1.  Basis of preparation of Financial Statements :-
 
 The financial statements are prepared under the historical cost
 convention on the accrual basis of accounting, in accordance with the
 generally accepted accounting principles and the provisions of the
 Companies Act, 1956 as adopted consistently by the Company.
 
 2.  Fixed Assets:-
 
 (a) Tangible Assets
 
 Fixed Assets are accounted at cost of acquisition (net of cenvat
 availed) inclusive of inward freight, duties, taxes and incidentals
 related to acquisition and installation including interest on loan
 taken for the acquisition of assets upto the date of commissioning of
 assets. Pre-operating expenses for major projects are also capitalised,
 wherever appropriate. Assets under installation or under construction
 as at the Balance Sheet date are shown as Capital Work-in-Progress
 
 The revalued amounts of Fixed Assets revalued are presented in the
 Balance Sheet by restating the net book value by adding thereon the net
 increase on account of revaluation.
 
 (b) IntangibleAssets
 
 Intangible Assets are stated at cost of acquisition. Costs relating to
 development of Computer Software are capitalized. Software expenses,
 other than development costs, are expensed off in the yearthey are
 incurred.
 
 3.  Depreciation / Amortisation:-
 
 Depreciation is provided on pro-rata basis on W.D.V. method at the
 rates prescribed by Schedule XIV to the Companies Act, 1956 except
 Leasehold Improvements which are amortized over the period of Lease
 i.e. five years and Computer Software is amortized over a period of
 five years.
 
 Premium on leasehold land is amortized over the period of lease.  100%
 depreciation is provided in respect of assets upto Rs.5,000/-.
 Depreciation on the revalued portion of Fixed Assets is charged to the
 Merger Adjustment Account.
 
 4.  Inventories :-
 
 Inventories are valued as under :-
 
 i) Raw Material - At lower of cost determined on FIFO basis or net
 realisable value.
 
 ii) Work-in-Progress - At lower of cost or net realisable value.
 
 iii) Finished Goods
 
 - Manufactured - At lower of cost including excise duty or net
 realisable value.
 
 - Bought out - At cost.  iv) Material in Transit - At cost.
 
 5.  Revenue Recognition :-
 
 Sales:
 
 Sale of goods is recognised at the point of despatch of finished goods
 to customers. Sales are inclusive of excise duty and exclusive of sales
 tax.
 
 Investing and other Activities:
 
 Income on account of interest and other activities are recognized on an
 accrual basis. Dividends are accounted for when the right to receive
 the payment is established.
 
 6.  Transactions in Foreign Currency :-
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing on the date of transaction.
 
 Foreign currency monetary items (including forward contracts) are
 translated at year end rates. Exchange differences arising on
 settlement of transactions and translation of monetary items (including
 forward contracts) are recognized as income or expense in the year in
 which they arise.
 
 The premium or discount arising at the inception of a forward contract,
 which are not intended for trading purpose, is amortised as expense or
 income over the life of the contract.
 
 7.  Employee Benefits
 
 (a) Short Term Employee Benefits
 
 Short-term employee benefits are recognized as an expense at the
 undiscounted amount in the Profit and Loss Account of the year in which
 the related service is rendered.
 
 (b) Long Term Employee Benefits (i) Defined Contribution Plan
 
 Provident Fund and Employees State Insurance Schemes
 
 All employees of the Company are entitled to receive benefits under the
 Provident Fund, which is a defined contribution plan. Both the
 employees and the employer make monthly contributions to the plan at a
 pre-determined rate (presently 12.0%) of the Employees Basic Salary
 and Deamess Allowance. These contributions are made to the fund
 administered and managed by the Government of India. In addition, some
 employees of the Company are covered under the Employees State
 Insurance schemes, which are also defined contribution schemes
 recognized and administered by the Government of India.
 
 The Companys contributions to both these schemes are expensed in the
 Profit and Loss Account. The Company has no further obligations under
 these plans beyond its monthly contributions.
 
