A.  Depreciation :
 
 (a) Tangible Assets :
 
 The Depreciation on Fixed assets is provided on straight line method at
 the rates as per Schedule-XIV of the Companies Act, 1956.
 
 (b) Intangible Assets :
 
 (i) Software and their implementation costs are written off over the
 period of 5 years.
 
 (ii) Technical Know-how acquired and internally generated are amortised
 over the useful life of the assets, not exceeding ten years.
 
 (c) Lease hold land is amortised over the period of lease.
 
 B.  Investments (Long Term) :
 
 Investments (Long Term) are valued at cost. A provision for diminution
 is made to recognise a decline, other than temporary, in the value of
 investments.
 
 C.  Valuation of Inventory :
 
 Inventories are valued at lower of their cost or net realisable value.
 The cost of raw material, stores and consumables is measured on moving
 weighted average basis.
 
 D.  Employees Retirement Benefit :
 
 The accruing liability of Gratuity is covered by Employees Group
 Gratuity Scheme of Life Insurance Corporation of India and the premium
 is accounted for in the year of accrual. The additional liability, if
 any, due to deficit in the Plan assets managed by LIC as compared to
 the present value of accrued liability on the basis of actuarial
 valuation, is recognised and provided for.
 
 Benefits in respect of leave encashable at retirement / cessation are
 provided for based on valuation, as at the Balance Sheet date, made by
 independent actuaries.
 
 E.  Research and Development Expenses:
 
 Revenue expenditure on Research and Development is charged off as an
 expense in the year in which incurred and capital expenditure is
 grouped with Fixed Assets under appropriate heads and depreciation is
 provided as per rates applicable.
 
 F.  Foreign Currency Transactions:
 
 (a) Foreign Currency transactions are recorded at the rate of exchange
 on the date of the transaction.
 
 (b) Monetary items of Assets and Liabilities booked in foreign currency
 are translated in to rupee at the exchange rate prevailing at the
 Balance Sheet date.
 
 (c) Exchange difference resulting from settlement of such transaction
 and from translation of monetary items of Assets and Liabilities are
 recognised in the Profit and Loss account.
 
 (d) The premium or discounts arising on Forward Contracts is amortized
 over the life of the Contract.
 
 (e) Exchange difference arising on translation of foreign currency
 liabilities for acquisition of fixed assets are adjusted to the Profit
 and Loss account.
 
 G.  Cost of borrowings incurred for acquisition, construction or
 production of qualifying asset is capitalised as per the Accounting
 Standard No. AS 16 issued by the Institute of Chartered Accountants of
 India.
 
 H.  Leases :
 
 (a) Where the Company is the Lessee :
 
 Leases where the Lessor effectively retains substantially all the risks
 and benefits of ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognised as an expense
 in the Profit and Loss Account.
 
 (b) Where the Company is the Lessor :
 
 Assets subject to operating leases are included in fixed assets, lease
 income is recognised in the Profit and Loss Account. Costs, including
 depreciation are recognised as an expense in the Profit and Loss
 Account.