SIGNIFICANT ACCOUNTING POLICIES

a. General

Financial statements are brpared under the historical cost convention and in accordance with generally accepted accounting standards.

b. Fixed Assets and Debrciation

1. Fixed Assets are stated at cost less accumulated debrciation. Cost of acquisition of Fixed Assets is inclusive of freight, duties, taxes & incidental expenses and net of Cenvat/Modvat credit, if any.

2. Debrciation is systematically allocated over the useful life of the asset as specified in Schedule II of Companies Act , 2013.

c. Investments

Investments are stated at cost price.

d. Inventories

1. Sugar is valued at cost price or net realizable value which ever is less.

2. Molasses and Bagasse (By products) valued at net realizable value.

3. Stores and Spares, Stock-in-process and other inventories valued at cost or Net Realizable value whichever is lower. Cost is determined by using weighted average method.

e. Revenue recognition

1. Revenue/Income and Cost/Expenditure are generally accounted on accrual basis except as stated other wise.

2. Sales are inclusive of Excise duty.

f. Capital Grants

Investment subsidy from State Government towards capital cost has been considered as Capital Reserve.

g. Retirement Benefits

Contribution to Provident Fund is made monthly, at a brdetermined rate, to the Commissioner of Provident Fund and debited to the Profit and Loss Account on accrual basis.

h. Cenvat Credit on Capital goods

Cenvat credit on capital goods is adjusted and taken credit out of the sale proceeds

i. Miscellaneous Expenditure

Capital Issue Expenses / Preliminary Expenses are being amortized over a period of 10 years. j. Taxes

Provision for current tax is made after taking into consideration benefits under the provision of the Income-Tax Act, 1961.

Deferred Tax is provided and recognized on timing differences between taxable income and accounting income subject to consideration of prudence.

k. Foreign Currency Transaction

Transaction in foreign currency are accounted for at the exchange rates brvailing on the date of transaction. Foreign currency current assets and current liabilities as at the year and other than those relating to fixed assets are translated at the applicable year end exchange rate and exchange differences, if any, are recognized in the Profit and Loss account. Foreign currency transactions covered under forward contracts are accounted for at the contracted rates.

l. Impairment of Assets

An Asset is treated as impaired when the carrying cost of the Asset exceeds its recoverable value. An Impairment loss is charged to Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

NOTE 2

NOTES TO ACCOUNTS

a. Contingent Liabilities / Liabilities not provided

1. Company has entered into a Settlement Agreement with Ashok Leyland Finance Limited for Rs. 28.52 lacs payable in 3 instalments. Out of the said settled amount company has already paid a sum of Rs.20 lacs. The Company has requested further time for payment of balance amount and the same is under consideration of M/s. Ashok Leyland Finance Limited. On receipt of the full amount the cases will be withdrawn by Ashok Leyland Finance Limited. In case of failure, an additional amount of Rs. 15.99 lacs (P.Y. - Rs.14.93 lacs) to be further provided in the Books of Accounts.

2. Claims Rs.22.08 Lacs (P.Y.- 22.08 Lacs) by Soubhagya Advertising Associates for services for which an appeal is pending with High Court of Andhra Pradesh.

3. Sales Tax claim of Rs.22.80 Lacs (Previous Year Rs. 22.80 Lacs) for which an appeal is pending with High Court of Andhra Pradesh. The Company has paid Rs. 11.65 lacs (P.Y. -Rs.11.65 lacs) against above claim which is shown as deposit recoverable in the books of accounts.

4. The Company has issued 16% Cumulative Redeemable Preference Shares to promoters in the year 1995-96 redeemable on or before 12.01.2005 which is pending redeemable to the tune of Rs.8 lacs. The Company had also issued 16% Cumulative Redeemable Preference Shares for Rs.400 lacs in the year 1996-97 redeemable on or before 10.02.2006. The Company could not redeem the above shares in time as it was registered with BIFR, if redeemed with accumulative dividend, the liability upto 31.03.2015 shall stand to Rs.5634.99 lacs (P.Y. -Rs.4801.48 Lacs) on account of Dividend.

5. Disputed claim of interest on delayed payment of Purchase Tax Rs.1104.78 lacs. (P.Y. -Rs.1035.08 lacs)

6. Disputed claim of penal charges on delayed payment of Provident Fund Rs.9.87 lacs. (P.Y. - Rs.9.87 lacs)

b. IIBI

M/s. VAB Ventures has informed that they have finalized the amount with Edelweiss Assets Management Co. Ltd., and made the balance payment to them. The Company is in the process of finalizing the amount payable to M/s. VAB Ventures and get the charge on Assets satisfaction. Pending finalization of the amount payable to M/s. VAB Ventures, no further provision had been made in the books of accounts.

Company is in the process of negotiating the outstanding amount payable to IIBI which was purchased by Edelweiss Assets Management Company Limited, Mumbai. There is outstanding of Rs.11.27 lacs payable in the books of accounts. Pending Final settlement no provision has been made in the books of accounts for interest etc.

d. Balance in Trade Receivables, Trade payables, Secured Loans, Unsecured Loans, Loans and Advances, Other Current Assets and Current Liabilities are subject to reconciliation/confirmation. In the opinion of the management Trade Receivables, Loans and Advances and other Current Assets are fully realizable.

e. The Company is in the process of obtaining the actuarial value for Gratuity and Leave Encashment.

As such the same is not provided for the current year. However the Amount paid during the year is debited to Profit and Loss account.

f. There are no Micro and Small Enterprises to whom the company owes amounts which are outstanding as at 31st March 2015. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 (MSME) has been determined on the basis of and to the extent information is available with the company. No interest is paid/payable during the year to any enterprises registered under the MSME.

g. The company operation consists only one segment - Sugar and therefore the figures given relates to one segment.

h. Pursuant to enactment of Companies Act, 2013, the company has applied the estimate useful life as specified in Schedule II. Accordingly the unamortised carrying value is being debrciated/ amortized over the remaining/ revised useful life. The written down value (net off Deferred Tax of Rs.81.87 Lacs) amounting to Rs. 170.39 Lacs of Fixed Asset whose lives has expired as at 01.04.2014 has been adjusted, in opening balance of Profit and Loss Account.

i. Previous year figures are re casted /rearranged wherever necessary.