 (ii) . Defined benefit plan
 
 Leave Encashment - Liability on account of unavailed earned leave at
 the year end is provided as per the actuarial valuation according to
 Projected Unit Credit Method.
 
 Gratuity - Liability on account of Gratuity at the year end is provided
 as per the actuarial valuation according to the Projected Unit Credit
 Method.
 
 (iii) Actuarial gains or losses arising from such transactions are
 charged to revenue in the year in which they arise.
 
 8.  Borrowing Costs:-
 
 Borrowing Costs attributable to acquisition and construction of
 qualifying assets are capitalised as a part of the cost of such assets
 upto the date when such assets are ready for intended use. Other
 Borrowing Costs are charged as an expense in the year in which these
 are incurred.
 
 9.  Investments :-
 
 Long Term Investments are stated at cost after deducting provision, if
 any, made for decline, other than temporary, in the values. Current
 Investments are stated at lower of cost and market / fair value.
 
 10.  Taxation:-
 
 Tax expense comprises both current and deferred tax. Current Tax is
 measured at the amount expected to be paid to the tax authorities,
 using the applicable tax rates and tax laws. Deferred tax assets and
 liabilities are recognized for future tax consequences attributable to
 the timing difference between taxable income and accounting income that
 are capable of reversal in one or more subsequent period(s) and are
 measured using tax rates enacted or substantively enacted as at the
 Balance Sheet date. Deferred Tax assets are not recognized unless, in
 the management judgment, there is virtual certainty that sufficient
 future taxable income will be available against which such deferred tax
 assets can be realized. The carrying amount of deferred tax is reviewed
 at each balance sheet date.
 
 11.  Earnings Per Share :-
 
 Basic Earnings per equity share is computed by dividing net profit or
 loss for the period attributable to equity share holders by the
 weighted average number of equity shares outstanding during the period.
 The Diluted Earnings per share is calculated on the same basis as Basic
 Earnings per share, after adjusting for the effects of potential
 dilutive equity shares.
 
 12.  Segment Reporting :-
 
 Revenue and expenses are identified to segments on the basis of their
 relationship to the operating activities of the segment. Revenue and
 expenses, which relate to the enterprise as a whole and are not
 allocable to segments on a reasonable basis, are included under
 Unallocated Corporate Expenses.
 
 13.  Leases:-
 
 Operating Lease-As Lessee
 
 Lease Rentals in respect of assets taken on Operating Lease are
 charged to the Profit and Loss Account on an actual basis.
 
 14.  Pre-operative Expenditure :-
 
 The Expenditure incurred by the Company from the date of setting up of
 a new unit, up to the date of commencement of commercial production of
 the unit is treated as Pre-operative expenditure to be capitalised as a
 part of the indirect cost of construction. The amount of such
 expenditure is apportioned over the individual assets in an equitable
 manner in the year of commencement of Commercial Production of the
 unit. The amounts not directly attributable to fixed assets are charged
 to the Profit and Loss Account in the year in which such expenditure is
 incurred.
 
 15.  Impairment of Assets:-
 
 Assets that are subject to amortisation/depreciation are reviewed for
 impairment whenever events of changes in circumstances indicate that
 the carrying amount may not be recoverable. An impairment loss is
 recognised for the amount by which the assets carrying amount exceeds
 its recoverable amount. The recoverable amount is the higher of the
 assets fair value less costs to sell and value in use.
 
 For the purpose of assessing impairment, assets are grouped at the
 lowest levels for which there are separately identifiable cash flows
 (cash generating units).
 
 16.  Provisions, Contingent Liabilities and Contingent Assets:-
 
 Provisions are recognized when the Company has a present obligation as
 a result of past events; it is more likely than not that an outflow of
 resources will be required to settle the obligation; and the amount has
 been reliably estimated. Contingent Liabilities are not recognized but
 are disclosed in the notes. Contingent Assets are neither recognized
 nor disclosed in the financial statements.