(a) Accounts are maintained on accrual basis. Claims/Refunds not
 ascertainable with reasonable certainty are accounted for on settlement
 basis.
 
 (b) Fixed Assets are stated at cost adjusted by revaluation of certain
 assets.
 
 (c) Expenditure during construction/erection period is included under
 Capital Work-in-Progress and allocated to the respective fixed assets
 on completion of construction/ erection.
 
 (d) (i) Foreign currency transactions are recorded at exchange rates
 prevailing on the date of transaction.
 
 Monetary assets and liabilities in foreign currencies as at the Balance
 Sheet date are translated at exchange rate prevailing at the year end.
 Premium or discount in respect of forward contracts covered under AS 11
 (revised 2003) is recognized over the life of contract. Exchange
 differences arising on actual payments/ realizations and year end
 translations including on forward contracts are dealt with in Statement
 of Profit and Loss except foreign exchange loss/gain on reporting of
 long-term foreign currency monetary items used for depreciable assets,
 which are capitalized. Non Monetary Foreign Currency items are stated
 at cost.
 
 (ii) In accordance with Announcement issued by the Institute of
 Chartered Accountants of India all outstanding derivatives except
 covered under AS 11 (revised 2003) are marked to market on Balance
 Sheet date and loss, if any, is recognized in Statement of Profit and
 Loss, and gains are ignored.
 
 (e) Long term investments are stated at cost. Provision for diminution
 in the value of long term investments is made only if such a decline is
 other than temporary in the opinion of the management. The current
 investments are stated at lower of cost and quoted/fair value computed
 category-wise. When investment is made in partly convertible debentures
 with a view to retain only the convertible portion of the debentures,
 the excess of the face value of the non-convertible portion over the
 realisation on sale of such portion is treated as a part of the cost of
 acquisition of the convertible portion of the debenture. Income in
 respect of securities with long-term maturities is accounted for as per
 contractual obligation.
 
 (f) Inventories are valued at the lower of cost and net realisable
 value (except scrap/ waste which are valued at net realisable value).
 The cost is computed on weighted average basis. Finished Goods and
 Process Stock include cost of conversion and other costs incurred in
 bringing the inventories to their present location and condition.
 
 (g) Export incentives, Duty drawbacks and other benefits are
 recognized in the Statement of Profit and Loss.  Project subsidy is
 credited to Capital Reserve.
 
 (h) Revenue expenditure on Research and Development is charged to
 Statement of Profit and Loss in the year in which it is incurred and
 capital expenditure is added to Fixed Assets.
 
 (i) Borrowing cost is charged to Statement of Profit and Loss except
 cost of borrowing for acquisition of qualifying assets which is
 capitalised till the date of commercial use of the asset.
 
 (j) (i) Depreciation on Buildings, Plant & Machinery, Railway Siding
 and Other Assets of all Units is provided as per straight line method
 considering the rates in force at the time of respective additions of
 the assets made before 02.04.1987 and on additions thereafter at the
 rates and in the manner specified in Schedule XIV of the Companies Act
 1956. Continuous Process Plants as defined in Schedule XIV have been
 considered on technical evaluation. Depreciation on additions due to
 exchange rate fluctuation is provided on the basis of residual life of
 the assets. Depreciation on assets costing up to Rs. 5000/- and on
 Temporary Sheds is provided in full during the year of additions.
 
 (ii) Depreciation on the increased amount of assets due to revaluation
 is computed on the basis of the residual life of the assets as
 estimated by the valuers on straight-line method.
 
 (iii) Leasehold Land is being amortised over the lease period.
 
 (k) An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable amount. An impairment loss is charged to the
 Statement of Profit and Loss when an asset is identified as impaired.
 Reversal of impairment loss recognised in prior periods is recorded
 when there is an indication that the impairment losses recognised for
 the assets no longer exist or have decreased. Post impairment,
 depreciation is provided on the revised carrying value of the asset
 over its remaining useful life.
 
 (l) Employee Benefits:
 
 (i) Defined Contribution Plan
 
 Employee benefit in the form of Superannuation Fund is considered as
 defined contribution plan and charged to the Statement of Profit and
 Loss in the year when the contribution to the respective fund is due.
 
 (ii) Defined Benefit Plan
 
 Retirement benefits in the form of Gratuity is considered as defined
 benefit obligation and provided for on the basis of an actuarial
 valuation, using the projected unit credit method, as at the date of
 Balance Sheet.
 
 The Provident Fund Contribution is made to trust administered by the
 trustees. The interest rate to the members of the trust shall not be
 lower than the statutory rate declared by the Central Government under
 Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Any
 shortfall, if any, shall be made good by the Company.
 
 (iii) Other long-term benefits
 
 Long term compensated absences are provided for on the basis of an
 actuarial valuation, using the projected unit credit method, as at the
 date of Balance Sheet.
 
 Actuarial gain/losses, if any, are immediately recognized in the
 Statement of Profit and Loss.
 
 (m) Lease rentals in respect of assets taken on finance lease are
 accounted for in reference to lease terms.
 
 (n) Expenditure incurred against which benefit is expected to flow
 into future periods, are treated as Deferred Revenue Expenditure and
 charged to Revenue Account over the expected duration of benefit.
 Share issue expense is charged to Securities Premium Reserve in the
 year of issue. ECA Premium on loans is to be amortised over the tenure
 of loan.
 
 (o) Intangible Assets are being recognised if the future economic
 benefits attributable to the asset are expected to flow to the
 company and the cost of the asset can be measured reliably. The same
 are being amortised over the expected duration of benefits.
 
 (p) Current tax is the amount of tax payable on the estimated taxable
 income for the current year as per the provisions of Income Ta x Act,
 1961. Deferred tax assets and liabilities are recognised in respect of
 current year and prospective years. Deferred tax assets are recognised
 on the basis of reasonable certainty / virtual certainty as the case
 may be, that sufficient future taxable income will be available
 against which the same can be realised.
 
 (q) Provisions involving substantial degree of estimation in
 measurement are recognised when there is a present obligation as a
 result of past events and it is probable that there will be an outflow
 of resources. Contingent liabilities are not recognised but are
 disclosed in the notes.
 
 (r) Premium on redemption of preference shares is accounted for in the
 year of redemption.