I. Basis of Preparation of Financial Statements :
 
 (a) The Financial Statements have been prepared under the historical cost convention in accordance with
generally accepted accounting  principles and provisions of Companies Act, 1956 as adopted consistently by
the Company.
 
 (b) The Company generally follows Mercantile system of accounting and
 recognises significant items of Income and Expenditure on accrual basis
 
 II. Fixed Assets :
 
 Fixed Assets are stated at cost less Modvat, Accumulated Depreciation.
 All Costs including financial cost till the commencement of Commercial Production and adjustments arising
from exchange rate variations relating to borrowings, attributable to the Fixed Assets are capitalised.
 
 III. Depreciation :
 
 (a) Depreciation on Factory Building and Plant & Machinery is provided
 on Straight Line method and on other assets on reducing balance method
 at the rates and the manner prescribed in Schedule XIV to the Companies
 Act, 1956.
 
 (b) Where historical cost of the Plant &b Machinery which has undergone
 a change due to increase/decrease the depreciation on the revised un-amortized depreciable amount is
provided prospectively.
      
 IV. Inventories :
 
 (a) Raw materials, Stores, Spares & Chemicals are valued at cost.
 
 (b) Finished Goods are valued at lower of cost or net realisable value.
 
 (c) Scrap is valued at realisable value.
 
 V. Foreign Currency Transactions :
 
 (a) Transactions denominated in Foreign Currency are normally recorded
 at the rates prevailing at the time of transactions.
 
 (b) Monetary items denominated in Foreign Currency are translated at the exchange rate prevalent at the end
of Financial Year.
 
 VI. Contingent Liability :
 
 These are disclosed by way of notes to the Balance Sheet.  Provision is
 made in the accounts in respect of those liabilities which are likely to materialise after the year end,
till finalisation of accounts and have material effect on the position stated in Balance Sheet last year
end.
 
 VII. Sales Turnover :
 
 Sales includes value of goods, Excise Duties and other recoveries such as Transportation and Packing Charges
but excludes Sales Tax.
 
 VIII. Excise Duty :
 
 Excise Duty payable on finished goods is accounted as and when Finished
 Goods are cleared from factory premises.  No provision is made in the accounts for the goods manufactured
and lying in the factory premises at the end of Financial Year.
 
 IX. Custom Duty :
 
 Custom Duty on goods lying in Customs Bonded Warehouses is charged in the year of clearance of goods when it
becomes payable.
 
 X. Modvat :
 
 Modvat benefit is accounted on actual receipt of Duty paying documents on purchase of materials and
appropriated against consumption of materials.
 
 XI. Employees Retirement Benefits :
 
 Company's contribution to the Provident Fund and Employees State Insurance are charged to Profit and Loss
Account.  The liability for the Gratuity is provided on estimate for eligible employees under the  payment of
Gratuity act, 1972 who has completed five year of their service.