1.  Basis of Accounting
 
 The Financial statements have been prepared on the historical cost
 convention basis, except where otherwise stated. Generally, accepted
 accounting principles and the Accounting Standards referred under
 Section 211 (3C) of the Companies Act, 1956, has been adopted by the
 company except wherever stated otherwise and disclosures are made in
 accordance with the requirements of Schedule VI of the Companies Act,
 1956 and Indian Accounting Standards.
 
 2.  Use of Estimates
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amounts of income
 and expenses of the year, assets and liabilities and disclosures
 relating to contingent liabilities as of the date of the financial
 statements.
 
 3.  Recognition of Income and Revenue
 
 a) Sale is inclusive of excise duty and internal transfers and
 recognized on passing of title of goods, which generally coincides with
 delivery of goods to customers.
 
 b) All other income and expenses are accounted for on mercantile basis
 except leave encashment, gratuity and export incentive, which are
 accounted for on cash basis.
 
 4.  Fixed Assets
 
 The Fixed Assets of the Company are stated at cost of acquisition
 including direct expenses of acquisition / installation less adjustment
 of the MODVAT Credit and includes amounts added on revaluation less
 depreciation.
 
 5.  Impairment of assets
 
 Impairment losses, if any, are provided to the extent the carrying
 amount of the assets exceeds their recoverable amount. Recoverable
 amount is the higher of an assets net selling price and its value in
 use.  The value in use is the present value of estimated future cash
 flows expected to arise from the continuing use of an asset and from
 its disposal as at the end of its useful life. Such impairment, if any,
 are ascertained and reviewed at each year-end.
 
 6 Depreciation
 
 Depreciation is provided on Straight-line basis as per rates specified
 in Schedule XIV of the Companies Act, 1956. Depreciation on
 addition/disposal is provided pro-rata with reference to the month of
 addition/ disposal.
 
 7.  Inventories
 
 Description            Basis of Valuation
 
 Raw Materials          At cost on FIFO basis, or net realizable value.
 
 Stores & Spares        At cost; provision is made for likely 
                        devaluation for
 
                        declared surplus/obsolete store.
 
 Finished goods         At lower of cost or net realizable value.
 
 
 8.  Retirement Benefits
 
 a.  Liability on account of gratuity benefit to employees is treated on
 cash basis.
 
 b.  Leave encashment benefit is provided for on cash basis.
 
 c.  Retirement benefits in the form of Provident Fund and Pension
 Schemes are charged to the Profit & Loss Account of the year when the
 contributions to respective funds are due.
 
 9.  Provisions, Contingent Liabilities & Contingent Assets
 
 The Company recognizes a provision when there is a present obligation
 as a result of past event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of
 obligation. A disclosure for a Contingent Liability is made when there
 is a possible obligation or a present obligation that may, but probably
 will not require an outflow of resources. Contingent assets are not
 recognized or disclosed in the financial statements.
 
 10.  Taxes on Income
 
 a.  Current Tax is determined as the amount of tax is payable in
 respect of taxable income for the period based on applicable tax rates
 and laws.
 
 b.  Deferred tax is recognized, subject to consideration of prudence,
 on timing difference being the difference between taxable income and
 accounting income that originates in one period and are capable of
 reversal in one or more subsequent periods and is measured using Tax
 rates and Laws that have been enacted or substantively enacted by the
 Balance Sheet date. Deferred tax assets are reviewed at each Balance
 Sheet date to reassess excess realization.
 
 11.  Segment Reporting
 
 The segment reporting as required under Accounting Standard-17 is not
 applicable to the company since the products of the company fall under
 the same segment and the economic environment being the same for all
 the products.
 
 12.  Earnings per Share
 
 Basic earnings per share is calculated by dividing the net Profit or
 loss for the period attributable to equity share holders by the
 weighted average number of equity shares outstanding during the year.
 
 For the purpose of calculating diluted earning per share, the net
 Profit or Loss for the year attributable to the equity share holders
 and weighted average number of shares outstanding, if any, are adjusted
 forthe effects of all dilutive potential equity shares.