1. SIGNIFICANT ACCOUNTING POLICIES:

i) ACCOUNTING CONVENTION:

The financial statements are brpared under the historical cost convention, in accordance with applicable accounting standards u/s 133 of the Companies Act,2013 read with rule 7 of the Companies (Accounts) Rules 2014.

ii) REVENUE RECOGNITION:

a) Sale of goods is recognized at the point of dispatch of finished goods to the customers and all the significant risks & rewards of the ownership are transferred to the buyer and company retains no effective control and no uncertainty exists regarding recovery of amount. The sale value is inclusive of excise duty wherever applicable paid on the clearance of finished goods.

b) Revenue in respect of benefit under Duty Entitlement Pass Book Scheme/Duty Drawback Scheme is recognized on post export basis.

c) Revenue in respect of Insurance and other claims is recognized when no significant uncertainty exists with regard to the amount to be realized.

d) Scrap (i.e. Empties, Wastages etc. Other than Production) is accounted for on sale basis.

e) Interest Income is recognized on time basis

f) Investment Income is accounted for on sale basis

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

iii) FIXED ASSETS AND DEbrCIATION/ AMORTISATION:

A. Tangible assets are stated at cost less accumulated debrciation. Cost of acquisition is inclusive of freight, duties, taxes and other incidental expenses. Debrciation is charged on following basis.

B. Debrciation on fixed assets has been charged as per Schedule-II of the Companies Act,2013.

a) In Garment Division at Ludhiana debrciation is charged on W.D.V. basis

b) In all other units, debrciation is charged on Straight Line basis

c) Intangible assets are stated at cost less accumulated amount of amortization. Such assets are amortized on Straight Line Basis on the estimated useful life.

iv) INVESTMENT:

Non Current Investments are stated at cost. Diminution in value of Investment if any is not considered because of temporary nature. Current Investments are valued at lower of cost or fair value

v) INVENTORIES:

Inventories are valued at cost or net realizable value, whichever is lower. However to determine the cost, the following methods are adopted:-

1) a) For Raw Material on moving weighted average method plus direct expenses.

b) For Stores and Spares on moving weighted average method plus direct expenses.

c) For Work - in - Process, cost of Raw Material plus appropriate share of manufacturing expenses/relevant Overheads/conversion cost depending upon the stage of completion.

2) For Finished goods, cost of raw material plus conversion costs, packing cost and other overheads incurred to bring the inventories to their brsent condition and location.

3) Further Wastage and Rejections are valued at net realizable value only.

4) Goods in Transit are valued at cost.

vi) RETIREMENT BENEFITS:

a) Gratuity

The Company has taken a Group Gratuity Policy from LIC of India to discharge its liability for Gratuity. The liability for gratuity is provided on the basis of the actuarial valuation carried out by an independent actuary at the balance sheet date.

b) Provident Fund:

Contribution to Provident Fund is made in accordance with the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and is charged to the Statement of Profit and Loss.

vii) FOREIGN EXCHANGE TRANSACTION:

a) The gains or losses on foreign exchange transactions are recognized in the Statement of Profit and Loss . Monetary assets and liabilities other than those covered by forward contracts have been valued at the exchange rate brvailing at the close of the financial year. The exchange difference on foreign currency transactions relating to fixed assets acquired from a country outside India are being adjusted to revenue.

b) In respect of Forward contracts, forward brmium or discount arising at the inception of forward contract is amortized as expenses or income over the life of contract. Exchange differences on such contracts are recognized in the Statement of profit and loss in the year in which exchange rates change.

