(1) Basis of accounting
 
 The financial statements are prepared under the historical cost
 convention, on an accrual basis, in accordance with Generally Accepted
 Accounting Principles in India and are in accordance with the
 requirements of the Companies Act, 1956 and comply with the Accounting
 Standards.
 
 (2) Use of Estimates
 
 The preparation of financial statements in conformity with Generally
 Accepted Accounting Principles requires the management to make
 estimates and assumptions that affect the reported balances of assets
 and liabilities as of the date of the financial statements and
 reported amounts of income and expenses during the period. Management
 believes that the estimates used in the preparation of financial
 statements are prudent and reasonable. Actual results could differ from
 the estimates.
 
 (3) Revenue recognition
 
 Revenue from sales is recognised when the signifi cant risks and
 rewards of ownership of the goods are transferred to the customers.
 
 (4) Revenue from real estate activity
 
 Revenue from real estate is recognised on the transfer of all signifi
 cant risks and rewards of ownership to the buyers and it is not
 unreasonable to expect ultimate collection and no significant
 uncertainty exists regarding the amount of consideration.
 
 The freehold land under Real Estate Development planned for sale, is
 converted from fixed assets into stock-in-trade at market value. The
 difference between the market value and cost of that part of freehold
 land is credited to revaluation reserve. Revenue arising on sale of
 undivided interest in the underlying freehold land pertaining to flats
 / office premises, which are under construction, is being accounted
 when agreement for sale for such flats / office premises, is entered
 into with a corresponding release from revaluation reserve.
 
 Revenue from construction activity is recognised on the ''Percentage of
 Completion Method'' of accounting. Revenue is recognised in relation to
 the sold areas only, on the basis of percentage of actual cost incurred
 as against the total estimated cost of construction. Revenue is only
 recognised if the actual cost incurred is in excess of 25% of the total
 estimated cost. The estimates of saleable area and costs are revised
 periodically by the management. The effect of such changes to estimates
 is recognised in the period such changes are determined.  The estimated
 cost of the construction as determined, is based on management''s
 estimate of the cost expected to be incurred till the fi nal completion
 and includes cost of materials, service and other related overheads.
 Unbilled costs are carried as real estate work 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, concerning, where relevant, the percentages of
 completion, costs to completion, the expected revenues from the project
 / activity and the foreseeable losses to completion.
 
 (5) Fixed assets
 
 Fixed assets are stated at cost (net of cenvat credit wherever
 applicable) less accumulated depreciation and impairment losses, if
 any.  The cost includes cost of acquisition, construction, erection,
 installation etc, preoperative expenses (including trial run) and
 borrowing costs incurred during construction period.
 
 (6) Depreciation
 
 Depreciation on fixed assets other than furniture and motor vehicles
 is provided under the straight line method in a manner that amortises
 the cost of the assets after commissioning, over their estimated useful
 lives or lives based on the rates specifi ed in Schedule XIV to the
 Companies Act, 1956, whichever is higher. Depreciation on furniture and
 motor vehicles is provided on the written down value method at the
 rates specifi ed in Schedule XIV to the Companies Act, 1956. Useful
 lives as estimated by the management are as under:
 
 (i) Assets of retail shops including leasehold improvement – 6 years
 
 (ii) Computer software – 5 years
 
 (iii) Technical know-how – 10 years
 
 (iv) Leases hold land – lease period namely 95 years
 
 The Textile processing plant at Ranjangaon has been treated as a
 Continuous process plant based on technical assessment.
 
 (7) Impairment
 
 The carrying amounts of the Company''s tangible and intangible assets
 are reviewed at each balance sheet date to determine whether there is
 any indication of impairment. If any such indication exists, the
 asset''s recoverable amounts are estimated in order to determine the
 extent of impairment loss, if any. An impairment loss is recognized
 whenever the carrying amount of an asset exceeds its recoverable
 amount. The impairment loss, if any, is recognized in the statement of
 Profit and Loss in the period in which impairment takes place.
 
 Where an impairment loss subsequently reverses, the carrying amount of
 the asset is increased to the revised estimate of its recoverable
 amount, however subject to the increased carrying amount not exceeding
 the carrying amount that would have been determined (net of
 amortisation or depreciation) had no impairment loss been recognized
 for the asset in prior accounting periods.
 
