(i) All revenues, expenses, assets and liabilities are accounted for on
 accrual basis except,
 
 (a) revenue/expenses in respect of insurance claims, interest etc. is
 recognised only when it is reasonably certain that the ultimate
 collection/payment will be made;
 
 (b) contingent liabilities not provided for are disclosed by way of
 notes to the Accounts.
 
 (ii) FIXED ASSETS
 
 Fixed Assets are recorded in the books at cost of acquisition
 (including expenditure on installation) or construction. Gross Block at
 the year end is stated at cost as increased by appreciation entered in
 the books on revaluation of assets made as of 30th April, 1961 and
 again as of 1st November, 1971.
 
 (iii) DEPRECIATION
 
 The Company's policy for providing depreciation on fixed assets is as
 under :
 
 (a) in respect of assets installed prior to 1st November, 1976 on
 written down value method in accordance with Section 205(2)(a) of the
 Companies Act, 1956:
 
 (b) in respect of Building, Machinery and Equipment and Moulds & Cores
 installed on or after 1st November,1976 and upto 31st October, 1981 and
 all other assets installed on or after 1st November, 1976 and upto 31st
 Oct, 1987, on straight line method under Section 205(2)(b) at the rates
 determined considering the specified life of the asset at the time of
 its installation as per the Circular dated 21st May, 1986 issued by the
 Department of Company Affairs, Government of India;
 
 (c) in respect of Building, Machinery and Equipment and Moulds & Cores
 constructed/installed on or after 1st November, 1981 and upto 31st
 March, 1993 at the revised straight line rates arrived at on the basis
 of useful economic life of these assets as under, certified by the
 Valuers and Chartered Engineers.
 
 Building                        -  Useful economic life 50 years
 
 Machinery & Equipment           -  10/15/20/25 years as identified
 
 Moulds                          -  10 years
 
 (d) in respect of assets other than Building, Machinery and Equipment
 and Moulds & Cores installed on or after 1st November, 1987 and upto
 31st March, 1993 and all assets installed after 31st March, 1993 at
 straight line rates prescribed in Schedule XIV to the Companies Act,
 1956.
 
 with a view to fall inline with the Accounting Standard for
 depreciation,from accounting year 1998-99 the Company has decided to
 charge depreciation on appreciation entered in the books by writing up
 the fixed assets to appraised values as determined by the independent
 valuers as of 30th April, 1961 and again as of 1st November 1971 (also
 refer note no.15).
 
 (iv) INVESTMENTS
 
 Investments are stated at cost of acquisition.
 
 (v) INVENTORIES
 
 Inventories are valued at Lower of cost (weighted average and Duties
 thereon) and Net realisable value. Cost of own manufactured goods is
 determined on standard cost principles and comprise of raw materials,
 direct labour, production overheads and excise duty paid.
 
 (vi) SALES
 
 Sales include excise duty recovered but exclude sales tax.
 
 (vii) GRATUITY
 
 Provision is made in the books each year, based on actuarial valuation
 by charging to Profit and Loss Account. In addition, gratuity liability
 falling due during the year is charged to Profit and Loss Account.
 However, Gratuity liability has not been funded.
 
 (viii) RESEARCH AND DEVELOPMENT
 
 Revenue Expenditure on research and development is charged to Profit &
 Loss Account in the year in which it is incurred. Capital Expenditure
 on research and development is shown as an addition to fixed assets.
 
 (ix) FOREIGN CURRENCY TRANSACTIONS
 
 Transactions in foreign currency are recorded at the rate of exchange
 in force at the time the transactions effected. All exchange
 differences arising in respect of foreign currency transactions are
 dealt with in Profit & Loss Account (except those relating to
 acquisition of Fixed Assets which are adjusted in the cost of assets).
 All Foreign currency assets and liabilities as at the Balance Sheet
 date are restated at the applicable exchange rates prevailing on that
 date and any material differences arising on such restatement are dealt
 with in the Profit and Loss Account except those relating to
 acquisition of fixed assets.