(i) Revenue Recognition
 
 All income and expenditure items having a material bearing on the
 financial statements are recognized on accrual basis.
 
 (ii) Fixed Assets
 
 Fixed Assets are stated at cost of acquisition (Net of Modvat)
 inclusive of expenses relating to acquisition.
 
 (iii) Amortization and Depreciation
 
 Depreciation on Fixed Assets is provided on straight line method at the
 rates prescribed in Schedule XIV of the Companies Act, 1956 as amended
 vide Notification No.GSR 756(E) dated 16.12.1993 issued by the Ministry
 of Law, Justice and Company Affairs, Department of Company Affairs.
 
 (iv) Retirement Benefits
 
 (a) Provision for gratuity is made as per the provision of payment of
 gratuity act, as calculated by the management.
 
 (b) Liabilities in respect of encashment of accumulated leaves by the
 employees is estimated by the management and charged to Profit & Loss
 account.
 
 (c) As ascertained by the Company , the premium pertaining to provision
 for superannuation fund has been paid to LIC & the amount appears in
 superannuation Fund account has no longer liability against the assets
 of the company.
 
 (v) Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is present obligation as a result of past
 events and it is possible that there will be an outflow of resources.
 Contingent Liabilities are not recognized in the financial statements
 but are disclosed in the notes to accounts. Contingent Assets are
 neither recognized and nor disclosed in financial statements.
 
 (vi) Foreign Currency Transactions
 
 (a) Transactions denominated in foreign currency are intially recorded
 at the exchange rate prevailing at the time of transaction. Current
 Assets and Current liablities denominated in Foreign Currency are
 converted into Indian rupees at the exchange rate prevailing at the
 close of the year.
 
 (b) Any income or loss on account of exchange fluctuation on settlement
 / year end, is recognised in the profit & loss account except in cases
 where they relate to acquisition of fixed assets in which case they are
 adjusted to the carrying cost of such asset ae per guidelines and AS-11
 issued by Institute of Chartered Accountants of India.
 
 (vii) Excise Duty
 
 Excise Duty, Service Tax And VAT on inputs and services are carried
 forward till it is utilized. Further Excise duty is accounted for on
 the basis of both payment made in respect of goods cleared as also
 provision made for goods lying in bonded warehouse.
 
 (viii) Taxes on Income
 
 (a) Provision for Income Tax is made at the amount expected to be paid
 to the Tax Authorities in accordance with the Income Tax Act, 1961
 using the tax rates as per the Tax Law that have been enacted or
 substantively enacted as on the date of the Balance Sheet.
 
 (b) Deferred Tax Assets and Liabilities are recognized on timing
 differences, being the difference between taxable income and accounting
 income that originate in one period and are capable of reversal in one
 or more subsequent periods in accordance with the Accounting Standard
 22 Accounting for Taxes on Income, issued by the Institute of
 Chartered Accountants of India. Deferred Tax Assets and Liabilities are
 recognised using the tax rates as per the Tax Law that have been
 enacted or substantively enacted as on the date of the Balance Sheet.
 
 (ix) Cash Flow Statement
 
 Cash flows are made using the indirect method, whereby profit before
 tax is adjusted for the effects of transactions of a non cash nature
 and any deferrals or accruals of past or future cash receipts or
 payments.  The cash flows from Opearting Activities, Financing
 Activities and Investing Activities are segregated.
 
 (x) Impairment Of Assets
 
 Fixed Assets are assesed annually on the balance sheet date havings
 regards to the internal & external source of information so as to
 analyze whether any impairment of the asset has taken place. If the
 recoverable amount, represented by the higher of Net Selling Price or
 the Value in use, is lesser than carrying amount of Cash-generating
 unit, then the difference is recognized as Impairment Loss and is
 debited to Profit and Loss Account. Further Suitable reversals are made
 in the books of accounts as and when the impairment loss ceases to
 exist or shows a decrease.
 
 (xi) Miscellaneous Expenditure
 
 Miscellaneous expenditure represents R & D deffered revenue expenditure
 and are written off over a period of 10 years.
 
 Borrowing Cost
 
 Borrowing cost that are directly attributable to acquisition or
 construction of qualifying assets has been capitalized as part of such
 asset as per AS-16 on Borrowing Costs issued by the ICAI. All other
 borrowing cost are charged to revenue in the period when they are
 incurred.
 
 Earning Per Share
 
 EPS is calculated by dividing the net profit for the year attributable
 to equity shareholders by the weighted average no. of equity shares
 outstanding during the year as per AS-20 issued by the ICAI.
 
 Inventories
 
 INVENTORIES Basis of Valuation
 
 Raw Material At cost, based on first in first out method, or net
 realisable value which ever is lower.
 
 Work in progress At cost or net realisable value whichever is lower
 
 Finished Goods At cost or net realisable value whichever is lower