i.  Fixed Assets
 
 a) Fixed Assets are stated at historical cost of acquisition or
 construction and includes amounts added on account ol revaluation of
 Fixed Assets less accumulated depreciation.
 
 b) Expenditure incurred on Product Development is treated as an
 Intangible Asset to be amortised over a period of 5 years using the
 Straight Line Method.
 
 ii.  Depreciation on Fixed Assets
 
 a) Depreciation has been provided on the Straight Line Method in
 accordance with the provisions of Section 205 (2) (b) of the Companies
 Act, 195.6, at the rates and in the manner specified in Schedule XIV to
 the said Act.
 
 b) Depreciation for the year/period is provided on revalued cost of
 assets and is charged to Fixed Assets as revalued.
 
 c) Depreciation has been provided at 5.28% on: .  .
 
 i) Furnaces, Conveyor Belts and Washing Machines installed at Kalwe
 Unit and forming part of heat treatment process and operations for High
 Tensile Fcisteners manufactured by the Company; and
 
 ii) Furnaces, Nitrogen Gas Plant, Pickling Furnace and Boiler installed
 at Mahad Unit and forming part of annealing-and pickling process for
 wire coils (raw materials) purchased by the Company/by considering
 these machines as continuous process plant as defined in Schedule XIV
 to the Companies Act, 1956.
 
 iii.  Investments (Long Term)
 
 Long Term Investments are carried at cost, after providing for any
 diminution in value, if such diminution is other than temporary in
 nature.
 
 iv.  Inventories
 
 a) Raw Materials: At cost on First In First Out basis.
 
 b) Finished Goods and Work-in-Progress:
 
 Finished Goods and Work-in-Progress at cost or market value, whichever
 is lower. Cost is determined on the basis of absorption costing method.
 Market value is based on available market price/quotation.
 
 c) Tools: Tools which are actually consumed during the year/period are
 amortised over a period of 5 years.
 
 d) Obsolete items of stocks are valued at Nil.
 
 v.  Provision for Bad and Doubtful Debts and Advances
 
 Provision is made for Doubtful Debts and Advances which are considered
 irrecoverable in the opinion of the Management.  vi.  Retirement
 Benefits
 
 a) Gratuity:
 
 Provision for Gratuity is made @ 8.33% on Annual Salary which includes
 Basic Salary,. Dearness Allowance and Adhoc Allowance.  .  - .  
 
 b) Provident Fund:
 
 Liability is provided on the basis of contribution as required under
 the Statute/Rules.
 
 vii.  Leave Salary
 
 Liability towards Leave Salary is provided during the year/period only
 in respect of those employees who have left the Company and where
 settlement with them is duly made.
 
 viii.  Foreign Currency Transactions
 
 Transactions in Foreign Currency are accounted at the exchange rate
 prevailing on the date of the transactions. Any exchange gains or
 losses arising out of subsequent fluctuations are accounted in the
 Financial Statements as per Accounting Standard -11. In respect of
 Foreign Currency Loans taken, for Fixed Assets, exchange gains or.
 losses are deducted from/added to Fixed Assets as per Schedule VI to
 the Companies Act, 1956.
 
 ix.  Premium on Redemption of Debentures
 
 Premium payable on redemption of Debentures is accounted as and when
 paid.  
 
 x.  Revenue Recognition
 
 a) Sales are recognised when there is reasonable certainty and
 substantial risk and reward of ownership is transferred.
 
 b) Interest on delayed payments from Customers is accounted as and when
 received.  
 
 xi.  Deferred Taxes
 
 Deferred Tax resulting from timing differences between Book and Tax
 Profits is accounted for under the liability method, at the current
 rate of Tax, to the extent that the timing differences are expected to
 crystallise.  
 Deferred Tax Assets are recognised and carried forward to the extent
 that there is reasonable certainty that sufficient future taxable
 income will be available against which such Deferred Tax Assets can be
 realised.
 
 xii.  Contingent Liabilities
 
 Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
 Provision is made in the Accounts in respect of those contingencies
 which are likely to materialise into liabilities after the year end
 till the approval of the Accounts by the Board of Directors and which
 have material effect on the position stated in the Balance Sheet.