(i) Basis of Preparation o financial statements :
 
 The financial statements have been prepared under the historical cost
 convention in accordance with the normally accepted accounting
 principles and the provisions of the Companies Act, 1956.
 
 (ii) Accounting policies not specifically referred to otherwise or
 consistent and in consonance with the generally accepted accounting
 principles.
 
 (iii) Foreign Currency Translations :
 
 (a) Current Assets and Current Liabilities in foreign currencies at the
 year end and not contracted are translated at year end rate and those
 covered by contracts are translated at the contracted rate.
 
 Gains or Losses on cancellation of Forward exchange contracts are
 recognised separately and on the date of cancellation.
 
 (b) Any Income or Expense on account of Exchange difference either on
 settlement or on transactions recognised in the Profit and Loss account
 except in respect of the acquisition of Fixed Assets which are adjusted
 to the carrying cost of such Assets.
 
 (iv) Fixed assets and depreciation :
 
 (a) Fixed assets are stated at the cost of acquisition less accumulated
 depreciation.
 
 (b) Depreciation is provided on written down value basis in the manner
 and at the rates specified in Schedule XIV to the Companies Act, 1956.
 Premium on lease hold land is amortised over the period of the lease.
 
 (v) Inventories :
 
 Basis of Valuation
 
 (a) Inventories are valued at lower of cost and net estimated
 realisable value.
 
 (b) Cost Formulae Used :
 
 i) Stores                         : F.I.F.O.
 
 ii. Raw Materials                 : F.I.F.O. or Specific identification
                                     as applicable.
 
 iii. Stock-in Process             : Material cost plus direct labour
                                     and other overheads and Finished
                                     Goods
 
 (vi) Retirement Benefits :
 
 Gratuity and Leave Salary is provided for on the basis of actuarial
 valuation.