2. MATERIAL ACCOUNTING POLICIES
(a) COMPLIANCE WITH IND AS
The financial statements comply in all material aspects with Indian Accounting Standards
(Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015.
(b) BASIS FOR PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared on a historical cost basis, except for certain
financial assets and liabilities (including derivative financial instruments) that are measured
at fair value at the end of each reporting period. Historical cost is generally based on the fair
value of the considerations given in exchange for goods and services.
Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. The principle or the most
advantageous market must be accessible by the company. In estimating the fair value of an asset or a
liability, the Company takes into account the characteristics of the asset or liability if market
participants would take those characteristics into account when pricing the asset or liability at the
measurement date.
A fair value measurement of a non-financial asset takes into account a market participants ability to
generate economic benefits by using the asset in its highest and the best use.The company uses its
valuation techniques that are approximate in the circumstances and for which data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
Fair value for measurement and/or disclosure purposes in these financial statements is determined on
such a basis, except for leasing transactions that are within the scope of Ind AS 116, and
measurements that have some similarities to fair value but are not fair value, such as net realizable
value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or
3 based on the degree to which the inputs to the fair value measurements are observable and the
significance of the inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities
that the entity can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for
the asset or liability, either directly or indirectly; and
Notes to Financial Statement for the Financial Year Ended 31“ March 2025
NOTE C : CORPORATE INFORMATION, BASIS OF PREPARATION AND MATERIAL ACCOUNTING POLICIES:
• Level 3 inputs are unobservable inputs for the asset or liability.
• For assets and liabilities that are recognised in the financial statements on recurring basis the
company determines whether transfers have occurred between the levels in the hierarchy by re¬
assessing categorization (based on the lowest level of input that is significant to the fair value
measurement as a whole) at the end of each reporting period.
The Company management determines the policies and procedures for recurring and non- recurring
fair value measurement. Involvement of external valuers is decided upon annually by the company
management
At each reporting date the Company’s management analyses the movements in the values of the assets
and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting
policies.
(c) CURRENT AND NON- CURRENT CLASSIFICATION
All assets and liabilities have been classified as current or non-current as per the Company’s normal
operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. An asset is
treated current when it is :
• Expected to be realized or intended to be sold or consumed in normal operating cycle. The
Company has ascertained its operating cycle as 12 months for the purpose of current and non-
current classification of assets and liabilities.
• Held primarily for the purpose of trading
• Expected to be realised within twelve months (12 months) after reporting date
• Cash or Cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non - current.
A liability is current when:
• It is expected be settled in a normal operating cycle
• It is held primarily for the purpose of trading
• It is due to be settle within twelve months after the reporting period, or
• There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period.
Deferred tax assets and liabilities are classified as non - current assets and liabilities.
The company classifies all other liabilities as non - current. The operating cycle is the time
between the acquisition of assets for processing and their realization in cash and cash equivalents.
The Company has identified twelve months as its operating cycle.
(d) ROUNDING OF AMOUNTS
The financial statements including notes thereon are presented in Indian Rupees (“Rupees “or
“Rs.”), which is the Company’s functional and presentation currency. All amounts disclosed in the
financial statements including notes thereon have been rounded off to the nearest lakhs as per the
requirement of Schedule III to the Act, unless stated otherwise.
(e) USE OF ESTIMATES
In preparing the Company’s financial statements in conformity with Ind AS, the Company’s
management is required to make estimates, judgements and assumptions that affect the
application of accounting policies, the reported amounts of assets and liabilities and the disclosure
of contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period, the actual results could differ from
those estimates. Difference between actual results and estimates are recognised in the period in
which the results are known or materialized and if material, their effects are disclosed in the notes
to the financial statements.
(f) PROPERTY, PLANT AND EQUIPMENT (PPE) and OTHER INTANGIBLE ASSETS:
Property, plant and equipment
Property, plant and equipment held for use in production or supply of goods or services or for
administrative purposes are stated at cost less accumulated depreciation /amortization less
accumulated impairment, if any. The cost of fixed assets comprises its purchase price /
manufacturing cost (in case of self-constructed asset), net of any trade discounts and rebates, any
import duties and other taxes (other than those subsequently recoverable from the tax
authorities), any directly attributable expenditure on making the asset ready for its intended use,
and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the
asset is ready for its intended use.
