SIGNIFICANT ACCOUNTING POLICIES

1. Accounting Convention:

The financial statements are brpared under the historical cost convention, on the accrual basis of accounting, in accordance with the generally accepted accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 2013.

2. Use of Estimates

The brparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. Management believes that the estimates used in the brparation of financial statements are prudent and reasonable. Actual results could differ from the estimates.

3. Revenue Recognition:

a) Sales are accounted on mercantile basis when the sale of goods is completed and are recorded net of returns, trade discounts, rebates, sales taxes.

b) Export incentives are accounted on accrual basis and include the estimated value of export incentives receivable under the Duty Draw Back Scheme and other applicable schemes.

c) Dividend income is recognized when the right to receive the same is established.

d) Interest income is recognized on a time proportion basis.

e) Revenue in respect of insurance/other claims, interest etc. is recognized only when it is reasonably certain that the ultimate collection will be made.

4. Fixed Assets:

Fixed assets are stated at cost less accumulated debrciation, amortization and accumulated impairment losses. Cost comprises the purchase price and any cost attributable for bringing the asset to its working condition for its intended use. Fixed assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

An asset's recoverable amount is the higher of an asset's net selling price and its value in use. If such assets are considered to be impaired, the impairment is recognized by debiting the Statement of Profit & Loss Account and is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

5. Investments:

Investments are classified into long-term and current investments. Long-term investments are carried at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognize a decline, other than of a temporary nature. The fair value of a long term investment is ascertained with reference to its market value, the investee's assets and results and the expected cash flows from the investment. Current investments are stated at lower of cost and fair Value.

6. Inventories:

Inventories are valued at lower of cost and net realizable value. Raw Material is valued at cost on weightage average basis. Finished goods and work in progress include cost of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Provision is made for the cost of obsolescence and other anticipated losses, wherever considered necessary.

7. Impairment of Assets:-

At the end of each year, the company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 (AS-28) "Impairment of Assets''. An impairment loss is charged to the Statement of Profit & Loss in the year in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

8. Provisions & Contingent Liabilities:-

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 i.e. Contingent liabilities arising from Claim, litigation, Assessments, fines, penalties etc. are provided for when it is probable that a liability may be incurred and the amount can be reasonably estimated.

9. Debrciation Accounting:-

Till the year ended 31st March 2014, debrciation rates brscribed under Schedule - XIV were treated as minimum rates and the company was not allowed to charge debrciation at lower rates even if such lower rates were justified by the estimated useful life of the asset. Schedule - II to the Companies Act, 2013 brscribes useful lives for fixed assets which, in many cases, are different from lives brscribed under the erstwhile Schedule XIV. Considering the applicability of Schedule - II, the management has re-estimated useful lives and residual values of all its fixed assets. The management believes that debrciation rates currently used fairly reflect its estimate of the useful lives and residual values of fixed assets. Debrciation on fixed assets is provided on straight-line method, over estimated useful lives, as determined by the management.

Assets costing less than Rs. 5,000/- are fully debrciated in the year of purchase.

For assets purchased/ sold during the year, debrciation is being provided on pro rata basis by the Company.

10. Foreign Currency Transactions:

Monetary foreign currency assets and liabilities are translated at the balance sheet date at rates notified by the Foreign Exchange Dealers' Association of India ("FEDAI").

Foreign exchange contracts are stated at net brsent value using LIBOR/SWAP curves of the respective currencies.

The resulting profits or losses are recognized in the profit and loss account. Premia/discounts on foreign exchange swaps, that are used to hedge risks arising from foreign currency assets and liabilities, are amortized over the life of the swap.

Income and expenditure in foreign currency are accounted for at exchange rates brvalent on the date of the transaction.

In accordance with AS - 11 "The Effects of changes in Foreign Exchange Rates", contingent liabilities in respect of outstanding foreign exchange forward contracts, derivatives, guarantees, endorsements and other obligations are stated at the exchange rates notified by FEDAI corresponding to the balance sheet date.

11. Government Grants:-

Grants, in the nature of interest subsidy under the Technology Up-gradation Fund (TUF) Scheme, are accounted for when it is reasonably certain that ultimate collection will be made. Government grants not specifically related to fixed assets are recognized in the Statement of Profit and Loss in the year of accrual / receipt.

Government grants in the nature of Promoters' funds have been recognized in the nature of shareholders' funds by way of contribution towards its total capital outlay.

12. Employee Benefits:

i. Defined contribution plans:

The Company contribution to provident fund and ESIC are charged to the Statement of Profit and Loss.

ii. Defined Benefit Plans / Long Term Compensated Absences Gratuity:-

The Company provides for gratuity, a defined benefit retirement plan, covering eligible employees. The plan provides for lump sum payments to vested employees at retirement or upon death while in employment or on termination of employment for an amount equivalent to 15 days' eligible salary payable for each completed year of service if the service is more than 5 years. The Company accounts for the liability for future gratuity benefits using the projected unit cost method based on annual actuarial valuation. The Company recognizes the actuarial gains and losses during the year in which the same are incurred.

Provident fund

In accordance with law, all employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employee and the Bank contribute monthly at a br determined rate. Contribution to provident fund are recognized as expense as and when the services are rendered. The Company has no liability for future provident fund benefits other than its annual contribution.

