a.  Basis of presentation
 
 The accompanying financial statements have been presented for the year
 ended September 30, 2010 along with comparative information for the
 year ended September 30, 2009. The accompanying financial statements
 have been prepared on a going concern basis under the historical cost
 convention on the accrual basis of accounting in conformity with
 accounting principles generally accepted in India (Indian GAAP). The
 accounting policies have been consistently applied by the Company and
 are consistent with those used in the previous year, except as stated
 hereunder.
 
 b.  Use of estimates
 
 In preparing the Companys financial statements in conformity with
 accounting principles generally accepted in India, the Companys
 management is required to make estimates and assumptions that affect
 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.
 
 c.  Fixed assets
 
 Fixed assets are stated at cost less accumulated depreciation. Cost
 comprises the purchase price and any cost attributable to bringing the
 asset to its working condition for its intended use. Expenditure
 incurred during construction period has been added to the cost of the
 assets. These expenses have been allocated to the sugar, power
 generation and ethanol units on a reasonable basis.
 
 d.  Borrowing costs
 
 Financing cost incurred upto the date of completion of construction or
 installation of qualifying assets, on funds borrowed are capitalised as
 a part of the cost of the asset.
 
 e.  Depreciation
 
 Depreciation is provided at the rates and in the manner prescribed in
 Schedule XIV of the Indian Companies Act, 1956.  The Companies assets
 are depreciated using the straight-line method. As per estimates of the
 management, these rates are representative of the economic useful life
 of these assets. No depreciation is provided on assets held for sale.
 
 f.  Leases
 
 Operating lease payments are recognised as an expense in the profit and
 loss account on a straight-line basis over the lease term.  In case of
 long term leases, the expenditure to the profit and loss account is
 recognised on the basis of equated lease rentals arrived at by
 allocating the total outflow of lease rentals on the entire contractual
 period over the period of the lease.
 
 g.  Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classifed as current investments. All other
 investments are classifed as long-term investments. Current investments
 are carried at lower of cost or fair value/ market value, determined on
 an individual investment basis. Long-term investments are carried at
 cost. However, provision for diminution in value is made to recognise a
 decline other than temporary in the value of the investments.
 profit/loss on sale of investments is computed with reference to their
 average cost.
 
 h.  Amalgamation
 
 Accounting for Amalgamation is as per AS-14 of the Indian Accounting
 Standards as prescribed by The Institute of Chartered Accountants of
 India. The Goodwill arising on Amalgamation is amortised on the basis
 over its useful life but shall not exceed fve years.
 
 i.  Inventories
 
 Inventories are valued as follows:
 
 Raw materials, stores and spares and packing materials
 
 Lower of cost or net realisable value. However, materials and other
 items held for use in the production of inventories are not written
 down below cost if the fnished products in which they will be
 incorporated are expected to be sold at or above cost. Cost is
 determined on a First In First Out (‘FIFO) basis.
 
 Finished goods
 
 Lower of cost or net realisable value. Cost includes direct materials,
 labour and a proportion of manufacturing overheads based on normal
 operating capacity. Cost of fnished goods excludes excise duty.
 
 Work-in-process
 
 Lower of cost upto estimated stage of process or 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 cost. Inter-unit transfers of by-products
 also include the cost of transportation, duties, etc.
 
 Inter-segment
 
 The inter-segment transfers of inventories are valued at cost.
 
 j.  Revenue recognition
 
 Revenue is recognised to the extent it is probable that the economic
 benefits will fow to the Company and the revenue can be reliably
 measured. 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, excise duty, sales
 returns.
 
 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.
 
 k.  Foreign currency transactions
 
 Initial Recognition
 
 Foreign currency transactions are recorded in the reporting currency,
 by applying to the foreign currency amount the exchange rate between
 the reporting currency and the foreign currency at the date of the
 transaction.
 
 Conversion
 
 Foreign currency monetary items are reported using the closing rate at
 the date of the Balance Sheet. Non-monetary items which are carried in
 terms of historical cost denominated in a foreign currency are reported
 using the exchange rate at the date of the transaction and investments
 in foreign companies are recorded at the exchange rates prevailing on
 the date of making the investments.
 
