NOTES FORMING PART OF THE ACCOUNTS:

1. SIGNIFICANT ACCOUNTING POLICIES:

(A) General:

1. The accounts of the Company are brpared under the historical cost convention using the accrual method of accounting. However, insurance claims and other than, cash compensatory incentives are accounted on the basis of receipt.

2. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

(B) Use of Estimates:

The brsentation of the financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management's evaluation of relevant facts and circumstances as on the date of financial statement. The actual outcome may diverge from these estimates.

 (E) Tangible assets:

1. The whole of the fixed assets are erected and installed on the NA land acquired by the company through registered perpetual lease deed with registrar of land Tal: Talod, Dist: Sabarkantha.

2. All Fixed assets are stated at cost, net of debrciation and impairment losses where ever applicable and also net of tax, duty credits availed if any.

3. Any expenditure is taken to capital expenditure only if it increases its future life and usefulness as compared to past estimates. All other day to day or other repairing expenditure is charged directly to statement of profit and loss account for the period in which they are incurred.

4. This is the first year when, any and/or all assets are put to use and so debrciation is claimed first time this year.

5. The company has borrowed fund from Vijaya Bank for purchase of Machinery and rest of the Fixed assets are generated by their own fund. Borrowing cost i.e. Interest on term loan for the month of April-14 is capitalized on prorates bases as per terms of AS 16.

6. In the head of fixed assets Machineries include tube mills, straightening machines, polishing machines, crane, lathe machine, welding machine, drilling machine, roll sets and many such other ancillary machines which are part an parcel of manufacturing plant.

7. Factory shed includes main factory shed, staff quarters, office brmises, road, verandah, electric room, penal room, store room etc. other civil and fabricated structures etc.

(F) Intangible assets:

The company does not have any intangible assets till now.

(G) Debrciation:

Debrciation is calculated as per method given in schedule - II of the Companies Act 2013 on the straight line method on all assets from current year as this is the first year of put to use of all assets of the company. After considering the actual utilization time period of the machines along with total utilization of days, the management decided the percentage of utilization of machine and based on that debrciation is calculated.

 (H) Investments:

There are no long term investments found in books of account under audit. The subsidy of Rs. 15 Lakh under scheme CLCSS received is lying with Vijya Bank due to lock in period of three years and the same is taken to capital reserve in the Balance Sheet.

(I) Inventories:

1. Inventories include raw material, work in progress, finished goods, scrap, packing material, store and spares, oil and gas etc. Inventories are valued at lower of the cost or net realizable value as required as per AS 2.

2. Cost of inventories includes cost of raw material, labour and proportionate direct manufacturing overheads based on normal production capacity.

3. Net realisable value is estimated selling price in ordinary course of business.

(J) Revenue:

1. The sales revenue is recognized on issuance of sales invoice and taken to sales excluding all taxes applicable to that sale. First production has been done by the company on 12.04.2014 than the company carried out trial and error in getting acceptable and marketable product and executed first sale on 20.05.2014. Than from July onwards company got good and growing sales turnover during the year.

2. Sales is taken net of taxes collected on behalf government like excise, vat etc. and so revenue from operation is net of all such taxes and cess.

3. Company received provisional sanction from government authorities for interest subsidy and it satisfied all conditions there in and so having not only reasonable but virtual certainty for receipt of same and so interest subsidy income is recognized as income for the period under audit.

(K) Excise duty Vat etc Tax items:

1. Excise duty is accounted as separate item of taxation liability and directly taken to this head at both sales and purchase time. Then, any payable is paid to government authorities on monthly or quarterly bases as per applicability..

2. The same system is followed for vat and service tax also.

(L) Employee Benefits:

1. This is the first year of company for production and sales or operation and all employee benefits which require to be paid to them are paid.

(M) Prior period and extraordinary items:

There are two prior period items which are accounted this year. One is office rent of for brmises at Gandhinagar and second is lease rent of lease hold land used for factory erection and there are no extraordinary items in the current financial year.

(N) Preliminary expense or expenses to be written off.

Preliminary expenses are firstly booked under this head and will be written off as per IT act from the next financial year as the company has not started business in this year.

(O) Provisions and Contingent liabilities

1. Provisions are recognized in the accounts in respect of brsent probable obligations, the amount of which can be reliably estimated.

2. There is no contingent liability in the balance sheet of the company.

(P) Export benefits:

There is no export made by company during year under audit.

(Q) Foreign currency transactions:

There are no foreign currency transactions in the current financial year.

(R) Borrowing Cost:

Interest on Term loan of Rs. 228567/- for the period of erection installation of machinery is capitalized and distributed between machineries as per AS 16.

(S) Impairment of Assets :

As this is being the initial stage of the company there is no impairment of assets is observed.

(T)Taxes on Income:

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is to be recognized, subject to the consideration of prudence in respect of deferred tax liability/assets, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. As this is being the first year and the company is at its initial stage, by using the prudence no deferred tax asset is created in books of accounts.

NOTES FORMING PART OF THE ACCOUNTS:

• Previous year's figures are regrouped rearranged wherever necessary.

• Corporate Information:

The company is registered private limited company duly registered with Registrar of Companies Gujarat with CIN number U28112GJ2013PTC074916 from 07.05.2013 and engaged in the business of manufacturing of stainless steel pipes with registered address at 207, 2nd Floor, Suman Tower, Sector-11, Gandhinagar, Gujarat, India Pin 382 Oil and factory address at Survey No. 284/1,2,3 & 4, At. Toraniya, Post Ujediya, Ta. Talod, Dist. Sabarkantha, Gujarat, India Pin 383 215.

• Secured Loans:

Short Term/Long term Loans and Advances from Banks:

The company had taken working capital loan and term loan from Vijaya Bank. The working capital loan is secured by way of hypothecation of entire current assets (entire stock and book debts/receivable) of the company and the term loan is secured by way of mortgage/hypothecation of leasehold land, shed, machineries high speed heavy duty tube mill & other machineries to be used for mfg of SS pipes, tubes and other capital assets to be acquired out of term loan.

• Unsecured Loans:

• The company has taken unsecured loan from its promoters, directors and their relatives as required to be contributed by company as its own contribution against banks share of finance.

• Others

• As explained to us the provision of gratuity is not applicable to them as it is the very first year of operation of the company.

• The authorized share capital is 75.00 lakhs and the issued and paid up share capital is also Rs. 75.00 lakhs.

• All the balances in the balance sheet are as per books of accounts and are subject to third party confirmations and reconciliation.

• In the opinion of the board the current assets, loans & advances and other receivables have value on realization in ordinary course of business at least equal to the amount at which they are stated in the balance sheet.

The Company has not proposed any dividend for the financial year 2014-15.

AS PER OUR REPORT OF EVEN DATE

FOR Fratirajsinh Raulji & CO.

Chartered Accountants

 (Pratirajsinh Raulji)

 Partner

Mem. No. 149089

FRN. No 134692W

For & On behalf of the Board of Directors

Umiya Tubes Pvt. Ltd.

(Beena P Vaghela)

(Director DIN; 03577571)

(Bharat F. Patel)

(Director DIN : 06562786)

Place: Gandhinagar

Date : 27.08.2015