1 SIGNIFICANT ACCOUNTING POLICIES :

1.1 BASIS OF ACCOUNTING AND brPARATION OF FINANCIAL STATEMENTS: The financial statements are brpared under historial cost convention on the accrual basis of accounting in accordance with the generally accepted accounting principles, the applicable mandatory Accounting Standards and the relevant provisions of the Companies Act, 2013.

1.2 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 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. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable.

1.3 FIXED ASSETS : Fixed Assets are stated at cost of acquisition or construction (net of cenvat credits). All costs relating to the acquisition and installation of fixed assets are capitalized and include borrowing costs directly attributable to construction or acquisition of fixed assets, up to the date of asset is put to use. Subsidy received as contribution towards cost of capital investment project is considered as Capital Reserve.

1.4 INVESTMENTS :

Recognition and Measurement : Investments, which are readily realisable and intended to be held for not more than one year from balance sheet date, are classified as current investments. All other investments are classified as non-current investments.

Non Current investments which are intended to be held for more than a year, from the date of acquisition, are considered as long-term investments and are carried at cost. However, provision for diminution in value of investments is made to recognise a decline, other than temporary, in the value of the investments. Investments other than long-term investments being current investments are valued at cost or fair value whichever is lower, determined on an individual basis.

1.5 INVENTORIES : Inventories are valued at lower of cost or net realisable value.

(i) Raw-materials and packing materials are valued on First in First Out basis.

(ii) Work-in process and Finished Goods are valued at cost and includes element of production overheads.

(iii) Traded goods are valued on First in First Out basis.

(iv) Consumable stores are charged to the profit and loss account in the year of its purchases.

1.6 REVENUE RECOGNITION :

(i) Sale is recognised on despatch of goods. Export sales are accounted for on basis of the dates of bill of lading. Sales are net of trade discounts, sales tax, sales returns and remissions. Excise Duty recovered is brsented as reduction from gross turnover.

(ii) Provision is made for the non salable returns of goods from the customers estimated on the basis of historical data of such returns. Such provision for non salable returns is reduced from sales for the year.

(iii) Export benefits under duty exemption scheme is being accounted in the year of exports.

(iv) Revenues from services are recognized when such services are rendered.

(v) Dividend is accounted when right to receive is established.

(vi) Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable.

1.7 DEbrCIATION/ AMORTISATION : Debrciation on assets is provided on Straight Line Method, pro-rata to the period of use, based on the useful life of the assets as brscribed under the Schedule II of the Companies Act, 2013.

Capital Expenditure incurred on the assets not owned by the company are amortised over a period of five years.

Brands and Technical Know-how are ammortised on a straight line basis over a period of ten years. Software cost is amortised on Straight line basis over a period of three years.

1.8 FOREIGN CURRENCY TRANSACTIONS : Foregin Currency transactions are recorded at the exchange rate brvailing on the date of the transactions. Monetary items (i.e. receivables, payables, loans etc) denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate brvailing on the date of balance sheet. Exchange difference arising on settlement and conversion of foregin currency transactions are recgonised as income or expenses in the period in which they arise, except those relating to fixed assets whichare adjusted in the cost of assets.

1.9 EMPLOYEE BENEFITS :

i) Defined Contribution Plan:

Employee benefits in the form of contribution to Provident Fund, Employees State Insurance Corporation and Labour Welfare Fund are considered as defined contribution plan and the same is charged to the statement of profit and loss for the year when the contributions to the respective funds are due.

ii) Defined Benefit Plan: Gratuity

The company has an obligation towards gratuity, a defined benefit plan covering eligible employees.

The company has created an Employees' Group Gratuity Fund which has taken a Group Gratuity Assurance Scheme with the Life Insurance Corporation of India. Company's contribution are based on acturial valuation, using the projected unit credit method, as at the date of the balance sheet. Actuarial gains / losses, if any, are recognised in the statement of profit and loss.

iii) Other Long Term Benefits: Compensated Absences

The company provides for the encashmnet of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits, for furture encashment. Compensated absences are provided for on the basis of an actuarial valuation, using the projected unit credit method, as at the date of the balance sheet. Actuarial gains / losses, if any, are immediately recognised in the statement of profit and loss.

1.10 BORROWING COSTS : Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take substantial period of time to get ready for the intended use are capitalised. Other borrowing costs are charged to the profit and loss account.

1.11 EARNINGS PER SHARE : Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

1.12 TAXATION : Tax Expenses comprises of current tax and deferred tax. Current Tax is provided on taxable income using applicable tax rates and tax laws.

The deferred tax for timing difference between the book and tax profits/losses for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of Balance Sheet date.

Deferred tax assets arising on account of unabsorbed debrciation and brought forward losses are recognised to the extent there is virtual certainty that the assets can be realised in furture.

