(a) Basis of Accounting
 
 The accounts are prepared under historical cost convention on accrual
 basis.
 
 (b) Fixed Assets and Depreciation
 
 Fixed assets are valued at cost of acquisition (net of modvat)
 inclusive of any other cost attributable to bring the same to working
 condition.
 
 Depreciation is provided in accordance with Schedule XIV of the
 Companies Act, 1956 on straight line method.
 
 (c) Inventories
 
 Finished goods and work in process are valued at cost or estimated net
 realisable value whichever is lower. Byproducts are valued at estimated
 net realisable value.
 
 Raw materials, stores and spares are valued at cost on the basis First
 In First Out.
 
 (d) Revenue Recognition
 
 Revenue in case of sale of goods is recognised when the ownership is
 transferred to the buyer. Sales proceeds considered are net of duties
 and taxes.
 
 (e) Expenditure during construction
 
 All revenue expenses transferred to 'Expenditure during construction'
 account is allocated to capital cost of respective assets on their
 commissioning.
 
 (f) Retirement benefits
 
 Superannuation is funded by payments to Life Insurance Corporation of
 India. Gratuity is funded on the basis of actuarial valuation.
 
 Liability for leave encashment benefit on retirement is provided for on
 the basis of actuarial valuation.
 
 (g) Foreign Currency Transactions
 
 All transactions in foreign currency are converted at the exchange rate
 on the respective date of transactions.
 
 Any income or loss on account of exchange difference either on
 settlement or on translation is recognised in the Profit and Loss
 Account except in cases where they relate to acquisition of Fixed
 Assets in which case they are adjusted to the carrying cost of such
 assets.
 
 (h) Purchases
 
 Purchases are recognised on the basis of acceptance of goods by the
 Company.
 
 (i) Deferred Revenue Expenditure
 
 Deferred Revenue Expenditure are amortised over a period of 3 to 5
 years, depending upon the nature and the benefit of such expenditure in
 future.
 
 (j) Prior Period Items
 
 All prior period items which are material and arise in the current
 period as a result of error or ommission in the preparation of prior
 period's financial statement are separately disclosed in the current
 statement of Profit and Loss.