i) General:
 
 The financial statements have been prepared on the historical cost
 convention in accordance with generally accepted accounting principles.
 
 ii) Fixed Assets & Depreciation:
 
 a) Fixed assets are stated at historical cost net of cenvat and vat
 credits as reduced by accumulated depreciation.
 
 b) Depreciation on fixed assets has been provided -
 
 i) at the rates specified in Schedule XIV of the Companies Act, 1956
 
 - on straight line method for plant and machinery and buildings and
 
 - on written down value method for electronic data processing machines
 and other fixed assets.  ii) on the basis of estimated life of the
 capital tools.
 
 c) Leasehold land:
 
 Premium paid on leasehold land is amortised over the lease period.
 
 d) The cost of intangible assets being computer software (other than
 software relating to ERP) is amortised over the estimated useful life
 viz. 3 years. The cost of software relating to ERP is amortised over
 the estimated useful life viz. 5 years.
 
 e) i) The expenditure during construction period relating to the new
 projects till the commencement of commercial production is capitalised
 and allocated to fixed assets.
 
 ii) In accordance with AS 16 - Borrowing costs issued by the ICAI, the
 borrowing costs attributable to the new projects are capitalised till
 the commencement of commercial production and included in expenditure
 during construction period and allocated to fixed assets and other
 borrowing costs are recognised in the year in which it is incurred.
 
 iii) Investments:
 
 Investments are stated at cost less provision for diminution other than
 temporary if any, in value of such investments.
 
 iv) Inventories:
 
 The stock of raw materials, stores, loose tools and goods in transit
 are valued at cost (net of cenvat and vat credits on weighted average
 basis). The stock of finished goods and work-in-process are valued at
 cost (net of cenvat and vat credits including appropriate overheads) or
 market value whichever is lower.
 
 v) Staff terminal benefits:
 
 a) Provident Fund:
 
 Eligible employees receive benefits from Provident Fund which is defned
 contribution plan. Both, the employees and the Company make monthly
 contributions to the provident fund authorities, equal to specified
 percentage of eligible covered employees salary. The Company has no
 other obligations than the monthly contributions.
 
 b) Gratuity:
 
 The gratuity plan provides for a lump sum payment to vested employees
 at the time of retirement, death, incapacity or termination of
 employment. Liabilities with regard to the gratuity plan are determined
 by actuarial valuation as at the Balance Sheet date based upon which
 the Company contributes all the ascertained liabilities to LIC, who are
 the trustees / administrator of the plan.
 
 c) Superannuation:
 
 Eligible employees receive benefit from Superannuation at the time of
 retirement, death or leaving the services. The Company makes an annual
 contribution to LIC of India, equal to a specific percentage of the
 eligible employees basic salary. Apart from this, the Company has no
 other obligation under this head, than the annual contribution.
 
 d) Unencashed Leave Salary:
 
 Unencashed leave salary is accounted on actuarial valuation.
 
 vi) Research & Development expenses:
 
 Revenue expenditure on Research & Development is charged to profit &
 loss account in the year in which it is incurred.
 
 vii) Foreign Currency Transactions:
 
 The exchange differences arising on reporting of Long Term Foreign
 Currency Monetary Items at rates different from those at which they
 were initially recorded during the financial year, in so far as they
 relate to depreciable capital assets are added to or deducted from the
 cost of the asset and are depreciated over the balance life of the
 asset and in other cases are accumulated in Foreign Currency Monetary
 Item Translation Difference Account and amortized over the balance
 period of such long term asset / liability but not beyond 31st March,
 2012.
 
 Foreign currency transactions other than the above items outstanding at
 the year end are accounted for at year end rates and the profit / loss
 so determined and also the realised exchange gains / losses are
 recognized in the Profit and Loss Account. In respect of Forward
 Exchange contracts, the difference between the forward rate and the
 exchange rate at the date of inception of the contract is recognized as
 income or expense over the period of the contract. Any profit or loss
 arising on cancellation or renewal of such forward exchange contracts
 is recognized as income or expense for the year.
 
 viii) Export Incentives:
 
 Export incentives are recognised as revenue as and when exports are
 made.
 
 ix) Derivative Contracts:
 
 The profit/loss arising on derivative contracts is accounted for as
 income/expenditure on the date of settlement of the contract.
 
 The outstanding derivative contracts are revalued at the end of the
 year and while the net loss arising therefrom is debited to profit and
 loss account, the net unrealised gain is ignored, except in case where
 they relate to borrowing costs that are attributable to the acquisition
 of Fixed Assets, in which case they are adjusted to the carrying cost
 of such fixed assets.