Capital work-in-progress for production, supply of administrative purposes is carried at cost less
accumulated impairment loss, if any, until construction and installation are complete and the
asset is ready for its intended use.
Depreciation is provided (other than on capital work-in-progress) using Writtendown Value method
over the estimated useful lives of assets. Depreciation on assets acquired/ purchased,
sold/discarded during the year is provided on a pro-rata basis from the date of each addition till
the date of sale/retirement. The estimated useful lives of assets are stated below:
The Company, based on technical assessment made by management estimate, depreciates certain
items of Plant, Property and Equipment over estimated useful lives which are different from the
useful life prescribed in Schedule II to the Companies Act, 2013. This assessment takes into
accountnature of assets, the estimated usage of assets, the operating conditions of the assets, past
history of replacement, anticipated technological changes, maintenance history, etc.The estimated
useful life is reviewed at the end of each reporting period, with effect of any change in estimate
being accounted for on a prospective basis.
Where the cost of part of the asset is significant to the total cost of the assets and the useful life of
that part is different from the useful of the remaining asset, useful life of that significant part is
determined separately. Depreciation of such significant part, if any, is based on the useful life of
that part.
Freehold land is not depreciated.
An item of property, plant and equipment is derecognized upon disposal or when no future
economic benefits are expected to arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of property, plant and equipment, determined as
the difference between the sales proceeds and the carrying amount of the asset, is recognized in
the Statement of Profit or Loss.
The residual values, useful lives and methods of depreciation of property plant and equipment are
reviewed at each financial year end and adjusted prospectively, if appropriate.
INTANGIBLE ASSETS
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired, if any, in a business combination is their fair value at the date of
acquisition. Following initial recognition, intangible assets are carried at cost less any
accumulated amortization and accumulated impairment loss if any. Internally generated
intangibles excluding capitalized development costs are not capitalized and the related expenditure
is reflected in statement of profit and loss in the year in which expenditure is incurred.
Amortization is recognized on Straight Line Method basis over their estimated useful life of 3 years,
which reflects the pattern in which the asset’s economic benefits are consumed. The estimated
useful life, the amortization method and the amortization period are reviewed at the end of each
reporting period, with effect of any change in estimate being accounted for on a prospective basis.
An intangible asset is derecognized on disposal or when no future economic benefits are expected
from use or disposal. Gains or losses arising from de-recognition of an intangible asset, measured
as the difference between the net disposal proceeds and the carrying amount of the asset, and are
recognized in the profit or loss when the asset is derecognized.
As summary of amortization policies applied to the Company’s acquired intangible assets is given
as under.
INVESTMENT PROPERTIES
Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are stated at cost less accumulated depreciation and
accumulated impairment loss if any.
The cost includes the cost of replacing parts and borrowing costs for long term construction
projects if the recognition criteria are met. When significant parts of the investment properties are
required to be replaced at intervals, the company depreciates them separately based on their
specific useful lives. All other repair and maintenance costs are recognised in the profit or loss as
incurred.
The company depreciates building component of investment property over years from the date of
original purchase / date of capitalisation.
Property that is held for long-term rental yields or for capital appreciation or both, and that is not
occupied by the Company, is classifiedas investment property.
Investment properties are derecognised either when they have been disposed or when they are
permanently withdrawn from the use and no future economic benefit is expected from their
disposal. The difference between net disposal proceeds and carrying amount of the asset is
recognised in the profit or loss in the period of de-recognition.
Depreciation on building is provided over its useful life as mentioned above using the written down
value method as per the provisions of Schedule II to the Companies Act, 2013.
(g) LEASES
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS
116. Identification of a lease requires significant judgment. The Company uses significant
judgement in assessing the lease term (including anticipated renewals) and the applicable
discount rate. The Company has elected not to apply the requirements of Ind AS 116to leases
which are expiring within 12 months from the date of transition by class of asset and leases for
which the underlying asset is of low value on a lease-by-lease basis.
