1. SIGNIFICANT ACCOUNTING POLICIES:

1.1. Basis of brparation of financial statements:

The financial statements have been brpared under the historical cost convention in accordance with the generally accepted accounting principles in India, and in compliance of the Accounting Standards notified under section 211(3C) of the Companies Act, 1956, which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13-09-2013 of the Ministry of Corporate Affairs and the relevant provisions of the Companies Act, 1956 and Companies Act, 2013, as applicable, as adopted consistently by the Company. The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

1.2. Use of Estimates:

The brparation of financial statements in accordance with the generally accepted accounting principles requires management to make judgments, estimates and assumption that affect the reported amounts of revenue, expenses, assets and liabilities at the end of the reporting period. Difference between the actual results and the estimated are recognized in the period in which the results are known / materialized.

2. Fixed Assets - Tangible & Intangible and Debrciation

2.1. Fixed Assets are stated at cost less debrciation. Cost comprises of purchase price (net of rebates and discounts), import duties, levies and any directly attributable cost of bringing the assets on its working condition for the intended use.

2.2. Cost of initial spares and tools is capitalized along with the respective assets. Expenditure directly related and incidental to construction /development and borrowing cost in para '3' are capitalized up to date the assets are ready for their intended use. Exchange differences are capitalized to the extent dealt with the respective assets.

2.3. Debrciation:

AR ENDED 31st MARCH, 2015

2.4. Debrciation is provided on a pro rata basis from the month the assets put to use during the financial year. In respect of assets sold / disposed off during the year, debrciation is not provided for the same.

3. Borrowing Costs :

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets.

All other borrowing costs are charged to revenue.

4. Investments:

Investments are recorded as long term investments unless they are expected to be sold within one year. Investments in subsidiaries and associates are valued at cost less any provision for impairment. Investments are reviewed for impairment if events or changes in circumstances indicate that the carrying amount may not be recoverable.

5. Inventories:

5.1. Inventories are valued at lower of cost or net realizable value except for scrap and by products which are valued at net realizable value.

5.2. Cost of inventories of finished goods and work -in - process includes material cost, cost of conversion and other cost.

5.3. Stores and spares is valued at weighted average cost.

6. Foreign Currency Transaction:

6.1. Export sales are accounted at exchange rates brvailing on the date of negotiation of bills by the bankers.

6.2. Purchase of imported raw materials and components are accounted at amounts paid to discharge the related liabilities.

6.3. Foreign currency loans for acquisition of fixed assets are converted at the rate brvailing on the date of Balance Sheet. The gain or loss arising out of currency translation is adjusted in the cost of fixed assets.

6.4. Current Assets and Current Liabilities are translated at the rate brvailing on the date of Balance Sheet. The gain or loss if any, arising there from are recognized in the Profit and Loss Account.

7. Employee Benefits:

7.1. Employee benefit expenses include salary, wages, performance incentive and other perquisites. It also

includes post - employment benefits such as provident fund, gratuity, pensionary benefits, etc.,

7.2. Short term employee benefits are charged off at the undiscounted amount in the year in which the related service is rendered.

7.3. Contribution payable by the Company under defined contribution schemes towards Provident Fund for the year are charged to Profit and Loss Account.

7.4. The Company has its own approved Gratuity Fund and the contributions to that fund are being made to LIC.

7.5. The Leave encashment entitlement is computed on Calendar year basis and payment made to the Employees accordingly in the succeeding January of every year. Hence, there is no outstanding liability towards Leave encashment as per Accounting Standard 15.

8. Revenue Recognition:

Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection.

8.1. Export Sales is stated at C & F / CIF / FOB basis.

8.2. Domestic Sales excludes Excise duty, Education cess, VAT and CST.

8.3. Dividend income is recognized when right to receive the payment is established by the Balance Sheet date.

8.4. Interest income is recognized on accrual basis.

8.5. Income from windmill:

The value of power generated at windmill is captively consumed by the company.

It is not treated as revenue but have been set off against cost of Power & Fuel.

9. Provision, Contingent liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

10. Research and Development :

No such expenditure incurred during the current year.

11. TAXES ON INCOME :

Tax expense comprises current tax and deferred tax.

11.1 Current income tax is measured at the amount expected to be paid to the tax authorities, computed in accordance with the applicable tax rate and tax laws.

11.2 The Company recognizes the deferred tax liability / asset based on the accumulated timing difference using the current tax rate.

12. Government SUBSIDY / GRANT :

12.1 Interest subvention under Pre and Post shipment advance is credited to the interest and finance charges

12.2 Export incentives and incentives in the nature of subsidies / duty scrip / rebates given by the government are reckoned in revenue in the year of eligibility.

13. IMPAIRMENT OF ASSETS : AS-28

In the Opinion of the Company, the recoverable amount of the fixed assets of the Company will not be lower than the book value of the fixed assets. Hence, no provision has made for impairment.

14. The Company has fulfilled export obligations, net foreign exchange earnings and other conditions, as applicable till date, in terms of schemes of Government of India, for 100% EOU.

18. Derivatives:

The company uses derivative financial instruments such as forward contracts (both Exports and Imports) to hedge currency exposures, brsent and anticipated, denominated mostly in US Dollars and Euro. Generally such contracts are taken for exposures materializing in the next twelve month. The company actively manages its currency exposures and uses derivatives to mitigate the risk from such exposures

2. As at 31.03.2015, the company has no outstanding dues to Micro, Small and Medium Enterprises. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company.

3. The Company has generated power out of Windmill installed at Pazhavoor Taluk, Tirunelveli District, and the generated power was captively consumed by the Company by drawing the power from TNEB Grid. The Power and Fuel consumed is net of Rs. 21.20 Lakhs being the credit given by TNEB for the transfer of power to the Grid.

4. The Company's shares, listed in Madras Stock Exchange were admitted in "Permitted to Trade" category in Bombay Stock Exchange for trading. Since, the Madras Stock Exchange has been closed under the directions of SEBI, trading of our company shares were discontinued with effect from 22.05.2015 in BSE (INDONEXT). Please note, we have already filed with BSE, the application and the fee of Rs. 5 Lakhs for direct listing of our company shares in BSE and the same is under process.

5. Deferred Tax (AS 22) :

Deferred Tax Liability (Net) for Rs.36.00 Lakhs as on 31.03.2015 has been provided from the Current year's Profit in accordance with the Accounting for deferred tax in pursuance of AS 22 issued by the Institute of Chartered Accountants of India.

6. Figures relating to brvious year have been regrouped wherever found necessary.

As per our report of even date

M/s.KRISHNAN AND RAMAN

Chartered Accountants

Firm Registration No. 001515S

V. SRIKRISHNAN

Partner,

Membership No. 206115

R. RAMJI

Managing Director & CEO

S.V. RAVI

Director

A. THIRUPPATHY RAJA

Director

S. SANKAR

Director

Rajapalayam 29.05.2015

P.S. RAMANATHAN S. SEENIVASA VARATHAN

Secretary & CCO CFO