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, Intangible Assets & Depreciation:
 
 a Fixed Assets are stated at cost less accumulated depreciation.  b
 Depreciation on Fixed Assets acquired up to 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 Income 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.
 
 Domestic Sales includes Excise Duty but excludes Sales Tax and Value
 Added Tax
 
 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.
 
 Interest Income is recognized on Time-Proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 5 Measurement of foreign currency monetary items at the Balance Sheet
 date and Treatment of Exchange Differences:
 
 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 or options for trading or speculating pupose.
 
 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 yearend closing rates. The
 differences arising on such restatement are reflected in the Profit and
 Loss Account and 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 accounted on Cash Basis.
 
 The Company was in receipt of Interest Subsidy under Technology
 Up gradation Fund (TUF) Scheme during the year for an amount of Rs.2.52
 crs. Refer Note 26.
 
 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
 recognized 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 the Revised Accounting Standard 15.
 
 9 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 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 recognized Deferred
 Tax Asset.
 
 10 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 recognized 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 realized in the due course of the business. The provision for
 all liabilities is adequate and not in excess of the amount reasonably
 necessary.
 
 11 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.
 
 12 Segment reporting:
 
 The Company has considered business segment as the primary segment for
 disclosure. The Company is primarily engaged in a single segment
 business of manufacturing garments and is managed as one entity and is
 governed by a similar set of risks and return.