Advance Taxes and provision for current income taxes are brsented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same governing taxation laws.

1.12 IMPAIRMENT OF ASSETS : The Company assesses at each balance sheet date for possible impairment in carrying value of assets based on external and internal sources of information and indications. In case of recoverable amount of assets / cash generating unit is less than carrying amount, impairment loss is recognised in the Profit & Loss Account for difference in carrying value of assets / cash generating units and recoverable amount.

1.14 PROVISION AND CONTINGENT LIABILITIES :

i) Provision in respect of brsent obligation arising out of past events is made in accounts when reliable estimates can be made of the amount of obligation and it is probable that an outflow of resources will be required to settle the obligation.

ii) Contingent liabilities are disclosed by way of note to the financial statements after careful valuation by the management of the facts and legal aspects of matter involved. Contingent Assets are not recognised in the financial statements.

NOTE 1 .

(a) Gross amount required to be spent by the company during the year: 7. 9.68 lacs

(b) Amount spent during the year on: NIL

NOTE 2.As per the requirement of the Companies Act, 2013 (Act), the company has reassessed the remaining useful life of the fixed assets taking into consideration the useful life brscribed in Schedule II of the Act. The written down value of 7. 280.07 Lacs as on April 1, 2014 (net of deferred tax of 7. 98.12 Lacs) of the assets, whose residual life is exhausted has been adjusted against the opening balance of Reserves and Surplus.

NOTE 3

In compliance with Accounting Standard-2 (AS-2) revised, excise Duty liability estimated at 7. 22.42 Lacs (Previous year 7. 8.91 Lacs) on finished goods lying in factory brmises has been loaded on the valuation of Finished goods. However, it has no impact on the Profit and Loss Account. The Excise duty of 7. 13.51 lacs related to the difference between the closing stock and opening stock is given effect in the Profit & Loss Account.

NOTE 4 .The Company has appointed an internal auditor ,an independent firm of Chartered Accountants to carry out the audit of stock records maintained by the company. The audit inter alia includes physical verification and valuation of inventories of all its locations and accordingly the same has been incorporated in accounts. Certificate issued in this regard be relied upon.

NOTE 5.In the opinion of the management inventories of 7. 3680.14 Lacs (Previous year 7. 2611.54 Lacs) shown in Balance Sheet are good and do not include any slow moving, or dead stock. Due provision is made for the near expiry material and depletion in its value, if any. In the opinion of the management, all the current assets including inventories, loans and advances have a value on a realisation in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet.

NOTE6 Balance of Trade Receivable, loans & advances, Trade Payable and security and Trade Deposits from Agents and Stockists balance are subject to confirmations, verification and adjustments necessary upon reconciliation thereof. Pending adjustments on confirmation, if any, it is shown as good in nature.

Company has already initiated process of identifying Trade Receivable, Advances and Trade creditors which are non-recoverable in nature and will make necessary provision upon completion of process. However during the financial year 2014-15 it has made necessary provision/or transferred amount to bad debts in respect of debtors which are not recoverable in nature.

NOTE 7.The company has given security deposit of 7 300 lacs to Gufic Private Limited towards the use of its factory brmises at Navsari for its manufacturing activities. Accordingly an amount of 7 300 lacs has been shown under the head long term loans and advances.

Company has also given Security Deposit to Gufic Chem Private Limited of 7 120 lacs towards supply of products at concessional rate to the company and the same has been show under the head Long Term Loan and Advance to related parties.

NOTE 8.

The company has unearthed the fraud committed by one of its marketing employee who has misappropriated amount of 7. 123.80 Lacs (gross 7. 146.30 Lacs less recovered 7. 22.50 Lacs). The management has taken necessary steps including legal action and is hopeful of recovering the said amount. Accordingly it has been shown the amount of 7. 123.80 Lacs under the head other non-Current Assets (other).

NOTE 9

The company is in process of implementing ERP system in a phased manner for integration of its various functions and it could implement only some of its modules. Company has also continued with the old accounting system. Pending implementation of complete ERP system, the management confirms that it has taken enough care/diligence to ensure that the data / accounts, so brsented, are materially correct and that the books of accounts have been duly reconciled with the various systems.

NOTE 10.Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

As per our Report of even date attached

For S H R & Co

Chartered Accountants

FRN : 120491W

Deep N Shroff

Partner

Membership No. 122592  

For and on behalf of the Board of Directors

Jayesh P Choksi

Chairman & Managing Director

Pranav J. Choksi

Chief Executive Officer & Executive Director

Hemal Desai

Chief Financial Officer & Director

Santoshkumar J. Sharma

Company Secretary

Place : Mumbai

date :  - May 29th, 2015