1. SIGNIFICANT ACCOUNTING POLICIES  

A)  Corporate Information

Godavari Biorefineries Limited is a Company incorporated under the provisions of Indian Companies Act, 1913, having its registered office at Somaiya Bhavan, 45-47, M.G. Road, Fort, Mumbai-400 001, India. Godavari Biorefineries Limited's origins can be traced to The Godavari Sugar Mills Limited, which was founded in 1939 by Late Padmabhushan Shri Karamshibhai Jethabhai Somaiya (1902-1999). The Godavari Sugar Mills Limited transferred its operating assets, namely, sugar, power, chemical and distillery business to the Company, on a going concern basis, on March 20, 2009 with effect from April 01, 2008, vide an order from the High Court of Bombay.

The Company is a fully integrated unit and is among the top sugar companies in India. The quality of its sugar is also comparable to the best and therefore fetches brmium in the domestic and international markets. The Company is one of the largest producers of alcohol and a pioneer in manufacture of alcohol based chemicals in India. The Company manufactures various products from renewable resources, thereby forming an entire value chain right from sugarcane to sugar and other value added products like power, ethanol, bio-fertilizers etc. The Company's chemical unit at Sakarwadi, Maharashtra is an Export Oriented Unit (EOU).

The Company is actively pursuing the goal of creating a unique bio-refinery using green and renewable sugarcane as a feedstock.

B)  Principles of Consolidated Financial Statements:

The Consolidated Financial Statements of the Company and its Subsidiary Companies (collectively referred as "the Group") have been brpared on the following basis:

i) The Financial Statements of the Company and its Subsidiaries are consolidated on a line-by-line basis by adding together the book values of like item of Assets, Liabilities, Income and Expenditure, after fully eliminating intra Group balances, intra group transactions and any unrealized profit / loss included therein in accordance with Accounting Standard (AS-21) "Consolidated Financial Statement".

ii)  The Consolidated Financial Statements have been brpared using uniform accounting policies, except stated otherwise, for like transactions and are brpared, to the extent possible, in the same manner as the Company's separate financial statements.

iii) The Subsidiary Companies considered in the Financial Statements are as follows:

Name	Country of Incorporation	% of ownership / voting power
31stMarch 2017	31stMarch 2016
Solar Magic Pvt Ltd	India	100.00	100.00
Cayuga Investments B. V.	Netherlands	100.00	100.00
Godavari Biorefineries B.V. (Subsidiary of Cayuga Investments B. V.)	Netherlands	100.00	100.00
Godavari Biorefineries Inc. (Subsidiary of Cayuga Investments B. V.)	United States of America	100.00	100.00

C)  Basis of Accounting and Preparation of Financial Statements:  

These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, Companies (Accounting Standards) Amendment Rules, 2016 and the provisions of the Act (to the extent notified).

D)  Use of Estimates:

The brparation of Financial Statement requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities as of the date of the Financial Statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the brparation of the Financial Statements are prudent and reasonable. Difference between the actual results and estimates are recognised in the period in which the results are known /materialised.

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E)  Property, plant and equipment and Debrciation:

Property, plant and equipment, capital work in progress are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition for the intended use and initial estimate of decommissioning, restoring and similar liabilities. Any trade discounts and rebates are deducted in arriving at the purchase price. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of plant and equipment are required to be replaced at intervals, the Company debrciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the statement of profit and loss as incurred.

Items of stores and spares that meet the definition of property, plant and equipment are capitalized at cost and debrciated over their useful life. Otherwise, such items are classified as inventories.

Gains or losses arising from de-recognition of Property, Plants and Equipments are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognised.

Debrciation on Property, plant and equipment: 

Debrciation on Property, plant and equipment is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, which are equal to the life brscribed under the Schedule II to the Companies Act, 2013 except in respect of certain assets where the useful life was determined by technical evaluation and experience.

Debrciation for additions to/deductions from Property , Plants and Equipment is calculated from the date of capitalisation /deductions.

F)  Intangible assets:

Intangible Assets are related to 'Patents', which have been recognised at nominal value. Intangible assets are amortised on straight line method other than patents.

G)  Leased Assets:

Operating Leases: Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, 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.

H)  Foreign Currency Transactions:

i) Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of transaction.

ii) Monetary items denominated in Foreign Currencies are reinstated at the year end rates.

iii) Premium or discount on foreign exchange forward contracts are amortised and recognised in the statement of profit and loss over the period of the contract.

I) Investments: 

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

J)  Inventories:

Raw Materials are valued at lower of moving average cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials and components is determined on a transaction moving moving average cost.. Stores and spares which do not meet the definition of property, plant and equipment are accounted as inventories.

Stores and Spares are valued at moving average cost.

Work-in-Progress valued at lower of cost and net realisable value.

iv)  Finished stocks are valued at cost and net realisable value whichever is lower.

v)  Traded goods are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their brsent location and condition. 

Bagasse, Molasses and waste/scrap generated in the production process are valued at net realisable value.

The valuation of raw materials ,components and stores and spares includes taxes, duties of non refundable nature and direct expenses and other direct cost attributable to the cost of these inventories, net of excise duty/ countervailing duty / education cess and value added tax. 

