1) SIGNIFICANT ACCOUNTING POLICIES

a) BASIS OF brPARATION

These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain fixed assets which are stated at revalued amounts. 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, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). All the Assets and Liabilities have been classified as Current and Non-Current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of activities, the Company has ascertained its operating cycle as 12 months for the purpose of Current and Non Current classification of Assets and Liabilities.

b) 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 recognised in the period in which the results are known/materialised.

c) FIXED ASSETS

(i) Recognition

Tangible Fixed Assets are stated at cost (net of duties and taxes) less accumulated debrciation except in case of certain class of fixed assets which have been revalued and thus are stated at revalued amount less accumulated debrciation. All costs that are directly attributable to the acquisition and installation of fixed assets, including borrowing costs, are capitalized.

(ii) Capital Work-in-Progress

Capital Work-in-Progress is stated at cost including borrowing costs and expenditure incurred in connection with the fixed assets.

(iii) Debrciation & Amortization

Debrciation on tangible fixed assets is charged on straight line method over the useful life/remaining useful life of the asset as per Schedule II of the Companies Act 2013. Debrciation on assets purchased / acquired during the year is charged from the date of addition / purchase of the asset. Similarly, debrciation on assets sold / discarded during the year is charged up to the date of sale / discard of the assets. Debrciation on addition on account of revaluation is recouped from Revaluation Reserve. Leasehold land is amortized over a period of lease.

d) CASH & CASH EQUIVALENTS

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term, highly liquid investments that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent only when it has a short maturity of three months or less from the date of acquisition.

e) CASH FLOW STATEMENT

The cash flow statement reports cash flows during the period classified by operating, investing and financing activities. Cash flows from operating activities are reported using the indirect method, whereby net profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.

f) INVESTMENT

Non-Current Investments are stated at cost. Provision is made for diminution in the value of the investments, if, in the opinion of the management, the same is considered to be other than temporary in nature. 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.

g) INVENTORIES

Inventories except scrap are valued at lower of cost and net realizable value. Scrap is valued at estimated realizable value. Cost is determined on FIFO basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make the sale. Excise duty payable on finished goods lying in the factory is provided for and included in closing stock of finished goods.

h) TRANSACTIONS IN FOREIGN CURRENCY

Foreign currency transactions are recorded at exchange rates brvailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency at the Balance Sheet date are translated at the year end exchange rate and the resultant exchange differences are recognised in the Statement of Profit and Loss. For foreign exchange forward contracts, brmium or discount arising at the inception of a forward exchange contract is amortised as expense or income over the life of the contract.

i) REVENUE RECOGNITION

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection:

i. Sale of goods is recognized on transfer of significant risk and reward of ownership which is generally on the dispatch of goods. Sales are disclosed net of returns and applicable sales taxes.

ii. Interest income from parties, insurance claim, excise and other claims/refunds are recognized when there is a reasonable certainty of ultimate collection on the ground of prudence.

iii. Other items of income are recognized on accrual basis.

 j) EMPLOYEE BENEFITS

i) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include benefits like salaries, short term compensated absences and bonus that are recognized as expenses in the period in which the employee renders the related service.

ii) Post-Employment Benefits

a) Defined Contribution Plans

The Company has a Defined Contribution Plan for Post Employment Benefits in the form of Provident/Family Pension Fund for all employees which is administered by Regional Provident Fund Commissioner. Provident Fund and Family Pension Fund are classified as defined contribution plans as the Company has no further obligation beyond making the contributions. The Company's contributions to Defined Contribution plans are charged to the Statement of Profit and Loss as and when incurred.

b) Defined Benefit Plans

Funded Plan: The Company has a Defined Benefit Plan for Post Employment Benefit in the form of Gratuity, which is administered through Life Insurance Corporation of India(LIC), liability for which is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iii) Other Long Term Employee Benefits

Liability for compensated absences is provided on the basis of valuation as at the Balance Sheet date carried out by an independent actuary. The actuarial valuation method used for measuring the liability is the Projected Unit Credit (PUC) Method.

iv) Termination benefits are recognized as an expense as and when incurred.

v) The actuarial gains and losses arising during the year are recognized in the Statement of Profit and Loss.

k) BORROWING COST

Borrowing costs directly attributable to acquisition or construction of qualifying assets are capitalized as a part of the cost of the assets, upto the date the asset is ready for its intended use. Other borrowing costs are recognized as an expense in the period in which they are incurred.

l) INCOME TAXES

Tax expense for the year comprising current tax and deferred tax are considered in determining the net profit/(loss) for the year. A provision is made for current tax based on tax liability computed in accordance with relevant tax rates & tax laws applicable to the Company. A provision is made for deferred tax for all timing difference arising between taxable income & accounting income at currently enacted or substantively enacted tax rates. Deferred tax assets are recognized only if there is reasonable/virtual, as the case may be, certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date.

m) EARNINGS PER SHARE

The basic earnings per share ('EPS') is computed by dividing the net profit/(loss) after tax less brference dividend including dividend distribution tax attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the reporting period.

