NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2016 Corporate Information

Towa Sokki Limited is a public limited company domiciled in India and incorporated under the Companies Act, 1956 (now Companies Act, 2013). Equity shares of the company are listed in Bombay Stock Exchange Ltd. in India. The Company is engaged in manufacturing and selling of Survey Instruments.

Note 1 - Basis of Accounting

i) The financial statements have been brpared under the historical cost convention in accordance with the generally accepted accounting principles to comply with the applicable Accounting Standards as brscribed under section 133 of the Companies Act, 2013 read with rule 7 of the Company Rules, 2014

ii) The Company generally follows the mercantile system of accounting and recognises significant items of income and expenditure on accrual basis.

iii) Use of estimates : The brparation of financial statements in conformity with generally accepted accounting principles in India requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements.

1.1 Summary of Significant Accounting Policies

i) Fixed Assets :

a) Fixed Assets are shown at cost of acquisition including direct material, labour and overheads if any, less accumulated debrciation and less sold during the year.

b) Works under erection / installation / execution for capital works are shown as "Capital Advances and includes interest on borrowings and advances to suppliers etc.

ii) Inventories :

a) Raw Materials, Stores, & Spares are valued at cost.

b) Finished Goods are valued at cost or market value whichever is lower. Stock of purchased items traded is valued as lower of the landed cost or realisable value.

iii) Debrciation :

a) Debrciation on all fixed assets is provided on "Straight Line Method" on the basis of useful life of the assets as brscribed at the rates specified in the Schedule II to the Companies Act, 2013. Debrciation on additions to fixed assets is charged on prorata basis.

b) Debrciation in respect of assets acquired and put to use for implementation of the new project is grouped under Pre-Operative Expenses.

iv) Encashment Of Leave and Other Retirement Benefits :

The company extends benefit of encashment of leave to its employees while in service as well as on retirement. Encashment of leave accumulated while in service is generally accounted when paid on yearly basis. Further, any liability on this account is recognised only when claim is received. Other retirement benefits such as Gratuity etc. are recognised only when the liability for such payments arises.

v) Accounting For Miscellaneous Expenditure :

Preliminary Expenses (for New Project) and Share Capital Expenses / Public Issue Expenses (for New Project) will be amortised over the period of ten years from the year in which the commencement of commercial production (for New Project) is started.

Note 2) Capital and other commitments

Estimated amounts of contracts remaining to be executed on capital account & not provided for net of advance Rs. 1.24 lacs (Previous year Rs. 1.39 lacs)

Note 3) The Company has made Public Issue of Equity Shares in the year 1995-96 and the total expenditure of Rs. 35.76 Lacs incurred on the said Issue has been treated as Deferred Revenue Expenditure and shown under the head of "Miscel laneous Expenditure".

Note 4) The tax effect of the carried forward loss as tax assets in accordance with the AS-22 " Accounting for Taxes on Income" has not been reckoned in the books of accounts for the year under review in view of the perception of the management that such asset may not be realized within the applicable / reasonable time limit.

Note 5) In the opinion of the management, there are no indications, internal or external which could have the effect of impairment of the assets of the Company to any material extent as at the Balance Sheet date, which requires recognition in terms of Accounting Standard 28 (AS-28) on "Impairment of Assets".

Note 6) Previous years figures have been regrouped and reclassified wherever necessary to be in conformity with the figures of the current year which is as per Revised schedule VI.

As per our report of even date attached

For BHAVAN PATEL & CO.

CHARTERED ACCOUNTANTS

(Firm Registration No. : 101362W)

B. H. PATEL

Proprietor

(Membership No. 36103)

For and on behalf of the Board of Directors

O. J. BANSAL Managing Director

SOMESH O. BANSAL CFO

S. J. BANSAL Director

VANDANA YADAV Company Secretary

Place : Mumbai

Date : 24th May 2016