ARCL Organics Limited Note : 1 : Significant Accounting Policies 1. Basis of Accounting: The Financial statements have been brpared on the historical cost convention basis, except where otherwise stated. Generally, accepted accounting principles and the Accounting Standards notified under the relevant provisions of the Companies Act, 2013, has been adopted by the company except wherever stated otherwise and disclosures are made in accordance with the requirements of Schedule III of the Companies Act, 2013. 2. Use of Estimation The brparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of income and expenses of the year, assets and liabilities and disclosures relating to contingent liabilities as of the date of the financial statements. 3. Recognition of Income and Revenue a) Sale is inclusive of internal transfers and recognized on passing of title of goods, which generally coincides with delivery of goods to customers. b) All other income and expenses are accounted for on mercantile basis. 4. Fixed Assets The Fixed Assets of the Company are stated at cost of acquisition / including direct expenses of acquisition/installation less adjustment of the CENVAT Credit and includes amounts added on revaluation less debrciation. 5. Impairment of assets Impairment losses, if any, are provided to the extent the carrying amount of the assets exceeds their recoverable amount. Recoverable amount is the higher of an asset's net selling price and its value in use. The value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal as at the end of its useful life. Such impairment, if any, are ascertained and reviewed at each year-end. 6. Debrciation Debrciation is provided on straight-line basis at useful life of the assets as brscribed in Schedule II to theCompanies Act, 2013. Debrciation on addition/disposal is provided pro-rata with reference to the month of addition/disposal. 7. Inventories Description Basis of Valuation Raw Materials At cost of FIFO basis, or net realizable value, whichever is lower. Stores & Spares At cost; provision is made for likely devaluation for declared surplus/obsolete store. Finished goods At lower of cost or net realizable value. 8. Employees Benefits The Company accounts for its obligations for gratuity benefits based on an independent external valuation, determined on the basis of Projected Unit Credit Method. Actuarial gains or losses are recognized in the Profit and Loss Account. As per the Company's brsent system, un-availed leaves are not accumulated and carried forward. Contribution to Provident Fund and Pension Scheme are charged to the Statement of Profit and Loss for the year. 9. Provisions, Contingent Liabilities & Contingent Assets The Company recognizes a provision when there is a brsent obligation as a result of past event that probably requires an out flow of resources and a reliable estimate can be made of the amount of obligation. A disclosure for a 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. Contingent assets are not recognized or disclosed in the financial statements. 10. Taxes on income a. Tax is determined as the amount of tax is payable in respect of taxable income for the period on applicable tax rates and laws. b. Deferred tax is recognized, subject to consideration of prudence, on timing difference being the difference between taxable income of accounting income that originates in one period and are capable of reversal in one or more subsequent period and is measured using Tax rates and Laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to reassess excess realization. ARCL Organics Limited Note 24 : Additional Notes to Accounts 1. Sales include '13,62,08,068 (at transfer price) towards the value of internal transfers. 2. Balance confirmations are awaited in few cases in respect of trade receivable and trade payables. In the opinion of the management it is unlikely that there will be any major reconciliation difference with material impact on the carrying amounts of these assets and liabilities as reflected in these financial statements. 3. The Company on the basis of information available to it has not able to verify the status of vendors under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year-end together with interest paid/payable under this Act has not been given. 4. In accordance with the requirement under Accounting Standards (AS) 22 Accounting for Taxes on Income deferred tax assets at the year-end has recognized in the account. 5. Interest (Dr.) include ' (76,43,249) (Previous year ' 28,77,472) on term loans. 6. Disclosure of related party transactions in terms of Accounting Standards 18 are given below. (a) Name of the related parties with relationship: i) Mr. SurajRatanMundhra,Director - Key Management Personnel ii) Mr. MukeshMundhra, Director - Key Management Personnel iii) Mr. Ajay Kumar Mimani, Director - Key Management Personnel iv) Mr. Rajesh Mundhra - Relative of Key Management Personnel (b) Transactions with the related parties during the year: Key Management Personnel (KMP) (') Relative of KMP (') Remuneration 15,78,400 10,00,000 (5,18,400) (3,00,000) Loans & Advances Given Nil Nil (Nil) (Nil) 7. Earnings per Share 2014-15 (') 2013-14 (') a) Net profit attributable to the shareholders (3,53,29,990) 3,62,826 b) Weighted average no. of equity share of face value of ' 10/- each --- --- Basic earnings per share (8.36) c) Weighted average potential no. of equity shares 80,00,000 80,00,000 Diluted earnings per share (8.36) Rs.0.05 8. Employee Benefits: a) Present Value of Obligations for Defined Benefits: Gratuity (Funded) 