a.  Basis of Accounting
 
 The accounts are prepared on historical cost convention on an accrual
 basis and materially complies with the mandatory accounting standards
 issued by the Institute of Chartered Accountants of India.
 
 b.  Fixed Assets
 
 Fixed Assets are stated at cost, net of Cenvat, less accumulated
 depreciation. All costs, including financial costs till commencement of
 commercial production.
 
 c.  Depreciation
 
 Depreciation on Fixed Assets other than Plant and Machinery has been
 provided on “Straight Line Method at the rates provided in Schedule
 XIV to the Companies Act, 1956. Depreciation on Plant and Machinery has
 been provided on “Written down Value Method at the rates provided in
 Schedule XIV to the Companies Act, 1956.
 
 d.  Inventories
 
 Inventories at year-end are valued at the lower of cost and net
 realizable value. Raw Materials, Stores, Spares, Fuel, Packing
 Materials, Finished Goods and Work in Progress are valued on FIFO
 basis.
 
 e.  Foreign Currency Transactions
 
 Transactions denominated in Foreign Currency are normally recorded at
 the exchange rate prevailing at the time of transaction.  Monetary
 items denominated in foreign currencies at the year are translated at
 the rate prevailing on the date of Balance Sheet.  Exchange differences
 are dealt with in the Profit & Loss account.
 
 f.  Sales
 
 Sales are accounted for on dispatch of goods to the customers and are
 inclusive of Excise Duty and Sales Tax but net of sales returns and
 trade discounts.
 
 g.  Investments
 
 Long Term Investments are stated at its cost. Provision is only made to
 recognize a decline other than temporary, in the value of investments.
 
 h.  Borrowing Cost
 
 Borrowing Costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. All other borrowing costs are charged to revenue.
 
 i.  Taxation
 
 i) Provision for current tax is made and retained in the accounts on
 the basis of estimated tax liability as per the applicable provisions
 of the Income Tax Act, 1961.
 
 ii) Deferred Tax resulting from timing differences between book and tax
 profit is accounted for under the liability method, at the current
 rates of tax, to the extent that the timing differences are expected to
 crystallize.
 
 j.  Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 notes to accounts. Contingent Assets are neither recognized nor
 disclosed in the financial statement.
 
 k.  Impairment of Assets
 
 The Management Periodically assesses using external and internal
 sources whether there is an indication that an asset may be impaired.
 If an asset is impaired, the company recognizes the an impairment loss
 as the excess of the carrying amount of the asset over the recoverable
 amount.
 
 l.  Earning Per Share
 
 Basic earning per share is calculated by dividing net profit after tax
 for the year attributable to equity share holders of the company by the
 weighted average number of equity shares issued during the year.
 Diluted earning per share is calculated by dividing net profit
 attributable to equity share holders (after adjustment for diluted
 earnings) by average number of weighted equity shares outstanding
 during the year.
 
 m.  Employee Benefits
 
 (i) The employee and Company make monthly fixed Contribution to
 Government of India Employee''s Provident fund equal to a specified
 percentage of the covered employee''s salary, Provision for the same is
 made in the year in which service are rendered by the employees.
 
 (ii) The Liability for Gratuity to employee, which is a defined benefit
 plan, is determined on the basis of actuarial Valuation based on
 Projected Unit Credit method. Actuarial gain/Loss in respect of the
 same is charged to the profit and loss account.
 
 (iii) Leave encashment benefit to eligible employee has been
 ascertained on actuarial basis and provided for. Actuarial gain/loss in
 respect of the same is charged to the profit and loss account.