A) Basis of preparation of Financial Statements
 
 The financial statements have been prepared on an accrual basis and
 under historical cost convention (except freehold land which has been
 revalued) and in compliance, in all material aspects, with the
 applicable accounting principles in India, the applicable accounting
 standards notified under Section 211 (3C) and the relevant provisions
 of the Companies Act, 1956.
 
 B) Use of Estimate
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities on the
 date of the financial statements and the reported amounts of revenues
 and expenses during the reporting period. Differences between actual
 results and estimates are recognized in the period in which the results
 are known / materialized.
 
 C) Revenue Recognition
 
 (i) Revenues / Incomes and Costs / Expenditure are generally accounted
 on accrual, as they are earned or incurred.
 
 (ii) Sale of Goods is recognized on transfer of significant risks and
 rewards of ownership, which is generally on the dispatch of goods.
 Export Sales is recognized on the basis of shipment of goods to
 customer.
 
 (iii) Sales include sale of power produced at Windmill Power Plant.
 
 (iv) Benefit on account of entitlement to import goods free of duty
 under the Duty Entitlement Pass Book Scheme  and Duty Draw Back
 Scheme are accounted in the year of export.
 
 (v) Insurance claims are recognized when there exists, no significant
 uncertainty with regard to the amount to be realized and the ultimate
 collection thereof.
 
 (vi) Interest Income is accrued on time proportion basis over the
 period of loan / deposit / investment.
 
 (vii) Dividend income is accounted for the year in which the right to
 receive the same is established.
 
 D) Fixed Assets
 
 (a) Fixed Assets are carried at cost of acquisition or construction
 including incidental expenses, less accumulated depreciation,
 amortization except freehold land. Expenditure on additions,
 improvements and renewals is capitalized.
 
 (b) Freehold Land has been revalued as on 31st March, 2007 and
 accordingly carried thereafter at revalued figure.
 
 E) Intangible Assets
 
 Capital expenditure on purchase and development of identifiable assets
 viz., Computer Software is recognized as Intangible Assets in
 accordance with principles given under AS-26 - Intangible Assets.
 
 F) Expenditure Incurred During Construction Period
 
 In respect of new/ major expansion of the Units, the indirect
 expenditure incurred during construction period up to the date of
 commencement of commercial production is capitalized on various
 categories of fixed assets on proportionate basis.
 
 G) Depreciation
 
 i) Depreciation on Furniture and Fixtures, Vehicles and Office
 Equipments is provided on written down value method and on other assets
 it is provided on straight-line method at the rates given in Schedule
 XIV to the Companies Act, 1956.
 
 ii) Depreciation on additions due to foreign exchange variations
 capitalized in earlier years is provided over the remaining useful life
 of the assets.
 
 iii) Premium paid on Leasehold Land is amortized over the period of
 lease.
 
 iv) Intangible assets, in form of Computer Software are amortized over
 a period of five years.
 
 v) Depreciation is provided on pro-rata basis with reference to the
 month of addition / deletion. Assets costing less than ^5000/- each are
 fully depreciated in the year of purchase.
 
 vi) Pursuant to the revision in the rates prescribed in Schedule XIV to
 the Companies Act, 1956 vide notification No. GSR 756 (E) dated
 16.12.93 issued by the Ministry of Law, Justice and Company Affairs,
 depreciation has been calculated at new rates only on additions to
 assets made after the said date.
 
 H) Investments
 
 Long term Investments are stated at cost. Provision for diminution in
 value is made only if decline in the value of such Investments is other
 than temporary.
 
 I) Inventories
 
 Inventories of Raw Materials, Work-in-Progress, Finished Goods
 (including purchased for trade), Packing Materials, Stores and Spares
 are stated ''at cost or net realizable value, whichever is lower. Cost
 comprises all costs of purchase, cost of conversion and other costs
 incurred in bringing the inventories to their present location and
 condition. The excise duty in respect of closing inventory of finished
 goods is included as part of finished goods., Cost formulae used are
 ''Weighted Average Cost''. Due allowance is estimated and made for
 defective and obsolete items, wherever necessary, based on the past
 experience of the Company. Research and Development inventories are
 written off over a period of three years.
 
 J) Foreign Currency Translations
 
 All transactions in foreign currency are recognized at the rates of
 exchange prevailing on the dates when the relevant transactions have
 taken place.
 
