A.  Basis of Accounting:
 
 The financial statements are prepared under the historical cost
 convention on the accrual basis of accounting in accordance with the
 generally accepted accounting principles, the applicable mandatory
 Accounting Standards and the relevant provisions of the Companies Act,
 1956.
 
 B.  Use of Estimates:
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities
 disclosure of contingent liabilities as on the date of the financial
 statements and the reported amounts of revenues and expenses during the
 reporting period. Differences between actual results and estimates are
 recognized in the period in which the results are known/ materialized.
 
 C.  Revenue Recognition:
 
 i) The company recognizes sales at the point of dispatch of goods to
 the customers.
 
 ii) Dividend income recognized when the right to receive the same is
 established.
 
 iii) Interest income is recognized on the time proportion basis.
 
 D.  Fixed Assets:
 
 I.  Fixed Assets are stated at cost of acquisition/revaluation and
 pre-operative expenses capitalized forms part of the value of assets
 less accumulated Depreciation.
 
 II.  Own Fabricated Plant & Machinery are capitalized at cost including
 an appropriate share of overheads.
 
 III. Gross Block of Fixed Assets includes assets purchased under hire
 purchase agreements.
 
 E.  Depreciation:
 
 Depreciation is provided under the straight line method at the rates
 specified in schedule XIV of the Companies Act 1956. Lease hold Lands
 are not depreciated.
 
 F.  Investments:
 
 Investments are classified into current and long-term investments.
 Long-term investments are carried at cost.  Cost of acquisition
 includes all costs directly incurred on the acquisition of the
 investment after providing for diminution in value, if such diminution
 is of permanent nature.
 
 G. Inventories:
 
 I.  Raw Materials valued at cost or net realized value, whichever is
 lower.
 
 II.  Work in progress valued at cost or net realized value, whichever
 is lower.
 
 III.  Finished goods are valued at cost [including Excise Duty
 payable].
 
 IV. Stores and Spares and packing materials are stated at cost or net
 realized value, whichever is lower.
 
 H. Debtors & Advances:
 
 Debtors & Advances are stated at book value and no provision is made
 for Doubtful Debts.
 
 I.  Foreign Currency Transactions:
 
 a.  Transactions in foreign currencies are converted in Rupees at rate
 prevailing on the date of transaction.  Monetary assets and liabilities
 denomination in foreign currency are translated at the period end
 exchange rates.  Gains/losses arising on account of
 realisation/settlement of foreign exchange transactions and on
 translation of foreign currency assets and liabilities are recognised
 in the Profit and Loss Account.
 
 b.  All Foreign Currency liabilities and monetary assets are stated at
 the exchange rate prevailing as at the date of Balance Sheet and the
 difference taken to Profit & Loss account as Exchange Fluctuation loss
 or gain.
 
 J.  Export Benefit:
 
 Export benefits in respect of exports made under the Duty Entitlement
 Pass Book (DEPB) scheme as per the Import and Export policy have been
 accounted on cash basis.
 
 K. Employee Benefits:
 
 i) Post-employment Benefits
 
 a) Defined Contribution Plans:
 
 The Company has Defined Contribution Plan for Post employment benefit
 in the form of Provident Fund for all employees which are administrated
 by Regional Provident Fund Commissioner.
 
 b) Defined Benefit Plans:
 
 Funded Plan: The Company has defined benefit & Leave Encashment plan
 for Post-employment benefit in the form of Gratuity for all employees.
 Liability for above defined benefit plan is provided on the basis of
 valuation, as at the Balance Sheet date, the actuarial method used for
 measuring the liability is the Projected Unit Credit method.
 
 ii) Gratuity:
 
 The Provision has been made in the accounts for the present liability
 for future payment of gratuity to employees of the company in terms of
 Payment of Gratuity act, 1972.
 
 iii) The actuarial gains and losses arising during the year are
 recognized in the Profit & Loss Account of the year.
 
 L.  Borrowing Costs:
 
 Borrowing costs that are not directly attributable to the acquisition,
 construction or production of a qualifying asset is charged to Profit &
 Loss Account
 
 M. Impairment of Assets:
 
 At Balance Sheet date, an assessment is done to determine whether there
 is any indication of impairment in the carrying amount of the company''s
 fixed assets. If any such indication exists, the asset''s recoverable
 amount is estimated. An impairment loss is recognized wherever the
 carrying amount of an asset exceeds its recoverable amount. An
 impairment loss is charged to profit and loss account in the year in
 which an asset is identified as impaired.
 
 N. Taxes on Income:
 
 Income tax expense comprises current tax and deferred tax charge or
 release. Deferred tax is recognized on timing differences, subject to
 consideration of prudence, being the differences between taxable income
 and accounting income that originates in one period and capable of
 reversal in one or more subsequent periods.
 
 O.  Contingencies:
 
 The company creates a provision for loss, contingencies arising from
 claims, litigations, assessment, fines, penalties etc when there is a
 present obligation as a result of past events that probably requires
 outflow of resources and a reliable estimate can be made of the amount
 of obligation.