1.  a) Accounting convention
 
 The accounts are prepared on accrual basis under the historical cost
 convention in accordance with the accounting standards referred to in
 section 211(3C) of the Companies Act, 1956 and other relevant
 provisions of the said Act.
 
 b) Going Concern Convention
 
 The accounts of the company have been prepared on going concern basis.
 
 c) Use of Estimates
 
 The preparation of financial statements, in conformity with the
 generally accepted accounting principles, require estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities as of 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 the results materialise.
 
 2.  Revenue Recognition:
 
 a) Sales:
 
 Sales comprise sale of goods, services and export incentives net of
 excise duty, sales tax/VAT and trade discount.  Revenue from sale of
 goods is recognized:
 
 i) When all the significant risks and rewards of ownership are
 transferred to the buyer and the company retains no effective control
 of the goods transferred to a degree usually associated with ownership;
 and
 
 ii) No significant uncertainty exists regarding the amount of the
 consideration that will be derived from the sale of goods.
 
 b) Interest:
 
 Interest income is recognized on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 c) Export Benefits/Incentive:
 
 Revenue in respect of the above Benefit is recognized on post export
 basis.
 
 d) Insurance and Other Claims:
 
 Revenue in respect of claims is recognized when no significant
 uncertainty exists with regard to the amount to be realized.
 
 3.  Retirement/ Other Employee Benefits
 
 (a) Gratuity
 
 Provision for gratuity liability to employees is made on the basis of
 actuarial valuation as at the close of the year.
 
 (b) Provident Fund
 
 Contribution to Provident Fund is made in accordance with the
 provisions of the Employee''s Provident Fund and Miscellaneous
 Provisions Act, 1952 and charged to the profit & Loss Account.
 
 (c) Leave with wages
 
 Provision for leave with wages is made on the basis of leave accrued to
 the workers during the financial year.
 
 4.  Fixed Assets
 
 Fixed assets are stated at the values at which they are acquired, less
 accumulated depreciation and cenvat credit if availed. The cost of fi
 xed assets included interest on borrowing attributable to acquisition
 of fixed assets up to the date of commissioning of the assets and
 other incidental expenses incurred up to that date. Machinery spares
 whose use is expected to be irregular are capitalized and depreciated
 over the useful life of the principal item of asset.
 
 5.  Intangible assets
 
 Intangible assets are stated at cost less accumulated amount of
 amortization.
 
 6.  Capital Work in Progress
 
 Projects under commissioning and other Capital Work in Progress are
 carried at Cost, comprising direct cost, related incidental expenses,
 indirect expenditure and attributable interest related to that project.
 
 7.  Inventories
 
 Inventories are valued at cost or net realizable value, whichever is
 lower. The cost in respect of the various items of inventory is
 computed as under:
 
 - In case of raw material at actual cost determined on FIFO basis plus
 direct expenses.
 
 - In case of Stores and spares at weighted average cost.
 
 - In case of Work in process at raw material cost plus appropriate
 proportion of direct labour and overheads.
 
 - In case of fi nished goods at raw material cost plus conversion cost
 and appropriate proportion of overheads.
 
 8.  Impairment of Assets
 
 At each balance sheet date an assessment is made whether any indication
 exists that an asset has been impaired. If any such indication exists,
 an impairment loss i.e. the amount by which carrying amount of an asset
 exceeds its recoverable amount is provided in the books of accounts.
 
 9.  Depreciation
 
 Depreciation is provided in accordance with and in the manner and at
 the rates specifi ed in schedule XIV to the Companies Act, 1956 as
 under:
 
 a) on written down value basis for assets acquired prior to 06/03/2006
 and
 
 b) on straight line basis for assets acquired after that date.
 
 10.  Foreign Currency Conversion/Translation
 
 Purchase and Sales are accounted at exchange rate prevailing on the
 date of transaction. Monetary assets and liabilities in foreign
 currency as at Balance Sheet date are translated at rates prevailing at
 the year end and the resultant net gains or losses are recognized as
 income or expense in the year in which they arise except the net
 variation arising on account of such conversion in case of liabilities
 incurred for acquisition of fixed assets is adjusted to the cost of
 the respective fixed asset.
 
 11.  Borrowing Costs
 
 Borrowing cost attributable to construction periods is capitalized.
 Other borrowing costs are recognized as an expense in the period in
 which they are incurred.
 
 12.  Investments
 
 Long term investments are carried at cost, less provision for
 diminution, in value of such investments. Current Investments are
 carried individually at lower of Cost and fair value.
 
 13.  CENVAT Credit
 
 The CENVAT Credit of excise duty if any availed on inputs and capital
 goods is accordingly reduced from the purchase cost of related inputs
 or capital goods as the case may be.
 
 14.  Accounting for Taxes on Income
 
 Provision for tax if any, is based on the assessable profits computed
 in accordance with the provisions of Income Tax Act 1961 and the
 Accounting Standard 22 issued by the Institute of Chartered Accountants
 of India.
 
 15.  Cash Flow Statement
 
 The company has prepared the Cash Flow Statement using the Indirect
 Method in compliance of Accounting Standard issued by The Institute Of
 Chartered Accountants of India (AS-3).
 
 16.  Segmental Reporting
 
 The company is principally engaged in the business of textiles (mainly
 manufacturing of yarn of different kinds and trading of knitted cloth &
 acrylic top etc.) and the project of wind mill (for generation of
 electricity for re-sale.) The company is also operating in different
 geographical segments. The relevant information about these segments
 are given as part of Notes on Accounts.
 
 17.  Earning per share:
 
 Basic earning per share is computed by dividing the net profit or loss
 for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period. Diluted
 earning per share is computed by taking into account the aggregate of
 the weighted average number of equity shares outstanding during the
 period and the weighted average number of equity shares which would be
 issued on conversion of all the dilutive potential equity shares into
 equity shares.