1.  Basis of Preparation: The financial statements are prepared under
 historical cost convention and following fundamental accounting
 assumptions namely going concern, consistency and accrual so as to
 comply with the mandatory accounting standards issued by The Institute
 of Chartered Accountants of India. The accounting policies have been
 consistently applied by the company and are consistent with those used
 in the previous year.
 
 2.  Revenue Recognition : In compliance with the requirement of accrual
 system of accounting following standards have been set out and are
 being followed over years:
 
 a) Sale- is recognized when the ownership and control has been
 transferred to the prospective buyer provided there is no significant
 uncertainty in collection of the amount of consideration.
 
 b) In case of benefit of DEPB, income is recognized after obtaining the
 license from the concerned authorities.
 
 c) Revenue from interest is recognized on time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 d) Dividend income is recognized when right to receive such income is
 established.
 
 Having regard to the size of operations and nature and complexities of
 company''s business, in management''s opinion the above are the
 reasonable standards of applying the accrual system of accounting
 required by the law.
 
 3.  Inventories/Work-in-Progress : Inventories are stated at lower of
 cost or net realizable value. Cost is determined using FIFO method and
 comprises of the purchase price including duties and taxes and other
 expenditure directly attributable to the acquisition, but excluding the
 trade discount and other rebates.
 
 4.  Fixed Assets And Depreciation :
 
 a) Fixed assets are stated at cost or revalued amounts, as the case may
 be, less accumulated depreciation and impairment losses, if any. Cost
 comprises the purchase price and any attributable cost of bringing the
 asset to its working condition for its intended use.
 
 b) Depreciation has been provided on historical cost and where
 revaluation of assets has been made on written up cost in the manner
 and as per Written Down Value Method at the rates prescribed in the
 Schedule XIV of the Companies Act, 1956. Proportionate depreciation is
 charged for additions/ deletions during the year on the basis of no. of
 days of use of the asset.
 
 5.  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 between the reporting currency and the foreign currency
 on the date of transaction.
 
 b) Conversion : Foreign currency assets (debtors) are translated at the
 rates of exchange prevailing on the date of the transaction.
 
 c) Exchange Differences : Exchange difference arising on the settlement
 of monetary items at rates different from those at which they were
 initially recorded during the year, or reported in previous financial
 statements, are recognized as income or as expense in the year in which
 they arise.
 
 d) Forward contract other than those entered into to hedge foreign
 currency risk on unexecuted firm commitment or of highly probable
 forecast transactions are treated as foreign currency transactions and
 accounted accordingly. Exchange difference arising on such contracts is
 recognized in the period in which they arise.
 
 6.  Derivative Instruments:
 
 Derivative financial instruments such as forward exchange contracts are
 used to hedge its risks associated with foreign currency fluctuations
 related to the underlying transactions.  In respect of Forward Exchange
 contracts with underlying transactions, the premium or discount arising
 at the inception of the contract is amortized as expense or income over
 the life of the contract.
 
 Other derivative contracts outstanding at the balance sheet date are
 marked to market and resulting loss, if any, is provided for in the
 financial statements. Any profit or losses arising on cancellation of
 derivative instruments are recognized as income or expense for the
 period.
 
 7.  Investment: Investments intended to be held for more than a year
 are classified as long '' term investments and carried at cost. However,
 provision for diminution in value, other than temporary, will be
 recognized wherever necessary.
 
 8.  Retirement Benefit: Provident fund and Pension fund are defined
 contribution schemes and the contributions thereto are charged to
 Profit & Loss Account for the year when the contributions to the
 respective funds are paid/due.
 
 Group Gratuity Fund is defined contribution scheme. In case of Defined
 Benefit Plans, the cost of providing the benefit is determined using
 the Projected Unit Credit Method with actuarial valuation being carried
 out at each Balance Sheet date.
 
 9.  Earnings per share : Basic and diluted earning per share are
 calculated by dividing the net profit or loss for the period
 attributable to equity shareholders by the number of equity shares
 outstanding, there being no potential equity shares in the capital
 structure of the company.
 
 10.  Taxation : Tax expense comprises both current and deferred taxes.
 Current tax is measured at the amount expected to be paid to the
 taxation authorities, using the applicable tax rates and tax laws.
 Deferred tax is recognized for all the timing differences subject to
 the consideration of prudence in respect of deferred tax assets and
 measured using the tax rates and tax laws enacted by the balance sheet
 date. Unrecognized deferred tax assets of earlier years are reassessed
 and recognized to the extent that it has become reasonably certain that
 future taxable income will be available against which such deferred tax
 assets can be realized.
 
 11.  Impairment of Assets (AS-28): The management has carried out an
 impairment test as perAS-28, Impairment of Assets, issued by the
 Institute of Chartered Accounts of India on all its fixed assets. As
 there was no impairment, no provision has been made.
 
 12.  Provisions : Provisions are recognized for present obligation as a
 result of past events where it is probable that outflow of resources
 will be required to settle the obligation and in respect of which a
 reliable estimate can be made at the balance sheet date. These are
 reviewed at each balance sheet date and adjusted to reflect the current
 best estimates.
 
 Note : (i) As the future liability for gratuity and leave encashment is
 provided on an actuarial basis for the company as a whole, the amount
 pertaining to the directors is not ascertainable and therefore not
 included above.