1.  BASIS OF ACCOUNTING:
 
 The accounts have been prepared on the basis of historical cost
 convention and as a going concern. Accounting policies not specifically
 referred to otherwise are consistent with generally accepted accounting
 policies. The company generally follows the mercantile system of
 accounting recognizing both income and expenditure on accrual basis.
 
 2.  FIXED ASSETS:-
 
 Fixed Assets are stated at cost of acquisition less depreciation.
 
 3.  DEPRECIATION:
 
 Depreciation on fixed assets is provided on written down value method
 at the rates specified in Schedule XIV to the Companies Act, 1956 on
 single shift basis.
 
 4.  INVESTMENTS:
 
 Long Term Investments are shown at cost and fluctuations in the market
 price of quoted shares are not provided for. Current Investments are
 valued at lower of cost or realizable value and any reduction in
 realizable value is debited to the Profit & Loss Account. If realizable
 value of current investment increases in subsequent years the increase
 in value of current investment to the level of the cost is credited to
 the Profit & Loss Account.
 
 5.  INVENTORIES:
 
 Basis of valuation
 
 Raw Materials                  : At average cost
 
 Finished / Semi-finished goods : At cost or market value 
                                  whichever is lower
 
 Stores, spare parts            : At cost and in appropriate cases
                                  charged to manufacturing expenses 
                                  in the year of purchase.
 
 6.  FOREIGN CURRENCY TRANSACTIONS :
 
 Transactions in foreign currency are accounted for in accordance with
 AS-11 issued by the Institute of Chartered Accountants of India.
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the dates of the transactions. Monetary items denominated
 in a foreign currency and outstanding at the Balance Sheet date are
 translated at the exchange rate prevailing at the year end and the
 difference arising on account of variation in exchange rate is
 recognized as income or expense in the year in which they arise.
 Non-monetary items denominated in foreign currency are carried at the
 exchange rate in force at the date of the transaction.
 
 7.  RETIREMENT BENEFITS:
 
 (i) Company''s contribution to Provident Fund, Family Pension Fund, ESI
 etc. are charged to Profit & Loss Account on accrual basis.
 
 (ii) Liability for gratuity in respect of employees is covered under
 the Group Gratuity Policy taken by the company from Life Insurance
 Corporation of India. The premium payable under the Policy, are charged
 to Profit & Loss Account. The short fall in the Fund, as indicated by
 the LLC. is provided for by the Company as gratuity liability.
 
 (iii) The leave salary payable in respect of encashable leave is
 provided for according to the service rule of the Company. Unavailed
 leave, which is not encashable during the continuance of service is not
 provided for.
 
 8.  ACCOUNTING FOR DUTY CREDIT SCRIPT UNDER FOCUS PRODUCT SCHEME:
 
 Duty Credit Script under Focus Product Scheme are normally consumed in
 payments of custom duty against imports made. Entries for scripts
 transferred are accounted for on realised value. Duty Credit Script
 under Focus Product Scheme receivable at the end of accounting year is
 accounted on estimated realizable value.
 
 9.  CONTINGENT LIABILITIES:
 
 Contingent Liabilities are generally not provided for in the Accounts
 and are shown by way of Notes on Accounts.
 
 10.  SALES:
 
 Sales include export sales whether made directly or through third
 parties.
 
 11.  The accounting policies have been consistently followed and there
 has been no significant change in such policies during the year.