1.  BASIS OF ACCOUNTING
 
 a) The financial statements of the Company are prepared under the
 historical Cost Convention using Accrual Method of Accounting.
 
 b) The financial statements have been prepared in accordance with the
 mandatory Accounting Standards and relevant presentation requirements
 of the Companies Act, 1956.
 
 2.  FIXED ASSETS AND DEPRECIATION
 
 a) Fixed assets are accounted for at cost of acquisition inclusive of
 freight, duties, taxes, erection, installation and other incidentals
 related to acquisitions and exclusive of Excise Modvat recoverable on
 purchase of Capital Goods.
 
 b) Cost of fixed Assets acquired from outside India are converted into
 Indian rupees at the exchange rates prevailing on the date of
 disbursements.
 
 c) Depreciation on fixed Assets is provided on Straight Line Method
 considering single shift working in accordance with the rates specified
 in schedule XIV of the Companies Act, 1956 as amended by Notification
 No.  GSR 756(E) dated 16th December, 1993 of the Ministry of Law,
 Justice & Company Law Affairs, Department of Company Affairs.
 
 3.  INVESTMENT
 
 Investments are taken at cost.
 
 4.  SALES
 
 Sales represents invoiced value of goods sold and services rendered,
 net of sales tax but inclusive of excise duty.
 
 5.  INVENTORIES
 
 Inventories are valued as per AS-2 (Valuation of Inventories) issued by
 the ICAI as under:
 
 a) Stocks of Raw Materials are valued at cost by adopting FIFO Method.
 
 b) Stock of Work in process is valued at cost of Raw Material and
 proportionate direct manufacturing expenses.
 
 c) Stock of stores, spares and packing material are valued at cost by
 adopting FIFO Method.
 
 d) Stocks of finished goods are valued at lower of cost or net
 realizable value. Cost includes raw material cost and appropriate share
 of manufacturing expenses and is inclusive of depreciation and excise
 duty paid / payable thereon.
 
 6.  RESEARCH AND DEVELOPMENT EXPENDITURE
 
 The capital expenditures are debited to the respective heads under
 fixed assets. The revenue expenditure is charged to revenue account and
 disclosed separately.
 
 7.  BORROWING COSTS
 
 Borrowing costs attributable to acquisition, construction of qualifying
 assets are capitalized as part of cost of the relevant asset up to the
 date the asset is put to use. All other borrowing costs are recognized
 as an expense in the year in which they are incurred.
 
 9.  RETIREMENT BENEFIT PLANS:
 
 Future liability for gratuity and leave encashment is determined on the
 basis of actuarial valuation at year end.
 
 10.  PROVISION FOR CURRENT AND DEFFERED TAX:
 
 Provision for current tax assets and liability is estimated as per the
 provisions of the Income Tax Act, 1961
 
 Deferred tax is recognized subject to the consideration of prudence on
 timing difference being the difference between taxable incomes and
 accounting income that originate in one period and are capable of
 reversal in one or more period.
 
 11.  IMPAIRMENT OF ASSETS:
 
 In case of indication of impairment of the carrying amount of the
 Company''s assets, an asset''s recoverable amount is estimated impairment
 loss is recognized wherever the carrying amount of an asset exceeds its
 recoverable amount.
 
 Reversal of Impairment loss recognized in prior periods is recorded
 when there is an indication that the impairment loss recognized for the
 asset no longer exist or has decreased.
 
 Post Impairment depreciation is provided on the revised carrying value
 of the asset over its remaining useful life.
 
 12.  REVENUE RECOGNITION
 
 i) Sales are recognized on dispatch of goods to customers.
 
 ii) Profit / Loss on sale of investment and Fixed Assets are recognized
 in the year of sale.
 
 13. DEFERRED REVENUE EXPENDITURE
 
 Deferred revenue expenditure is written off over a period of six year.
 
 14.  MISCELLENOUS EXPENDITURE
 
 Miscellaneous Expenditure is written off over a five year.