Significant Accounting Policies and Notes on Financial Statements:

1. Significant Accounting Policies :

(i) Basis of Preparation of Financial Statements:

The Financial Statements are brpared on going concern assumption and under the historical cost convention, in accordance with generally accepted Accounting Principles in India and the provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current and non - current as per normal operating cycle of the Company and other criteria set out in the revised Schedule VI to the Companies Act, 2013. Based on nature of products/ services, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

(ii) Use of Estimates:

The brparation of financial statements requires estimates and assumption to be made that effect the reported amount of assets and 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 results are known/ materialized.

(iii) Fixed Assets

(a) Fixed Assets are stated at cost less accumulated debrciation. Cost (net of Cenvat credit) is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. Interest and other borrowing costs on borrowed funds used to finance the acquisition of fixed assets, upto the date the assets are put to use, are estimated and capitalised and included in the cost of the respective asset.

(b) Fixed assets retired/discarded and held for disposal are considered as nil value.

(iv) Debrciation:

(A) On Tangible Assets :

(a) (i) Debrciation on tangible assets is provided pro-rata to the period of use on straight line method in the manner and at the rates specified in Schedule II of the Companies Act, 2013. (ii) Upto 31st March, 2014, the Company was providing, (since 1st April,1993) debrciation on Plant and Machinery (including machineries related to utilities), considering the same as continuous process plant, which is required and designed to operate 24 hours a day, on the basis of technical opinion obtained by the Company in an earlier year, in this regard and on other tangible assets on pro-rata basis on on straight line method in the manner and at the rates specified in Schedule XIV of the Companies Act, 1956.

(b) Value of lease hold land is amortized over the period of lease

(c) Assets of value not exceeding Rs.5,000/- are fully debrciated in the year of purchase.

(B) On Intangible Assets :

(a) Computer Software is amortized over a period of five years.

(b) Corporate Club Memberships is amortized over a period of ten years from respective date of membership.

(C) Impact due to change in Debrciation Policy

Due to change in the debrciation policy, the debrciation rates have been revised as per Shcedule II of the Companies Act., 2013. Due to above change in the Debrciation Policy and rates, debrciation for the current year in higher by Rs. 7,98,474/- and the Profit for the year and Net Block of Assets is lower by the similar amount.

(v) Lease Rentals:

As no assets were taken on lease after 1st April, 2001, the Accounting Standard (AS-19) 'Accounting for Leases' issued by The Institute of Chartered Accountants of India, is not applicable.

(vi) Non-Current Investments :

(a) Non-current investments are stated at cost.

(b) Dividend income is recognized when right to receive is established.

(c) Provision for diminution in the value of Long Term (Non-Current) Investments is made only if such a decline in the opinion of the management is other than temporary. However the break up value of Equity Shares of M/s V.S. Lignite Pvt.Ltd. in which the Company has made such investments is Rs. Nil as per the said Company's Balance Sheet as at 31.03.2014 against cost of Rs.1,67,47,190/- towards equity shares for which no provision has been made in Accounts, as the investment is made for purchase of power at cheaper rate on Long Term basis and plant for power generation is fully operational, and that power plants take longer time to be profitable.

V.S. Lignite Power Pvt. Ltd. has discontinued supply of power with effect from 1st March, 2015, claiming force majeure clause, which the Company is contesting and have filled application under Arbitration Act. Provision for diminution, if any, will be made after the final outcome in the matter.

(vii) Valuation of Inventories:

Inventories are valued at lower of cost (net of Cenvat / VAT credits) and net estimated realizable value. Cost has been arrived at as follows :

(a) (i) Cost of Stores and Spares has been computed on the basis of weighted average method

(ii) There are no significant machinery spares lying in stock which can be directly used in connection with Plant & Machinery and whose life is expected to be irregular.

(b) Cost of Raw Materials has been computed on the basis of first in first out method.

(c) Cost of Work in process and Finished goods has been computed on the basis of estimated cost of materials, cost of labor, cost of conversion and other costs incurred for bringing the inventories to their brsent location and condition and excise duty payable on clearance.

(d) Waste and scrap and residual materials are computed on the basis of estimated market value.

(e) Provision of Rs. 16,64,102/- (P.Y. Rs.13,96,887/- has been made in respect slow moving items of stores and raw materials. The management has confirmed that there are no other obsolete/ slow moving stocks for which further provision need to be made in Accounts.

(viii) Excise Duty and Cenvat/VAT/ Service Tax Credits:

(a) The value of closing stock of finished goods lying in factory brmises (except goods meant for export) are inclusive of excise duty.

