(A) Basis of preparation of financial statements and revenue
 recognition
 
 i) The financial statement have been prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act, 1956 as adopted
 consistently by the Company.
 
 ii) Accounting policies not specifically referred to otherwise are
 consistent with generally accepted accounting principles followed by
 the Company.
 
 iii) Sale of goods is recognised on transfer of significant risk and
 rewards of ownership which is generally on shipment and dispatch to
 customers.  Sale is inclusive of excise duty and other levies wherever
 applicable. Export benefits/Value added tax benefits are recongnised as
 Income when the right to receive credit as per the terms of the scheme
 is established and there is no significant uncertainty regarding the
 claim. Other revenue/ cost is recognised on accrual basis.
 
 (B) Fixed Assets & Depreciation / Amortisation
 
 i) Fixed assets are stated at cost of acquisition or construction net
 of Value Added Tax less accumulated depreciation. All cost, till
 commencement of commercial production is capitalized. Application
 software expenses for internal use are treated as intangible assets.
 
 ii) Depreciation on fixed assets is provided on the straight Line
 Method at the rates and in the manner prescribed in Schedule XIV of the
 Companies Act, 1956. Intangible assets are amortized equally over five
 years.
 
 iii) Pursuant to Accounting standard 28 Impairment of Assets issued
 by the ICAI, the Company has a system to review the carrying cost of
 all the assets vis-à-vis recoverable value and impairment loss, if any
 is charged to Profit and Loss account in the year in which an asset is
 identified as impaired. The impairment loss recognized in prior
 accounting periods is reversed if there has been a change in estimate
 of recoverable amount.
 
 iv) Lease hold assets are amortized over the period oflease from the
 date of start of commercial production.
 
 (C) Investments
 
 i) Long term Investments are stated at cost of acquisition. Provision
 for diminution in the value of long term investments is made only if
 such decline is other than temporary in the opinion of the management.
 
 ii) Current Investments, if any, are stated at lower of cost and fair
 value determined on individual investment basis.
 
 iii) Investments in shares of foreign subsidiaries are expressed at the
 rates of exchange prevailing at the time when original investments were
 made.
 
 iv) Dividend income is recognised when right to receive is established.
 
 v) Share of profit/loss from partnership firm is recognized when the
 Company''s right/obligation to receive /pay is established.
 
 (D) Foreign Currency Transactions
 
 i) Transactions denominated in foreign currency are normally recorded
 at the exchange rate prevailing at the time of the transactions.
 Monetary items denominated in foreign currency remaining unsettled at
 the year-end are restated at the exchange rate prevailing at the end of
 the year.  Gains and losses on foreign exchange transactions other than
 those relating to fixed assets are charged to profit & loss account.
 Premium paid on forward contract has been recognised over the life of
 the contract. Any profit or loss on cancellation or renewal of such
 forward exchange contract is recognised as income or expenditure for
 the period
 
 (E) Inventories
 
 Inventories are valued at lower of cost and net realizable value except
 by products which is valued at estimated realizable value. In
 determining the cost of raw material, stores, spares, and other
 material the first in first out (FIFO) method is used. Finished goods
 and work in progress include material cost, labour and factory
 overheads and excise duty, if applicable.
 
 (F) Employee Retirement Benefit
 
 i) Company makes contributions in respect of provident fund to
 Government authorities and the liability is limited to the extent of
 contributions.  The employees of the Company are entitled to leave as
 per leave policy of the Company. The liability in respect of unutilized
 leave balances is provided based on an actuarial valuation carried out
 by an independent actuary as at the year end and charged to the Profit
 and Loss Account.
 
 ii) The Company has created a trust and has taken group gratuity policy
 with The Life Insurance Corporation of India for the future payments of
 retiring gratuities. The liability for the defined benefit plan of
 Gratuity is determined on the basis of an actuarial valuation by an
 independent actuary at the year end which is calculated using Projected
 Unit Credit Method. Actuarial gains and losses which comprise
 experience adjustment and the effect of changes in actuarial
 assumptions are recognized in the Profit and Loss Account.
 