 Exchange Differences
 
 Exchange differences arising on the settlement of monetary items or on
 reporting companys monetary items at rates different from those at
 which they were initially recorded during the period or reported in
 previous financial statements, are recognised as income or as expenses
 in the period in which they arise, except for loans denominated in
 foreign currencies utilised for acquisition of fixed assets until the
 date of capitalisation where the exchange gains/losses are adjusted to
 the cost of such assets.
 
 Forward Exchange Contracts not intended for trading or speculation
 purposes
 
 The premium or discount arising at the inception of forward exchange
 contracts is amortised as expense or income over the life of the
 contract. Exchange differences on such contracts are recognised in the
 profit and loss account in the period in which the exchange rates
 change. Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognised as income or as expense for the
 period.
 
 l.  Retirement benefits
 
 Contributions in respect of provident fund and gratuity are made to the
 appropriate authorities/trust set up by the Company for the purpose and
 charged to profit and loss account. Provisions for liabilities in
 respect of leave encashment benefits are made based on actuarial
 valuation made by an independent actuary as at the balance sheet date.
 
 m.  Income tax
 
 Tax expenses comprise both current and deferred taxes.
 
 Deferred income tax refects the impact of current period timing
 differences between taxable income and accounting income for the period
 and reversal of timing differences of earlier periods. 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 recognised only to the extent that there is reasonable certainty
 that suffcient future taxable income will be available against which
 such deferred tax assets can be realised.
 
 n.  Miscellaneous expenditure
 
 Preliminary expenses are written-off over a period of fve years from
 the year of commencement of commercial production.
 
 The Deferred Revenue Expenditure comprises of debenture issue expenses
 which is written off over a period of fve years & expenses incurred on
 the lease units upto the date of production which is written off in
 proportion to the period of lease unexpired or 1/5th in case of long
 lease period.
 
 o.  Government grants
 
 Government grants in the nature of promoters contribution are credited
 to capital reserve and treated as a part of Shareholders funds.
 
 p.  Financial derivatives and commodity futures
 
 Transactions in financial derivatives and commodity futures are
 accounted based on the mode of fnal settlement. Transactions, which are
 ultimately settled net, without taking delivery, are recorded net with
 the gains/losses being recognised as income/ expenses in the financial
 statements. Transactions, which stipulate physical delivery of the
 goods and where the company intends to take delivery, are recorded at
 gross, as purchases and sales as a part of the Companys sugar
 manufacturing activities.
 
 q.  Provisions, contingent liabilities and contingent assets
 
 Provisions are recognised for liabilities that can be measured only by
 using a substantial degree of estimation, if
 
 - The Company has a present obligation as a result of a past event
 
 - A probable outflow of resources is expected to settle the obligation
 and
 
 - The amount of the obligation can be easily estimated
 
 Contingent Liability is disclosed in the case of
 
 - A present obligation arising from a past event, when it is not
 probable that an outflow of resources will be required to settle the
 obligation
 
 - A possible obligation, unless the probability of outflow of resources
 is remote
 
 Depending on facts of each case and after due evaluation of relevant
 legal aspects, claims against the Company not acknowledged as debts are
 disclosed as contingent liabilities. In respect of statutory matters,
 contingent liabilities are disclosed only for those demand(s) that are
 contested by the Company.
 
 Contingent Assets are neither recognised nor disclosed.
 
 r.  Earnings per share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period. The
 weighted average numbers of equity shares outstanding during the period
 are adjusted for events of bonus issue.
 
 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.
 
 s.  Segment reporting
 
 The accounting policies adopted for segment reporting are in line with
 the accounting policies of 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 and expenses have been identifed 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 and expenses, which relate to the enterprise as a whole
 and are not allocable to segments on a reasonable basis, have been
 included under Unallocated Corporate Expenses.
 
 t.  Impairment of assets
 
 As at each balance sheet date, the carrying amount of assets is tested
 for impairment so as to determine,
 
 a.  The provision for impairment loss, if any, required or
 
 b.  The reversal, if any, required of impairment loss recognised in
 previous periods.  Impairment loss is recognised when the carrying
 amount of an asset exceeds its recoverable amount.