a) CONVENTION:
 
 The financial statements are prepared under the historical cost
 convention in accordance with applicable accounting standard and
 requirement of the Companies Act, 1956.
 
 b) BASIS OF ACCOUNTING :
 
 The company follows the Mercantile system of Accounting. 
 
 C) FIXED ASSETS:
 
 i) Fixed Assets are stated at cost of acquisition and subsequent
 improvements including taxes, freight and other incidental expenses
 related to acquisition, installation and foundation less accumulated
 depreciation (other than leasehold land where no depreciation is
 charged).
 
 ii) Costs of fixed assets are net of CENVAT to be set off against
 excise payable on sales, irrespective of actual set-of during the year
 under review.
 
 iii) Leasehold land will be written off, in the year in which the
 respective lease period expires.
 
 d) DEPRECIATION
 
 i) Depreciation on fixed assets has been provided on SLM method as per
 rates specified in AMENDED SCHEDULE-XIV of the Companies Act, 1956 vide
 Notification No. GSR: 758(2) dated 16-12-1992 on pro-rata basis.
 
 e) INVENTORIES:
 
 The inventories are valued as under:
 
 i) Stores, Spare parts & Packing material at cost;
 
 ii) Work-in-progress at cost;
 
 iii) The Raw Material has been valued at Lower cost plus expenses or
 net r ealizable Value.
 
 f) IMPORTS EXCISE CENVAT:
 
 i) The purchase cost of raw material & other expenses have been
 considered net of cenvat remaining unabsorbed at the year ending;
 
 ii) Costs of fixed assets are net of cenvat, as the said cenvat is to
 be set off against excise duties payable in sales.  
 
 iii) Value of import includes duties, freight, clearing charges,
 expenses incidental to acquisition.  iv) Increase/ decrease in rupee
 liability at the end of the year in respect of money borrowed for
 purchase or construction of fixed assets consequent to fluctuation in
 exchange rates are treated as addition/ deduction to the fixed assets.
 
 g) SALES & EXPORTS:
 
 Sales are net of sales rejections for the year under review but
 inclusive of excise duty and sales tax. Rejection quantity of the
 period under review is not incorporated in Quantitative detail of
 Production. Sales rejection of the earlier period is charged to profit
 & loss account as sales rejection & shown separately.  h) EXCISE
 
 Total excise collected, irrespective of net pa /merit in PLA after
 adjustment of cen vat, has been considered to work out net income.
 
 Excise and service tax credit receivable are considered as per books of
 accounts but irrespective of actual claims lodged with revenue
 authorities.
 
 j) WAGES & SALARIES:
 
 Includes PF contribution from employer, salaries to trainees &
 apprentices.
 
 k) TAXATION:
 
 Provision for current tax is made on the basis of estimated taxable
 income for the period in accordance with the provisions of the income
 Tax Act, 1961. Deferred tax is recognized, subject to consideration of
 prudence, on timing di fferences between taxable income and accounting
 income for the period that originate in one period and are capable
 reversal in one or more subsequent periods.
 
 I) FOREIGN CURRENCY TRANSACTIONS:
 
 Transactions in foreign currencies are recognized at the prevailing
 exchange rates on the date of transaction and difference, if any, on
 realization date is charged to Profit & Loss Account under the head
 Exchange difference account. Unrealized gains and losses on settlement
 of f oreign currency transactions realized after the year-end are
 recognized in the Profit and Loss Account at the rate prevailing at the
 year end. Foreign currency transactions relating to acquisition of
 fixed assets are adjusted in the cost of the fixed assets.
 
 m) IMPAIRMENT OF ASSETS:
 
 As per the opinion of the management, there being no indication of
 impairment of assets, no loss has been recognized on impairment of
 assets.
 
 n) RETIREMENT BENEFITS :
 
 i) Contributions to employees Provident F und remitted to statutory
 authority are charged to revenue.  
 
 ii) Gratuity benefits wherever applicable are covered by policies taken
 with the L.I.C. The premium paid under the scheme is charged to
 revenue. However, the company had made provision for gratuity as per
 actuarial valuation as required by Accounting Standard -15.  iii)
 Liability on leave encashment to employees are provided on actuarial
 Valuation Report as required by Accounting Standard -15.
 
 o) PRELIMINARY EXPENSES :
 
 Preliminary expenses are written off in five equal installments.
 Preliminary expenses on public issue are written off in five equal
 installments from the year in which Proceeds from the public Issue has
 been utilized.
 
 p) PREOPERATIVE EXPENSES (SEZ PROJECT)
 
 Revenue and financial expenses incurred and to be incurred upto
 commencement of commercial production on SEZ projects is to be
 capitalized and will be allocated to the fixed assets on the
 commencement of the commercial production in SEZ project.