 (8) Borrowing costs
 
 Borrowing costs that are directly attributable to the acquisition or
 construction of qualifying assets are capitalised. A qualifying asset
 is an asset that necessarily takes substantial period of time to get
 ready for its intended use. Other borrowing costs are recognised as an
 expense in the period in which they are incurred.
 
 (9) Investments
 
 (i) Long term investments are stated at cost. Provision for diminution
 is made to recognise a decline, other than temporary, in value of long
 term investments, where applicable.
 
 (ii) Current investments are stated at lower of cost and fair value and
 the resultant decline, if any, is charged to revenue.
 
 (10) Inventories
 
 (i) Inventories are valued at lower of cost and net realisable value.
 (ii) Cost is determined as follows:
 
 (a) Stores, spare parts and catalysts on a weighted average method.
 
 (b) Raw Materials
 
 - cotton, fi bre, cloth, yarn, purifi ed terepthalic acid,mono ethylene
 glycolon, dyes & chemicals and other materials on a weighted average
 method.
 
 (c) Work-in-process and fi nished goods Textile division- Material
 costs included in the valuation are determined on the basis of the
 average consumption rates closer to the year end so as to refl ect the
 fair approximation to the costs incurred. Costs of conversion and other
 costs are determined on the basis of standard costs, adjusted for
 variances between standard and actual costs, if material. Cost of
 inventory at retail outlets is determined on a ''retail method'', by
 reducing from the sales value of the inventory, an appropriate
 percentage of gross margin. Cost of ready fi nished cloth is determined
 by a combination of Specific identifi cation plus weighted average
 method.
 
 PSF division- Material cost included in the valuation are determined on
 the basis of the weighted average rate and cost of conversion and other
 costs are determined on the basis of average cost of conversion of the
 last month.
 
 (d) Real estate under development- Real estate under development
 comprises undivided interest in the freehold land at market value,
 determined at the rate at which it was converted from fixed assets
 into stock-in-trade and expenditure relating to construction. Cost of
 land and construction/ development is charged to Profit and loss
 account proportionate to area sold and at the time when corresponding
 revenue is recognised.
 
 (11) Foreign currency transactions
 
 (i) Transactions in foreign currency are recorded at exchange rates on
 the date of transaction. Monetary assets and liabilities denominated in
 foreign currency, remaining unsettled at the period end are translated
 at closing rates. The difference in translation of all monetary assets
 and liabilities and realised gains and losses on foreign currency
 transactions are recognised in the Profit & Loss Account.
 
 (ii) Forward exchange contracts other than those entered into to hedge
 foreign currency risk of fi rm commitments or highly probable forecast
 transactions are translated at period end exchange rates and the
 resultant gains and losses as well as the gains and losses on
 cancellation of such contracts are recognised in the Profit and Loss
 Account. Premium or discount on such forward exchange contracts is
 amortised as income or expense over the life of the contract.
 
 (iii) The company used forward foreign exchange contract to hedge its
 exposure against movements in foreign exchange rates.
 
 (12) Accounting for Derivatives
 
 The Company enters into derivative financial instruments to hedge
 foreign currency risk of fi rm commitments and highly probable forecast
 transactions. The method of recognizing the resulting gain or loss
 depends on whether the derivative is designated as a hedging
 instrument, and if so, the nature of the item being hedged. The
 carrying amount of a derivative designated as a hedge is presented as a
 current asset or liability. The company does not enter into any
 derivatives for trading purposes.
 
 Cash Flow Hedge
 
 Forward exchange contracts entered into to hedge foreign currency risks
 of fi rm commitments or highly probable forecast transactions, that
 qualify as cash fl ow hedges are recorded in accordance with the
 principles of hedge accounting enunciated in Accounting Standard (AS)
 30 – Financial Instruments Recognition and Measurement. The gains or
 losses on designated hedging instruments that qualify as effective
 hedges is recorded in the Hedging Reserve account and is recognized in
 the statement of Profit and Loss in the same period or periods during
 which the hedged transaction affects Profit or loss.
 
 Gains or losses on the ineffective hedge transactions are immediately
 recognized in the Profit and Loss account. When a forecasted
 transaction is no longer expected to occur the gains and losses that
 were previously recognized in the Hedging Reserve are transferred to
 the statement of Profit and Loss immediately.
 
 (13) Employees benefits
 
 (i) Short term employee benefits:
 
 Short term employee benefits are recognised as an expense at the
 undiscounted amount in the Profit and loss account of the year in
 which the related service is rendered.
 
