1.01 Basis of Preparation of Financial Statements
 
 The financial statements have been prepared and presented under the
 historical cost convention on the accrual basis of accounting except
 interest on Margin Money Deposits in accordance with the Generally
 Accepted Accounting Principles in India and comply with the Accounting
 Standards (AS) notified under Section 211 (3C) of the Companies Act,
 1956 and other relevant provisions of the Companies Act, 1956, to the
 extent applicable. The financial statements are presented in Indian
 Rupees (Rs. in Lakhs).
 
 1.02 Use of Estimates
 
 The preparation of financial statements in conformity with Indian GAAP
 requires management to make estimates and assumptions that affect the
 reported amounts of assets and liabilities and disclosure of contingent
 liabilities on the date of the financial statements. Actual results
 could differ from those estimates. Any revision to accounting estimates
 is recognised prospectively in current and future periods.
 
 1.03 Fixed Assets
 
 a) Fixed assets are carried at cost of acquisition less accumulated
 depreciation. The cost of fixed assets comprises the purchase price
 (net of rebates and discounts) and any other directly attributable
 costs of bringing the assets to working condition for their intended
 use. Borrowing costs directly attributable to acquisition of those
 fixed assets which necessarily take a substantial period of time to get
 ready for their intended use are capitalized.
 
 b) Advances paid towards acquisition of Fixed Assets outstanding at
 each Balance Sheet date and the cost of Fixed Assets not ready for
 their intended use before such date are disclosed as capital
 work-in-progress.
 
 1.04 Intangible Assets
 
 Intangible Assets are stated at cost of acquisition less accumulated
 depreciation.
 
 1.05 Depreciation
 
 a) Depreciation on Fixed Assets is provided using the straight-line
 method as per the rates prescribed in Schedule XIV to the Companies
 Act, 1956.
 
 b) The rates of depreciation prescribed in Schedule XIV to the
 Companies Act, 1956 are considered as minimum rates. If the
 management''s estimate of the useful life of a Fixed Asset at the time
 of acquisition of the Asset or of the remaining useful life on a
 subsequent review is shorter than envisaged in the aforesaid schedule,
 depreciation is provided at a higher rate based on the management''s
 estimate of the useful life/remaining useful life.
 
 c) Depreciation is calculated on a pro-rata basis from/upto the date
 the assets are purchased/sold.
 
 1.06 Investments
 
 a) Investments are classified as current or long-term in accordance with
 Accounting Standard 13 on Accounting for Investments.
 
 b) Current Investments are stated at lower of cost and fair value. Long
 Term Investments are stated at cost. Provision for diminution in the
 value of long-term investments is made only if such a decline is other
 than temporary.
 
 c) The investments in fully owned subsidiaries are carried out at the
 cost of acquisition as the same are long term investments.
 
 1.07 Revenue Recognition
 
 a) Revenue is recognized when it is earned and to the extent that it is
 probable that the economic benefits will flow to the company and the
 revenue can be reliably measured.
 
 b) Revenue from sale of goods is recognized on delivery of the
 products, when all significant contractual obligations have been
 satisfied, the property in the goods is transferred for a price,
 significant risks and rewards of ownership are transferred to the
 customers and no effective ownership is retained.
 
 c) Sales are net of sales returns and trade discounts. Export turnover
 includes related export benefits. Excise duty and VAT are recovered is
 presented as a reduction from gross turnover.
 
 d) Interest revenue on fixed deposits is recognized on accrual basis.
 
 1.08 Inventories
 
 Inventories are valued at the lower of Cost or Net Realizable Value.
 Cost of Inventories comprise all costs of purchase, costs of conversion
 and other costs incurred in bringing the inventories to their present
 location and condition. Cost is arrived at,
 
 a) In case of raw materials and other trading products on weighted
 average cost method.
 
 b) In case of stores and spares on weighted average cost method.
 
 c) In case of work in process and finished goods, includes material
 cost, labour, manufacturing overheads.
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion to make the
 sell.
 
 1.09 Employee Benefits
 
 a) Short-term employee benefits
 
 All employee benefits falling due wholly within twelve months of
 rendering the services are classified as short term employee benefits.
 The benefits like salaries, wages, short term compensated absences etc.
 and the expected cost of bonus, ex-gratia are recognised in the period
 in which the employee renders the related service.
 
 b) Post-employed benefits
 
 i) Long-term employee benefits (benefits which are payable after the
 end of twelve months from the end of the period in which the employees
 render service) and post-employment benefits (benefits which are
 payable after completion of employment) are measured on a discounted
 basis by the Projected Unit Credit Method on the basis of annual third
 party actuarial valuations.
 
 ii) Contributions to Provident Fund, a defined contribution plan are
 made in accordance with the statute, and are recognized as an expense
 when employees have rendered service entitling them to the
 contributions.
 
 iii) The gratuity benefit obligations recognized in the Balance Sheet
 represents the present value of the obligations as reduced by the fair
 value of plan assets. Any asset resulting from this calculation is
 limited to the discounted value of any economic benefits available in
 the form of refunds from the plan or reductions in future contributions
 to the plan.
 
