These financial statements have been prepared in accordance with the
 Accounting Standards as prescribed by the Institute of Chartered
 Accountants of India and referred to in Section 211(3)(c) of the
 Companies Act, 1956. Significant accounting policies adopted in the
 presentation of the accounts are:
 
 1.  General
 
 The Company follows the Mercantile System of Accounting and recognises
 Income and Expenditure on Accrual Basis otherwise specifically stated.
 The Accounts are prepared as a going concern on the historical cost
 basis. Accounting Policies not referred to otherwise are consistent
 with Generally Accepted Accounting Principles.
 
 2.  Fixed Assets and Depreciation
 
 Fixed Assets are stated at cost less accumulated depreciation. The cost
 of an asset comprises its purchase price and any directly attributable
 cost of bringing the assets to working condition for its intended use
 and also includes financing cost till commencement of commercial
 production. In respect of assets taken on Leases, the same are
 accounted for only on transfer of ownership to the Company and on
 transfer cost. The Depreciation have been provided on straight line
 method at the rates as specified in Schedule XIV of the Companies Act,
 1956.
 
 4.  Investments
 
 Investments in India are stated at cost. Investment outside India
 involving foreign currency transactions are being valued at the year
 end rates.
 
 5.  Inventory Valuation
 
 Inventories of Raw Materials, Consumable Stores & Spares, Stock in
 trade of Trading Purchases and Stock-in-Process are valued at cost on
 FIFO basis. Finished Goods and Scrap are valued at realizable value.
 
 6.  Revenue Recognition
 
 Sales and Job Work Charges are recognised at the point of dispatch.
 Other Income is recognised as and when the same is accrued.
 
 7.  Gratuity, Bonus and Leave Encashment to Employees
 
 The Gratuity has been provided for on the basis of ''Actuarial Valuation
 dated 04.05.2011, which was prepared on Projected Unit Credit Method
 and Bonus to employees is provided for on accrual basis. The Company
 has adopted policy to pay the leave encashment on yearly basis
 calculated as per calendar year to all eligible employees.
 
 8.  Contingent Liability
 
 Contingent Liabilities are not provided for and are disclosed by way of
 Notes.
 
 9.  Taxation
 
 The current charge for income taxes is calculated in accordance with
 the relevant tax regulations applicable to the company. Deferred tax
 assets and liabilities are recognised for future tax consequences
 attributable to the timing difference that result between the profit
 offered for income tax and profit as per the financial statements.
 Deferred tax assets in respect of unabsorbed depreciation and carry
 forward losses are recognized if there is virtual certainty that there
 will be sufficient future taxable income available to realize such
 losses. Similarly deferred tax liabilities, if any, are measured as per
 the tax rate/laws that have been enacted or substantially enacted by
 the Balance Sheet date.
 
 10.  Business Segment
 
 The company is engaged in business of manufacturing of yarn and trading
 of cloth, which is in same business segment.
 
 11.  Earnings per Share
 
 The Company reports basic and diluted earnings per equity share in
 accordance with AS-20, Earnings Per Share. Basic earning per equity
 share has been computed by dividing net profit after tax by the
 weighted average number of equity shares outstanding for the period.
 Diluted earning per equity share has been computed using the weighted
 average number of equity shares and dilutive potential equity shares
 outstanding during the period.  B.  NOTES TO THE ACCOUNTS 1.
 Contingent Liabilities:
 
 (i) The Income Tax assessments of the Company is pending for the
 assessment year 2009-2010 and 2010-2011. However the Company does not
 envisage any liability in respect thereof. The Company''s Appeals for
 assessment year 1998-99 & 2001 -02 are pending before the Income Tax
 Appellate Tribunal but the Company does not envisage any liability and
 expect full relief in the appeal.  
 
 (ii) The Trade Tax assessments of the Company for the assessment years
 2008-2009,2009-2010 and 2010-2011 are pending but the Company does not
 envisage any liability for these years other than what has been paid or
 provided.
 
 (iii) Estimated amount of Contracts remaining to be executed on capital
 account and not provided for Rs.75.00 Lacs (previous year Rs.45.00
 Lacs)
 
 (iv) A demand of Rs.8,51,135.34 has been raised by The Maharashtra
 State Co-op. Cotton Growers Marketing Federation Ltd., Mumbai after
 adjusting advance of Rs.19,07,422.31, deposited by us, for purchase of
 Cotton. However, the Company did not purchase such Cotton. The
 Maharashtra State Co-op. Cotton Growers Marketing Federation Ltd.,
 Mumbai raised dispute, which is pending in litigation before the Court
 of Law.