is established.
n) Employees Benefits
Contribution of Employer''s Share to Employee''s Provident Fund are
worked on accrual basis and charged to Profit & Loss Account. The
Company also provides for gratuity and leave encashment based on
actuarial valuation made by an independent actuary as per AS-15.
The liability for Gratuity and leave encashment has been provided with
Annual Contribution to the Life Insurance Corporation of India under
its Group Gratuity-cum-Life tosuiawce S>cV\evt\e( Group Leave
Lease rentals on operating leases are charged on a monthly basis to
Accounts. Assets taken on Finance Lease have been capitalised during
the year of Agreement and charged off in accordance with the applicable
rate of depreciation.
p) Borrowing cost
Borrowing cost 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 incurred.
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 are capable of reversal in one or more subsequent
Provisions are recognised in respect of obligations where, based on the
evidence available, their existence at the Balance Sheet date.
s) Excise duty under expenditure, represents payments made/ to be made
during the year on goods cleared/ to be cleared.
Payment of services where service tax is charged and credit for the
same is taken as accounted net of service tax.
t) 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 statement of Profit & Loss in the year of harvesting.