1. Basis of Accounting
 
 The financial statements are prepared on historical cost convention on
 accrual basis as a going concern in accordance with the generally
 accepted accounting principles in India and the provisions of the
 Companies Act, 1956.
 
 2. Fixed Assets
 
 Fixed Assets are stated at original cost of acquisition. The cost of an
 asset comprises of its purchase price less of excise modvat and any
 directly attributable cost of bringing the asset to working condition
 for its intended use.
 
 3. Depreciation
 
 Depreciation on fixed assets is provided on straight line method at the
 rates prescribed in the amended schedule XIV of the Companies Act,
 1956.
 
 4. Investments Investments are stated at cost
 
 5. Inventories
 
 Inventories are valued at the lower of cost or estimated net realisable
 value. Cost of finished goods and work-in-process include cost of
 material, direct labour and an appropriate portion of overheads. Cost''s
 determined using First In First Out (FIFO) Method.
 
 6. Retirement Benefits
 
 Gratuity is accounted on payment basis. Leave salary is accounted on
 payment basis.
 
 7. Taxation
 
 Tax expense comprises current tax and deferred tax charge/credit. The
 deferred tax charge/credit is recognised using current tax rates.
 Deferred tax assets/liabilities are reviewed as at each Balance Sheet
 date.
 
 8. Provisions. Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are not recognized but are disclosed in the
 notes. Contingent Assets are neither recognized nor disclosed in the
 financial statements.