I. SIGNIFICANT ACCOUNTING POLICIES:

1. BASIS OF ACCOUNTING:

The company follows mechantile system of accounting and recognizes income and expenditure on accrual basis unless otherwise stated. The Financial Statements are brpared under historical cost convention and comply with applicable accounting standards issued by The Institute of Chartered Accountants of India and the relevant provisions of The Companies Act, 1956.

2. REVENUE RECOGNITION:

1. Revenues from sale of goods are recognised up on passage of title to the customers whichgenerally coincides with their delivery.

2. Job work charges accounted at the time of dispatch to customers and are grouped under sales.

3. USE OF ESTIMATES

The brparation of financial statements requires estimates and assumptions to be made that affectthe reported amount of assets and liabilities on the date of the financial statements and the reportedamount of revenues and expenses during the reporting period. Difference between the actual resultsand estimates are recognised in the period in which the results are known / materialized.

4. FIXED ASSETS:

Fixed Assets are stated at cost of acquisition inclusive of inward freight, duties and incidentalexpenses related to acquisition.

All Expenditure are accumulated and disclosed as capital work in progress until the assets are readyfor commercial use. Assets under Work in progress are not debrciated.

5. DEbrCIATION:

Debrciation on fixed assets has been provided on the straight line Method excluding the building& plant and machinery of Unit II on which no debrciation has been provided, at the rates specifiedn Schedule XIV of the Companies Act, 1956, on pro-rata basis read with relevant circulars issued bythe Department of Company Affairs from time to time.

6. IMPAIRMENT OF ASSETS

Management periodically assesses using external & internal sources whether there is an indicationthat an asset may be impairmed. An impairment occurs where the carrying value exceeds therecoverable amount. The impairment loss which is excess of value carrying amount over thehigher of assets net selling price or brsent value of future cash flows expected to arise from thecontinuing use of the assets and its eventual disposal is charged to the profit & loss accountin the respective years.

7. INVENTORIES

Inventories are valued at lower of cost and net realizable value. Cost is computed on weightedaverage method. Cost includes purchase cost net of CENVAT credit availed and attributableexpenses.

Finished goods is valued at cost or net realizable value whichever is lower. Goods in transit arevalued at cost which rebrsents the cost incurred upto the stage at which the goods are in transit.

8. EMPLOYEES BENEFITS:

i) Short term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified asshort term employee benefits and are recognized in the period in which the employee renders therelated service.

ii)Post employment benefits (defined benefit plan)

Gratuity will be provided by the company at the time of actual payment.

iii) Post employment benefits (defined contribution plan)

Contribution to Provident fund is made in accordance with the provisions of The Employees Provident Fund and miscellaneous Act, 1952 and is treated as revenue expenditure

v) Long term employee benefits

The Company does not have any policy of paying leave encashment to employees

9. BORROWING COSTS

Borrowing costs that are attributable to the acquisition or construction of  qualifying assets are capitalised as part of cost of such assets. A qualifying asset is one that necessarily takessubstantial period of time to get ready for intended use. All other borrowing  costs arecharged to revenue.

10. PROVISIONS:

Provisions are recognized when there is a brsent obligation as  a result of past event and it isprobable that an outflow of  resources will be required to settle the obligation, in respect  ofwhich the reliable estimate can be made. These are reviewed at each balance sheet dateand adjusted to reflect the current best estimate.

11.TAXES ON INCOME:

Provision  for current tax is made considering  various allowances and benefits available tothe Company under Income tax law. In accordance with Accounting Standard  AS 22"Accounting for Taxes on Income" issued by Institute of Chartered Accountants of IndiaDeferred Taxes resulting from timing differences between book profits and tax profits areaccounted for at the current rate of tax to the extent the time differences are expected to becrystallized.

12. EARNINGS PER SHARE:

The earnings considered in ascertaining the EPS comprises of the Net Profit after Tax. Thenumber of shares used in computing EPS is the total number of shares comprised in the Paid upShare Capital of the company.

i) Short term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified asshort term employee benefits and are recognized in the period in which the employee renders therelated service.

ii)Post employment benefits (defined benefit plan)

Gratuity will be provided by the company at the time of actual payment.

iii) Post employment benefits (defined contribution plan)

Contribution to Provident fund is made in accordance with the provisions of The Employees Provident Fund and miscellaneous Act, 1952 and is treated as revenue expenditure

v) Long term employee benefits

The Company does not have any policy of paying leave encashment to employees