1.  BASIS OF ACCOUNTING:
 
 The financial Statements are prepared on accruals basis following the
 historical cost convention in accordance with generally accepted
 accounting principles (GAAP), in compliance with the provisions of the
 Companies Act, 1957 and with the accounting standards prescribed by the
 ICAI. Revenue are recognised and expenses are accounted on their
 accrual.
 
 2.  USE OF ESTIMATES:
 
 The presentation of financial statements requires certain estimates and
 assumptions. These estimations and assumptions affect the reported
 amount of assets and liabilities on date of the financial statement and
 the reported amount of revenues and expenses during the reporting
 period. Difference between the actual result and estimates are
 recognised in the period in which the results are known/materialised.
 
 3.  FIXED ASSETS AND DEPRECIATION: 
 
 i) tangible assets:
 
 fixed Assets are stated at original cost net of tax/duty credits
 availed, if any, less accumulated depreciation and impairment losses.
 Cost of acquisition comprises all costs incurred to being the assets to
 their location and working condition up to the date the assets are put
 to use. Costs of construction are composed of those costs that relate
 directly to specific assets and those that are attributable to the
 construction activity in general and can be allotted to the specific
 assets up to the date the asset are put to use. The expenditure
 incurred during the period of construction is debited to the capital
 work-in-progress and on completion the costs are allotted to the
 respective fixed assets.
 
 Depreciation on fixed assets is provided on straight line method at the
 rates and in the manner specified in Schedule XIV of the Companies Act,
 1956.
 
 ii) intangible assets:
 
 Intangible Assets are stated at their cost of acquisition less
 accumulated amortisation and impairment losses. An asset is recognised,
 where it is probable that the future economic benefits attributable to
 the assets will flow to the enterprises and where its cost can be
 reliably measured. Specified software purchased is amortised over a
 period of three years.
 
 4.  investment:
 
 Investments are classified as current or long-term.
 
 i) Current Investments are stated at lower of cost and fair value. Any
 reduction in the carrying amount and any reversals of such reductions
 are charged or credited to the Profit and loss account.
 
 ii) Long-Term Investments are stated at cost. Provision for diminution
 is made to recognise a decline, other than temporary, in the value of
 such investments.
 
 5.  INVENTORIES:
 
 i) finished goods and work-in-process are valued at lower of cost or
 net realisable value. Cost comprises of material, labour, power,
 depreciation and appropriate portion of overheads, incurred in bringing
 the inventories to their present location and condition.
 
 ii) Raw material, material in transit, stores & spares and packing
 materials are valued at cost (Net of input credits) or net realisable
 value whichever is lower.
 
 6.  EMPLOYEE BENEFITS:
 
 i) Retirement benefits in the form of contribution to provident fund are
 charged to Profit and loss account on accrual basis and deposited in
 employees provident fund account administered by the Central
 Government.
 
 ii) Gratuity liability under the payment of gratuity act is accounted
 on accrual basis.
 
 7.  BORROWING COSTS:
 
 Borrowing costs that are attributable to the acquisition/construction
 of qualifying assets are capitalised as part of the cost of such
 assets. A qualifying asset is one that necessarily takes substantial
 period of time to get ready for its intended use. All other borrowing
 costs are charged to Profit and Loss account.
 
 8.  REVENUE RECOGNITION:
 
 i) Revenue from sale of products is recognised when the significant risk
 and rewards of ownership of the goods have passed to the buyer and
 there is no uncertainty regarding the amount of consideration or
 collectability.
 
 ii) Subsidy is recognised on the basis of the concession scheme
 announced by the Government of India from time to time. Subsidy is
 accounted for on the basis of sale made by the Company.
 
 iii) Dividend income from investments is accounted for in the year in
 which the right to receive the payment is established.
 
 9.  TAXES ON INCOME:
 
 i) Current tax is determined as the amount of tax payable on taxable
 income for the year.
 
 ii) Deferred tax are recognised on the basis of timing difference
 between the taxable income and accounting income that originate in one
 year and are capable of reversal in one or more subsequent year.
 
 10.  PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:
 
 i) Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 
 ii) Contingent liabilities are not recognised, but are disclosed in the
 notes.
 
 iii) Contingent assets are neither recognised nor disclosed in the
 financial statements.
 
 11.  NET PROFIT FOR THE PERIOD AND PRIOR PERIOD ITEM:
 
 i) All items of income and expenses pertaining to the year are included
 in arriving at the net Profit for the year unless specifically mentioned
 elsewhere in the financial statements or as required by accounting
 standards.
 
 ii) Prior period items are disclosed separately in the Profit and loss
 account.
 
 12.  FOREIGN CURRENCY TRANSACTIONS:
 
 i) Transactions in foreign currencies are recorded at the exchange
 rates prevailing on the date of transaction.  foreign currency monetary
 assets and liabilities are translated at year end exchange rates.
 Exchange difference arising on settlement of transactions and
 translation of monetary items are recognised as income or expense in
 the year in which they arise.
 
 ii) In respect of forward exchange contracts, the difference between the
 forward rate and the exchange rate at the inception of contract is
 recognised as income or expense over the period of the contract.
 
 iii) Gains or Losses on cancellation/settlement of forward exchange
 contracts are recognised as income or expense.
 
 13.  EXCISE DUTY:
 
 Excise duty is accounted on the basis of both, payments made in respect
 of goods cleared as also provision made for goods lying in bonded
 warehouses.