A) GENERAL
 
 The accounting policies followed by the Company are consistent with the
 accounting principles in general.
 
 B) SYSTEM OF ACCOUNTING
 
 The Company follows accrual system of accounting.
 
 C) VALUATION OF INVENTORIES
 
 Raw Material and consumable stores etc. are valued at cost on FIFO
 basis. Work-in-Progress is valued at estimated cost.  Stock of Finished
 Goods are valued at cost or market value whichever is lower.
 
 D) FIXED ASSETS/TRANSLATION OF FOREIGN CURRENCY LOANS (for acquisition
 of fixed assets)
 
 - Fixed Assets are capitalised at cost inclusive of freight, duties,
 taxes and all incidental expenses related thereto and net of Mod vat
 credit.
 
 - Expenditure related to and incurred during implementation of the
 project is included under capital work-in-progress and the same is
 capitalised under the appropriate heads on completion of the project.
 
 - All fixed assets are valued at historical cost. Adjustment arising
 from foreign exchange rate fluctuation relating to borrowing
 attributable to the fixed assets are capitalised.
 
 F) FOREIGN EXCHANGE TRANSACTIONS
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the date of the transaction. Current assets and current
 liabilities are translated at year end exchange rates and the
 profit/loss so determined and also the realised exchange gains/losses
 are recognised in the Profit & Loss Account.
 
 G) DEPRECIATION
 
 Depreciation is provided in accordance with provision of and as per
 rates prescribed under Schedule XIV of the Companies Act, 1956 on
 Straight Line Method.
 
 - The Foreign Exchange Fluctuations up to the end of the current year
 are adjusted in cost of the fixed assets. Depreciation is provided on
 revised unamortized cost of assets after adjusting Foreign Exchange
 Fluctuations.
 
 H) SHARE ISSUE EXPENSES
 
 Share Issue Expenses are written off in ten equal annual instalments.
 
 I) GRATUITY
 
 Provision on account of gratuity payable to employees is made on the
 basis of the amount payable as per me Payment of Gratuity Act, 1972.
 
 J) LEAVE ENCASHMENT
 
 Provision is made for accumulated leave at the year end for which the
 employees are entitled to as per Company's Rules.