(A) ACCOUNTING CONVENTION
 
 The Company follows the accrual method of accounting. The financial
 statements have been prepared in accordance with the historical cost
 convention (except so far as they relate to (a) revaluation of fixed
 assets and providing for depreciation on revalued amounts and (b) items
 covered under''Accounting Standard (AS) - 30'' on ''Financial Instruments:
 Recognition and Measurement'' which have been measured at their fair
 value) and accounting principles generally accepted in India.
 
 The preparation of financial statements requires the management to make
 estimates and assumptions in the reported amounts of assets and
 liabilities (including contingent liabilities) as of the date of the
 financial statements and the reported income and expenses during the
 reporting period. Management believes that the estimates used in
 preparation of the financial statements are prudent and reasonable.
 Future results could differ from these estimates.
 
 (B) INFLATION
 
 Assets and liabilities are recorded at historical cost to the Company
 (except so far as they relate to (a) revaluation of fixed assets and
 providing for depreciation on revalued amounts and (b) items covered
 under''Accounting Standard (AS) - 30'' on ''Financial Instruments:
 Recognition and Measurement which have been measured
 at their fair value).  These costs are not adjusted to reflect the
 changing value in the purchasing power of money.
 
 (C) REVENUE RECOGNITION
 
 (C.i) Sales and operating income includes sale of products, by-products
 and waste, income from job work services and gain or loss on forward
 contracts. Sales are recognized based on passage of title to goods
 which generally coincides with dispatch. Revenue from export sales are
 recognized on shipment basis.  Sales are stated net of returns, excise
 duty & Sales Tax/ VAT. Export incentives are accounted on accrual basis
 at the time of export of goods, if the entitlement can be estimated
 with reasonable accuracy and conditions precedent to claim are
 fulfilled.
 
 (C.2) Revenue from job work services is recognized based on the 
 services rendered in accordance with the terms of contracts.
 
 (C.3) Revenue in respect of projects for Construction of Plants and
 Systems, execution of which is spread over different accounting
 periods, is recognised on the basis of percentage of completion method
 in accordance with Accounting Standard 7-Accounting for Construction
 Contracts.
 
 Percentage of completion is determined by the proportion that contract
 costs incurred for work done till date bears to the estimated total
 contract cost.
 
 Difference between costs incurred plus recognised profit/loss
 recognised losses and the amount invoiced is treated as contract in
 progress.
 
 Determination of revenues under the percentage of completion method
 necessarily involves making estimates by the Company, some of which are
 of a technical nature, relating to the percentage of completion, costs
 to completion, expected revenue from the contract and the foreseeable
 losses to completion.
 
 (C.4) Claims receivable on account of Insurance are accounted for 
 to the extent the Company is reasonably certain of their
 ultimate collection.
 
 (D) VALUATION OF INVENTORY
 
 (D.i) The stock of Work-in-progress and finished goods of the Yarn,
 Fabric and Branded Garment Business has been valued at the lower of
 cost and net realizable value. The cost has been measured on the
 standard cost basis and includes cost of materials and cost of
 conversion.
 
 (D.2) All other inventories of stores, consumables, raw materials
 (Electronics Division), project material at site are valued at cost.
 The stock of waste is valued at market price. The other raw materials,
 finished goods and stock at branches are valued at lower of cost and
 net realizable value. Cost is measured on actual average for the whole
 year. Excise duty wherever applicable is provided on finished goods
 lying within the factory and bonded warehouse at the end of the year.
 
 (E) FIXED ASSETS & DEPRECIATION
 
 (E.i) Fixed assets are stated at their original cost of
 acquisition/revalued cost wherever applicable less accumulated
 depreciation and impairment losses.  Cost comprises of all costs
 incurred to bringthe assets to their location and working 
 condition.
 
 (E.2) Land held for sale is stated at the lower of their net book value
 and net realizable value.
 
 (E.3) Exchange rate gain or loss on foreign currency loans related to
 acquisition of depreciable assets are being capitalized as per the
 notification dated 31st March, 2009 issued by Ministry of Corporate
 Affairs, New Delhi.
 
 (E.4) Depreciation on Revalued Fixed Assets is calculated on the
 residual life of the assets or as per rates specified in the Schedule
 XIV to the Companies Act, 1956 whichever is higher.
 
 (E.5) Additions to fixed assets after 1st October 2006 have been stated
 at cost net of CENVAT wherever applicable.
 
 (E.6) Directly identifiable preoperative expenses of new projects of
 capital nature under implementation are carried forward under capital
 work-in-progress, pending capitalization.
 
