NOTE 1 - Significant Accounting Policies and Corporate Information Corporate Information:

The Company is engaged in the business of manufacturing of Welding electrodes, Copper coated wires, flux cored wires and welding fluxes. The manufacturing activitiesare located in Kalyan & Kolkata.

The company is a Public Limited Company.

Basis of Preparation of Financial Statements

The Financial statements of the Company have been brpared on accrual basis under historical cost convention, in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with Accounting Standards specified in Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and the relevant provisions of the Companies Act, 2013. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard or a more appropriate brsentation of the financial statements requires a change in the accounting policy hitherto in use.

Use of Estimates

The brparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statement and the reported amount of revenue and expenses during the reporting periods. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. The management believes that the estimates used in the brparation of financial statements are prudent and reasonable.

Fixed Assets

Fixed assets are stated at cost of acquisition except certain items, which have been shown at revalued amount. Direct costs are capitalized until assets are ready to be put to use and are stated net of modvat /cenvat.

The cost of assets not ready for use as at the balance sheet date isdisclosed under capital work-in-progress.

Intangible assets are recognized only if it is probable that thefuture economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably.

Leased Assets

i. Assets taken on finance lease, including taken on hire purchase arrangements, wherein the Company has an option to acquire the asset, are accounted for as fixed assets in accordance with the Accounting Standard 19 on "Leases"(AS 19).

ii. Assets taken on lease under which the lessor effectively retains all the risk and rewards of ownership are classified as operating lease. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with the respective lease agreement.

iii. The cost of improvements to lease properties are capitalized and disclosed appropriately. Debrciation

Assets are debrciated / amortized on pro rata on straight line basis over the useful lives of the assets, as brscribed under Schedule II of the Companies Act,2013 with effectfrom 1st April,2014except as under:

a) Debrciation on leasehold land is provided upto 31.3.1994.No debrciation has been charged on leasehold land in subsequent years.

b) Debrciation on Leasehold land, buildings and plant & machinery subject to revaluation, is calculated on the respective revalued amounts, over the balance useful life as determined by the valuation experts.

c) For assets whose remaining useful life as on 1" April 2014 is nil, the carrying amount of such asset after deducting the residual value is charged fully to the Statement of profit and loss.

Debrciation is charged on a proportionate basis for all assets purchased and sold during the period. Individual assets costing less than Rs.5,000are debrciated in full in the period of purchase. Impairment of Assets:

In compliance with Accounting Standard (AS) 28 -"Impairment of Assets"the Company assesses at each Balance Sheet date whether there is any indication that an asset is impaired where the carrying amount of the asset exceeds its recoverable value. If any such indication exists, then an impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

Investments

Long term investments are stated at cost less provision for diminution other than temporary, if any Current investments are valued at lower of cost and market value

Inventories

Inventories are valued at lower of cost and net realisable value, cost being ascertained on the following basis:

a) Raw materials, stores, spares, consumable tools and components: on First in First out (FIFO) formula.

b) Work-in-process, finished /trading goods include cost of conversion and other costs incurred in bringing the inventories to their brsent location and conditions.

c) Cost includes taxes and duties and is net of credits under Cenvat/VAT.

Foreign Currency Transactions

Foreign currency transactions are recorded at the rates brvailing on the date of the transaction. Monetary assets and liabilities in foreign currency are translated at year end rates. Exchange differences arising on the settlement of transactions and translation of monetary items are recognized as income or expense.

Revenue recognition

a) Revenue from sale of products is recognized on dispatch or appropriation of goods in accordance with the terms of sale and is net of sales lax/Vat and applicable discounts.

b) Materials returned/rejected are accounted for in the year of return/rejection.

c) Export entitlements and other Government grants, if any recognized in the accounts on receipt after the consideration of certainty of their receipt.

d) Dividend income is recognised when the right to receive the dividend is established.

e) Insurance claims are accounted on acceptance/certainty of recovery.

Borrowing 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 intended use. All other borrowing costs are recognized as an expense in the period in which they are incurred.

Employee benefits

a) Short term employee benefit obligations are estimated and provided for.

b) Post employment benefits and other long term employee benefits

Defined contribution plans:

Company's contribution to Provident fund, employee state insurance and other funds are determined under the relevant schemes and / or statute and charged to revenue.

Defined Benefit plans:

Company's liability towards gratuity and other retirement benefits are actuarially determined at each balance sheet date and provided with Life Insurance Corporation of India.

Taxes, Duties, etc.

Excise duty has been accounted for in respect of goods cleared and provision has also been made for goods lying in stock at the year-end. This accounting treatment has no impact on the profit for the year.

Taxation

Provision for taxation is made on the basis of estimated taxable income for current accounting year in accordance with Income Tax Act, 1961.

Deferred Tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversing in one or more subsequent periods.

Earnings per Share

Basic earnings per share is calculated by dividing the net profit after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. The number of shares and potentially dilutive equity shares are adjusted for stocks plits.

Derivative Transactions - Equity & Commodities Futures and options

Gains are recognized only on settlement/expiry of derivative instruments.

All open positions are marked to market and unrealized losses are provided for.Unrealized gains ,if any, on marked to market are not recognized.

Provisions and contingent liabilities

The Company creates a provision when there is a brsent obligation as a result of an obligating event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may but probably will not, require an outflow of resources. Where there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote.no  provision or disclosure is made.

