1. Accounting Conventions
 
 Financial statements have been prepared on the accrual basis of
 accounting, under the historical cost convention and are in accordance
 with the Companies Act, 1956 and the applicable accounting standards
 issued by the Institute of Chartered Accountants of India.
 
 2. Consignment Sale
 
 Consignment sale is accounted for on receipt of Consignment Note from
 consignment agent.
 
 3.  Fixed Assets
 
 Fixed Assets are valued at cost less accumulated depreciation. Cost
 includes expenses incurred during pre-operative period, inward freight,
 duties, taxes and expenses incidental to acquisition and installation.
 
 4.  Inventories
 
 Inventories are valued as under:
 
 i) Raw material at FIFO basis
 
 ii) Work in Progress at cost including related overhead
 
 iii) Finished Goods at lower of cost or net realisable value.
 
 iv) Stores, Packing Materials & Chemicals are valued at FIFO basis
 
 v) By-Products are valued at Net realisable value
 
 5.  Depreciation
 
 Depreciation on fixed assets has been provided on straight line method
 as per Schedule XIV of the Companies Act, 1956. Depreciation on assets
 costing Rs.5,000/- or less has been charged at hundred percent.
 
 6. Retirement Benefits
 
 Provision for / contributions to retirement benefits scheme are made as
 follows :
 
 a) Provident Fund on actual liability basis
 
 b) Gratuity on accrual basis assuming that all employees will retire at
 the end of the financial year.
 
 7. Revenue Recognition
 
 a.  Sales are recognised when goods are despatched to customers and are
 recorded net of rebates and include excise duty.
 
 b.  Interest Income is recognised on time proportion method.
 
 c.  Insurance claims are recognised when the right to receive it is
 confirmed.
 
 8.  Taxation
 
 The provision for taxation is ascertained on the basis of assessable
 profits computed in accordance with the provisions of the Income Tax
 Act, 1961.
 
 Deferred tax is recognised, subject to the consideration of purdence,
 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.  Deferred tax Assets are
 recognised and carried forward to the extent that there is a reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax assets can be realised.