NOTE - 1: SIGNIFICANT ACCOUNTING POLICIES:

1) Basis of Preparation:

These financial statements have been brpared in accordance with the Generally Accepted Accounting Principles in India ("Indian GAAP") to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, and the relevant provisions of the Companies Act, 2013. The financial statements have been brpared under the historical cost convention on accrual basis.

The accounting policies have been consistently applied by the Company and are consistent with those used in the brvious year.

2) Revenue Recognition:

Income from sale of goods is recognized at the point of dispatch to customers except in the case of consignment agents where the revenue is recognized only after sale is effected by the consignment agent. Sale value includes Excise Duty and freight wherever applicable.

3) Fixed Assets

Fixed assets are stated at cost of acquisition or construction. Cost comprises of the purchase price and other attributable expenses including cost of borrowings till the date of capitalization of the asset acquired / installed / commissioned.

All the expenditure incurred on establishing / setting up of new projects / substantial expansion of existing facilities/creation of new assets is capitalized. Such expenditure to be capitalized includes borrowing / finance costs, direct and indirect expenditure incurred on such assets up to the time they are completed.

4) Debrciation:

During the year, debrciation is provided on the straight line method and at the useful life and in the manner specified in Schedule II of the Companies Act, 2013 except Plant & Machinery. The Management has estimated the useful life for the Plant & Machinery as 25 Years.

For Plant and Machinery based on internal Assessment and Independent Technical evaluation carried out by external valuers the management believes that the useful life as given above best rebrsent the period over which management expects to use these assets. Hence the useful life of the above asset is different from the useful lives as brscribed under Part C of Schedule II of the Companies Act 2013.

5) Investments:

Long term investments are stated at cost. The diminution in the market value of such investments is not recognized unless it is considered permanent in nature.

Current investments are valued at the cost or market value whichever is lower.

6) Borrowing Costs:

Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds.

7) Accounting for Leases:

Rentals in respect of leased brmises are charged to profit and loss account.

8) Inventories:

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost comprises of cost of purchase, cost of conversion, and other costs incurred in bringing the inventories to the brsent location and condition.

9) Employee Benefits:

a) Defined Contribution Plan:

Retirement benefits in the form of Provident Fund are defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contribution to the respective funds become due.

b) Defined Benefit Plan Compensated absences:

Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method as at the Balance Sheet date. Actuarial gains / losses are immediately recognized in the Profit & Loss Account.

Gratuity:

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financial year. The company has taken a group gratuity cum insurance policy with Life Insurance Corporation of India (LIC), for future payment of gratuity to the employees. The Company accounts for gratuity liability of its employees on the basis of actuarial valuation carried out at the year end.

Superannuation:

Retirement benefits in the form of Superannuation Fund are defined contribution scheme and the contribution is charged to the Profit and Loss Account of the year.

10) Taxes on Income:

a) Current Tax:

Provision for current tax is made for the amount of tax payable in respect of taxable income for the year computed under the provisions of the Income Tax Act, 1961.

b) Deferred Tax:

Deferred tax is recognized on timing difference being the difference between taxable incomes and accounting income that originate in one period and are capable of being reversed in the subsequent period/s, subject to the consideration of prudence.

11) Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate brvailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end are translated at the year-end rates, the resultant gain or loss will be recognized in the profit and loss account. Any gain or loss arising on account of exchange difference on settlement of transaction is recognized in the profit and loss account

12) Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are disclosed when the Company has possible obligation or a brsent obligation and it is probable that a cash outflow will not be required to settle the obligation. Contingent Assets are neither recognized nor disclosed in the financial statements.

13) Use of Estimates

The brparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets, liabilities, revenues and expenses. The estimates used in brparation and brsentation of financial statements are prudent and reasonable. Actual results could differ from estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods.

14) Impairment

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An impairment loss will be recognized if the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of asset's net selling price and value in use. In assessing the value in use, the estimated future economic benefits are discounted to the brsent value at the weighted average cost of capital.

Note - 3

Section 135(5) of the Companies Act 2013 stipulates that the company needs to spend two per cent of the average net profits made during the three immediately brceding financial years in pursuance of it Corporate Social Responsibility Policy.

The Company has incurred an average net loss for the past 3 years and hence is not required to spend on CSR activities for the Current Financial Year 2014-15.

Note - 4 Previous year figures have been reclassified /regrouped and rearranged wherever necessary.

As Per our report of even date

For and on behalf of the Board

For Ramanatham & Rao

Chartered Accountants

FR No : S-2934

A. Subramanian

Managing Director

V. Subramanian

Director

C. Kameswara Rao

Partner

Membership No : 24363

M. L. Kumavat

Chief Financial Officer

Anu Nair

Company Secretary

Place: Chennai

Date : 28.05.2015