System of accounting: The accounts have been prepared and presented
 under the historical cost convention method on the accrual basis of
 accounting in accordance with the accounting principles generally
 accepted in India and comply with the Accounting Standards issued by
 Institute of Chartered Accountants of India (ICAI) to the extent
 applicable.
 
 2) Fixed Assets: Fixed Assets are stated at cost less accumulated
 depreciation Cost is inclusive of duties & taxes (net of CENVAT / VAT),
 incidental expenses and erection / commissioning expenses.
 
 3) Depreciation: Depreciation on fixed assets is provided on
 straight-line method at the rates specified in Schedule XIV of the
 Companies Act, 1956. The depreciation on incremental value arising from
 the revaluation of the fixed assets is charged to Revaluation Reserve
 Account.
 
 4) Expenditure during construction period: Expenditure (including
 finance cost relating to borrowed funds for construction or acquisition
 of fixed assets) incurred on projects under implementation are treated
 as Preoperative expenses pending allocation to the assets and are shown
 under Capital Work in Progress and the same are apportioned to fixed
 assets on commencement of commercial production.
 
 5) Investments: Long-term investments and investments in subsidiary
 companies are carried at cost. Provision for diminution in value is
 made whenever necessary in accordance with the Accounting Standards in
 force.
 
 6) Valuation of Inventories
 
 a) Inventories are valued at the lower of cost or net realisable value.
 
 b) Inventories of raw material, consumables and stores and spares are
 valued at cost as per FIFO method. Cost does not include duties and
 taxes that are subsequently recoverable.
 
 c) Cost for the purpose of finished goods and material in process is
 computed on the basis of cost of material, labour and other related
 overheads.
 
 d) Goods in transit are stated at costs accrued up to the date of
 Balance Sheet.
 
 e) Stocks with consignment agents are stated at costs accrued up to the
 date of the Balance sheet.
 
 7) Government grants: Government grants received in the nature of
 promoter''s contribution and where no repayment is ordinarily expected
 are treated as capital reserve.
 
 8) Foreign Exchange: Foreign exchange transactions are recorded at the
 exchange rates prevailing at the time of transactions or at contracted
 rates. Current assets and current liabilities are translated at values
 prevailing at the Balance Sheet date. Gains/Losses, if any, arising
 thereby are recognised in the Profit and Loss account.
 
 9) Revenue Recognition
 
 a) Revenue from sales is recognised when significant risk and rewards
 in respect of ownership of the products are transferred.
 
 b) Revenue from domestic sales is recognised on dispatch of products
 from the factory of the Company and in case of consignment sale, on
 further sale made by the agents.
 
 c) Revenue from export sales is recognised on the basis of dates of
 Bill of Lading.
 
 10) Export Benefits: Advance licenses are issued to the Company under
 the Advance License Scheme [Duty Exemption Entitlement Certificate
 (DEEC Scheme)] / duty entitlement credited under the Duty Entitlement
 Pass Book Scheme (DEPB Scheme) on the export of the goods manufactured
 by it. Whenever export sales are made by the Company, pending receipt
 of imported duty-paid raw materials under the DEEC / DEPB Schemes, the
 cost of domestic raw materials actually consumed for the purpose of
 such exports is compensated and / or matched by accruing the value of
 the benefit under the DEEC / DEPB Scheme.
 
 11) Research and development expenses:
 
 a) Research costs not resulting in any tangible property/equipment are
 charged to revenue as and when incurred.
 
 b) Know-how/ product development costs incurred on an individual
 project are carried forward when its future recoverability can
 reasonably be regarded as assured. Any expenditure carried forward is
 amortised over the period of expected future benefits from the related
 project, not exceeding ten years.
 
 c) The carrying value of know-how/ product development costs are
 reviewed for impairment annually when the asset is not yet in use and
 otherwise when events or changes in circumstances indicate that the
 carrying value may not be recoverable.
 
 12) Employee Retirement Benefits:
 
 a) Defined Contributions Plan: Contributions paid/payable to the
 defined contribution plan of Provident Fund for certain employees
 covered under the scheme are recognised in the Profit and Loss account
 each year.
 
 The Company makes contributions to a State operated contribution scheme
 for certain employees at a specified percentage of the employees''
 salary. The Company has an obligation only to the extent of the defined
 contribution.
 
 b) Defined Benefit Plan: Gratuity for certain employees is covered
 under a scheme of Life Insurance Corporation of India (LIC) and
 contributions in respect of such scheme are recognised in the Profit
 and Loss account. The liability as at the Balance Sheet date is
 provided for based on the actuarial valuation carried out in accordance
 with revised Accounting Standard 15 as at the end of the year/period.
 
 c) Other long term employee benefits: Other long term employee benefits
 comprise of leave encashment which is provided on the actuarial
 valuation carried out in accordance with revised Accounting Standard 15
 as at the end of the year/period.
 
 13) Borrowing costs: Borrowing costs incurred in relation to the
 acquisition and construction of assets are capitalised as part of the
 cost of such assets up to the date when such assets are ready for
 intended use. Other borrowing costs are charged as an expense in the
 year in which they are incurred.
 
 14) Income tax expense:
 
 a) Current Tax Expense
 
 The Current charge for income tax is calculated in accordance with the
 tax regulations.
 
 b) Deferred Tax Expense
 
 Deferred income tax reflects the impact of timing difference between
 accounting income and tax income for the year / period. Deferred tax is
 measured based on the tax rates and the tax laws enacted at the Balance
 Sheet date. Deferred tax asset is recognised only to the extent of
 certainty of realisation of such asset.