Any Profit and Loss arising on cancellation or renewal of forward exchange contract is recognized as income or expenses in the period in which such income or loss arises.

viii) EXCISE DUTY:

Excise Duty payable on finished goods, if any, is accounted for on clearance of goods from the factory. Cenvat in respect of excise duty paid on Raw Material, Stores and Capital Goods is taken, if any, in accordance with the Cenvat Credit Rules 2004.

ix) WARRANTY CLAIMS:

As per the nature of Company's business, the question of warranty claims does not arise. The routine claims on account of quality or quantity lodged with the company other than those which are disputed one, are accounted for as and when accepted by the Company.

x) EXPENDITURE INCURRED DURING CONSTRUCTION PERIOD:

In respect of new/major expansion of units, the indirect expenditure incurred during construction period upto the date of commencement of commercial production is capitalized on various categories of fixed assets on proportionate basis.

xi) BORROWING COSTS:

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the asset. Other borrowing costs are recognized as an expense in the period in which they are incurred.

xii) GOVERNMENT GRANTS/SUBSIDY:

Government Grants/ Subsidy are recognized, when there is a reasonable assurance that

i) The Company will comply with conditions attached to them and

ii) The Grants/Subsidy will be received.

The Government Grants/Subsidy received for specific asset is reduced from the cost of the asset.

xiii) ACCOUNTING FOR TAXES ON INCOME:

Provision for taxation for the year comprises of current taxes and deferred tax. Current taxes consists of Income Tax and Wealth Tax. Current Tax is the amount of Income tax determined to be payable in respect of taxable income for the period. Deferred tax is calculated for timing difference that originates in one period and is capable of reversal in the subsequent period.

xiv) IMPAIRMENT OF ASSETS:

At each Balance Sheet date an assessment is made whether any indication exists that an asset has been impaired. If any such indication exists, an Impairment loss i.e. the amount by which the carrying amount of an asset exceeds its recoverable amount, is provided in the books of accounts.

xv) PROVISION AND CONTINGENT LIABILITIES

a) Provisions are recognized for liabilities that can be measured by using a substantial degree of estimation, if:

- the company has a brsent obligation as a result of past event.

- A probable outflow of resources embodying economic benefits is expected to settle the obligation and the amount of the obligation can be reliably estimated.

b) Contingent Liability is disclosed in case of :

- A brsent obligation arising from a past event when it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation or

- A possible obligation, unless the probability of outflow in settlement is remote.

c) Re-imbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the re-imbursement will be received.

2. CONTINGENT LIABILITIES NOT PROVIDED FOR:

a) Bank guarantees outstanding Rs.1662.54 Lacs ( Previous Yr. 1790.89 Lacs )

b) The Company has bound itself unto the President of India for Rs.138.00 Lacs (Previous Year Rs.138.00 Lacs) under Central Excise Act, 1944 for clearance of goods without payment of excise duty, in respect of export of various types of yarn and for storage of various commodities manufactured within factory brmises.

c) Excise/Sales Tax/Income Tax/ Other Government Authorities have raised demands of Rs.404.52 Lacs (Previous Year Rs.414.36 Lacs) out of which a sum of Rs.7.20 Lacs(Previous Year Rs. 10.31 Lacs) has been deposited against said demand. Further these demands have been contested in appeal and no provision has been made in the financial statement.

d) The electricity demand of Rs. 3212.54 lacs (Previous year 3215.54 Lacs) was raised by MPMKVV Co. Ltd and was contested by the company before Hon'ble High court of Jabalpur. The company deposited Rs. 561.92 Lacs under protest and also furnished bank guarantee for Rs.1662.54 Lacs. The Hon'ble High court decided the issue but the matter is contested by MPMKVV Co.Ltd before Hon'ble Subrme Court which is pending . No provision for any liability has been made in the books.

e) The Madhya Pardesh Government's Ordinance to collect cess on Captive Power generation was declared ultravires by the Hon'ble Subrme court vide order dated 09/12/2003. But the State Government subsequently enacted an Act namely M.P.Upkar (Sanshodhan Tatha Vidhimanyatakaran) Adhiniyam 2004 on 15th April 2004 which deemed to have come in to force from 29.06.2001.After the above act, the M.P.High Court passed an order dated 31/08/2007 to collect the dues of Cess from Captive Power plant users along with interest. According to this order, on the disputed amount,Rs. 170.65 Lacs (Previous year Rs.159.03 lac) is payable as interest .The above refered order has been challenged by some actual users in Hon'ble Subrme Court and matter being sub-judice,hence liability has not been provided for in the books .'

