1.  Basis of Accounting
 
 a) The financial statements have been prepared under the historical
 cost convention in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act,1956 as adopted
 consistently by the Company.
 
 b) The Company generally follows accrual system of accounting and
 recognises significant items of income and expenditure on accrual
 basis.
 
 2.  Fixed Assets
 
 a) Fixed Assets are stated at their original cost of acquisition
 including all related expenses of acquisition and installation.
 
 b) Depreciation is provided on Straight Line Method at the rates
 prescribed under Schedule XIV to the Companies Act, 1956 from the month
 the assets are put to use.
 
 c) Leasehold land is amortised, over the period of lease. Computer
 Software acquired is to be amortised over a period of five years on
 Straight Line Basis.
 
 3.  Inventories
 
 a) Inventories (other than scrap) are valued at lower of cost or net
 realisable value.
 
 The cost of inventories is computed on weighted average basis except
 Trading goods the cost for which is calculated on first in first out
 basis. The cost of Finished Goods and Stock-in-Process include cost of
 conversion and other cost incurred in bringing the inventories to their
 present location and condition.
 
 b) Scrap is valued at net realisable value.
 
 4.  Investments
 
 Long Term Investments are carried at cost. Provision for diminution is
 made to recognise a decline, other than temporary, in the value of long
 term investments, scrip wise. Current Investments are valued at lower
 of cost or fair value, category wise.  Cost of investments include
 acquisition cost such as brokerage, stamp duty etc.
 
 5.  Sales
 
 a) Sale of goods is recognised at the time of transfer of substantial
 risk and rewards of ownership to the buyer for a consideration.
 
 b) Sales is inclusive of Excise Duty and net of Sales Tax and Trade
 Discount.
 
 6.  Employee benefits
 
 a) Short-term employee benefits are recognized as an expense at the
 undiscounted amount in the Profit & Loss Account of the year in which
 the related service is rendered.
 
 b) Post employment and other long term employee benefits are recognized
 as an expense in the Profit & Loss Account for the year in which the
 employee has rendered services. The expense is recognized at the
 present value of the amount payable determined as per actuarial
 valuations. Actuarial gains and losses in respect of long term employee
 benefits are recognized in the Profit and Loss account.
 
 7.  Research & Development
 
 Revenue expenditure pertaining to research and development is charged
 to revenue in the year in which it is incurred.  Capital Expenditure on
 Research & Development is shown as addition to Fixed Assets.
 
 8.  Foreign Currency Transactions
 
 a) Transactions in Foreign Currency are initially recorded at the
 Exchange Rate at which the transactions are carried out.
 
 b) Monetary items are translated at Exchange Rate prevailing at the
 year-end.
 
 The difference in translation of monetary items and realised gains and
 losses on foreign exchange transactions are recognised in the Profit
 and Loss Account.
 
 c) Forward exchange contracts entered into for hedging purposes are
 accounted for separately from the underlying transactions. The premium
 or discount on forward exchange contract is amortized over the period
 of the respective contract.
 
 9.  Insurance Claims
 
 Insurance claims are recognized when the amount thereof can be
 reasonably ascertained and the claim is likely to be received.
 
 10. Deferred Revenue Expenditure
 
 Payment to employees under employees separation scheme are amortized
 equally over a period of five years.
 
 11. Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions are recognized in respect of obligations where, based on the
 evidence available, their existence at the Balance Sheet date is 
 considered probable.
 
 Contingent liabilities are shown by way of Notes on Account in respect
 of obligations where, based on the evidence available, their existence 
 at the Balance Sheet date is considered not probable.
 
 Contingent assets are not recognized in the Accounts.
 
 12.  Taxes on Income
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the year. Deferred tax is recognized, subject to
 consideration of prudence in respect of deferred tax assets, on timing
 difference, being the difference between taxable income and accounting
 income that originate in one period and are capable of reversal in one
 or more subsequent periods.
 
 13.  Government Grant
 
 Government Grant received on Capital Account is shown as Capital
 Reserve.
 
 14.  Impairment Of Assets
 
 An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. An impairment loss is charged to the
 profit and loss account in the year in which an asset is identified as
 impaired. The impairment loss recognized in prior accounting period is
 reversed if there has been a change in the estimate of recoverable
 amount.