i) Accounting convention
 
 The financial statements are prepared under the historical cost
 convention as modified to include the revaluation/ business valuation
 of certain fixed assets as indicated in (iii) below. These statements
 have been prepared in accordance with the applicable mandatory
 Accounting Standards and relevant presentational requirements of the
 Companies Act, 1956.
 
 ii) Use of Estimates
 
 The preparation of financial statements requires the management of the
 Company to make estimates and assumptions that affect the reported
 balances of assets and liabilities and disclosures relating to the
 contingent liabilities as at the date of the financial statements and
 reported amounts of income and expenses during the period. Example of
 such estimates include provisions for doubtful debts, future
 obligations under employee retirement benefit plans, provision for
 income taxes and the useful lives of fixed assets. Contingencies are
 recorded when it is probable that a liability will be incurred and the
 amount can be reasonably estimated. Actual results could differ from
 such estimates.
 
 iii) Fixed assets
 
 Fixed assets [other than certain fixed assets of Simbhaoli Sugar
 Division and Simbhaoli Distillery Division where cost has been modified
 based on revaluation/business valuation thereof as determined by the
 valuer] are valued at cost.
 
 Cost is inclusive of freight, duties, taxes, other incidental expenses
 and, in case of capital projects, financing cost relating to borrowed
 funds attributable to construction or acquisition of fixed assets, up
 to the date of their commissioning.
 
 iv) Impairment
 
 At each Balance Sheet date, the Company reviews the carrying amounts of
 its fixed assets 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 assets net selling price and value in use. In assessing
 value in use, the estimated future cash flows expected from the
 continuing use of the asset and from its disposal are discounted to
 their present value using a prediscount rate that reflects the current
 market assessments of time value of money and the risks specific to the
 asset.
 
 v) Depreciation
 
 A. In respect of fixed assets of Simbhaoli Sugar Division and Simbhaoli
 Distillery Division, where costs have been modified based on
 revaluation/business valuation, depreciation is provided on the
 straight line method at the rates applicable to the balance useful life
 of the relevant assets as estimated by the valuer or at the rates and
 in the manner specified in Schedule XIV to the Companies Act, 1956,
 whichever is higher.
 
 B.  In respect of other assets, the depreciation is provided by
 applying the following method at the rates specified in Schedule XIV to
 the Companies Act, 1956 :
 
 - Buildings (Other than Simbhaoli - Written down value method
 Distillery Division and Chilwaria
 
 Sugar Division)
 
 -  Buildings(Simbhaoli Distillery       -   Straight line method
 Division and Chilwaria Sugar
 Division)
 
 - Plant and machinery                   -   Straight line method
 (other than electric
 installations, typewriters and
 office equipments)
 
 - Railway siding/electric               - Written down value method
 installations/typewriters
 and office equipment/furniture
 and fixtures/ motor lorries and
 vehicles
 
 C.  Fixed assets costing up to Rs. 5,000 are fully depreciated in the
 year of acquisition.
 
 D.  In respect of buildings and other revalued assets, an amount
 equivalent to the additional charge for depreciation arising due to
 revaluation is transferred from the revaluation reserve to the profit
 and loss account.
 
 vi) Investments
 
 Long term investments are stated at cost as reduced by permanent
 diminution in value, if any.
 
 vii) Inventories
 
 Stores, spare parts and tools and appliances are valued at cost or
 under. Stock-in-trade is valued at the lower of cost and net realizable
 value. The bases of determining cost for different categories of
 inventory are as follows:
 
 Stores and spare parts - Monthly weighted average
 
 Raw materials - First in first out (FIFO)
 
 Process stocks/finished - FIFO material cost plus goods appropriate
 share of labour and manufacturing overheads
 
 viii)State excise duty
 
 The state excise duty payable on finished goods is accounted for on the
 clearance of goods from the factory premises or bonded warehouses. The
 amount of state excise duty payable on potable alcohol not cleared from
 the factory premises and bonded warehouses as at the year end is not
 determinable as it varies according to the places to which the goods
 will be dispatched. However, non-provision of this liability does not
 affect the profit/loss of the year.
 
