a.  Basis of Preparation of Financial Statements
 
 The financial statements have been prepared under historical cost
 convention and in conformity with the generally accepted accounting
 principles in India, applicable provisions of the Companies Act, 1956
 and as per the Accouting Standards issued by the Institute of Chartered
 Accountants of India.
 
 b.  Income and Expenditure
 
 All items and expenditure shown in the statement having material
 bearing on the accounts are accounted on accrual basis.
 
 c.  Fixed Assets
 
 Fixed Assets are stated at cost of acquisition. Cost of acquisition is
 inclusive of freight, duties, levies, preparatory works, erection,
 installation and all incidentals attributable to bringing the asset to
 its working condition.
 
 d.  Capital Work in Progress
 
 The assets under installation or under construction and related
 advances as at the Balance Sheet date are shown as Capital Work in
 Progress.
 
 e.  Depreciation
 
 Depreciation is computed on Straight Line method basis in accordance
 with the provision of Schedule XIV of the Companies Act, 1956.
 
 f.  Investments
 
 Investments are stated at cost of acquisition and the same are
 considered as long term investments.
 
 g.  Provision for Tax
 
 Provision for tax has been computed on the basis of Profits in
 accordance with the Income Tax .Act, 1961.
 
 h. Deferred Income Tax
 
 The Company has accounted for Deferred Tax in accordance with the
 Accounting Standard-22 “Accounting for Taxes on Income” issued by the
 Institute of Chartered Accountants of India.
 
 Deferred tax is accounted for by computing the tax effect of timing
 differences, which arise during the year and reverse in subsequent
 periods.
 
 The deferred Tax Liability for the current year amounting to Rs.9.96
 Lakhs is shown in the Profit and Loss account under provision for
 Deferred tax. As at the year end, deferred Tax liability aggregates to
 Rs.58.17 Lakhs.
 
 i.  Employee Benefits
 
 Provident fund: The Company makes contribution to Provident Fund
 administered by the Central Government under the Provident Fund Act,
 1952.
 
 j.  Contingent Liabilities
 
 Contingent Liabilities are generally not provided for in the accounts
 and are shown separately if any in the notes on accounts.