Notes to Accounts for the year ended 31stMarch 2015 26. Contingent liabilities and commitments

• Guaranteesoutstandingasat31st March 2015.-Rs 1,683,106/-(as at31st March2014:Rs.5,523,952/-)

• Foreign LC outstanding as at 31st March 2015 :Rs49,870,363/- (as at 31" March 2014:Rs.4,687,120/-)

• Disputed Demands against the Company as at 3111 March 2015 (paid under protest and thereby reflecting under Loans and Advances): Custom Duty - Rs 1,500,000 (as at 31" March 2014: Rs 1,500,000)

Excise Duty - Rs 20,710,006 (as at 31st March 2014: Rs 20,710,006)

The Company had received a show cause notice dated 12th May 2010 demanding Rs.4.02 Cr. of CENVAT credit on certain imported material, imported in theyear 2008-09.Under the instructions from excise authorities the Company has already reversed under protest CENVAT credit ofRs.3.09Cr in the earlier year. Pending disposal of the case a sum of Rs.2.1 Cr. reversed under protest is shown under "Claims against the excise authorities "under the head loans and advances. The Company has filed an early hearing application and the next hearing is scheduled on 10'" August,2015. Based on the legal opinion, the company is hopeful of favourable order as the matter is one of interbrtation of law.

• Assessment for Sales Tax/Vat for the year 2006-07 has been completed during the current financial year and the sales tax/vat demand of Rs. 23.25 Lacs excluding interest and penalty has been raised for non submission of Central Sales Tax Declaration Forms. The Company has filed appeal for the above mentioned years seeking time for submission of Central Sales Tax Declaration Forms.The management is of the opinion that there will be no liability as pending Central SalesTax Declaration Forms will be submitted soon. Similar Sales Tax Appeal for FY 2005-06 & 2008-09 is pending before Sales Tax Authorities for the Sales Tax demand of Rs.21.70 Lacs&30.37 Lacs excluding interest & penalty, respectively.

However the company has made payment under protest of Rs.11 lacs, Rs. 10 Lacs & Rs.12.55 Lacs for FY 2005-06,2006-07 & 2008-09 respectively, which is shown under sundry assets in the Balance Sheet.

• Income Tax Liability as per TDS (Traces) for various years is Rs.11,77,928/-. The Management has rebrsented that necessary rectification applications are being made and there would not be any liability on this count.

27. Borrowings Secured Loan

a. Term Loans from Banks are secured by mortgage/hypothecation of related immovable/movable assets of the Company, both brsent and future. The term loans are repayable in installments and carried interest @ 13.70% p.a. Final repayments are due on August 2016. Amount of term loan repayable within a period of one year is Rs.636.56 lacs.

b. Working Capital Loans from Banks are secured by hypothecation of stocks and book debts ranking pari-passu between them as also mortgage/hypothecation of specified immovable and movable fixed assets of the Company ranking pari-passu by way of second charge. The facilities carried interest @ 12.25%.

c. Vehicle Loans are secured by hypothecation of related vehides. The vehicle loans are repayable in installments sbrad over 3 to 5 years and carries interest ranging from 9.3% to 12.44%.Amount of vehicle loan repayable within a period of one year is Rs.7.24 lacs (excluding interest)

The Company has exited from consortium banking arrangement with SBL&TJSB in 2015-16. All borrowing limits from SBI have been taken over by DBS

Bank Ltd. The company has entered into a multiple banking arrangement with DBS Bank & TJSB Bank.

This decision has been taken to reduce finance cost as ROI offered by DBS is significantly lower than that of SBI.

Unsecured Loan:

The Company has borrowed monies in form of Inter corporate deposit (ICDs) from various parties. The balance as at 31" March,2015 is Rs.720.29 Lacs.The said ICDs are unsecured and bears interest @ 12%p.a.

2. Change in Debrciation Estimate

In accordance with requirements brscribed under Schedule II of the Companies Act 2013, the company has assessed the estimated useful life of its assets and has adopted the useful life as brscribed in the Schedule II in respect of all assets.

(i) The debrciation charged to Statement of Profit and Loss includes the carrying amount of those assets whose useful life is over at the beginning of the financial year amounting to Rs.79,605/-

(ii) The debrciation charged to Statement of Profit and Loss is lower by Rs 10,433,355/- on account of changes in estimated useful life

3. Based on the information available with the Company, the amounts due to SSI units and suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 as at 31st March 2015 are not outstanding for more than 30 days. The SSI units have been identified by the Company and relied upon by the auditors.

4. In the opinion of the management, the current assets, loans & advances are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business and provision for all known liabilities have been adequately made in the accounts.

5. Segment Information

The Company is engaged in the business of manufacturing Welding consumables, Copper coated wires, Flux Cored Wires and Welding fluxes and is organizationally managed in two units. Accordingly, the Company has only one business reporting segment.It  has customers in India as well as outside India. However, as per AS-17,segment reporting is not required to be furnished.

6. Long term contracts and derivatives contract in the financial years:

The Company does not have long term contract including long term derivative contract.

7. Investor Education and Protection Fund:

There is no amount required to be transferred to Investor Education and Protection Fund by the Company.

8. Corporate Social Responsibility (CSR):

During the year the company was required to spend 2% of average profits for last three years towards CSR expenditure as per Section 135 of the Act which works to Rs. 15,94,159/- for the year.The company has spent Rs. 16,00,000/- amount on CSR expenditure.

9. Public deposit:

The company has not accepted any deposit from the public, within the meaning of Sections 73 to 76of companies Act 2013 and the rules framed thereunder.

10. Previous year's figures have been regrouped / rearranged wherever considered necessary, to conform to the current period's brsentation.