A.  Basis of Accounting:
 
 The Financial Statements are prepared on accrual basis of accounting,
 in conformity with the applicable accounting principles generally
 accepted in India, and comply with the applicable accounting standards
 notified u/s 211(3C) of the Companies Act,1956 and the relevant
 provisions of the Act.
 
 B.  Fixed Assets and Depreciation:
 
 I) Fixed Assets are stated at cost less accumulated depreciation. Cost
 comprises of cost of acquisition, cost of improvements
 
 and any attributable cost of bringing the asset to the condition for
 its intended use. Interest on loans taken for procurement of specific
 assets accrued up to the date of acquisition/installation of the said
 assets is capitalised.
 
 ii) Depreciation for the year has been provided on all the fixed assets
 (except in the case of leasehold land which is being amortised over the
 period of the lease) on the Straight Line Method at the rates specified
 as per Schedule XIV to the Companies Act, 1956.
 
 C.  Investments:
 
 I) Investments, being long term, are stated at cost, less other than
 temporary diminution in value, if any.
 
 ii) Current Investments are stated at cost or fair value whichever is
 lower.  iii) Income on investment:
 
 Dividend income is accounted when the right to receive is established.
 
 D.  Inventories:
 
 Inventories are valued at the lower of cost and net realisable values,
 which are determined as follows:
 
 i) Raw Materials, (including stock lying at terminals) Packing
 Materials, Traded Goods and Stores and Spares are valued at moving 
 weighted average cost after taking credit for CENVAT,wherever applicable 
 and Material-in-transit at cost.
 
 ii) The cost of work-in-progress and finished goods comprises of raw
 materials, direct labour, other direct costs and related production
 overheads and Excise duty as applicable. Net realizable value is the
 estimate of the selling price in the ordinary course of business as
 applicable.
 
 iii) Customs Duty as applicable is included in the cost of traded goods
 and raw materials lying in stock.
 
 E.  Revenue recognition:
 
 The Company recognises sales at the point of transfer of significant
 risks and rewards of ownership to the customers. Sales are net of Sales
 Tax, Excise Duty and returns.
 
 Revenue in respect of Duty Draw back, Insurance and other claims is
 recognised only when these claims are accepted.
 
 F.  Research and Development:
 
 Capital expenditure on Research and Development is treated in the same
 manner as Fixed Assets. The Revenue expenditure on Research and
 Development is charged off as an expense in the year in which it is
 incurred.
 
 G.  Foreign Currency Transactions:
 
 The transactions in foreign currencies are accounted at the exchange
 rate prevailing on the date of transactions. Gain or loss resulting
 from the settlement of such transaction and from the translation of
 monetary assets and liabilities denominated in foreign currency are
 recognised in the Profit and Loss Account.
 
 Premium or discount in respect of forward contracts is accounted over
 the period of contracts. The exchange difference measured by the change
 in rate between date of inception of forward contract and date of
 balance sheet is applied on foreign currency amount of the forward
 contract and is recognised in the profit and loss account.
 
 H. Taxes on Income :
 
 Current Tax:
 
 Current Tax is determined as the amount of tax payable in respect of
 taxable income for the year.
 
 Deferred Tax:
 
 Deferred Tax resulting from timing differences between book and tax
 profits is accounted for under the liability method, at the current
 rate of tax, to the extent that the timing differences are expected to
 crystallise.
 
 I.  Retirement Benefits:
 
 a) In case of Defined Contribution plans, the Company''s contributions
 to these plans are charged to the Profit and Loss Account as incurred.
 Liability for Defined Benefit plans is provided on the basis of
 valuations, as at the Balance Sheet date, carried out by an independent
 actuary. The actuarial valuation method used for measuring the
 liability is the Projected Unit Credit method. The obligations are
 measured as the present value of estimated future cash flows discounted
 at rates reflecting the prevailing market yields of Indian Government
 securities as at the Balance Sheet date for the estimated term of the
 obligations. The estimate of future salary increases considered takes
 into account the inflation, seniority, promotion and other relevant
 factors. The expected rate of return of plan assets is the Company''s
 expectation of the average long term rate of return expected on
 investments of the fund during the estimated term of the obligations.
 Plan assets are measured at fair value as at the Balance Sheet date.
 The liability for leave encashment and compensated absences is provided
 on the basis of valuation, as at the Balance Sheet date, carried out by
 an independent actuary.
 
 b) Actuarial gains and losses comprise experience adjustments and the
 effects of changes in actuarial assumptions and are recognised in the
 Profit and Loss Account in the year in which they arise.
 
 J.  Provision and Contingent Liabilities:
 
 The Company recognises a provision when there is a present obligation
 as a result of a past event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of the
 obligation. A disclosure for contingent liability is made when there is
 possible obligation or a present obligation that may, but probably will
 not, require an outflow of resources.  Where there is a possible
 obligation or a present obligation that the likelihood of outflow of
 resources is remote, no provision or disclosure is made.
 
 Provisions are not discounted to its present value and are determined
 based on best estimate required to settle the obligation at the balance
 sheet date. These are reviewed at each balance sheet date and adjusted
 to reflect current best estimates.
 
 K.  Impairment of Asset :
 
 The Company assesses at each Balance Sheet date whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount of the asset. If
 such recoverable amount of asset or the recoverable amount of cash
 generating unit to which the asset belongs is less than its carrying
 amount, the carrying amount is reduced to its recoverable amount. The
 reduction is treated as an impairment loss and is recognised in the
 Profit and Loss Account. If at the Balance Sheet date there is an
 indication that if a previously assessed impairment loss no longer
 exists, the recoverable amount is reassessed and the asset is reflected
 at the recoverable amount.