A. BASIS OF ACCOUNTING :
 
 The financial statements are prepared under historical cost convention
 on an accrual going concern basis and are in accordance with the
 requirement of the Companies Act, 1956.
 
 B. CAPITAL EXPENDITURE :
 
 a. Cost of major civil works required for plant and Machinery supports
 is considered as Plant and Machinery.
 
 b. Capital Assets under erection/installation arc reflected in the
 Balance Sheet as Capital Work in Progress including advance to
 supplies, contractors and others.
 
 c. All fixed Assets arc recorded at cost of aquisition or
 construction. They are stated at historical cost. Financial cost
 relating to borrowed funds attributable to construction or acquisition
 of Fixed Assets is included in the gross book value of Fixed Assets to
 which they relate.
 
 C. DEPRECIATION
 
 Depreciation on fixed Assets is provided on Stratight Line Method at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act 1956, as amended from time to time. Also refer Note No.IX of Notes
 on Accounts.
 
 D. INVESTMENTS:
 
 Investments are valued at cost.
 
 E. INVENTORIES:
 
 Items of inventories are valued on the basis given below:
 
 The old stock of Inventories such as Finished goods, Raw materials,
 work-in-process packing materials, consumable stores, fuel oil arc
 taken with the same value as taker since the last three years.
 
 F. ACCOUNT OF MODVAT CREDIT
 
 MODVAT credit is accounted on the basis of raw materials purchased. The
 refund of excise in the form of MODVAT credit available on inputs of
 materials as per excise laws are deducted from the landed cost of the
 materials purchased and, accordingly, closing stock of input materials
 are valued net of MODVAT credit.
 
 G. EXCISE DUTY :
 
 Sales of products arc inclusive of Excise Duty, Export Sales arc
 accounted on F.O.B. basis. The excise duty payable on Finished Goods
 are accounted for on the clearance of goods from the factory. No
 provision is made for Excise Duly in respect of Finished Products lying
 in the factory premise.
 
 H. RESEARCH & DEVELOPMENT :
 
 Revenues expenditure on Research and Development is charged to profit
 and Loss Account in the year in which it is incurred. Capital
 expenditure on Research and Development is shown as an addition to
 Fixed Assets.
 
 I. TREATMENT OF EXPENDITURE DURING CONSTRUCTION
 
 Incidental expenses incurred during construction period of new projects
 are capitalised upto the date of first commissioning of the project.
 Pending capitalisation, estimated percentage, based on management
 perspective, of revenue expenses incurred during the year upto the date
 of completion have ben capitalised.
 
 I. CONTINGENT LIABILITIES :
 
 These arc disclosed by way of Notes on Accounts. Provision is made to
 the accounts in respect of those liabilities which arc likely to
 materialise after the year end, till the finanlisation of accounts and
 have material effect on the position stated in the Balance Sheet.
 
 K. FOREIGN EXCHANGE/CURRENT CONVERSION
 
 Transactions in foreign Currency arc recorded in rupees b applying rate
 of exchange ruling at the time of transaction and exchange differences
 arising out of their settlements are dealt with in the Profit and Loss
 accounts.
 
 L. Prior period Adjustment:
 
 Prior period adjustment of indentifical items of Income and Expenditure
 pertaining to the prior period arc accounted through prior period
 adjustment Account.
 
 M. Treatment of retirment benefits
 
 As there are no employees on payroll, there is no liability for
 gratuity, Leave Encashment etc. as on 31-03-2002.