1 System of Accounting
 
 The financial statements of the company have been prepared to comply
 with all material aspects of the applicable Accounting Principles in
 India, the Accounting Standards issued by The Institute of Chartered
 Accountants of India and the relevant provision of the Companies Act,
 1956. The financial statements have been prepared under the historical
 cost convention and on the basis of going concern.
 
 2 Fixed Assets & Depreciation a Cost of Fixed Assets
 
 All Fixed Assets are valued at cost/revalued cost net of cenvat credit
 wherever eligible. Cost includes all expenses and borrowing cost
 attributable to the project till the date of commercial production /
 put to use.
 
 b Depreciation /Amortisation
 
 Depreciation is provided on straight line method at the rates specified
 in schedule XIV of the Companies Act 1956 on pro rata basis and the
 assets having the value upto Rs.5000 have been depreciated at the rate
 of 100%. Lease hold Land is amortised over the period of lease. The
 policy of company is to provide depreciation on the Buildings , Plant &
 Machinery and Other Fixed assests from the date of commercial
 production/ put to use.
 
 c Intangible Assets (Other Assets)
 
 Cost of product development for which the company becomes entitled to a
 Patent or DMF filed with regulatory authorities is recognised as other
 assets. The policy of company is to amortise such assets acquired upto
 31-03-2008 on straight-line basis in five subsequent years and those
 acquired after 31.3.2008 and onwards in eight subsequent years from the
 year in which these are acquired.
 
 3 Borrowing Costs
 
 Borrowing costs that are directly attributable to the
 acquisition,construction of qualifying assets have been capitalised as
 part of cost of assets. Other Borrowing costs are recognised as an
 expense in the period in which they are incurred
 
 4 Inventories
 
 Inventories are valued as under : Stores & Spares are valued at cost.
 
 Raw Materials are valued at cost on FIFO basis.
 
 Work in Process is valued at estimated cost basis or net realisable
 value whichever is less.
 
 Finished Goods are valued at cost or net realisable value whichever is
 less and is inclusive of excise duty and all expenditure directly
 attributable to production.
 
 5 Recognition of Income and Expenditure
 
 Sales are recognised when goods are supplied and are recorded net of
 rebates and sales tax but inclusive of excise duty. Expenses are
 accounted for on accrual basis.
 
 6 Foreign Currency Transactions
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing at the date of the transactions. The gain or loss arising
 from forward transactions have been stated on prorata basis over the
 terms of the contract. Foreign currency denominated current assests &
 current liablities are translated at year end exchange rates. The
 resulting gain or loss is recognised in the Profit& Loss Account.
 
 In translating the financial statement of representative foreign
 offices for incorporation in main financial statements, the monetary
 assets and liabilties are translated at the closing rates non monetary
 assets and liabilities are translated at exchange rates prevailing at
 the dates of the transactions and income and expenses items are
 converted at the yearly average rate.
 
 7 Commodity Exchange Transactions
 
 Commodity Exchange Transaction are recorded at the commodity exchange
 rate prevaling on the transaction date. Contracts remaining outstanding
 at the year end have been recorded as per year end rate and resultant
 profit and loss arising from outstanding contracts are recognised
 accordingly in the profit and loss account.
 
 8 Retirement Benefits
 
 The retirement benefits of the employees include Gratuity ,Provident
 Fund & Leave Encashment . The gratuity is funded through the Group
 Gratuity Policy with Life Insurance Corporation of India and the
 contribution to the fund is based on actuarial valuation carried out
 yearly as at 31st March. Contirbution to the provident fund is provided
 on accrual basis. The leave encashment is provided on the basis of
 employees entitlement in accordance with company''s rules.
 
 9 Employees Stock Option Scheme
 
 The accounting value of stock options representing the excess of the
 market price on the date of grant over the exercise price of the shares
 granted under Employees Stock Option Scheme of the Company, is
 amortised as Deferred Employees Compensation on a straight-line basis
 over the vesting period in accordance with the SEBI [Employee Stock
 Option Scheme and Employee Stock Purchase Scheme] Guidelines, 1999 and
 Guidance Note 18  on Share Based Payments issued by the ICAI.
 
 10 Current & Deferred Tax
 
 The provision for current tax is made at the actual rate applicable for
 the income of the year as given under the Income Tax Act, 1961. However
 deferred tax is made at the rate applicable to the subsequent financial
 year.
 
 MAT Credit Entitlement is shown under the Current Assets in the Balance
 Sheet. The same will be charged to profit & loss account in coming
 years as per the provisions of Section 115JB of Income Tax Act, 1961.
 
 11 Contingent Liabilities
 
 The company has made the provision when there is a present obligation
 as a result of a past event where the outflow of economic resources is
 probable and a reliable estimate of the amount of obligation can be
 made. Contingent Liabilities, barring frivolous claims, are disclosed
 and those liablities which are possible of maturing are provided for.
 
 12 Government Subsidy
 
 The policy of company is to account for the Government Subsidy on
 actual receipt basis.
 
 13 Export Incentives
 
 a) Obligation / entitlements on account of Advance Licences Scheme for
 import of raw materials are not accounted for but given by way of note.
 
 b) Export incentives are treated as income on export under DEPB & other
 post export incentive schemes and the same is offset & treated as
 expenditure in the year of import/utilisation of license.
 
 14 Investments
 
 Long Term Investements are being valued at cost Current Investments are
 carried at lower of cost & fair value,determined on an individual
 investment basis.
 
 15 Impairement of Assets
 
 Management periodically assesses using external and internal sources
 where there is an indication that an asset may be impaired.  An
 impairment occurs where the carrying value exceeds the present value of
 future cash flows expected to arise from the continous use of the
 assets and its eventual disposal. The impairment loss to be accounted
 for is determined as the excess of the carrying amount over the higher
 of the asset''s net sales price or present value.
 
 16 Other Accounting Policies
 
 Accounting Policies not specifically referred to are in accordance with
 generally accepted accounting principles.