1.  Basis of preparation of Financial Statements
 
 (a) The financial statements have been prepared under the historical
 cost convention in accordance with the generally accepted accounting
 principles (GAAP) in India and the provisions of the Companies Act,
 1956, as adopted consistently by the Company.
 
 (b) The Company recognises income and expenditure on accrual basis
 except those of significant uncertainties.
 
 2.  Fixed Assets
 
 Fixed Assets are stated at cost net of CENVAT and includes amounts
 added on revaluation, less accumulated depreciation. All costs,
 including interest on borrowings attributable to acquisition of Fixed
 Assets upto the date of commissioning of the assets and net charges on
 foreign exchange contracts and adjustments arising from exchange rate
 variations relating to borrowings attributable to the fixed assets are
 capitalised.
 
 3.  Depreciation
 
 (i) Depreciation on fixed assets is provided on straight line method at
 the rates and in the manner specified in Schedule XIV to the Companies
 Act, 1956.
 
 (ii) Depreciation on additions is being provided on pro rata basis from
 the date of such additions.
 
 (iii) Depreciation on assets sold, discarded, disabled or demolished
 during the year is being provided up to the date in which such assets
 are sold, discarded, disabled or demolished.
 
 (iv) Depreciation on additions on account of increase in rupee value
 due to revaluation of foreign currency loan is being provided at
 respective rates of depreciation of related assets.
 
 4.  Foreign CurrencyTransactions
 
 (i) The Monetary items denominated in foreign currency are translated
 at the exchange rate prevailing on the last day of the accounting year
 where the Company has entered into forward exchange contracts, the
 difference between the forward rate and the exchange rate at the date
 of the transaction is recognised in the statement of profit & loss over
 the life of the contract.
 
 (ii) Exchange differences arising due to repayment or restatement of
 monetary items denominated in foreign currency are recognised in Profit
 & Loss Account.
 
 5.  Investments
 
 Investments that are readily realisable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value.  Long-term
 investments are carried at cost. However, provision for diminution in
 value is made to recognise a decline other than temporary in the value
 of the investments.
 
 6.  Employee Benefits
 
 i.  Contribution to the provident fund with the government at
 pre-determined rates is a defined contribution scheme and is charged to
 the Profit and Loss account. There are no other obligations other than
 contribution to PF Schemes.
 
 ii.  Liabilities in respect of defined benefit plan of Gratuity is
 determined as per actuarial valuations made by an independent actuary
 as at the balance sheet date. The actuarial gains or losses are
 recognised immediately in the profit and loss account. Company has plan
 assets with Life Insurance Corporation of India and SBI Life Insurance
 Company Limited.
 
 iii. Provisions for other long term employee benefits- leave, a defined
 benefit scheme, is made on the basis of actuarial valuation at the end
 of each financial year and are charged to the profit and loss account .
 All actuarial gains or losses are recognised immediately in the profit
 and loss account.
 
 7.  Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosure of contingent liabilities as at the
 date of the financial statements and reported amounts of revenues and
 expenses during the reporting period. Actual results could differ from
 these estimates. Any revision to accounting estimates is recognised
 prospectively in current and future periods.
 
 8.  Inventories
 
 (i) Raw material, Stores & Spares are valued at cost on FIFO basis.
 
 (ii) Finished Goods are valued at cost or net realisable value
 whichever is lower. Cost includes direct cost and appropriate portion
 of production overheads.
 
 (iii) Semi-finished goods are valued at cost or net realisable value
 whichever is lower.
 
 (iv) Scrap and Salvage is valued at realisable value.
 
 (v) Excise duty is included in value of finished goods.
 
 9.  Revenue Recognition
 
 Sale of goods are recognised where significant risk and reward in goods
 is passed to customers. In case of export sale are recognised or the
 basis of dates of Mate''s Receipts and initially recorded at the
 relevant exchange rates prevailing on the date of transaction.
 
 10.  Taxation
 
 The current charge for income tax is measured at the amount expected to
 be paid to the tax authorities in accordance with the Indian Income Tax
 Act including probable adjustments.
 
 The deferred tax for timing differences between the book and tax
 profits for the year is accounted for using the tax rates and laws that
 have been enacted or substantively enacted as of the balance sheet
 date.  Deferred tax assets arising from timing differences are
 recognised to the extent there is reasonable certainty that the assets
 can be realised in future. Deferred tax assets are reviewed at each
 balance sheet date for its readability.