a) Accounting Assumptions:
 
 The financial statements are prepared under the historical cost
 convention on the basis of a going concern on an accrual basis and they
 comply with the mandatory accounting standards referred to in Section
 211 (3C) of the Companies Act, 1956.
 
 b) Fixed Assets:
 
 Fixed assets are accounted at cost of acquisition inclusive of inward
 freight, duties, taxes, incidentals related to acquisition and
 pre-operational expenditure till commissioning of the asset. Capital
 work-in-progress comprises outstanding advances paid to acquire fixed
 assets, and the cost of fixed assets that are not yet ready for their
 intended use at the balance sheet date.
 
 c) Revenue recognition:
 
 Sales are recognized on dispatch of goods to customers and it includes
 excise duty and Value Added Tax on sale.
 
 d) Foreign currency transactions:
 
 Income and expenses in foreign currencies are converted at exchange
 rate prevailing on the date of transaction. Foreign currency monetary
 assets and liabilities are translated at the exchange rate prevailing
 on the Balance sheet date. Exchange differences on translation of
 monetary items for purchase of machinery are included in the cost of
 such assets.
 
 e) Investments:
 
 Long term investments are stated at cost. Provision is made where there
 is a permanent fall in valuation of Long term investments.
 
 f) Depreciation:
 
 Depreciation has been provided as per the rates given in Schedule XIV
 to the Companies Act, 1956.  Depreciation is charged on Plant &
 Machinery at straight-line method and on all other assets at written
 down value method.
 
 g) Inventories:
 
 Inventories including work-in-progress are valued at lower of cost or
 market value. The cost is calculated on weighted average method. Cost
 comprises expenditure incurred in the normal course of business in
 bringing such inventories to its location and includes, where
 applicable, appropriate overheads based on normal level of activity.
 
 Stocks in transit are valued at cost.  
 
 h) Employee Benefits: Short term benefits:
 
 Short term employee benefits are charged off at the undiscounted amount
 in the year in which the related services are rendered.  Long term
 benefits:
 
 Payments to the defined contribution retirement benefit schemes are
 charged as an expense as they fall due.  Under defined benefit scheme,
 Company provides for gratuity, a defined benefit retirement plan (the
 Gratuity Plan) covering eligible employees. In accordance with the
 Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum
 payment to vested employees at retirement, death, incapacitation or
 termination of employment, of an amount based on the respective
 employee''s salary and the tenure of employment. The company has taken
 master policy with Life Insurance Corporation of India under group
 gratuity scheme.  Liabilities with regard to the Gratuity Plan are
 determined by actuarial valuation as of the balance sheet date,
 
 based upon which, the Company contributes all the ascertained
 liabilities to the Life Insurance Corporation of India.
 
 The leave encashment payable to the employees is provided based on the
 actuarial valuation carried out in accordance with the AS 15.  
 
 i) Deferred Taxation:
 
 Deferred Tax, resulting from timing differences between book and tax
 profits, is accounted for under the liability method, at the current
 rate of tax.
 
 j) Government grants receivable under Industrial Investment Promotion
 Policy 2005 - 10 of Government of Andhra Pradesh are accounted based on
 verification and recommendation of the competent authority as per the
 policy of Government and in accordance with Accounting Standards 9 and
 12.