(b) Benefits of Cenvat/VAT/Service Tax Credits to the extent claimed/ availed are accounted for by adjusting to the cost of relative materials/ fixed assets / expenses.

(ix) Revenue/Income Recognition:

(a) Income and Expenses considered receivable and payable respectively, are accounted for on accrual and prudent basis except for the following :

(i) Interest receivable on refunds of Sales Tax / VAT and Income Tax is accounted for at the time respective assessment.

(ii) Sale value of fixed Assets written off/ discarded during the year is accounted for at the time of disposal of written off/ discarded assets.

(iii) Claims of Rs.23,07,672/- raised by the Company on a party in an earlier year had been settled by the Bombay High Court and the Company had been granted a decree for recovery of such amount along with interest etc. As the whereabouts of the party are not known, the sum of Rs.13,67,265/- payable to the said party as per accounts had been written back to the Profit and Loss Account during the year ended 31.03.2011. The balance amount, recoverable Rs.9,40,407/- from the party along with accrued interest, the amount whereof is not brsently ascertainable and hence not stated, is intended to be accounted for in Statement of Profit and Loss, when the same are actually recovered.

(iv) Remissions, if any, received against Rs 1,36,99,162/- (P.Y. Rs.1,61,30,994/-) charged in accounts under respective heads of expenditure, for Entry Tax for the period after July, 2006 till the year ended 31.03.2015, the deposits of which have been stayed by the Rajasthan High Court to the extent of the 50% of the assessed tax.

(v) Service Tax payments relating to expenses for Exports were debited by the Company to relative expenses heads of account up to 31st March 2010. In view of certain notifications issued by concerned Authority, the Company has filed claims for refunds of Rs.31,06,451/- (P.Y. Rs. 31,06,451/-) but such refund claims were rejected by the authorities. Company had filed appeals before CEGAT against such rejections. Such claims are intended to be accounted for as and when settled and or refund is received.

(x) Turnover/Sales:

(a) Local sales are recognized on dispatch of goods and are inclusive of Excise Duty collected but excluding sales tax / VAT

(b) Export sales are recognized on basis of dates of Bills of lading and are exclusive of Excise Duty except to the extent clearance made on payment / adjustment of excise duty.

(xi) Retirement benefits/gratuity and leave encashment benefits:

(a) The liability for gratuity is covered under the Group Gratuity Scheme with Life Insurance Corporation of India.

(xii) A. Foreign Currency Transactions:

(a) Transactions arising in foreign currency for exports/ imports of goods are accounted for at rates of exchange brvailing on the dates of transactions

(b) Foreign currency monetary items at the Balance Sheet date are translated at the exchange rates brvailing on the date of the Balance Sheet

(c) Exchange rate differences resulting from foreign exchange transactions on revenue account, settled during the year, including on year end translation of monetary items, are recognized in Statement of Profit & Loss.

(d) Exchange rate difference resulting from foreign exchange transaction on capital account settled during the year outstanding on year end are adjusted to the respective assets/ Liability.

B. Exchange Forward Contracts:

(a) The Company uses Exchange Forward Contracts to hedge its risks associated with foreign currency related to firm commitments and highly probable forecasted transactions. The management has certified that the Company has not entered into any forward contracts which are intended for trading or speculation purposes. The Company has not entered in to any derivative contract to hedge the exchange risk.

(b) Profit/ Loss on cancellation or renewal of forward Exchange contracts are accounted for as income/ Expense for the period.

(c) The Company has accounted for Mark to Market (MTM) gain (net) of Rs.6,23,37,695/- (P.Y. 97,32,676/-) as per Bank Statement for MTM. MTM net gain includes component of brmium/discount in respect of the aforesaid outstanding forward exchange contracts.

(xiii) Export benefits:

(a) Duty Drawback benefits are accounted for on accrual basis.

(b) Premium for transfer of Duty credit scripts under Focus Product/ Market Schemes and Premium in respect of such entitlements of Rs.1,40,52,474/- (P.Y. 1,47,27,004/- ) in hand as on the close of the year and or entitlements to be received are accounted for on accrual basis, which is being valued at net estimated realizable value.

(xiv) Borrowing Costs:

Interest and other costs on borrowing funds used to finance the acquisition of fixed assets, up to the dates the assets are put to use, are estimated and capitalized under respective fixed assets. Other interest and costs incurred by the Company in connection with the borrowing of funds are recognized as expenses in the period in which they are incurred.

