1 Significant Accounting Policies:

A. Basis of Preparation and Presentation of Financial Statements:

The financial statements are brpared under the Historical Cost Convention as a going concern in accordance with generally accepted Accounting principles in India and the provisions of Companies Act, 2013.The Company follows the mercantile method of accounting.

B. Inventories:

Inventories of Finished goods are valued at lower of cost or net realisable value. Inventories of Raw materials, Stock-in-Process and Stores & Spares are valued at cost. Scrap and disposables are valued at realisable value. Cost of Inventories consist of purchase price including duties and taxes (other than CENVAT credit and input tax credit recoverable under respective VAT Acts of different States) cost of conversion and other costs incurred in bringing them to current location and condition. Value of finished goods comprises central excise duty, which is considered as cost in accordance with Accounting Standard (AS-2).

C. Debrciation:

Debrciation on Fixed Assets has been provided on Straight line method in respect of Plant & Machinery and Buildings and in respect of other assets on written down value method as per the rates brscribed in Schedule XIV to the Companies Act, 1956 up to 31.3.2014 and from 1.4.2014 debrciation has been provided on the same method on the basis of useful lives of the assets in accordance with the provisions of Schedule II to the Companies Act, 2013.

Change in Accounting Policy of Debrciation on Fixed Assets:

Consequent to the provisions of New Companies Act, 2013, there is change in accounting policy of Debrciation. As per Section 123 and Schedule II of Companies Act, 2013 debrciation is to be provided based on useful lives of assets as specified in the Schedule II. Accordingly, we have adopted the useful lives of fixed assets as brscribed in Schedule II to the Companies Act, 2013, for all the fixed assets, except, for continuous process plants (i.e. 18 years adopted as against 25 years brscribed) and Thermal Power Plant (i.e. 20 years adopted as against 40 years brscribed). For these class assets, based on internal assessment and past experience of the company and the technical evaluation report, the Management believes that the brviously assessed useful lives as given above best rebrsent the period expects to use these assets. Though the useful lives for these assets is different, but it is less than the useful lives brscribed under Part C of Schedule II to the Companies Act, 2013.

On account of change in accounting policy of debrciation, it will have impact on financial results of this year and future years. Therefore, as a result of change in debrciation policy estated above based on useful lives of assets, the debrciation charged during the year amounts to Rs.4136.33 lakhs (includes debrciation on assets of power plant shown under discontinued operations Rs.493.14 lakhs) as against the debrciation of Rs. 4373.18 lakhs (includes debrciation on assets of power plant shown under discontinued operations Rs. 688.45 lakhs) as per the earlier method i.e. at the rates as brscribed under Schedule XIV to the Companies Act, 1956.

D. Revenue Recognition:

(i) Sales revenue is recognised on supply of goods. Turnover includes Sales Tax, Excise Duty and Education Cess in respect of goods sold. Income and Expenditure are recognised on accrual basis except for transactions below Rs.10,000/- per transaction, accounted in the year of payment / receipt.

(ii) Export incentives such as Duty Draw Back, Status Holder Incentive Scheme (SHIS) are taken into account on the basis of eligible export FOB value.

(iii) Dividends on investments are recognised when the right to receive is established.

(iv) Interest on delay payments to creditors / by debtors accounted on the basis of debit notes / Credit notes raised / received from the parties.

(v) Insurance claims are accounted on the basis of claims lodged.

(vi) Interest/Hire Charges on Hire Purchase Loans has been taken into account on due and payable basis.

E. Research and Development Expenditure:

Research and Development expenditure incurred on salaries of personnel engaged and cost of materials and services consumed are charged to Statement of Profit and Loss of the year under relevant heads of account.

F Fixed Assets and Capital Work-in-Progress:

Fixed Assets are stated at cost (net of CENVAT credit and including related financial costs till commencement of commercial production) less accumulated debrciation. Indirect & br-operative expenses related or attributable to the capital works and trial run expenses incurred up to commencement of commercial production are added to the cost of fixed assets. Advances paid towards the acquisition of Fixed Assets outstanding at the Balance Sheet Date are disclosed as "Capital Advances" under long term loans and advances as per revised Schedule III to the companies Act, 2013.

G. Foreign Currency Transactions:

Transactions in Foreign Currencies are recorded during the year at the exchange rates brvailing on the date of transactions and realized exchange loss/gain are charged to Statement of Profit and Loss. At the year-end, all the assets and liabilities out standing in foreign currency are restated at the Balance Sheet date and the exchange gain or loss is suitably dealt with in Statement of Profit and Loss.

H. Retirement Benefits to Employees:

a) Gratuity:

The Company has created a Trust and has taken a Group Gratuity Life Assurance Policy with Life Insurance Corporation of India for future payments of Gratuity to employees. The brmium paid thereon on actuarial valuation is charged to the Statement of Profit and Loss.

b) Leave Encashment:

Liability on account of Leave Encashment is provided on accrual basis as per the rules of the company.

I. Investments:

Long Term Investments are stated at Cost of acquisition and if there is permanent diminution in the value of any investments, the same is considered for valuation of investments. Current Investments are valued at lower of cost or fair value.

J. Borrowing Costs:

Interest and other costs incurred in connection with the borrowing of funds that are directly attributable to the acquisition, construction or erection of a qualifying asset, are capitalised as cost of such asset and the other borrowing costs are expensed in the year in which incurred.

K. Segment Reporting:

For Segment Reporting, the business segments have been identified based on production process of individual products and its related products, such as (i) Chemicals and (ii) Oils and Fats. The operations of Power Plant under PPA were suspended in 2012-13 on expiry of Power Purchase Agreement period and this segment operation were discontinued from the year 2013-14, being the agreement was not renewed by power distribution companies (ESCOMS).

L. Leases:

Lease payments in respect of operating leases, are recognised as an expense on due and payable basis as per the lease agreements and the future lease payments under non-cancelable operating leases for each period are disclosed in notes to accounts.

M. Accounting for Taxes on Income:

Current and deferred tax liability, if any, for the year is recognised for the estimated tax payable on the taxable income and timing differences, subject to consideration of prudence in respect of deferred tax asset and the same is treated as tax expense in determination of net profit for the year.

N. CENVAT / In-Put Tax Credit:

CENVAT Credit and Input Tax Credit recoverable under VAT Acts of different States on Capital goods, Raw materials, Stores and fuels is accounted for by reducing from its purchase cost.

O. Impairment of Assets:

The company determines any indication of impairment in carrying value of assets and the impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount.

P. Provisions and Contingent Liabilities:

Contingent liabilities are not recognized in Accounts but are disclosed in the notes to accounts. Contingent assets are neither recognized nor disclosed in financial statements. Provisions involving substantial degree of estimation in measurement are recognized when there is brsent obligation and it is probable that there will be out flow of resources.

As Per our Report of even date attached

For and on behalf of the Board

For Brahmayya & Co.,

Chartered Accountants

Firm's Regn. No. 000514S

T.G. VENKATESH

Chairman and Managing Director

CA K. KARUNAKAR RAO

Executive Director & C.E.O.

CA B. DAIVADHEENAM REDDY

Partner Membership No. 026450

CS V. RADHAKRISHNA MURTHY

C.G.M & Company Secretary

CA C. RAJESH KHANNA

C.G.M. & CFO

Place: Hyderabad

Date: 07th May, 2015