 (E.7) Depreciation on Fixed Assets is provided, pro rata for the period
 of use, on Straight Line Method (SLM), as per rates specified in the
 Schedule XIV to the Companies Act, 1956 except for the following which
 are based on management''s estimate of useful lives of thefixed assets:
 
 Car Vehicles: 20%; Leasehold Improvements: 10%
 
 (E.8) Depreciation on impaired asset is provided on the asset''s revised
 carrying amount, over its remaining useful life.
 
 (E.9) Depreciation on exchange rate difference capitalized is provided
 over the balance life of the assets as per the notification dated 31st
 March, 2009 issued by the Ministry of Corporate Affairs.
 
 (E.10) Individual assets costing less than Rs. 5,000/- have been fully
 depreciated in the year of purchase on pro rata basis.
 
 (E.11) Revaluation Reserve on Assets sold is transferred to General
 Reserve.
 
 (F) IMPAIRMENT OF ASSETS
 
 An asset is considered as impaired in accordance with Accounting
 Standard 28 on Impairment of Assets when at balance sheet date there
 are indications of impairment and the carrying amount of the asset, or
 where applicable the cash generating unit to which the asset belongs,
 exceeds its recoverable amount (i.e. the higher of the asset''s net
 selling priceand value in use). The carryingamount is reduced to the
 recoverable amount and the reduction is recognized as an impairment
 loss in the profit and loss account.
 
 (G) INVESTMENTS
 
 (G.i) Investments are classified as investments in Subsidiaries,
 Available for Sale and Held-to-Maturity within the meaning of
 Accounting Standard 30 on ''Financial Instruments: Recognition and
 Measurement'' read with the limited revision of Accounting Standard 21
 on Consolidated Financial Statements.
 
 (G.2) Investments in subsidiaries are valued at cost less any provision
 for impairment. Investments are reviewed for impairment if events or
 changes in circumstances indicate that the carrying amount may not be
 recoverable.
 
 (G.3) Investments classified as available for sale are remeasured at
 subsequent reporting dates to fair value. Unrealized gains/losses on
 such investments are recognised directly in Investment Revaluation
 Reserve Account. At the time of disposal, derecognition or impairment
 of the investments, cumulative gain or loss previously recognised in
 the investment revaluation reserve account is recognised in the profit
 and loss account.
 
 (G.4) Investments classified as held for trading that have a market
 price are measured at fair value and gain/loss arising on account of
 fair valuation is routed through profit and lossaccount.
 
 (H) FOREIGN CURRENCY TRANSACTIONS
 
 (H.i) Transactions denominated in foreign currencies are normally
 recorded at the exchange rate prevailing at thetimeof thetransaction.
 
 (H.2) Monetary items denominated in foreign currencies at the year end
 are restated atyear end rates.
 
 (H.3) Non-monetary foreign currency items are carried at cost.
 
 (H.4) All long-term foreign currency monetary items consisting of loans
 which relate to acquisition of depreciable capital assets at the end of
 the year have been restated at the rate prevailing at the balance sheet
 date. The difference arising as a result has been added to or deducted
  from th ecost of the assetsasper the notification issued by
 the Ministry of Corporate Affairs dated March 31,2009. Exchange rate
 difference on other long-term foreign currency loans is carried to
 ''Foreign Currency Monetary Item Translation Difference Account''to be
 amortized up to the period of loan or upto 31st March, 2012 whichever
 is earlier.
 
 (H.5) Any income or expense on account of exchange difference either on
 settlement or on translation other than as mentioned in (H.4) above is
 recognised in the profit and loss account.
 
 (H.6) Expenses of overseas offices are translated and accounted atthe
 monthly average rate.
 
 (I) DERIVATIVES and COMMODITY HEDGING TRANSACTIONS
 
 (1.1) In order to hedge its exposure to foreign exchange, interest rate
 and commodity price risks, the Company enters in to forward, option, 
 swap contracts and other derivative financial instruments. 
 The Company neither holds nor issues any derivative financial 
 instruments forspeculative purposes.
 
 (1.2) Derivative financial instruments are initially recorded at their
 fair value on the date of the derivative transaction and are
 re-measured at their fair value at subsequent balance sheet dates.
 
 (1.3) Changes in the fair value of derivatives that are designated and
 qualify as cash flow hedges and are determined to be an effective hedge
 are recorded in hedging reserve account. To designate a forward
 contract or option as an effective hedge, management objectively
 evaluates and evidences with appropriate supporting documents at the
 inception of each contract whetherthe contract is effective in
 achieving offsetting cash flows attributable to hedged risk. Any
 cumulative gain or loss on the hedging instrument recognised in hedging
 reserve is kept in hedging reserve until the forecast transaction
 occurs or the hedged accounting is discontinued. Amounts deferred to
 hedging reserve are recycled in the profit and lossaccount in the
 periods when the hedged item is recognised in the profit and
 lossaccount or when the portion of the gain or loss is determinedto
 bean ineffective hedge.
 
