1.  BASIS OF ACCOUNTING
 
 i) The Financial statements are prepared on the basis of historical
 cost convention based on the accrual concept and in accordance with
 applicable Accounting Standards referred under Section 211 (3C) of the
 companies Act, 1956. The accounting is on the basis of going concern
 concept.
 
 ii) Income and expenditure are recongnized and accounted on accrual
 basis. Revenue for sale transaction is recognized as and when the
 property in the goods sold is transferred to the buyer for a definite
 consideration.
 
 2.  USE OF ESTIMATES
 
 The preparation of Financial statement requires estimates and
 assumption to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reported period. Difference
 between the actual results and estimates are recognized in the period
 in which results are known/materizlised.
 
 3.  INVENTORIES
 
 Inventories are valued as under
 
 (As Furnished, valued and certified by the Management)
 
 i) Raw Materials - At Identified Cost
 
 i) Raw Materials obsolete - At lower of identified cost or Realisable
 value
 
 ii) Process Stock - At Average Cost
 
 iii) Finished Goods - At Lower of Cost or Net
 
 Realisable value iv) Waste - At Net Realisable Value
 
 v) Stores, Consumables & Spares - At Weighted Average cost
 
 4.  FIXED ASSETS
 
 Fixed Assets are stated at cost and includes all expenditure of capital
 nature including the cost of borrowings and net of Cenvat Credit
 wherever applicable. The preoperative expenses and the loss during
 trial production of new units are capitalized as Fixed Assets wherever
 applicable.
 
 5.  DEPRECIATION
 
 Depreciation has been provided on Straight Line Method in accordance
 with the rates specified under schedule XIV of the Companies Act, 1956.
 Depreciation on additions during the year is provided on pro-rata basis
 with reference to the date of installation and period of use. In
 respect of assets up to Rs.5000/- each, the policy of the Company is to
 charge 100% depreciation in the year in which such assets are installed
 or put to use.
 
 
 6.  IMPAIRMENTS OF ASSETS
 
 The Company has internal system to access their impairment of assets.
 Appropriate disclosure on material impairment of losses and their
 treatment in Profit and Loss account, classes of assets and nature of
 impairment will be made during the period in which the impairment is
 recognized.
 
 7.  INVESTMENTS
 
 Investments are meant to be long term investments and are stated at
 cost. Diminution in the value of investments, other than temporary in
 nature, are provided for.
 
 8.  EMPLOYEE RETIREMENT BENEFITS
 
 i) Defined Benefit Plan
 
 The Company has taken out a Master policy with LIC of India Under the
 Cash Accumulation Scheme to cover the gratuity liabilities of the
 Company. The amount charged to Profit & Loss A/c recognized at the
 present value of the amount payable determined using actuarial
 valuation techniques.
 
 ii) Defined Contribution Plan
 
 Company''s Contribution paid/payable during the year towards Provident
 Fund Scheme and Employee State Insurance are recognized in the Profit
 and Loss Account.
 
 9.  FOREIGN CURRENCY TRANSACTIONS
 
 i) Transactions arising in foreign currency for import of raw
 materials, spares and fixed assets and for exports during the year are
 converted at exchange rates prevailing on the date of transaction.
 
 ii) Liabilities payable in foreign currencies as on the date of the
 Balance sheet are restated at year end exchange rate in such cases
 where the fluctuations results in losses or at the rates at which
 foreign currency forward covers have been obtained. All exchange
 differences arising from conversion are included in the Profit and Loss
 Account except relating to specific borrowings and other liabilities
 attributable to the fixed assets, which are capitalized.
 
 10.  INTEREST ON BORROWINGS
 
 Borrowing cost is charge to the Profit and Loss Account for the year in
 which it is incurred except for capital assets which is capitalised
 till the date the asset is put to commercial use.
 
 11. INTEREST UNDER TUF SCHEME
 
 Certain term loans of the company have been sanctioned under the TUF
 scheme of the Govt. of the India. Under this scheme, an interest
 subsidy @ 5% p.a is given by the Government on the interest paid by the
 company on its term loans which is refunded quarterly after TUF claim
 is lodged.  This refund is accounted for on mercantile basis.
 
 12.  TAXES ON INCOME
 
 a. Deferred tax is recognized, subject to consideration of prudence on
 all timing differences between taxable income and accounting income
 that originate in one period and are capable of being reversed in one
 or more subsequent periods. The accumulated deferred tax liability is
 adjusted by applying applicable tax rates under relevant tax laws.
 
 
 b. Minimum Alternative Tax (MAT) credit is recognized as an asset only
 when and to the extent there is convincing evidence that the company
 will pay normal income tax during the specified period. MAT credit
 becomes eligible to be recognized as an asset in accordance with the
 recommendation contained in the Guidance Note issued by the Institute
 of Chartered Accountant of India, the said asset is created by way of
 credit to the Profit and Loss Account and shown as MAT credit
 entitlement. The Company reviews the same at each balance sheet date
 and writes down the carrying amount of MAT credit entitlement to the
 extent there is no longer convincing evidence to the effect that
 Company will pay normal income tax during the specified period.
 
 13.  MISCELLANEOUS EXPENDITURE
 
 Hi thereto the Company was amortising the Preliminary and Public Issue
 expenses over a period of 10 years. From the current year onwards the
 expenses are rescheduled and amortised over a total period of five
 years.
 
 14.  CONTINGENT LIABILITIES
 
 Contingent liabilities are not provided for and are disclosed by way of
 notes.
 
 15.  GOVERNMENT GRANTS – CAPITAL SUBSIDY
 
 In respect of Capital Subsidy on Specific Machinery from Government,
 the Company has opted the second option spelt out in AS 12 – Accounting
 for Government Grants, which is the income Approach due to which the
 income is recognized in the Profit & Loss Account. Hit hereto the above
 subsidy is recognized as income equally over 10 years. From the current
 year onwards the income is rescheduled and recognized over a total
 period of five years.