1.  Principles of Consolidation
 
 a). The Financial statements of the company and its subsidiary
 companies are combined on a line- by- line basis by adding together the
 book values of like items of assets, liabilities, income & expenditure,
 after fully eliminating intra- group balances and intra- group
 transactions and unrealized gain or loss in accordance with accounting
 Standard ( AS-21) -  Consolidated Financial Statements.
 
 b) In case of foreign subsidiaries, being non-integral foreign
 operations, revenue items are consolidated at an average rate
 prevailing during the year. All assets are converted at rates
 prevailing at the end of the year. Any exchange arising during
 consolidation is recognized in the exchange fluctuation reserve.
 
 c) The difference between the costs of investment in subsidiaries, over
 the net assets at the time of acquisition of shares in the subsidiaries
 is recognized in the financial statements as Goodwill or Capital
 Reserve as the case may be.
 
 d) Minority Interest''s share of net profit of consolidated subsidiaries
 for the year is identified and adjusted against the income of the group
 in order to arrive at the net income attributable to the shareholders
 of the company.
 
 e) Minority Interest''s share of net assets of consolidated subsidiaries
 is identified and presented in consolidated balance sheet separate from
 the liabilities and equity of the Company''s shareholders.
 
 f) As far as possible, the consolidated financial statements are
 prepared using uniform accounting policies for like transactions and
 other events in similar circumstances and are presented in the same
 manner as the Company''s separate inancial statements
 
 2.  The financial statements are prepared under the historical cost
 convention on accrual basis and in accordance with generally accepted
 accounting principles in India.
 
 3.  Recognition of Income and Expenditure
 
 i) The company recognizes revenue when the significant terms of the
 arrangements are enforceable, services have been delivered and the
 collectability is reasonably assured. The method for recognizing
 revenues and costs depends on the nature of the services rendered.
 
 ii) Direct fiscal duties and taxes are charged out as an expense in the
 year in which they are paid or provided.
 
 4.  Fixed Assets and Depreciation
 
 Fixed assets are stated at cost of acquisition and include other
 direct/indirect and incidental expenses incurred to put them into use
 but excludes CENVAT availed on such assets
 
 Borrowing costs directly attributable to acquisition or construction of
 those fixed assets which necessarily take a substantial period of time
 to get ready for their intended use are capitalized.
 
 Depreciation on fixed assets is provided using the Written Down Value
 method at the rates specified in Schedule XIV to the Companies Act,
 1956.  Depreciation is calculated on a pro –rata basis from the date of
 installation till the date the assets are sold or disposed. Individual
 assets costing less than Rs. 5,000/- are depreciated full in the year
 of acquisition.
 
 5.  Investments
 
 Investments are classified as current investments and long term
 investments. Current investments are stated at lower of cost and fair
 value. Long term investments are stated at cost less provision for
 permanent diminution in value of such investments.
 
 6.  Inventories
 
 Inventories are valued at the lower of cost and net realizable value,
 including necessary provisions for obsolescence. Cost is determined
 using the weighted average method. Cost of work - in-progress and
 finished goods include material cost and appropriate share of
 manufacturing overheads.
 
 7.  Cash Flow statement is prepared in accordance with AS-3 except in
 case of Subsidiaries for which cash flow is not available due to non
 availability of information
 
 8.  Sales
 
 Revenue from sale of products is recognized when the product has been
 delivered in accordance with the sales contract. Revenue from product
 sales are shown as net of excise duty, sales tax separately charged and
 applicable discounts. Commission is recognized based on the agreement &
 arrangements made with the parties.
 
 9.  Foreign Currency Transactions:
 
 Foreign currency transactions are recorded at the rate of exchange
 prevailing on the date of the transaction. Monetary foreign currency
 assets and liabilities are translated into Rupee at the rate of
 exchange prevailing on the balance sheet date.  The difference in
 translation of monetary assets and liabilities and realized gains and
 losses on foreign currency transactions, other than those relating to
 fixed assets acquired outside India are recognized in the profit and
 loss account.
 
 10.  Foreign Currency Translation
 
 In respect of non-integral foreign operations the translation to India
 Rupees for the purpose of Consolidation is performed for Balance Sheet
 Accounts using theaverage exchange rates in effect at the Balance Sheet
 date and revenues and expenses accounts at average exchange rates for
 the respective periods. The gains or losses resulting from such
 translations are reported as separate component as a ''Exchange
 Fluctuation Reserve.
 
 11.  Retiring benefits :
 
 i) Retiring Benefits in the form of Provident Fund is not Applicable in
 the view of non applicability of the provident Fund Act.
 
 ii) The Gratuity Act is not applicable in the non- completion of
 qualifying years of service by the employees.
 
 iii) Leave encashment is paid and payable at the end of the each
 calendar year and necessary provisions if any, required is being made
 in the accounts.
 
 12.  Taxes on Income:
 
 i) Current tax is determine, under the tax payable method on the
 liability as computed after taking credit for allowances and
 exemptions.  Adjustments in books are made only after the completion of
 the assessment.
 
 ii) Deferred tax is recognized, subject to the consideration of
 prudence, on timing difference, being the difference between taxable
 incomes and accounting income, that originate in one period and reverse
 in one or more subsequent period.
 
 13.  Contingent liabilities NIL
 
 a) i) Liability towards irrevocable letters of
 credit established: Rs. Nil. (PY Rs. NIL) 
 
 ii) Liability in respect of Bank Guarantees :
 Rs. NIL . (PY NIL) 
 
 iii) Corporate Guarantees given for other
 group Companies: Rs. Nil. (PY NIL) 
 
 iv) Corporate guarantees given to Customers:
 Rs. NIL. (PY NIL)
 
 b) Show cause notices against the company not acknowledged as debt : Rs
 NIL ( PY - NIL)