1.  Basis of Accounting:
 
 The financial statements are prepared in accordance with Indian
 Generally Accepted Accounting Principles (GAAP) under the
 historical cost convention (except for certain revalued fixed assets)
 on the accounting principles of a going concern and the Company follows
 mercantile system of accounting and recognizes income and expenditure
 on accrual basis except those with significant uncertainties. GAAP
 comprises mandatory accounting standards issued by th6 Institute of
 Chartered Accountants of India (ICAI), the provisions of the
 Companies Act, 1956 and guidelines issued by the Securities and
 Exchange Board of India. Accounting policies have been consistently
 applied except where a newly issued accounting standard is initially
 adopted or a revision to an existing accounting standard requires a
 change in accounting policy hitherto in use.
 
 2.  Revenue Recognition:
 
 Sale is recognised on the basis of date of dispatch / Bill of lading
 and as and when significant risks and rewards of ownership are
 transferred to the customers.
 
 Sales include excise duty and freight, wherever applicable. Claims and
 Rebates are excluded therefrom.
 
 3.  Use of estimates:
 
 The presentation of financial statements in conformity with Generally
 Accepted Accounting Principles (GAAP),requires the management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities, and the disclosure of contingent liabilities on the
 date of financial statements. Actual results may differ from these
 estimates. Any revision to accounting estimates is recognised
 prospectively.
 
 4.  Fixed Assets:
 
 a) Buildings, Plant and Machinery and Electrical Installations acquired
 up to 31st March, 1993 were revalued on 1st April, 1993 and are stated
 at updated book value less depreciation. Other assets are stated at
 cost less accumulated depreciation.
 
 b) Expenditure during construction period is included under Capital
 Work-in-Progress and the same is allocated to the respective Fixed
 Assets on the completion of its construction.
 
 5.  Depreciation / Amortisation and Impairment loss:
 
 a) Depreciation (including on revalued assets) is provided on Straight
 Line Method at the rates and in the manner prescribed in Schedule XIV
 to the Companies Act, 1956. Depreciation on the amounts ''capitalised
 during the year on account of foreign exchange fluctuation is provided
 prospectively over'' the residual life of the assets.
 
 b) Leasehold premium is being amortised over the remaining period of
 lease after the commencement of production.
 
 c) The Company assesses at each Balance Sheet date whether there is any
 indication that any asset may be impaired. If any such indication
 exists, the carrying value of such assets is reduced to its recoverable
 amount and the impairment loss is charged to Profit & Loss Account. If
 at the Balance Sheet date there is any indication that a previously
 assessed impairment loss no longer exists, then such loss is reversed
 and the asset is restated to that effect.
 
 6.  Investments:
 
 Long-Term Investments are carried at cost and provision is made to
 recognize any decline, other than temporary, in the value of such
 Investments.
 
 7.  Valuation of Inventories:
 
 a) Inventories are valued at the lower of the cost and net realisable
 value.
 
 b) Cost of raw materials is determined on specific identification
 basis.
 
 c) Cost of stores, spares, packing materials and fuel is determined on
 weighted average basis.
 
 d) Finished goods and work-in-progress include conversion and other
 costs incurred in bringing the inventories to their present location
 and condition.
 
 8.  Employee benefits:
 
 Employee Benefits in the form of Provident Fund is a defined
 contribution scheme and the contributions are charged to the Profit and
 Loss Account of the year when the contributions to the respective funds
 are due. There are no other obligations other than the contribution
 payable to the respective trusts.
 
 Gratuity liability under the Payment of Gratuity Act, 1972 is a defined
 benefit obligation and is provided for on the basis of the actuarial
 valuation made at the end of each financial year.
 
 Short term compensated absences are provided for based on estimates.
 Long term compensated absences are provided for based on actuarial
 valuation.
 
 Actuarial gains/losses are immediately taken to profit and loss account
 and are not deferred.
 
 9.  Transaction of Foreign Currency Items:
 
 Transaction in Foreign Currency is recorded at the rate of exchange in
 force at the date of transaction.  Foreign Currency assets and
 liabilities are stated at the rate of exchange prevailing at the year
 end and resultant gains / losses are recognised in the Profit and Loss
 Account. Premium / Discount in respect of forward foreign exchange
 contracts is recognised over the life of the contracts.
 
 10.  Government Grants:
 
 Capital grants relating to specific assets are reduced from the gross
 value of the Fixed Assets and Capital grants for Project Capital
 Subsidy are credited to Capital Reserve. Other revenue grants are
 credited to Profit & Loss account or deducted from the related
 expenses.
 
 11.  Borrowing Costs:
 
 Interest and other costs in connection with the borrowing of the funds
 to the extent related/attributed to the acquisition/construction of
 qualifying fixed assets are capitalised up to the date when such assets
 are ready for its intended use and other borrowing costs are charged to
 Profit & Loss Account.
 
 12.  Taxation:
 
 Provision for current tax is made on the basis of the estimated taxable
 income for the current accounting year in accordance with the Income
 Tax Act, 1961.
 
 The deferred tax for timing differences between the book and tax
 profits for the year is accounted for using the tax rates and laws that
 have been enacted or substantively enacted as of the balance sheet
 date.  Deferred tax assets arising from timing differences are
 recognised to the extent there is reasonable/virtual certainty that
 these would be realised in future and are reviewed for the
 appropriateness of their respective carrying values at each balance
 sheet date.
 
 13.  Provisions, Contingent Liabilities and Contingent Assets:
 
 A provision is made based on a reliable estimate when it is probable
 that an outflow of resources embodying economic benefits will be
 required to settle an obligation.
 
 Contingent Liabilities in respect of show cause notices received are
 considered only when they are converted into demands. Contingent
 Liabilities under various fiscal laws include those in respect of which
 the Company/ Department is in appeal. Contingent liabilities are
 disclosed by way of notes to accounts.
 
 Contingent assets are not recognised or disclosed in the financial
 statement.