1. CORPORATE INFORMATION & SIGNIFICANT ACCOUNTING POLICIES

A) CORPORATE INFORMATION

Kothari Fermentation and Biochem Limited ("The Company") is a public limited company incorporated in 1990 under the provisions of the Companies Act, 1956. The Company is engaged in the business of manufacturing of Yeast and its derivatives.

The equity shares of the Company are brsently listed on Bombay Stock Exchange (BSE). The Company is headquartered at New Delhi and the works of the Company is situated at Village Rajarampur, Industrial Area Sikandrabad, Distt. Bulandshahr in the State of U.P.

B) SIGNIFICANT ACCOUTING POLICIES

(i) BASIS OF brPARATION OF FINANCIAL STATEMENT The financial statements have been brpared in accordance with applicable Accounting Standards and relevant brsentational requirements of the Companies Act, 2013 and are based on the historical cost conventions. The Company follows the mercantile system of accounting and recognizes income and expenses (including financial charges) on accrual basis except claims.

(ii) USE OF ESTIMATES

The Preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ from these estimates.

(iii) FIXED ASSETS

Fixed Assets are stated at cost of acquisition inclusive of freight, duties, taxes and br- operative expenses relating to period prior to commencement of commercial production and net of Vat credit availed.

Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are disclosed as "Capital Advances" under Long Term Loan and Advances and cost of fixed assets not ready to use before such date are disclosed under "Capital Work-in-Progress".

(iv) DEbrCIATION (Tangible Assets) a)Debrciation on Fixed Assets is provided to the extent of debrciable amount on the Straight Line Method (SLM). Debrciation is provided based on useful life of the assets as brscribed in Part 'C' of Schedule II to the Companies Act, 2013 except in the case of continuous process plant and machinery where the life of assets is taken as 18 years as per the management estimates based on technical advice and history of usage.

b) Debrciation has been calculated on a pro-rata basis from the date of acquisition / installation of additions to assets during the year, and pro-rata upto the date of disposal in case of deletion.

c) No amount is being written off on Leasehold land and Freehold land.

(v) INVENTORIES

a) Stores, spare parts, loose tools, raw material and packing material are valued at cost or net realizable value, whichever is less.

b) Finished goods are valued at material cost plus expenses or net realizable value, whichever is less.

c) Stock in trading division is valued at cost and related expenses or net realizable value, whichever is less.

d) Stock in process is valued at material cost plus attributable expenses or net realizable value, whichever is less.

(vi) RESEARCH AND DEVELOPMENT Revenue expenditure on research and development is charged as an expense in the year in which it is incurred. Capital expenditure on Research and Development is included in Fixed Assets.

(vii) SALES

Sales of goods are recognized at the point of despatch from factory to customers and sales from Depot are recognized at the time of billing to the customers. Sales are net of returns, rebate, damaged goods and exclusive of Vat/Sales tax.

(viii) TAXATION

Tax expenses comprise current tax and deferred tax charge or credit. Current tax is determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between book and taxable profit is accounted for using the tax rates and laws that are enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the asset will be realized in future.

(ix) EMPLOYEE BENEFITS

Defined Contribution Plan

Fixed contribution to Provident Fund and Employees State Insurance are recognized in the accounts at actual cost to the company.

Defined Benefit Plan

A) Gratuity: The Company makes contribution to a scheme administered by the Life Insurance Corporation of India (LIC) to discharge gratuity liabilities to the employees. The Company accounts its liability for future gratuity based on independent actuarial valuation as at the balance sheet date, using Projected Unit Credit Method.

B) Accumulated Compensated Absence: Provision for liabilities in respect of leave encashment is made on the basis of actual leaves as at the balance sheet date.

Short Term Benefits

Short Term Employees benefits are recognized as an expense on an undiscounted basis in the Profit & Loss Account of the year in which the related service is rendered.

(x) FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of acquisition. Monetary items are translated at the rates brvailing on reporting dates. The exchange difference between rate brvailing on the date of transaction and on the date of settlement and also on translation of monetary tems at the reporting date is recognized as income or expense.

(xi) EARNING PER SHARES

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

Diluted earning per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year (adjusted for the effects of dilutive options).

(xii) BORROWING COST

Borrowing cost attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost till the assets are ready for use. Other borrowing costs are recognized as expense in the period in which these are incurred.

(xiii) PROVISIONS, 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 disclosed in the Notes to Accounts. Contingent assets are neither recognized nor disclosed in the financial statements.

(xiv) EVENTS OCCURING AFTER BALANCE SHEET DATE

Events occurring after balance sheet date have been considered in the brparation of financial statement.

(xv) IMPAIRMENT OF ASSETS

An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value. An impairment loss, if any, is charged to profit and loss account, in the year in which asset is identified as impaired.

1. Previous year's figures have been re-grouped/reclassified wherever necessary, to make them comparable

As per our report of even date attached

for NAHATA JAIN & ASSOCIATES

Chartered Accountants

ANIL K. JAIN

Partner,

Mem No. 093912

For and on behalf of the board

PRASANNA KUMAR PAGARIA

D i rector

(DIN - 00162904)

PRAMOD KUMAR KOTHARI

Managing Director (DIN - 00086145)

ARUN KUMAR SEKHANI

Chief Financial Officer

KAPIL DEV PURI

Director

(DIN - 00278929)

ISHA GUPTA

Company Secretary

Place: New Delhi

Date : 30th May,2015