a. System of Accounting
 
 The Financial Statements of the Company have been prepared under the
 historical cost convention, on accrual basis, to comply in all material
 respects with the mandatory Accounting Standards issued by the
 Institute of Chartered Accountants of India and the relevant provisions
 of the Companies Act, 1956, except in the case of sale of realizable
 scrap which is accounted for on receipt basis. The accounting policies
 have been consistently applied by the company and are consistent with
 those used in the previous year,
 
 b. Revenue Recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the company and the revenuecanbe
 reliably measured
 
 i.  Revenue from sale of goods is recognised on dispatch which
 coincides with transfer of significant risks & rewards to customer and
 is net of sales returns and sales tax, wherever applicable.
 
 ii.  Interest is recognized on a time proportion basis taking into
 account the amount outstanding and the rate applicable
 
 c. Fixed assets and Depreciation
 
 i.  Fixed asse ts are stated at cost less accumulated depreciation,
 impairment losses and specific grant/subsidies if any. Cost comprises
 the purchase price, freight, duties, taxes and any attributable cost of
 bringing the asset to its working condition for its intended use.
 finance costs relating to acquisition of fixed assets are included to
 the extent they relate to the period till such assets arereadv for
 intended use.
 
 ii.  Expenditure directly relating to construction activity is
 capitalized. Indirect expenditure is capitalized to the extent it
 relates to the construction activity or is incidental thereto. Income
 earned during construction period is deducted from the total
 expenditure relating to construction activity.
 
 iii.  Assets retired from active use and held for disposal are stated
 at their estimated net realizable values or net book values, whichever
 is lower.
 
 iv, The carrying amount of fixed assets are reviewed at each balance
 sheet date when required to assess whether they are recorded in excess
 of their recoverable amounts, and where carrying values exceed the
 estimated recoverable amount, assets are written down to their
 recoverable amount.
 
 v.  Depreciation is provided on written down value method, at the rate
 specified in schedule XIV to the Companies Act, 1956.
 
 d. Research and Product Development costs:
 
 Research costs which is of revenue nature is charged to revenue, while
 capital expenditure is included in the respective heads under fixed
 assets.
 
 e. Investments
 
 i.  Investments that are readily realizable and intended to be held for
 not more than a year are classified as current investments. All other
 investments are classified as long term investments.
 
 ii.  Long-term investments are carried atcost. However, provisions
 fordiminution in value is made to recognize a decline, other than
 temporary, in the value of the investments.  Current investments are
 carried at lower of cost and fair value determined on individual
 investment basis.
 
 f. Inventories
 
 i.  Raw materials, packing materials, stores, spares and consumables
 are valued at cost, calculated on First- in first out basis.  Items
 held for use in the production of inventories are not written down
 below cost if the finished product in which they will be incorporated
 are expected to be sold at or above cost.
 
 ii.  Finished goods and Work-in-process are valued at lower of cost or
 net realizable value.  Cost includes materials, labour and a proportion
 of appropriate overheads.
 
 iii.  Trading goods are valued at lower of cost or netrealizable value
 
 iv.  Net realizable value is the estimated selling price in the
 ordinary course of business, reduced by the estimated costs of
 completion and costs to effect the sale.
 
 v.  Management has carried out physical verification of stock.
 
 g. Retirement and other Employee Benefits
 
 i.  Contribution to Provident Fund, which is a defined contribution
 plan, are charged to the profit and loss account on an accrual basis.
 
 ii.  Gratuity is a defined benefit obligation and is provided for on
 the basis of an actuarial valuation made at the end of each financial
 year.
 
 h. Income Tax
 
 Tax expense consists of both current and deferred taxes. Current income
 tax is measured at the amount expected to be paid to the tax
 authorities in accordance with the Indian Income Tax Act, 1961.
 Deferred income taxes reflect the impact of currency year timing
 differences between taxable income and accounting income for the year
 and reversal of timing differences of earlier years. Deferred tax is
 measured based on the tax rates and the tax laws enacted or
 substantively enacted at the balance sheet date.
 
 i. Earnings per Share
 
 Basic Earnings per share is calculated by dividing the net profit or
 loss for the period attributable to equity shareholders and the
 weighted average number of shares outstanding during the period an
 adjusted for the effects of all dilutive potential equity shares.
 
 j. Provisions
 
 A provision is recognized when the Company has a present obligation as
 a result of past event i.e., it is probable that an outflow of
 resources will be required to settle the obligation in respect of which
 a reliable estimate can be 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 the current best
 estimates.