BASIS OF PREPARATION OF ACCOUNTS
 
 The financial statements have been prepared on the basis of going
 concern, under the historic cost convention, (with the exception of
 land and buildings, which have been revalued), to comply in all
 material aspects with applicable accounting principles in India, the
 applicable Accounting Standards notified under Section 211 (3C) of the
 Companies Act, 1956 (the Act) and the relevant provisions of the Act.
 
 REVENUE RECOGNITION
 
 Sales are recognised when the property in the goods is transferred and
 are recorded net of trade discounts, rebates and value added tax. Sales
 are inclusive of excise duty.
 
 Income from investments is accounted for when accrued.
 
 FIXED ASSETS INCLUDING INTANGIBLES
 
 Fixed Assets are stated at historic cost except so far as they relate
 to the revaluation of Land and Buildings. Historical cost is inclusive
 of freight, installation cost, duties and taxes, interest on specific
 borrowings utilised for financing the assets and other incidental
 expenses.
 
 Rights on time shares are amortised over a period of 20 years.
 
 Assets costing less than Rs. 5,000 are fully depreciated in the year of
 purchase. Depreciation on the revalued assets is calculated on the
 revalued costs and the Revaluation Reserve is adjusted with the
 difference between the depreciation calculated on such revalued costs
 and historic costs. All the fixed assets are assessed for any
 indication of impairment, at the end of each financial year.
 
 On such indication, the impairment loss, being the excess of carrying
 value over the recoverable value of the assets, is charged to the
 Profit and Loss Account in the respective financial years. The
 impairment loss recognised in the prior years is reversed in cases
 where the recoverable value exceeds the carrying value, upon re-
 assessment in the subsequent years.
 
 INVENTORIES
 
 Inventories are valued at cost or below. Cost is computed based on the
 weighted average cost per unit after taking into account receipts at
 actual cost net of CENVAT credit availed. Consumption and/or other
 stock diminution is accounted for at the aforesaid weighted average
 cost. In the case of finished goods, cost comprises of material, direct
 labour, applicable overhead expenses, applicable excise duty and taxes
 paid/payable thereon.
 
 Goods in transit/with third parties are valued at cost which represents
 the costs incurred upto the stage at which the goods are in
 transit/with third parties.
 
 TAXES ON INCOME
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the period.
 
 Deferred tax is recognised on timing differences between taxable income
 and accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods, subject to consideration of
 prudence.
 
 INVESTMENTS
 
 Long term investments are valued at cost net of provision, for
 permanent diminution, if any. Current investments are stated at lower
 of cost and fair value.
 
 EMPLOYEE BENEFITS
 
 Contribution to various recognised provident funds/approved pension and
 gratuity funds and contributions to secured retiral benefits are
 charged to revenue. Liability for gratuity and leave encashment is
 determined on the basis of actuarial valuation as at the end of the
 accounting period.
 
 Payments under Voluntary Retirement Scheme are charged to revenue on
 accrual basis in the year in which they become due for payment.
 
 RESEARCH AND DEVELOPMENT
 
 Revenue expenditure on Research and Development is charged to Profit
 and Loss Account in the year it is incurred.
 
 Capital expenditure on research and development is included under fixed
 assets.
 
 FOREIGN EXCHANGE TRANSACTIONS
 
 The transactions in foreign currency are accounted for at the exchange
 rate prevailing at the date of the transaction. Gains and losses
 resulting from the settlement of such transactions and from translation
 of monetary assets and liabilities denominated in foreign curriencies
 are recognised in the Profit and Loss Account.
 
 Forward exchange contracts outstanding as at the period end on account
 of firm commitment/highly probable forecast transaction are marked to
 market and the resultant gain/loss is dealt in the Profit and Loss
 Account.
 
 Difference between the forward exchange contract rate and the exchange
 rate as at the date of transaction is recognised as income or expense
 over the life of the said contract.
 
 PROPOSED DIVIDEND
 
 Dividend proposed by the Directors, pending approval at the Annual
 General Meeting, is provided for in the books of account.
 
 LEASES
 
 Assets acquired by way of finance lease are capitalised at the lower of
 the fair value and the present value of the minimum lease payments at
 the inception of the lease term and disclosed as leased assets. Lease
 payments are apportioned between finance charge and reduction of the
 lease liability based on the implicit rate of return. Finance charges
 are charged in the Profit and Loss Account.
 
 Lease rentals paid in respect of operating leases are charged to Profit
 and Loss Account.