Notes Forming Part of the Financial Statements

(l) Significant accounting policies

(a) Basis of accounting and brparation of financial statements

The financial statements are brpared under the historical cost convention on an accural basis of accounting in accordance with the genrally accounting principles. Accounting Standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof.

(b) Use of estimates

The brparation of the financial statements requires management to make judgements, estimates an assumptions, that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosures of contingent liabilities at the date of these financial liabilities and the reported amounts of revenues and expenses for the year under review. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable and in conformity with Indian GAAP. Actual results may differ from these estimates and the differences between the actual results and the estimates are recognised in the periods inwhich the results are known or materialised. Estimates and underlying assumptions are reviewed on an ongoing basis.

(c) Inventories

Inventories of raw material are valued at the lower of cost and the net realisable value on on FIFO basis after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of manufacturing facility, including octroi and other levies. Inventories of finished goods are valued at the lower of cost and net realisable value after proiding for obsolesence. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies. Net realisable value is estimated selling price in the ordinary course of business less estimated cost of completion and selling expenses.

(d) Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value

(e) Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

(f) Debrciation and amortization

Debrciation has been provided on written down method as per the rates brscribed in Schedule XIV to the Companies Act, 1956. -

(g) Revenue recognition

Sale of goods

Sales are recognised, net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude sales tax and value added tax. Income from Rented Properties

Income from Commercial properties rented are recognised on accural basis and for invoices raised. Rental income is inclusive of related deducted at source but exluding service tax. (h)Other income

Interest income from Bank Fixed Deposit and other interest is accounted on accrual basis, inclusive of related tax deducted at source. Dividend income is accounted on receipt basis. (i)Fixed assets

Fixed Assets are stated at cost of acquisition less accumlated debrciation / amortisation. Cost includes purchase price, taxes and duties and other direct costs incurred upto the date the asset is ready for its intended use.

(j)Foreign currency transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company and its integral foreign operations are accounted at the exchange rates brvailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company and its net investment in non-integral foreign operations outstanding at the Balance Sheet date are restated at the year-end rates. Exchange differences arising out of these translations are recognised in the Statement of Profit and Loss. (k)lnvestments

Long-term investments (including investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. 

 (l) lmpairment

At each Balance Sheet date, the Company assesses whether there is any indication that the fixed assets have suffered an impairment loss. If any such indication exits, the receoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where it is nor possible to estimate the recoverable amount of the individual asset, the

Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

As per the assessment conducted by the company at March 31st., 2014, there were no indication that the fixed assets have suffered an impairment loss.

(m)Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity and leave enchasement. Defined contribution plans

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made. Defined benefit plans

For defined benefit plans in the form of gratuity fund are accounted on cash basis, (n) Business Segments

The Company is engaged mainly in the business of manufacturing of garments and renting of properties. These, in context of Accounting Standard 17 on Segment Reporting, as specified in the Companies (Accounting Standard) Rules, 2006, are considered to two primary segments. Further, there is no reportable secondary segment i.e. Geographical Segment,

(o) Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares, (p) Taxes on Income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Current tax is net of credit for entitlement for Minimum Alternate Tax (MAT).

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed debrciation and carryforward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised.

Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheetdate for their readability.

(q)Provisions and contingencies

The Company records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For losses that are possible (but not probable), the Company provides disclosure in the financial statements dut does not record a liability in its accounts unless the loss becomes probable. 

Note 2 Other Note*

(I) Amount of Rs. 14.06.383/- receivable from an overseas party is classified as unsecured but considered good, tile Company has filed a suit hi Court outside India.

Note 3 Previous year's figures

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current

year's classification / disclosure.