(a) ACCOUNTING CONCEPTS
 
 i) The accounts are prepared on historical cost convention and in
 accordance with applicable Accounting standards except where otherwise
 stated. For recognition of Income and Expenses, Mercantile System of
 Accounting is followed.
 
 (b) REVENUE RECOGNITION
 
 Revenue from sale of goods is recognised upon passage of title to the
 customers, which generally coincides with their delivery.
 
 (c) FIXED ASSETS
 
 Fixed Assets are stated at cost less accumulated depreciation. The cost
 of an asset comprises its purchase price and any directly attributable
 cost of bringing the asset to working condition for its intended use.
 
 (d) DEPRECIATION
 
 Depreciation is provided on Straight Line Method at rates specified in
 Schedule XIV of the Companies Act, 1956 as amended vide notification
 dated 16th December, 1993 issued by the Department of Company Affairs,
 Government of India.
 
 (e) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions arising in foreign currency are accounted for at the rates
 closely approximating those ruling on the transaction date.
 
 Amounts payable and receivable in foreign currency are translated at
 the exchange rate prevailing on the balance sheet date. In respect of
 forward contract, the forward premium or discount is recognized as
 income and expenses over the life of contract in the profit and loss
 account and exchange difference between the exchange rate prevailing at
 the year end and the date of the inception of the forward exchange
 contract is recognized as income or expenses in the Profit & Loss
 Account.
 
 (f) EXCISE DUTY
 
 The Company accounts for excise duty on manufactured goods at the time
 of their clearance from the factory rather than at the point of
 manufacture. This has, however, no impact on the operating results of
 the Company.
 
 (g) INVENTORIES
 
 Inventories are valued as follows:
 
 Raw Material         - at lower of cost or net realizable value
 
 Stores & Spare Parts - at lower of cost or net realizable value
 
 Goods Under Process  - at lower of cost or net realizable value
 
 Finished Goods       - at lower of cost or net realizable value
 
 Cost is determined using FIFO Method
 
 (h) RETIREMENT BENEFITS:
 
 a) Contribution to defined contribution scheme such as Provident Fund
 is charged to the profit & loss account as incurred.
 
 b) The provision for Gratuity and Leave with wages liability are based
 on actuarial valuation.
 
 c) Company provides for privilege leaves not availed of by the
 employees at the end of the year.
 
 (i) AMORTISATION OF MISCELLANEOUS EXPENDITURE
 
 Preliminary and Share issue expenses are amortised over a period to
 five years.
 
 (j) Finance Leases, which effectively transfer to the Lessee
 substantially all risks and benefits incidental to ownership of the
 leased item, are capitalized at the inception of the lease period at
 the lower of the fair value and present value of the minimum lease
 payments at the inception of the lease term by credit to liability for
 an equivalent amount. Lease payments are apportioned between the
 Finance charges and reduction of the lease liability so as to achieve a
 constant rate of interest on the remaining balance of the liability.
 
 (k) Impairment of Assets
 
 At each Balance Sheet an assessment is made whether any indication
 exists that an asset has been impaired. If any such indication exists,
 an impairment loss i.e the amount by which the carrying amount of an
 asset exceeds its recoverable amount is provided in books of accounts.