Significant Accounting Policies & Notes

A. Basis of Preparation of Financial Statements

The financial statements are brpared under the historical cost convention, on the basis of going concern assumption in accordance with Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

B. Use of Estimates

The brparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the 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 recognized in the period in which the results are known/materialized.

C. Fixed Assets

Fixed Assets are stated at cost net recoverable taxes including any cost directly attributable for bringing the assets to its working condition for its intended use less accumulated debrciation.

Projects under which assets are not ready for their intended use are disclosed under Capital Work in Progress.

D. Debrciation

Debrciation has been charged on fixed assets on Straight-Line Method basis. Debrciation is provided based on useful life of the assets as brscribed in Schedule II to the Companies Act, 2013. Further 100% debrciation has been charged on assets valued up to H5000/- per item.

E. Foreign Currency Transaction

(a) Transactions denominated in foreign currencies are recorded at the exchange rate brvailing on the date of the transaction or that approximates the actual rate at the date of transaction.

(b) Monetary items denominated in foreign currencies at the year-end are restated at the year-end rates.

(c) Non-Monetary foreign currencies Items are carried at cost.

(d) Any income or expense on account of exchange differences either on settlement or on translation is recognized in the profit & loss account except in case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying cost of such assets.

F. Investments

Current Investments are carried at lower of cost and fair value. Non-Current Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary.

G. Inventories

Item of Inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. The cost of work in progress and finished goods is determined on absorption cost price which comprises of cost of purchase, cost of conversion, and other manufacturing overheads incurred in bringing them to their respective brsent location and condition.

H. Revenue Recognition

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Revenue on sale of goods is recognized on passes of title to customers, sales are excluding of VAT, Excise duty and adjustment for rate difference. Export sale are accounted for on the basis of dates of bill of lading.

I. Excise duty/CENVAT

Excise duty is accounted for on the basis of payment made in respect of goods cleared. CENVAT claim on purchase of raw material is reduced from the cost of raw material.

J. Employee Benefits

(a) Short Term Employee benefits are recognized as an expense at the undiscounted amount in profit & loss account of the year in which the related service is rendered.

(b) Defined benefit plans: The Company operates a gratuity plan covering qualifying employees. The benefit payable is the greater of the amount calculated as per the payment of Gratuity Act or the Company scheme applicable to the employee. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting. The Company makes annual contribution to the group gratuity scheme administered by the Life Insurance Corporation of India through its Gratuity Trust Fund.

(c) Defined contribution plans: Company's contribution to Provident Fund, ESIC scheme for the year is charged to Profit and Loss account. Retirement benefit, medical reimbursement and leave payments to employees are accounted for on cash basis.

K. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss account.

L. Provision for Current & Deferred Tax

Provision for current tax is made after taking into account benefits admissible under the provisions of the Income Tax Act, 1961. Deferred tax resulting from "Timing Difference" between taxable incomes & accounting income is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date.

M. Provisions, Contingent Liabilities & 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 not recognize but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

N. Segment Reporting

The Company is mainly engaged in the business of manufacturing various types of Pump & Motors. Considering the nature of business & financial reporting of the Company, the company has only one segment as reportable segment. The Company operates in Local & Export Segments Geographically. The sales for both are separately given, but due to the nature of business the assets/liabilities and expenses for these activities cannot be bifurcated separately.

O. Share Warrant

During the year the Company had received the balance share warrant money and then converted all 15,00,000 (Fifteen Lacs) outstanding Equity Share warrants into equivalent number of equity shares of H10/- each. Premium received on conversion have been transferred to securities brmium account.

As per our Report of even date

For Vinay Gandhi & Associates

Chartered Accountants

FRN : 014442C

Vinay Gandhi

(Proprietor)

(M.No.75972)

For and on Behalf of the Board

R. Shadananan (Company Secretary)

Dinesh Patidar (Chairman and Managing Director)

Ramesh Patidar (Executive Director)

Place : Pithampur

Date : 21.05.2015