I. SIGNIFICANT ACCOUNTING POLICIES

Note : 1  I. Basis of brparation of financial statements:

These financial statements have been brpared to comply with Accounting Principles Generally accepted in India (Indian GAAP), the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements are brpared on accrual basis under the historical cost convention. The financial statements are brsented in Indian rupees rounded off to the nearest rupees in crore.

II. Use of estimates:

The brparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

III. Tangible & Intangible Fixed Assets:

a) Tangible assets are stated at their original cost of acquisition inclusive of inward freight, duties and expenditure incurred in the acquisition, construction/installation less accumulated amortization and impairment loss, if any. CENVAT/ VAT credit availed on capital equipment is accounted for by credit to respective fixed assets.

b) In case of assets acquired out of foreign currency loans, the increase/decrease in liability on account of fluctuation in exchange rates has been charged to Profit & Loss Account.

c) Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization/ depletion and impairment loss, if any.

IV. Debrciation and amortization:

Debrciation / amortization on tangible and intangible fixed assets is provided to the extent of debrciable amount on the straight line (SLM) Method. Debrciation is provided at the rates and in the manner brscribed in Schedule II to the Companies Act, 2013 except on some assets, where useful life has been taken based on external / internal technical evaluation.

V. Impairment:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired.

VI. Investments:

Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

VII. Inventories:

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective brsent location and condition.

Inventories are valued on the following basis:

a) Stores and Spares - at moving weighted average basis.

b) Raw Materials - at moving weighted average basis.

c) Work-in-Process - at estimated cost.

d) Finished Goods - at lower of cost or net realizable value.

e) Stock in trade - at lower of cost or net realizable value.

f) Material in Transit - at cost.

VIII. Revenue Recognition:

Revenue is recognized only when risks and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes sale of goods, services and excise duty, adjusted for discounts (net).

Note : Rs.BSIGNIFICANT ACCOUNTING POLICIES

Dividend income is recognized when the right to receive payment is established.

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the interest rate applicable.

IX. Excise Duty:

Excise duty is accounted on the basis of both, payments made in respect of goods cleared and provision made for goods lying in bonded warehouses.

X. Foreign Currency Transactions:

a) Transactions denominated in foreign currencies are recorded at the exchange rates brvailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b) Monetary items denominated in foreign currencies at the year end are restated at year end rates, except in cases covered by forward exchange contracts.

c) Any income or expense on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

XI. Government grants and subsidies:

Grants and subsidies from the 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.

Where the grant or subsidy relates to revenue, it is recognized as income on a accrual basis in the statement of profit and loss. Where the grant relates to a fixed asset, it is net off from the relevant asset.

XII. Employee Benefits:

a) Short term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

b) Long term employee benefits : Liability towards Gratuity and unavailed leaves has been provided on the basis of actuarial valuation.

XIII. Borrowing costs:

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.

XIV. Research & Development:

Revenue Expenditure on research and development is charged to Profit & Loss Account in the year in which it is incurred. Capital Expenditure on research and development is treated as additions to Fixed Assets in case the same qualifies as a tangible asset as per AS - 10 issued by ICAI.

XV. Provision, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

XVI. Income Tax:

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates. Deferred income tax reflects the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/ period. Deferred tax assets are recognized only to the extent that there is a reasonable certainty that sufficient future income will be available except that deferred tax assets, in case there are unabsorbed debrciation or losses, are recognized if there is virtual certainty that sufficient future taxable income will be available to realize the same. Deferred tax assets and liabilities are measured using the tax rates and tax law that have been enacted or substantively enacted by the Balance Sheet date.

XVII.Unless specifically stated to be otherwise, these policies are consistently followed.

Note No : 1  As per policy of the Company for Directors and other senior employees, the Company has, during the year, paid a sum of Rs.0.5 Crores on account of insurance brmium under the employer employee policy obtained on the life of key directors and the same lies debited under the head 'Insurance Charges'. The policy may be assigned in the name of the insured in future. In such an event of assignment of the policy, the same shall be treated as perquisite in the hands of the key personnel.

Note No : 2  Balances of certain debtors, creditors, loans and advances are subject to confirmation.

Note No : 3  In the opinion of the Management current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated except where indicated otherwise.

Note No :4.A demand of Rs.5.74 Crores for entry tax relating to earlier years was outstanding as on 31st March, 2014 and Rs.2.87 Crores, paid against the same was shown under current assets, since the Company was contesting the demand raised by the department. In the current year, the Rajasthan state government announced an amnesty scheme offering waiver of interest and penalty. The Company decided to settle the demand under the scheme by paying a further Rs.2.87 Crores. Accordingly, the total amount of Rs.5.74 crores has been charged to the statement of profit and loss and shown under the head 'exceptional items'.

Note No : 5 To comply with the guidance note on "Accounting Treatment of Excise Duty" issued by Institute of Chartered Accountants of India, excise duty amounting to Rs.21.12 Crores (brvious year 13.53 Crores) has been included in the value of inventories as on 31.03.2015 and the corresponding amount of Excise Duty payable has been included in other liabilities. However, this accounting policy has no impact on the profit for the year.

Note No :6 GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS:

The Company has a defined benefit gratuity plan. Gratuity (being administered by a Trust) is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Gratuity plan for the Company is a defined benefit scheme where annual contributions are deposited to a Gratuity Trust Fund established to provide gratuity benefits. The Trust Fund has taken a Scheme of Insurance, whereby these contributions are transferred to the insurer. The Company makes provision of such gratuity asset/liability in the books of accounts on the basis of actuarial valuation as per the Projected unit credit method. Plan assets also include investments and bank balances used to deposit brmiums until due to the insurance company.

Note No : 7.As per Section 135 of the Companies Act, 2013, Schedule VII and Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company was required to spend Rs.2.92 crores for CSR activities. The company has incurred CSR expenditure of Rs.1.09 crore during the current financial year and is in process of identifying the projects/activities for the benefit of the Public in general and in the neighborhood of the manufacturing facilities in the best possible manner into various projects for future.

The company has reclassified brvious year figures to conform to this year's classification.

In terms of our report of even date annexed

For O. P. Bagla & Co.

Chartered Accountants

Atul Bagla

Partner

Membership No.: 91885

For and on behalf of the Board

Ashok Kajaria (DIN: 00273877)

Raj Kumar Bhargava (DIN: 00016949) Chairman & Managing Director

Debi Prasad Bagchi (DIN: 00061648)

Ram Ratan Bagri (DIN: 00275313)

H. Rathnakar Hegde (DIN: 05158270)

Ram Chandra Rawat Executive

V.P. (A&T) & Company Secretary (FCS No. 5101)

Chetan Kajaria (DIN: 00273928)

Rishi Kajaria (DIN: 00228455) Jt. Managing Directors

Dev Datt Rishi (DIN: 0031 2882)

Sushmita Shekhar (DIN: 02284266)  Directors

Sanjeev Agarwal CFO

Place: New Delhi

Dated: 29th April 2015