1) REVENUE RECOGNITION
 
 a) Sales inclusive of Excise Duty but exclusive of VAT and Discounts
 are accounted for at the time of handing over the goods to the
 customers /carting agents/transporters.
 
 b) Purchases (net of Discounts) are booked on the receipt of the goods
 by the Company.
 
 c) Other Revenues are recognized on accrual basis in accordance with
 AS-9.
 
 2) FIXED ASSETS
 
 Fixed Assets are stated at cost, except Land and Buildings which were
 revalued and are, therefore, stated at the revalued book values. Cost
 includes interest on borrowing for creation of specific assets,
 freight, duties, taxes and other incidental expenses up to the date of
 the commissioning of the assets.
 
 3) DEPRECIATION
 
 a) Depreciation on Fixed Assets is provided on the original
 cost/revalued cost of the Asset at written down value except Plant &
 Machinery on which depreciation is provided on Straight Line Method, at
 the rates and in the manner prescribed in Schedule XIV of the Companies
 Act, 1956.
 
 b) Items of assets costing Rs. 5,000 or less are fully depreciated in
 the year of acquisition.
 
 c) Revalued Fan Factory Buildings - WDV Rates computed by taking the
 residual revalue and estimated residual life as certified by valuers.
 
 d) Tools and Dies (Included - Costing uptoRs. 2 Lacs-100% in the year
 of acquisition.  in Plant & Machinery) - Costing above Rs.2 Lacs -
 1/3rd of the cost per annum
 
 e) Difference between depreciation provided on the revalued Assets and
 depreciation on the historical value thereof is transferred to
 revaluation reserve and is shown as reduction from the calculated
 depreciation.
 
 4) INTANGIBLE ASSETS
 
 Intellectual Property Rights have been depreciated @25% p.a. and cost
 of EDP Software Licences @ 40% p.a. on WDV method.
 
 5) INVENTORY VALUATION
 
 The inventory of Finished Goods, Raw Materials & Components and Loose
 Tools are valued at lower of cost or estimated realisable value. The
 basis of determining cost of various categories of stocks are as
 follows :-
 
 - Raw Materials and Components - Moving Weighted Average Rate (net of
 CENVAT & VAT)
 
 - Processed Stocks - Direct material costs, direct wages and
 appropriate overheads
 
 - Finished Goods - Manufactured - Direct material costs, wages,
 appropriate overheads and Excise Duty.  - Purchased - Weighted Moving
 Average Price (net of VAT)
 
 6) FOREIGN EXCHANGE TRANSACTIONS
 
 Transactions in foreign currency are accounted at the rate prevalent on
 the date of transactions.  Foreign Currency Current Assets / Current
 Liabilities are translated at the year end rates. The amount of
 fluctuations whether gain or loss is disclosed in the Profit & Loss
 Account.
 
 7) EMPLOYEE LONG TERM BENEFITS
 
 Liability towards gratuity and leave encashment is determined based on
 the actuarial valuation as on Balance Sheet date.
 
 Gratuity, Provident Fund, Superannuation Fund & Employee State
 Insurance are accounted for on the basis of the contribution made to
 the respective funds.
 
 8) EXPORT BENEFITS
 
 The value of the DEPB licenses against export entitlement are accounted
 for on accrual basis.
 
 9) BORROWING COSTS
 
 Cost of borrowing is charged to revenue except the borrowings used for
 creation of Fixed Assets prior to capitalisation.
 
 10) PROVISION FOR TAXATION
 
 Provision for Current Tax and Fringe Benefit Tax have been made as per
 the provisions of Income Tax Act 1961 and adjustment for Deferred Tax
 is made in accordance with Accounting Standard-22.
 
 11) WARRANTY PROVISIONS
 
 Provisions for Warranty Costs have been made on estimated basis.
 
 12) CONTINGENT LIABILITIES
 
 Liabilities, though contingent, are provided for if there are
 reasonable prospects of such liabilities maturing. Other contingent
 liabilities, barring frivolous claims, not acknowledged as debt, are
 disclosed by way of note.