 1.10 Foreign Currency Transactions
 
 a) Foreign currency transactions are recorded in the reporting currency
 at the exchange rates prevailing on the date of the transaction.
 
 b) Exchange differences arising on the settlement of monetary items on
 reporting company''s monetary items at rates different from those at
 which they were initially recorded during the year, or reported in
 previous financial statements, are recognized as income or as expenses
 in the year in which they arise.
 
 c) Non-monetary items such as investments are carried at historical
 cost using the exchange rates on the date of the transaction.
 
 d) Closing Monetary Foreign Current assets and current liabilities have
 been re-instated in the reporting currency at the exchange rate
 prevailing on Balance Sheet date, in accordance with Accounting
 Standard 11 on The Effects of changes in Foreign Exchange Rates The
 difference arising on these transactions being charged/revenue to
 Statement of Profit and Loss.
 
 1.11 Taxes on Income
 
 a) Income taxes are accounted for in accordance with Accounting
 Standard 22 on Accounting for Taxes on Income.
 
 b) Taxes comprise both current and deferred tax. Current tax is
 measured at the amount expected to be paid/recovered from the revenue
 authorities, using the applicable tax rates and laws.
 
 c) Minimum alternate tax (MAT) paid in accordance with the tax laws,
 which gives rise to future economic benefits in the form of adjustment
 of future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal tax after the tax
 holiday period. Accordingly, it is recognized as an asset in the
 balance sheet when it is probable that the future economic benefit
 associated with it will flow to the Company and the asset can be
 measured reliably.
 
 d) The tax effect of the timing differences that result between taxable
 income and accounting income and are capable of reversal in one or more
 subsequent periods are recorded as a deferred tax asset or deferred tax
 liability.
 
 e) Deferred tax assets and liabilities are recognized for future tax
 consequences attributable to timing differences. They are measured
 using the substantively enacted tax rates and tax regulations.
 
 f) The carrying amount of deferred tax assets at each balance sheet
 date is reduced to the extent that it is no longer reasonably certain
 that sufficient future taxable income will be available against which
 the deferred tax asset can be realized.
 
 g) Tax on distributed profits payable in accordance with the provisions
 of Section 115O of the Income Tax Act, 1961 is in accordance with the
 Guidance Note on Accounting for Corporate Dividend Tax regarded as a
 tax on distribution of profits and is not considered in determination
 of profits for the year.
 
 1.12 Earnings per Share
 
 a) The Company reports basic and diluted Earnings Per Share (EPS/DEPS)
 in accordance with Accounting Standard 20 on Earnings Per Share.
 Basic EPS is computed by dividing the net profit or loss for the year
 by the weighted average number of equity shares outstanding during the
 year.
 
 b) Diluted EPS is computed by dividing the net profit or loss for the
 year by the weighted average number of equity shares outstanding during
 the year as adjusted for the effects of all dilutive potential equity
 shares from the exercise of Convertible Share Warrants of un-issued
 share capital, except where the results are anti-dilutive.
 
 1.13 Leases
 
 a) Leases under which the Company assumes substantially all the risks
 and rewards of ownership are classified as finance leases. Such assets
 acquired on or after 1st April 2001 are capitalized at the fair value
 or the present value of minimum lease payments at the inception of the
 lease, whichever is lower.
 
 b) Lease income from assets given on operating lease is recognized as
 income in the Statement of Profit and Loss. Lease payments for assets
 taken on operating lease are recognized as expense in the Statement of
 Profit and Loss.
 
 1.14 Segment Reporting
 
 Disclosure is made as per the requirements of the Standard. Details
 have furnished under Note No. 2.30 of Notes to Accounts.
 
 1.15 Impairment of Assets
 
 a) The Company assesses at each Balance Sheet date whether there is any
 indication that any assets forming part of its cash generating units
 may be impaired. If any such indication exists, the Company estimates
 the recoverable amount of the asset. If such recoverable amount of the
 asset or the recoverable amount of the cash generating unit to which
 the asset belongs to is less than its carrying amount, the carrying
 amount is reduced to its recoverable amount. The reduction is treated
 as an impairment loss and is recognized in the Statement of Profit and
 Loss.
 
 b) If at the Balance Sheet date, there is an indication that a
 previously assessed impairment loss no longer exists, the recoverable
 amount is re-assessed and the asset is reflected at the re-assessed
 recoverable amount subject to a maximum of depreciated historical cost.
 
 1.16 Provision for Doubtful Debts/Advances
 
 a) Provision for doubtful debts/advances is made when there is
 uncertainty of realization of debts which are long outstanding. All
 debts which are over and above one year are provided in full unless
 there is certainty of its recovery.
 
 b) In addition to the above, provision is also made in respect of dues
 in respect of which suits are filed. Writing off doubtful
 debts/advances are made when the un-realisability is established.
 
 1.17 Provisions, Contingent Liabilities and Contingent Assets
 
 a) 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.
 
 b) Contingent Liabilities are not recognised but are disclosed in the
 notes.
 
 c) Contingent Assets are neither recognised nor disclosed in the
 financial statements.
 
 1.18 Cash Flow statement
 
 Cash Flow Statement has been prepared using the Indirect Method as
 per the Accounting Standard 3 on Cash Flow Statements.
 
 1.19 Borrowing cost
 
 a) Borrowing Costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use.
 
 b) All other borrowing costs are charged to Statement of Profit and
 Loss.
 
 1.20 Related party disclosure
 
 Disclosure is made as per the requirements of the Standard and as per
 the clarifications issued by the Institute of Chartered Accountants of
 India.
 
 1.21 Interim Financial Reporting
 
 Quarterly financial results are published in accordance with the
 requirement of Listing Agreement with Stock Exchanges. The recognition
 and measurement principle as laid down in the Standard have been
 followed in the preparation of these results.