a. Accounting Convention
 
 The financial statements are prepared under the historical cost
 convention and materially comply with the mandatory accounting standard
 issued by the Institute of Chartered Accounts of India.
 
 b. Fixed Assets
 
 Fixed Assets are stated at their original cost, net of MODVAT,
 Including Freight, Duties, Taxes and other incidental expenses relating
 to acquisition and installation.  Exchange difference in respect of
 liabilities incurred to acquired Fixed Assets including gains/losses
 arising from forward contracts is adjusted to the carrying amount of
 Fixed Assets.
 
 Expenditure incurred during the period of construction are carried
 forward as Capital Work-in-Process and on completion, the costs are
 allocated to the respective Fixed Assets.
 
 c. Depreciation
 
 Depreciation is provided on a prorata basis, from the date the assets
 have been installed and put on use, on Straight Line Method at the
 rates and in the manner specified in Schedule XIV of the Companies Act,
 1956.
 
 d. Inventory
 
 Stores, Spares, Raw Material, Packing Material and Work-in-Progress are
 stated at cost.  Finished Goods are stated at lower of cost and
 realisable value.  Waste is valued at realisable value.
 
 The basis for determining cost for various categories of inventories is
 as follows :
 
 i) Stores, Spares, Raw Material and
 Packing Material                    : First in first out
 
 ii) Finished Goods and
 Work-in-Progress                   : Cost plus appropriate various
                                      expenses
 
 e. Foreign Currency Transactions
 
 Transaction in Foreign Currency are recorded at the exchange rate
 existing at the time of transaction.  Any gain/loss arising at the time
 of realisation is accounted for as Foreign Exchange Fluctuation in the
 year of realisation.  Foreign currency liabilities incurred for the
 acquisition of Fixed Assets are translated at exchange rates prevailing
 on the last working day of the accounting year and the loss or gain
 arising out the said translation is adjusted to the cost of Fixed
 Assets.
 
 f. Excise Duty
 
 The amount of Excise Duty paid on goods cleared and remaining unsold is
 carried over and shown as `MODVAT Credit Receivable' under Loans and
 Advances.
 
 g. Sales and Sales tax
 
 Sales are recognised at the point of the despatch to the customers.
 Sales are inclusive of Excise Duty and Freight.  The Company is
 eligible for Sales Tax exemption under the terms and conditions of
 Director of Industries, Haryana.
 
 h. Claims and Benefits
 
 Claims receivables and modvat benefit are accounted for on accrual
 basis.  Subsidy granted under capital investment scheme will be
 accounted on receipt basis.
 
 i. Income from Investments/Deposits
 
 Income from Deposits is credited to revenue in the year in which it
 accrues.
 
 j. Miscellaneous Expenditure
 
 Preliminary Expenses are being written off over a period of ten years.
 Share Issue Expenses and Deferred Revenue Expenditure are being written
 off over a period of five years.
 
 k. Contingent Liabilities
 
 Unprovided contingent liabilities are disclosed in the accounts by way
 of notes giving nature and quantum of such liabilities.
 
 Demand received from custom department not acknowledge as debt amount
 to Rs. 31,13,695/- (Previous year Rs.31,13,695/-) against EPCG
 Commitment not met out by the Company.