NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Accounting:

The financial statements are brpared under historical cost convention on accrual basis. Accounts are being maintained on mercantile basis.

2. Fixed Assets and Debrciation:

Fixed Assets are stated at historical cost less accumulated debrciation. The debrciation is provided on written down value pro-rata basis as on the basis of useful life brscribed under schedule II of companies Act, 2013.

3. Staff retirement benefits:

Retirement benefit i.e. gratuity liability is determined based on the percentage of the annual wage bill specified by the Life Insurance Corporation under the Group Gratuity cum Life Insurance Scheme. As regards leave encashment as part of retirement benefit, company is making provision as per actuarial valuation.

4. Inventories:

Valuation of stocks: -

(a) Raw material Raw Material and other supplies used in production are valued at Lower of cost or net realizable value by applying FIFO method.

(b) Stores, spares etc. Lower of cost or net realizable value by applying FIFO method.

(c) Finished goods. Lower of cost or net realizable value. Cost being determined by including cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Net realizable value determined by excluding all payable statutory dues and direct sales expenses.

5. Treatment of Government Grants:

a. Unutilized Grants:-

i) Grants received from the Government, which are not utilized, are reported under Current Liabilities, corresponding amount under Current assets loan & advances.

ii) Interest income earned on un-utilized grant is credited to Grant except TDS on interest deducted by Bank.

iii) Revenue grants (where project is not completed) is shown net of grants Unutilized, b. Utilized Grants: -

i) Government grants related to specific fixed assets are deducted from the gross value of assets acquired in arriving at their Book Value. Where the grant related to a fixed asset equals the gross value of assets, the same is shown in the Balance Sheet at a nominal value.

ii) Revenue Grants are deducted from the related expenses and such expenses are reported net of grants utilized.

6. Income Recognition

All incomes are recognized on accrual basis except interest on security deposit, which are recognized on Cash basis.

NOTES 2 - NOTES OF ACCOUNTS

a. Estimated amount of contract remaining to be executed on capital/revenue account and not provided for (including revenue commitment of letter of credits, but excluding capital commitment relating to various grants) - Rs.3066.20 lacs (PY Rs.3174.49 lacs).and capital commitment on account of Grants Rs. NIL (PY Rs. 6.26).

b. Contingent Liabilities:-

Claim against the company not acknowledged as debts are Rs.742.52 lacs (PY Rs. 720.64 lacs) which includes:-

i. Land Cases:- Liability for the land compensation cases pending the outcome of appeal before Hon'ble High Court, Allahabad. However, decision of District Court, Bulandshahr

was against the company and the figures have been computed on the basis of District Court order: Rs.587.54 lacs including interest (PY. Rs. 573.08 lacs including interest).

ii. Administrative-cum-Housinq Complex:- Case is filed by M/s. Uppal Engineering Co. Pvt. Ltd. against civil work awarded for Administrative-cum-Housing Complex before Arbitrator. Arbitrator decided in favor of appellant. Company has filed an appeal before the competent court against Arbitration award figures have been computed on the basis of award Rs 80.31 lacs including interest (PY. Rs. 74.12 lacs including interest).

iii. Staff Litigations:- Litigation is pending in the cases filed against the company by the then staff i.e. Mr. Bhaskar Gupta & (Col.) V. K. Sethi for the subsistence allowance & salary respectively: Rs.40.06 lacs in total (PY Rs. 38.83 lacs in total).

iv. Income Tax: Income tax authority raised the demand of penalty u/s 271 (1) (c) of income tax act 1961. The company being not agreed with demand brferred an appeal before the appellant authority which is pending on the date of balance sheet the amount in dispute is Rs. 34.61 lacs excluding interest ( Previous year Rs.34.61 lacs excluding interest).

c. In the opinion of the Board of Directors, Current Assets, Loans and Advances shall have the value on realization, in the ordinary course of the business at least equal to the amount at which they are stated in the Balance Sheet.

d. Request for confirmation of balances of Trade Receivables and Trade Payables were sent. Confirmation of balances received from few cases. These confirmations are subject to reconciliation and consequential adjustment which in the opinion of management is not material.

e. Any gains or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Statement of Profit & Loss, In this regard during the year, company has booked net exchange gain of Rs. (-129.10) lacs. (P.Y. Rs. 273.03 lacs).

f. Disclosure as per Accounting Standard 15 (Accounting for Retirement benefit in the Financial Statements of Employer) is as under: -

The Accruing liability according to the actuarial valuation for the Leave Encashment is Rs.280.66 lacs (PY Rs. 253.97 lacs) & half pay leave is Rs.36.62 lacs (PY Rs. 29.71 lacs).

Leave Travel Concession:

a. Rs.5.54 lacs have been paid as LTC (All India) claimed (Previous Year Rs. 5.42 lacs).

b. Rs.0.50 lacs have been paid as LTC (Home Town) claimed (Previous Year Rs. 0.42 lacs).

Gratuity: Yearly payment is made to LIC to maintain the Gratuity Account of the Employees with Life Insurance Corporation of India. BIBCOL has no Gratuity Trust so the Actuarial Valuation has not been made

c. Provision for current year's Income Tax as well as Minimum Alternative Tax (MAT) u/s 115 JB of Income Tax Act, 1961 has been made for want of taxable/book profit.

d. The company has initiated the process of identifying the parties and obtaining information with respect to parties, if any, covered under the Micro, Small and Medium Enterprises Development Act, 2006 (or the "Act"). The Company would account for significant interest obligations subsequently, if any. Accordingly required disclosures in this regard have not been given in the current year.

e. Out of amount of Rs. 71.23 lacs shown as Advance Tax/TDS recoverable, the amount of Rs.60.80 lacs pertains to the Income tax refund claimed and pending for the assessment year 2006-07 to 2010-2011. The assessments stand completed up to the assessment year 2012-13.

f. On 20 January, 2014, the company was sanctioned working capital loan of Rs. 70.00 crores and foreign letter of credit limit of Rs.80.00 crores by Canara Bank, Green Park Extn., and New Delhi. The working capital loan has been sanctioned at interest rate of 13.95% p.a. (base rate 10.20% + 3.75%) (secured by way of first pari-passu charge on all fixed assets, both brsent and future (excluding Land & Building and Vehicles), stocks and book debts, whether now lying loose or in cases or which are not lying or stores in or whether in course of transit.

g. Diminution in the value of below detailed assets has been provided:-

Capital Work in Progress - The Administrative-cum-housing complex has been shown under the head Capital Work In Progress. The work has been suspended and has been kept in abeyance. The impairment in the value has been determined on the basis of valuation done by certified valuer as on 31.03.2006 and accounted for accordingly. The further impairment is to be determined.

h. In terms of AS 28, the company is in the process of forming a committee to look into the further impairment of the fixed assets.

i. The company is in process to forming a policy in regard to identifying of slow/non moving/obsolete items. Necessary entries will be made of the time of the identification.

j. The company has adopted RBI Reference Rates of foreign exchange as on 31.03.2015 for the valuation of the imported raw material and packing material as well as gain/ loss on account of exchange rate variation.

k. Previous year's figures have been re-named/re-classified/regrouped/re-arranged wherever considered necessary to make them comparable.

(Sandip Kumar Lai) Company Secretary

(U.K.Singh) CFO

(Sreeshan Raghavan) Managing Director(DIN-03431687)

(Dr. M. K. Bhan) Chairman  (DIN-03553265)

As per report of even date attached

For Hari & Associates

Chartered Accountants,

F.R.N. 001852C

 (Sachin Kr.Jain)

Partner

M.No.094187

PLACE: BULANDSHAHR

DATE: 20.08.2015