 (1.4) Derivative financial instruments that do not qualify for hedge
 accountingare marked to market atthe balance sheet date and gains or
 losses are recognised in the profit and loss account immediately.
 
 (1.5) Hedge accounting is discontinued when the hedging instrument
 expires or is sold, terminated or exercised, or no longer qualifiesfor
 hedge accounting. If a hedged transaction is no longer expected to
 occur, the net cumulative gain or loss recognised in hedging reserve is
 transferred to net profit or loss for the year.
 
 (J) EMPLOYEE BENEFITS
 
 (J.i) The Company has Defined Contribution Plans for post employment
 benefits namely Provident Fund and Superannuation Fund which are
 recognized by the Income Tax Authorities. These funds are administered
 through trustees and the Company''s contributions thereto are charged to
 revenue every year. The Company also pays insurance premiums to fund a
 post-employment medical assistance scheme, a Defined Contribution Plan
 administered by ICICI Lombard General Insurance Company Limited which
 is charged to revenue every year. The Company''s Contribution to State
 Plans namely Employee''s State Insurance Fund and Employee''s Pension
 Scheme are chargedto revenue everyyear.
 
 (J.2) The Company has Defined Benefit Plans namely leave encashment/
 compensated absences and Gratuity for all the employees, the liability
 for which is determined on the basis of an actuarial valuation at the
 year end and incremental liability, if any, is provided for in the
 books.  The actuarial valuation is done based on Projected Unit Credit
 Method. Gratuity scheme is administered through trust recognised bythe
 Income Tax Authorities and/ or by Life Insurance Corporation of India.
 
 (J.3) Actuarial Gains and Losses comprise of experience adjustments and
 the effects of changes in actuarial assumptions and are recognised
 immediately in the Profit and Loss Account as income or expense.
 
 (K) BORROWING COST
 
 Borrowing costs include interest, fees and other charges incurred in
 connection with the borrowing of funds. It is calculated on the basis
 of effective interest rate in accordance with Accounting Standard (AS)
 - 30 and considered as revenue expenditure and charged to profit and
 loss account for the year in which it is incurred except for borrowing
 costs attributed to the acquisition/improvement of qualifying assets
 upto the date when such assets are ready for intended use which are
 capitalised as a part of the cost of such asset.
 
 (L) LEASE ACCOUNTING
 
 (Li) Assets acquired under Finance Lease are segregated from the assets
 owned and recognized as asset at an amount equal to the fair value of
 the leased assets at the inception of the lease or the present value of
 the minimum lease payments whichever is lower with corresponding
 outstanding liability.
 
 (L.2) Lease rental payable on such finance lease has been apportioned
 between finance charge and the reduction in the outstanding liability.
 The finance charge has been allocated to periods during the lease term
 so as to produce constant periodic rate of interest on the remaining
 balance of liabilityfor each period.
 
 (L.3) Lease Rentals for assets acquired under operating lease are
 recognised as an expense in Profit & Loss Account on astraight line
 basis overthe lease term.
 
 (M) TAXES ON INCOME
 
 (M.i) Tax expense consists of both current as well as deferred tax
 liability. Current taxrepresents amount of income tax payable including
 the tax payable U/S115JB, if any, in respect of taxable
 incomefor the year.
 
 (M.2) Minimum Alternate Tax Credit is recognised as an asset only when
 and to the extent there is convincing evidence that the Company will
 pay normal income tax with in the specified period.
 
 (M.3) Deferred tax is recognised on timing difference between the
 accounting income and the taxable income for the year that originates
 in one period and are capable of reversal in one or more subsequent
 periods. Such deferred tax is quantified using the tax rates and laws
 enacted or substantively enacted as on the Balance Sheet date.
 
 (M.4) Deferred tax asset is recognised and carried forward to the
 extent thatthere is avirtual certainty supported by convincing evidence
 that sufficient future taxable income will be available against which
 such deferred tax asset can be realized.
 
 (N) EARNING PER SHARE
 
 The Company reports basic and diluted Earnings Per Share (EPS) in
 accordance with Accounting Standard 20 on Earnings Per Share. Basic EPS
 is computed by dividing the net profit or loss for the year by the
 weighted average number of Equity Shares outstanding during the year.
 Diluted EPS is computed by dividing the net profit or loss for the year
 by the weighted average number of equity shares outstanding during the
 year as adjusted for the effects of all dilutive potential equity
 shares, except wherethe results areanti-dilutive.
 
 (O) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 Provisions involving a 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
 accounts byway of a note. Contingent assets are neither recognized nor
 disclosed in thefinancial statements.
 
 (P) CAPITAL ISSUE EXPENSES
 
 Expenses on issue of Shares, Debentures and GDRs are being adjusted
 against Securities Premium Account as permitted by Section 78 of the
 Companies Act.