A) BASIS OF PREPARING FINANCIAL STSTEMENTS.
 
 i) The Financial Statements have been prepared under the historical
 Cost Convention in accordance with the normally accepted accounting
 principle and the provisions of the Companies Act, 1956, as adopted
 consistently by the company.
 
 ii) Accounting policies not specifically referred to otherwise are
 consistent and.  in accordance with generally accepted accounting
 principles.
 
 B) FIXED ASSETS AND DEPRECIATION.
 
 i) Fixed Asset is generally stated at cost of acquisition or
 revaluation amount less Value of Demolished & Discarded Assets and
 accumulated depreciation,
 
 ii) Depreciation on Fixed Assets other than land is provided on
 straight line method at the rates specified and in the manner
 prescribed in the schedule XIV of the Companies Act 1956.
 
 iii) In respect of revalued assets, depreciation to the extent that it
 pertains to the amount of revaluation, is transferred from the
 Revaluation Reserve to the Profit & Loss account.
 
 C) INVESTMENTS.
 
 i) Long term investments are stated at cost.
 
 ii) Diminution in the value of long Term investments is Provided for
 where it is considered other than Temporary in nature.
 
 D) INVENTORIES.
 
 Inventories are taken valued and certified by management and valuation
 is on following basis:- 
 
 i) Raw Material, Stores and spares are generally valued at cost
 determined on first in first out basis.
 
 ii) Work in Progress is valued at direct cost.
 
 iii) Finished Goods are valued at cost or market value whichever is
 lower,
 
 iv) Scrap is valued at estimated realizable value.  v) Loose Tools are
 valued at estimated cost.
 
 E) BASIS OF ACCOUTING.
 
 All items of income and expenditure having a material bearing on the
 financial statement are accounted for on accrual basis.
 
 F) EXCISE DUTY.
 
 Excise duty on the finished goods manufactured is accounted for on
 clearance of goods from the factory premises.
 
 G) SALES.
 
 i) Sales are net of excise duty & Sales Tax
 
 ii) Other income is recognized on accrual basis except when the
 realization of such income is uncertain.
 
 H) ACCOUNTING FOR FOREIGN CURRENCY TRANSACTION.
 
 Transactions denominated in foreign currencies are normally recorded at
 the exchange rate prevailing at the time of transactions.
 
 I) RETIREMENT BENEFITS
 
 Leave encashment of leave is permitted only on the retirement, hence no
 provision is made for leave encashment of the present employees for
 their I in-availed leave.
 
 J) PROVISION FOR CURRENT AND DEFFERED TAX
 
 Provision lor current income tax is made on the assessable income at
 the tax rate applicable to the relevant assessment year. Deferred
 income taxes are recognized for the future tax consequences
 attributable to timing differences between the financial statement
 carrying amounts of existing assets and liabilities and their
 respective tax bases.  Other deferred tax assets are recognized and
 carried forward to the extant that there is reasonable certainty of
 realization.