A.  Basis of Preparation
 
 The fnancial statements have been prepared under the historical cost
 convention and materially comply with the Accounting Standards issued
 by the Institute of Chartered Accountants of India (ICAI) and the
 provisions of the Companies Act, 1956. All income and expenditure
 having material bearing on the fnancial statements have been recognized
 on the accrual basis.
 
 B.  Use of Estimates
 
 The preparation of fnancial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and the disclosure of contingent liabilities on the date of
 fnancial statements. Actual results could differ from those estimates.
 Any revision to accounting estimates is recognized prospectively in
 current and future periods.
 
 C.  Fixed Assets and Depreciation
 
 a) Fixed Assets are stated at cost of acquisition / construction /
 revaluation less accumulated depreciation
 
 b) Depreciation on Fixed Assets is provided on straight line method at
 the rates and in the manner prescribed in Schedule XIV of the Companies
 Act, 1956.
 
 c) Depreciation on building to the extent of revalued amount has been
 debited to Revaluation Reserve account.
 
 d) On assets acquired during the year and assets sold during the year
 the depreciation has been provided pro rata for the period used.
 
 e) The company had acquired several vehicles a few of which are yet to
 be transferred in the name of the company. The company has all the
 ownership rights and the depreciation thereon has been charged at the
 rates prescribed in Schedule XIV to the Companies Act, 1956.
 
 D.  Investments
 
 Investments being long term are stated at cost. Provision is made to
 recognize a diminution other than temporary in the value of
 investments.
 
 E.  Inventory
 
 a) Raw material, packing materials, stores, spares and stock-in-transit
 valued at cost.
 
 b) Finished goods are valued at cost or market value whichever is
 lower. The cost includes cost of production and expenses incurred in
 putting the inventories in their present location and condition.
 
 c) Waste and scrap are not separately valued being insignificant in
 value
 
 F.  Revenue Recognition
 
 a) Revenue from sale of goods is recognized when the goods are handed
 over to the customer or his duly authorized agent
 
 b) Sales are accounted net of sales tax recovered, sales returns, trade
 discounts, rebates and allowances but include duties wherever
 applicable. (Though, quantity discounts, Incentive discounts are
 debited to profit & Loss A/c. directly.)
 
 G.  Employee benefits
 
 a) Bonus is accounted on accrual basis
 
 b) Gratuity is covered under the group gratuity scheme of life
 insurance Corporation of India.
 
 c) All employees are eligible for benefit under provident fund (PF)
 scheme. Provident Fund @ 12% of basic salary plus dearness allowance,
 wherever applicable, is deducted and paid alongwith Company''s
 contribution of an equal amount on a monthly basis to the government
 administered provident fund scheme and charged to profit and loss
 account.
 
 d) As per the policy of the company, only managerial staff is entitled
 to encash their Annual leave. The same is accounted for on cash basis.
 The liability is unascertainable.
 
 H.  Earning Per Share
 
 Basic earning per Share is calculated by dividing the net profit or loss
 for the year attributable to Equity Shareholders by the weighted
 average number of equity shares outstanding during the year.
 
 I.  Impairment of Assets
 
 The carrying amount of the Company''s Assets are reviewed at each
 balance sheet date if any indication of any impairment exists, an
 impairment loss is recognized to the extent of the excess of the
 carrying amount over the estimated accountable amount.
 
 J.  Foreign Currency Transactions
 
 a) The transactions in foreign currency are accounted at the exchange
 rate i.e. custom rate prevailing on the date of transaction.  Exchange
 fuctuation between the transaction date and settlement date in respect
 of transactions are transferred to exchange rate difference account and
 written off to profit & loss account.
 
 b) Current assets and current liabilities involving transactions in
 foreign currency are converted at the exchange rates prevailing on the
 date of Balance Sheet. Any profit and loss arising out of such
 conversion is charged to profit and loss account.
 
 c) Non-monetary items i.e. investments are converted at the rate
 prevalent on the date of transaction.