a) BASIS OF PREPERATION OF FINANCIAL STATEMENT :
 
 The financial statements are prepared as a going concern under
 historical cost convention on accrual basis, except those with
 significant uncertainty and in accordance with the Companies Act, 1956
 Accounting policies not stated explicitly otherwise are consistent with
 generally accepted accounting principles.
 
 All assets and liabilities have been classified as current or non
 current as per the company''s normal operating cycle and other
 criteria set out in the schedule VI (Revised) to the companies
 Act,1956. Based on the nature of products and the time between the
 acquisition of assets for processing and their realisation in cash and
 cash equivalents, the company has ascertained its operating cycle as 12
 months for the purpose of current - non current classification of
 assets and liabilities
 
 b) FIXED ASSETS :
 
 Fixed assets are stated at cost less accumulated depreciation. Cost of
 fixed assets is inclusive of pre-operative expenses (Net of revenue)
 incurred up to the date of Commissioning of project/plant, exchange
 losses or gains arising on specific foreign currency loan taken for
 acquiring the assets.
 
 c) CAPITAL WORK IN PROGRESS :
 
 All pre-operative project expenditure (net of income accrued) incurred
 upto the date of commercial production is capitalised
 
 d) CASH FLOW STATEMENT:
 
 Cash flows are reported using indirect method, where by profit/ (loss)
 before extraordinary items and tax is adjusted for the effects of
 transactions of non-cash nature and any deferrals or accruals of past
 or future cast) receipts or payments The cash flow from operating,
 investing and financing activities of the company is segregated based
 on the available information.
 
 e) DEPRECIATION AND AMORTISATION :
 
 i) Depreciation has been provided as per Straight Line Method at the
 rates and in the manner prescribed in schedule XIV to the Companies
 Act, 1956 and the relevant Accounting Standard issued by the Institute
 of Chartered Accountants of India. Plant & Machinery have been
 considered to be continuous Process Plants as defined in the said
 schedule on technical assessment and depreciation has been provided
 accordingly.
 
 II) Lease Hold Land is being amortised over the lease period.
 
 f) INVESTMENTS :
 
 i.  Quoted Investments are stated at Cost. Provision for diminution in
 long term investment is made only, if such a decline is other than
 temporary.
 
 ii.  Unquoted investments are stated at Cost.
 
 g) VALUATIONS OF INVENTORIES :
 
 Raw Materials :    Valued at Cost or Net Realisable Value whichever is
                    lower (Cost is computed using
 
                    Weighted Average Cost Method).
 
 Work-in-Progress : Valued at Cost or Net Realisable Value whichever is
                    lower (Cost includes material Cost plus appropriate
                    share of overhead)(Cost is computed Using 
                    Weighted Average Cost Method).
 
 Finished goods :
 
 i) Manufacturing 
 goods:             At Cost or Net Realisable Value whichever is
                    lower (Cost includes Cost of Purchase,
                    Conversion Cost, and other Cost i.e. overhead)
                    (Cost is computed using Weighted Average Cost 
                    Method).
 
 ii) Trading goods  At Cost or Net Realisable Value whichever is lower
                    (Cost is computed using Specific Identification
                    Method).
 
 Packing Materials, : Stores & Spare Parts
 
                    At Cost or Net Realisable Value whichever is lower
                    (Cost is Computed Using FIFO Method)
 
 Waste            : At Realisable Value
 
 h) RECOGNITION OF INCOME AND EXPENDITURE :
 
 i.  Items of Income & Expenditure are recognised on accrual basis.
 
 ii.  Sales & Purchases are accounted for as and when deliveries are
 effected.
 
 i) PROVISION, CONTINGENT LIABILITIES & CONTINGENT ASSETS :
 
 Provision involving substantial degree of estimation in measurement are
 recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognised but are disclosed in the
 notes. Contingent assets are neither recognised nor disclosed in the
 financial statement, 
 
 j) RETIREMENT BENEFITS TO EMPLOYEES :
 
 Leave Encashment : Accrued liability for leave encashment has been
 provided for as per actuarial valuation.
 
