A. System of Accounting
 
 The Company adopts the accrual concept in preparation of Accounts.
 
 The Financial statements have been prepared on the assumption of Going
 Concern principle based on sales orders on land, notwithstanding the
 reduction of operations and erosion of profitability and the net worth
 of the Company.
 
 B. Inflation
 
 The assets and liabilities are recorded at historical cost to the
 Company. These are not adjusted to reflect the changing value in
 purchasing power of the money.
 
 C. Investments
 
 The long term investments are stated at cost.
 
 D. Depreciation
 
 The depreciation is provided on straight line method at rates and in
 the manual prescribed in schedule XIV of the Companies Act, 1956. The
 Leasehold land is amortised over the life of the lease. No depreciation
 is provided on the machinery acquired from the conditional
 Grants-in-aid from the Department of Electronics.
 
 E. Valuation of Inventories
 
 The Company has valued its Raw Materials and Packing Materials at cost
 net of recoverable taxes and Excise Duty on F-I-F-O basis. The
 Work-in-Progress and Finished Goods have been valued at cost including
 appropriate manufacturing overheads or at the realisable value
 whichever is less. Finished Goods also include Excise Duty Payable.
 
 F. Retirement Benefits
 
 The provision for gratuity for the year is made on actuarial valuation
 made by the LIC on the date of the Balance Sheet as per the provisions
 of Payment of Gratuity Act 1972 and is funded. The Company's
 contribution to Government Provident Fund Scheme and the Employees
 Pension Scheme is charged to revenue each year. Provision for Leave
 encashment benefits is made on estimated basis.