1.1 Basis of Accounting:
 
 The Financial Statements are prepared under historical cost convention
 on an accrual basis, except as stated otherwise and are in accordance
 with the requirements of the Companies Act, 1956.
 
 1.2 Use of Estimates:
 
 The preparation of financial statements, in conformity with the
 generally accepted accounting principles, require estimate and
 assumption to be made that affect the reported amount of assets and
 liabilities as on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual results and estimates are recognized in the period
 in which the results materialize.
 
 1.3 Fixed Assets:
 
 Fixed Assets are valued at cost of acquisition inclusive of Inward
 Freight, Duties, Taxes and Incidental and trail run expenses. Exchange
 Fluctuation on conversion of Outstanding Foreign currency Loans for
 acquisition of Fixed Assets are adjusted to the Cost of Assets.
 
 1.4 Depreciation:
 
 Depreciation on fixed assets is provided on Straight Line Method at the
 rates specified from time to time in schedule XIV to the Companies Act,
 1956.
 
 1.5 Inventories:
 
 The raw materials, stores and spares, packing material, consumables and
 finished goods are valued at cost or net realizable value whichever is
 lower.
 
 1.6 Sales:
 
 Sales have been accounted net of Excise Duty and discount and purchases
 have been accounted net of discounts.
 
 1.7 Foreign Exchange:
 
 Foreign currency transactions are recorded at the rates prevailing on
 the date of the transactions.  Monetary assets and liabilities in
 foreign currency are translated at year end rate or at the rates of
 exchange fixed under contractual arrangements. Exchange differences
 arising on settlement of transactions and translation of monetary items
 are recognized as income or expense.
 
 1.8 Investments:
 
 Long term Investments are stated at cost. Provision, if any, is made
 for permanent diminution in the value of Investments.
 
 1.9 Retirement Benefits for Employees:
 
 Company does not have any employees within the purview of PF /Gratuity.
 
 1.10 Prior Period and Extraordinary items;
 
 Income and Expenditure pertaining to prior period as well as
 extraordinary items wherever material are disclosed separately.
 
 1.11 State investment subsidy:
 
 State investment subsidy is shown under Capital Reserve.
 
 1.12 Earning per Share:
 
 Basic earning per share is computed by dividing the net profit or loss
 for the period attributable to equity shareholder by the weighted
 average number of equity shares outstanding during the period. Diluted
 earning per share is computed by taking into account the aggregate of
 the weighted average number of equity shares outstanding during the
 period and the weighted average number of equity shares which would be
 issued on conversion of all the dilutive potential equity shares in to
 equity shares.
 
 1.13 Impairment of Assets:
 
 At each balance sheet date, an assessment is made whether any
 indication exists that an asset has been impaired. If any such
 indication exist, an impairment loss i.e. the amount by which the
 carrying amount of an asset exceeds its recoverable amount, is provided
 in the books of accounts.
 
 1.14 Segment Reporting:
 
 Segments are identified having regard to the dominant source and nature
 of risks and returns and the internal organization and management
 structure. Revenues, Expenses and Assets and Liabilities, which relates
 to the enterprise as a whole and are not attributable to segments, are
 included under Un-allocable Corporate Expenses/Revenues and
 Assets/Liabilities.
 
 1.15 Taxes on Income:
 
 Income tax liability for the year is calculated in accordance with the
 relevant tax laws and regulations applicable to the company.
 
 Deferred Tax is recognized, Subject to the consideration of prudence,
 on timing differences, being the difference between taxable incomes and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred tax assets on
 unabsorbed Depreciation and carry forward of losses are not recognized
 unless there is virtual certainty that there will be sufficient future
 taxable income available to realise such assets.