i) Basis of Accounting: The accounts of the company are prepared under
 the historical cost convention and in accordance with the applicable
 accounting standards, except where otherwise stated. For recognition of
 Profit or Loss, mercantile system of accounting is followed except in
 the following cases where accounting is done on payment/receipt basis:
 
 
 a) Leave with wages & salary
 
 b) Rebate/claim on sales & purchases
 
 c) Legal and Professional Charges.
 
 ii) Fixed Assets: Fixed assets acquired during the year are stated at
 cost of acquisition inclusive of all incidental expenses and any
 attributable cost for bringing the assets to its working condition and
 exclusive of CENVAT Credit on Capital Account.
 
 iii) Depreciation: The depreciation of fixed assets has been provided
 on Straight Line Method as per the rates prescribed in Schedule XIV to
 the Companies Act, 1956. Depreciation on additions/deletions during the
 year has been provided on Pro-rata basis. No amount has been written
 off in respect of leasehold land as grant of lease is for a long
 period.
 
 iv) Investments: Investments are held for long term hence are stated at
 cost. In compliance with AS- 13 where there is a decline of permanent
 nature in the carrying amounts of long-term investments, the resultant
 reduction is charged to the profit & loss statement.
 
 v) Inventories : Inventories are valued on the following basis:
 
 Raw Materials               - At cost
 Finished Goods              - At lower of cost or net realisable value
 Semi Finished Goods         - At estimated cost
 Trading Goods               - At cost
 Stores, Spares & Packing
 Materials                   - At cost
 Scrap & Waste               - At net realisable value
 Stocks of Finished Goods are inclusive of excise duty.
 
 vi) Gratuity: The management has decided to adopt cash basis of
 accounting for gratuity liability, hence no provision has been made for
 accrued liability in the accounts of the company.
 
 vii) Foreign Currency Transactions: Transactions in foreign exchange
 are accounted for at exchange rates prevailing on the date on which the
 transaction takes place. Gains and Losses arising out of fluctuations
 in exchange rates, relating to the fixed assets, are adjusted to the
 carrying amount of fixed assets and in other cases transferred to
 revenue accounts.
 
 viii) Excise Duty: The excise duty in respect of finished goods is
 included as part of inventory. The amount of cenvat credit, in respect
 of material consumed for sale is deducted from cost of materials
 consumed.
 
 ix) Taxation:  The provision for Taxation is ascertained on basis of
 assessable profit Computed in accordance with the provision of Income
 Tax Act, 1961. The company has not created deferred tax asset in
 absence of virtual certainty, supporting convincing evidence as per
 AS-22 Accounting for Taxes on Income issued by the Institute of
 Chartered Accountants of India.