1 Accounting Convention:
 
 The Financial Statements are prepared on accrual basis and in
 accordance with the requirements of the Companies Act, 1956 and the
 applicable Accounting Standards.
 
 2 Fixed Assets & Depreciation:
 
 a Fixed Assets are stated at cost less accumulated depreciation.
 
 b Depreciation on Fixed Assets acquired upto 31st March 2005 is
 calculated on Written Down Value Method at the rates specified in
 Schedule XIV to the Companies Act, 1956
 
 c Depreciation on addition to Fixed Assets on or after 1st April 2005
 has been provided on Straight Line Method at the rates specified in
 Schedule XIV to the Companies Act, 1956.
 
 d Additional Depreciation is being provided to the extent required
 during the year of Sale of Assets.
 
 e Borrowing Costs, (if any) attributable to acquisition and
 construction of qualifying assets are capitalized as a part of the cost
 of such asset. Other Borrowing Costs are charged to Profit and Loss
 Account.
 
 3 Inventories:
 
 a Raw Materials and Components are valued at lower of Cost or Net
 Realizable Value. Cost of the said is computed by applying Specific
 Identification Method.
 
 b Work in Progress and Finished Goods are valued at lower of Cost or
 Net Realizable Value. Cost of these inventories includes Costs of
 Conversion and Other Costs incurred in bringing them to the present
 location and condition.
 
 4 Revenue Recognition:
 
 Sales net of trade discounts and rebates are recorded when the
 significant risks and rewards of ownership are transferred.
 
 Export Sales are accounted on the basis of the dates of Bill of Lading,
 other delivery documents as per the contract.
 
 Export Incentives are accounted for on export of goods if the
 entitlements can be estimated with reasonable accuracy and conditions
 precedent to claim are fulfilled.
 
 Other Operating Income represents conversion charges received by the
 Company towards contract manufacturing activities and the same is
 accounted when the significant risks and rewards of ownership are
 transferred.
 
 Rental Income on properties given on lease are accounted on accrual
 basis.
 
 5 Foreign Currency Transactions
 
 The Company uses derivative financial instruments such as forward
 exchange contracts to hedge its risks associated with foreign exchange
 fluctuations. The Company does not use the foreign exchange forward
 contracts of options for trading or speculating purpose.
 
 Foreign Currency transactions are initially recorded at the exchange
 rates prevailing on the date of transactions. Current Assets and
 Current Liabilities are restated at the year end closing rates. The
 differences arising on such restatement are reflected in the Profit and
 Loss Account as Exchange Gain / Loss.
 
 Premium / Discount on Forward Foreign Exchange Contracts are recognized
 over the life of the Contracts. The value of unperformed contracts is
 shown under Loans & Advances.
 
 The Company has the policy of accounting the profits and losses from
 Derivative Contracts on Cash basis.
 
 6 Investments:
 
 Investments are either classified as current or long term based on
 Management''s intention at the time of purchase.
 
 Long term investments are stated at cost. Provision where necessary is
 made to recognize a decline other than temporary in the carrying value
 of each investments. Current investments are carried at lower of cost
 and quoted /fair value.
 
 7 Accounting of Government Grants:
 
 Government grants are recognized where it is reasonably certain that
 the ultimate collection will be made and the same is accounted on Cash
 Basis.
 
 We have not received any Interest Subsidy during the year.
 
 Capital grants were neither received nor accrued.
 
 8 Employees'' Benefits:
 
 Provident Fund is defined contribution plan and charged to Profit &
 Loss Account on accrual basis with corresponding contribution to
 recognised funds.
 
 Leave Entitlement is short term employees benefit and determined
 arithmetically and charged to Profit & Loss Account on accrual basis.
 
 Gratuity Liability under Payment of Gratuity Act is determined on the
 basis of an actuarial valuation made at the end of the financial year
 and in accordance with Revised Accounting Standard 15.
 
 9 Employee Stock Option Scheme:
 
 The employee compensation costs for the Stock Option Schemes is
 recognized in accordance with the Employee Stock Option Scheme and
 Employee Stock Purchase Scheme Guidelines, 1999 issued by the
 Securities and Exchange Board of India.
 
 The Company calculates the compensation costs based on the fair value
 method. Fair Value of the Shares means value determined by the
 Management during the period the Company was unlisted. The excess of
 fair value over the exercise price of the options given to employees
 under the employee stock option schemes of the Company is recognised as
 deferred stock compensation cost and amortised over the vesting period
 on a straight line basis.
 
 10 Segmental Reporting:
 
 The Company has only one business Segment - Manufacturing and Exporting
 of Ready-made Garments. Hence Segment reporting as defined in
 Accounting Standard -17 is not applicable.
 
 11 Taxation:
 
 The computation of tax liability is made in accordance with the
 provisions of Income Tax Act, 1961 and tax liability so computed is
 Nil and hence no provision has been made.  The
 
 Income Tax assessments of the Company has been completed upto
 assessment year 2007-08. The disputed demands total in all to is
 Rs.124.28 lakhs. Based on the decisions of the appellate authorities
 for the earlier years and interpretations of other relevant provisions,
 the Company is of the opinion that the demands are likely to be
 deleted, and consequently no provision has been made for  such
 demands.
 
 The Company has got a net deferred tax asset on account of accumulated
 losses and unabsorbed depreciation. In Compliance with the provisions
 of the Accounting Standard - 22, ''Accounting for Taxes on Income and
 based on General Prudence, the Company has not recognised Deferred Tax
 Asset.
 
 12 Impairment of Assets:
 
 The Company assesses at each Balance Sheet date whether there is any
 indication due to internal or external factors that an asset may be
 impaired.
 
 If any such indication exists, the Company estimates the recoverable
 amount of the asset. If such recoverable amount of the asset or the
 recoverable amount of the cash generating unit to which the asset
 belongs is less than its carrying amount, the carrying amount is
 reduced to its recoverable amount and the reduction is treated as an
 impairment loss and is recognised in the profit and loss account. If at
 any subsequent balance sheet date there is an indication that a
 previously assessed impairment loss no longer exists, the recoverable
 amount is reassessed and the asset is reflected at recoverable amount
 subject to maximum of depreciated historical cost and is accordingly
 reversed in the profit and loss account.
 
 In the opinion of the Management , Current Assets, Loans and Advances
 have a value of at least equal to the amounts shown in the Balance
 Sheet, if realised in the due course of the business.  The provision
 for all liabilities is adequate and not in excess of the amount
 reasonably necessary.
 
 13 Provisions and Contingent Liabilities:
 
 Provisions are recognized when the Company has a present
 
 obligation, as a result of past events, for which it is probable that
 an outflow of economic benefits will be required to settle the
 obligation and a reliable estimate can be made for the amount of
 obligation. Contingent liabilities are not recognized but are disclosed
 in the Notes.