16. SIGNIFICANT ACCOUNTING POLICIES :
 
 16.01 Fixed assets :
 
 Fixed assets are stated at cost except in case of certain items of
 Land, Buildings and Plant and Machinery which are stated on the basis
 of revaluation (with corresponding credit to the Revaluation Reserve
 Account), being inclusive of resultant write ups. Cost of fixed assets
 includes purchase price and directly attributable costs of bringing the
 assets to working condition for the intended use.
 
 16.02 Depreciation :
 
 Depreciation is calculated in the following manner :
 
 (i) Depreciation on revalued assets other than Land is calculated on
 their respective revalued amounts at rates considered applicable by the
 valuers on the Straight Line Method for Plant and Machinery and Written
 Down Value method for Buildings. (Also refer note 7 above).
 
 (ii) In respect of other assets, at rates prescribed in Schedule XIV to
 the Companies Act, 1956 :
 
 On Straight Line Method for Plant and Machinery. On Written down Value
 Method for assets other than Plant and Machinery.
 
 16.03 Investments (Long Term) :
 
 Investments are stated at cost less any provision for permanent
 diminution in value.
 
 16.04 Inventories :
 
 Inventories of finished goods are valued at lower of cost (inclusive of
 appropriate share of overheads) and net realisable value. Raw materials
 (including materials under Work-in-Process) and Stores and spares
 (other than spares for specific machinery) are valued at weighted
 average cost. Spares for specific machinery are valued at or under cost
 and are amortised over the useful lives of the related machinery as
 estimated by the management.
 
 16.05 Retirement benefits :
 
 Contribution to gratuity fund is made on a yearly basis under the
 Group Gratuity Scheme of Life Insurance Corporation of India. Accrued
 liability towards leave encashment benefits payable to employees is
 evaluated on the basis of management estimate.
 
 16.06 Revenue recognition :
 
 Income and expenditure are recognised on accrual basis.
 
 16.07 Sales :
 
 Sales are net of discount, rebate and sales tax.
 
 16.08 Contingencies :
 
 Contingencies which can be reasonably ascertained are provided for, if
 in the opinion of the Company there is a probability that the future
 outcome may be materially detrimental to the interest of the Company.
 
 16.09 Foreign currency transactions :
 
 Transactions in foreign currencies are accounted for at exchange rates
 prevailing at the time the transactions take place. Year-end balances
 of short term foreign currency working capital loan and other
 liabilities/receivables are translated at the applicable forward
 contract or year-end rates and the resultant gains/losses are
 appropriately recognised as income/revenue charges for the year/over
 the period of contract in case of forward contracts or adjusted against
 cost of related items of fixed assets.
 
 16.10 Taxation :
 
 Income tax expense comprises Current Tax and Deferred Tax charge.
 Deferred Tax is recognised on timing differences, being the difference
 between taxable income and accounting income that originate in one
 period and are capable of reversal in one or more subsequent periods.
 Deferred Tax Assets are recognised only if there is a reasonable
 certainty that sufficient future taxable income will be available
 against which such Deferred Tax Assets will be realised. Such assets
 are reviewed as at each balance sheet date to re-assess realisibility
 thereof.
 
 16.11 Miscellaneous Expenditure :
 
 Miscellaneous expenditure not written off is amortised over a period
 having due regard to its nature and benefit derived therefrom.
 
 17. Figures of the previous year have been re-arranged/re-grouped
 where necessary.