01.  Basis of Accounts
 
 The Financial Statements are prepared on Historical Cost Convention and
 en accrual basis except Retirement benefits like Gratuity which is
 accounted for on cash Basis.
 
 02.  Fixed Assets
 
 Fixed Assets are stated at cost cf acquisition, construction and
 improvement made which is inclusive of freight and taxes.
 
 03.  Depreciation
 
 Depreciation on Fixed Assets has been provided on written down value at
 the rates prescribed in Schedule-XIV as amended by notification dated
 at 16th December, 1993 to the Companies Act, 1956.
 
 04.  Inventories
 
 Finished goods are valued at average cost of production and Raw
 Materials are valued at average cost.
 
 05.  Excise Duty :
 
 Excise Duty payable on goods kept in the factory are neither included
 in the expenditure nor it is taken into account for valuation of
 closing stock. it is accounted at the time of clearance of goods from
 the Factory. This practice is consistently followed by the Company and
 has no impact on Profit & Loss. Modvat Credits in respect of Raw
 Materials are taken into account at the time of Purchase of Raw
 Material (to the credit of the respective purchase and utilised for
 payment of excise duty on goods manufactured).
 
 06.  Deferred Tax :
 
 Incoma Tax Expenses is accounted for in accordance with AS-22
 Accounting for Taxes on Income which include Current Tax and Deferred
 Taxes. Deferred Tax reflects the impact of current Year timing
 difference between Taxable Income and Accounting Income for the Year
 and reversal of timing difference of earlier Years. Deferred Tax Assets
 are recognized only to the extent that there is virtual certainty
 supported by convincing evidence that sufficient future Taxable income
 will be available against which such Deferred Tax Assets can be
 realised.
 
 07.  Accounting Policies not referred to otherwise are consistent with
 generally accepted accounting principles.