1) GENERAL
 
 a) The financial statements are prepared in accordance with Indian
 Generally Accepted Accounting Principles (GAAP) under the historical
 cost convention on the accounting principles of a going concern and the
 Company follows mercantile system of accounting and recognizes income
 and expenditure on accrual basis except those with significant
 uncertainties. GAAP comprises mandatory accounting standards issued by
 the Institute of Chartered Accountants of India (ICAI), the
 provisions of the Companies Act, 1956 and guidelines issued by the
 Securities and Exchange Board of India. Accounting policies have been
 consistently applied except where a newly issued accounting standard is
 initially adopted or a revision to an existing accounting standard
 requires a change in accounting policy hitherto in use.
 
 b) The preparation of financial statements in conformity with GAAP
 requires management to make estimates and assumptions that affect the
 reported amount of assets, liabilities, revenues and expenses and
 disclosure of contingent liabilities on the date of financial
 statements. The recognition, measurement, classification or disclosure
 of an item or information in the financial statements is made relying
 on these estimates. Any revision to accounting estimates is recognized
 prospectively.
 
 2) FIXED ASSETS
 
 a) All fixed assets are stated at cost (net of CENVAT / Value Added
 Tax) less accumulated depreciation and impairment loss, if any.
 Expenditure during construction period in respect of new project/
 expansion is allocated to the respective fixed assets on their being
 ready for intended use.
 
 b) In accordance with AS 28 on ''Impairment of Assets'' issued by The
 Institute of Chartered Accountants of India, where there is an
 indication of impairment of the Company''s assets related to cash
 generating units, the carrying amounts of such assets are reviewed at
 each balance sheet date to determine whether there is any impairment.
 The recoverable amount of such assets is estimated as the higher of its
 net selling price and its value in use. An impairment loss is
 recognized is recognized in the Profit & Loss Accounts whenever the
 carrying amount of such assets exceeds its recoverable amount.
 
 3) INVESTMENTS
 
 Investments are either classified as current or long-term based on the
 management''s intention at the time of purchase. Long-term investments
 are carried at cost and provision is made to recognize any decline,
 other than temporary, in the value of such investments. Current
 investments are valued at the lower of the cost and fair value and
 provision is made to recognize any decline in the carrying value.
 
 4) INVENTORIES
 
 Inventories are valued at lower of cost and estimated net realizable
 value except scrap which is valued at net realizable value. Cost is
 determined on First-in-First Out basis.
 
 The cost in case of finished goods and semi-finished goods includes
 cost of purchase, cost of conversion and other costs incurred in
 bringing the inventories to their present location and condition.
 
 5) REVENUE RECOGNITION
 
 Revenue is recognized when the property and all the significant risks
 and rewards of ownership are transferred to the buyer and no
 significant uncertainty exists regarding the amount of consideration.
 Local sales are inclusive of excise duty and sales tax.
 
 Dividend income on investments is accounted for when the right to
 receive the payment is established.
 
 Interest income is recognized using time proportion method.
 
 6) BORROWING COST
 
 Borrowing Costs directly attributable to acquisition and construction
 of qualifying assets are capitalized as a part of the cost of such
 asset upto the date when such asset is ready for its intended use.
 Other borrowing costs are charged to Profit & Loss Account.
 
 7) DEPRECIATION
 
 Depreciation is provided on Straight Line Method at the rates and in
 the manner prescribed in Schedule XIV to the Companies Act, 1956 read
 with relevant circulars issued from time to time by the Department of
 Company Affairs.
 
 Individual assets costing less than Rs. 5,000 are depreciated in full
 in the year of acquisition.
 
 Depreciation on additions / deletions of assets during the year is
 provided on pro-rata basis.
 
 8) EMPLOYEE BENEFITS
 
 a) Provident Fund Provident Fund is a defined contribution scheme and
 the contributions are charged to the Profit and Loss Account as
 incurred.
 
 b) Gratuity Gratuity is a defined benefit retirement plan and being
 accounted for on cash basis.
 
 c) Liability for leave encashment is accounted for on cash basis.
 
 9) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions denominated in foreign currency are recorded at the rate
 of exchange in force at the date of transactions. Gain and loses
 resulting from settlement of such transactions and from the transaction
 of monetary assets and liabilities denominated in foreign currencies
 are recognised in Profit and Loss Account.
 
 Premium in respect of forward foreign exchange contract is recognised
 over the life of the contracts. With respect to foreign exchange
 contracts entered into for highly probable future transactions or firm
 commitments, mark to market losses, if any, is recognized at the
 Balance Sheet date in view of the principle of prudence enunciated in
 AS - 1.
 
 10) TAXATION
 
 Income tax expenses comprise current tax (i.e., amount of tax for the
 year determined in accordance with the income tax law) and deferred tax
 charges or credit (reflecting the tax effects of timing differences
 between accounting income and taxable income of the year).
 
 The deferred tax charge or credit and the corresponding deferred tax
 liabilities or assets are recognized using the tax rates that have been
 enacted or substantively enacted by the balance sheet date. Deferred
 tax on assets are recognized and carried forward only if there is a
 virtual / reasonable certainty of realization of such assets in near
 future and are reviewed for their appropriateness of their respective
 carrying value at each balance sheet date.
 
 Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid
 in terms of Section 115JAA of the Income Tax Act, 1961 based on
 convincing evidence that the Company will pay normal tax within the
 statutory time frame and the same is reviewed at each Balance Sheet
 date.
 
 11) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 A provision is made based on a reliable estimate when it is probable
 that an outflow of resources embodying economic benefits will be
 required to settle an obligation. Contingent liabilities, if any are
 disclosed in the notes to accounts and are determined based on the
 management perception that these liabilities are not likely to
 materialize. Contingent assets are not recognized or disclosed in the
 financial statements.