Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention on the Accrual Concept of accountancy in accordance with
 the accounting principles generally accepted in India and comply with
 the accounting standards issued by the Institute of Chartered
 Accountants of India to the extent applicable and with the relevant
 provisions of the Companies Act, 1956.  Use of Estimates
 
 The preparation of financial statements requires management to make
 estimates and assumptions that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual results and estimates are recognized in the period
 in which results are known / materialized.
 
 Fixed Assets
 
 The Gross Block of Fixed Assets are shown at the cost which includes
 taxes, duties (Net of Cenvat) and other identifiable direct expenses
 and interest on borrowings attributable to acquisition of Fixed Assets
 upto the date of Commissioning of the assets.
 
 In case of new projects / expansion of existing projects, expenditure
 incurred during construction / preoperative period including interest
 and finance charges on specific / general purpose loans, prior to
 commencement of commercial production are capitalized. The same has
 been allocated to the respective fixed assets on completion of
 construction / erection of the capital project / fixed assets.
 
 Capital assets (including expenditure incurred during the construction
 period) under erection / installation are stated in the Balance Sheet
 as Capital Work in Progress.
 
 Impairment of Assets
 
 At each balance sheet date, the Company reviews the carrying amounts of
 its fixed assets to , determine whether there is any indication that
 those assets suffered an impairment loss. If any such indication
 exists, the recoverable amount of the asset is estimated in order to
 determine the extent of impairment loss. Recoverable amount is the
 higher of an assets net selling price and value in use. In assessing
 value in use, the estimated future cash flows expected from the
 continuing use of the asset and from its disposal are discounted to
 their present value using a pre-tax discount rate that reflects the
 current market assessments of time value of money and the risks
 specific to the asset.
 
 Depreciation
 
 The company has provided depreciation on fixed assets by written Down
 valued at the rates specified in schedule XIV of The Companies Act,
 1956. However depreciation is taken for the whole month in which assets
 is installed.
 
 Depreciation on additions to / deletions from fixed assets made during
 the period is provided on pro- rata basis from / up to the month of
 such addition / deletion as the case may be.
 
 Investments
 
 Long term investments are stated at cost. Current investments are
 stated at lower of cost and market price. Provision for diminution in
 the value of long term investments is made only if such a decline is
 other than temporary in the opinion of the management.
 
 Inventories
 
 1) Grey Cloth, Colour & chemical, packing material are valued at cost.
 
 2) Semi finish goods are valued at estimated cost as per Full
 absorption basis in accordance with the revised Accounting Standard -
 2.
 
 3) Finished goods are valued at cost or net realizable value, whichever
 is less.
 
 Due consideration is given to the saleability of the stock and no
 obsolete or unserviceable /damaged items included therein except at
 their net realizable value.  
 
 Revenue Recognition
 
 Sales are recognized when goods are supplied. Sales are net of trade
 discounts, rebates and vat. It does not include interdivisional sales.
 
 Revenue in respect of other item is recognized when no significant
 uncertainty as to its determination or realization exists.  
 
 Borrowing Cost
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes a
 substantial period of time to get ready for its intended use. All other
 borrowing costs are charged to revenue.
 
 Employee Benefits
 
 Short -term employee benefits are recognized as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 Post employment and other long term employee benefits are recognized as
 an expense in the profit and loss account for the year in which the
 employee has rendered services.
 
 Taxes on Income
 
 Income tax expenses for the year comprises of current tax and deferred
 tax. Current tax provision is determined on the basis of taxable income
 computed as per the provisions of the Income Tax Act.  Deferred tax is
 recognized for all timing differences that are capable of reversal in
 one or more subsequent periods subject to conditions of prudence and by
 applying tax rates that have been substantively enacted by the balance
 sheet date.  Provision, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 
 Contingent liabilities are not recognized but are disclosed in the
 notes.
 
 Contingent assets are neither recognized nor disclosed in the financial
 statements.