A) GENERAL
 
 The Financial Statements are preparedon the basis of historical cost
 convention, on the accounting principles of a going concern and in
 accordance with the applicable accounting standards. All the expenses
 and income to the extent considered payable and receivable,
 respectively, unless specifically stated to be otherwise, are accounted
 for on accrual basis.
 
 B) FIXED ASSETS:
 
 Fixed Assets are stated at cost including freight, duties, taxes and
 all incidental expenses related thereto.
 
 C) CAPITAL WORK-IN-PROGRESS
 
 Expenditure related to and incurred during the implementation of the
 projects is included under Capital Work-in-Progress and the same will
 be capitalised under the appropriate heads on completion of the
 projects.
 
 D) DEPRECIATION / AMORTIZATION
 
 Depreciation on Fixed Assets is provided for on written down value
 method at the rates specified in Schedule XIV to the Companies Act 1956
 (hereinafter referred to as the Act).
 
 E) INVENTORIES:
 
 The inventories are valued at lower of cost and net realizable value.
 Cost is assigned on weighted average basis. Obsolete, defective and
 unserviceable stocks are provided for.
 
 F) BORROWING COST
 
 Borrowing cost directly attributable to acquisition, construction,
 production of qualifying assets are capitalised as a part of the cost
 of such assets up to the date of completion. Other borrowing costs are
 charged to Statement of Profit and Loss.
 
 G) TAXATION
 
 i) Provision for Current Tax is made and retained in the accounts on
 the basis of estimated tax liability as per applicable provisions of
 Income Tax Act 1961.
 
 ii) Deferredtax for timing difference between tax profit and book
 profit is accounted for using the tax rates and laws as have been
 enacted or substantively enacted as of the balance sheet date. Deferred
 tax assets are recognized to the extent there is reasonable certainty
 that these assets can be realized in future and are reviewed for the
 appropriateness of their respective carrying values at each Balance
 Sheet date.
 
 (a) Interest (calculated on month end balance) amounting to Rs.
 45,14,057 (Previous Year Rs. 10,63,000) has not been charged for the
 year on loans and business advances given to an associates company as
 considered appropriate by the management, interalia, considering the
 long term business exigencies/ purposes.