1.  Accounting Convention
 
 Accounts are maintained on an accrual basis under historical cost
 convention.
 
 2.  Fixed Assets and Depreciation:
 
 * The Fixed assets are stated at the cost of acquisition/
 construction-less accumulated /depreciation thereon.
 
 * Cost includes inward freight, duties, taxes incidental expenses to
 acquisition /installation and other preoperation expenses.
 
 * Depreciation on fixed assets have been provided on straight line
 method (SLM) at the rates specified in scheduled XIV of the Companies
 Act, 1956
 
 * On the assets sold/discarded during the year depreciation is provided
 on to the date of sale or discarding.
 
 * On the assets acquired/put to use during the year depreciation is
 provided on pro-rata basis from the date of acquisition/ put to use of
 the assets.
 
 3.  Investments
 
 Investments are stated at cost of acquisitoin.
 
 4.  Inventories:
 
 Inventories are valued as follows:
 
 1.  Raw Material : At Cost on FIFO Basis
 
 2.  Stores : At Cost on FIFO Basis
 
 3.  Finished Goods : At Cost or Net realisable value whichever is
 lower.
 
 5.  Foreign Currency Transaction:
 
 Transactions completed during the year are adjusted on actual basis.
 Year-end balances of foreign currency transaction are translated at the
 year end rates and the corresponding effects have been given in the
 respective accounts.
 
 6.  Retirement Benefits:
 
 * Provision for Gratuity liability is based on the premium demanded by
 LIC in respect of employees covered under group gratuity scheme of LIC
 and on accrual basis in respect of employees not covered under the
 policy.
 
 * Provision for leave salary has been made on the actual basis
 
 7.  Revenue Recognition:
 
 i.  Sale of goods is recognised at the point of dispatch of finished
 goods to customers. Sales comprise of sale price of goods including
 excise duty but excludes sales tax.
 
 ii.  Interest receivable on security deposit accounted for an accrual
 basis.
 
 iii.  Dividend income is accounted for as and when the same is
 received.
 
 8.  Deferred Taxation:
 
 The liability of Company is estimated considering the provision of the
 Income Tax, 1961. Deferred tax is recognised subject to the
 consideration of prudence, on time difference being the differences
 between taxable income and accounting income that originate in one year
 and capable of reversal in one or more subsequent years.
 
 9.  Miscellaneous Expenditure
 
 Preliminary Expenses and Research & Development Expenses incurred are
 being written off over a period of 5 Years from the year in which these
 were incurred.