13. Borrowing Costs:-

Borrowing costs that are directly attributable to the acquisition/ construction of the qualifying asset are capitalized as a part of the cost of such asset, up to the date of acquisition / completion of construction. All other borrowing costs are charged to revenue in the year in which they are incurred.

14. Segment Reporting:-

Since the windmill power generation segment is not significant as defined in AS-17, the Company is considered to be a single segment company - engaged in the manufacture of textiles. Consequently, the Company has in its primary segment only one reportable business segment.

15. Taxes on Income:-

Tax expense comprises current and deferred tax. Current tax comprises of the amount of tax for the period determined in accordance with the Income Tax Act, 1961 and the rules framed there under. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax assets and liabilities are recognized for the future tax consequences of timing differences between the carrying values of assets and liabilities and their respective tax bases and operating loss carry forwards. Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates at the balance sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. In case of unabsorbed debrciation or carried forward loss under taxation laws, all deferred tax assets are recognized only if there is virtual certainty of realization of such assets supported by convincing evidence. Deferred tax assets are reviewed at each balance sheet date and appropriately adjusted to reflect the amount that is reasonably/virtually certain to be realized.

16. Intangible Assets:-

Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. The intangible assets are recorded at cost and are carried at cost less accumulated amortization and accumulated impairment losses, if any.

17. Earning Per Share:-

The Company reports basic and diluted earnings per equity share in accordance with Accounting Standard (AS) 20, "Earnings per Share" notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. Basic earnings per equity share have been computed by dividing net profit after tax for the year by the weighted average number of equity shares outstanding for the period. Diluted earnings per equity share have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the period except where the results are anti dilutive.

18. Employee Stock Compensation Cost

Measurement of the employee share-based payment plans is done in accordance with the Guidance Note on Accounting for Employee Share-based Payments issued by Institute of Chartered Accountants of India (ICAI) and SEBI (Share Based Employee Benefits) Regulations, 2014. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation cost is measured by the excess, if any, of the fair market price of the underlying stock (i.e. the last closing price on the stock exchange on the day brceding the date of grant of stock options) over the exercise price. The exercise price of the Company's stock option is the last closing price on the stock exchange on the day brceding the date of grant of stock options and accordingly there is no compensation cost under the intrinsic value method.

2. Balances of Sundry Debtors, Creditors and Loans & Advances are subject to confirmation and reconciliation, if any.

3. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days (P.Y. Nil), the above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

4. The Board of Directors have declared interim dividend @ 22.50% during the year amounting to Rs. 321.73 lakhs (Rs. 2.25 per share of face value of Rs. 10/- each i.e. 22.50%) excluding Dividend Distribution Tax of Rs. 65.87 lakhs. The Board of Directors have also proposed to declare the Final dividend @ 22.5% for the year amounting to Rs. 321.73 lakhs (Rs. 2.25 per share of face value of Rs. 10/- each i.e. 22.5%) excluding Dividend Distribution Tax of Rs. 65.87 lakhs.

5. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days (P.Y. Nil), the above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6. The Board of Directors have declared interim dividend @ 22.50% during the year amounting to Rs. 321.73 lakhs (Rs. 2.25 per share of face value of Rs. 10/- each i.e. 22.50%) excluding Dividend Distribution Tax of Rs. 65.87 lakhs. The Board of Directors have also proposed to declare the Final dividend @ 22.5% for the year amounting to Rs. 321.73 lakhs (Rs. 2.25 per share of face value of Rs. 10/- each i.e. 22.5%) excluding Dividend Distribution Tax of Rs. 65.87 lakhs.

6. Employees Stock Option Scheme

Your Company has instituted Stock Option Plans to enable its employees to participate in your Company's future growth and financial success. Your Company provides its employees a platform for participating in important decision making and instilling long term commitment towards future growth of the Company by way of rewarding them through Stock Options. The Stock Option Schemes also enable the Company to hire the best talent for its senior management and key positions.

The Company has reserved issuance of 1,47,000 (Previous year 52,000) Equity Shares of Rs. 10/- each for offering to Eligible Employees of the Company under Employees Stock Option Scheme (ESOS). During the year the Company has granted 95,000 options at a price Rs. 342/- per option, plus all applicable taxes, as may be levied in this regard on the Company (Previous year 52,000 at a price of Rs. 69.75 per option plus all applicable taxes, as may be levied in this regard on the Company) to the Eligible Employees. The options would vest over a maximum period of 4 years or such other period as may be decided by the Nomination and Remuneration Committee from the date of grant based on specified criteria.

7. The Sundry Debtors includes an amount of Rs. 467.18 lakhs (2014 Rs. 504.06 lakhs) due from its Wholly Owned Subsidiary Orbit Inc., USA and Rs. 1,095.68 lakhs (2014 Rs. 917.74 lakhs) due from its Associate Concern M/s. Rainbow Line Trading LLC, Dubai.

Signatures to Notes No. N1 to N 27

As per our report of even date

For Krishna R. Moondra & Associates

Chartered Accountants

Manish Kumar Gupta

Partner.

M. No. : 130883/ F.R. No. : 114488W.

for and on behalf of the Board

Pankaj S. Seth Managing Director

Mukesh Deopura CFO

Anisha P. Seth Whole-time Director

Neha Poddar Company Secretary

Place : Mumbai.

Dated : 22nd May, 2015