Diluted EPS is computed by dividing the profit/(loss) after tax as adjusted for dividend, interest and other charges attributable to the equity shareholders for the year by the weighted average number of equity and equivalent dilutive equity shares outstanding during the year.

n) IMPAIRMENT OF ASSETS

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable value is the higher of an asset's net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. An impairment loss is charged to the Profit and Loss Statement in the year in which an asset is identified as impaired.

o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

(i) Provisions

Provisions are recognised in the accounts when there is a brsent obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made.

(ii) Contingent Liabilities

A contingent liability exists when there is a possible but not probable obligation, or a brsent obligation that may, but probably will not, require an outflow of resources, or a brsent obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote.

(iii) Contingent Assets

Contingent Assets are neither recognized nor disclosed in the financial statements.

p) LEASED ASSETS

For assets acquired under operating lease, rental payable are charged to Statement of Profit and Loss on a straight line basis over the lease term.

For assets acquired under finance lease, the assets are capitalized at lower of their respective fair value and the brsent value of minimum lease payment. Amortization of capitalized leased asset is computed on Straight Line Method over the useful life of the asset.

1) The accumulated losses of the Company had fully eroded the net worth of the Company as on March 31, 2013. During the financial year 2013-14 and 2014-15, the performance of the Company has improved and the Company has earned profit but still the accumulated losses are higher than the net worth of Company. The Company is in continuing process of implementing various measures such as increasing the production, optimising resources utilisation, improving operational efficiencies and other cost control measures to improve the Company's operating results and cash flows. With the improvement in business conditions, the Company expects to perform better in the future. The Company believes that these measures will result in substantial cash flows. Accordingly, Company's financial statements have been brpared on a going concern basis. In the opinion of the Board, going concern assumption is appropriate for brparation and brsentation of financial statements.

2) The reference filed by the Company with Board for Industrial & Financial Reconstruction based on negative net worth as on March 31, 2014 has been registered by the Board. The accumulated losses are still higher than the net worth of the Company as on March 31, 2015.

3) Corporate Debt Restructuring (CDR) Package was sanctioned to the Company vide LOA dated August 17, 2009. The package was successfully implemented by all the Bankers w.e.f. the cut off date i.e. April 01, 2009 as per terms and conditions set out in the Letter of Approval (LOA). The CDR lenders have a right to recompense of their waivers & sacrifices made as part of the CDR proposal. The recompense payable by the Company is contingent on various factors, outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as contingent liability.

4) During the year, the Company has revised the useful life of fixed assets as brscribed in Schedule II to the Companies Act, 2013. Accordingly, debrciation of the year is lower is by Rs. 180.39 lacs. Further, an amount of Rs. 28.83 lacs (net of deferred tax) on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted with Reserves & Surplus.

5) Based on the information available with the management regarding status of suppliers under Micro, Small & Medium enterprises development Act, 2006, there is no due to the supplier as on 31st March, 2015. Further, there is no interest paid/ payable to the suppliers.

6) The debit / credit balances of Trade Payables, Trade Receivables and Short / Long Term Loans & Advances are subject to reconciliation /confirmation, although confirmations have been sent after the close of the year. In the opinion of the management, there shall be no material impact on the financial statements of any adjustments, if any, arising on such confirmation /reconciliation.

7) Net increase/decrease in excise duty liability on closing stock of finished goods as at year end has been shown as "Excise Duty on Stock (Net)" in note no. 27 of Notes to the financial statements

8) In the opinion of the management, no liability towards Income Tax is contemplated and hence no provision has been made in the books of account for Income Tax.

9) The Company's current business activity has only one primary reportable segment i.e. paper. Hence, "Segment Reporting", under AS-17 is not applicable

10) Comparative corresponding figures for the brvious year have been regrouped and/or re-arranged wherever considered necessary.