1.1 Method of Accounting
 
 The financial statements have been prepared under the historical cost
 convention on an accrual basis and in accordance with the Accounting
 Principles generally accepted in India (Indian GAAP) and comply with
 mandatory Accounting Standards notified by the Central Government of
 India under the Companies (Accounting Standards) Rules, 2006 and the
 relevant provisions of the Companies Act, 1956, to the extent
 applicable.
 
 1.2 Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities on the
 date of the financial statements and the reported amounts of revenues
 and expenses during the reporting period. Differences between actual
 results and estimates are recognized in the period in which the results
 are known / materialised.
 
 1.3 Fixed Assets
 
 Fixed assets are stated at historical cost net of .ivat credit /Value
 added Tax, including appropriate direct and allocated expenses and
 interest on specific borrowings related to qualifying assets up to the
 commencement of production less accumulated depreciation and impairment
 losses, if any.
 
 1.4 Investments
 
 Long Term Investments are carried at cost inclusive of all expenses
 incidental to acquisition.  Provision for diminution in value of long
 term investments is made only if such a decline is other than temporary
 in nature in the opinion of the management. Diminution with respect to
 market value, if temporary, is not recognized.
 
 1.5 Valuation of Inventories
 
 Inventories are valued as under
 
 a) Finished goods: Yarn and cloth at lower of weighted average cost and
 net realizable value (Including excise duty) wherever applicable.
 
 b) Waste at contracted prices.
 
 c) Raw materials and stock-in-process at lower of weighted average cost
 and net realisable value.
 
 d) Stores and spare parts, components at weighted average cost.
 
 e) Stock in trade of land under development comprises of Free hold land
 and buildings at net book value, converted from fixed assets into Stock
 in trade and expenses related / attributable to the development of the
 said property. The same is valued at Lower of such net book value or
 Net realisable value.
 
 1.6 Translation of Foreign Currency Transactions
 
 Foreign currency transactions are recorded at the prevailing exchange
 rates at the time of initial recognition. Exchange differences arising
 on final settlement are adjusted and recognized as income or expense in
 the Statement of Profit and Loss. Outstanding balances of monetary
 items denominated in foreign currency are restated at closing exchange
 rates and the difference adjusted as income or expense in the profit
 and loss statement.
 
 The premium or discount arising at the inception of forward exchange
 contracts is accounted as income or expense over the life of the
 contract.  Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognized as income or as expense in
 period in which they arise,
 
 1.7 Depreciation
 
 Depreciation is provided on plant and machinery and factory buildings
 on straight line basis and on the other assets on WDV basis at the
 rates specified in Schedule XIV of the Companies Act, 1956. For
 additions and deletions depreciation is provided on pro-rata basis.
 
 1.8 Recognition of Revenue
 
 Income and Expenditure are recognized and accounted on accrual basis as
 and when they are earned or incurred. Revenue from sale trans- action
 is recognized as and when significant risks and rewards attached to
 ownership in the goods is transferred to the buyer. Revenue from
 service transactions is recognized when invoiced / upon completion of
 work based on confirmed contracts. Dividend from investments and Export
 incentives under Duty Entitlement Pass Book [DEPB] Scheme and Duty
 drawback scheme are recognized when the right to receive payment /
 credit is established and no significant uncertainty as to
 measurability or collectability exists.
 
 1.9 Borrowing costs
 
 Borrowing costs, if any, attributable to acquisition / construction of
 qualifying assets are capitalized and included in the cost of the
 asset, as appropriate.
 
 1.10 Earnings per Share
 
 Basic Earning per share is calculated by dividing the Net Profit after
 tax attributable to the equity shareholders by the weighted average
 number of Equity Shares outstanding during the year.
 
 1.11 Employee Benefits
 
 Short term employee benefits (other than termination benefits) which
 are payable within 12 months after the end of the period in which the
 employees rendered service are accounted on accrual basis.
 
 Defined Contribution Plans
 
 Company''s contributions paid/payable during the year to Provident
 Fund and Superannuation Fund and ESIC are recognized in the profit and
 loss state- ment.
 
 Defined Benefit Plans
 
 Company''s liabilities towards gratuity is determined using the
 projected unit credit method which considers each period of service as
 giving rise to an additional unit of benefit entitlement and measures
 each unit separately to build up the final obligation. Past services
 are recognized on a straight line basis over the average period until
 the amended benefits becomes vested. Actuaries gains or losses are
 recognized immediately in the Statement of Profit and Loss as income or
 expenses. Obligation is measured at the present value of estimated
 future cash flows using a discounted rate that is determined by
 reference to market yields at the balance sheet date on government
 bonds where the currency and terms of the government bonds are
 consistent with the currency and estimated terms of the defined benefit
 obligations. The expected return on plan assets is based on market
 expectations at the beginning of the period for returns over the entire
 life of the related obligations.
 
 There is no scheme for encashment of unavailed leave on retirement
 since unavailed earned leave is settled annually and accounted on
 payment.  The cost of termination benefits, namely voluntary retirement
 payments are expensed in the year of payment.
 
 1.12 Taxes on Income
 
 Current Tax is determined as per the provisions of the Income-tax Act,
 1961 in respect of taxable income for the year and based on the
 expected outcome of assessment /appeals.
 
 Deferred Tax assets and liabilities are recognized on timing
 differences between accounting income and taxable income that originate
 in one period and are capable of reversal in one or more subsequent
 period and quantified using the tax rates and laws enacted or
 substantively enacted as on the balance sheet date.
 
 Deferred Tax assets arising on account of unabsorbed depreciation or
 carried forward business losses are recognized only when there is
 virtual certainty with convincing evidence that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realised.
 
 The carrying amount of deferred tax assets and liabilities are reviewed
 at each balance sheet date.
 
 1.13 Provisions, contingent liabilities and contingent assets
 
 Provisions involving 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
 notes to financial statements. Contingent assets are neither recognized
 nor disclosed in the financial statements. Provisions, contingent
 liabilities and contingent assets are reviewed at each balance sheet
 date and adjusted to reflect the best current estimate.
 
 1.14 Cash Flow Statements
 
 Cash Flows are reported using the Indirect method, whereby profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and items of income or expense associated with
 investing or financing cash flows. Cash and cash equivalents include
 cash on hand and balances with banks in current and deposit accounts
 with necessary disclosure of cash and cash equivalent balances that are
 not available for use by the company.
 
 1.15 Impairment of assets
 
 An asset is treated as impaired when the carrying amount of the asset
 exceeds its estimated recoverable value. Carrying amounts of fixed
 assets are reviewed at each balance sheet date to determine indications
 of impairment, if any, of those assets. If any such indication exists,
 the recoverable amount of the asset is estimated and an impairment loss
 equal to the excess of the carrying amount over its recoverable value
 is recognized as an impairment loss. The impairment loss, if any,
 recognized in prior accounting period is reversed if there is a change
 in estimate of recoverable amount.