i) (a) Method of Accounting:
 
 The accounts of the company are prepared under the historical Cost
 convention using the accrual method of accounting unless stated
 otherwise hereinafter. Accounting policies, not specifically referred
 to are consistent with generally accepted accounting principles.
 
 (b) The net worth of Company as on 31/03/2002 has been completely
 eroded & it has become a Sick Industrial Unit within the meaning of
 clause (O) of Sub Section (I) of Section 3 of the Sick Industrial
 Companies (Special Provisions) Act, 1985. The production activity is
 substantially lowered and Companys plant is under lay off. The
 Company will shortly submit restructuring / revival plan to its banker
 and deliberation and representation on the same is continuing. In
 expectation of positive response on the above the accounts for the
 period ended 31/ 3 /2002 has been prepared on going concern basis.
 
 ii) Fixed Assets
 
 (a) Fixed Assets have been stated at actual cost. The actual cost is
 inclusive of freight, installation cost, duties, Taxes and other
 incidental expenses.
 
 (b) Capital work in progress: - All expenses incurred for acquiring,
 erecting and commissioning of fixed assets incurred during
 commissioning of projects as shown under capital work in progress and
 allocated to the fixed assets on the completion of the projects.
 
 iii) Depreciation : The Company provides depreciation on its fixed
 assets on straight-line method at the rates specified in the Schedule
 XIV of the Companies Act, 1956.
 
 IV) Investments : Investments are valued at cost of acquisition.
 
 V) inventories
 
 a) Raw materials including consumables, packing materials, stores and
 spares are valued at cost on FIFO basis.
 
 b) Work in process is valued at cost of material and labour together
 with cost incurred in normal course of business.
 
 c) Finished goods are valued at cost of materials and labour together
 with relevant factory overheads or net realisable value whichever is
 lower. Due consideration is given to the salability of the stock and
 no obsolete or unserviceable / damaged items are included therein
 except of their net realisation value.
 
 VI) Treatment of Contingent Liability
 
 Contingent Liabilities are disclosed by way of Notes on Accounts.
 
 Vil) Foreign Currency Transactions
 
 Transactions in foreign currencies are recorded at the exchange rate
 prevailing at the time of occurrence of transaction.
 
 VIII) Preliminary and capital Issue Expenses.
 
 Preliminary and Capital Issue expenses are amortised over a period of
 10 years.
 
 IX) Differed Revenue Expenditure
 
 Differed Advertisement Expenditure is amortised over a period of 5
 years.