1.  Accounting Concepts:
 
 The accounts are prepared on historical cost basis as a going concern,
 following the mercantile system of accounting and recognizing income
 and expenditure on accrual basis except otherwise stated. Accounting
 policies not specifically referred to otherwise are consistent and in
 consonance with (GAAP''S) Generally Accepted Accounting Policies.
 
 2.  Inventories:
 
 Inventories are valued as under: -
 
 a.  Inventory is as per physical verification conducted by the
 management.
 
 b.  Stock of Raw Material, Stores & Spares and Consumables are valued
 at cost (cost being the last purchase price).
 
 c.  Finished goods are valued at cost of production or net realizable
 value whichever is lower.
 
 d.  Work-in-process has been valued at direct cost.
 
 3.  Fixed assets:
 
 Fixed Assets are accounted for on historical cost basis less
 depreciation.
 
 4.  Depreciation:
 
 Depreciation on fixed and intangible assets is provided on Straight
 Line method, at the rates prescribed in Schedule XIV to The Companies
 Act, 1956 as applicable to single shift units or the life of the
 assets, whichever is higher. Proportionate depreciation is charged for
 additions/deletions during the year.
 
 Individually low cost assets (Upto Rs. 5,000) are depreciated in full
 within a year of acquisition.
 
 5.  Foreign Exchange Transactions:
 
 Transactions in foreign currency are recorded at the exchange rates
 prevailing at the time of the transaction. In the case of liabilities
 incurred for the acquisition of fixed assets, fluctuations in foreign
 exchange rates are included in the carrying amount of the fixed assets.
 
 6.  Segment Reporting:
 
 The Company is engaged into the manufacturing and export of furnishing
 fabric and its Made-ups, and as per AS - 17, there is no Reportable
 Segment because there is only one segment in which company is dealing.
 Whereas the Geographical Segment reporting is concerned the company is
 into export business and exporting its products to various countries.
 But whereas the risk and return is concerned that is almost similar for
 all countries.
 
 The break-ups of export and domestic sales has been given in the profit
 & loss account. By applying definition of business segment and
 geographical segment contained in the accounting Standard - 17 segment
 reporting issued by the institute of Chartered Accountant of India, the
 Company is single segmented.
 
 7.  Provision for Current and Deferred Tax:
 
 Provision for current tax is made after taking into consideration
 benefit admissible under the provision of The Income Tax Act, 1961.
 
 Deferred Tax resulting from Timing Difference between book and
 taxable profit is accounted for using the tax rates and laws that have
 been enacted or substantially enacted as on the Balance Sheet date. The
 deferred tax are recognized and carried forward only to extent that
 there is reasonable certainty that the assets will be realized in
 future.
 
 8.  Due to Small Scale Industry:
 
 The Company has requested all its sundry creditors to furnish Small
 Scale Industries registration certificate but since none of the
 creditors having outstanding balance at the year end has furnished the
 same, it is deemed that none of them is a Small Scale Industries
 undertaking and no such amount is payable as on the balance sheet date.
 
 9.  Lease:
 
 The Company has not taken or given any lease during the Financial Year
 2011-2012.
 
 10.  Contingent Liabilities:
 
 The Company having an income tax demand Rs. 6.24 Lakh raised by the
 department during the assessment year 2004-05 out of which the company
 has deposited Rs. 3.13 Lakh as 50% of the amount and filed an appeal
 against this order.
 
 Further, assessment of income tax for the assessment year 2010-2011 is
 pending and sales tax assessment for the financial year 2008-2009 and
 2009-2010 is also pending. We are able to quantify the amount of this
 contingent liability.
 
 11.  Prior Period Items:
 
 There are no other prior items, which are considered material for the
 purpose of disclosure in accordance with the AS-5. Net Profit or loss
 for the period, prior period in accounting policies issued by The
 Institute of Chartered Accountants of India.
 
 12.  Claims are accounted for, in the year in which they are
 received/finally settled.
 
 13.  Debit Notes in respect of deductions made by the Customers are
 accounted for, in the year in which they are received/intimated.
 
 14.  The financial statements have been prepared in accordance with the
 applicable accounting standards issued by The Institute of Chartered
 Accountants of India.