(xv) Research and Development:

Routine research and development expenditure considered as of revenue nature are recognized as an expense in the period in which it is incurred. Such expenditure are included under various accounts in Notes 24 to 26, the amount whereof cannot be separately ascertained and stated. The expenditure of capital nature, if any, is capitalized as fixed assets

(xvi) Provision for taxation:

(A) Current tax :-

Income Tax is provided on the estimated taxable income (after set off the carried forwards losses / debrciation) or tax on book profit (MAT) whichever is higher, based on the brvailing rate as per Income Tax Act.1961.

(B) Deferred tax:

The deferred tax liabilities and assets are recognized using current tax rates, to the extent the management feels that there is virtual certainty that sufficient future taxable income will be available, against which such deferred

tax assets/ Liabilities can be realized/ adjusted. Such assets/ liabilities are reviewed as at each Balance Sheet date, to reassess realizations / Liabilities.

(xvii) Government Grant/ Interest Subsidy:

Interest subsidy received under Technology Upgradation Fund Scheme and under Rajasthan Investment Promotion Scheme, 2003 are being adjusted with interest paid on Term Loans to Banks in Note 25 of Finance Costs.

(xviii) Impairment of Assets:

As required by AS-28 "Impairment of Assets" issued by the Institute of Chartered Accountants of India, no provision for impairment loss of assets is required to be made as in view of the management the estimated realizable value of such assets will be more or equal to the carrying amount stated in the Balance Sheet.

(xix) Provisions, Contingent Liabilities and Contingent Assets:

(a) Provisions are recognized in respect of obligations where, based on the evidences available, and their existence at the Balance Sheet date, are considered probable.

(b) Contingent Liabilities are shown by way of Notes on accounts (refer note 3 below) in respect of obligations where, based on the evidences available, their existence at the Balance Sheet are considered not probable.

(c) Contingent Assets are neither recognized nor disclosed in Accounts.

2 In the opinion of the Board of Directors, the Assets (other than Fixed Assets and non-current Investments), Trade Receivables, Loans, Advances and Deposits are approximately of the value stated, if realized in the ordinary course of business, unless otherwise stated. The provisions for liabilities except as stated above are adequate and not in excess of the amount reasonably necessary.

3 M/s V.S. Lignite Power Pvt. Ltd., from whom Company is purchasing power, was raising bills up to 31.03.2015 part of which was disputed by the Company, though being charged under the head Power and Fuel Account in Note 26. The dispute was referred to arbitration and the arbitrators settled the dispute in favour of the Company. M/S V.S. Lignite Power Pvt. Ltd. had filed an appeal in Session Court in earlier year and the Session Court had also decided the matter in favour of the Company. But the said Company filed further appeal with Honorable Rajasthan High Court at Jaipur Bench and such case for Rs.3,87,90,346/- is still pending in Rajasthan High Court at Jaipur Bench. Liability, if any, arising on such appeal is intended to be provided as and when the case is finally decided.

4 The Company had entered into an agreement dated 22.02.07 (as amended by agreement dt. 01.07.2008) with M/s Marudhar Power Private Limited (Subsequently name changed to VS Lignite Power Private Limited), se??ng up a Group Cap??ve Power Plant, at Bikaner in the State of Rajasthan, for supply of 8MW of Power also to the Company and in pursuance to such agreements, the Company had subscribed for 16,74,719 Class "A" Equity Shares of Rs.10/- each fully paid at a total value of Rs. 1,67,47,190/- and for 14,85,629 Class "A" 0.01% Cumula??ve Redeemable Preference Shares of Rs.10/- each fully paid at a total value of Rs.1,48,56,290/- and the same have been classified as "Non- Current Investments" in Note "12" as "Trade Investements" Further , the Company had agreed to create lien on the aforesaid Shares at appropriate ??me in favour of M/s VS Lignite Power Private Limited (Formerly known as Marudhar Power Private Limited), as per terms of the Charter Documents as security towards its obliga??on under the Power delivery Agreement dated 22.02.2007 and as amended by agreement dt. 01.07.2008 (also refer Note 1(vi)(c) above). 

5 Previous Year, figures have been regrouped / rearranged, wherever necessary.

Signatures to Notes 1 to 27

As per our attached Report of even date.

On behalf of the Board of Directors

For G.P.KEJRIWAL & CO.

Chartered Accountants

Firm Registration No. 001036C

C.P.JAIN

Partner

M.No. 70156

Camp: Mumbai

Dated: 29/05/2015