1. Significant Accounting Policies:

1. Basis for brparation of financial statements

The financial statements are brpared in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards specified by the Institute of Chartered Accountants of India under Section 211(3C) of the Companies Act.

2. Method of Accounting

The company is following accrual basis of accounting.

3. Fixed Assets & Debrciation

Fixed Assets are stated at cost inclusive of finance charges on borrowed funds attributable to acquisition of Fixed Assets for the period up to the date of commencement of commercial production. Assets acquired under Hire Purchase Scheme are capitalized with the value of assets and finance charges are accounted as and when paid.

Debrciation on fixed assets are charged on straight line method at rates specified in the Companies Act 2013.

4. Borrowing Cost

Borrowing cost incurred for the acquisition of qualifying assets are recognized as part of cost of such assets when it is probable that they will result in future economic benefits to the company, while other borrowing cost are expensed.

5. Investments

Investments are stated at cost and are long term in nature. Diminution in the value of investments are provided for, if, such diminution is permanent.

6. Inventories

Inventories are valued as follows:

a. Stores and Spares at cost on FIFO method of valuation

b. Raw Materials at cost on FIFO method of valuation

c. Work in progress at cost*

d. Finished Goods at cost*/ net realisable value whichever is less

*Cost includes material, direct labour and other applicable overheads and excise duty in respect of Finished goods.

7. Transactions in Foreign Currency

Transactions in Foreign Currency are stated at rates brvailing on the transaction date. Monetary items like receivables/ payables in foreign currencies are stated at exchange rates brvailing as at the Balance Sheet date and the gain/loss arising there from are charged to the Profit & Loss account.

8. Deferred Revenue Expenditure

Debenture issue/Pre-operative expenses are amortised over a period of 5 years.

9. Income

a. Sale of Goods: Sale of Finished goods are net of returns and price variation, if any.

b. Sale of Scrap: The scrap is accounted in the books on the basis of actual sales. The unsold scrap is Not valued.

10. Retirement Benefits

Liability towards Gratuity to employees is funded through a scheme administered by Life Insurance Corporation of India and the contributions made to the fund are absorbed in the accounts. The contributions to the Provident fund and other defined contributions schemes are absorbed in the accounts. Liability towards Leave salary benefits is determined on the basis of actual cost of the Company

11. Provisions and Contingencies

A provision is recognised when the Company has a brsent legal or constructive obligation as a past event and it is probable that an out flow of resources will be required to settle the obligation in respect of which reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its brsent value and are determined based on estimate required to settle the obligation. Contingent liabilities are not recognised but are disclosed in the notes to financial statements.

Signatures to notes of accounts

For PAL & SHANBHOGUE

Chartered Accountants

FNR002528S

DIWAKAR S SHETTY

Chairman

KARTIK NAYAK

Jt. Managing Director

PRAVEEN MALLY

Jt. Managing Director

K.R. SHANBHOGUE

Partner MN 018578

Place : Bangalore

Date : 16th May, 2016