(1) Basis of Preparation of financial statements:-
 
 (i) The financial statements have been prepared under the historical
 cost convention and in accordance with the generally accepted
 accounting principles.
 
 (ii) Accounting policies not specifically referred to otherwise are
 consistent and in consonance with generally accepted accounting
 principles.
 
 (2) Inflation:
 
 Assets and liabilities are recorded on historical cost to the Company.
 The costs are not adjusted to reflect the changing value in the
 purchasing power of money.
 
 (3) Accounting of Incom^Expenditure:-
 
 All income and expenditure items having a material bearing on the
 financial statements are recognized on accrual basis except as stated
 otherwise. However, Dividend Income if any is accounted for on receipt
 basis. Sales are inclusive of sales tax and revenue is recognized on
 accrual basis. Sales are inclusive of service charges. In case of
 export sales, the bills are discounted and the amount realized in
 rupees is credited to sales account
 
 (4) Fixed Assets:-
 
 Fixed Assets have been carried at historical cost, inclusive of
 incidental expenses, interest, less accumulated depreciation.
 
 (5) Depreciation:-
 
 Depreciation has been provided on Straight Line Method on pro-rate
 basis at the Rates and in the manner prescribed in Schedule XIV to the
 Companies Act, 1956.
 
 (6) Inventories:
 
 i) Finished goods are valued at lower of cost or market price.
 
 ii) Raw materials, stores and spare parts are valued at cost.
 
 iii) Cost of inventory is generally on actual acquisition cost based on
 FIFO method.
 
 (7) Investments:- Investment are valued at cost.
 
 (8) Gratuity/Retirement Benefits:-
 
 The Company accounts for gratuity and leave encashment on cash basis.
 Also non of the employees have completed 5 years of service.
 
 (9) Miscellaneous Expenditure:-
 
 Preliminary expenses, public issue expenses and expenses for increasing
 the Authorised Capital is written off over a period of ten years.
 
 (10) Deferred Tax:-
 
 The deferred tax during the year for timing difference is accounted
 using tax rates that have been enacted. The net difference arising
 there on is debited to Profit & Loss A/C.