a) The financial statements are prepared under the historical cost
 convention and have been prepared in accordance with applicable
 mandatory Accounting Standards and relevant presentational requirements
 of the Companies Act, 1956.
 
 b) Fixed Assets are stated at cost less depreciation. The cost of fixed
 assets includes interest on specific borrowings obtained for the
 purpose or acquiring fixed assets up to the date of commissioning of
 the assets and other incidental expenses incurred up to that date.
 
 c) Plant and machinery includes expenses incurred on erection and
 commissioning, foundation, laboratory equipment, air and water
 pollution devices, electric installations, technical know-how fees,
 tools, and miscellaneous fixed assets other than land, building,
 furniture & fixture, vehicles, office equipments, computer equipments
 and air conditioning equipments. Technical know-how fee is inseparable
 and hence treated as part of plant & machinery. No adjustment is
 required to be made as per accounting standard 26 on intangible assets,
 issued by the Institute of Chartered Accountants of India.
 
 d) Long term investments are valued at cost. Where investments are
 reclassified from current to long term, transfers are made at the lower
 of cost and fair value at the date of transfer.
 
 e) Inventories of raw materials, stock-in-process, semi finished
 products, stores, packing materials, spares and loose tools, finished
 products are valued at lower of cost or net realizable value. In
 determining the cost, first in first out method is used .
 
 f) Prior year expenses / income, if any are adjusted in the respective
 head of expenses/ income. This has no effect on the working result of
 the Company.
 
 g) Depreciation has been provided on the straight-line method at rates
 and in the manner prescribed in Schedule XIV of the Companies Act,
 1956.Deprivation on addition to assets or sales / discardment of assets
 is calculated on pro rata basis from the date of such addition or upto
 the date of such discernment as the case may be.
 
 h) Provision for employee benefits charged on accrual basis is
 determined based on Accounting standard (AS) 15 (Revised) Employees
 Benefits issued by the Institute of Chartered Accountants of India as
 under:
 
 I) Contribution to provident fund scheme is charged to revenue.
 
 II) Liability for gratuity and privilege leave is determined on
 actuarial basis..
 
 i) The Government grants are recognized only on the assurance that the
 same will be received. The Government grants in respect of capital
 investment have been shown as capital reserve.
 
 j) Contingent liabilities are not provided for and are disclosed by way
 of notes. This has no effect on the working result of the Company.
 
 k) Income Tax are accounted for in accordance with Accounting Standard
 -22 on Accounting for Taxes on Income. Income Tax Comprise of both
 current and deferred Tax.
 
 Current Tax is measured at the amount expected to be paid to /
 recovered from the revenue authorities, using applicable tax rates and
 laws.
 
 The tax effect of the timing differences that result between taxable
 income and accounting income and are capable of reversal in one or more
 subsequent periods are recorded as Deferred Tax Asset or Deferred Tax
 Liability. Deferred Tax Assets and Liabilities are recognized for
 future tax consequences attributable to timing differences.  They are
 measured using substantively enacted tax rates and tax regulations.
 
 l) Foreign currency transactions denominated in foreign currencies are
 normally recorded at the exchange rate prevailing at the time of the
 transaction.
 
 m) Borrowing costs are directly attributable to the acquisition,
 construction or production of qualifying assets is capitalized till the
 month in which the assets is ready to use as part of the cost of that
 asset. Other interest and borrowing costs are charged to revenue.
 
 n) In case of the new industrial unit, all the operating expenditure
 (including borrowing costs) specifically for the project, incurred upto
 the date of installation, is capitalized and added pro-rata to the cost
 of fixed assets.
 
 o) Consignment sale is shown at net of expenses and are recognized when
 goods are sold to a third party.
 
 p) In the opinion of the company''s Management, there is no impairment
 to the assets to which Accounting Standard 28 Impairment of Assets
 applied requiring any revenue recognisition.