These financial statements have been prepared on an accrual basis and
 under historical cost convention and in compliance, in all material
 aspects, with the applicable accounting principles in India, the
 applicable accounting standards notified under Section 211 (3C) and the
 relevant provisions of the Companies Act, 1956. The significant
 accounting policies adopted by the Company are detailed below.
 
 1.  Use of Estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires Management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the results of operations during the reporting
 period. Although these estimates are based upon Managements best
 knowledge of current events and actions, actual results could differ
 from these estimates. Differences between actual results and estimates
 are recognised in the period in which the results are known 
 materialised.
 
 2.  Fixed Assets: (Tangible and Intangible)
 
 1.  Tangible Assets:
 
 i) Fixed assets are carried at cost of acquisition including incidental
 expenses, less accumulated depreciation, amortisation and impairment
 except freehold land, lease hold land Panoli and certain business
 premises at fair market value, assets received Free of Cost on
 premature cancellation of lease agreement with one lease which are at
 Fair Value.
 
 ii) Spares for specific machinery are carried at cost less
 amortisation.
 
 2.  Intangible Assets:
 
 Computer Software includes Enterprise Resource Planning (ERP) Project
 and other cost relating to software which provides significant future
 economic benefit. Costs comprise license fees and cost of system
 integration services.
 
 3.  Depreciation and Amortisation:
 
 Amortisation:
 
 i) Premium on lease hold land is amortised over the period of lease.
 
 ii) Cost of spares for specific machinery is amortised over balance
 period of life of related machinery.
 
 iii) Computer Software is being amortised over a period of three years.
 
 iv) Other fixed assets:
 
 Depreciation on Buildings and Plant and Machinery is being provided on
 Straight Line Method” basis in accordance with provisions of Section
 205(2)(b) of the Companies Act, 1956 in the manner and at the rates
 specified in Schedule XIV to the said Act and on all other assets is
 being provided on Written Down Value” basis in accordance with the
 provisions of Section 205(2)(a) of the Companies Act, 1956 in the
 manner and at the rates specified in Schedule XIV to the said Act.
 
 Depreciation on additions to the assets during the year is being
 provided on pro-rata basis at their respective rate with reference to
 the month of acquisition  installation as required by Schedule XIV to
 the Companies Act, 1956.
 
 Depreciation on assets sold, scrapped or discarded during the year is
 being provided at their respective rates up to the month in which such
 assets are sold, scrapped or discarded, as required by Schedule XIV to
 the Companies Act, 1956.
 
 Depreciation is adjusted in subsequent periods to allocate the assets
 revised carrying amount after the recognition of an impairment loss on
 a systematic basis over its remaining useful life.
 
 4.  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 will be recognised wherever the carrying
 amount of an asset exceeds its recoverable amount. The recoverable
 amount is greater of the assets net selling price and value in use. In
 assessing value in use, the estimated future cash flows are discounted
 to the present value by using weighted average cost of capital. A
 previously recognised impairment loss is further provided or reversed
 depending on changes in circumstances.
 
 5.  Borrowing Costs:
 
 Borrowing costs in relation to acquisition and construction of
 qualifying assets are capitalised as part of cost of such assets up to
 the date when such assets are ready for intended use. Other borrowing
 costs are charged as expense in the year in which these are incurred.
 
 6.  Investments:
 
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as long term investments and are
 carried at cost. However, provision for diminution in value of
 investments is made to recognise a decline, other than temporary, in
 the value of the investments.
 
 7.  Inventories:
 
 i.  Raw Materials, Packing materials and fuel are valued at cost or net
 realisable value whichever is lower. Cost is arrived at on Moving
 Weighted Average basis.
 
 ii.  Stores and spares other than specific spares for machinery are
 valued at cost or net realisable value whichever is lower. Cost is
 arrived at on Moving Weighted Average basis.
 
 iii.  Materials-in-Process and Finished Goods are valued at cost or net
 realisable value whichever is lower.  Finished goods stocks are valued
 at full absorption cost (Including Excise Duty).
 
 iv Purchased Finished Goods are valued at cost or net realisable value
 whichever is lower. Cost is arrived at on Moving Weighted Average
 basis.
 
 v.  Materials in transit and in Bonded Warehouse are stated at the cost
 to the date of Balance Sheet.
 
 8 Foreign Currency Transactions:
 
 a.  Initial Recognition:
 
 Transactions denominated in foreign currencies are recorded at the rate
 prevailing on the date of the transaction.
 
 b.  Conversion:
 
 At the year-end, monetary items denominated in foreign currencies
 remaining unsettled are converted into rupee equivalents at the
 year-end exchange rates. 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.
 
 c.  Exchange Differences:
 
 All exchange differences arising on settlement and conversion of
 foreign currency transactions are included in the Profit and Loss
 Account, except in cases where they relate to the acquision of fixed
 assets, acquired out of India in which case they are adjusted in the
 cost of the corresponding asset.
 
 d.  Forward Exchange Contracts not intended for trading or speculation
 purposes:
 
 The premium or discount arising at the inception of forward exchange
 contract is amortised as expenses or income over the life of the
 contract. Exchange differences on such contract is being recognised in
 the
 
 statement of profit and loss for the year. Any profit or loss arising
 on cancellation or renewal of forward exchange contract is recognised
 as income or expense for the year.
 
 e.  Derivatives:
 
 Where Company has entered into the derivative contracts such as
 Interest Rate Swaps, Currency Swaps, Forward Contracts and Currency
 Options, to hedge against risks of adverse movements in interest rates,
 foreign currencies of values of the hedged items associated with
 interest and foreign currency fluctuations relating to firm commitments
 and forecasted transactions. Hedging instruments are initially measured
 at fair value, and are remeasured at subsequent reporting dates.
 