(h) IMPAIRMENT OF NON- FINANCIAL ASSETS(TANGIBLE AND INTANGIBLE)
At the end of each reporting period, the Company reviews the carrying amounts of tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in
order to determine the extent of the impairment loss, if any. When it is not possible to estimate the
recoverable amount of individual asset, the Company estimates the recoverable amount of the
cash generating unit to which an individual asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets are also allocated to individual cash¬
generating units, or otherwise they are allocated to the smallest group of cash-generating units for
which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing,
value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessment of the time value of money and the risks
specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized immediately in the Statement of Profit or
Loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash¬
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have determined had
no impairment loss been recognized for the asset (or cash-generating unit) in prior years. The
reversal of an impairment loss is recognized immediately in the Statement of Profit or Loss.
After impairment, depreciation is provided on the revised carrying amount of the asset over its
remaining useful life. Impairment losses of continuing operations including impairment on
inventories are recognised in the statement of profit and loss except for properties previously
revalued with revaluation surplus taken to OCI. For such properties the impairment is recognised
in OCI up to the amount of any previous revaluation surplus.
(i) INVENTORIES
Inventories are valued as follows:
Raw materials, stores and spares, Material in transit, packing materials, crops in progress and
Petroleum products
The Raw materials, stores and spares, Material in transit, packing materials and Petroleum
products valued at lower of cost and net realisable value and Crops in progress valued at Fair
value less cost to sale. 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 is determined on Moving Weighted
Average basis.
Cost comprises costs of purchase, cost of conversion and other costs incurred in bringing the
inventories to their present location and condition.
Molasses, molasses in process, own Bagasse and scrap are valued at net realisable value.
Finished goods
Valued at lower of cost and net realizable value. Cost includes direct materials, labour and a
proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods
excludes excise duty. Excise duty is provided on manufacture of goods, which are not exempt from
the payment of duty.
Work-in-process
Valued at lower of cost up to estimated stage of process and net realisable value. Cost includes
direct materials, labour and a proportion of manufacturing overheads based on normal operating
capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
By-products
By-products are valued at net realizable value. Inter-unit transfers of by- products also include the
cost of transportation, duties, etc.
(j) REVENUE RECOGNITION
Revenue recognition is based on the five step revenue recognition model.
• Identifying the contract with customer.
• Identifying the performance obligations in the contract.
• Determining the transaction price.
• Allocation of transaction price.
• Recognition of revenue when (or as) a performance obligation is satisfied.
Each distinct goods or service that an entity promises to transfer is a performance obligation.
Revenue towards satisfaction of a performance obligation is measured at the amount of
transaction price (net of variable consideration) allocated to that performance obligation. The
transaction price of goods sold and services rendered is net of variable consideration on account of
discounts and schemes offered by the company as a part of the contract.
The Company adjusts the promised amount of consideration for the effects of time value of money
if payment by the customer occurs either significantly before or significantly after the performance.
The interest income or interest expense resulting from a significant financing component is
presented separately from revenue, unless interest income represents ordinary activity.
Considering the nature of business of the entity, accounting for warranties prescribed by the
standard is not applicable to the Company.
Contract modifications are accounted for as either separate or as a part of the existing contract
depending on the nature of the modification.
Costs to obtain contracts and fulfil the contracts are recognised as assets. Such recognized assets
are amortised over the period that the performance obligation is satisfied and are periodically
reviewed for impairment. Costs Recognition is subject to the following clause fulfilment:
• Costs are directly related to a contract or specific contract and;
• Costs generate or enhance resources used in satisfying performance obligation and;
• Entity expects to recover the costs.
Income from services is recognised as they are rendered (based on agreement/arrangement with
the concerned customers).
Revenue in respect of insurance / other claims, interest, subsidy, incentive, etc. is recognized only
when it is reasonably certain that the ultimate collection will be made.
This Ind AS does not deal with revenue from lease contracts, insurance contracts, financial
instruments and other contractual rights and obligations. It also scopes out non - monetary
exchanges between entities in similar business to facilitate sale to customers or potential
customers.
Interest income
Interest income from debt instruments is recognised using the effective interest rate method.
Dividends
Dividends are recognised in the Statement of Profit and Loss only when the right to receive
payment is established.
(k) INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
Investments in subsidiaries, joint ventures and associates are recognised at cost as per Ind AS 27.
Except where investments accountedfor at cost shall be accounted for in accordance with Ind AS
105, Non-current Assets Held for Sale and Discontinued Operations, whenthey are classified as
held for sale.
