a) Statement of compliance:

The Financial Statements have been prepared in accordance with the Indian Accounting Standards (‘Ind AS’) notified under the Companies(lndian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards)(Amendment) Rules, 2016.

Upto the year ended 31st March, 2016, the Company prepared its financial statements in accordance with the requirements of previous GAAP prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014.These are the Company’s first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. The transition from Previous GAAP to Ind AS has been accounted for in accordance with Ind AS 101 “First Time Adoption of Indian Accounting Standards”.

In accordance with Ind As 101 “First time adoption of Indian Accounting Standard”, the Company has presented a reconciliation from the presentation of financial statements under “Previous GAAP” to Ind AS of total equity as at April 1, 2016 and March 31, 2017, total comprehensive income and cash flowforthe yearended March 31, 2017.

b) Basis of preparation and presentation offinancial statements:

The financial statements are prepared and presented under the historical cost basis except for the following which have been measured at Fair Value amount:

- Certain financial assets and liabilities.

- Assets held for sale - Measured at Fair Value less cost to sell.

- Defined Benefit Plans - Plan Assets.

- Equity settled share-based payments.

The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (‘Ind AS’), including the rules notified underthe relevant provisions ofthe CompaniesAct, 2013.

Upto the year ended March 31, 2017, the financial statements had been prepared under the historical cost convention on an accrual basis and in accordance with Generally Accepted Accounting Principles including the Accounting Standards specified under Section 133 ofthe Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2014.

The Company’s financial statements are presented in Indian Rupees (?), which is also its functional currency.

These financial statements are the Company’s first Ind AS financial statements.

1.1 The Interest subsidy claim amounting to Rs. 209.50 Lacs was submitted to Ministry of Textile through bank out of which amount of Rs. 88.14 Lacs has been provided in the books of accounts is pending to be received. Considering the prolonged process and resultant uncertainty, the company had discontinued accounting for further accrual of interest subsidy claim under TUF, following conservatism. However, during the reporting year, the company has provided forthe amount of Rs.32.14 Lacs considering the same being received afterthe balance sheet date.

1.2 Others Includes Loans and Advances given to employees amounting to 14.05 Lacs (Previous Year 13.35 Lacs) valued at the actual amountof outflow.

2.1 The Board of Directors have recommended dividend of Rs. 1.25 per fully paid up equity share of Rs. 10/- each, aggregating to Rs. 75.63 lacs and tax on dividend of Rs. 15.40 lacs for the financial year 2017-18, which is based on relevant share capital as on March 31, 2018.Dividend declared by the company after the reporting period and tax on proposed dividend is not recognized as liability at the end of the reporting period in accordance with para 13 of Ind As 10.

3.1 Security Details of Secured Loan

a. Secured by Hypothecation of raw materials, stock-in-process, finished goods, books debts, plant and machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A& 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat. Facility further secured by equitable mortgage of open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation of Wind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.

b. Secured against hypothecation of Vehicles

* Refer Note no .16 for Current maturities of Long Term Debt

4.1 Security details for secured Loan

Secured by Hypothecation of raw materials, stock-in-process, finished goods, books debts, plant and machinery and equitable mortgage of factory land and building situated at Block no. 298, Plot no. 2, Block no. 76, Plot no. 2 at Village: Karanj, Taluka: Mandvi, Dist.: Surat and Block no. 141, Plot no. 3, Block no. 146, Plot no. 3/A & 13, Block no. 149, Plot no. 12/A & 12/B at Village: Mota Borasara, Taluka: Mangrol, Dist. Surat. Facility further secured by equitable mortgage of open Industrial land situated at Plot no.: Composite unit-1, Fairdeal Textile Park, Village: Mahuvej, Taluka: Mangrol, Dist.: Surat and office premises situated at eastern side of third floor, Dawer Chambers, Ring Road, Surat and hypothecation ofWind mill situated at Village: Suthari, Taluka: Abdasa, Dist: Kutch.

5.1 The Liability as on 31st March, 2016 does not exceed the amount already provided for, hence no provision is made in the year ended on 31st March, 2016.

6.1 Profit/Loss on Translation of monetary Items are recognized in Profit and Loss account in accordance with para 13.8.1 oflndAs-21

7.1 GRATUITY

The employee gratuity fund is managed by “ Life Insurance Corporation of India” & SBI Life Insurance Company Ltd.The Presentvalue ofobligation is determined based on actuarial valuation. The liability is fully funded.

8. REMITTANCE IN FOREIGN CURRENCY ON ACCOUNT OF DIVIDEND

Remittances by the company in foreign currencies for dividends (including amount credited to Non-Resident External Accounts):

9 Sale /Purchase includes inter-divisional transfer is Nil (Previous Year-Nil).

10 There are no dues (Previous Year - Nil) from the companies or firms where Directors are Directors/Partners.

11 Previous year figures have been regrouped/reclassified wherever necessary to correspond with the Current year’s Classification/ disclosure.