A.  System of Accounting
 
 The Financial Statements are prepared on accrual basis of accounting
 and in accordance with the Standard on Accounting notified by the
 Companies (Accounting Standard) Rules, 2006 and referred to in section
 211 (3C) of the Companies Act, 1956 except for certain fixed assets
 which have been revalued.
 
 B.  Fixed Assets and Depreciation
 
 I.  Fixed Assets
 
 Fibre, Resin and Preforms Divisions.
 
 Fixed Assets are stated at cost / revalued amount less depreciation.
 Cost comprises of Cost of acquisition, cost of improvements and any
 attributable cost of bringing the asset to condition for its intended
 use. Interest on loans taken for the procurement of specific assets
 accrued upto the date of acquisition/ installation of the said assets
 is capitalised along with the cost of the assets.
 
 II.  Depreciation
 
 Fibre Division:
 
 Depreciation has been provided on Plant and Machinery and Research and
 Development facilities on straight line basis and on other assets on
 written down value basis at the rates specified in Schedule XIV of the
 Companies Act, 1956 as amended from time to time. Certain Plants have
 been treated as continuous process Plants based on technical and other
 evaluation. However, higher rate of depreciation has been provided on
 certain Plant and Machinery ranging from 6.75% -12.50% compared to
 5.28% of Schedule XIV rate, based on technical evaluation. The total
 accumulated depreciation is restricted up to 95% of the Gross Block
 Value.
 
 Resin and Preforms Divisions:
 
 Depreciation has been provided on all assets on straight line basis at
 the rates specified in Schedule XIV of the Companies Act, 1956 as
 amended from time to time. However, higher rate of depreciation has
 been provided on certain Plant and Machinery ranging from 6.75%-12.50%
 compared to 5.28% of Schedule XIV rate, based on technical evaluation.
 The total accumulated Depreciation is restricted up to 95% of the Gross
 Block Value.
 
 C.  Investments
 
 Investments are classified into current and long term investments.
 Current investments are stated at the lower of cost and fair value,
 Long term investments are stated at cost. A provision for diminution is
 made to recognise a decline, other than temporary, in value of long
 term investments.
 
 Income on Investments:
 
 Dividend income is accounted when right to receive payment is
 established.
 
 D.  Inventories
 
 Inventories are valued as under:
 
 Raw Materials, Packing Materials, Stores and Spares: at Cost (Weighted
 average method) Materials-in-transit and Semi Finished Goods: at Cost.
 (Weighted average method)
 
 Finished Goods: at lower of cost or net realisable value. (Weighted
 average method)
 
 Traded items: at lower of cost or net realisable value.  (Weighted
 average method)
 
 E.  Sales
 
 Sale of goods is recognised en despatch to customers.  Sales include
 amounts recovered towards excise duty, but exclude amounts recovered
 towards sales tax.
 
 F.  Export Incentives
 
 Export Incentives are accounted on an accrual basis.
 
 G.  Foreign Currency Transactions
 
 Transactions in foreign currencies are recorded at current rates except
 transactions covered by forward contracts.
 
 
 Assets and Liabilities denominated in foreign currency are restated at
 the year end rates. All exchange gains and losses except those relating
 to acquisition of fixed assets which are adjusted to the carrying cost
 of such assets, are accounted for in the Profit and Loss Account.
 
 H.  Research and Development
 
 Revenue expenditure on Research and Development is charged as an
 expense in the year in which they are incurred. Capital expenditure is
 shown as an addition to Fixed Assets.
 
 Expenditure incurred on development of new products are amortised over
 a period of 10 years.
 
 I.  Employee Benefits
 
 (i) Defined Contribution Plan
 
 Company''s contributions paid /payable during the year to Superannuation
 Fund, ESIC and Labour Welfare Fund are recognised in the Profit and
 Loss Account. There are no other obligations other than the
 contribution payable to the respective trust/fund.  Company''s
 Contribution towards Superannuation and ESIC is based on a percentage
 of salary which is made to an approved fund.
 
 (ii) Defined Benefit Plan
 
 Company''s Contribution towards Provident Fund is based on a percentage
 of salary which is made to an approved fund.
 
 Company''s Contribution towards Gratuity is made to an approved fund as
 per actuarial valuation certificate obtained from an actuary which is
 determined using projected unit credit method.
 
 (iii) Short term compensated absences are provided as per actuarial
 valuation certificate obtained from an actuary which is determined
 using projected unit credit method.
 
 (iv) Long term employee benefit
 
 Long term compensated absences are provided as per actuarial valuation
 certificate obtained from an actuary which is determined using
 projected unit credit method.
 
 (v) Actuarial gains / losses are immediately taken to profit and loss
 account and are not deferred.
 
 J.  Deferred Revenue Expenses:
 
 Voluntary Retirement Scheme related payments are amortised over a
 period of 5 years.
 
 K.  Taxes on Income
 
 (a) Current Tax: Provision for Income Tax is determined in accordance
 with the provision of Income Tax Act, 1961.
 
 (b) Deferred Tax Provision: Deferred Tax is recognised on timing
 differences between the accounting income and the taxable income for
 the year and quantified using the tax rates and laws enacted or
 subsequently enacted on the Balance Sheet date.  Deferred Tax Assets
 are recognised and carried forward to the extent that there is a
 reasonable certainty that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.