SIGNIFICANT ACCOUNTING POLICIES
 
 (I) FIXED ASSETS : All fixed assets are valued at cost less
 depreciation
 
 (II) DEPRECIATION :
 
 Depreciation has been provided on straight line method at the rates
 prescribed in Schedule XIV of the Companies Act, 1956 as amended on
 prorata basis from the date each assets was put to use during the year
 
 (III) INVENTORIES VALUATION  :  
 
 a) Raw materials - At cost
 b) Work in process At cost
 
 c) Finished goods - At cost or market value whichever is lower
 
 d) Stores, Spares & Packing material - At cost (FIFO method)
 
 (IV) REVENUE RECOGNITION  :
 
 Items of Income and expenditure are recognised on accrual basis except
 for the following, which are being accounted for on cash basis, to the
 extent it is not possible to ascertain the exact quantum with
 reasonable accuracy.
 
 a) Compound Interest & Penal Interest on overdue payments
 
 b) Rate difference and discount
 
 c) Brokerage & incentive
 
 d) Bonus to employees
 
 e) Accounting for retirement benefit to the employees
 
 f) Leave en-cashment
 
 (V) SALES :
 
 Sales includes excise duty, textiles committee cess and transportation
 charges but net of rate difference & discount and excludes, recoveries
 such as packing charges & insurance
 
 (VI)  PURCHASE :          
 
 Purchase includes discounting charges, carriage inward and net of mod
 vat benefit Claim for rate difference arc debited to relevant
 supplier/agents as agreed which are subject to confirmation
 
 (VII)  EXCISE DUTY  :         
 
 Liability for excise duty on finished good is accounted as and when
 they are cleared from the factory premises No Provision is made in the
 accounts for goods manufactured and lying in bonded warehouse in
 factory premises
 
 (VIII) MODVAT :         
 
 Modvat benefit is accounted for by reducing the purchase cost of the
 relevant item
 
 (IX) CONTINGENT LIABILITIES  :        
 
 Contingent liabilities are shown by way of notes forming part of
 accounts
 
 (X) GRATUITY  :         
 
 Recorded in the books as and when paid