1) Basis of Preparation of Financial Statement
 
 a) The financial statements have been prepared under the historical
 cost convention on the basis of going concern and in accordance with
 the Accounting Standard 1 Referred to in section 211(3c) of the
 Companies Act, 1956
 
 b) The company follows mercantile system of accounting and recognises
 income and expenditure on accrua basis.
 
 c) Expenditure incurred in connection with the issue of Shares/GDRs is
 written off against security premium account in the year of incurrence
 
 2) Fixed Assets
 
 a) Fixed Assets are stated at cost net of duty credit availed less
 accumulated depreciation and impairments, if any.  The cost includes
 cost of acquisition/construction, installation and pre-operative
 expenditure including trial run expenses (net of revenue) and borrowing
 costs ncurred during pre-operation period. Expenses ncurred on capital
 assets are carried forward as capita work in progress at cost till the
 same are ready for use.
 
 b) Pre-operative expenses, including interest on borrowings for the
 capital goods, where applicable ncurred till the capital goods are
 ready for commercial production, are treated as part of the cost of
 capita goods and capitalised
 
 c) Machinery spares which are specific to particular item of fixed
 assets and whose use is irregular are capitalised as part of the cost
 of machinery.
 
 3) Impairment of Assets
 
 The Company recognises all the losses as per Accounting Standard -28
 due to the impairment of assets in the year of review of the physical
 conditions of the assets and is measured by the amount by which, the
 carrying amount of the assets exceeds the Fair Value of the asset.
 
 4) Depreciation
 
 Depreciation on fixed assets is provided on straight-line basis at the
 rates specified under Schedule XIV of the Companies Act, 1956.
 Depreciation for assets purchased / sold during the period is
 proportionately charged
 
 5) Inventories Valuation
 
 Raw material is valued at cost (First in First Out basis) or net
 realisable value whichever is lower. Finished Goods are valued at cost
 or net realisable value whichever is lower.  Stock of Scrap is valued
 at net realisable value. Stock of Trading Goods is valued at Cost
 (Weighted Average/ First in First Out basis)
 
 6) Foreign Exchange Transactions
 
 Foreign currency transactions are recorded at the rate of exchange
 prevailing on the date of transaction. All exchange differences are
 dealt within profit and loss account. Current assets and current
 liabilities in foreign currency outstanding at the year end are
 translated at the rate of exchange prevailing at the close of the year
 and resultant gains/losses are recognised in the profit and loss
 account of the year except in cases where they are covered by forward
 foreign exchange contracts in which cases these are translated at the
 contracted rates of exchange and the resultant gains/losses recognised
 in profit and loss account over the life of the contract.
 
 7) Duties & Credits
 
 a) Excise Duty is accounted for at the time of clearance of goods
 except closing stock of finished goods lying at the works.
 
 b) CENVAT Credit, to the extent available during the year, is adjusted
 towards cost of materials.
 
 c) Duty credit on export sales has been taken on accrued basis whether
 license has been issued after closing of the financial year.
 
 8) Sales are inclusive of excise duty and after deducting the trade
 discount and also sales tax applicable and Purchase made against Bank
 Guarantee, Letter of Credit are classified in sundry creditor for raw
 materials.
 
 9) Retirement Benefits
 
 a) The company has provided for the retirement benefits as per the
 actuarial valuation under the Projected Unit Credit Method
 
 b) Retirement benefits in the form of Provident Fund are charged to the
 Profit & Loss Account of the period when the contributions to the
 respective funds are due.
 
 10) Borrowing Cost
 
 Borrowing cost is charged to the Profit & Loss Account, except cost of
 borrowing for the acquisition of qualifying assets, which is
 capitalised till the date of commercial use of the assets.
 
 11)Taxes on Income
 
 Provision for current tax is made considering various allowances,
 disallowances and benefits available to the Company under the
 provisions of Income Tax Law.
 
 In accordance with Accounting Standard AS-22 “Accounting for Taxes on
 Income” issued by the Institute of Chartered Accountants of India,
 deferred taxes resulting from timing differences between book and tax
 profits are accounted for at tax rate substantively enacted by the
 Balance Sheet date to the extent the timing differences are expected to
 be crystallised
 
 12) Misc. Expenditure
 
 Misc. expenditure represents ancillary cost incurred in connection with
 the incorporation and share issue expenses and brand promotion
 expenditure. It has been decided to write off these expenses over the
 period of five years.
 
 13) Revenue Recognition
 
 Sale of goods is recognised when the risk and reward of ownership are
 passed on to the customers. Revenue from services is recognised when
 the services are complete.
 
 14) Investments
 
 Long term investments, other than investment in Associates and
 Subsidiaries, are carried at cost less provision for permanent
 diminution, if any, in value of such nvestments. Current investments
 are carried at lower of cost and fair value. Income/ Loss from
 investments are recognised in the year in which it is generated
 
 15) Provision and Contingencies
 
 The company creates a provision when there is a present obligation as a
 result of past event that 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 present obligation
 that may require an outflow of resources or where a reliable estimate
 of such obligation cannot be made.
 
 16) Cash Flow Statement
 
 Cash flows are reported using the indirect method, whereby net profit
 before tax is adjusted for the effects of transactions of a non-cash
 nature, any deferrals or accruals of past or future operating cash
 receipts or payments and item of income or expenses associated with
 investing or financing cash flows. The cash flows from operating,
 nvesting and financing activities of the Group are segregated
 
 17) Earnings Per Share
 
 Basic earnings per share is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders (after
 deducting attributable taxes) by the weighted average number of equity
 shares outstanding during the period. For the purpose of calculating
 diluted earnings per share, the net profit or loss for the period
 attributable to equity shareholders and the weighted average number of
 shares outstanding during the period are adjusted for the effects of
 all dilutive potential equity shares.