f) The Company has given the following Guarantees in respect of loans granted by the banks

Rs.2500 Lacs (brvious year Rs.2500 Lacs) to Oriental Bank of Commerce and Rs. 1500 Lacs (brvious year 1500Lacs) to Bank of Maharashtra in respect of financial assistance granted by the said banks to M/s Nahar Poly Films Limited, Ludhiana.

g) Levy of Entry Tax on certain items including yarn by the Punjab Government is subjudice before the Hon'ble Punjab & Haryana High Court .The Punjab Government has deferred the same subject to undertaking by the company that if the same is hold valid by the Hon'ble High Court , then company will deposit the same w.e.f the date of undertaking . The amount of such entry tax is Rs. 153.50 Lacs (brvious year Rs.153.50 Lacs) .It has no effect on the profitability of the company since the same will be claimed as Input Tax Credit.

3. Other Notes

i. Interunit job work and interunit sales are billed at market price. The closing stock of units is partly comprised of such material lying in finished or semi-finished stage. The mode of valuation referred to 'At Weighted Average Cost' rebrsents costs worked out by taking into account the price charged by such units.

ii. Salaries & wages incurred during the year on repairs and maintenance of Building and Plant & Machinery etc. have been charged to former accounts and not shown separately.

iii. In the opinion of the board, the value of Current Assets, Loans and Advances have a value in the ordinary course of business at least equal to that stated in the balance sheet

iv. Some balances of Trade Payables , Advances and Trade Receivables are subject to their Confirmation.

v. Borrowing cost amounting Rs. 95.59 Lacs (Previous Year Rs.226.73 Lacs) has been capitalized during the year.

vi. Material events occurring after the balance sheet date are taken into cognizance.

vii. Prior period and extraordinary changes in accounting policies, having material effect on the financial affairs of the Company (if any) are disclosed.

viii. The accounts of the Company have been brpared on going concern basis.

ix. Previous year figures have been regrouped/recasted/rearranged/reclassified wherever necessary to make them comparable.

x. All figures have been rounded off to the nearest Rs.Lacs

xi. Income in respect of Carbon Credits is accounted for only on sale as it does not have any cost to the company.

xii. In accordance with Accounting Standard (AS)-28 on impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004, the company has assessed as on Balance Sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the standards) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is brsent and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

xiii. There are no Micro & Small enterprises covered under Micro, Small and Medium Scale Development Act 2006, to whom the company owes dues, which are outstanding for more than 45 days, hence no disclosure has been given. This information has been determined on the basis of intimation received from such parties

xiv. The company is eligible for Sales Tax incentives /Interest subsidies from government of Madhya Pradesh. the same is being accounted for on receipt basis as the availability of the above incentives/Interest subsidies is only on the basis of completion of certain formalities

xv. The Company had floated a wholly owned subsidiary in U.A.E on 09/12/2013. The same has been wound up during the current year .No activity has been carried out during the period ended 31.03.2015.

xvi. (a) In one of the units of the company , debrciation on Other equipments, furniture and fixtures and vehicles, was being charged on W.D.V basis . From 01.04.2014 the debrciation on these assets has been changed to SLM basis on the useful life specified in the Schedule-II of the Companies Act 2013, Consequent to this change the lower debrciation of Rs.33.03 Lacs has been credited to the statement of Profit & Loss.

(b) In case of assets whose useful life have exhausted, the carrying values as at 1st April,2014 amounting to Rs. 1903.77 Lacs (net of deferred tax Rs.980.30 Lacs) have been adjusted against the opening reserves as on 1st April,2014 pursuant to the provision of Schedule II to the Companies Act,2013.

xvii. The company is operating in single segment i.e Textiles., Hence segment reporting as required under Accounting Standard 17 (Segment Reporting), is not applicable