1 ACCOUNTING CONVENTION:
 
 The Financial Statements are prepared under the historical cost
 convention on accrual basis and in accordance with Generally Accepted
 Accounting Principles in India (Indian GAAP). The said financial
 statements comply with the relevant provisions of the Companies Act ,
 1956 (the Act) and the mandatory Accounting Standards notified by the
 Central Government of India under the Companies (Accounting Standards)
 Rules 2006, to the extent applicable.
 
 2 USE OF ESTIMATES:
 
 The preparation of financial statements 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. Management
 believes that the estimates used in the preparation of financial
 statements are prudent and reasonable. Future results may vary from
 these estimates.
 
 3 FIXED ASSETS:
 
 a) Fixed assets are stated at original cost (net of CENVAT/VAT wherever
 applicable) including expenses related to acquisition and installation.
 Borrowing costs are capitalized as part of qualifying fixed assets when
 it is possible that they will result in future economic benefits. Other
 borrowing costs are expensed.
 
 b) Capital Subsidy relating to projects in backward area is credited to
 capital subsidy reserve on receipt and Government grants relating to
 specific assets are deducted from the cost of such assets.
 
 c) Depreciation is provided, on all depreciable assets, except
 intangible assets, on a straight line basis at the rates prescribed
 under Schedule XIV of the Companies Act, 1956.
 
 Depreciation on assets added / disposed of during the year is provided
 on pro-rata basis from the month of addition or up to the month prior
 to the month of disposal, as applicable.
 
 d) Intangible Assets are amortized over a period of 5 years or based on
 the period of usage/ licence, whichever is less.
 
 e) Individual assets costing less than Rs.5000 each are depreciated in
 full in the year of acquisition.
 
 4 INVESTMENTS:
 
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as long term investments and are
 carried at cost. However provision for diminution is made in the value
 of investments, if such diminution is other than of temporary nature.
 
 Current investments are stated at lower of cost or fair value.
 
 5 INVENTORIES:
 
 a) Finished Goods and work-in-progress are valued at lower of cost or
 net realizable value. Cost comprises of materials, labour and an
 appropriate proportion of production overheads and excludes interest,
 selling and distribution expenses. Material cost is computed on
 weighted average basis.
 
 b) Raw materials, stores and spares are valued at lower of cost or net
 realizable value. Cost computed on weighted average basis includes
 freight, taxes and duties net of CENVAT/VAT credit, wherever
 applicable.
 
 6 REVENUE RECOGNITION:
 
 a) Revenues are recognized and expenses are accounted on their accrual
 with necessary provisions for all known liabilities and losses. Revenue
 from Sale of goods are recognised on despatch of goods. Sales are
 accounted net of sales tax / VAT, discounts and returns as applicable.
 
 b) Export Benefits under Advance licence scheme are recognized on
 accrual basis on completion of export obligation.
 
 c) Dividend income on investments is accounted for when the right to
 receive the payment is established.
 
 7 EMPLOYEE BENEFITS:
 
 SHORT TERM EMPLOYEE BENEFITS
 
 Short term employee benefits including accumulated compensated absences
 are determined as per Companys policy and recognized as expense based
 on expected obligation on undiscounted basis.
 
 LONG TERM COMPENSATED ABSENCES
 
 Accumulated Compensated absences which falls due beyond 12 months is
 provided for in the books on actuarial basis at the year end using
 projected unit credit method.
 
 DEFINED CONTRIBUTION PLANS
 
 Superannuation fund, Provident fund and Pension fund are defined
 contribution plans towards which the company makes contribution at
 predetermined rates to the Superannuation Trust, and the Regional
 Provident Fund Commissioner respectively. The same is debited to the
 Profit and Loss Account on an accrual basis.  The Company also makes
 contributions to state plans namely Employees State Insurance Fund and
 Employees Pension Scheme 1995 and has no further obligation beyond
 making the payment to them.
 
 DEFINED BENEFIT PLAN
 
 The liability for gratuity to employees as at the Balance sheet date is
 determined on the basis of actuarial valuation using Projected Unit
 Credit method. The amount is funded to a Gratuity fund administered by
 the trustees and managed by Life Insurance Corporation of India. The
 liability thereof is paid and absorbed in the profit and loss account
 at the year end. Actuarial Gains and Losses arising during the year are
 recognised in the Profit and Loss Account immediately.
 
 Termination benefits are recognized as an expense as and when incurred.
 
 8 INCOME TAX:
 
 Income tax comprises the current tax provision and the net change in
 the deferred tax asset or liability during the year. Deferred tax
 assets and liabilities are recognized for the future tax consequences
 of timing differences between the carrying values of the assets and
 liabilities and their respective tax bases. Deferred tax assets are
 recognized subject to managements judgement that realization is more
 likely than not. Deferred tax assets and liabilities are measured using
 enacted tax rates expected to apply to taxable income in the years in
 which the timing differences are expected to be received or settled.
 The effect on deferred tax assets and liabilities arising from change
 in tax rates is recognized in the income statement in the period of
 enactment of the change.
 
 9 FOREIGN CURRENCY TRANSACTIONS:
 
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of the transactions .  Monetary assets and
 liabilities outstanding at the year end are translated at the rate of
 exchange prevailing at the year end and the gain or loss is recognized
 in the prof it and loss account.
 
 Exchange differences arising on actual payments/ realizations and year
 end restatements are dealt with in the profit and loss account.
 
 10 RESEARCH AND DEVELOPMENT:
 
 Revenue expenditure on research and development is charged as an
 expense in the year in which it is incurred.  Capital expenditure on
 Research and Development is included in fixed assets and depreciated in
 accordance with the depreciation policy of the company.
 
 11 PROVISIONS AND CONTINGENT LIABILITIES:
 
 A provision is recognized when an enterprise has a present obligation
 as a result of past event, it is probable that an outflow of resources
 will be required to settle the obligation in respect of which a
 reliable estimate can be made. Provisions are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the balance sheet date.
 
 These are reviewed at each balance sheet date and adjusted to reflect
 the current best estimates.
 
 Contingent Liabilities are determined on the basis of available
 information and are disclosed by way of notes to accounts.
 
 12 SEGMENT REPORTING:
 
 The accounting policies adopted for segment reporting are in line with
 the accounting policies of the Company with the following additional
 policies:
 
 a) Inter-segment revenues are accounted on the basis of prices charged
 to external customers.
 
 b) Revenue and expenses are identified to segments on the basis of
 their relationship to the operating activities of the segment. Revenue
 and expenses, which relate to the enterprise as a whole and not
 allocable to segments on a reasonable basis are included under Other
 un-allocable Expenditure net of un-allocable income
 
 13 IMPAIRMENT OF ASSETS:
 
 At each balance sheet date, the carrying values of the tangible and
 intangible assets are reviewed to determine whether there is any
 indication that those assets have suffered an impairment loss. If any
 such indication exists, the recoverable amount of the asset is
 estimated in order to determine the extent of the impairment loss (if
 any).  Where there is an indication that there is a likely impairment
 loss for a group of assets, the Company estimates the recoverable
 amount of the group of assets as a whole, and the impairment loss is
 recognised.
 
 14 EARNINGS/(LOSS) PER SHARE:
 
 The basic earnings / (loss) per share is computed by dividing the net
 profit attributable to equity shareholders for the year by the weighted
 average number of equity shares outstanding during the year. The number
 of shares used in computing diluted earnings per share comprises the
 weighted average shares considered for deriving basic earnings per
 share, and also the weighted average number of equity shares that could
 have been issued on the conversion of all dilutive potential equity
 shares.