 (ii) Post-employment benefits:
 
 (I) Defi ned Contribution Plan:
 
 a) Provident and Family Pension Fund
 
 The eligible employees of the Company are entitled to receive post
 employment benefits in respect of provident and family pension fund,
 in which both the employees and the Company make monthly contributions
 at a specifi ed percentage of the employees'' eligible salary (currently
 12% of employees'' eligible salary). The contributions are made to the
 provident fund and pension fund set up as irrevocable trust by the
 Company or to respective Regional Provident Fund Commissioner. The
 Company has no further obligations beyond making the contribution,
 except that any shortfall in the fund assets based on the Government
 specifi ed minimum rates of return in respect of provident fund set up
 by the Company, and the Company recognises such contributions and
 shortfall, if any, as an expense in the year incurred.
 
 b) Superannuation
 
 The eligible employees of the Company are entitled to receive post
 employment benefits in respect of superannuation fund in which the
 Company makes annual contribution at a specifi ed percentage of the
 employees'' eligible salary (currently 10% or 15 % of employees''
 eligible salary). The contributions are made to the Superannuation fund
 set up as irrevocable trust by the Company. Superannuation is classifi
 ed as Defi ned Contribution Plan as the Company has no further
 obligations beyond making the contribution. The Company''s contribution
 to Defi ned Contribution Plan is charged to Profit and loss account as
 incurred.
 
 (II) Defi ned Benefit Plan:
 
 a) Gratuity
 
 The Company has an obligation towards gratuity, a defi ned benefit
 retirement plan covering eligible employees. The plan provides a lump
 sum payment to vested employees at retirement, death while in
 employment or on termination of employment of an amount equivalent to
 15 days or 30 days salary payable for each completed year of service.
 Vesting occurs upon completion of fi ve years of service. The
 Contributions are made to the Gratuity Fund set up as irrecoverable
 trust by the Company. The Company accounts for gratuity benefits
 payable in future on the basis of an actuarial valuation by an
 independent actuary at the year end, which is calculated using Project
 Unit Credit method. Actuarial gains and losses which comprise
 experience adjustment and the effect of change in actuarial assumptions
 are recognised in the Profit and loss account.
 
 b) Other long-term employee benefits - compensated absences
 
 The Company provides for encashment of leave or leave with pay subject
 to certain rules. The employees are entitled to accumulate leave
 subject to certain limits for future encashment/ availment. The Company
 makes provision for compensated absences based on an actuarial
 valuation by an independent actuary at the year end, which is
 calculated using Project Unit Credit Method. Actuarial gains and losses
 which comprise experience adjustment and the effect of change in
 actuarial assumptions are recognised in the Profit and loss account.
 
 (14) Taxation
 
 Tax expense comprises current and deferred tax. Current tax is measured
 at the amount expected to be paid in accordance with the Income- tax
 Act, 1961. Deferred income taxes refl ects the impact of current year
 timing differences between taxable income and accounting income for the
 year and reversal of timing differences of earlier years. Deferred tax
 is measured based on the tax rate and tax laws enacted or substantially
 enacted at the balance sheet date. Deferred tax assets are recognised
 only to the extent that there is reasonable certainty that suffi cient
 future taxable income will be available against which such deferred tax
 assets can be realised. Deferred tax assets are not recognised on
 unabsorbed depreciation and carry forward of losses unless there is
 virtual certainty that suffi cient future taxable income will be
 available against which such deferred tax assets can be realised.
 
 (15) Provisions and Contingent Liabilities
 
 A provision is recognised when the enterprise has a present obligation
 as a result of past event and it is probable that an outfl ow of
 resources will be required to settle the obligation, in respect of
 which a reliable estimate can be made. Provisions are not discounted to
 their present values and are determined based on management estimate
 required to settle the obligation at the balance sheet date. These are
 reviewed at each balance sheet date and adjusted to refl ect the
 current management estimates.
 
 Contingent Liabilities are disclosed in respect of possible obligations
 that arise from past events but their existence is confi rmed by the
 occurrence or non occurrence of one or more uncertain future events not
 wholly within the control of the Company.
 
 (16) Leases
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased assets, are classifi ed as
 operating leases. Operating lease payments/receipts are recognised as
 an expense/income in the Profit and Loss Account on a straight-line
 basis over the lease term.
 
 (17) Government Grants
 
 Grants in the nature of subsidies related to revenue are recognized in
 the Profit and loss account over the period in which the corresponding
 costs are incurred and are recorded on accrual basis.