(a) The Company follows Mercantile System of accounting and recognises
 Income & Expenditure on accrual basis.
 
 (b) Financial statements are based on historical cost. These cost are
 not adjusted to reflect the impact of the changing value in the
 purchasing power of money.
 
 (c) Revenue Income are generally accounted on accrual basis as and when
 they are earned.
 
 (d) Cost expenditure is generally accounted on accrual basis except-
 
 i) in specific cases of expenditure incurred against which a definite
 benefit is expected to follow into future periods, such sums are
 treated as Deferred Revenue Expenditure and charged to Revenue Account
 over the expected duration of benefit.
 
 ii) Gratuity is accounted for on payment basis.
 
 (e) Fixed Assets and Depreciation:
 
 (i) All the fixed assets are stated at cost less depreciation, cost
 includes purchase price, inward fright expenses incidental to
 acquisition, installation and finance cost.
 
 (ii) In respect of all fixed assets, depreciation charged on straight
 line basis in in the manner specified in Schedule XIV of the Companies
 Act, 1956.
 
 (iii) In respect of addition/sale to the fixed assets on prorata
 basis with reference to the date of addition/sale fixed assets.
 
 (f) Investments Investment is stated at cost.
 
 (g) Inventories valuation
 
 Raw material, stores & spare parts are valued at cost.
 
 Finished goods are valued at lower of cost or realised value.
 
 (h) Sales
 
 Sales realisation includes excise duty, sales tax and other charge ;
 collected.
 
 (i) Sales Tax
 
 Quantum of Sales Tax Exemption is not ascertainable, as such liability
 of sates tax has been taken as per return submitted. The demand if any
 on completion of assessment will be accounted for on accrual basis.
 
 (j) Income Tax
 
 Liability of Income tax has been taken as per return submitted. The
 demand if any on completion of assessment will be accounted for on
 accrual basis.
 
 (k) Events occurring after Balance sheet date-
 
 Events occurring after Balance sheet date have been consideration in
 preparation of financial statements.