1.  Accounting Concepts
 
 a) The Company generally, except under uncertain circumstances, follows
 mercantile system of accounting and recognizes Income and Expenditure
 on accrual basis.
 
 b) Financial statements are based on historical cost.  These costs are
 not adjusted to reflect the impact of the changing value for the
 purchasing power of money.
 
 c) Accounting Policies not specifically referred to otherwise, are
 consistent and in consonance with generally accepted accounting
 principles followed by the Company.
 
 2.  Fixed Assets
 
 Fixed assets are stated at cost of acquisition or construction
 inclusive of freight, duties and taxes and incidental expenses less
 accumulated depreciation.
 
 3.  Investment
 
 Long Term Investments are valued at cost of acquisition. Short Term
 investments are valued at cost or market value whichever is lower.
 
 4.  Depreciation
 
 a) No depreciation is provided for leasehold land, freehold land and
 Plant & Machinery acquired on lease.
 
 b) Depreciation on fixed assets is being provided on Straight line
 method basis at the rates specified in Scheduled XIV to the Companies
 Act, 1956 till the WDV is reduced to 5% of the Gross Value. No
 depreciation is provided on such balance amount of 5%.
 
 c) Depreciation in respect of additions to fixed assets is provided on
 pro-rata basis from the month in which such assets are acquired /
 installed/started commercial production.
 
 d) Depreciation on fixed assets sold, discarded or demolished during
 the year is being provided at their respective rates up to the month in
 which such assets are sold, discarded or demolished.
 
 5.  Valuation of Inventories
 
 (Cost is inclusive of any, taxes and duties incurred):
 
 a) Raw materials and Work in process are being valued at cost.
 
 b) Stores, Spares and Tools are being valued at cost
 
 c) Goods in transit are stated at actual cost up to the date of the
 Balance Sheet.
 
 d) Finished Stocks are being valued at cost or market value which ever
 is lower.
 
 6.  Sales
 
 Sales are after deducting rebate & discount, claims and shortage.
 
 7.  Gratuity & Bonus
 
 Gratuity & Bonus are provided on cash basis.
 
 8.  Expenditure for Benefit of Endurig Nature
 
 Miscellaneous expenditure, such as preliminary expenditure, public
 issue expenditure and deferred revenue expenditure are amortised over a
 period of 10 years from the financial year in which it is incurred.
 
 9.  Prior period Expenses / Income
 
 The Company follows the practice of making adjustments through Prior
 Period Items in respect of all material transactions pertaining to the
 period prior to current accounting year.
 
 10. Income from Investment
 
 Income from Investments, wherever appropriate, is taken into revenue on
 receipt basis and tax deducted at source thereon is treated as advance
 tax.
 
 11. Treatment of Contingent Liabilities
 
 Contingent liabilities are disclosed by way of note to the accounts.
 Disputed demands in respect of Central Excise, Customs, Income Tax and
 other proceedings etc. are disclosed as contingent liabilities.
 
 12.  Capital Incentives / Subsidies
 
 Capital incentives/subsidies under various package schemes of
 Central/State Governments for new/ expansion/ modernisation of
 Industrial undertaking are being accounted for on sanctioned basis.
 
 In line with the Accounting Standard 12 Accounting for Government
 Grants issued by the Institute of Chartered Accountants of India, the
 Company has credited the grants sanctioned related to depreciable fixed
 assets to Deferred Income and allocated to Income in the proportion
 in which depreciation on related assets is charged.