ACCOUNTING POLICIES
 
 A. BASIS OF ACCOUNTING
 
 The accounts have been prepared on the basis of historical cost. The
 Company follows the mercantile system of accounting recognizing income
 and expenditure on accrual basis. Accounting policies not referred to
 specifically are consistent with generally accepted accounting
 principles. 
 
 B. REVENUE RECOGNITION
 
 Revenue on sale of goods is recognized on dispatches to customers from
 pant or stock points as applicable. Sales is inclusive of excise duty.
 
 C. FIXED ASSETS & DEPRECIATION
 
 i) Fixed assets are recorded at cost of acquisition or
 construction/erection excluding modvat availed plus incidental expenses
 directly attributed to bringing the assets to its working condition for
 the intended use.
 
 ii) Depreciation on fixed assets has been provided at the rates & in
 the manner prescribed in schedule XIV to the Companies Act, 1956 on
 straight line method.
 
 D. INVESTMENTS
 
 The long term quoted and unquoted investments are valued at cost. The
 aggregate market value of long term quoted investments as on 31st March
 2001 was Rs.11,32,362/- (previous year Rs.22,25,223/0) representing a
 diminution in value of Rs.90,94,308/- (previous year Rs.80,01,447/-) .
 In the opinion of the management, the decline is on account of market
 force and is not of a permanent nature, hence no provision has been
 made for such diminution.
 
 E. INVENTORIES
 
 Raw materials, packing materials and stores are valued at cost on FIFO
 basis. Finished goods are valued at lower of cost or realizable value.
 The valuation of work in progress is made considering certain
 percentage of overhead absorption depending upon the stage of
 completion as determined by the management.
 
 F. FOREIGN CURRENCY TRANSACTIONS
 
 All transactions in foreign currency are recorded on the basis of the
 exchange rate prevailing on the date of transaction. The difference, if
 any, on actual payment/ realization is charge to exchange fluctuation
 account. Foreign currency current assets and current liabilities are
 restated at rates ruling at the year-end. The net loss or gain arising
 out of such conversion is dealt with in the profit and loss account.
 
 G. RESEARCH & DEVELOPMENT
 
 Revenue expenditure on research & development is charged to profit and
 loss account in the year in which it is incurred. Capital expenditure
 on research and development is considered as an addition to fixed
 assets. 
 H. RETIREMENT BENEFITS
 
 Contribution to provident fund is made monthly, at a predetermined to
 the provident fund authorities and debited to the profit and loss
 account on an accrual basis. The Company has an arrangement with Life
 Insurance Corporation of India to administer its superannuation and
 gratuity schemes. The premium paid/payable are debited to the profit
 and loss account on an accrual basis.