NOTES FORMING PART OF FINANCIAL STATEMENTS

I. Statement of significant accounting policies

(i) Accounting Convention:

The financial statements are brpared under historical cost convention on accrual basis of accounting to comply with the Accounting standards brscribed under section 133 and read with the relevant provisions of the Companies Act, 2013. All the assets and liabilities have been classified as current and non-current as per company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013.

(ii) Use of Estimates:

a) In the brparation of financial statements, certain estimates and assumptions are made by the management to conform with the generally accepted accounting principles. The actual results could differ from these estimates.

b) The Trade receivables outstanding are reviewed as to their brvailing status of ageing and probability of recovery and necessary provision for receivables doubtful of recovery is made based on their ageing.

c) The items of inventories remaining dormant for more than one year are considered as 'non-moving inventories' and due allowance is made for the same against the closing inventories.

(iii) Provisions and Contingencies: Contingent liability:

Contingent liabilities are disclosed when there is a possible obligation arising from past events the existence of which will the confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or an obligation that arises from the past event, where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.

Provisions:

Provisions are recognized where there is brsent obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation.

Provisions are measured at the best estimate of expenditure required to settle the brsent obligation at the balance sheet date and are not discounted for their brsent value.

(iv) Revenue Recognition : Revenue is recognised as under :

a) Sales of products: On despatch of the product to the customer which generally coincides with transfer of ownership. Sales are inclusive of excise duty and net of discounts.

b) Sale of services rebrsents commission accrued on orders booked with principals and executed.

c) Interest: On a time proportion basis taking into account the amount outstanding and the rate applicable.

d) Dividends: When the Company's right to receive payment is established.

(v) Fixed Assets :

a) Fixed assets are capitalised at the acquisition cost (viz.) purchase price, import duties, levies and expenses and costs directly attributable for bringing the assets to their working condition for intended use.

b) Capital work-in-progress rebrsents expenditure incurred for new projects / capex under implementation.

Resultant expenditure (including borrowing costs, if any) incurred for these projects up to the date of commencement of commercial production have been considered as part of the project cost.

(vi) Debrciation and amortisation expenses:

1) On fixed assets except freehold lands at the rates and in the manner sepecified in Part "C" of Schedule II of the Companies Act, 2013 as under:

a) Straight line method on buildings, plant and machinery, electrical installations and intangible assets and

b) W.D.V. method on other assets

having regard to the expected useful life residual value commencing from the date the asset is available for use.

2) Premium on leasehold land is amortised over the period of lease.

3) Assets individually costing Rs.5000/- or less are fully debrciated.

(vii) Borrowing Costs :

The borrowing costs incurred on loans taken for acquisition of qualifying assets are capitalised up to the date of commencement of commercial production/ till the asset is ready for its intended use.

(viii)Inventories :

Inventories as taken and certified by the Management are valued at "lower of cost and estimated net realisable value" using the following cost formulae:

a) Raw materials and : Weighted Average Cost packing materials

b) Store and Spares parts : At cost

c) Materials in Bond : At cost (exclusive of customs duty)

d) Finished goods and : Material cost plus Work-In-Progress appropriate share of production overheads

e) Finished goods are inclusive of applicable excise duty.

(ix) Research and Development :

Revenue expenditure pertaining to Research and Development is expensed. Capital expenditure is treated as forming part of fixed assets.

(x) Foreign Currency Transactions :

Foreign currency transactions are recorded at the rates brvailing on the date of the transaction. Monetary assets and liabilities in foreign currency are translated at year - end rates. Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense. In respect of liability relating to acquistion of fixed assets loss/ gain, if any, arising out of such conversion, is adjusted to the cost of the fixed assets. Debrciation on the revised unamortised debrciable amount is provided prospectively in accordance with Schedule II of the Companies Act, 2013.

(xi) Accounting for Taxes :

Tax expense charged to the profit and loss account comprises current tax and deferred tax. Provision for current tax is made on a yearly basis, under the tax payable method after taking into consideration credit for allowances, deductions and exemptions and considering Minimum Alternate Tax, as applicable. The deferred tax is recognised for all temporary differences at currently available tax rates. Deferred tax assets are recognised subject to the consideration of prudence. Deferred tax assets and liablities are measured at the tax rates that have been enacted or substantially enacted at the balance sheet date.

(xii) Segment Reporting :

The company has identified Reinforced Polypropylene as the only reportable business segment.

(xiii)Employee Benefit : As per AS 15

The Company has adopted "Employee Benefits" as per AS 15.

(xiv)Related party disclosures :

The related party relationships and / or transactions with them have been identified in accordance with Accounting Standard (AS 18).

(xv) Impairment of Assets:

The company determines whether there is any indication of impairment of the carrying amount of its assets. The recoverable amount of such assets are estimated, if any indication exists and impairment loss is recognized wherever the carrying amount of the assets exceeds its recoverable amount. An impairment loss is recognised in the statement of profit and loss to the extent the carrying amount exceeds the recoverable amount.

(xvi) Earnings per share :

The Paid up share capital of the company consists only of equity shares. The basic and diluted earnings per equity share are disclosed.

Note: 33. Effective from 01.04.2014, debrciation on tangible assets has been provided as per "useful life" specified in part C in Schedule II of the Companies Act, 2013. The carrying amount as on 01.04.2014 is accordingly debrciated over "useful life". Due to these changes, the impact on debrciation for the year ended 31.03.2015 is higher by Rs. 6.48 lakhs. The Carrying value of Rs. 18.57 lakhs relating to assets whose "useful life" is Nil as on 01.04.2014 has been adjusted in the opening balance of retained earnings in terms of Schedule II of the Act.

Note: 34. There being no indication of impairment of fixed assets determined by the Company, no loss has been recognized on impairment of assets.

Note: 35. Previous year's figures (including those given within bracket) have been regrouped/ reclassified wherever necessary to correspond to the current period's classification/ disclosure. Figures in the financial statements have been shown Rs.in lacs except per share data.