1.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS

 The financial statements have been prepared under historical cost
 convention in accordance with the generally accepted accounting
 principles and provisions of the Companies Act, 1956. Company follows
 the mercantile system of accounting and recognizes significant items of
 income and expenditure on accrual basis.

 2.  FIXEDASSETS:

 Fixed assets are stated at cost. Cost includes purchase price net of
 excise duties and taxes recoverable, where claimed, interest on amount
 borrowed for acquisition of assets for the period up to the date the
 asset is ready to be put to use and incidental expenses related in
 bringing the assets to working condition for their intended use.

 Capital work in progress is stated at cost. Cost includes expenses
 incurred during preoperative / installation period, cost of capital
 goods, in transit and advances to suppliers.

 3.  DEPRECIATION ON FIXEDASSETS:

 Depreciation On Fixed Assets has been provided on the Straight Line
 Method at the rate prescribed in schedule XIV to the Companies Act,
 1956.

 In respect of additions to the assets made during the year,
 depreciation for the year is calculated from the date of such
 additions. Depreciation on assets disposed off during the year is
 charged up to the date of disposal.

 4.  INVENTORYVALUATION:

 Raw materials are valued at cost which is determined on First in First
 Out Basis. Cost includes the purchase price, duties and taxes (net of
 duties and taxes recoverable.

 Work in progressed at factory cost consisting of direct material and
 labor cost together will related factory overheads Finished goods
 manufactured by the company are valued at lower of cost together with
 related factory overheads Finished goods manufactured by the Company
 are valued at lower of cost or net realizable values.  An adequate
 write off for the stock is made for old and absolute items.

 5.  INVESTMENTS:

 Long term investments are valued at cost less provision for diminution
 in value, if the diminution is other than temporary

 6.  SUNDRY DEBTORS/LOANS AND ADVANCES/CREDITORS:

 The Company has been making Provision for Bad and Doubtful debts and
 Also on Amounts Payable to Creditors. This year the management has
 taken a decision to write off Payables and Receivables outstanding for
 a Period of More than 3 years and accounts where there is no
 Transaction in Three Years. The Payables which have been written off
 are to be shown as Contingent Liabilities for a further Period of One
 year.

 7.  FOREIGN EXCHANGE TRANSACTIONS:

 Transactions in foreign currencies are recorded at the rate of exchange
 prevailing on the date of the transaction and subsequent gains/losses
 are recognized on realization.

 Monitory assets and liabilities relating to foreign currency
 transaction remaining unsettled at the end of the year are translated
 at year end rates.  The difference in translation of monetary assets
 and liabilities on foreign exchange transactions are recognized in the
 profit and loss account for the year.

 8.  REVENUE RECOGNITION:

 Revenue from sale of goods is recognized on dispatch to customers or
 authorized agent or transporter. Sales are net of sales tax recovered,
 sales returns, trade discounts, rebate and allowances.

 9.  EMPLOYEES BENEFITS.

 Employees benefit comprises payments under defined contribution plans
 like provident fund and family pension. Payments under defined
 contribution plans are charged to the profit and loss account. The
 liability in respect of the defined benefit schemes like gratuity and
 leave encashment benefit on retirement is provided on the basis of
 actuarial valuation at the end of each year.

 10.  RESEARCH AND DEVELOPMENT:

 Revenue expenditure on research and development is charged under their
 respect heads of accounts. Capital expenditure on research and
 development is included as part of fixed assets and depreciated on the
 same basis as the other fixed assets.

 11.  IMPAIRMENT OF ASSETS:

 An asset is related as impaired when the carrying cost of assets
 exceeds its recoverable value .An impairment loss is charged to profit
 and loss account in the year in which the asset is identified as
 impaired he impairment loss recognized in prior accounting period id
 revised if there has been a change in the estimate of recoverable
 amount.

 12.  INCOMETAX:

 Income taxes have been computed using the tax effect accounting method,
 where taxes are accrued in the same period as the related revenue and
 expense. Deferred tax assets and liabilities are recognized for the
 expected future tax consequences attributable to timing differences
 between the taxable income and the accounting income over a period.
 Deferred tax assets and liabilities are measured using enacted tax
 rates expected to apply to  taxable income in the year in which the
 timing differences are expected to b recovered or settles. The effect
 of changes in Tax rates on deferred tax assets and liabilities is
 recognized in the statement of income in the period of change. The
 effect of changes in tax rates on deferred tax assets and liabilities
 is realized in the statement of income in the period of change.
 Deferred tax assets are recognized only to the extent management is
 virtually certain as to the sufficiency to future taxable income
 against which the deferred tax assets can be realized.

 13.  PROVISIONS AND CONTINGENCIES:

 Contingencies are recorded which it is probable that a liability will
 be incurred and the amount can be reasonably estimated. Where no
 reliable 'estimates can be made as to the outcome of an event, a
 disclosure is made as contingent liability .Contingent assets are not
 recognized in the accounts.

 14.  EARNINGS PER SHARE:

 The basic earnings per share are computed by dividing the net profit
 after tax for the year by the weighted average number of equity shares
 outstanding during the year. For the purpose of calculating diluted
 earnings per share, net profit after tax for the year and the weighted
 average

 15.  LEASES:

 Operating Lease:

 Lease where the lesser effectively retains substantially all the risks
 and benefits of ownership of the leased term is classified as operating
 lease.

 Operating Lease payments are recognized as an expense in the profit and
 loss account.

 16.  EVENTS AND CONTINGENCIES AFTER THE BALANCE SHEET DATE 

 i) Sale of place and machinery/Disposal

 ii) Loss cannot be valued

 iii) Going concern affected