a.  The Accounts of the Company have been prepared under the Historical
 cost convention in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act, 1956 as adopted
 consistently by the company. The Company follows the Mercantile system
 of accounting and recognizes significant items of Income and
 Expenditure on accrual basis, except provident fund and employees state
 insurance contributions, Bonus, interest due from trading advances to
 sister concerns and interest due to NBFCs, which are accounted on
 payment basis.
 
 b.  A Sale is net of excise, charity, cess and sales tax collected from
 customers.
 
 c.  DEPRECIATION
 
 Fixed Assets are stated at acquisition cost less accumulated
 depreciation.
 
 The Company provides depreciation under the Straight line method at the
 rates and in the manner prescribed by Schedule XIV of The Companies
 Act, 1956 in respect of Assets acquired in Unit A after 31/03/93 and in
 respect of all assets acquired in Unit B.  However, in respect of
 assets acquired in unit A prior to 31/03/93, the Company provides
 depreciation under the Written Down Value method at the rates
 prescribed under the Income Tax Rules, 1962.
 
 However the company has obtained opinion from the certified engineer
 relating to the residual useful life of the assets. Further during the
 year the critical power position in Tamil Nadu TNEB has reduced demand
 KVA by 30% resulting in lower utilization of the machineries. Taking
 the above in to the consideration, the depreciation has been provided
 on the plant and machinery at 60% of the prescribed rate under the
 companies Act.  Depreciation at normal rate will be higher by Rs. 49.27
 lacs
 
 d.  INVENTORIES
 
 The Company values its stock of Raw materials and Stores at Cost and
 values its Finished Goods at Sales/ realizable value. The Process Stock
 is valued at Average Cost
 
 2.  CONSIGNMENT SALES
 
 The Company records sales to the extent of statements received from the
 consignees in respect of stock of finished goods despatched to the
 consignees.
 
 3.  FOREIGN CURRENCY TRANSACTION.
 
 Liability in Foreign Currency has been shown at cost incurred at the
 time of the transaction. Any fluctuation in the liability arising out
 of the exchange rates will be accounted for at the time of repayment
 and hence no provision has been made for the difference.
 
 4.  RETIREMENT BENEFITS AS - 15
 
 a.  GRATUITY
 
 In respect of Unit A, all the employees except few staffs have opted
 for Voluntary Retirement Scheme and hence in respect of the new
 employees there is no gratuity liability. In respect of staffs in the
 Unit A and employees of Unit B, gratuity is payable as and when the
 employee leaves and the same is accounted on cash basis. However the
 Company is taking necessary steps to obtain Actuarial valuation
 certificate in respect of anticipated future gratuity liability.
 
 b.  LEAVE ENCASHMENT.
 
 The Company normally allows its employees to utilize the leave and no
 encashment leave has been demanded.  In the event of leave entitlement
 being en-cashable in future it will be accounted on payment basis.
 However, as at the end of the year no employees have accumulated leave
 to encash.
 
 c.  PROVIDENT FUND
 
 The Company deposits the Provident fund contribution under the
 Employees Provident Fund Scheme run by the Government.
 
 5.  BORROWING COSTS - AS - 16.
 
 The Company is following AS-16 with regard to the treatment of
 borrowing costs.  But there are no borrowing costs to be capitalized
 during the year.