 ix) Employee benefits
 
 Companys contribution paid/payable during the year to provident fund
 and superannuation fund are recognised in the profit and loss account.
 Provision for gratuity and compensated absences determined on an
 actuarial basis at the end of the year are charged to revenue each
 year.
 
 x) Research and development expenditure
 
 The revenue expenditure on research and development is charged as
 expenditure in the year in which it is incurred, under the respective
 revenue heads. Expenditure which results in the creation of capital
 assets is treated in the same manner as expenditure on a fixed assets.
 
 xi) Revenue recognition
 
 Sales are recognized on transfer of the significant risk and rewards of
 ownership of the goods to the buyer and stated at net of sales tax but
 inclusive of excise duty.  Interest income is recognized on time
 proportion basis.
 
 xii) Foreign Currency Transactions and Forward contracts
 
 Transactions in foreign currency are recorded on initial recognition at
 the exchange rate prevailing on the date of transaction.
 
 Monetary items (i.e. receivables, payables, loans etc.) denominated in
 foreign currency are reported using the closing exchange rate on each
 balance sheet date.
 
 Exchange differences relating to long term foreign currency monetary
 items, to the extent they are used for financing the acquisition of
 fixed assets are added to or subtracted from the cost of such fixed
 assets and the balance accumulated in Foreign Currency Monetary Item
 Translation Difference Account and amortised over the balance term of
 the long term monetary item or 31st March, 2011 whichever is earlier
 (Refer note 19).
 
 In case of forward exchange contracts, the premium or discount arising
 at the inception of such contracts is amortised as income or expense
 over the life of the contract. Further, exchange difference on such
 contracts i.e. difference between the exchange rate at the reporting/
 settlement date and the exchange rate on the date of inception of
 contract/the last reporting date, is recognized as income/ expense for
 the year except that the exchange differences, including premium or
 discount on forward exchange contracts, arising till the commissioning
 of fixed assets, relating to borrowed funds and liabilities in foreign
 currency for the acquisition of the fixed assets are adjusted to the
 cost of fixed assets.
 
 xiii)Government grants
 
 Government grants related to revenue are recognized in the profit and
 loss account over the years necessary to match them with the related
 costs.
 
 Government grants related to depreciable fixed assets are recognized in
 the profit and loss account over the useful life of the asset to which
 they relate.
 
 xiv)Taxation
 
 The provision for taxation for the period comprises the residual tax
 liability for the assessment year 2010-11 relevant to the period
 October 1, 2009 to March 31, 2010 and the liability which has accrued
 on the profit for the period April 1, 2010 to September 30, 2010, under
 the provisions of the Income-tax Act, 1961.
 
 Deferred tax is recognized, subject to the consideration of prudence,
 on timing differences, being the difference between taxable incomes and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent period. Deferred tax assets are
 recognized on unabsorbed depreciation and carry forward of losses based
 on virtual certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realized.
 (Refer note 20)
 
 xv) Securities issue expenses
 
 Securities issue expenses (net of tax) are adjusted from the securities
 premium account. This is in accordance with section 78 of the Companies
 Act, 1956.
 
 xvi)Premium payable on redemption of securities
 
 Premium payable on redemption of securities issued for financing
 capital project up to the date of commissioning of such projects is
 included in cost thereof. Subsequent to the date of commissioning of
 such project, premium payable on redemption of securities (net of tax)
 is adjusted from securities premium account. This is in accordance with
 section 78 of the Companies Act, 1956.
 
 xvii)Accounting for Employee Share Based Payments
 
 Measurement and disclosure of the employee share based payment plans is
 done in accordance with the guidance note on Accounting for Employee
 Share - Based Payments, issued by the Institute of Chartered
 Accountants of India (ICAI). The Company measures compensation cost
 relating to employee stock options using the intrinsic value method.
 Compensation expense is amortized on straight line basis over the
 vesting period of stock option.