K)  Provision for Current Tax and Deferred Tax:

i)  Tax on income for the current period is determined on the basis of taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and Income Computation and Disclosure Standards (ICDS) and based on the expected outcome of assessments/appeals.

ii)  Deferred Tax resulting from "timing differences" between book and taxable profit is accounted for using the tax rates and laws that have been enacted and substantively enacted as on the Balance Sheet date.

iii) Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty or virtual certainty as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.

 L)  Provisions:

A provision is recognised when the Company has a brsent obligation as a result of past event, 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 the obligation. Provisions are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is brsented in the statement of profit and loss net of any reimbursement.

Contingent liabilities 

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond control of the Company or a brsent obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that can't be recognised because it can't be measured reliably. The Company does not recognise the contingent liability but disclose its existence in its financial statements.

Contingent Assets

 Contingent assets are neither recognised nor disclosed.

M) Impairment of Assets:

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset's recoverable amount. An asset's recoverable amount is the higher of an asset's or cash-generating unit's (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their brsent value using a br-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are brpared separately for each of the Company's cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses of continuing operations are recognized in the statement of profit and loss. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life.

An assessment is made at each reporting date as to whether there is any indication that brviously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset's or cash-generating unit's recoverable amount. A brviously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset's recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of debrciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognized in the statement of profit and loss.

N)  Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

i)  Revenue from sale of manufactured and traded goods is recognised when the substantial risks and rewards of ownership are transferred to the buyer under the terms of the contract.

ii) Power sales are accounted as per the rate mentioned in Contracts entered with state governments and other entities.

iii)  Dividends are recognised when right to receive is established. 

iv) Export benefits are accounted on the basis of completion of Export Obligation, which are to be received with a reasonable certainty.

 O)  Turnover:

Turnover includes sale of goods, excise duty net of value added tax, adjusted for discounts.

 P)  Expenditure on Research and Development:

Revenue expenditure on research and development is charged to revenue in the year in which it is incurred. Capital expenditure on research and development is added to plant, property and equipment's and are debrciated in accordance with policies of the Company. 

Q)  Retirement Benefits:  

i)  Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

ii)  Post-employment benefits:

a. Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme, employee pension scheme are defined contribution plans . The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

b. Defined Benefit plans: The group gratuity scheme and leave encashment are defined benefit plans.

R)  Extraordinary and Exceptional Items:

 Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/ transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expenses, is classified as an extraordinary items and disclosed as such.  

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to ordinary activities of the Company is such that its disclosure improves an understanding of performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

S)  Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time as the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised as an expense in the period in which they are incurred.

 T)  Segment Accounting:

i) Segment accounting policies are in line with the accounting policies of the Company. In addition, the following specific accounting policies have been followed for segment reporting:

a) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter-segment revenue.

b) Expenses that are directly identifiable with/allocable to segments are considered for determining the segment result. Expenses, which relate to the Company as a whole and not allocable to segments, are included under "unallocable corporate expenditure".

ii)  The Company's reporting segments are identified based on activities/products, risk and reward structure, organisational structure and internal reporting systems..

 U)  Commodity Futures:

 Transactions in commodity futures are accounted based on the mode of final settlement. Transaction, 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 Company's sugar manufacturing activities

29. Excise Duty and Value Added Tax :

Finished goods attracting excise duty and value added tax, lying in the factory as at 31stMarch, 2017 could not be separated into those for sale in domestic market and /or export market. Hence excise duty and value added tax payable is not determinable on the manufactured goods lying in the stock at the year-end. However, non-provisioning has no impact on the profit for twelve months ended 31stMarch, 2017.

30. Borrowing Costs:

The Company has capitalised interest cost during the construction period for the projects, aggregating toRs.1,676Lacs (Previous Year Rs.Nil)in accordance with the Accounting Standard AS 16 on Borrowing Costs.

31. Small Scale and Auxiliary Industries:

The Company does not have outstanding to Micro, Small and Medium Enterprises as at 31stMarch, 2017. The Company does not have outstanding for more than 45 days to Micro, Small and Medium Enterprises during the twelve months ended 31stMarch, 2017. This information as required to be disclosed under the Micro, Small and Medium Enterprises Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

32. SEBI Order dated 1stJanuary, 2016 and amendment thereon. 

The Company had allotted 22,69,600 shares to the Trustees of Sameerwadi Sugarcane Farmers' Welfare Trust in the Financial Year 2009 - 2010. Securities and Exchange Board of India (SEBI), delivered its Order in the matter on the 1st of January, 2016.

As per the said Order company has allotted 22,42,300 Equity shares to the consented contributories/beneficiaries and made the payment to contributories/beneficiaries as per the SEBI Order. The company has also filed Compliance Report to the SEBI on 23/12/2016.

Q)  Retirement Benefits:  

i)  Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, short term compensated absences etc. and the expected cost of bonus, ex-gratia are recognised in the period in which the employee renders the related service.

ii)  Post-employment benefits:

a. Defined contribution plans: The state governed provident fund scheme, employee state insurance scheme, employee pension scheme are defined contribution plans . The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

b. Defined Benefit plans: The group gratuity scheme and leave encashment are defined benefit plans.

