SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015

A. SIGNIFICANT ACCOUNTING POLICIES:

a) General:

i) The financial statements are brpared on the basis of historical cost convention, in accordance with the applicable accounting standards and on the accounting principals of a going concern. All expenses and income to the extent ascertainable with reasonable certainly are accounted for on accrual basis.

ii) Export benefit in terms of duty free imports of raw materials is accounted for in the year of exports.

b) Uses of estimates:

The brparation of financial statements to be in conformity with generally accepted accounting principals (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result could differ from these estimates. Any revision to accounting estimates is recognized prospectively.

c) Revenue recognition:

i) Revenue from sale of goods is recognized when significant risks and rewards of ownership are transferred to the customers and their logistics. Sales are net of sales returns and trade discounts.

ii) Interest is accrued over period of loans /Investments.

iii) Dividend is accrued in the year in which it is declared, whereby right to receive is established.

d) Fixed Assets:

i) Fixed assets are stated at cost less accumulated debrciation. Costs comprise the purchase price, related br operational expenses, borrowing cost and any attributable cost of bringing the assets to its working conditions for its intended use.

ii) The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any, such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to profit and loss account. If at the balance Sheet date there is any deduction that a brviously assessed impairment loss no longer exists, then  such loss is reversed and the asset is restated to that effect.

e) Debrciation:

i) Debrciation on fixed assets is provided on Straight Line Method at the useful life specified in Schedule II to the Companies Act, 2013.

Debrciation on the fixed assets added/disposed off/ discarded during year is provided on pro-rata basis with reference to the month of addition/ disposal/discarding.

Debrciation on spares purchased for specific machinery and having irregular use is provided prospectively over the residual life of the specific machinery.

ii) Leasehold land brmium is amortised over the period of lease.

f) Investments:

i) Long term investments are stated at cost less amortised brmium. No adjustment is made in the carrying cost for temporary decline in the value of long term investments.

ii) Current investments are carried at lower of the cost and fair value.

g) Inventories:

Inventories are valued at the lower of the cost (computed on weighted average basis) and estimated net realisable value after providing for obsolescence and other anticipated losses, if any. Finished goods and work in progress include costs of conversion and other costs incurred in bringing the inventory to their brsent locations and condition.

h) Employee Benefits:

i) Provident Fund and Superannuation Fund:

Retirement benefits in the form of provident fund/ superannuation fund are a defined contribution scheme and the contributions are charged to profit and loss account for the year when the contributions to the respective funds are due.

ii) Gratuity:

Gratuity liability is defined benefit obligations. The Company has taken an insurance policy under the

Group Gratuity Scheme with the Life Insurance Corporation of India to cover the gratuity liability of all its employees up to the Sixty years of age and the amount paid /payable in respect of brsent value of liability of past services is provided for, on the actuarial valuation at the year end.

iii) Leave Entitlement:

Liability for leave entitlement is provided on the basis of the actuarial valuation at the year end.

i) Research and Development Expenditure:

Revenue expenditure is charged to profit and loss account and capital expenditure is added to the cost of fixed assets in the year in which it is incurred.

j) Foreign Currency Transaction:

Foreign currency transactions are recorded at the rate of exchange brvailing on the date of the transaction. Current assets and current liabilities are stated at the rate of exchange brvailing at the year end and resultant gains/loss is recognized in the profit and loss account.

In case of forward contracts, the exchange differences are dealt with in the profit and loss account over period of the contracts.

k) Borrowing Costs:

Borrowing costs attributable to acquisition or construction of qualifying assets are capitalised as part of the costs of such assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the profit and loss account.

l) Accounting for Taxes on Income:

Income Tax expenses comprise current tax (amount of tax for the period determined in accordance with the Income Tax laws) and deferred tax charge or credit (reflecting the tax effects of timing difference between accounting income and taxable income for the year).

Deferred tax assets are recognized only to the extent that there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed debrciation or carry forward loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainly of realisation of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain as the case may be to be realised.

Credit entitlement in respect of Minimum Alternate Tax (MAT) is considered on management estimation of regular taxation in future.

m) Provisions, Contingent liabilities and Contingent assets:

Provisions are recognized only when there is brsent obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii)Present obligation arising from past events where it is not possible that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realised.

2. Commitments:

(a) Estimated amount of contracts remaining to be executed and not provided for (net of advance, unsecured considered good), on capital account are 5264,699,369 (net of advance of 5 63,718,332);Previous Year 517,681,198 (net of advance of 5 19,135,683)

(b) In respect of long term investment made with private equity fund, the Company is further committed to invest 5 364,100,000 (Previous Year 5240,300,000)

3. Secured Loans:

(a) Interest Rate on Working capital loans is Base Rate plus 2.75% per annum (Previous Year Base Rate plus 2.75% per annum) and limit utilised 5 34,895,055 (Previous Year 513,845,437) are secured by hypothecation of stocks and debtors and charge on immovable properties of Bhandara unit.

(b) Non fund based limit utilised 5 13,845,437 (Previous Year 5 24,444,291) are secured by lien over fixed maturity plan (FMP) valued of 5 20,000,000 (Previous Year 5 40,000,000).

(c) Vehicle loans (repayable over a period of 1 to 4 years) are secured by way of hypothecation of vehicles purchase their against and carry Interest in the range of 9.80 % to 10.75% (Previous Year 9.80 % to 10.75%).

Unsecured Loans:

Interest free Sales tax Loans is repayable within 12 years.

4. (a) In the opinion of the Board, assets other than fixed assets and non-current investment have a value on realization in the ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet. The provision for debrciation and other known liabilities is adequate and not in excess of what is required. (b) The accounts of Trade receivable and payable and Loans and Advances are subject to formal confirmations / reconciliation and adjustments, if any. The management does not expect any material difference affecting the current year's financial statements due to the same.

5. Pursuant to enactment of the Companies Act, 2013 (the Act), the Company has , effective 1st April, 2014, reviewed and revised the estimated useful life of certain fixed assets, in accordance with the Schedule II of the Act. Accordingly, the Company has given impact of Rs. 4,101,094 (net of deferred tax of Rs. 1,393,962) on account of assets whose useful life already exhausted on 1st April, 2014 to Statement of Profit & Loss. If the Company had continued with the brviously assessed useful lives, charge for debrciation for the year would have been higher by Rs. 9,565,192.

6. Previous years' figures have been regrouped/reclassified whenever necessary to conform to current years' classification. Figures in brackets pertain to brvious year.

For and on behalf of the Board of Directors

Raghu Mody  

Chairman

P. K. Choudhary

Managing Director

Amit Goenka  

V.P. Finance and Company Secretary

Sunil Jindal

Chief Financial Officer

Date: 07th May 2015

Place : Mumbai