1 BASIS OF ACCOUNTING
 
 The financial statements are prepared on accrual basis and in
 accordance with the requirements of the Companies Act, 1956.
 
 2 FIXED ASSETS:
 
 (a) Fixed Assets are stated at cost less accumulated depreciation. The
 Company capitalises all costs relating to the acquisitions and
 installations of fixed assets.
 
 (b) Capital work in progess includes all costs relating to the capital
 expenditure incurred on the Projects.
 
 3 DEPRECIATION:
 
 Depreciation on original cost has been provided under the Straight Line
 Method at the rates provided by Schedule XIV to the Companies Act,
 1956. Except in the case of Motor Vehicles, for which the depreciation
 is charged on W.D.V.
 
 4 INVENTORIES:
 
 (a) Raw Materials are valued at lower of cost and net realisable value
 arrived on Fl FO basis.
 
 (b) Finished Products and Work in Process are valued at lower of cost
 and net realisable value arrived at on FIFO basis.
 
 Cost of finished products and work-in-process includes material cost,
 labour, direct expenses production overheads and excise duty, where
 applicable.
 
 5 SALES:
 
 Sales are inclusive of excise duty.
 
 6 FOREIGN CURRENCYTRANSACTIONS:
 
 Foreign currency transactions are translated into Indian Currency at
 the exchange rate prevailing on the date of transaction. Other monetary
 assets/ liabilities are valued at the rate prevailing on the date of
 balance sheet. The gain/ losses resulting from the settlement of these
 transactions are recognized in the Profit & Loss Account and the
 exchange difference relating to fixed assets are adjusted in the cost
 of the asset.
 
 7 EXCISE DUTY:
 
 Excise duty at the applicable rates payable on products is accounted
 for at the time of despatch of goods but is accrued for stocks held at
 the close of financial year.
 
 8 RETIREMENT BENEFITS:
 
 Contribution to Provident Fund are charged to Profit & Loss Account,
 
 9 GRATUITY:
 
 No provision for gratutiy has been made in the books of accounts.
 
 10 CONTINGENT LIABILITIES:
 
 Liabilities which are of contingent nature are disclosed by way of
 Notes and such liabilities which are likely to mature are provided for.
 
 11 TAXES ON INCOME:
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the period.  Deferred tax is recognized subject to
 the consideration of prudence in respect of deferred tax assets on
 timing differences, being the defference between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or the subsequent periods.