1.  System of Accounting:
 
 The Financial Statement have been prepared to comply with the mandatory
 Accounting Standards issued by The Institute of Chartered Accountants
 of India and the relevant provisions of the Companies Act, 1956.The
 financial statements have been prepared under the historical cost
 convention on accrual basis except in case of assets for which
 revaluation is carried out. The accounting policies have been
 consistently applied by the company unless otherwise stated.
 
 2.  Fixed Assets:
 
 All Fixed Assets are valued at historical costs less accumulated
 depreciation. Cost of assets comprise of purchase price and any
 attributable cost of bringing the asset to its working condition except
 in case of assets for which revaluation is carried out.
 
 3.  Depreciation:
 
 Depreciation has been provided using Written Down Value method as per
 rates prescribed by Schedule XIV of the Companies Act, 1956.
 
 4.  Investments:
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value determined on
 an individual investment basis.
 
 Long-term investments are carried at cost. However, provision for
 diminution in the value is made to recognise a decline other than
 temporary in the value of the investments.
 
 5 Inventory Valuation:
 
 Raw material- Lower of cost and net realisable value. However,
 materials and other items held for use in the production of finished
 goods are not written down below cost if the finished products in which
 they will be incorporated are expected to be sold at or above cost.
 Cost is determined on a weighted average basis.
 
 Work in Process and Finished Goods- Lower of cost and net realisable
 value. Cost includes direct materials, labour and a proportion of
 manufacturing overheads based on normal operating capacity. Cost is
 determined on a weighted average basis.
 
 Net Realisable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and the
 estimated costs necessary to make the sale.
 
 6 Revenue Recognition:
 
 Revenue is recognised to the extent it is probable that the economic
 benefits will flow to the Company and the revenue can be reliably
 measured.
 
 a) Sale of Goods: Revenue in respect of sale of products is recognised
 at the time of dispatch of the goods, when the significant risks and
 rewards of ownership of the goods is passed to the buyer.
 
 b) Rendering of Services Revenue from the service is recoginsed when
 the service is performed, as per the terms of contract, and the
 performance of service is regarded as achieved when no significant
 uncertainty exists regarding the amount of consideration that will be
 derived from rendering the service.
 
 c) Interest Revenue is recognised on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 d) Insurance Claims Claims receivable on account of insurance are
 accounted for to the extent the Company is reasonably certain of their
 ultimate collection.
 
 e) Export Benefits Export benefits under Duty Drawback Scheme are
 accounted for in the year of export of goods.
 
 7 Foreign Currency Transactions:
 
 a) Initial recognition Foreign currency transactions are recorded in
 the reporting currency, by applying to the foreign currency amount the
 exchange rate prevailing at the date of the transaction.
 
 b) Conversion Foreign currency monetary items are reported using the
 closing rate. Non- monetary items which are carried in terms of
 historical cost denominated in a foreign currency are reported using
 the exchange rate at the date of the transaction; and non-monetary
 items which are carried at fair value or other similar valuation
 denominated in a foreign currency are reported using the exchange rates
 that existed when the values were determined.
 
 c) Exchange differences Exchange differences arising on reporting
 monetary items of Company at rates different from those at which they
 were initially recorded during the year, or reported in previous
 financial statements, are recognised as income or as expenses in the
 year in which they arise.
 
 8 Employees Benefits:
 
 a) Short term Employee Benefit:
 
 All employee benefits payable with in twelve month of rendering of the
 service are classified as short-term benefits. Such benefits include
 salaries, wages, bonus, short term compensated absences, awards,
 exgratia etc.  and are recognised in the period in which the employee
 renders the related service.
 
 b) Post Employment benefits:
 
 (i) Defined Contribution Plans:
 
 The Company''s State government provident fund scheme and employee state
 insurance scheme are defined contribution plans. The contribution paid/
 payable under the scheme is recognised during the period in which the
 employee renders the related service.
 
 (ii) Defined Benefits Plans:
 
 The employee''s gratuity fund scheme, long term compensated absences are
 company''s defined benefit plans. The present value of the obligation
 under such defined benefit plans is determined based on the actuarial
 valuation on the date of the balance sheet.Gratuity Liability is funded
 through a Group Gratuity Scheme with Life Insurance Corporation of
 India wherein contributions are made and
 
 charged to revenue on annual basis.
 
 9 Accounting for Taxes on Income:
 
 Tax expense comprises of current and deferred tax.  Current income tax
 is measured at the amount expected to be paid to the tax authorities in
 accordance with the Indian Income Tax Act, 1961.  Deferred income taxes
 reflects the impact of current year timing differences between taxable
 income and accounting income for the year and reversal of timing
 differences of earlier years and has been accounted as per provisions
 of the Accounting Standard-22 issued by The institute of Chartered
 Accountants of India.
 
 Deferred tax assets are recognised only to the extent that there is
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.
 
 10 Impairment of Assets:
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal/external
 factors. An impairment loss is recognised wherever the carrying amount
 of an asset exceeds its recoverable amount.
 
 The recoverable amount is the greater of the asset''s net selling price
 and value in use. In assessing value in use, the estimated future cash
 flows are discounted to their present value at the weighted average
 cost of capital.
 
 After impairment, depreciation is provided on the revised carrying
 amount of the asset over its remaining useful life.
 
 11 Borrowing Costs:
 
 Borrowing costs directly attributable to the acquisition and
 construction of an asset that necessarily takes a substantial period of
 time to get ready for its intended use are capitalised as part of the
 cost of the respective asset. All other borrowing costs are expensed in
 the period they occur. Borrowing costs consists of interest and other
 costs that an entity incurs in connection with the borrowing of funds.
 
 12 Expenditure during Construction Period:
 
 In case of new projects/substantial expansions of existing factories,
 expenditure incurred, including trial production expenses net of
 revenue earned and attributable interest and financing costs prior to
 commencement of commercial production are capitalized.
 
 13 Provisions, Contingent Liabilities and Contingent Assets:
 
 Provisions are recognised for liabilities that can be measured only by
 using a substantial degree of estimation, if
 
 a) the Company has a present obligation as a result of a past event;
 
 b) a probable outflow of resources is expected to settle the obligation
 and; the amount of obligation can be reliably estimated; Reimbursements
 expected in respect of expenditure required to settle a provision is
 recognised only when it is virtually certain that the reimbursement
 will be received.
 
 Contingent Liability is discolsed in case of
 
 a) a present obligation arising from the past event, when it is not
 probable that an outflow of resources will be required to settle the
 obligation;
 
 b) a possible obligation, of which the probability of outflow of
 resources is remote.  Contingent Assets are neither recognised nor
 disclosed.
 
 Provisions, Contingent Liabilities and Contingent Assets are reviewed
 at each Balance Sheet date.