1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
 
 a) The Financial Statements have been prepared under the historical
 cost convention on accrual basis as a going concern with revenue
 recognised in accordance with generally accepted accounting principles
 and the provisions of the Companies Act, 1956 as adopted consistently
 by the Company.
 
 b) Incomes and expenditure are accounted for on accrual basis except
 CST reimbursement claims being accounted for as and when settled.
 
 2. FIXED ASSETS:
 
 Fixed assets are stated at cost of acquisition less accumulated
 depreciation. Cost of acquisition includes inward Freight, Duties,
 Taxes, Installation expenses and Pre-Operative expenses.
 
 3. DEPRECIATION:
 
 The Company is providing depredation on Written Down Value Method at
 the rates prescribed in Schedule XIV of the Companies Act, 1956.
 
 4. INVENTORIES:
 
 Inventories are valued at Lower of Cost or Net Realisable Value except
 Finished Goods, which is valued at net re-leasable value. Cost is
 determined by using FIFO (First in First out) method and does not
 include recoverable duties and taxes except CST Reimbursement, which is
 being accounted for on cash basis.
 
 5. EMPLOYEES RETIREMENT BENEFITS:
 
 a) Companys contribution to Employees Provident Fund and Family
 Pension Fund during the period are charged to Profit & Loss Account.
 
 b) Gratuity is accounted for on Cash Basis.
 
 6. FOREIGN EXCHANGE TRANSACTIONS:
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing at the time of transaction.
 
 7. Preliminary and public issue expenses are amortized over a period of
 10 years