SIGNIFICANT ACCOUNTING POLICIES:
 
 A) Basis of Preparation of Financial Statements :
 
 i) The Company generally follows mercantile system of accounting and 
 recognises significant items of income and expenditure on accrual 
 basis.
 
 B) Fixed Assets and Depreciation :
 
 i) Fixed Assets are stated at cost less accumulated depreciation. All 
 costs till commencement of commercial production, interest on term 
 loans for the entire period of loans and net changes on foreign 
 exchange adjustments from exchange rate variations relating to 
 borrowings attributable to the fixed assets are capitalised.
 
 ii) Depreciation is provided on Plant and Machinery, Building, 
 Electricity and Water Installation of SLM as per the rates specified 
 in Schedule XIV to the Companies Act, 1956 as amended vide 
 notification No. GSR 756 dated 16 Dec., 93 issued by the Deptt. of 
 Company Affairs.  The current rate of depreciation have been applied 
 on the old as well as new assets for the current period. Depreciation 
 on Furnitures, Fixture, Office Equipments, Electricity Equipments and 
 Vehicles is provided on WDV as per rates specified in Schedule XIV of 
 the Companies Act, 1956.  Miscellaneous/Sundry Assets valuing up to 
 Rs. 5000/- each are fully depreciated in the year of purchase.
 
 C) Foreign Currency Transactions :
 
 Transactions denominated in foreign currencies are normally recorded 
 at the exchange rate prevailing at the time of the transaction. 
 Monetary items denominated in foreign currencies at the year end are 
 translated at year end rates. Non monetary foreign currency items are 
 carried at cost.
 
 Any income or expenses on account of exchange difference either on 
 settlement or on translation is recognised in the Profit and Loss 
 Account except in cases where they relate to the acquisition of fixed 
 assets in which case they are adjusted to the carrying cost of such 
 assets.
 
 D. Investments :
 
 Long term investments are carried at cost and current investments are 
 carried at lower of cost and quoted/fair value.
 
 E. Inventories :
 
 a) Raw materials stores, spares, tools and materials in transit are 
 valued at cost.
 
 b) Work in process is valued at estimated cost.
 
 c) Finished goods are valued at lower of cost or net realisable value 
 and stock of scrap is valued at estimated realisable value.
 
 F. SALES:
 
 Sales comprise excise duty net of discounts. Excise duty has been 
 accounted for on the basis of payments made in respect of goods 
 cleared only. Sales are recognised on despatches to parties.
 
 G. Employee Retirement Benefits:
 
 Company's contribution to provident funds and superannuation fund are 
 charged to profit and loss account. Gratuity and leave encasement 
 benefit at the time of retirement are charged to profit and loss 
 account on the basis of estimation followed consistently. However 
 actuarial valuation of the liability has not been done.
 
 H. Preliminary, Capital issues and Deferred Revenue Expenses :
 
 Preliminary, Capital Issues and Deferred Revenue expenses are 
 amortised over a period of ten years.
 
 I. Research and Development Expenses :
 
 Research and development costs (other than cost of fixed assets 
 acquired) are charged as an expenses in the year in which they are 
 incurred.
 
 J. Leases :
 
 Lease rentals are expensed with reference to lease terms.