1 BASIS OF PREPARATION OF FINANCIAL STATEMENT:
 
 The financial statements are prepared under the historical cost
 convention on accrual basis of accounting and in accordance with
 accounting principles generally accepted in India. The financial
 statements comply in all material aspects with the Accounting Standards
 issued by the Institute of Chartered Accountatns of India and the
 relevant provisions of the Companies Act, 1956.
 
 2 FIXED ASSETS:
 
 Fixed assets are stated at cost of acquisition or construction less
 accumulated depreciation and impairment loss, if any.
 
 3 IMPAIRMENT LOSSES:
 
 Impairment losses are provided to the extent the carrying amount
 exceeds their recoverable amounts.  Recoverable amount is the higher of
 an asset''s net selling price and its value in use. Value in use is
 present value of estimated future cash flows expected to arise from the
 continuing use of the asset and from its disposal at the end of its
 useful life. Net selling price is the amount obtainable from sale of an
 asset at arm''s length transaction between knowledgeable and willing
 parties less cost of disposal.
 
 4 BORROWING COSTS:
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes a
 substantial period of time to get ready for its intended use. All other
 borrowing costs are charged to revenue.
 
 5 INVESTMENTS:
 
 Investments of long term nature are stated at cost, less adjustment for
 any diminution, other than temporary, in the value thereof. Current
 investments are stated at lower of cost and fair market value.
 
 6 INVENTORIES:
 
 Raw materials, stores, spares, and packing material are valued at
 Weighted average cost. Finished goods and Work-in-Process are valued at
 cost or net realizable value whichever is lower.
 
 7 REVENUE RECOGNITION:
 
 Revenue from sale of goods is recognized when significant risks and
 rewards in respect of ownership of the products are transferred to the
 customer. Revenue from export sales and domestic sales are recognized
 on despatch of products from the factories of the Company.
 
 Revenue from product sales is stated inclusive of excise duty, sales
 tax and applicable trade discounts and allowances. Revenue from
 services is recognised as per the terms of the contract with the
 customers when the services are performed.
 
 8 DEPRECIATION:
 
 Depreciation is charged in the accounts as under:
 
 -on Fixed Assets on Straight Line Method, applying the rates in
 Schedule XIV to the Companies Act, 1956.
 
 -on Assets acquired or disposed of during the year, on prorata basis
 with reference to the month of acquisition or disposal.
 
 9 TRANSLATION OF FOREIGN CURRENCY ITEMS:
 
 Transactions in foreign currency are accounted at the exchange rate
 prevailing on the date of transaction.  Gain/Loss arising out of
 fluctuations in exchange rates are accounted for on realization.
 
 Current Assets and Current Liabilities are translated at the exchange
 rate prevailing on the Balance Sheet date and the resultant gain/loss
 is recognized in the financial statements.
 
 To account of differences between the forward exchange rates and the
 exchange rates at the date of transactions as income or expense over
 the life of the contracts.
 
 To account for profit/loss arising on cancellation or renewal of
 forward exchange contracts as income/ expense for the period.
 
 To account for premium paid on currency options in the Profit and Loss
 Account at the inception of the option.
 
 To account for profit/loss arising on settlement or cancellation of
 currency option as income/expense for the period.
 
 To recognize the net mark to market loss in the Profit and Loss Account
 on the outstanding portfolio of options as at the Balance Sheet date,
 and to ignore the net gain, if any.
 
 10 RETIREMENT BENEFITS:
 
 Contributions to Gratuity Funds, being defined benefit schemes with the
 Life Insurance Corporation of India, are determined by periodical
 actuarial valuation and the adequacy of such annual contributions have
 been confirmed by the Life Insurance Corporation of India.
 
 Long term compensated absences are provided for based on actuarial
 valuation. The actuarial valuation is done as per projected unit credit
 method. The Company accounts for leave encashment liability of its
 employees on the basis of actuarial valuation carried out by an
 independent actuary.
 
 11 TAXES ON INCOME:
 
 Deferred tax liabilities and deferred tax assets are recognized for the
 tax effect on the difference between taxable income and accounting
 income which are not permanent in nature subject to the consideration
 of prudence in the case of deferred tax assets.