1.  Basis of Preparation
 
 (i) The Financial Statements have been prepared in accordance with the
 applicable Accounting Standards issued by the Institute of Chartered
 Accountants of India and the relevant disclosure requirements of the
 Companies Act, 1956 under historical cost convention and on the basis
 of going concern.
 
 (ii) Accounting policies not specifically referred to otherwise are
 consistent and does in consonance with generally accepted accounting
 principles.
 
 2.  Fixed Assets
 
 Fixed Assets are stated at acquisition cost (net of modvat/ cenvat, if
 any) including directly attributable cost of bringing them to their
 respective working conditions for the intended use less accumulated
 depreciation including impairment loss. All costs, including financing
 costs till commencement of commercial production attributable to the
 fixed asset are capitalized. Assets acquired on Hire Purchase are
 stated at their cash values. Assets revalued in past are stated at the
 value determined by the valuer net of depreciation thereon.
 
 3.  Depreciation
 
 Depreciation on Fixed Assets has been provided on WDV method in
 accordance with the rates provided under the Income Tax Act, 1961. The
 Company is eligible for additional depreciation on certain equipments
 under Income Tax Act. However, depreciation at ordinary rates has been
 charged to Profits Loss Account on these equipments.
 
 4.  InventoryValuation
 
 The company has valued its inventory on cost or net realizable value
 whichever is lower basis and is in compliance with the Accounting
 Standard-2 issued by ICAI. However, stock-in-process has been valued on
 lower of estimated cost and net realizable value. Further, the
 valuation of inventory is inclusive of Excise Duty component wherever
 applicable as required u/s 145Aofthe Income Tax Act, 1961.
 
 5.  Consumption of Raw Materials, Stores, Fuels, Chemicals, Consumables
 & Packing are accounted for after reckoning the Closing Stock of
 respective items as ascertained by the Companys experts at the end of
 the year from the total of the Opening Stock and purchases.
 
 6.  Revenue Recognition
 
 The Company follows mercantile system of accounting where all the
 Income and Expenditure items having material bearing on the financial
 statements are recognized on accrual basis.
 
 7.  Foreign Currency Transactions
 
 (i) Transactions denominated in foreign currencies are normally
 recorded at the exchange rate prevailing at the time of the
 transaction.
 
 (ii) In case of monetary items, which are covered by forward contracts,
 the premium paid on forward contract has been recognized over the life
 of such contracts, 
 
 (iii) Any income or expense on account of exchange difference either on
 settlement or on transaction is recognized in the Profit & Loss Account
 except in cases where they relate to acquisition of fixed asset in
 which case they are adjusted to the carrying cost of such asset.
 
 8.  Retirement Benefits
 
 The retirement benefits such as Contribution to Provident Fund, Leave
 Encashment etc. are accounted for on accrual basis and the payment and
 provision for Gratuity is made on the basis of actuarial valuation done
 by Life Insurance Corporation of India.
 
 9.  Excise Duty
 
 Excise Duty is recognized at the point of Production and the value of
 finished goods lying in the factory as well as at depots are inclusive
 of Excise Duty. Similarly, other inventories are also inclusive of
 Excise Duty Component wherever applicable.
 
 10.  Turnover
 
 Turnover include sale of goods, excise duty, trade/ sales tax and other
 recoverable expenses.
 
 11.  Borrowing Costs
 
 Borrowing cost that is attributable to the acquisition or construction
 of qualifying assets are capitalized as part of the cost of such asset.
 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.
 
 12.  Provision for Current & Deferred Tax
 
 The provision for Income Tax for the current year is made on normal
 basis. The deferred tax liability resulting from timing difference
 between book and taxable profit is accounted for based on the tax rates
 and laws enacted as on date of Balance Sheet. The deferred tax Asset/
 credit is recognized and carried forward only to the extent that there
 is a reasonable certainty that the asset will be realized in future.
 
 13.  Investments
 
 The investments being long-term investments are valued at cost, after
 providing for any diminution in value, if such diminution is of a
 permanent nature.
 
 14.  The Interest accrued and due on secured and unsecured loans fall
 due on 31 st March 2007 and have been paid on that date. Therefore the
 amount outstanding is NIL and has not been disclosed under respective
 heads.
 
 15.  Miscellaneous Expenditure
 
 (a) Expenditure on formation of company being in the nature of
 preliminary expenses is amortized over the period as prescribed u/s
 35-D of the Income Tax Act, 1961.
 
 (b) Expenditure incurred against which benefit to flow into future
 period are treated as deferred revenue expenditure and are charged to
 revenue account over the expanded duration of benefit.The expenditure
 incurred on raising public issue of equity shares have been treated as
 deferred revenue expenditure.
 
 (c) Deferred Revenue expenditure includes development expenses on
 agricultural produce. These expenses are set off against revenue from
 agricultural produce when accrue/arise. The agricultural income earned
 during the year is net of such expenses.