NOTES TO THE FINANCIAL STATEMENT Note:1. BASIS OF brPARATION The financial statements of the company have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP).The financial statements have been brpared to comply in all material respects with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended and as applicable from time to time) and the relevant provisions of the Companies Act 2013& Companies Act 1956 as applicable as on the date. The financial statements have been brpared on an accrual basis and under the historical cost convention on going concern basis. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. Note: 1A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1A. (i) Use of Estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. 1A. (ii) Recognition of Revenues & Expenses 1A. (a) Incomes, Export Incentives/benefits and all Expenditures are accounted for on accrual basis except for interest on account of delayed payments/overdue outstanding to various parties and insurance claims, where there is no reasonable certainty regarding the amount and/or its collectability. Interest income is stated in full with tax thereon being accounted under advance tax. (b) Domestic Sales are recognized on dispatch of goods by the Company to its customers whereas the company recognizes export sales on transfer of risk and rewards of goods to its customers. (c) Dividends income is recognized when the shareholders right to receive payment was established by the balance sheet date. (iii) Inventory Valuation (a) Finished Goods: (i) Free Sugar - at lower of cost or net realizable value. (ii) Levy Sugar - at lower of cost or levy price. (b) Goods in Process - at cost (c) Raw material - at cost (d) Stores and spares - at cost (computed on FIFO basis) (e) Molasses (By-product) is valued at net realizable value. (f) Provision for obsolescence and other anticipated losses are made on the stocks, whenever identified / considered necessary. 1A. (iv) Fixed & Intangible Assets (a) Fixed Assets are stated at historical cost less accumulated debrciation. Historical cost comprises all costs relating to acquisition and installation of fixed assets. (b) Government grants relating to specific fixed assets are deducted from the gross value of the assets concerned in arriving at their book value. (c) Intangible assets are recognized on the basis of recognition criteria as set out in Accounting Standard (AS) - 26 "Intangible Assets". (d) Factory Approach Road rebrsents expenditure incurred & capitalized by the company on roads outside factory brmises & are written off over a period of Five years. 1A. (v) Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 1A. (vi) Debrciation Debrciation has been charged on the following basis: (a) Leasehold Land is being amortized over the period of the Lease. (b) Assets leased out are written off over the period of lease at cost less terminal transfer price. (c) Assets below Rs. 5000/- are fully debrciated in the year of addition. (d) Other assets are being debrciated on the straight-line method as per the useful life mentioned in Schedule II of Companies Act, 2013. (e) Software's of the nature of Intangible Assets are amortized over a period of 5 years. (f) In the case of assets where an impairment loss is recognized, the revised carrying amount is debrciated over the remaining estimated useful life. 1A. (vii) Investments Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost and fair value. Long-term investments are carried at cost individually. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments in case of long term investments. 1A. (viii) 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. 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 non-monetary items which are carried at fair value or other similar valuation denominated in foreign currency, are reported using the exchange rates that existed when the values were determined. Investments in foreign companies are considered at the exchange rates brvailing on the date of their acquisition. Exchange Differences Any income or expense on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit and Loss in the year in which they arise. 1A. (ix) Employee Benefits Expenses and liabilities in respect of employee benefits are recorded in accordance with Accounting Standard 15 - "Employee Benefits". (a) Provident Fund The Company makes contribution to provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee. (b) Gratuity Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognized in the balance sheet in respect of gratuity is the brsent value of the defined benefit/obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by an independent actuary using the projected unit credit method. Actuarial gains and losses arising from past experience and changes in actuarial assumptions are charged or credited to the Statement of Profit and Loss in the year to which such gains or losses relate. (c) Compensated Absence Liability in respect of compensated absence becoming due or expected after the balance sheet date is estimated on the basis of an actuarial valuation performed by an independent actuary using the projected unit credit method. 1A. (x) Pre-operative Expenses and Miscellaneous Expenditure Expenses incurred during the br-operative period are allocated to the respective fixed assets on commencement of commercial operations. 