- USE OF ESTIMATES:
 
 The Preparation of the financial statements in conformity with
 accounting standard requires the Management to make estimates and
 assumptions that affect the reported accounts of assets and
 liabilities, disclosure of contingent liabilities as at the date of the
 financial statement and the reported amount of income and expenses
 during the reporting period like useful lives of fixed assets,
 provision for doubtful debts/ advances, provision for diminution in
 value of investments, provision for employee benefits, provision for
 warranties/ discounts, allowances for certain uncertainties, provision
 for taxation, provision for contingencies etc. Actual results could
 differ from those estimates.  Changes in estimates are reflected in the
 financial statements in the period in which changes are made and, if
 material, their effects are disclosed in the financial statements.
 
 - BASIS FOR PREPARATION OF FINANCIAL STATEMENTS:
 
 The Financial Statements have been prepared on a going concern basis
 under the historical cost convention, on accrual basis unless
 specifically stated herein below and in accordance with the applicable
 Accounting standards (AS) issued by the Institute of Chartered
 Accountants of India and relevant provisions of the Companies Act,
 1956.
 
 - REVENUERECOGNITION:
 
 Sales are recognized on completion of sale of goods (Export Sales are
 recognized on the basis of Shipping Bills prepared) and are net of
 trade discounts, rebates and inclusive of excise duty & exchange
 fluctuation but excludes taxes on sales.
 
 Export incentives are recognized as and when export sale is accounted
 for. Profit/ Loss on sale of DEPB license is recognized inthe year of
 sale.
 
 - FIXED ASSETS:
 
 a) All fixed assets are stated at cost, net of MODVAT/CENVAT less
 accumulated depreciation. Cost comprises cost of acquisition and all
 expenses incurred which are directly attributable, including cost of
 borrowings and exchange fluctuation, for bringing the assets into
 working condition for its intended use.
 
 b) Cost of assets not ready to put to use before year end and advances
 paid for acquisition or construction of Capital Assets are shown as
 ''Capital Work in Progress''.
 
 - DEPRECIATION:
 
 Depreciation on the fixed assets is provided on Straight Line Method at
 the rates and in the manner as prescribed in Schedule XIV to The
 Companies Act, 1956. Leasehold lands are amortised over the lease
 period. Brand &Trade Mark are being amortised over a period of ten
 years.
 
 - INVESTMENTS:
 
 a) Investments are carried at cost. However, provision for diminution
 in value is made to recognize any decline, other than temporary, in the
 value of investments except investment inunquoted &subsidiary companies.
 
 b) Investments that are readily realizable and intended to hold for not
 more than a year are classified as Current investments. All other
 investments are classified as Long Term Investment.
 
 - INVENTORIES:
 
 Raw Material, Stores & Spares are valued at cost. Cost of raw material
 is determined by First in First Out (FIFO) method except cotton,
 which is valued at weighted average cost.
 
 Finished and Semi Finished goods produced and purchased, are valued at
 lower of cost or net realizable value. The identification of Semi
 Finished goods is done on the basis of location of the goods.
 
 
 - BORROWING COST:
 
 Borrowing costs that are directly attributable to the acquisition or
 construction of fixed assets, which necessarily take a substantial
 period of time to get ready for their intended use, are capitalized.
 Other borrowing costs are recognized as expense in the year in which
 they are incurred.
 
 - RETIREMENT AND OTHER EMPLOYEE BENEFITS:
 
 The provision for gratuity liability and earned leaves are made in
 accordance with the actuarial valuation on projected unit credit
 actuarial method at the end of the year. The provisions for medical
 leaves are made on basis of leaves accrued to employees.
 
 - RESEARCH AND DEVELOPMENT COSTS:
 
 Research & Development expenses of revenue nature are charged to Profit
 and Loss Account and those of capital nature are capitalized as Fixed
 Assets.
 
 - MISCELLANEOUS  EXPENDITURE:
 
 Preliminary expenses and capital issue expenses are amortised over a
 period of ten years.
 
 Deferred revenue expenditure includes product development, design
 development, sampling expenses and human resource development expenses
 and are written off over a period of five years.
 
 - FOREIGN CURRENCY TRANSACTIONS:
 
 a) Transactions denominated in foreign currency are generally recorded
 at the exchange rate prevailing at the time of the transactions.
 
 b) Monetary items denominated in foreign currencies at the year end are
 restated at the year end rates. In case of monetary items which are
 covered by forward exchange contracts, the difference between the year
 end rate and the rate on the date of contract is recognized as exchange
 difference and the premium paid on forward contracts is recognized over
 the life of the contract.
 
 c) Non monetary foreign currency items are carried at cost.
 
 d) Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the profit and loss
 account except in cases where they relate to acquisition of fixed
 assets, in which case they are adjusted to the carrying cost of such
 assets.
 
 - IMPAIRMENT OF ASSETS:
 
 The carrying amounts of assets are reviewed at each balance sheet date.
 If there is any indication of impairment, based on internal / external
 factors, an impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount.
 
 - TAXATION:
 
 a) Provision for current income tax is made in accordance with the
 applicable provisions of the Income Tax Act, 1961.
 
 b) Liability for deferred tax is provided while deferred tax asset is
 recognized only if there is virtual certainty of their realization in
 future in terms of Accounting Standard on Deferred Tax Accounting
 (AS-22) issued by the Institute of Chartered Accountants of India.
 
 - GOVERNMENT GRANTS:
 
 Capital grants are accounted for and deducted from the respective
 assets in the year of receipt.
 
 The interest subsidy under TUF scheme have been considered on accrual
 basis and deducted from the interest expenditure.
 
 
 - OPERATING LEASE:
 
 Lease payments are recognizedas an expense in the Profit and Loss      
 Account according to the terms and conditions of the respective
 agreement.