1.1 General:
 
 The accounts are prepared on accrual basis under the historical cost
 convention and in accordance with the accounting standards specified
 under sub section (3c) of section 211 of the Companies Act, 1956.
 
 1.2 Fixed Assets:
 
 a.  Fixed assets are stated at cost less accumulated depreciation. Cost
 of acquisition of fixed assets is net of CENVAT / Input VAT Credit and
 inclusive of freight, duties, taxes, incidental expenses including
 interest on specific borrowings as allotted.
 
 b.  Expenditure during construction/erection period is included under
 Capital Work-in-Progress and allocated to the respective fixed assets
 on completion of construction/erection.
 
 1.3 Investments:
 
 Investments are stated at cost, inclusive of all expenses relating to
 acquisition. Provision for diminution in the market value of long-term
 investments is made, if in the opinion of the Management such
 diminution is permanent in nature.
 
 1.4 Inventories:
 
 Inventories are valued at the lower of the cost (net of CENVAT / Input
 VAT Credit) or net realisable value (except scrap / waste which are
 valued at estimated realisable value).  Cost is computed on monthly
 weighted average basis. Finished Goods and Process Stock include cost
 of conversion and other costs incurred in bringing the inventories to
 their present location and condition.
 
 1.5 Borrowing Costs:
 
 Borrowing cost is charged to statement of Profit and Loss except cost
 of specific borrowing for acquisition of qualifying assets which is
 capitalised till date of commercial use of the said asset.
 
 1.6 Sales:
 
 Sales are inclusive of Excise Duty and net of rebates and Sales Tax.
 
 1.7 Employee Benefits:
 
 (i) Defined Contribution Plans:
 
 Employee Benefits in the form of Employee Provident Pension Funds are
 considered as Defined Contribution plans and the contributions are
 charged to the statement of Profit & Loss of the year when the
 contributions to the said fund are due.
 
 (ii) Defined Benefit Plans:
 
 Retirement Benefit in the form of Gratuity is considered as Defined
 Benefit Obligation and is provided for on the basis of an actuarial
 valuation using the projected unit credit method as at the date of
 Balance Sheet.
 
 (iii) Other Long Term Benefits:
 
 Long-Term Compensated Absences are provided on the basis of an
 actuarial valuation using the Projected Unit Credit Method as at the
 date of Balance Sheet.
 
 Actuarial gains / losses, if any, are immediately recognised in the
 statement of Profit & Loss.
 
 1.8 Depreciation:
 
 Depreciation on buildings and plant and machinery is charged under
 straight-line method and on the remaining assets under written down
 value method at the rates specified in Schedule XIV of the Companies
 Act, 1956.
 
 1.9 Foreign Currency Transactions:
 
 Transactions on account of foreign currency are accounted for at the
 rates prevailing on the date of the transaction. Foreign Currency
 assets and liabilities are restated at the rates prevailing as on the
 date of Balance Sheet. Exchange rate differences are dealt with in the
 statement of Profit and Loss. Premium or discount on forward exchange
 contracts are amortised and recognised in the statement of Profit &
 Loss over the period of the contract.