1 SIGNIFICANT ACCOUNTING POLICIES:

1.1. BASIS FOR brPARATION OF ACCOUNTS

These financial statements have been brpared in accordance with the Generally Accepted Accounting Principles in India (GAAP) under the historical cost convention on accrual basis, except for certain tangible assets which are being carried at revalued amounts. These financial statements have been brpared to comply in all material aspects with the accounting standards as brscribed by Companies (Accounting Standards) Rule, 2006, as amended and the other relevant provisions of the Companies Act, 2013.

1.2. USE OF ESTIMATES

The brparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

1.3. FIXED ASSETS

a) Tangible:

Fixed Assets are stated at cost of acquisition / revalued amounts less accumulated debrciation. Cost of acquisition includes taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised.

Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard. The cost of fixed assets not ready for their intended use is recorded as capital work-in-progress before such date. Spares that can be used only with particular items of plant and machinery and such usage is expected to be irregular are capitalised.

b) Intangible:

Intangible Assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment loss, if any.

1.4. DEbrCIATION / AMORTISATION

a) Tangible:

Principal Straight Line Method (SLM) rates, in the manner brscribed by Schedule II of the Companies Act, 2013, have been adopted for the purpose of calculation of debrciation except for the amount added on revaluation of certain assets which are debrciated on the estimate provided by the valuer of the remaining useful life of such assets. Leasehold land is amortised over the period of lease. Debrciation on the assets which have been impaired is provided on the basis stated in note 1.5 below. In respect of following assets, where useful life is different than those brscribed in schedule II are used:-

Particulars Debrciation

Boiler No-5 Over its useful life as technically assessed (35 Years)

Turbine 7 MW Over its useful life as technically assessed (35 Years)

Evaporator Spent Wash Over its useful life as technically assessed (35 Years)

b) Intangible:

Intangible assets are amortised on a straight line basis over their estimated useful lives and have been amortised @ 10% per annum.

1.5. IMPAIRMENT OF ASSETS

All assets other than inventories, investments and deferred tax assets, are reviewed for impairment, in accordance with Accounting Standard (AS 28), "Impairment of assets", issued by the Institute of Chartered Accountants of India, wherever events or changes in circumstances indicate that the carrying amount may not be recoverable. Assets whose carrying value exceeds their recoverable amount are written down to the recoverable amount. After impairment, debrciation is provided on the revised carrying amount of the assets over its remaining useful life. Previously recognised impairment loss shall be increased or reversed depending on changes in circumstances. However the carrying amount after reversal is not increased beyond the carrying value that would have brvailed by charging usual debrciation if there was no impairment.

1.6. INVESTMENTS

Long Term Investments are stated at cost and provision for diminution is made to recognise a decline, other than temporary, in the value of investments. Current Investments are stated at lower of cost and fair value.

1.7. INVENTORIES

Inventories are valued at the lower of cost (inclusive of excise duty, as applicable) or net realisable value. Cost is determined on a weighted average basis and it includes all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their brsent location and condition.

1.8. INCOME

a) Sale is recognised on dispatches made from respective locations of the Company and is inclusive of excise duty on sales wherever payable by the Company. Sales include goods sold by contract manufacturers on behalf of the Company, since risk and reward belongs to the company in accordance with the terms of the relevant contract manufacturing agreements.

b) Revenue from job work is recognised on the completion of a relevant job.

c) Interest on Income Tax refunds, Insurance claims, Export benefits and Other refunds are accounted for as and when amounts receivable can be reasonably determined as being acceptable to authorities. Royalty income is accounted on an accrual basis in accordance with terms specified in the relevant agreements.

1.9. EMPLOYEE BENEFITS

(i) Gratuity and leave encashment which are defined benefits, are accrued based on actuarial valuations at the balance sheet date, carried out by an independent actuary.

(ii) Contributions payable to the Government provident fund and approved superannuation fund which are defined contribution schemes, are charged to Profit and Loss account.

(iii) Long Term Compensated absences are provided for based on actuarial valuation carried by an actuary as at the end of the year.

(iv) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.

1.10. FOREIGN CURRENCY TRANSACTIONS

Foreign currency transactions are accounted for at the exchange rate brvailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rate brvailing at the date of the balance sheet. All exchange differences other than in relation to acquisition of fixed assets and other long term foreign currency monetary liabilities are dealt with in the statement of Profit and Loss.

1.11. BORROWING COSTS

Borrowing costs attributable to the acquisition and/ or construction of qualifying assets are capitalised as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other Borrowing costs are charged to Statement of Profit and Loss.

1.12. LEASE ACCOUNTING

Operating Lease payments are recognized as an expense in the Profit and Loss Account on straight-line basis over the lease term [ Note 42 ].

1.13. TAXATION

Tax expense/ earning is the aggregate of current tax and deferred tax charged/ credited to Profit and Loss Account for the year. Current tax is the amount of tax payable in respect of taxable income for the year and measured by using the applicable tax rates and laws. Deferred tax assets and liabilities are recognized on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognized subject to the consideration of prudence and to the extent there is reasonable/virtual certainty that sufficient future taxable income will be available against which such deferred tax asset can be realised. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet date.

1.14. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

The Company creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow 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 probably will not require an outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent assets are neither recognised nor disclosed.