 Monetary items in the form of Loans, Current Assets and Current
 Liabilities in foreign currency, outstanding at the close of the year,
 are converted in Indian Currency at the rates of exchange prevailing on
 the date of the Balance Sheet. Resultant gain or loss is accounted
 during the year.
 
 K) Borrowing Costs
 
 Interest and other borrowing costs attributable to the acquisition /
 construction of qualifying assets are capitalized.  Other interest and
 borrowing costs are charged to revenue.
 
 L) Employee Benefits
 
 A.  Short Term Employee Benefits:
 
 All employee benefits payable within twelve months of rendering the
 service are classified as short term benefits.  Such benefits include
 salaries, wages, bonus, short term compensated absences, awards,
 ex-gratia etc. and are recognized in the period in which the employee
 renders the related service.
 
 B.  Post Employment Benefits:
 
 i.  Defined Contribution Plans:
 
 Company''s contribution paid/payable during the period to Provident
 Fund, EDLI, Officer Superannuation Fund, ESIC and Labour Welfare Fund
 are recognized in the Profit and Loss Account.
 
 ii.  Defined Benefit Plans:
 
 Provision for payments to the Employees Gratuity Fund after taking into
 account the funds available with the LIC is based on acturial valuation
 done at the close of each financial year. At the reporting date
 Company''s liabilities towards gratuity is determined by an independent
 actuarial valuation using the projected unit credit method which
 considers each period of service as giving rise to an additional unit
 of benefit entitlement and measures each unit separately to build up
 final Obligation. Past services are recognized on a straight line basis
 over the average period until the amended benefits become vested.
 Obligation is measured at the present value of estimated future cash
 flows using a discounted rate that is determined by reference to market
 yields at the Balance Sheet date on Government Bonds where the currency
 and terms of the Government Bonds are consistent with the currency and
 estimated terms of the defined benefit obligation.
 
 Hi.  Other Defined Benefits:
 
 Provision for other defined benefits for long term leave encashment is
 made based on an independent actuarial valuation on projected unit
 credit method at the end of each financial year. Actuarial gains and
 losses are recognized immediately in the statement of Profit and Loss
 Account as income or expense.  Company recognizes the undiscounted
 amount of short term employee benefits during the accounting period
 based on service rendered by the employee.
 
 M) Miscellaneous Expenditure
 
 Share Issue expenses are amortized over a period of five years.
 
 N) Research and Development
 
 Research and Development expenditure is charged to revenue under the
 natural heads of accounts in the year in which it is incurred. However,
 Research and Development expenditure on fixed assets is treated in the
 same way as expenditure on the other fixed assets.  >
 
 O) Taxation
 
 Income Tax expense comprises current tax and deferred tax charge or
 credit.
 
 Provision for Current Tax is made on the assessable income at the tax
 rate applicable to the relevant assessment year.
 
 Deferred tax assets and deferred tax liability is calculated by
 applying tax rate and tax laws that have been enacted or substantively
 enacted by the Balance Sheet date.
 
 Deferred tax assets arising mainly on account of brought forward losses
 and unabsorbed depreciation under tax laws, are recognized only if
 there is a virtual certainty of its realization, and supported by
 convincing evidence. Deferred tax assets on account of other timing
 differences are recognized only to the extent there is a reasonable
 certainty of its realization. At each Balance Sheet date, the carrying
 amount of Deferred tax assets is reviewed to reassure realization.
 
 P) Government Grants
 
 Grants received against specific fixed assets are adjusted to the cost
 of the assets. Revenue Grants are recognized in the Profit and Loss
 Account in accordance with the related scheme and in the period in
 which these are accrued.
 
 Q) Impairment of Assets
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 if there is any indication of impairment based on internal / external
 factors. An asset is impaired when the carrying amount of the asset
 exceeds its recoverable amount. An impairment loss is charged to the
 Profit and Loss Account in the year in which an asset is identified as
 impaired. An impairment loss recognized in prior accounting periods is
 reversed if there has been a change in the estimate of the recoverable
 amount.
 
 R) Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving a substantial degree of estimation in measurement
 are recognized when there is a 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
 Financial Statements. Contingent assets are neither recognized nor
 disclosed in the Financial Statements.