SIGNIFICANT ACCOUNTING POLICIES AND NOTES TO THE ACCOUNTS 31.03.2016

Kriti Industries (India) Ltd., a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 12.03.1990 and having its Registered office in Indore (MP). The company's shares are listed in the Bombay Stock Exchange(BSE)

1.2. Significant  Accounting  Policies

1.2.1 Basis of Preparation of Financial Statements

The financial statements have been brpared in accordance with the generally accepted accounting principles (GAAP) in India under the historical cost convention on accrual basis. GAAP Comprises mandatory accounting Standards as brscribed under section 133 of the Companies Act ,2013 ('Act') read with Rule 7 of the Companies (Accounts)Rules, 2014.

1.2.2 Use of Estimates

The brparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

1.2.3 Fixed assets and debrciation

Fixed assets are stated at acquisition cost less accumulated debrciation. The cost of fixed assets comprises its purchase price including import duties and other non-refundable taxes or levies and any directly, attributable cost of bringing the asset to the working condition for its intended use.

Tangible Assets

Debrciation is provided on the straight-line method ('SLM') as per the useful life of the assets as brscribed in Schedule II of the Companies Act, 2013. Debrciation on addition has been charged from the 1st day of the next month of addition.

Based on the technical evaluation, the management belives that the useful life of Dies and Moulds is 6 years. Capital Work-In-Progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

Intangible Assets

Intangible assets are stated at acquisition cost less accumulated amortization. Amortization is provided on straight line method (S.L.M.) over the useful life of six years of the asset.

1.2.4 Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that an asset or a group of assets (cash generating unit) may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset or a group of assets. If such recoverable amount of the asset or the recoverable amount of the cash-generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit & loss account. If at the balance sheet date there is an indication that a brviously assessed impairment loss no longer exits, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of debrciable historical cost.

1.2.5 Investments

Investments classified as long term investment are carried at cost. Provision for diminution, if any, is made to recognize a decline other than temporary, in the value of the investment.

1.2.6 Inventories

1. Stores and Spares parts, etc: At Cost, with moving average price on FIFO basis

2. Raw materials: At cost, with moving average price on FIFO basis.

3. Finished Goods: At estimated cost or net realizable value (whichever is lower)

Cost comprises all cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition.

1.2.7 Revenue recognition

(a) Revenue from sale of products is recognized on transfer of all significant risk and rewards of ownership of products to the customers, which is generally on dispatch of goods. Sales are stated exclusive of Value Added Tax.

(b) Dividend income is recognized when the right to receive the dividend is established.

1.2.8 Employee Benefits

(a) Short Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, wages and short term compensated absences, etc. are recognized in the period in which the employee renders the related services.

(b) Post-Employment Benefits:-

(i) Defined Contribution Plans: The Employee State Insurance Scheme and Contributory Provident Fund administered by Provident Fund Commissioner are defined contribution plans. The Company's contribution paid/payable under the schemes is recognized as expense in the profit and loss account during the period in which the employee renders the related service.

(ii) Defined Benefit Plans: The Company has taken Group Gratuity and Cash Accumulation Policy issued by the Life Insurance Corporation of India (LIC). The brsent value of the obligation under such defined benefit plans is determined based on actuarial valuation as advised by LIC, using the Projected Unit Credit method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the brsent value of the estimated future cash flows. The discount rates used for determining the brsent value of the obligation under defined benefit plans, are as advised by LIC. Actuarial gains and losses are recognized immediately in the Statement of Profit & Loss.

1.2.9 Foreign Currency Transactions

Transactions denominated in foreign currency are recorded at the exchange rate brvailing on the date of transactions. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the profit and loss account of the year.

Monetary assets and liabilities in foreign currency, which are outstanding as at the year-end, are translated at the closing exchange rate/ forward contract booked (if any) and the resultant exchange differences are recognized in the profit and loss account.

Realized gain or loss on cancellation of forward exchange contract is recognized in the Statement of Profit and Loss for the year.

