1.1 ACCOUNTING CONVENTION
 
 The financial statements have been prepared in accordance with the
 historical cost convention on the going concern basis.  System of
 accounting followed is Mercantile System in accordance with the
 generally accepted accounting principles and the provisions of the
 Companies Act''1956, on consistent basis.  Accounting policies not
 specifically referred to are consistent with generally accepted
 accounting principles followed by the company.
 
 1.2 FIXED ASSETS
 
 Fixed assets are recorded at cost or are based on payments in case of
 hire purchase and are stated at historical cost less depreciation.
 
 1.3 DEPRECIATION
 
 Depreciation is charged on straight-line method on pro-rata basis in
 accordance with the rates specified in Schedule-XIV of the Companies
 Act''1956.
 
 1.4 REVENUE RECOGNITION
 
 Revenue is recognized when sales are completed which generally coincide
 with the passage of title to the customer / delivery of goods /
 rendering of services.
 
 1.5 INVENTORIES
 
 - Finished goods are valued at cost or market value, whichever is
 lower.
 
 - Raw materials, stores, spares and tools are valued at cost.
 
 - Work in progress is valued at cost
 
 1.6 Preliminary, share issue exp. and deferred exp. are amortized over
 a period of 20 years only out of profit.  2.0 Secured term loans
 represent amount after restructuring under the BIFR Scheme.