(a) Basis of Accounting:
 
 The Financial Statements are prepared under historical cost convention
 on an accrual basis and comply with the accounting standards referred
 to in Section 211 (3C) of the Companies Act, 1956.
 
 (b) Fixed Assets:
 
 Fixed Assets are stated at cost of acquisition/construction less
 accumulated depreciation.
 
 (c) Depreciation:
 
 Depreciation is provided on Straight Line Method at the rates
 prescribed under Schedule XIV of the Companies Act, 1956. The
 Depreciation on Assets has been charged without taking into
 consideration the surplus on revaluation of Assets.
 
 (d) Valuation of Inventories:
 
 Raw Materials, Packing Materials, Stores and Work in Process are valued
 at cost. Finished Goods are valued at lower of the cost or net
 realisable value. Excise Duty on goods manufactured by the Company and
 remaining in inventory is included as a part of valuation of finished
 goods.
 
 (e) Revenue Recognition:
 
 Sales comprise sale of goods and services. Sale of goods is recognized
 at the point of despatch of the finished goods to customers. Sales are
 exclusive of Excise Duty and Sales Tax.
 
 (f) Customs Duty:
 
 Customs duty payable on Raw Materials, Stores and Spares are accounted
 for on clearance of goods from bonded warehouses.
 
 (g) Research and Development Expenses:
 
 Revenue expenditure pertaining to research and development is charged
 to revenue in the year in which it is incurred. Capital Expenditure is
 treated as forming part of Fixed Assets.
 
 (h) Retirement Benefits:
 
 The Company has created a trust and has taken a group gratuity policy
 with The Life insurance Corporation of India for future payment of
 retiring gratuities. The premium thereon has been so adjusted as to
 cover the liability in respect of all employees at the end of their
 future anticipated services with Company.
 
 (i) Income Tax:
 
 The Income Tax is ascertained on the basis of assessable profits
 computed in accordance with the provisions of the Income Tax Act, 1961.
 
 (j) Deferred Taxation:
 
 Deferred Tax resulting from timing difference between book and tax
 profits is accounted for under the liability method, at the current
 rate of tax, to the extent that the timing difference are expected to
 crystallise.