2014-2015 ' Gratuity (Funded) 2013-2014 ' As at the beginning of the year 93,37,960 1,07,10,306 Current Service Cost 5,91,606 7,42,237 Interest Cost 7,83,084 8,59,678 Actuarial (Gains)/Losses 10,90,933 (2,394,328) Benefits paid (16,52,350) (5,79,933) As at the end of year 1,01,51,233 93,37,960 b) Fair Value of Planned Assets: Gratuity (Funded) 2014-2015 'Gratuity (Funded) 2013-2014 ' As at the beginning of the year 0.00 0.00 Expected return on plan assets 0.00 0.00 Contribution by Employer 16,52,350 5,79,933 (Benefits Paid) (16,52,350) (5,79,933) As at the end of the year 0.00 0.00 c) Reconciliation of Present Value of defined benefits Obligation in a above and fair value of Plan assets in above: Gratuity (Funded) 2014-2015 'Gratuity (Funded) 2013-2014 ' Present Value of Obligation at the end of the year 1,01,51,233 93,37,960 Fair value of plan assets at the end of the year 0.00 0.00 Net Asset / (Liability) recognized in the Balance Sheet (1,01,51,233) (93,37,960) 9. Expenditure in Foreign Currency: 2014-2015 ' 2013-2014 ' Travelling 3,95,162 5,47,352 Commission --- 4,30,385 Business Development Expenses 2,54,200 ---- 10. Earnings in Foreign Currency 2014-2015 ' 2013-2014 ' Value of Exports on FOB basis 5,05,66,171 3,27,73,734 Brokerage and Commission received 2,17,536 45,77,256 11. CIF Value of imports 2014-2015 '2013-2014 ' Raw Materials --- 11,89,65,231 12. The charge of dues of IDBI Bank now taken over by Stressed Assets Stabilization Fund (SASF) and WBIDCL has not yet been filed in connection with satisfaction of charge on ROC portal, despite full and final payment made as per the scheme approved by the Hon'ble Calcutta High Court. Since SASF has failed to issue NOC as stipulated in the scheme, the company has filed a petition before the Hon'ble Calcutta High Court on the ground of breach of terms and conditions of the scheme. The matter is pending before Hon'ble Calcutta High Court. The matter for NOC with WBIDCL is being followed. 13. Deferred tax is calculated on the difference arises due to adjustment made in the fixed assets for change in debrciation by giving effect of Schedule - II of Companies Act, 2013 for Rs.5,57,77,297. The tax computed thereon is Rs.1,72,35,186shown under Deferred Tax Asset and the difference of Rs.38,542,111 is adjusted with General Reserve. 14. Contingent Liabilities a) The company has taken ground of Budge Budge Plant on rent from Kolkata Port Trust, but no payment or provision for ground rent accumulated in last 22 months has been booked, since the amount of rent is under dispute and the matter is sub judice. b) The particulars of dues of Income Tax , Sales Tax and Excise Duty as at 31st March , 2015 which have not been deposited on account of disputes are as follows : Name of the statute Nature of dues Amounts ('. in Lakhs ) Period to which the amount relates Forum where dispute is pending Income Tax Act , 1961 Income Tax 640.78 1.4.1988 to 25.8.1998 High Court Kolkata Central Excise Act, 1944 Excise Duty and Penalty thereupon 13.63 2003-04 to 2006-07 Central Excise and Service Tax Appellate Tribunal Central Excise Act , 1944 Excise Duty and Penalty thereupon 324.00 2003-04 to 2007-08 Central Excise and Service Tax Appellate Tribunal Central Excise Act , 1944 Excise Duty and Penalty thereupon 621.20 2004-05 to 2008-09 Calcutta High Court Central Excise Act , 1944 Excise Duty and Penalty thereupon 171.48 2007-08 Calcutta High Court Central Excise Act , 1944 ( Anti Evasion Unit ) Excise Duty and Penalty thereupon 183.52 2007-08 & 2008-09 Commissioner of Central Excise Central Excise Act , 1944 Excise Duty and Penalty thereupon 20.12 2007-08 & 2008-09 Central Excise and Service Tax Appellate Tribunal Central Excise Act , 1944 Excise Duty 18.70 2012-14 Add. Commissioner Kol-V Service Tax Service Tax and Penalty thereupon 161.62 2007-08 to 2011-12 Central Excise and Service Tax Appellate Tribunal Service Tax Service Tax and Penalty thereupon 13.04 2008-09 Commissioner (Appeal) West Bengal Sales Tax Act, 1941 Sales Tax 15.95 1980-81 to 1986-87 Taxation Revisional Board 6.04 1979-80 Assistance Commissioner of Sales Tax Name of the statute Nature of dues Amounts (' in Lakhs ) Period to which the amount relates Forum where dispute is pending 190.00 1993-94 to 1994-95, from 1997-98 to 1999-2000 and 2001 Taxation Revisional Board 327.50 2005-06 to 2010-11 Joint Commissioner/ Sr. Joint Commissioner 15. Previous year's figures (given in parenthesis in some cases) has been arranged / regrouped wherever considered necessary.

1. Employee Benefits: a) Present Value of Obligations for Defined Benefits: Gratuity (Funded) 2014-2015 ' Gratuity (Funded) 2013-2014 ' As at the beginning of the year 93,37,960 1,07,10,306 Current Service Cost 5,91,606 7,42,237 Interest Cost 7,83,084 8,59,678 Actuarial (Gains)/Losses 10,90,933 (2,394,328) Benefits paid (16,52,350) (5,79,933) As at the end of year 1,01,51,233 93,37,960 b) Fair Value of Planned Assets: Gratuity (Funded) 2014-2015 'Gratuity (Funded) 2013-2014 ' As at the beginning of the year 0.00 0.00 Expected return on plan assets 0.00 0.00 Contribution by Employer 16,52,350 5,79,933 (Benefits Paid) (16,52,350) (5,79,933) As at the end of the year 0.00 0.00 c) Reconciliation of Present Value of defined benefits Obligation in a above and fair value of Plan assets in above: Gratuity (Funded) 2014-2015 'Gratuity (Funded) 2013-2014 ' Present Value of Obligation at the end of the year 1,01,51,233 93,37,960 Fair value of plan assets at the end of the year 0.00 0.00 Net Asset / (Liability) recognized in the Balance Sheet (1,01,51,233) (93,37,960)