Accounting Concepts:
 
 The Company follows the mercantile system of accounting and recognises
 income and expenditure on an accrual basis. Financial statements are
 based on historical cost adjusted by the revaluation of certain Fixed
 Assets.
 
 Fixed Assets:
 
 Fixed assets are stated at cost adjusted by revaluation of certain land
 and buildings as on 30.06.1985 and 31.03.1991 and plant and machinery
 as on 31.03.1991, at the then replacement values less depreciation. All
 costs relating to the acquisition and installation of fixed assets are
 capitalised and include interest on specific loans availed for
 acquiring fixed assets upto the date the assets are put to use and
 exchange difference arising on foreign currency loans.
 
 Investments:
 
 Investments are long term in nature and are stated at cost. Diminution
 in the value of investments, other than temporary in nature, are
 provided for.
 
 Inventory Valuation:
 
 Stocks of Raw Materials (including waste). Stores & Spares,
 Work-in-process and Finished Goods are stated at lower of cost and net
 realizable value. The cost is arrived at on First In First Out for Raw
 Material, Work-in-Process and Finished Goods, and weighted average cost
 for others.
 
 Income Taxes:
 
 Income Tax comprises the current tax provision under the tax payable
 method and the net change in the deferred tax asset or liability in the
 year. Deferred Tax Assets and Liabilities are recognised for the future
 tax consequences of temporary differences between the carrying values
 of the assets and liabilities and their respective tax bases. Deferred
 tax assets are recognised subject to managements judgement that
 realisation is virtually certain. Deferred tax assets and liabilities
 are measured using enacted tax rates expected to apply to taxable
 income in the years in which the temporary differences are expected to
 be received or settled. The effect on deferred tax assets and
 liabilities of a change in tax rates is recognised in the income
 statement in the period of enactment of the change.
 
 Foreign Currency Transaction:
 
 Foreign currency transactions are accounted at exchange rates
 prevailing on the date of the transaction. All foreign currency assets
 and liabilities as at the Balance Sheet date are translated into rupees
 at the applicable exchange rate on that date. All exchange differences
 are dealt with in the profit and loss account, except those relating to
 the acquisition of fixed assets, which are adjusted in the cost of the
 fixed assets.
 
 Research and Development:
 
 Expenditure on Research and Development other than capital items is
 expensed. 
 
 Retirement Benefits:
 
 i) Future liability to gratuity to employees is determined on the basis
 of actuarial valuation as at the year end and funded through a separate
 trust, while the liability for leave encashment benefits based on
 actuarial valuation is provided for.
 
 ii) Contributions to Provident and Superannuation Funds being fixed
 contributions are absorbed in the accounts.
 
 Depreciation:
 
 Depreciation on Fixed assets is provided on a straightline basis at the
 rates prescribed in Schedule XIV of the Companies Act, 1956, except
 vehicles and computers which are depreciated on an accelerated basis.
 Depreciation on account of enhancement in the value of certain Fixed
 Assets on account of revaluation is adjusted against Revaluation
 Reserve.
 
 Voluntary Retirement Scheme:
 
 Compensation paid to the employees under Voluntary Retirement Scheme
 (VRS) is absorbed in the accounts in the year of payment.