1.  Accounting Convention:
 
 The financial statements of the Company have been prepared, unless
 otherwise stated, under historical cost convention, having due regard
 to the fundamental accounting assumptions of going concern,
 consistency, accrual and in compliance with the mandatory Accounting
 Standards as specified in the Companies (Accounting Standards) Rules,
 2006.
 
 2.  Use of estimates:
 
 The preparation of financial statements in conformity with Generally
 Accepted Accounting Principles requires Management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 year end. Although these estimates are based upon Management''s best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 B) Significant Accounting Policies
 
 1.  Revenue recognition:
 
 Revenues are generally recognised on accrual basis except where there
 is an uncertainty of ultimate realisation.
 
 i) Sales are recognised when the property in goods are transferred for
 a price and their collection is expected within the agreed time.
 
 ii) Lease income from non-cancellable operating leases are recognised
 in the statement of Profit & Loss Account, on straight line basis, over
 the lease term. In respect of other operating leases, lease income is
 recognised in accordance with the terms of the lease deeds as modified
 based on negotiations from time to time.
 
 iii) Interest is recognised on time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 iv) Dividends and royalty income are accounted for, when the right to
 receive the payment is established.
 
 2.  Valuation of Inventories:
 
 Inventories are valued at lower of weighted average cost and net
 realisable value. Cost of inventories comprises of cost of purchase,
 cost of conversion and other costs incurred in bringing the inventories
 to their present location and condition.
 
 3.  Fixed Assets:
 
 Fixed assets are stated at cost less depreciation, wherever applicable.
 The land in Bangalore is stated at the revalued amount as adjusted in
 accordance with the revaluation done in August 2001 at the market value
 determined by approved valuers. All costs relating to the acquisition
 and installation of fixed assets are capitalised and such costs include
 borrowing cost relating to borrowed funds attributable to the
 acquisition of qualifying assets for the period upto the date of
 acquisition / installation.
 
 4.  Borrowing Cost:
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of a qualifying asset are capitalised as part of cost of
 such assets till such time as the asset is ready for its intended use
 or sale.  A qualifying asset is an asset that necessarily requires a
 substantial period of time to get ready for its intended use or sale.
 All other borrowing costs are recognised as an expense in the period in
 which they are incurred.
 
 5.  Depreciation:
 
 Depreciation has been provided under written down value method at the
 rates prescribed under Schedule XIV of the Companies Act, 1956.
 
 6.  Effects of changes in Foreign Exchange rates :
 
 i) Transactions in foreign currencies are translated applying the
 following exchange rates:
 
 a) In respect of export transactions, at the average exchange rate
 prevailing in the month preceding the month in which the transaction
 took place.
 
 b) In respect of all other transactions at the rate of exchange
 prevailing on the date of transaction.
 
 ii) Monetary assets and liabilities denominated in foreign currency are
 translated at the rates of exchange at the Balance Sheet date and the
 resultant gain or loss is recognised in the Profit & Loss Account .
 
 iii) Non monetary items are carried at historical cost denominated in
 foreign currency and these are translated using the exchange rate
 prevailing on the date of transaction.
 
 7.  Accounting for Government Revenue Grants :
 
 Government revenue grants available to the Company are considered for
 inclusion in the accounts, where there is reasonable assurance that the
 Company will comply with the conditions attached to them and where such
 benefits have been earned by the Company and it is reasonably certain
 that the ultimate collection will be made. Grants of revenue nature are
 recognised in the Profit & Loss Account.
 
 8.  Investments:
 
 i) Current investments refer to the investments that are readily
 realisable and intended to be held for not more than a year.
 
 ii) Trade investments refer to the investments made with the aim of
 enhancing the group''s business interest.
 
 iii) Long term investments are stated at cost. All expenses relating to
 acquisition of investments are capitalised.  Diminution in the value of
 investments, if considered permanent, is provided for.
 
 iv) Current investments are stated at lower of cost and fair value on
 the Balance Sheet date.
 
 9.  Employee Benefits:
 
 a) Defined-contribution plans :
 
 These are plans in which the Company pays pre-defined amounts to
 separate funds and does not have any legal or informal obligation to
 pay additional sums. These comprise of contributions to the Employees''
 Provident Fund, Superannuation Fund and certain state plans like
 Employees'' State Insurance and Employees'' Pension Scheme. The Company''s
 payments to the defined contribution plans are recognised as expenses
 during the period in which the employees perform the services that the
 payment covers.
 
 b) Defined-benefit plans:
 
 Gratuity: The Company provides for gratuity, a defined benefit plan
 (Gratuity Plan), to certain categories of employees. Liability with
 regard to gratuity plan is accrued based on actuarial valuation, based
 on Projected Unit Credit Method, carried out by an independent actuary,
 at the Balance Sheet date. Actuarial Gains and Losses comprise
 experience adjustments and the effect of changes in the actuarial
 assumptions and are recognised immediately in the Profit & Loss Account
 as income or expense.
 
 c) Other long term employee benefits:
 
 Compensated absences which are not expected to occur within twelve
 months after the end of the period in which the employee renders the
 related services are recognised as a liability at the present value of
 the defined benefit obligation at the Balance Sheet date based on
 actuarial valuation carried out at each Balance Sheet date.
 
 d) Short term employee benefits:
 
 Undiscounted amount of short term employees benefits expected to be
 paid in exchange for the services rendered by the employees is
 recognised during the period when the employee renders the services.
 These benefits include compensated absences such as paid annual leave
 and performance incentives.
 
 10.  Segment reporting:
 
 The operations of the Company are divided into alcoholic beverages,
 leather products, investments, guarantee services, property development
 and other activities. Accordingly, the primary segment reporting
 comprises the performance under these segments and the secondary
 segment reporting is based on geographical locations of customers.
 
 11.  Related Party disclosures:
 
 Transactions between related parties are disclosed as per Accounting
 Standard 18 - Related Party Disclosures. Accordingly, disclosures
 regarding the name of the transacting related party, description of the
 relationship between the parties, nature of transactions and the amount
 outstanding as at the end of the accounting year, are made.
 
 12.  Taxes on Income:
 
 Provision for income tax comprises current taxes and deferred taxes.
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the period.
 
 Deferred tax is recognised on timing differences between the accounting
 income and the taxable income for the year and quantified using the tax
 rates and laws enacted or substantively enacted as on the Balance Sheet
 date.
 
 Deferred tax assets are recognised and carried forward to the extent
 that there is reasonable / virtual certainty that sufficient future
 taxable income will be available against which such deferred tax asset
 can be realised.
 
 13.  Impairment of assets:
 
 The Company evaluates all its assets for assessing any impairment and
 accordingly recognises the impairment, wherever applicable, as provided
 in Accounting Standard 28 - Impairment of Assets.
 
 14.  Provisions and Contingencies:
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event and it is probable that an out flow of
 resources will be required to settle the obligation in respect of which
 a reliable estimate can be made. Provisions are not discounted to its
 present value and are determined based on Management estimates required
 to settle the obligation at the Balance Sheet date. These are reviewed
 at each Balance Sheet date and adjusted to reflect the current
 Management estimates.
 
 15.  Earnings per share:
 
 Earnings per equity share (basic / diluted) is arrived at by dividing
 the Net Profit or Loss for the year attributable to the equity
 shareholders by the weighted average number of equity shares
 outstanding during the year.