2. CONTINGENT LIABILITIES:

The following are the details of Contingent liabilities the outflow of which is uncertain at this stage:

3.1 Particulars of various claims against the Company not acknowledged as debts Rs. 1,953 lacs (Previous year Rs. 195 lacs):

i) Claim by Punjab Government in respect of amount paid to Mahalaxmi Sugar Mills pending before the ‘The Court of Civil Judge (Senior Division), Kapurthala’Rs. 22 lacs (Previous year Rs. 22 lacs).

ii) Claim in respect of case filed by ESI Corporation Rs. 6 lacs (Previous year Rs. 6 lacs)

iii) Employees related claims Rs. 179 lacs (Previous year Rs. 167 lacs)

iv) Liability in respect of notice received from GAIL (India) Limited on account of Annual Take or Pay Deficiency Claim for the Contract Year 2014 Rs. 1,746 lacs (Previous year Nil)

v) There are certain claims against the Company relating to usage of trade mark etc., which have not been acknowledged as debts. The outcome of such claims is not ascertainable at this stage.

2.2 Particulars of various Excise & Service Tax demands under dispute Rs. 1,150 lacs (Previous year Rs. 1,111 lacs) which have not been deposited on account of dispute:

i) Demand of Service Tax and penalty in respect of wrong availment of Service Tax Cenvat Credit Rs. 261 lacs (Previous year Rs. 261 lacs).

ii) Demand of Excise Duty in respect of reversal of Cenvat Credit on Turbine Rs. 74 lacs (Previous year Rs. 74 lacs).

iii) Demand in respect of service tax, interest and penalty on income from Tie-up operations and royalty Rs. 569 lacs (Previous year Rs. 569 lacs).

iv) Demand of cess and penalty under Central Excise Act on manufacturing of corrugated paper board Rs. 1 lac (Previous year Rs.1 lac).

v) Demand of service tax on renting of immovable property Rs.127 lacs (Previous year Rs. 127 lacs).

vi) Demand of service tax under service of supply of tangible goods Rs. 62 lacs (Previous year Rs. 62 lacs).

vii) Demand of service tax and penalty under management, maintenance and repair services Rs. 48 lacs (Previous year Rs. 17 lacs).

viii) Demand of Excise Duty in respect of clearance of broken glass generated during the handling of bottles used for IMFL and Country Liquor Rs. 8 lacs (Previous year Nil).

2.3 Particulars of various Sales tax demands under dispute Rs. 6 lacs (Previous year Rs. 82 lacs) :

i) Demand of Sales Tax under Central Sales Tax Act on account of incomplete submission of sales tax forms Rs. 6 lacs (Previous year Rs.9 lacs).

ii) Demand of Sales Tax under UP Sales Tax Act & Central Sales Tax Act Rs. Nil (Previous year Rs. 73 lacs).

30.4 Certain matters relating to various assessment years of Income Tax are pending at the various levels of tax authorities and High Court. The financial impact, if any,

on the outcome of these matters is not determinable at this stage.

3. The additions to fixed assets includes interest on borrowing which has been capitalised amounting to Rs. 113 Lacs (Previous year Rs. Nil)

4. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 20 lacs (Previous year Rs. 262 lacs).

5. Maximum amount of advances due from Subsidiary companies,"S.R.K. Investments Pvt. Limited", "JIL Trading Pvt. Ltd " and "L.P Investments Limited" at any time during the year is Rs.3,262 lacs (Previous year Rs. 3,251 lacs).

6. At the end of the year unclaimed deposits of Rs.124 lacs (brvious year Rs. 77 lacs) disclosed under current liabilities are not required to be transferred to the Investor Education and Protection Fund (IEPF) in terms of section 205C of the Companies Act, 1956, as these deposits are unclaimed for less than 7 years from the date of their maturity. Additional unclaimed deposits of Rs. 0.49 lacs as on 31.3.2015 (Previous year 0.37 lacs) lying unclaimed for more than 7 years have been deposited in the IEPF on 11th April, 2015 (Previous year 12th April, 2014).

36. In accordance with ASI 14 on 'Disclosure of Revenue from Sales Transactions' issued by Institute of Chartered Accountants of India, excise duty on turnover amounting to Rs. 40,850 lacs (Previous year Rs. 43,140 lacs) has been reduced from turnover in Statement of Profit & Loss.

Differential excise duty on opening and closing stock of finished goods amounting to Rs. 37 lacs [Previous year Rs. (207) lacs] has been separately shown in Manufacturing Expenses under 'Other Expenses Schedule' (Refer Note 29).

7. The Company normally acquires vehicles under operational lease with the respective underlying assets as security. Minimum lease payments outstanding as on March 31, 2015 in respect of these assets are Nil (Previous year Nil).

Lease payments of Rs. Nil (Previous year Rs. 9 lacs) have been recognised as an expense in the profit and loss account for the year ended March 31, 2015

8. The Company has provided for debrciation adopting the useful lives of the assets (except for some Plant and Machinery) as brscribed in Schedule II of the Companies Act, 2013. However some plants and machinery have been debrciated on the re-evaluated useful life assessed by the technical experts which are different from the useful life brscribed in Schedule - II read with the relevant provisions thereof. Had the Company continued with the brviously assessed useful life, charge for debrciation and loss for the period ended 31st March, 2015 would have been higher by Rs. 575 Lacs for the assets held as at 1st April, 2014. Further, based on transitional provisions provided in clause 7(b) of Schedule II of the Companies Act,2013, an amount of Rs. 439 lacs (net of deferred tax assets Rs.196 lacs) rebrsenting the carrying value of those Assets which have become nil, has been charged to the retained earnings as at 1st April, 2014.

9. During the year, net profit amounting to Rs. 375 lacs and (brvious year Rs Nil) has been earned by the Company from sale of its industrial property situated In Block C, Sector 57, Noida, Gautam Budh Nagar (U.P).

10. Previous year’s figures have been regrouped / reclassified whenever necessary to correspond with the current year’s classification/ disclosure.