A) Accounting Assumptions
 
 Accounts have been prepared under the historic cost convention on the
 basis of a going concern in accordance with the disclosure
 requirements of the Companies Act, 1956.
 
 B) Revenue Recognition
 
 i) Income & Expenditure are accounted for on accrual basis.
 
 ii) Sales are inclusive of excise duty but net of returns, rebate and
 sales tax. Sale of scrap/waste has been accounted for on cash basis.
 
 iii) Insurance Claims have been accounted for on the basis of best
 estimate/actual loss surveyed/assessed
 
 C) Fixed Assets
 
 Fixed Assets are accounted at cost of acquisition, including inward
 freight, non-refundable duties or taxes and any directly attributable
 cost of bringing the asset to its working condition for its intended
 use-
 
 D) Depreciation
 
 i) Depreciation has been provided as per Straight Line Method at the
 rates prescribed in Schedule XIV of Companies Act, 1956. as amended by
 Notification No. GSR 756(E) dated 16th December, 1993.
 
 ii) Premium on lease hold land is amortized over the period of lease.
 
 iii) The Company has been technically advised that it can be
 categorised as continuous process plant within the meaning of footnote
 No. 7 to Schedule XIV and has accordingly provided depreciation on
 Plant & Machinery.
 
 E) Investments
 
 Long Term investments are stated at cost.
 
 F) Inventories
 
 in) Inventories of Finished Goods, Goods in Process. Raw Material,
 Packing Material and Stores & Spares are valued at lower of cost or net
 realisable value.
 
 ii) Valuation of finished goods lying in Excise Godown is valued at the
 rates including Excise Duty.
 
 G) Lease
 
 Lease rentals, as per respective operating lease agreement, are charged
 to Profit & Loss Account
 
 H) Government Grants
 
 Capital Investment Subsidy received by the Company is treated as
 Capital Reserve.
 
 I) Employees Retirement Benefits
 
 Companys contribution to Provident Fund are charged to Profit and Loss
 Account. Gratuity liability to employee is covered under the Group
 Gratuity Policy taken from Life Insurance Corporation of India, the
 annual premium is charged to Profit & Loss Account. Provision is being
 made tor leave encashment based on actual liability of the year end.