1.1. Corporate Information
The Company is a Public Limited Company domiciled in India and
incorporated under the provisions of the Companies Act. 1956. Its
shares are listed in India on Bombay Stock Exchange Limited. The
Company is engaged in the manufacturing and trading of sugar, farm
operation and power generation for own consumption
1.2. Basis of Preparation
The Financial statements are prepared and presented under the
historical cost convention and in accordance with accounting principals
generally accepted in India (Indian GAAP) and comply in all material
aspects with the accounting standards notified under Section 211(3C) of
the Companies Act, 1956 and the relevant provisions of the Companies
Act, 1956 except where otherwise stated.
The Company follows accrual method of accounting unless otherwise
1.3. Recognition of Income and Expenditure
i) The revenue from sale of goods is recognized on passing of title of
the goods, which generally coincides with delivery of goods to the
customers. Sales are inclusive of excise1 duty.
ii) Expenditure is recognized on accrual basis and provision is made
for all known losses and liabilities, except insurance and leave
encashment which is accounted for on cash basis.
1.4. Use of Estimate
The preparation of financial statements requires estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
results are known/materialized.
1.5. Government Grants & Subsidies
Government Grants related to depreciable assets are credited to Capital
Subsidy Reserve and transferred to Profit & Loss Account over the
useful life of assets. Grants received during the year towards revenue
expenses are being reduced from the respective expenses.
1.6. Fixed Assets
Fixed assets are stated at cost of acquisition including any
attributable cost for bringing the asset to its working condition for
its intended use less accumulated depreciation and impairment losses.
Capital work in progress is stated at amount expended upto the date of
a) Depreciation on Fixed Assets as on 30.6.1987 has been provided at
the rates prevailing at that time on straight line method pursuant to
circular no 1/86 dated 21.5.1986 issued by the Department of Company
Affairs, New Delhi.
b) In respect of Fixed Assets acquired from 01.07.1987 depreciation has
been provided on Straight line basis as per rates specified in Schedule
XIV to the Companies Act. 1956.
c) In respect of Assets costing less than Rs. 5000/- full depreciation
is provided in the year of acquisition.
a) Sugar stocks have been valued at lower of cost or net realizable
The cost of Finished Goods and Work-in-Process include cost of
conversion and other directly apportionable overheads incurred in
bringing the inventories to their present location and condition.
b) By-Products, Scrap and Standing crop are valued at net realizable
c) Stores & spares are valued at cost determined on weighted average
1.9. Excise Duty
Closing stock of finished goods includes Excise duty payable thereon.
This treatment has no impact on the profit or loss for the year
1.10. Retirement Benefits
a) The liability for gratuity to employees as at the balance sheet date
is determined on the basis of actuarial valuation based on Projected
Unit Credit Method administered by the trustees and managed by Life
Insurance Corporation of India. The contribution thereof paid/payable
is charged in the books of accounts. Acturial gain/loss are charged of
to Profit & Loss Account.
b) The leave records are maintained from July to June every year,
therefore the accumulation of leave, if any, is encashed before closing
of next financial year Hence the same is accounted for on cash basis in
the year of payment.
c) Retirement benefits in the form of Provident Fund and Pension
Schemes are charged to the Profit & Loss Account of the year when the
contributions to respective funds accrues.
1.11. Taxes on Income
a) Current Tax is determined as the amount of tax is payable in respect
of taxable income for the period based on applicable tax rates and
b) Deferred tax is recognized, subject to the consideration of
prudence, 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 subsequent periods and is measured
using Tax rates and Laws that have been enacted or substantively
enacted by the Balance Sheet date. Deferred tax assets are not
recognized on unabsorbed depreciation and carry forward losses unless
there is virtual certainty that sufficient future taxable income will
be available against which such deferred tax asset can be realized.
Deferred tax assets are reviewed at each Balance Sheet date to reassess
1.12. Segment Reporting
The Company is having Farm activity for growing of cane Seed and
production of Vermi Compost.
Geographical segments have been considered for Secondary Segment
Reporting. The whole of India has been considered as a Geographical
1.13. Earning 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. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they were entitled to participate in dividends relative to
a fully paid equity share during the reporting period.
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 or the effects of all dilutive potential equity shares.
1.14. Impairment of Assets
Impairment losses, if any, are provided to the extent the carrying
amount of the assets exceeds their recoverable amount. Recoverable
amount is the higher of an asset''s net selling price and its value in
use. The value in use is the present value of estimated future cash
flows expected to arise from the continuing use of an asset and from
its disposal as at the end of its useful life. Such impairment, if any,
are ascertained and reviewed at each year-end.
1.15. Provisions, Contingent liabilities and Contingent assets
Provisions are recognized in respect of obligations based on the
evidence available, their existence at the balance sheet date, is
considered probable. Estimated liability in respect of business
performance is provided for based on past experience and historical
Contingent liabilities are not provided for in the books of accounts
and are disclosed by way of a note in the accounts.
Contingent assets are not recognized in the accounts