i) Basis of Accounting
 
 The company maintains its accounts on accrual basis following the
 historical cost conventions in accordance with Generally Accepted
 Accounting Principles (GAAP) and in compliance with the Accounting
 Standards referred to in section 211(3C) and other requirements of the
 Companies Act, 1956.
 
 The preparation of the financial statements in conformity with GAAP
 requires that the management of the company makes estimates and
 assumptions that affect the reported amounts of income and exper :es of
 the year, the reported balances of assets and liabilities and the
 disclosures relating to conti; ent liabilities as of the date of the
 financial statements. Examples of such estimates include the usefu;
 :ife of fixed assets and intangible assets, provisions for doubtful
 debts/advances, future obligations in respect of retirement benefit
 plans, etc. actual results could differ from these estimates.
 
 ii) Revenue Recognition
 
 Revenue is recognized based on the nature of activity when
 consideration can be reasonably measured and there exists reasonable
 certainty of its recovery.
 
 (a) Revenue from sale of goods is recognized when the substantial risks
 and rewards of ownership are transferred to the buyer under the terms
 of the contract.
 
 (b) Sale of power to Punjab State Power Corporation Limited (PSPCL),
 Uttar Pradesh Power Corporation Limited (UPPCL) & merchant power
 purchasers is accounted for based on the meter reading as per metering
 equipments of PSPCL and UPPCL installed at the Power Grid.
 
 (c) Other income is accounted for on accrual basis as and when the
 right to receive arises.
 
 iii) Inventories
 
 Inventories except molasses and bagasse being by-products, are valued
 at lower of cost and net realizable value. The by-products are valued
 at net realizable value. Cost of inventories is determined using
 Weighted Average Cost method. In respect of finished goods and work in
 process appropriate overheads are considered.
 
 iv) Fixed Assets
 
 Fixed assets are stated at cost, net of Excise Duty, less accumulated
 depreciation and impairment loss, if any. All costs directly related to
 the acquisition and installation of fixed assets are capitalized and
 added to the respective assets. Borrowing costs relating to acquisition
 of fixed assets which takes substantial period of time to get ready for
 its intended use are also included to the extent they relate to the
 period till such assets are ready to be put to use.
 
 v) Depreciation
 
 Depreciation is provided on all the fixed assets using the
 straight-line method in accordance with and in the manner specified in
 Schedule XIV to the Companies Act, 1956.
 
 vi) Foreign Currency Transactions
 
 Transactions denominated in foreign currency are normally recorded at
 the exchange rates prevailing at the time of the transactions. Monetary
 items denominated in foreign currencies at the year end are translated
 at the year end exchange rates. Any income or expenses on account of
 exchange difference either on settlement or on translation is
 recognized in the Statement of Profit & Loss.
 
 vii) Expenditure on new projects & substantial expansions
 
 Expenditure directly relating to construction/substantial expansion
 activity is capitalized. Indirect expenditure incurred during
 construction period is capitalized as part of the indirect construction
 cost to the extent to which the expenditure is indirectly related to
 construction or is incidental thereto.  Income earned during the
 construction period is deducted from the total of the indirect
 expenditure.
 
 As regards indirect expenditure on expansion, only that portion is
 capitalized which represents the
 
 marginal increase in such expenditure involved as a result of capital
 expansion. Both direct and indirect expenditure are capitalized only if
 they increase the value of the asset beyond its original standard of
 performance.
 
 viii) Impairment of Assets
 
 At each balance sheet date, the carrying amount of fixed assets are
 reviewed by the management to determine whether there is any indication
 that those assets suffered an impairment loss. If any such indication
 exists, the recoverable amount of the asset is estimated in order to
 determine the extent of impairment loss (recoverable amount is the
 higher of an asset''s net selling price or value in use). In assessing
 the value in use, the estimated future cash flow expected from the
 continuing use of the assets and from their disposal are discounted to
 their present value using a pre discounted rate that reflects the
 current market assessment of time value of money and risks specific to
 the asset.
 
 Reversal of impairment loss is recognized immediately as income in the
 Statement of Profit and Loss.
 
 ix) Government Grants and Subsidies
 
 Grants and subsidies from the government are recognized when there is
 reasonable assurance that the grant/subsidy will be received and all
 attaching conditions will be complied with.
 
 When grant or subsidy relates to an expense item, it is recognized as
 income over the periods necessary to match them on a systematic basis
 with the related cost, which it rs intended to compensate. Where
 grant/subsidy relates to an asset, its value is deducted in arriving at
 the carrying amount of the related asset against which grant/subsidy
 has been received and further where the grant/subsidy is in the nature
 of promoters contribution the amount of grant/subsidy is accounted for
 as a capital reserve.
 
 x) Investments
 
 Investments that are readily realizable and intended to be held for
 less then one year are classified as current investments, Current
 investments are carried at lower of cost or market value, whereas long
 term investments are carried at historical cost. The provision for
 diminution in the value of investment other than temporary is provided
 for.
 