47	NOTES FORMING PART OF ACCOUNTS FOR THE YEAR ENDED AT 31st March 2017
	Particulars of Segment Information as required by Accounting Standard (AS-17) "Segment Reporting"
A) Primary Segment
		Sugar	Cogen	Chemical	Distillery	Unallocated	Total
		2016-2017	2015-2016	2016-2017	2015-2016	2016-2017	2015-2016	2016-2017	2015-2016	2016-2017	2015-2016	2016-2017	2015-2016
I	Segment Revenue
	External Sales revenue	52800.72	83239.05	2579.46	5644.69	37988.73	40853.06	11901.48	13940.51	25.87	604.06	106437.04	144281.36
	Less Excise Duty	3268.41	3878.52	0.00	0.13	1912.48	1364.79	621.81	442.70	0.00	0.00	5802.70	5686.14
	External Sales revenue	49532.32	79360.53	2579.46	5644.56	36076.25	39488.27	11279.67	13497.81	25.87	604.06	100634.34	138595.22
	Inter Segment Transfers	7728.89	11944.94	3947.74	7551.70	0.00	32.93	0.00	0.00		0.00
		57261.21	91305.47	6527.21	13196.26	36076.25	39521.19	11279.67	13497.81	25.87	604.06	100634.34	138595.22
	Other Income	218.24	210.37	1.43	17.68	136.67	54.27	0.73	46.15	321.69	322.92	754.17	651.39
II	Segment Result
	Operating Profit Before Interest and Exceptional items	1045.96	-3100.57	-504.58	3938.96	1251.14	734.34	1799.06	5327.23	-655.05	-562.83	2786.01	6337.14
	Interest and Exceptional items						0.00			9061.58	8360.69	9061.58	8360.69
				0.00	0.00	0.00		0.00
	Excess / (Short) provision for Income Tax					0.00	0.00	0.00		4.29	0.00	4.29	0.00
	Deferred Tax (Income) / Expenses					0.00	0.00	0.00		-1455.83	-433.42	-1455.83	-433.42
	Net Profit / (Loss)											-4824.05	-1590.13
III	Other information
	Segment Assets	39735.65	43443.16	2155.32	3189.52	19105.03	15766.35	4188.61	6553.04	1436.85	1146.07	67590.74	70098.13
	Capital assets including CWIP	17072.41	17915.09	11594.03	11361.30	11024.55	10773.65	12848.09	7968.51	477.18	756.66	53270.69	48775.22
	Segment Assets	56808.06	61358.25	13749.34	14550.82	30129.58	26540.00	17036.70	14521.55	1914.03	1902.72	120861.43	118873.35
	Segment Liabilities	82268.42	82019.03	2858.84	5085.99	20292.13	14802.60	2356.61	1294.88	0.00	803.42	109219.94	104005.93
IV	Capital Expenditure	1921.18	414.61	776.81	264.51	749.81	3262.77	43.11	1184.80	75.24	123.26	3566.64	5249.95
V	Segment Debrciation	2539.07	1953.82	834.21	810.59	888.84	923.70	623.80	562.48	91.21	109.84	4997.04	4360.42
VI	Non cash expenses other than Debrciation	-0.77	-3.93	0.00	0.00	0.00	-3.08	0.00	0.00			-0.77	-7.01
B) Secondary Segment
	Geographical segment has been identified as secondary segment based on segment revenue.
			Rs. in Lacs
		Twelve Months Ended 31st March 2017	Twelve Months Ended 31st March 2016
	Domestic Sales	88512.91	116762.58
	Export Sales	17924.13	27518.78
	Total	106437.04	144281.36
			Rs. in Lacs				Rs. in Lacs
	Capital expenditure	Twelve Months Ended 31st March 2017	Twelve Months Ended 31st March 2016		Segment Assets	Twelve Months Ended 31st March 2017	Twelve Months Ended 31st March 2016
	within India	3566.64	5250.12		within India	120241.50	116333.98
	Outside India	0.00	0.00		Outside India	619.93	2539.36
	Total	3566.64	5250.12		Total	120861.43	118873.34
Significant Accounting Policies
1	Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17) taking into account the organisation structure as well as the differential risks and returns of these segments.
2	The Company has disclosed Business Segment as the primary segment.
3	Types of products and services in each business segment:
a	Sugar	Production and sale of Sugar
b	Cogen	Production and sale of Power
c	Chemical	Production and sale of Ethyl Acetate,3-Methyl-3-Pentene-2-One etc.
d	Distillery	Production and sale of Rectified Spirit, Extra Neutral Alcohol, Ethanol etc.
e	Trading	Purchase and sale of Fertilizer farm equipments and irrigation infrastructure related activities.
4	Segment Report is brpared in conformity with accounting policies adopted for brparing and brsenting financial statements.
5	Inter-segment transfers are recorded at cost except for by-products Bagasse and Molasses, cost of which are unascertainable and which are recorded at brvalent market prices.