(l) GOVERNMENT GRANTS AND ASSISTANCE
Grants and subsidies from Government are recognized when there is reasonable assurance that (i)
the company will comply with the conditions attached to them and (ii) the grant/subsidy will be
received.
When the grant subsidy relates to revenue, it is recognized as income on a systematic basis on the
statement of profit and loss over the periods necessary to match them with the related costs which
they are intended to compensate. Government grants relating to the purchase of property, plant
and equipment are reduced from the gross book value of property, plant and equipment.
When company receives grants of non-monetary assets, the asset and the grant are recorded at
fair value amounts and released to profit or loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset i.e. by equal annual installments. When loans
or similar assistance are provided by governments or related institutions with an interest rate
below the current applicable market rate, the effect of this favorable interest is regarded as
government grant. The loan or assistance is initially recognized and measured at fair value and
government grant is measured as the difference between initial carrying value of the loan and
proceeds received. The loan is subsequently measured as per the accounting policy applicable to
financial liabilities. Currently the Company does not have any grant/assistance that qualifies for
such accounting treatment.
(m) FOREIGN CURRENCIES
The financial statements are presented in Indian rupees, which is also the functional currency of
the Company.
(n) INVESTMENTS
The Company has measured its investments at Cost except for following:
(i) Investments in Mutual Fund are valued at fair market value using NAV as on 31st March
2025.
(ii) Investment in Preference shares of Synergy Green Industries Ltd is valued at fair market
value using discounted cash flows.
(o) EMPLOYEE BENEFITS
Short Term Employee Benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the
statement of profit and loss of the year in which the related service is rendered.
Other Long Term Employee Benefits
The Company provides for the encashment of leave or leave with pay subject to certain rules. The
employees are entitled to accumulate leave for availment as well as encashment subject to the
rules. As per the regular past practice followed by the employees, it is not expected that the entire
accumulated leave shall be encashed or availed by the employees during the next twelve months
and accordingly the benefit is treated as long-term defined benefit. The liability is provided for
based on the number of days of unutilised leave at the Balance Sheet date on the basis of an
independent actuarial valuation.
Post Employment Benefits
(i) Defined Contribution Plans
The eligible employees of the Company are entitled to receive benefits under the Provident
Fund, a defined contribution plan in which both the employees and the Company make
monthly contributions at a specified percentage of the covered employees’ salary. The
Company is maintaining separate trust for Provident Fund andrecognises such contributions
made to the trust as expense of the year in which the liability is incurred.
(ii) Defined Benefit Plans
The Company has an obligation towards Gratuity, a defined benefit retirement plan covering
eligible employees. The plan provides for a lump sum payment to vested employees at
retirement, death while in employment or on termination of employment of an amount
equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon
completion of five years of service. The plan is managed by a trust and the fund is invested
with Life Insurance Corporation of India under its Group Gratuity Scheme. The Company
makes annual contributions to Gratuity Fund and the Company recognises the liability for
Gratuity benefits payable in future based on an independent actuarial valuation.
(p) BORROWING COSTS
Borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their
intended use or sale, are added to the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. Interest income earned on the temporary
investment of specific borrowings pending their expenditure on qualifying assets is deducted from
the borrowing cost eligible for capitalization. All other borrowing costs are recognized in profit or
loss in the period in which they are incurred.
(q) INCOME TAX
Current income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted at the reporting date.
Current income tax relating to items recognised outside profit or loss is recognised either in other
comprehensive income or in equity. Current tax items are recognised in correlation to the
underlying transaction either in OCI or statement of profit and loss.
Deferred Tax
The income tax expense or credit for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences arising
between the tax bases of assets and Labilities and their carrying amount in the financial
statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting period and are accepted to apply when the
related deferred and income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognized for all deductible temporary differences and unused tax losses,
only if, it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset
current tax assets and liabilities and whenthe deferred tax balances relate to the same taxation
authority. Current tax assets and tax liabilities are offset where the Company has legally
enforceable right to offset and intends either to settle on a net basis, or to realize the asset and
settle the liability simultaneously.
Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent
that it relates to items recognised in other comprehensive income or directly in equity. In this case,
the tax is also recognised in other comprehensive income or directly in equity, respectively.
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