NOTE  : SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Preparation of Financial Statements :

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 129 and 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 1956, as applicable. The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year except for change in the accounting policy for debrciation.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of materials and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle to be less than 12 months. As a result, current assets comprise elements that are expected to be realised within 12 months after the reporting date and current liabilities comprise elements that are due for settlement within 12 months after the reporting date.

(b) Use of Estimates :

The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known /materialised.

(c) Fixed Assets :

Fixed assets are stated at the cost of acquisition less accumulated debrciation and impairment loss, if any (except for Land, Building and Machinery which had been revalued on 30th May, 1986). Cost of fixed assets includes taxes (other than those subsequently recoverable from tax authorities), duties, freight and any other costs directly attributable for bringing the asset to its working condition and other indirect costs specifically attributable to the acquisition or construction of the respective assets.

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

(d) Debrciation :

Debrciation in respect of fixed assets acquired during the year is charged on a straight line method so as to write-off the cost of the assets over the useful lives.

With respect to the existing class of assets acquired prior to 1s' April, 2014 the management has estimated useful life which differs from the useful life brscribed under the Act on the basis of internal assessment and as per chartered engineer's technical evaluation. The management believes that the useful lives provided for assets acquired prior to 01/04/2014 best rebrsents the period over which management expects to use these assets. Hence the useful lives for these assets are different from the useful lives as brscribed under Part C of Schedule II of the Companies Act, 2013.

Debrciation method, useful life and residual value are reviewed periodically.

(e) Borrowing Costs :

Interest and other costs incurred in connection with the borrowing of funds are charged to revenue on accrual basis.

(f) Inventories :

Inventories of Raw Materials, Work in Progress and Finished Goods are stated at cost or net realizable value, whichever is lower. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including overheads incurred in bringing them to their respective brsent location and condition. Cost of Inventory is determined on First-in-First-out basis. The excise duty in respect of closing inventory of finished goods is included as part Of finished goods.

(g) Revenue Recognition :

Gross Sales are inclusive of Excise Duty, VAT, and Net of returns, Claims, and Discount etc. The Company recognizes sale of goods when all the obligations connected with the transfer of risks and rewards to the buyer have been fulfilled after the price has been determined and collection of the receivable is reasonably certain.

Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

(h) Employee Benefits :

(i) Short term employee benefits are recognised as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the Company.

(ii) Post employment and other long term employee benefits are recognised as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognised at the brsent value of the amounts payable, determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the statement of profit and loss.

(i) Foreign Currency Transactions :

Transactions in foreign currency are recorded at the exchange rate brvailing on the date of transaction. Exchange difference arising on foreign currency transactions settled during the year are recognised as income or expenses in the statement of profit and loss for the year.

Monetary items in the form of Current/Non Current Assets and Current/Non Current Liabilities in foreign currency, outstanding at the end of the year, are converted in Indian Currency at the appropriate rate of exchange brvailing on the date of Balance Sheet and resultant gain or loss is accounted during the year.

(j) Taxation :

Tax expense comprises of current tax and deferred tax. Current tax is measured at the amount expected to be paid to the tax authorities, using applicable tax rates. Deferred income tax reflects the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is a reasonable certainty that sufficient future income will be available. In case there are unabsorbed debrciation or losses, it is recognised if there is virtual certainty that sufficient future taxable income will be available to realize the same.

Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the Balance Sheet date.

(k) Provisions, Contingent Liabilities and Contingent Assets :

Provisions is recognized in the accounts when there is a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements.

(I) Segment Accounting :

The segment of the Company has been identified in line with the Accounting Standard 17 on "Segment Reporting" issued by the Institute of Chartered Accountants of India. However during the year under review the Company was operating in single segment of Power Electronics business, hence Segment reporting is not applicable.

(m) Impairment of Assets :

The carrying amounts of assets are reviewed periodically for any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use.

(n) Investments :

Non current investments are stated at cost. Provision for diminution in the value of Non Current Investments is made only if such a decline is other than temporary.

NOTE1.0 : The financial statements are brpared under Schedule III of the Companies Act, 2013. Accordingly, the brvious year's figures have been re-grouped/re-classified to conform to the current year's classification.

As per our attached Report of even date

For AJAY SHOBHA & Co.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Chartered Accountants

(Regn. No. 317031E)

(Hasmukh J. Shah)  

Director

(Manoj P. Mehta)

Director

(AJAY GUPTA)

Partner

M. No. 053071

(Pravin G. Shah)

Director

(Kisan R. Choksey)

Director

Place Date

Mumbai

 (Venkitaraman Iyer)

Director

(Bhavin P Rambhia)

Company Secretary

Date : 2T* May, 2015