SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS

I. Basis of Preparation of Financial Statements:

a) These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly-issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

b) The Company follows mercantile system of accounting and recognizes all significant items of income and expenditure on accrual basis.

c) All income & expenditure having material bearing on the financial statements are recognised on an accrual basis.

d) Use of Estimates: The brparation of financial statements in confirmity with generally accepted accounting principles requires management to make assumptions and estimates which it believes are reasonable under the circumstances that affect the reported amounts of assets, liabilities and contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognised in the year in which the results are known/materialized.

II. Statement of Significant Accounting Policies:

A. Fixed Assets

All fixed assets are stated at Historical Cost less Debrciation except in the case of Land and Site Development whereas it is stated at Cost Plus Development expenditure. The expenses incurred in setting up the project are capitalised and apportioned to the assets procured for that project in proportion to the value of each of the asset.

B. Debrciation

The debrciation on fixed assets has been provided on Written Down Value method for Fixed Assets in Diketene Division and common assets at Corporate Office and on Straight Line Method for Assets in Bio-Tech Division over the useful life of assets as brscribed under Part C of Schedule II of the Companies Act, 2013 .Debrciation is not provided on Land. Debrciation on Assets acquired for the project are provided on Commercialisation and debrciation on other assets if put into use is provided accordingly. The management estimates the usefull lives for the Fixed Asset as follows:

C. Employees' Benefits

Contribution to defined schemes such as Provident Fund , ESI are charged as incurred on accrual basis.

D. Foreign Currency Transactions:

a. Transactions denominated in foreign currencies are recorded at spot rates / average rates.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates.

c. Non monetary foreign currency items are carried at cost.

d. In respect of branches, which are integral foreign operations, all transactions are translated at rates brvailing on the date of transaction or that approximates the actual rate on the date of transaction. Branch monetary assets and liabilities are restated at the year end rates.

e. Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss except in case of long term liabilities, where they relate to

acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets as applicable in AS 11

E. Inventories:

As per AS - 2 Inventories are valued as under:

a. Raw Materials, Stores, Consumables, Packing materials and other materials: at cost on Moving average basis

b. Work in process is carried at cost of input RM and estimated cost of manufacturing upto the stage of completion.

c. Finished Goods: At realizable value or cost whichever is lower.

F. Excise Duty, Service Tax and Education Cess

Excise Duty is accounted on the basis of payments made in respect of goods cleared. Cenvat , Service Tax and Education Cess on capital goods, raw materials and services as the case may be are accounted on receipt / completion of contracts, job works etc.

G. Revenue Recognition:

As per AS- 9 Revenue in respect of sales is recognised as and when goods are supplied and in respect of insurance claims, interest etc., is recognised when it is reasonably certain that the ultimate collection will be made.

H. R & D Expenditure:

Expenditure for capital items are debited to respective Fixed Assets and debrciation at applicable rates. Revenue expenditure is charged to Profit & Loss Account.

I. Deferred tax:

Deferred tax is accounted for by computing the tax effect of timing differences, which arise during the year and reversed in subsequent periods. Deferred Tax assets on accumulated losses and unabsored debrciation are recognised only to the extent there is certainity of realisation of such asset in future. J. Earnings Per Share :

The basic and diluted Earnings Per Share is calculated by dividing the profit/(loss) after tax by the weighted average number of equity shares outstanding.

K. Impairment of Assets :

At each Balance Sheet date, the carrying values of the assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where there is an indication that there is a likely impairment loss for a group of assets, the company estimates the recoverable amount of the group of assets as a whole, to determine the value of impairment.

L. Investments:

Investments are stated at cost. M. Borrowing Cost:

Borrowing Costs attributable to acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset, till the period in which the asset is ready for use. Other borrowing costs are recognised as an expense in the period in which these are incurred. N. Provisions and Contingent Assets :

Provisions are recognised only when there is a 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) brsent obligation arising from past events where it is not probable 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 assests are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

O. Cash and Cash Equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks.

P. Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

11 The company has entered into the settlement agreement on April' 2015 with the workers employed in Sadashivpet Plant and the company has agreed to pay Rs. 282 lacs in full & final settlement of workers and the company will pay the amount in due course.

12 Exceptional Items and Changes in Accounting Policies Rs 253.76 Lakhs is towards reversal of certain employee related accruals made in earlier period.

13 Other Notes

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

(b) In the opinion of the Board of Directors, other current assets have a value on realisation in the ordinary course of the Company's business, which is at least to the amount at which they are stated in the balance sheet.

As per our report of even date For and on behalf of the Board

for Mukesh Mehta & Associates

Chartered Accountants

Mukesh Mehta Proprietor Mem. No. 100407

Ajit Kamath Chairman FRN: 116309W

Manoj Jain Director

Rajendra Kaimal Director

Jignesh Patel Company Secretary

Date: 29.05.2015

Place: Mumbai