I.  The financial statements are prepared under the historical cost
 convention on accrual basis of accounting, in accordance with the
 requirements of the Companies Act, 1956 and accounting standards
 applicable in India.
 
 II.  All items of income and expenditure are accounted for on accrual
 basis. However, gratuity is being accounted for on cash basis as the
 Company has not got actuarial valuation done of its total future
 liabilities for its employees on account of gratuity.
 
 III.  Fixed Assets
 
 Fixed Assets are stated at cost less accumulated depreciation. Cost of
 acquisition is inclusive of freight, duties and other incidental
 expenses incurred during construction period and exclusive of CENVAT
 credited.
 
 The assets acquired on hire purchase basis are stated at their cash
 value. The interest paid with the installments is being charged to the
 revenue.
 
 IV.  Depreciation
 
 Depreciation of Fixed Assets has been provided on written down value
 method at the rates provided under the Companies Act. 1956 on pro-rata
 basis.
 
 V.  Closing Stock
 
 i.  Raw materials are valued at cost.
 
 ii.  Finished Goods are stated at lower of the cost or net realisable
 value.
 
 iii. Stores items purchased are treated as consumed in the year of
 purchase.
 
 VI.  Sales-tax collected by the company is not treated as part of its
 income.
 
 VII.  Foreign Currency Transactions
 
 a) Transactions denominated in foreign currencies are normally recorded
 at the exchange rate prevailing at the time of the transaction.
 
 b) Foreign currency transactions remaining unsettled till the
 finalisation of accounts of the year are translated at contracted
 rates, when covered by forward exchange contracts and at year end
 rates, in all other cases.
 
 VIII. Taxes on income
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the year.  Deferred tax is recognised on timing
 differences, being the difference between taxable income and accounting
 income that originate in one period and are capable of reversal in one
 or more subsequent periods. Where there is unabsorbed depreciation and
 carry forward losses, deferred tax assets are recognised only if there
 is virtual certainty of realisation of such assets. Other deferred tax
 assets are recognised only to the extent there is reasonable certainty
 of realisation in future.
 
 IX.  Contingent Liability
 
 Contingent Liability, if any, are generally not provided for in the
 accounts and are shown separately as a note to the accounts.