I Basis of Accounting
 
 These financial statements are prepared under historical cost
 convention on an accrual basis in accordance with the Generally
 Accepted Accounting Principles in India and the Accounting Standards
 (AS) as notified under Companies (Accounting Standards) Rules, 2006.
 
 II Use of estimates
 
 The presentation of financial statements in conformity with the
 generally accepted accounting principles requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements 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.
 
 III Fixed Assets and Depreciation / Amortisation
 
 Fixed Assets including intangible assets are stated at historical cost
 (net of cenvat credit) less accumulated depreciation/ amortisation
 thereon and impairment losses, if any. Depreciation on tangible assets
 is provided on Straight Line Method at the rates specified in Schedule
 XIV to The Companies Act, 1956. Assets costing Rs. 5,000/- or less are
 depreciated at hundred percent rate on prorata basis in the year of
 purchase. Intangible assets consisting of trademarks, designs,
 technical knowhow, non- compete fees and other intangible assets are
 amortised on Straight Line Method from the date they are available for
 use, over the useful lives of the assets (10/20 years), as estimated by
 the Management considering the terms of agreement. Leasehold land is
 amortised over the period of lease.
 
 IV Leases
 
 Lease rental for assets taken on operating lease are charged to the
 Profit And Loss Account in accordance with Accounting Standard 19 on
 Leases.
 
 V Revenue Recognition
 
 Sales of products are recognised when risk and rewards of ownership of
 the products are passed on to the customers, which is generally on
 despatch of goods. Export sales are recognised on the basis of Bill of
 lading / Airway bill. Sales includes delayed payment charges and are
 stated net of returns and Vat / Sales Tax, if any.
 
 VI Investments
 
 Investments are classified into Current and Long Term Investments.
 Current Investments are valued at lower of cost and fair value.  Long
 Term Investments are stated at cost less provision, if any, for other
 than temporary diminution in their value.
 
 VII Inventories
 
 Inventories consisting of raw and packing materials, stores and spares,
 work in progress and finished goods are stated at lower of cost (Raw
 and Packing Material - Specific Identificaiton Method; Stores and
 Spares - FIFO basis; Work in Progress and Finished Goods - Weighted
 Average Method) and net realisable value.
 
 VIII Research and Development
 
 The research and development cost is accounted in accordance with
 Accounting Standard - 26 ‘Intangible Assets''. All related revenue
 expenditure incurred on original and planned investigation undertaken
 with the prospect of gaining new scientific or technical knowledge and
 understanding up to the time when it is possible to demonstrate
 probable future economic benefits, is recognised as research expenses
 and charged off to the profit and loss account, as incurred. All
 subsequent expenditure incurred for product development on the
 application of research findings or other knowledge upon demonstration
 of probability of future economic benefits, prior to the commencement
 of production, to the extent identifiable and possible to segregate are
 accumulated and carried forward as development expenditure under
 Capital Work in Progress, to be capitalised as an intangible asset on
 completion of the project. In case a project does not proceed as per
 expectations / plans, the same is abandoned and the amount classified
 as development expenditure under Capital Work in Progress is charged
 off to the profit and loss account.
 
 IX Foreign Currency Transactions
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate that approximates the actual rate prevailing at the date
 of the transaction. Monetary items denominated in foreign currency at
 the year end are translated at year end rates.
 
 In respect of monetary items, which are covered by forward exchange
 contracts, the difference between the year end rate and the rate on the
 date of the contract is recognised as exchange difference and the
 premium on such forward contracts is recognised over the life of the
 forward contract. The exchange differences arising on settlement /
 translation are recognised in the Profit and Loss Account.
 
 X Derivative Accounting:
 
 Forward Contracts in the nature of highly probable forcasted
 transactions / firm commitments entered into for hedging the risk of
 foreign currency exposure are accounted for on the principles of
 prudence as enunciated in Accounting Standard 1 (AS-1) “Disclosure of
 Accounting Policies”. Pursuant to this, losses, if any, on Mark to
 Market basis, are recognised in the Profit and Loss Account and gains
 are not recognised on prudent basis.
 
 XI Taxes on Income
 
 Provision for taxation comprises of Current Tax and Deferred Tax.
 Current Tax provision has been made on the basis of reliefs and
 deductions available under the Income Tax Act, 1961. Deferred tax
 resulting from “timing differences” between taxable and accounting
 income is accounted for using the tax rates and laws that are enacted
 or substantively enacted as on the balance sheet date. The deferred tax
 asset is recognised and carried forward only to the extent that there
 is a reasonable certainty that the assets can be realised in future.
 However, where there is unabsorbed depreciation or carry forward losses
 under taxation laws, deferred tax assets are recognized only if there
 is virtual certainty of realisation of such assets. Deferred tax assets
 are reviewed as at each Balance sheet date.
 
 XII Employee Benefits
 
 (a) The Company''s contribution in respect of provident fund is charged
 to Profit and Loss Account each year.
 
 (b) With respect to gratuity liability, Company contributes to Life
 Insurance Corporation of India (LIC) under LIC''s Group Gratuity policy.
 Gratuity liability as determined on actuarial basis by the independent
 valuer is charged to Profit and Loss Account.
 
 (c) Liability for accumulated compensated absences of employees is
 ascertained for on actuarial valuation basis and provided for as per
 the Company rules.
 
 XIII Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised. Other borrowing
 costs are recognised as an expense in the period in which they are
 incurred.
 
 XIV Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions are recognised only when there is a present obligation as a
 result of past events and when a reliable estimate of the amount of the
 obligation can be made. Contingent liability is disclosed for (i)
 Possible obligations which will be confirmed only by future events not
 wholly within the control of the Company or (ii) Present obligations
 arising from past events where it is not probable that an outflow of
 resources will be required to settle the obligation or a reliable
 estimate of the amount of the obligation can not be made. Contingent
 Assets are not recognised in the financial statements since this may
 result in the recognition of income that may never be realised.
 
 XV Government Grants / Subsidy
 
 Government grants, if any, are accounted when there is reasonable
 assurance that the enterprise will comply with the conditions attached
 to them and it is reasonably certain that the ultimate collection will
 be made. Capital Subsidy in nature of Government Grants related to
 specific fixed assets is accounted for where collection is reasonably
 certain and the same is shown as a deduction from the gross value of
 the asset concerned in arriving at its book value and accordingly the
 depreciation is provided on the reduced book value.
 
 XVI Impairment of Assets
 
 The Company assesses at each Balance Sheet date whether there is any
 indication that an asset 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 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
 recognised in the Profit and Loss Account. If at the Balance Sheet date
 there is an indication that if a previously assessed impairment loss no
 longer exists, the recoverable amount is reassessed and the asset is
 reflected at the lower of recoverable amount and the carrying amount
 that would have been determined had no impairment loss being
 recognised.