A Basis for preparation of financial statement
 
 The financial statements have been prepared and presented under the
 historical cost convention on accrual basis of accounting, in
 accordance with the accounting principles generally accepted in India
 and comply with the mandatory accounting standards issued by the
 Institute of Chartered Accountants of India and the relevant provision
 of the Companies Act, 1956 except where otherwise stated, the
 accounting principals have been consistently applied.
 
 B Use of Estimates
 
 The preparation of financial statements is in conformity with generally
 accepted accounting principles if requires management to make
 assumptions and estimates, which it believes are reasonable under the
 circumstances that affect the reported amounts of assets, liabilities
 and contingent liabilities on the date of financial statements and the
 reported amounts of revenue and expenses during the year. Actual
 results could differ from those estimates.  Difference between the
 actual results and estimates are recognized in the year in which the
 results are known/materialized.
 
 C Revenue recognition:
 
 Revenue is recognized to the extent that it can be reliably measured
 and is probable that the economic benefits will flow to the company.
 The Company recognizes sales at the point of dispatch of goods to the
 customers. All other income are recognized as revenue, when earned or
 when the right to receive is established.
 
 D Fixed Assets:
 
 i. Fixed Assets are stated at cost of acquisition or construction less
 accumulated depreciation. The cost of fixed assets includes non
 refundable taxes and levies, freight and other incidental expenses
 related to the acquisition and installation of the respective assets
 and reducing there from modvat credit received / receivable, if any.
 Borrowing cost attributable to acquisition or construction of fixed
 assets are capitalized to respective assets.
 
 ii. The computer software cost are capitalized and recognized as
 intangible assets in terms of the Accounting Standards 26 on Intangible
 Assets based on materiality, accounting prudence and significant
 economic benefit therefrom expected to flow for a period longer than
 one year. Capitalized costs include direct costs of implementation and
 expenses directly attributable to the development of software.
 
 iii. Advances paid towards the acquisition of fixed assets outstanding
 at each Balance Sheet Date and the cost of fixed assets not put for
 their intended use before such date are disclosed under capital work in
 progress.
 
 E Depreciation:
 
 i. Depreciation on fixed assets (except lease hold land and information
 technology assets) is provided on straight-line method at the rates and
 in the manner prescribed in Schedule XIV to the Companies Act, 1956.
 
 ii. Computer Software cost capitalized is amortized over estimated
 useful life of 3 to 5 years as estimated at the time of capitalization.
 
 F Inventories:
 
 i. Stock of Raw Materials and Finished Goods are valued at lower of
 cost or realizable value. The cost of Raw Materials is determined on
 FIFO basis. The cost of Finished Goods produced is determined on
 weighted average basis whereas cost of Finished Goods traded is
 determined on FIFO basis.
 
 ii. The stocks of Packing Materials, Consumables Stores, Promotional
 Materials & Stock-in-Process are valued at cost. The cost of Packing
 Materials, Consumable Stores & Promotional Material is determined on
 FIFO basis. The cost of Work In Progress produced is determined on
 weighted average basis.
 
 G Retirement Benefits:
 
 i. Short term employee benefits are recognized as expense in the profit
 and loss account of the year in which service is rendered.
 
 ii. Contribution to defined contribution schemes such as Provident
 Fund, Family Pension Fund and ESI Fund are charged to the profit and
 loss account
 
 iii The defined benefit obligations in respect of gratuity are
 recognized on the basis of valuation done by an independent actuary
 applying project unit credit method. The actuarial gain / loss arising
 during the year and recognized in the profit and loss account of the
 year.  The company has an employees'' gratuity fund managed by the Life
 Insurance Corporation of India (LIC).
 
 iv.  Leave encashment is charged to revenue on accrual basis.
 
 H Investments:
 
 i. Long Term Investments are stated at cost and provision is made to
 recognize any diminution in value other than that of a temporary
 nature.
 
 ii. Current investments are carried at lower of cost and market value.
 Diminution in value is charged as a loss in profit and loss account.
 
 I Foreign Exchange Transactions
 
 i. The Transactions in Foreign Currency have been accounted at the
 exchange rate prevailing on the date of the transaction. Year-end
 Receivables / Payables have been translated at the year-end rate of
 exchange. The difference on account of fluctuation in the rate of
 exchange as prevailing on Sales / Purchase transaction date and on
 Realization / Payment / year-end date are recognized in Profit & Loss
 Account.
 
 ii. Investment in shares in Foreign Subsidiaries and other companies
 abroad are expressed in reporting currencies at the rate of exchange
 prevailing at the time when the original investments were made.
 
 iii. Foreign Exchange Gain or Foreign Exchange losses arising out of
 revaluation in respect of outstanding FCCB at the Balance Sheet date
 shall be recognised in the books of accounts and amount of such gains /
 losses shall be disclosed as extra-ordinary item in Profit & Loss
 account .
 
 iv. The premium payable on redemption of FCCB shall be provided in the
 books of accounts as per the terms of the Offering Circular. The
 Premium on Redemption of FCCB will first be adjusted from Share Premium
 available and after full utilization of Share Premium, the balance
 would be adjusted from Free Reserves or charged to Profit & Loss
 Account and premium so payable shall be disclosed separately.
 
 J Research and Development:
 
 Research and Development costs (other than cost of fixed assets
 acquired) are charged as an expense in the year in which they are
 incurred.
 
 K Income/Expenditure during construction period:
 
 Revenue Expenditure during construction are capitalized to respective
 assets. Similarly revenue incomes during construction are reduced from
 respective assets.
 
 L Provisions, Contingent Liabilities and Contingent Assets:
 
 The Company makes a provision when there is a present obligation as a
 result of a past event where the outflow of economic resources is
 probable and a reliable estimate of the amount of obligation can be
 made.
 
 A disclosure is made for possible or present obligations that may but
 probably will not require outflow of resources or where a reliable
 estimate cannot be made, as a contingent liability in the financial
 statements.
 
 Contingent asset is neither recognized nor disclosed in the financial
 statements.
 
 M Miscellaneous Expenditure (to the extent not written off):
 
 Security Issue Expenses and other Deferred Revenue Expenses shall be
 amortized on the basis of 1/5th of the total expenses and the extent to
 which they are not written off shall be disclosed in the Balance Sheet.
 
 N Provision for Current & Deferred tax
 
 Provision for Ta x for the year comprises Current Income Ta x and
 Deferred Tax.
 
 Provision for Current Ta x is determined after taking into
 consideration the provision of the Income tax Act, 19 61 relevant for
 the fiscal year as applicable or substantively enacted as on the
 balance sheet date.
 
 Deferred tax resulting from timing differences between Taxable &
 Accounting Income is accounted for using the tax rates and laws that
 are enacted or substantively enacted as on the balance sheet date. The
 deferred tax asset is recognized and carried forward only to the extent
 that there is a virtual certainty that the asset will be realized in
 future.
 
 O Lease
 
 Assets taken on lease, under which all the risks and rewards of
 ownership are effectively retained by the lessor, are classified as
 operating lease. Operating lease payments are recognized as expense in
 the Profit and Loss Account.