1 System of Accounting
 
 Unless otherwise stated hereunder the financial accounts of the Company
 have been drawn up on historical cost convention and on accrual basis.
 
 2 Use of Estimates
 
 The preparation of financial statement requires management to make
 certain estimates and assumptions that affect the amounts reported in
 the financial statements and notes thereto. Differences between actual
 results and estimates are recognised in the period in which they are
 materialise.
 
 3 Sales
 
 Sales are net of taxes and sales returns but inclusive of excise duty
 and exchange rates fluctuations.
 
 4 Fixed Assets
 
 Fixed Assets are capitalised at cost of acquisition and subsequent
 improvements thereto including taxes, duties etc other than Cenvat
 credit wherever applicable. Freight & other incidental expenses related
 to acquisition and installation are added to cost. In case of write-up
 due to revaluation are shown at such higher amount.
 
 5 Depreciation
 
 i) Depreciation on all assets has been charged by written down value
 method in accordance with the rates and manner specified in Schedule
 XIV to the Companies Act, 1956.
 
 ii) In respect of revalued assets, the incremental depreciation
 attributable to the Revaluation is transferred to Revaluation Reserve.
 
 6 Inventories
 
 Inventories have been valued as follows -
 
 Raw Materials : At cost *
 
 Finished Goods : At lower of the cost and net realisable value **
 
 Work in Progress : At cost *
 
 Stores, Tools & Other Materials : At cost *
 
 * The cost has been arrived at by using ''FIFO'' method.
 
 ** The cost of finished goods has been determined by considering
 standard conversion cost.
 
 7 Impairment of Assets
 
 The Company determines whether there is any indication of impairment of
 the carrying amount of the company''s assets. The recoverable amount of
 such assets are estimated, if any indication exists, and impairment
 losses recognised wherever the carrying amount of the assets exceeds
 its recoverable amount.
 
 8 Employees'' Benefits
 
 Company''s contribution to Provident Fund and Family Pension Fund are
 charged to profit & loss account.
 
 Provision for Gratuity and Leave Encashment benefits, in respect of
 employees governed by Indian rules and regulations is made on the basis
 of actuarial valuation as at the end of the year in confirmity with the
 Acccoutning standard-15 (Revised) issued by the Institute of Chartered
 Accountants of India and the provision for leave encashment (including
 long term leave) in respect of employees at foreign branches is made as
 per law prevalent in foreign country.
 
 Contribution to Employee Group Gratuity Trust for the current year are
 charged to Profit & Loss account and for the past years are adjusted in
 the Provision for Gratuity a/c.
 
 9 Foreign Currency Translations 
 
 a Foreign Currency Transactions
 
 Transactions in foreign currency are accounted for at the exchange
 rates prevailing at the date of transaction. Gains and losses resulting
 from the settlement of such transactions and from the translation of
 monetary assets and liabilities denominated in foreign currency are
 recognised in the profit and loss account. Exchange differences arising
 on account of monetary liabilities related to fixed assets are adjusted
 in the cost of assets. Bank Guarantee in foreign currency are
 translated at the exchange rate prevailing at the year end.
 
 b Foreign Branch Operation''s Translations
 
 The activities of the Foreign Branches are an integral part of the
 operations of the company and hence the foreign branch financial
 statements are translated in accordance with accounting standard
 applicable to Integral Foreign Operation as given under: 
 
 i) Income & Expenditure items by applying to the foreign currency
 amount, the exchange rate at the date of transaction.
 
 The rate used is an average rate for calendar month and used for all
 transaction occurring during that calendar month.
 
 ii) Fixed Assets at the exchange rate prevailing on the date of
 transaction.
 
 iii) Depreciation on the fixed assets in Indian rupees, which are
 reported using the exchange rate at the date of transaction.
 
 iv) Inventories related to stocks transfer from reporting enterprise
 are shown at the cost of reporting enterprises plus expenses incurred
 to bring the material at the shelf of foreign branch''s warehouse and
 local bought out inventories are translated at the exchange rate
 prevailing at year end.
 
 v) Other current assets and liabilities are converted at the exchange
 rates prevailing at the year end.
 
 vi) The exchange difference on translation of Foreign Branch financial
 statements are recognised in profit & loss account.
 
 10 Research & Development
 
 Revenue expenditure pertaining to research and development is charged
 to revenue in the year in which it is incurred.  Capital Expenditure is
 treated as forming part of Fixed Assets.
 
 11 Government Grants
 
 i) Revenue grants are accounted for in Profit & Loss Account.
 
 ii) Capital grants other than relating to specific fixed assets are
 credited to Capital Reserve.
 
 12 Miscellaneous Expenditure
 
 Public Issue Expense, Deferred Revenue Expenses & other expenses on
 intangible assets are recognised & amortised as per the Accounting
 Standard no. 26 on Intangible Assets issued by the Institute of
 Chartered Accountants of India.
 
 13 Borrowing Cost
 
 Interest and other costs in connection with borrowing of funds to the
 extent related / attributed to the acquisition / construction of
 qualifying fixed assets are capitalised upto the date when such assets
 are ready for its intended use and other borrowing cost are charged to
 Profit and Loss Account.
 
 14 Provision for Deferred and Current tax
 
 Provision for current tax is made after taking into consideration
 benefits admissible under the provisions of the Income Tax Act, 1961.
 Deferred Tax resulting from timing difference between book and
 taxable profit is accounted for using the tax rates and laws that have
 been enacted or substantively enacted as on the balance sheet date. The
 deferred tax asset is recognised and carried forward only to the extent
 that there is a reasonable certainty that the assets will be realised
 in future.