(a) Use of Estimates - The presentation of financial statements is in
 conformity with the generally accepted accounting principles requires
 estimates and assumptions to be made that affect the reported amount of
 assets and liabilities on the date of the financial statements and the
 reported amount of revenues and expenses during the reporting period.
 Difference between the actual and the estimates are recognized in the
 period in which the results are known / materialized.
 
 (b) Fixed Assets - Fixed assets are stated at cost of acquisition or
 construction, net of cenvat / value added tax, less accumulated
 depreciation. All costs, including trial production and financing costs
 till commencement of commercial production are capitalized.
 
 (c) Depreciation - Depreciation on fixed assets is provided at the
 rates and in the manner specified in Schedule XIV of the Companies Act,
 1956, on written down value method.
 
 (d) Investments - Long term investments are carried at cost. Provision
 for diminution in the value of long term investments is made only if
 such a decline is other than temporary in the opinion of management.
 Current investments are carried at the lower of costs and market value
 / net assets value, computed individually.
 
 (e) Inventories - In general, all inventories of finished goods,
 work-in-progress etc., are stated at lower of cost or net realisable
 value. Cost of inventories comprise of all cost of purchase, cost of
 conversion and other cost incurred in bringing the inventory to their
 present location and condition. Raw material and stores and spares are
 stated at cost on FIFO basis. Scrap is valued at estimated net
 realisable value. Inventories of finished goods and scrap includes
 excise duty whenever applicable.
 
 (f) Foreign Currency Transaction - (i) Transactions denominated in
 foreign currencies are normally recorded at the exchange rate
 prevailing at the time of the transaction.
 
 (ii) Monitory items denominated in foreign currencies at the year end
 are restated at the year end rates.
 
 (iii) Non-monetary foreign currency items are carried at cost.
 
 Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the Profit and Loss
 account.
 
 (g) Preliminary Expenses - The preliminary expenses are amortized /
 charged to the profit and loss account over a period of ten years.
 
 (h) Turnover - Turnover include sales of scrap, service charges, export
 incentive and excise duty but excludes sales tax / value added tax.
 
 (i) Borrowing Cost - Borrowing costs that are attributable to the
 acquisition or construction of qualifying assets are capitalized as
 part of the cost of such assets. A qualifying asset is one that
 necessarily takes substantial period of time to get ready for intended
 use. All other borrowing costs are charged to revenue.
 
 (j) Impairment of Assets - An asset is treated as impaired when the
 carrying cost of asset exceeds its recoverable value. An impairment
 loss is charged to the Profit and Loss account in the year in which an
 asset is identified as impaired. The impairement loss recognized in
 prior accounting periods is reversed if there has been a change in the
 estimate of the recoverable amount.
 
 (k) Provision, Contingent Liabilities and Contingent Assets - Provision
 involving substantial degree of estimation in measurement is recognized
 when there is present obligation as a result of past events and it is
 probable that there will be an outflow of resources. Contingent
 Liabilities are not recognized but are disclosed in the notes.
 Contingent Assets neither recognized nor disclosed in the financial
 statement.