The Accounts have been prepared on Mercantile Method of Accounting.
 
 INCOME AND EXPENDITURE : (REVENUE RECOGNITION)
 
 All expenses and Incomes to the extent considered payable and
 receivable respectively, unless specifically stated to be otherwise are
 accounted for on Accrual basis and except otherwise stated are on the
 same basis as adopted in the previous year.
 
 (A) SALES AND INCOME :
 
 (1) The Sales are recorded when supply of goods take place in
 accordance with the terms of sales and on change of title in the goods
 and is inclusive of sales tax.  The sale sis shown Gross and discount
 is debited to kassar vatav Account and sales returns is accounted
 separately.
 
 (2) The Income of Processing Charges is included in other Income.
 
 (3) The Interest Income is recognised to the extent and as and when
 considered / found receivable.
 
 (B) PURCHASE AND EXPENSES :
 
 (1) The purchases are shown net of Sales tax / Purchase tax set off.
 
 (2) The major items of the expenses are accounted for on time pro-rata
 basis and necessary provisions for the same are made.
 
 (C) FIXED ASSETS :
 
 The fixed Assets are stated at the cost and the related expenses like
 freight, taxes and other incidental and erection expenses are added and
 Depreciation is calculated at the Straight Line Method.
 
 (D) DEPRECIATION :
 
 The Depreciation of Fixed Assets is provided as per the Straight Line
 Method at the rates specified in Schedule XIV of the Companies Act,
 1956.
 
 (E) INVESTMENTS :
 
 The investments are shown at cost and is inclusive of related expenses.
 
 (F) INVENTORY :
 
 Raw Materials, Components, stores spares and loose tools Stocks are
 valued at cost.
 
 The finished and semi finished stocks goods are valued at the cost or
 net market price whichever is less.  The valuation of the finished
 goods is made after adding the appropriate overheads to the cost of the
 raw materials.
 
 (G) GENERAL :
 
 The accounts of the Company are prepared under the Historical Cost
 Convention using the accrual method accounting.
 
 (H) RETIREMENT BENEFITS :
 
 Gratuity is not provided in the books while Provident Fund is deducted
 from the staff and contribution of the employer portion is provided in
 the books.
 
 (I) SECURED LOAN :
 
 Company is enjoying Cash Credit facility of Rs. 500 Lakhs (Rs. 100
 Lakhs Working Capital and 400 Lakhs Foreign L/c.) from The Jammu &
 Kashmir Bank Ltd., Ahmedabad Branch, against security of hypothecation
 of plant & machinery, Raw Material & Finished Goods and Personal
 guarantee of Directors.