1.  Basis of Preparation of Financial Statements:
 
 The Financial Statements have been prepared under the historical cost
 convention using accrual method of accounting in accordance with
 Generally Accepted Accounting Principles and Provisions of the
 Companies Act, 1956 as adopted consistently by the Company following
 going concern concept.
 
 Accounting policies not specifically referred to otherwise are
 consistent and in accordance with the accounting principles generally
 accepted and as recommended by the Institute of Chartered Accountants
 of India.
 
 All assets and liabilities have been classified as current or
 non-current as per revised Schedule VI to the Companies Act, 1956.
 
 2.  Revenue Recognition:
 
 Sales are net of returns, discounts and sales tax. However, Turnover
 Discount and other non-recurring discounts have not been netted from
 Sales. Incomes and expenditures are recognised on accrual basis.
 However, customers'' claims are accounted for as and when arise/settled
 on the basis of final settlement.
 
 3.  Fixed Assets and Depreciation:
 
 Fixed Assets are stated at cost less accumulated depreciation. The cost
 includes taxes, duties, freight, installation and other directly
 attributable costs of bringing the assets in its working condition for
 its intended use. Long term lease hold land is stated at cost.
 Intangible asset is stated at the cost of acquisition less accumulated
 amortization and impairment loss.
 
 Depreciation on Plant & Machinery and other assets are provided at the
 rates prescribed under the Schedule XIV under Written down Value Method
 in accordance with the provisions of the Companies Act, 1956 at the
 rates and in the manner specified in Schedule XIV of the said Act.
 
 Capital Work-in-progress and Pre-Operative Expenses towards Expansion
 cum Diversification Project is disclosed separately below the Gross
 Block of Assets. Such expenditures are allocated on the respective
 assets in the year of installation.
 
 Software, which is not an integral part of hardware, is treated as an
 intangible asset and is amortized over its useful economic life as
 estimated by the management between 3 to 5 years.
 
 4.  Inventories:
 
 Raw Materials and Stores, Spares, Packing Materials & Stock in Trade
 are valued at cost computed on FIFO basis.  Scrap is valued at
 estimated realisable value.
 
 Work in Progress is valued at material cost plus conversion cost and
 finished goods are valued at lower of cost or net realisable value.
 Cost for this purpose includes direct cost and appropriate
 administrative and other overheads.
 
 5.  Borrowing Cost:
 
 Borrowing costs that are attributable to the acquisition of qualifying
 assets are capitalised as a part of cost of such assets. All other
 borrowing costs are charged to revenue.
 
 6.  Preliminary Expenses:
 
 Preliminary expenses incurred by the company are subject to
 amortization over a period of 5 years equally.
 
 7.  Taxation:
 
 Provision for current tax is made in the accounts on the basis of
 estimated tax liability as per the applicable provisions of the Income
 Tax Act, 1961.
 
 Deferred tax effect of timing differences between tax profit and book
 profit is accounted for using the tax rates and laws that have been
 enacted or subsequently enacted as on the Balance Sheet date. Deferred
 tax assets are recognised to the extent there is virtual certainty that
 these assets can be realised in future.
 
 8.  Employees'' Benefits:
 
 Employees'' benefits in the form of contribution towards Provident Fund,
 ESI are considered as defined contribution plan and the contributions
 to recognised funds are charged to the Profit and Loss Account of the
 year when the contributions are due, as per the provisions of
 respective statutes.
 
 Leaves lying in credit of the employees are not paid as the Company
 follows practice of granting leaves as and when demanded by the
 employees. These leaves are non-accumulating and the un-availed leaves
 automatically lapse at the year-end. Hence, no provision for the same
 is required to be made.
 
 Gratuity is a post employment benefit and is in the nature of defined
 benefit plan. The defined benefit/obligation is calculated by Life
 Insurance Corporation of India, an independent Actuary using the
 projected unit credit method.
 
 9.  Foreign Currency Transactions:
 
 Exchange rate difference arising from foreign currency transactions
 relating to import/export of goods are dealt with in the Profit & Loss
 Account. Further, as per the notification issued by the Ministry of
 Corporate Affairs, the company has opted to capitalize the exchange
 difference on the foreign currency loans against purchase of fixed
 assets after the same has been put to use and depreciated over the
 balance useful life of the assets.
 
 10.  Cash Flow Statement:
 
 The cash flow statement is prepared under the indirect method as set
 out in the Accounting Standards 3. Cash and cash equivalents in the
 cash flow statement comprise cash at bank and in hand and short-term
 investments with an original maturity of three months or less.
 
 11. Accounting for Investments:
 
 Investments which are readily realizable 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 determined on
 an individual investment basis. Long-term investments are carried at
 cost. However, provision for diminution in value is made to recognize a
 decline other than temporary in the value of investments.
 
 12.  Segment Reporting:
 
 The accounting policies applicable to the reportable segments are same
 as those used in the preparation of the financial statements. However,
 items of income and expenditures, assets and liabilities which are not
 directly attributable / identifiable / allocable on a reasonable basis
 to a business segment are shown as unallocated.
 
 13.  Earnings Per Share :
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 14.  Impairment of Assets:
 
 The carrying amounts of assets are reviewed at each balance sheet date
 if there is any indication of impairment based on internal/ external
 factors. An impairment loss is recognized wherever the carrying amount
 of an asset exceeds its recoverable amount. The same is charged to the
 Profit and Loss Account. After impairment, depreciation is provided on
 the revised carrying amount of the asset over its remaining useful
 life.
 
 15.  Accounting for the Government Grant
 
 The company recognizes the Government grant only when there is
 reasonable assurance that:
 
 - The enterprise will comply with the conditions attached to them and
 
 - The grant will be received.
 
 16 Provisions, Contingent Liability and Contingent Assets:
 
 A provision is recognised when there is a present obligation as a
 result of past event that there is possibility of an outflow of
 resources to settle the obligation and in respect of which reliable
 estimate can be made. Provision is determined based on the best
 estimate required to settle the obligation at the end of the year.
 These are reviewed at each year end and adjusted to reflect the best
 current estimates.
 
 Contingent liabilities are not provided for in the accounts and are
 separately shown in the Notes on Accounts.  Contingent Assets are
 neither recognised nor provided or disclosed in the financial
 statements.