 Changes in the fair value of these derivatives that are designated and
 effective as hedges of future cash flows are recognised directly in
 shareholders funds, under Hedging Reserve” and the ineffective
 portion is recognised immediately in the Profit and Loss Account.
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognised in the Profit and Loss
 Account as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. At that time for forecasted transactions, any cumulative
 gain or loss on the hedging instrument recognised in shareholders
 funds is retained there until the forecasted transaction occurs. If a
 hedged transaction is no longer expected to occur, the net cumulative
 gain or loss recognised in shareholders funds is transferred to the
 Profit and Loss Account for the period.
 
 9.  Revenue Recognition:
 
 a.  Sale of Goods:
 
 Revenue is recognised when the significant risks and rewards of
 ownership of goods have passed to the buyer, which generally coincides
 with delivery. It includes excise duty but excludes value added tax and
 sales tax.
 
 b.  Export sales are accounted on the basis of dates of Bill of Lading
 and  or Air Way Bill.
 
 c.  Benefit on account of entitlement to import goods free of duty
 under the Duty Entitlement Pass Book under Duty Exemption Scheme” is
 accounted in the year of export.
 
 d.  Lease rental income is recognised on accrual basis.
 
 e.  Dividend Income is accounted for in the year in which the right to
 receive the same is established.
 
 f.  Interest Income is recognised on a time proportion basis taking
 into account the amount outstanding and the rate applicable.
 
 10.  Provisions:
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event and it is probable that an outflow of
 resources will be required to settle the obligation, in respect of
 which a reliable estimate can be made.
 
 Provisions are not discounted to its present value and are determined
 based on Management estimate required to settle the obligation at the
 balance sheet date and adjusted to reflect the current Management
 estimates.
 
 11.  Research and Development Expenditure:
 
 Research and Development Expenditure is charged to revenue under the
 natural heads of account in the year in which it is incurred. However,
 Research and Development Expenditure on fixed assets is treated in the
 same way as expenditure on other fixed assets.
 
 12.  Employee Benefits:
 
 a.  Defined Contribution Plan:
 
 Companys contribution paid  payable during the period to Provident
 Fund, Employees Deposit Link Insurance Scheme, Officer Super Annuation
 Fund, Employees State Insurance Corporation, and Labour Welfare Fund
 are recognised in the Profit and Loss Account.
 
 b.  Defined Benefit Plan:
 
 Gratuity:
 
 Gratuity liability is defined benefit obligation and is provided for on
 the basis of an actuarial valuation on projected unit credit method
 made at the end of each financial year. The liability so provided is
 represented by creation of separate funds and is used to meet the
 liability as and when it accrues for payment in future.  Actuarial
 gains  losses are immediately taken to Profit and Loss Account.
 
 Long Term Leave Encashment:
 
 Long term leave encashment are provided for on the basis of an
 actuarial valuation carried out at the end of the year on the project
 unit credit method. Actuarial gains  losses are immediately taken to
 Profit and Loss Account.
 
 c.  Short-Term Employee Benefits:
 
 Short term leave encashment are provided at undiscounted amount during
 the accounting period based on service rendered by employee.
 
 d.  Voluntary Retirements:
 
 Compensation payable under the Voluntary Retirement Scheme is being
 charged to Profit and Loss Account.
 
 13.  Taxation:
 
 i. Income-tax expense comprises current tax and deferred tax charge or
 credit. Provision for current tax is made on the basis of the
 assessable income at the tax rate applicable to the relevant assessment
 year.
 
 ii. MAT credit is recognised as an asset only when and to the extent
 there is convincing evidence that the Company will pay normal Income
 Tax within the specified period.
 
 iii. Deferred tax asset and deferred tax liability are calculated by
 applying tax rate and tax laws that have been enacted or substantively
 enacted by the Balance Sheet date. Deferred tax assets on account of
 timing differences are recognised, only to the extent there is a
 reasonable certainty of its realisation. Deferred tax assets are
 reviewed at each Balance Sheet date to reassure realisation.
 
 14 Government Grants:
 
 i.  Government grants are recognised when there is reasonable assurance
 that the same will be received.  ii.  Revenue grants for expenses
 incurred are reduced from the respective expenses.  iii.  Capital
 grants relating to specific fixed assets are reduced from the cost of
 the respective fixed assets.  iv.  Capital grants for project capital
 subsidy are credited to capital reserve.