1A. (xi) Impairment of Assets Assets are grouped at the lowest levels for which there are separately identifiable cash flows (i.e. cash generating units). For the purpose of assessing impairment at each Balance Sheet date, Assets within a Cash Generating Unit are reviewed for impairment wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount at which the assets under individual Cash Generating Unit are carried in the books exceeds its recoverable amount being the higher of the assets net selling price and its value in use. Value in use is based on the brsent value of the estimated future cash flows relating to the assets. Previously recognized impairment losses, relating to assets other than goodwill, are reversed where the recoverable amount increases because of favourable changes in the estimates used to determine the recoverable amount since the last impairment was recognized. A reversal of an asset impairment loss is limited to its carrying amount that would have been determined (net of debrciation or amortization) had no impairment loss been recognized in prior years. 1A. (xii) Tax on Income (a) Tax expense comprises of current and deferred. Provision for Current Tax is made in accordance with the provisions of Income Tax Act, 1961. (b) In accordance with Accounting Standard AS-22 'Accounting for Taxes on Income' as notified by Companies (Accounting Standards) Rules, 2006 Deferred Tax Liability/ Asset arising from timing differences between book and income tax profits is accounted for at the current rate of tax to the extent these differences are expected to crystallize in later years. However, deferred tax assets are recognized only if there is a reasonable/ virtual certainty of realization thereof. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. The carrying amount of deferred tax assets is reviewed at each balance sheet date to reassess realization. (c) In MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the Minimum Alternative tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period. 1A. (xiii) Leases (a) Finance Lease Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of the fair value and brsent value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges ands other initial direct costs are capitalized. If there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, capitalized leased assets are debrciated over the shorter of the estimated useful life of the asset or the lease term. (b) Operating Lease Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term are classified as operating leases. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. 1A. (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 brference dividends and attributable taxes) 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 related to a fully paid equity share during the reporting period. The weighted average numbers of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares). 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. 1A. (xv) Interim Financial Reporting Quarterly financial results are published in accordance with the requirement of listing agreement with Stock Exchange. The recognition and measurement principal as laid down in the Accounting Standard (AS) - 25 "Interim Financial Reporting" have been followed in the brparation of these results. 1A. (xvi) Provisions, Contingent Liabilities and Contingent Assets A provision is recognized when there is a brsent obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation. A contingent liability is recognized for: (a) a brsent obligation that arises from past events but is not recognized as a provision because either the possibility that an outflow of resources embodying economic benefits will be required to settle the obligation is remote or a reliable estimate of the amount of the obligation cannot be made; and (b) 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 company. Contingent assets are neither accounted for nor disclosed in the financial statements. 1A. (xvii) Cash and Cash Equivalents Cash and Cash equivalents comprise cash and cash deposit with banks and corporations. The company considers all highly liquid investments with the remaining maturity at the date of purchase of 3 months or less. And that are readily convertible to known amounts of cash to be cash equivalents. 1. Considering the adverse economic/sector conditions and current financial instability the Management of the company vide their resolution dated 05th March, 2013 has decided to dispose-off its Chandil Power Plant (under implementation). The company has formed a committee to negotiate with potential buyers. The management expects that the assets will be realized to the extent as stated & does not call for any provision as on the date of the Balance Sheet. Therefore, the Capital Work in Progress, Capital Advances and other related accounts of the Chandil Power Project have been shown as assets held for disposal. 2. The State Government of Utter Pradesh has, as per PNCM Cabinet Decision dated 12th November 2014, inter alia, announced cash subsidy up to Rs. 28.60 per Qtl of cane purchased for the sugar industry, linked to the average selling price of sugar and it's by products. During the period 1st October 2014 to 31st March2015,the prices being remained below the threshold limit provided in the notification. Since the Management is virtually certain regarding realisation of subsidy, the Company has accounted for cash subsidy of Rs. 28.60 per Qtl of cane purchased by it aggregating to Rs. 25,66,05,990. 3. Previous year figures have been regrouped/ rearranged wherever considered necessary. Previous year figures are given in the bracket wherever applicable. SIGNED FOR IDENTIFICATION NOTE 1 to 46 For & on behalf of DOOGAR & ASSOCIATES Chartered Accountants Firm Regn. No. : 000561N Sd/- Abhishek Modi (Whole Time Direcor) DIN No.00002798 Sd/- Jayesh Modi (Director) DIN No. 02849637 Sd/- Lakhmi Chand Sharma (Chief Financial Officer) Sd/- Rajeev Kumar Agarwal (Director) DIN No. 00298252 Sd/-Shobit Nehra (Company Secretary) Mukesh Goyal Partner Membership No. : 081810 Place : New Delhi Date : 30th May 2015 |