1) System of Accounting
 
 a) The Company maintains its accounts generally on accrual basis
 following the historical costs convention, in compliance with the
 historical cost convention, in compliance with the Accounting Standards
 specified to be mandatory by the Institute of Chartered Accountants of
 India and the relevant provisions of the Companies Act, 1956.
 
 b) The income and expenditure are generally recognised on mercantile
 basis except those with significant uncertainties.
 
 c) The historical costs are not adjusted to reflect the impact of
 changing value in the purchasing power of money.
 
 d) Accounting policies not specifically referred to otherwise are
 consistent and in consonance with the generally accepted accounting
 principles.
 
 2) Fixed Assets
 
 a) Fixed Assets are stated at cost of acquisition, net off MODVAT
 (CENVAT), less accumulated depreciation.
 
 b) The Company follows the practice of capitalising all costs including
 financial costs and interest on borrowings for capital expenditure for
 the period upto the date on which the plant is ready for commercial
 production i.e. production in commercially feasible quantities and in a
 commercially practicable manner in accordance with the accounting
 treatment recommended by the Institute of Chartered Accountants of
 India.
 
 c) All the pre-operative expenditure and trial run expenditure
 accumulated as Capital Work-in-Progress are allocated on prorata basis
 depending on the prime costs of the assets.
 
 d) Capital work in progress in stated at amount spent upto the date of
 Balance Sheet and includes advances for capital expenditure and
 pre-operative expenses and costs of financing for expansion projects,
 pending capitalization.
 
 3) Depreciation
 
 a) Depreciation is provided on straight-line method as per the rates
 specified in Schedule XIV to the Companies Act, 1956.  It is provided
 for the part of the year in respect of assets acquired during the year.
 
 b) Depreciation on increase/decrease in value of fixed assets due to
 foreign exchange fluctuation is provided on straight-line method during
 the residual life of the assets.
 
 4) Investments
 
 Long term, investments are carried at cost, including related expenses.
 Provision, if necessary, is made for decline, other than temporary, in
 their value.
 
 5) Inventories
 
 a) Inventories in general are valued at cost or net realisable value,
 whichever is lower.
 
 b) Cost of inventories of raw materials is arrived at on weighted
 average method and is net off MODVAT (CENVAT) credit thereon.
 
 c) Cost of Stores, Spares & Consumables is arrived at an specific
 identification cost or weighted average cost, whichever is applicable.
 
 d) Finished goods & Semi-finished goods are valued at cost of raw
 materials and conversion cost thereof, including the cost incurred in
 the normal course of business in bringing the goods upto the present
 condition and location.  The cost is ascertained on the basis of
 absorption costing which takes into account and direct expenses,
 depreciation on plant and machineries, interest on export packing
 credit but excludes selling and distribution expenses.  Excise duty
 relating to finished goods has also been included in the cost of such
 inventories.
 
 6) Sales
 
 Sales of product & services are recognised when the products are
 dispatched and services rendered and are inclusive of excise duty and
 sales-tax.
 
 7) Translation of Foreign Currency Items
 
 a) Transactions in foreign currencies are recorded at the exchange rate
 prevailing on the date of the transaction.
 
 b) Current assets and current liabilities are translated at the year
 end rate.
 
 c) The difference between the rate prevailing on the date of the
 transaction and on the date of settlement and also on translation of
 Current Assets Liabilities at the end of the year are recognised s
 income or expenditure as the case may be and are adjusted in the Profit
 and Loss Account accordingly.
 
 d) Liability on account of Exchange difference in respect of foreign
 currency utilised for the purpose of acquiring fixed assets and
 outstanding on the balance sheet date, is added to the cost of the
 fixed assets.  Exchange difference on such loan installments paid
 during the year is accounted for as revenue expense.
 
 8) Preliminary & Share Issue Expenses
 
 Preliminary & Share Issue Expenses are amortised over a period often
 years.
 
 9) Expenditure during construction period and on expansion projects
 
 In the case of substantial expansion of existing units all pre-operative
 expenditure, including interest on borrowings specifically for the
 projects or interest on general borrowings of the Company whenever
 utilised for such expenditure, incurred up to the date of commencement
 of commercial production is capitalised and added pro-rata to the cost
 of fixed assets.
 
 10) Retirement Benefits
 
 Provision for retirement benefits are made as follows :
 
 a) Employer's contribution to Provident Fund on actual liability basis.
 
 b) Gratuity liability based on actuarial valuation.
 
 c) Leave Encashment liability on retirement based on actuarial
 valuation.
 
 11) Prior period and extra ordinary items
 
 Income and expenditure pertaining to prior period as well as
 extra-ordinary items, where material, are disclosed separately.