1.2.10 Borrowing Costs

The borrowing costs that are directly attributable to the acquisition, construction or productions of a qualifying asset are capitalized as part of the cost of that asset. The amount of borrowing cost eligible for capitalization is determined in accordance with Accounting Standard (AS) 16- Borrowing Costs issued by the Institute of Chartered Accountants of India (ICAI) and as specified under section 133 of the Companies Act, 2013 (The Act) read with rule 7 of the Companies (Accounts) Rules, 2014.

1.2.11 Taxation

Current taxis the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Current tax is net of credit for entitlement for Minimum Alternative Tax (MAT). Deferred tax is recognized, on timing differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

1.2.12 Earning Per Share

Basic and diluted earnings per share are computed by dividing the net profit attributable to equity shareholders for the year, by the weighted average number of equity shares outstanding during the year.

1.2.13 Provisions for contingencies

Provisions comprise liabilities of uncertain timing or amount. Provisions are recognized when the company recognizes it has a brsent obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reasonably estimated.

Disclosures for 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 when there isa possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Loss contingencies arising from claims, litigation, assessment, fines, penalties, etc. are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.

Contingent assets are not recognized in the financial statements.

2 in the opinion of the Board of Directors of the Company, the Current Assets, Loans and Advances have a value realizable in the ordinary course of business at least equal to the amount at which they are stated and provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

3. Contingent liabilities

3.1 Estimated amount of contracts remaining to be executed on Capital Account Rs.76.01 Lacs net of advance given (Previous Year Rs. 23.62 lacs)

3.2 Bank has given guarantee on behalf of the Company to various parties to the extent of Rs.2232.91 Lacs (Previous Year Rs. 2149.61 lacs.)

3.3 Claims not acknowledge by the company on Commercial tax matters Rs 244.19 Lacs (Previous Year 255.89 Lacs).

4. Company's Income tax assessments have been completed upto Assessment year 2013-14. Income Tax Dept. has raised a demand ofRs. 28.28 LacsforA.Y2013-14,176.41 lacsforA.Y.2012-13and Rs.133.07 lacsforA.Y.2011-12 respectively against which company has filed appeal before Higher Authorities. Company has not made any provision against such demand and shall be dealt with in books when crystallized finally. In the opinion of Board of Director's provision made for the year for Income Taxis adequate.

5. Unpaid overdue amount due on March 31, 2016 to Micro Small and Medium Enterprises and/or ancillary industrial supplierson account of principal together with interest aggregate to Rs. Nil.

This disclosure is on the basis of the information available with the company regarding the status of the suppliers as defined under the Micro, Small and Medium Enterprises Development Act, 2006.

6. The amount of Foreign Exchange Gain/ (Loss) included in the statement of profit & loss is Rs.88.71 Lacs as gain (Previous Year Gain Rs. 129.73 Lacs). Current year gain included in Other Income & Previous Year Gain amount is included in Other Income.

7. The amount of Foreign Exchange gain/(loss) included in the profit & loss account is Rs.(15.18) lacs (Previous Year gain/(loss)Rs.(32.03)lacs).

8. During the year ended 31.03.2016 excise duty on closing stock amounting to Rs. (-) 0.12 Lacs is net off excise duty on opening stock (Rs.390.51 Lacs minus Rs.390.63 ).Consequently the change in Inventories of finished goods, work-in-progress and stock-in-trade & other expenses are reduced to that extent, instead of grossing of stocks & Expenses. There is no impact on year ended results due to this change.

9. During the year Company paid Rs. 75 Lacs towards Excise Duty which includes Rs. 15.09 Lacs for earlier years on account of rate difference between fixed rate contract and dispatch value to depots/dealers due to observations made by DGCEI in its inspection to avoid any litigation on this account.

10. Previous year figures have been reclassified / regrouped wherever necessary.

As per Our Report of Even Date Attached

For : Rakesh Kumar & Associates

Chartered Accountants FRN:002150C

Rakesh Kumar Gupta

Partner

M.No. 070906

For and on behalf of the Board of Directors

Shiv Singh Mehta (Managing Director) DIN 00023523

Purnima Mehta (Executive Director) DIN 00023632

V. K. Mittal (Chief Financial officer)

Priyanka Gupta (Company Secretary)

Place: Indore

Date:- 12th May, 2016