Notes on Accounts for the year on 31st March, 2016

Note No. 1

SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Accounting:

Accounts of the Company are brpared in accordance with the Indian Generally Accepted Accounted Principles (GAAP) under the historical cost convention. Company has complied with Accounting Standards as recommended by Institute of Chartered Accountants of India, provisions of Companies Act, 2013 and guidelines issued by Securities and Exchange Board of India.

The Company has brpared the Financial Statements as per the format brscribed under the Schedule III of the Companies Act, 2013.

1.2 Fixed Assets:

(i) Fixed assets except leasehold land are stated at cost (net of Cenvat and MVAT wherever applicable) of acquisition. less accumulated debrciation after retaining the specified residual value as per Schedule II of the Companies Act, 2013. Cost includes all costs incurred for bringing the assets to its working condition for intended use.

(ii) The cost of leasehold land is amortised over the period of lease. Intangible assets include Computer Software, which is recorded at cost of acquisition.

1.3 Impairment of Fixed Assets:

The company has reviewed the carrying costs of fixed assets and does not expect any loss on account of impairment.

1.4 Debrciation:

Debrciation is charged on all the assets based on useful life as per part C of Schedule II of the Companies Act 2013 on straight line basis.

1.5 Investment:

Investments are stated at cost and income thereon is credited to revenue on accrual basis.

1.6 Inventories:

Inventories are valued at cost or market price whichever is lower. The Company has valued closing stock exclusive of excise duty as per the new guidelines.

1.7 Foreign Exchange Transactions:

Foreign Currency transactions are accounted at the exchange rates ruling on the date of the transactions. At the year end all monetary assets and liabilities denominated in foreign currency are restated at the closing exchange rate. Exchange differences arising out of actual payments/realizations and from the year-end restatement referred to above are dealt with in the Profit & Loss Account.

1.8 Contingent Liabilities & Provisions:

Contingent liabilities are disclosed after careful evaluation of facts and legal aspects of the matter involved. Provisions are recognized when the company has a legal obligation and on management discretion as a result of past events for which it is probable that cash outflow may be required and reliable estimate can be made of the amount of obligation.

1.9 Sales:

Sales are recognised on despatches to customers. Sales exclude Excise Duties, VAT and CST. 1.10 Retirement Benefits:

The Company has created The Employees Group Gratuity Fund, which has taken Gratuity Cum Life Insurance Policy from Life Insurance Corporation of India. Base for gratuity is the brmium paid on the above policy. Provision for leave encashment is made on the basis of Actuarial Valuation. Company's contribution to Provident Fund has been charged to Profit and Loss Account.

1.11 Disclosure of Borrowing Cost Capitalised under Accounting Standard 16:

During the year Company has capitalised certain assets. Appropriate borrowing cost directly related to asset has been capitalized to respective assets including Capital Work in Process as required under AS 16.

1.12 Segment Reporting Under Accounting Standard 17:

The company operates in one business segment namely "Auto Components". Hence reporting under this standards is not applicable to the company

1.13 Lease Accounting as per Accounting Standard 19:

Not applicable to the company since no new lease transaction took place during the year, which is covered under the brview of AS-19.

1.14 Earning Per Share:

The Basic Earnings Per Share for the year 2015-16 is Rs. 3.19 (Previous year Rs. 2.47). The Diluted Earnings Per Share is not applicable as the Company has not issued any Preference Shares / security / warrant / debentures which are convertible into equity shares in future.

1.15 Accounting for Taxes on Income:

Deferred taxes on income are computed as per accounting standard 22 and same are provided in the audited accounts at appropriate places.

Note No.2

Contingent Liabilities

a. State Bank of India has given guarantee on behalf of the Company for Rs. 52.06 lacs (Previous year Rs. 31.95 lacs).

b. Central Sales Tax and MVAT assessments are completed up to 31.03.2010 respectively. The liability in respect of pending assessments / appeals under BST/CST /VAT is unascertainable.

c. The Income Tax assessments are completed up to the Assessment Year 2013-2014. (Relevant to accounting year ended 31.03.2013).Tax demand raised for A. Y. 2013-14 is Rs.13,03,190/- against which Company has gone into appeal. Liability if any, in respect of the pending assessments or appeals under the Income Tax Act, 1961 is unascertainable.

d. Duty amount under export obligation under EPCG scheme is Rs. 31,13,367.00

Note No. 3

Other Notes

a. Previous year figures are regrouped wherever necessary to conform to current year figures.

b. Amounts are rounded off to the nearest lac or decimal thereof.

c. The Company has been accounting liability for Excise Duty on Finished Goods as and when they are cleared. A liability for Excise Duty in respect of finished goods in stock at the close of the year estimated at R. 72.57 lacs and has not been provided in the accounts nor included in the valuation of the inventory. However the said liability, if accounted, would have no impact on the profit for the year.

As per our report of even date attached

For M/s. P.M.Vardhe & Co.

Chartered Accountants

P.M.VARDHE

Proprietor

Membership No.:031817

For and on behalf of the Board of Directors

RAM MENON Chairman

NITIN MENON Joint Managing Director

ARUN ARADHYE CFO

ANUP PADMAI Company Secretary

Place : Kolhapur

Date :10th May, 2016