a.  Basis of preparation of financial statements
 
 The financial statements are prepared under the historic cost
 conversion, on the basis of a going concern and as per applicable
 Notified Accounting Standards laid down in Companies (Accounting
 Standards) Rules, 2006 and relevant provisions of the Companies Act,
 1956. The Company follows mercantile system of accounting and
 recognizes Income and Expenditure on accrual basis. The accounting
 policies have been diligently applied by the Company and are consistent
 with those used in the previous year.
 
 b.  Use of estimates
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires the Management to
 make estimates and assumptions that affect the reported balances of
 assets and liabilities and disclosure of contingent assets and
 liabilities at the date of the financial statements and the results of
 operations during the period under review. Although these estimates are
 based upon the Managements best knowledge of current events and
 actions, actual results could differ from these estimates. Changes in
 estimates are reflected in the financial statements in the period in
 which changes are made, if material, their effects are disclosed in the
 notes to the financial statements.
 
 c.  Fixed Assets
 
 Fixed assets are stated at cost less accumulated depreciation and
 impairment losses, if any. Cost comprises the purchase price, expenses
 incidental to the installation of the assets, cost of bringing the
 asset to its working condition for its intended use and attributable
 borrowing costs.
 
 d.  Depreciation
 
 The Company provides depreciation on fixed assets on Straight Line
 Value Method at the rates and in the manner prescribed in Schedule XIV
 of the Companies Act, 1956. Depreciation on additions/deletions during
 the year has been provided for on pro-rata basis. Assets
 purchased/installed during the year costing less than Rs. 5, 000/- each
 are fully depreciated.
 
 e.  Impairment of Assets:
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment of the carrying amount of the
 Company''s assets. If any indication exists, the recoverable amount of
 such assets is estimated. An impairment loss is recognized wherever the
 carrying amount of the assets exceeds its recoverable amount. The
 recoverable amount is greater of the net selling price or value in use.
 Where it is not possible to estimate the recoverable amount of an
 individual asset, the Company estimates the recoverable amount of the
 cash generating unit to which the asset belongs.
 
 f.  Investments
 
 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. Current
 investments are carried at lower of cost and fair value determined on
 an individual investment basis. Long term investments are carried at
 cost.
 
 g.  Inventories
 
 Inventories are valued at lower of cost and net realizable value and
 cost is determined on FIFO/Weighted Average method. Cost of inventories
 comprises of cost of purchase, cost of conversion and other cost
 including appropriate production overhead incurred in bringing such
 inventories to their present location and condition.
 
 h.  Employee Benefits
 
 i) Post-Employment Benefit Plans:
 
 Contribution to defined contributory retirement benefit schemes are
 recognized as an expense when employees have rendered services
 entitling them to contributions. For defined benefit schemes, the cost
 of providing benefits is determined using the Project Unit Credit
 Method, with actuarial valuation being carried out at each Balance
 Sheet Date. Actuarial gains and losses are recognized in full in the
 Statement of Profit and Loss for the period in which they occur. Past
 service cost is recognized immediately to the extent that the benefits
 are already vested, and otherwise it is amortized on straight-line
 basis over the average period until the benefits become eligible for
 being vested.
 
 ii) Short Term Employee Benefits:
 
 The amount payable on account of short term employee benefits
 comprising largely of salaries and wages, annual bonus is valued on an
 undiscounted basis and charged to the Statement of Profit and Loss for
 the year.
 
 i. Revenue Recognition
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 i) Rendering of Services:
 
 Revenue consists of job work receipts which are recognized keeping in
 view the arrangements with customers or trade practice.
 
 ii) Dividend Income:
 
 Dividend income is accounted for when the right to receive is
 established.
 
 iii) Interest Income:
 
 Interest Income is recognized on a time proportionate basis taking into
 account the amount outstanding and the rate applicable.
 
 j. Borrowing Costs
 
 Borrowing costs that are directly attributable to the acquisition and
 construction of qualifying assets are capitalized as part of the cost
 of asset up to the date such asset is ready for its intended use. A
 qualifying asset is one that necessarily takes substantial period of
 time to get ready for intended use. Other borrowing costs are charged
 to the Statement of Profit and Loss in the year in which they are
 incurred.
 
 k. Taxation
 
 i) Current Tax:
 
 Provision for current taxation has been made in accordance with the
 Income Tax laws applicable to the assessment year.
 
 ii) Deferred Tax:
 
 The deferred tax asset and deferred tax liability is calculated by
 applying tax rate and tax laws that have been enacted or substantively
 enacted by the Balance Sheet date. Deferred tax assets arising mainly
 on account of brought forward losses and unabsorbed depreciation under
 tax laws are recognized only if there is a virtual certainty of its
 realization supported by convincing evidence. Deferred tax asset on
 account of other timing differences are recognized only to the extent
 there is a reasonable certainty of its realization. At each balance
 sheet date the carrying amount of deferred tax assets are reviewed to
 reassure realization. 12. In view of the losses the ability of the
 Company to continue as a going concern is dependent on the
 implementation of the rehabilitation scheme approved by the Board of
 Industrial Financial Reconstruction (Refer note 1.2 below). As a
 conservative policy Deferred Tax Assets are not recognised.
 
 l. Foreign Currency Transactions:
 
 Foreign currency transactions are dealt with in accordance with the
 Accounting Standard 11 The Effects of Changes in Foreign Exchange
 Rates, notified by the Companies (Accounting Standards) Rules, 2006.
 
 m. Earnings per Share
 
 The Company reports basic and diluted Earnings per share (EPS) in
 accordance with Accounting Standard (AS) - 20 on Earning per Share
 issued by the ICAI. Basic earnings per share are calculated by dividing
 the net profit for the period attributable to equity shareholders
 (after deducting preference dividends and attributable taxes) by the
 weighted average number of equity shares outstanding during the period.
 For the purpose of calculating diluted earnings per share, the net
 profit for the period attributable to equity shareholders and the
 weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 n. Accounting for Provisions, Contingent Liabilities and Contingent
 Assets
 
 A provision is recognized when the Company has a present obligation as
 a result of past event and 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 present
 value and are determined as best estimates required to settle the
 obligation at the Balance Sheet date.
 
 Contingent Liabilities are not recognised but disclosed by way of notes
 to accounts in case of:
 
 i) A present obligation arising from past events, when it is not
 probable that an outflow of resources will be required to settle that
 obligation;
 
 ii) A present obligation when no reliable estimate is possible; and 
 
 iii) A possible obligation arising from past events where the
 probability of outflow of resources is remote.
 
 Contingent Assets are neither recognised nor disclosed in the financial
 statements.