 '' xi) Miscellaneous Expenditure
 
 Preliminary expenses and cost incurred in raising funds are written off
 to the Statement of profit and loss in the year in which the same are
 incurred.
 
 xii) Employees Benefits
 
 - The liability on account of gratuity is provided in accordance with
 LICs Group Gratuity Scheme and Actuarial Valuation certificate basis.
 
 - Provision for Leave encashment liability is made on Actuarial
 valuation certificate basis.
 
 - Provident Fund: Contribution to provident fund is made in accordance
 with the provisions of the Employees Provident Fund Act, 1952.
 
 xiii) Tax Expenses
 
 Tax expenses comprises of current and deferred income tax, and wealth
 tax. Current income tax is calculated at the amount expected to be paid
 to the tax authorities in accordance with the Indian Income Tax Act,
 1961. Deferred income taxes reflects the impact of current year timing
 differences between taxable income and accounting income for the year
 and reversal of timing differences of earlier years.
 
 Deferred tax is measured based on the tax rates and the tax laws
 enacted or substantively enacted at the balance sheet date. Deferred
 tax assets are recognized only to the extent that there is virtual
 certainty supported by convincing evidence that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realized. If the company has carry forward of unabsorbed
 depreciation and tax losses, deferred tax, assets are recognized only
 if there is virtual certainty supported by convincing evidence that
 such deferred tax assets can be realized against further taxable
 profits.  Unrecognized deferred tax assets of earlier years are
 re-assessed and recognized to the extent that it has become reasonably
 certain that further taxable income will be available against which
 such deferred tax assets can be realized.
 
 xiv) Earnings per Share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders (after
 deducting preference dividend & taxes) by the weighted average number
 of equity shares outstanding during the year. Equity shares that are
 partly paid up are treated as a fraction of an equity share to the
 extent they entitled to participate in dividends. The weighted average
 numbers of equity shares outstanding during the year are adjusted for
 events such as bonus issue, bonus element in a right issue to the
 existing shareholders, share split and consolidation of shares.
 
 For the purpose of calculating diluted EPS, the net profit or loss
 attributable to equity share holders and weighted average number of
 equity shares outstanding during the period are adjusted for the
 effects of all dilutive potential equity shares.
 
 xv) Segment Reporting
 
 a).  Segment accounting policies are in line with the accounting
 policies of the company. In addition, the following specific accounting
 policies have been followed for segment reporting.
 
 (1) Segment revenue includes sales and other income directly
 identifiable with/allocable to the segment including inter segment
 sales.
 
 (2) Expenses that are directly identifiable with/allocable to segment
 are considered for determining the segment result. Expenses which
 relate to the company as a whole and not allocable to segment are
 included under Un-allocable corporate expenditure.
 
 (3) Income which relates to the company as a whole and not allocable to
 segments is included in un-allocable corporate income.
 
 (4) Segment assets and liabilities include those directly identifiable
 with the respective segments.  Un-allocable corporate assets and
 liabilities represent the assets and liabilities that relate to company
 as a whole and not allocable to any segment. Un-allocable assets mainly
 comprise corporate head office assets, investments and tax deposited
 with the Income Tax Authorities.  Un-allocable liabilities include
 mainly Unsecured Loans and Tax Payable to Income Tax authorities.  .
 
 b).  Inter Segment transfer pricing
 
 Segment revenue resulting from transactions with other business
 segments is accounted on the basis of market price, xvi.) Provisions &
 Contingent liabilities
 
 a) Provisions are recognized when an enterprises has
 
 (1) A present obligation as a result of past events.
 
 (2) It is probable that an outflow of resources will be required to
 settle the obligations.
 
 (3) In respect of which a reliable estimate can be made.
 
 The provisions are determined based on the best estimates required to
 fulfill the obligations on the balance sheet date. The provisions are
 reviewed at each balance sheet date and adjusted to reflect the current
 best estimates.
 
 b) Contingent liability is
 
 (1) A possible obligation that arises from past events and the
 existence of which will be confirmed only by the occurrence or
 non-occurrence of one or more uncertain future events not wholly within
 the control of the enterprise: or
 
 (2) A present obligation that arises from past events but is not
 recognized.
 
 The Contingent Liabilities are not recognized but are disclosed in the
 notes. The Contingent Assets are neither recognized nor disclosed in
 financial statements, xvii) Cash and Cash equivalents
 
 Cash and cash equivalents in the balance sheet comprises cash at bank,
 cash in hand & short term investments.