ACCOUNTING CONVENTION
 
 The Financial Statements are prepared under the historical cost
 convention in accordance with aplicable account- ing standards and
 relevant presentation requirements of the Companies Act, 1956
 
 1.  FIXED ASSETS AND DEPRECIATION
 
 a.  Tangible assets are stated at the cost minus the accumulated
 depreciation. Cost of acquisition is inclusive of freight, duties,
 taxes and other incidental expenses and in the case of plant and
 machinery, interest on loans taken for the acquisition of assets upto
 the date of commissioning of the assets. In case of foreign exchange
 transaction relating to fixed assets, the cost has been taken on the
 basis of payment made at exchange rate, prevailing on the date of
 payment.
 
 b.  Depreciation is charged on a pro-rata basis under the Straight line
 method rates prescribed in Schedule XIV to the Companies Act, 1956
 except for plant and machinery costing less than Rs. 5,000/- each in
 value, which is depreciated at the rate of 100%.
 
 2.  INVESTMENTS
 
 Investments are stated at cost.
 
 3.  INVENTORIES 
 
 Basis of Valuation
 
 Stores and Spare Parts : At Cost
 
 Raw Materials : At Cost anA Market Value
 
 Work-in-process : At Material Cost
 
 Finished Goods : At Realisable Value
 
 4.  RETIREMENT BENEFITS
 
 a) Gratuity Payment have been accounted for on Payment Basis.
 
 b) The Company has taken LIC Group Insurance Scheme in Jieu of
 Employees Deposit Linked Insurance Scheme to provide life assurance
 benefits to the employees.
 
 5.  FOREIGN EXCHANGE TRANSACTION
 
 Foreign Currency Liabilities are transacted at exchange rate prevailing
 on the date of clearance of goods from custom authorities. The loss or
 gain arising out of said transaction if any, on account of exchange
 rate variation are adjusted under the respective head if paid during
 the same year. Otherwise the same are adjusted to Profit and Loss
 Account of year in which it is paid.
 
 6.  SALES
 
 Sales includes excise duty and sales tax collected.