 Gratuity : Accruing liability for gratuity to employees is covered by
 the Group Gratuity-Cash-Accumulation Scheme of LIC of India and annual
 contribution due there under are paid /provided in accordance
 therewith,
 
 k) FOREIGN CURRENCY TRANSACTIONS :
 
 i.  Export Sales : At the rates as on the date of transactions.
 
 ii.  Expenditures : At the rates as on the date of transaction.
 Outstanding amounts in respect of current assets/current liabilities
 are translated at the rate as at the close of the year, at the forward
 contract rates or at the rate at which liabilities/assets are likely to
 be disbursed/realised, wherever applicable, and the exchange difference
 thereon is adjusted in the Profit & Loss Account.
 
 iii. Foreign Exchange Forward Contract : Exchange differences in
 respect of foreign exchange contract (other than for acquisition of
 fixed assets) are recognised as income or expense over the life of the
 contract.
 
 iv Bank Balance in Foreign Currency Bank Account as at dose of the year
 is translated at exchange rate as on that date, v. Loans in foreign
 currency for financing the fixed assets are converted at the prevailing
 exchange rate on the transaction dates Liabilities payable in foreign
 currencies on the date of Balance Sheet are restated and all exchange
 rate differences arising from such restatement are adjusted with the
 fixed asset 
 
 I) FINANCIAL DERIVATIVES AND COMMODITY HEDGING TRANSACTION 
 
 The company uses foreign currency forward contracts and currency
 options to hedge its risk associated with foreign currency fluctuations
 relating to certain firm commitments and forecasted transactions. The
 company designate these hedging instruments as cash flow hedges
 applying the recognition and measurement principles setout in the
 Accounting Standard 30 financial Instruments: Regulation and
 measurement (AS''30).
 
 In respect of derivative contracts, premium paid, gain/losses on
 settlement and provision for losses for cash flow hedges are recognized
 in the Profit & Loss Account, except in case, where they relate to
 borrowing costs that are attributable to the acquisition or
 construction of fixed assets, in which case, they are adjusted to the
 carrying cost of such assets 
 
 m) BORROWING COSTS :
 
 Borrowing Costs in respect of fixed Assets charged to the respective
 fixed assets till the date of commercial use and in respect of others,
 is charged to Profit & Loss Account in the year, the same has been
 incurred, 
 
 n) PROVISION FOR CURRENT AND DEFERRED TAX :
 
 Provision for Current Tax is made on the basis of taxable income for
 the current accounting period and in accordance with the provisions as
 per Income Tax Act, 1961.
 
 Deferred Tax resulting from timing difference between book and
 taxable profit for the year is accounted for using the tax rates and
 laws that have been enacted or substantially enacted as on the balance
 sheet date. The deferred tax asset is recognised and carried forward
 only to the extent that there is a reasonable certainty that the assets
 will be adjusted in future.
 
 Current income tax is measured at the amount expected to be paid to the
 tax authorities, computed in accordance with the applicable tax rates
 and tax laws. In case of tax payable as per provisions of MAT under
 section 115JB of the Income Tax Act, 1961, deferred MAT credit
 entitlement is separately recognized under the head Long-Term loans
 and Advances.  Deferred MAT credit entitlement is recognized and
 carried forward only if there is a reasonable certanity of it being set
 off against regular tax payable within the stipulated statutory period,
 
 o) IMPAIRMENT OF ASSETS :
 
 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 assets. If
 such recoverable amount of the assets or the recoverable amount of the
 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
 recognized 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.
 
 p) GOVERNMENT GRANTS / SUBSIDIES :
 
 Government grants / subsidies are recognized when there is reasonable
 certainty that the same will be received.  Revenue grants are
 recognized in the Profit & Loss Account either as income or deducted
 from related expenses. Capital grants / subsidies are credited to
 respective fixed assets where it relates to specific fixed assets.
 Other grants / subsidies '' are credited to the Capital Reserve.