NOTE -1 SIGNIFICANT ACCOUNTING POLICES:

A. Accounting Convention:

i) The Financial Statements are brpared In accordance with the requirements of the Companies Act, 1956 under the historical cost convention on the accrual basis.

Use of Estimates

ii) Estimates and assumptions used in the brparation of the financial statements are based upon Management's evaluation of the relevant facts and circumstances as of the date of the Financial Statement.

B. Revenue Recognition:

Revenue from sale of goods is recognised upon passing of title to the consumer, and delivery as per terms of sale. Other income and expenses are accounted for on mercantile; basis, No business operations during the year.

C. Fixed Assets:

Land and building only is the assets of the company.

D. Debrciation:

None of the Fixed Assets have been revalued during the year. Debrciation Is provided on Straight Line Method at the rates brscribed under the Schedule-XIV of the Companies Act, 1956. During the year the mill did notrun and no conversion charges received. However, there will be usual wear andtear. Hence debrciation has been claimed.

E. Inventories NIL

F. Investments : NIL

G. EMPLOYEE BENEFITS:

a) SHORT-TERM EMPLOYEE BENEFITS:

There is only One employee. Hence not considered.

b) POST EMPLOYMENT BENEFITS:

i) Defined Contribution Plans:

There is only One employee.. Hence not considered.

ii) Defined Benefit Plans:

There is only One employee. Hence not considered.

H. Sales : NIL No Income from operations during the year.

Previous Year's Figure have been regrouped / reclassified wherever necessary to correspond with the current year's figure.

In terms of our Report attached

ForD. SAMPATHKUN1AR &CO.,

CHARTERED ACCOUNTANTS

(FRNo.003556S)

M.K, RAVINDRAN

PARTNER

Membership No. 20887

For and on behalf of the Board of Directors of

STERLING SPINNERS LTD.

K.S. VENUGOPALA

CHAIRMAN-CUM-MANAGING DIRECTOR

R. VUAYKUMAR

DIRECTOR

Place: Chennai

Date: 30.05.2014