A) Fixed Assets and Depreciation/Amortisation :
 
 i) Fixed Assets are stated at cost of acquisition or construction less
 depreciation/amortisation.  Cost comprises the purchase price and other
 attributable costs.
 
 ii) Depreciation on fixed assets :
 
 a) Depreciation on tangible fixed assets is provided on the straight
 line method at the rates and in the manner specified in Schedule XIV to
 the Companies Act, 1956.except in respect of following assets where the
 rates are higher:
 
 Certain Plant & Machinery - 10%
 
 Certain Dies, Moulds, Jigs & Fixtures - 15% to 50%
 
 Certain Vehicles - 20%
 
 b) Leasehold land is amortised over the period of the lease.
 
 iii) Goodwill and Technical knowhow (intangible assets) are amortised
 on a straight line basis over a period of 5 years.
 
 B) Inventories :
 
 Inventories are stated at the lower of cost and net realisable value.
 In determining the cost of inventories the annual weighted average
 method is used in respect of raw materials and components and
 first-in-first-out (FIFO) method in respect of stores and spares.
 Cost of work- in-progress and manufactured finished goods include
 material cost, labour and manufacturing overheads on the basis of full
 absorption costing.
 
 C) Foreign Exchange Transactions
 
 Transactions in foreign currencies are recorded at the exchange rates
 prevailing on the date of the transaction. Current assets and current
 liabilities outstanding at the period end are translated at period end
 exchange rates and the profit / loss so determined and also the
 realised exchange gains / losses are recognised in the profit and loss
 account.
 
 D) Employee Benefits :
 
 Employee benefits includes gratuity, superannuation and provident fund
 and leave encashment benefits under the approved schemes of the
 Company. In respect of defined contribution plans, the contribution
 payable for the year is charged to the Profit and Loss Account.
 
 In respect of defined benefit plans and other long term employee
 benefits, the employee benefit cost is accounted for based on an
 acturial valuation as at the Balance Sheet date.
 
 E) Borrowing Cost :
 
 Borrowing costs that are directly attributable to the acquisition,
 construction or production of a qualifying asset are capitalised as
 part of the cost of that asset. Other borrowing costs are recognised as
 an expense in the year in which they are incurred.
 
 F) Taxes on Income :
 
 Tax expenses for the year is included in the determination of the net
 profit for the year.
 
 Deferred tax is recognised on all timing differences, subject to
 consideration of prudence in respect of deferred tax assets.
 
 G) Miscellaneous Expenditure (to the extent not written off / adjusted
 ) : Discount on issue of debentures are amortised over the period of
 debentures.