a) System of Accounting
 
 The Financial statements are based on historical cost and on the basis
 of a going concern concept. The Company follows Mercantile system of
 Accounting and recognises income and expenditure on accrual basis.
 
 b) Fixed Assets
 
 Fixed Assets are stated at historical cost of acquisition including
 installation and erection charges upto the date of commissioning of the
 asset less accumulated depreciation.
 
 c) Depreciation
 
 i. In respect of Fixed Assets commissioned upto 31.12.1987 depreciation
 is provided under SLM at the appropriate rates to amortise 95% of the
 original cost of the Assets over the useful life of the assets.
 
 ii. In respect of Fixed Assets commissioned on or after 01.01.1988, the
 SLM rates prescribed under Schedule XIV of the Companies Act, 1956 have
 been adopted.
 
 iii. In respect of Assets grouped under `Canteen Amenities the value
 of assets put into use are written off at 25% on SLM basis.
 
 d) Sales
 
 Sales are stated at Gross Invoice rates net of returns before charging
 excise duty and sales tax and before allowing discounts.
 
 e) Valuation of Inventories:
 
 i. Finished Goods and Stock in process
 
 Finished goods and Stock in process have been valued at lower of the
 cost or realisable value as per accounting standards.
 
 ii. Raw materials, Stores & Spares :
 
 These are valued at weighted average cost method.
 
 iii. Scrap :
 
 These are valued at `net realisable value
 
 f) Treatment of Retirement Benefits.
 
 i. The Company is a member of LICs Group Gratuity Assurance Scheme and
 therefore the liability towards Gratuity is provided at the year end on
 the basis of Actuarial valuation provided by LIC of India.
 
 ii. Liability towards Leave encashment is provided on the basis of
 Actuarial valuation provided by an Actuary from the Current year.
 
 iii. Ex-gratia to Employees retiring under Voluntary Retirement Scheme
 is charged off in full in the year in which they are relieved from
 service.
 
 g) Research & Development :
 
 Revenue expenditure on Research & Development is written off in the
 year in which it is incurred.
 
 h) Foreign Exchange Transactions:
 
 Transactions in foreign currency are recorded at exchange rates
 prevailing on the date of transactions, Current assets, current
 liabilities and foreign currency loans, outstanding at the year-end,
 are translated at exchange rates applicable as of that date. The
 resultant exchange gains and losses except those relating to
 acquisition of fixed assets, which are adjusted to the cost of such
 assets till they are fully depreciated, are accounted in the Profit and
 Loss Account.
 
 i) Prior Period and Prepaid Items:
 
 Expenses and Income of values more than Rs. 10,000 only are recognised
 for prior period adjustment. Expenses of values more than Rs.5,000 only
 are recognised for prepaid expenses & Outstanding expenses.
 
 j) Technical knowhow fees:
 
 Technical knowhow fees are being written off at 1/10th of the cost
 incurred, each year.