1. Basis of Accounting
 
 Accounts have been prepared on the basis of Historical Cost Convention
 and Going Concern Concept as per the accepted accounting principles and
 the provisions of the Companies Act, 1956 except stated otherwise.
 
 2. Fixed Assets
 
 a. Fixed assets are stated at cost of acquisition, including taxes,
 duties (net of MODVAT) and other identifiable direct expenses less accumulated depreciation.
 
 b. Leasehold Land is amortised over the period of lease.
 
 3. Depreciation
 
 i. On buildings, plant & machinery (including weighing scale and
 electric installation other than electrical installation for open end
 machinery), as per the Straight Line Method at the rates specified
 under Schedule XIV to the Companies Act, 1956.
 
 ii. On remaining assets, as per Written Down Value Method at the rates
 specified under Schedule XIV of the Companies Act, 1956.
 
 4. Valuation of Inventories
 
 Inventories are valued on the following basis :
 
 i.   Raw materials & goods in 
      process                       :  At cost
 
 ii.  Finished goods                :  At lower of cost or market value.
 
 iii. Stores, Spares & Tools        :  At cost
 
 iv.  Waste & Scrap materials       :  At realisable value
 
 5. Retirement benefits
 
 Company's gratuity liability is covered under Group Gratuity Scheme of
 Life Insurance Corporation of India which is accounted for as and when
 premium is paid to the L.I.C. or on actual payment to employees, not
 covered under the scheme.
 
 6. Excise Modvat Credit
 
 Modvat Credit availed on the raw materials is accounted for in the books of accounts by reducing it from the
cost of raw materials consumed.
 
 Liability on account of Excise duty in respect of finished goods not
 cleared from the factory premises is accounted for, on clearance of goods from the factory premises.