The financial statements are prepared under the historical cost
 convention in accordance with applicable accounting standards and
 relevant presentational requirements of the Companies Act, 1956.
 
 i) Fixed assets and depreciation
 
 Fixed assets are stated at cost of acquisition or construction less
 accumulated depreciation and include interest on loans attributable to
 the acquisition of qualifying assets upto the date of their
 commissioning.
 
 No amortization is done in respect of leasehold land in view of the
 lease being perpetual.
 
 Depreciation in the accounts is charged on the straight line method at
 the rates prescribed under the Companies Act, 1956 and is calculated on
 a full year basis on additions during the year and no depreciation is
 provided on assets deleted during the year. Extra shift depreciation is
 computed in full on a concern basis and not prorated to the number of
 days of shift working. Assets, other than items costing upto Rs. 5000
 each, are depreciated upto 95% of their value and 5% residual value is
 retained in the books.
 
 The depreciation rates which are different from the principal rates
 specified in Schedule XIV of the Companies Act, 1956 are as follows:-
 
 Items of machinery and equipment costing upto Rs. 5,000 each acquired
 upto December 16, 1993
 
 95%
 
 Assets, other than data processing equipment, acquired upto December
 31, 1987 and data processing equipment acquired upto December 31, 1986
 
 SLM equivalent of rates applicable under the Income-tax Rules, 1962 at
 the time of acquisition of such assets.
 
 ii) Investments
 
 Long term investments are stated at cost net of provision for permanent
 diminution, if any. Current investments are stated at cost or fair
 value, whichever is lower.
 
 iii) Inventories
 
 Inventories are valued at cost or net realisable value, whichever is
 lower except stores and spare parts which are valued at cost or under.
 Cost of real estate is determined taking into account revalued cost of
 land and construction cost incurred thereon. The cost of raw materials,
 stores and spares and other goods is determined on moving weighted
 average cost basis. The cost of finished goods and work-in- process is
 determined on standard absorption cost basis which approximates actual
 costs. Absorption cost comprises raw materials cost, direct wages,
 appropriate share of production overheads and applicable excise duty
 paid/payable thereon.
 
 iv) Revenue recognition
 
 Sale of goods is recognised at the point of despatch of goods to
 customers. Sales are inclusive of excise duty where applicable but
 exclusive of sales tax. Income from investments is recognised on an
 accrual basis.
 
 v) Employee benefits
 
 The Company has various schemes of employee benefits such as provident
 fund, superannuation fund and gratuity fund duly recognised by the
 Income-tax authorities. The funds are administered through trustees and
 the Company''s contributions are charged against the revenue every year.
 Accrued liability for gratuity and compensated absences on retirement
 are determined on the basis of actuarial valuation at the end of the
 financial year.
 
 vi) Income-tax
 
 Provision for income-tax is based on the assessable profits computed in
 accordance with the provisions of the Income-tax Act, 1961.
 
 Deferred tax is recognised, subject to the consideration of prudence,
 on timing differences, being the differences between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods.
 
 vii) Proposed dividends
 
 Dividends proposed by the directors as appropriation of profits are
 provided for in the books of account, pending approval of shareholders
 at the annual general meeting.
 
 viii) Research and development expenditure
 
 Research and development expenditure is charged to revenue under the
 natural heads of account in the year in which it is incurred.
 
 ix) Foreign currency transactions
 
 Transactions in foreign currency are recorded at the exchange rates
 prevailing at the time of transactions.  Gains/losses on settlement of
 the transactions are taken to the profit and loss account. The monetary
 items are translated at the year end rates and the gains/losses are
 taken to the profit and loss account.
 
 The difference between the forward rate and the exchange rate at the
 date of the forward contract transaction is recognised as income or
 expense over the life of the contract in the profit and loss account.
 The exchange difference on such contracts i.e. difference between the
 exchange rate at the reporting / settlement date and the exchange rate
 on the date of inception of the contract/the last reporting date, is
 recognised as income or expense for the period.