1) Basis of Accounting
 
 The financial statements of the Company are prepared under the
 historical cost convention on an accrual basis and in accordance with
 the generally accepted accounting principles and Accounting Stan- dards
 issued by the Institute of Chartered Accountants of India.
 
 2) Fixed Assets and Depreciation
 
 (a) Fixed assets are stated at cost less accumulated depreciation. Cost
 includes all related expenses incurred up to the date of putting them
 to use.
 
 (b) Depreciation is provided at the rates and in the manner specified
 in Schedule XIV of the Companies Act, 1956 as follows:
 
 - In respect of Plant & Machinery and Buildings : Straight Line Method
 
 - In respect of Furniture & Fixtures, Patterns, Vehicles,
 
 Office equipment, Computers and Misc. Equipment.  : Written Down Value
 Method
 
 3) Inventories
 
 (a) Raw Materials, Components and Consumable Stores are valued at cost
 on first in first out basis (FIFO).
 
 (b) Finished goods and Work-in-progress are valued at lower of cost and
 net realizable value on full absorption cost basis.
 
 4) Sales
 
 Sales includes excise duty are accounted for on dispatch of goods to
 the customers that generally coin- cides with the transfer of risk and
 rewards.
 
 5) Foreign Currency Transactions
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing at the time of transaction.
 
 Monetary items denominated in foreign currencies at the year end not
 covered by forward exchange contracts are translated at year end rates
 and the difference is charged to the Profit and Loss Account.
 
 6) Retirement Benefits
 
 All the Employees of the Company are entitled to retirement benefits of
 Provident Fund and Gratuity.
 
 (a) Provision for Gratuity liability to employees is made on the basis
 of actuarial valuation.
 
 (b) Provision is made for value of unutilized leaves due to employees
 at the end of the year.
 
 (c) Deferred Tax
 
 Deferred Tax is accounted for by computing the tax effect of timing
 differences that arise during the year and reverse in subsequent
 periods.
 
 7) Leases
 
 Assets acquired under finance leases on or after April 1, 2001 are
 recognized at the lower of the fair value of the leased assets at
 inception and the present value of minimum lease payments. Lease pay-
 ments are apportioned between the finance charge and the reduction of
 the outstanding liability. The finance charge is allocated to periods
 during the lease term at a constant periodic rate of interest on the
 remaining balance of the liability.