A.  The financial statements are prepared under the historical cost
 convention (except for revaluation of certain Fixed Assets), on the
 accounting principles of a going concern, in accordance with the
 applicable accounting standards and on accrual basis except
 specifically stated here below.
 
 All income and expenses to the extent considered receivable / payable
 with reasonable certainty are accounted for on accrual basis except
 specifically stated here below.
 
 B.  USE OF ESTIMATES .
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles (GAAP) requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities on the
 date of financial statements and reported amounts of revenue and
 expenses for that year. Actual result may some time differ from these
 estimates. Any revision to accounting estimates is recognized
 prospectively.
 
 C.  FIXED ASSETS
 
 I.  a) Certain Land & Buildings and Plant & Machinery were revalued
 from time to time and are stated at updated book values less
 
 depreciation, where applicable.  b) Other assets are stated at cost
 less depreciation/amortisation . Cost comprises of all expenses
 incurred upto commissioning/ putting the assets to use.
 
 II.  IMPAIRMENT OF ASSETS
 
 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 asset is reduced to its recoverable
 amount and the impairment loss is charged to the profit and loss
 account. If at the Balance Sheet date, there is any indication that a
 previously assessed impairment loss no longer exists, than such loss is
 reversed and the asset is restated to that effect.
 
 D.  DEPRECIATION / AMORTISATION
 
 a) Depreciation on Fixed Assets is provided for on written down value
 method in accordance with Schedule XIV to the Companies Act, 1956
 (hereinafter referred to as the ''Act''). In respect of assets whose
 actual cost does not exceed Rupees Five thousand and acquired before
 01.04.1993, depreciation is continued to be provided for at the general
 rates applicable to them under the said Schedule and those acquired
 thereafter, at the rate of 100% in the year of acquisition.
 
 b) Depreciation on the revalued Fixed Assets is provided for on
 straight line method on the increased book value of the assets (Net of
 scrap/ salvage value) based on the balance life of the said assets as
 estimated by the valuer. Out of the depreciation so calculated, the
 amount of depreciation as stated in (a) above is charged to the Profit
 and Loss Account and the balance is adjusted against a like amount
 transferred from Revaluation Reserve.
 
 c) Depreciation on spares purchased subsequently for specific machinery
 and having irregular use is provided prospectively over the residual
 life of the specific machinery.
 
 E.  INVESTMENTS
 
 Long Term investments are carried at cost less write offs, if any, for
 diminution other than temporary in the value of such investments,
 determined for each investment individually.
 
 F.  VALUATION OF INVENTORIES
 
 a) (i) Stock in Trade-Immovable Properties is valued at estimated
 market value as per the expert opinion received in the matter.
 (ii)Other Inventories are valued at lower of cost and estimated net
 realisable value. Obsolete, defective and unserviceable stocks are
 provided for.
 
 b) Cost of Inventories is computed on moving weighted average /FIFO
 basis.
 
 c) Cost of finished goods, work-in-progress and other materials
 includes conversion and other costs incurred in bringing the
 inventories to their present location and condition.
 
 d) Advertisement and Sales promotion materials/items are charged to
 revenue as and when purchased.
 
 G. REVENUE RECOGNITION
 
 a) Sale of goods is recognised when the property and all the
 significant risks and rewards of ownership are transferred to the buyer
 and no significant uncertainty exists regarding the amount of
 consideration that is derived from the sale of goods. Sales include
 Excise Duty and are net of Discounts / Margins (as considered
 appropriate by the management), Value Added Tax and Damaged & Dented
 stocks. Damaged & Dented stocks are accounted/ provided for as and when
 inspected and destroyed.
 
 b) Export sales are accounted for on the basis of the date of Bill of
 Lading / Mates Receipt.
 
 c) Export Benefit Claims are accounted in the year of export.  H.
 EMPLOYEE BENEFITS
 
 (a) Contributions towards provident fund and superannuation fund are
 made under defined contribution retirement benefit plans for qualifying
 employees. The provident fund plan is operated by the Regional
 Provident Fund Commissioner. The superannuation fund is administered by
 the Trustees of the GTL Management Staff Superannuation Scheme and is
 funded under Group Superannuation Scheme of Life Insurance Company
 Limited. The Company is required to contribute a specific percentageof
 payroll cost towards retirement benefits. The contributions are charged
 to Profit and Loss account in the respective year.  »
 
 (b) Leave entitlement liability is provided for on the basis of
 actuarial valuation carried out at the year-end. Actuarial gains and
 losses are recognized immediately in the profit & loss account.
 
 (c) Gratuity liability is paid in accordance to a defined benefit plan
 but is accounted for as and when employees retire and the amount Is
 due.
 
 I. RESEARCH AND DEVELOPMENT EXPENSES
 
 Research & Development expenses of revenue nature are charged to the
 Profit and Loss Account and that of capital nature are shown as an
 addition to the respective Fixed Assets.
 
 J. TRANSLATION OF FOREIGN CURRENCY ITEMS
 
 a) Transactions in foreign currency are recorded at the rate of
 exchange in force on the date of the transaction.
 
 b) Assets, liabilities and capital commitments denominated in foreign
 currency are restated at the rate of exchange prevailing at the year
 end.
 
 c) In case of forward contracts, the premium/discount is dealt with in
 the Profit and Loss Account over the period of the contracts.
 
 d) The exchange differences are adjusted to Profit and Loss Account.
 
 K. BORROWING COSTS
 
 Borrowing Costs attributable to acquisition or construction of
 qualifying assets are capitalised as part of the cost of such assets up
 to the date when such asset is ready for its intended use. Other
 borrowing costs are charged to the Profit and Loss Account.
 
 L. TAXATION
 
 Provision for current tax is made on the basis of 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 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
 realized in future.
 
 M. PROVISIONS, CONTIGENT 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, if material,
 are disclosed by way of notes to accounts. Disputed show cause notices
 / show cause-cum-demand notices are not considered as contingent
 liabilities Contingent assets are not recognized or disclosed in the
 financial statements.