 (G) Lease Rent
 
 Lease rentals are expensed with reference to lease terms and other
 considerations.
 
 (H) Liquidated Damages
 
 Liquidated damages / Penalties, if any are provided whenever there is a
 claim from party and when the same is accepted by the Company.
 
 (I) Custom Duty
 
 The year end inventory is inclusive of custom duty.
 
 (J) Taxation
 
 Taxation expense comprise current tax and deferred tax charge or
 credit. Provision for income tax is made on the basis of the assessable
 income at the tax rate applicable to the relevant assessment year.
 Advance tax and tax deducted at source are adjusted against provision
 for taxation and balance, if any, are shown in the balance sheet under
 respective heads.
 
 (K) Deferred Taxation
 
 Deferred tax resulting from timing differences between book and tax
 profit is accounted for under the liability method at the current rate
 of Income tax to the extent that the timing differences are expected to
 crystallize as deferred tax charge/ benefit in the profit and loss
 account and as deferred tax Assets/Liability in the Balance Sheet.
 
 (L) Insurance Claim
 
 Insurance and other claims to the extent considered recoverable are
 accounted for in the year of claim based on the amount assessed by the
 surveyor. However, claims and refund whose recovery cannot be
 ascertained with reasonable certainty, are accounted for on
 acceptance/actual receipts basis.
 
 (M) Borrowing Cost
 
 Borrowing cost that are attributable to the acquisition or construction
 of qualifying assets are capitalised as part of the cost of such
 assets.  A qualifying asset is one that necessarily takes substantial
 period of time to get ready for intended use. All other borrowing costs
 are charged to Revenue.
 
 (N) Excise Duty and Sales Tax
 
 Excise duty has been accounted on the basis of both payment made in
 respect of goods cleared and provision for goods lying in bonded area.
 Sales Tax is Charge to Profit and Loss Account.
 
 (O) Use of Estimates
 
 In preparing Company''s financial statements in conformity with
 accounting principles generally accepted in India, management is
 required to make estimates and assumptions that affect the reported
 amounts of assets and liabilities and the disclosure of contingent
 liabilities at the date of the financial statements and the reported
 amounts of revenue and expenses during the reporting period.  Actual
 results could differ from those estimates.
 
 (P) Commodity Hedging Transactions
 
 The commodity hedging contracts are accounted on the date of their
 settlement and realised gain/ loss in respects of settled contracts are
 recognised in the profit and loss account, along with the underlying
 transactions. Pursuant to announcement on accounting for the
 derivatives issued by the Institute of Chartered Accountants of India
 (ICAI), in accordance with the principle of prudence as enunciated in
 Accounting Standard -1 (AS-1) Disclosure of Accounting Policies the
 Company provide for losses in respect of all outstanding derivatives
 contracts at the balance sheet date by marking them mark to market. Any
 net unrealized gains arising on such Mark to Market are not recognised
 as income.
 
 (Q) Provision, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as result of past
 events and it is probable that there will be an outflow of resources.
 Contigent liabilities are not recognised but are disclosed in the
 notes.  Contingent assets are neither recognised nor disclosed in the
 financial statements.
 
 (R) Related Party Transaction
 
 Parties are considered to be related if at any time during the year,
 one party has the ability to control the other party or to exercise
 significant influence over the other party in making financial and / or
 operating decision.
 
 (S) Earning Per Share (EPS)
 
 The earning considered in ascertaining the Company''s EPS comprises the
 net profit for the period after tax attributed to equity shareholders.
 The number of shares used in computing basic EPS is the weighted
 average number of shares outstanding during the year.
 
 (T) Government Grants
 
 Grants received against specific fixed assets are adjusted to the cost
 of the assets and those in the nature of promoter''s contribution are
 credited to capital reserve. Revenue grants are recognized in the
 profit and loss account in accordance with the related schemes and in
 the period in which these are accrued and it is reasonably certain that
 the ultimate collection will be made.
 
 (U) Share Issue Expenses
 
 Share Issue expenses are adjusted against security premium account.