1 Basis of Accounting :
 
 The financial statements are prepared under the historical cost
 convention on the Accrual Concept of accountancy in accordance with
 the accounting principles generally accepted in India and they comply
 with the Accounting Standards prescribed in the Companies [ Accounting
 Standards ] Rules, 2006 issued by the Central Government to the extent
 applicable and with the applicable provisions of the Companies Act,
 1956.
 
 2 Use of Estimates :
 
 The preparation of Financial Statements in conformity with the
 Accounting Standards generally accepted in India requires, the
 management to make estimates and assumptions that affect the reported
 amounts of assets and liabilities and disclosure of contingent
 liabilities as at the date of the financial statements and reported
 amounts of revenues and expenses for the year. Actual results could
 differ from these estimates. Any revision to accounting estimates is
 recognised prospectively in current and future periods.
 
 3 Fixed Assets and Depreciation :
 
 A Fixed Assets are stated at historical cost of acquisition /
 construction less accumulated depreciation and impairment loss. Cost [
 Net of Input tax credit received / receivable ] includes related
 expenditure and pre-operative & project expenses for the period up to
 completion of construction / assets are put to use. The loss or gain on
 exchange rates on long term foreign currency loans attributable to
 fixed assets, effective from April 1, 2007 is adjusted to the cost of
 respective fixed assets.
 
 B Depreciation is provided on straight line method as per Section 205
 (2) (b) of the Companies Act, 1956 at the rates prescribed in Schedule
 XIV thereto.
 
 C Depreciation on impaired assets is calculated on its residual value,
 if any, on a systematic basis over its remaining useful life.
 
 D Leasehold land is amortized over the period of the lease.
 
 E Trade Marks, Technical Know-how Fees and other similar rights are
 amortised over their estimated economic life of ten years.
 
 F Capitalised costs incurred towards purchase / development of software
 are amortised using straight line method over its useful life of four
 years as estimated by the management.
 
 G Depreciation on additions / disposals of the fixed assets during the
 year is provided on pro-rata basis according to the period during which
 assets are put to use.
 
 H Where the actual cost of purchase of an asset is below Rs. 10,000/-,
 the depreciation is provided @ 100 %.
 
 4 Impairment of Assets :
 
 The Company, at each balance sheet date, assesses whether there is any
 indication of impairment of any asset and / or cash generating unit. If
 such indication exists, assets are impaired by comparing carrying
 amount of each asset and / or cash generating unit to the recoverable
 amount being higher of the net selling price or value in use. Value in
 use is determined from the present value of the estimated future cash
 flows from the continuing use of the assets.
 
 5 Borrowing Costs :
 
 A Borrowing costs that are directly attributable to the acquisition /
 constructions of a qualifying asset are capitalised as part of the
 
 cost of such assets, up to the date, the assets are ready for their
 intended use.  B Other Borrowing costs are recognised as an expense in
 the period in which they are incurred.  C Borrowing Costs also include
 Exchange differences arising from Foreign Currency borrowings to the
 extent that they are regarded
 
 as an adjustment to interest costs.
 
 6 Expenditure during the Construction Period :
 
 The expenditure incidental to the expansion / new projects are
 allocated to Fixed Assets in the year of commencement of the commercial
 production.
 
 7 Investments :
 
 A Long term and strategic investments are stated at cost, less any
 diminution in the value other than temporary.  B Current investments,
 if any, are stated at lower of cost and fair value determined on
 individual investment basis.  C Investments in shares of foreign
 subsidiary and other Companies are expressed in Indian Currency at the
 rates of exchange prevailing at the time when the original investments
 were made.
 
 8 Inventories :
 
 A Raw Materials, Stores & Spare Parts, Packing Materials, Finished
 Goods and Works-in-Progress are valued at lower of cost and net
 
 realisable value.  B Cost [ Net of Input tax credit availed ] of Raw
 Materials, Stores & Spare Parts, Packing Materials & Finished Goods is
 determined
 
 on Moving Average Method.  C Cost of Finished Goods and
 Works-in-Progress is determined by taking material cost [ net of Input
 tax credit availed ], labour and
 
 relevant appropriate overheads.
 
 9 Revenue Recognition :
 
 A Revenue from Sale of goods is recognised when significant risks and
 rewards of ownership of the goods have been passed to the buyer.  B
 Service income is recognised as per the terms of contracts with the
 customers when the related services are performed or the
 
 agreed milestones are achieved and are net of service tax wherever
 applicable.  C Dividend income is recognised when the unconditional
 right to receive the income is established.  D Interest income is
 recognised on time proportionate method.  E Revenue in respect of other
 income is recognised when no significant uncertainty as to its
 determination or realisation exists.
 
 10 Foreign Currency Transactions :
 
 A The transactions in foreign currencies on revenue accounts are stated
 at the rates of exchange prevailing on the dates of transactions.  B
 The net gain or loss on account of exchange differences either on
 settlement or on translation of short term monetary items is recognised
 in the Profit and Loss Account.  C The net gain or loss on account of
 exchange differences either on settlement or on translation of long
 term monetary items including long term forward contracts is recognised
 under  Foreign Currency Monetary Items Translation Difference Account
 
 
 [ FCMITDA ], except in case of foreign currency loans taken for funding
 of fixed assets, where such difference is adjusted to the cost of
 respective fixed assets. The FCMITDA is amortised during the tenure of
 loans but not beyond March 31, 2011.  D Investments in foreign
 subsidiaries are recorded in Indian Currency at the rates of exchange
 prevailing at the time when the investments were made.  E The foreign
 currency assets and liabilities including forward contracts are
 restated at the prevailing exchange rates at the year end.
 
 The premium in respect of forward contracts is accounted over the
 period of the contract.
 
 11 Derivative Instruments and Hedge Accounting :
 
 The Company is exposed to foreign currency fluctuations on foreign
 currency assets, liabilities and forecasted cash flows denominated in
 foreign currency. The Company limits the effects of foreign exchange
 rates fluctuations by following established risk management policies,
 including use of derivatives. The company enters into forward, options
 & swap contracts where the counter parties are banks.  Accordingly,
 losses in respect of all outstanding derivatives, contracts, other than
 options & swap contracts, at the year end by marking them to market are
 provided. However, out of prudence, the net gain, if any, on all such
 outstanding options & swap contracts is not accounted for.
 
 12 Research and Development Cost :
 
 A Expenditure on research and development is charged to the Profit and
 Loss Account of the year in which it is incurred.  B Capital
 expenditure on research and development is given the same treatment as
 Fixed Assets.
 
 13 Excise Duty :
 
 Excise Duty is accounted gross of Cenvat benefit availed on inputs,
 fixed assets and eligible services.
 
 14 Retirement Benefits :
 
 A Defined Contribution Plans :
 
 The Company contributes on a defined contribution basis to Employees
 Provident Fund towards post employment benefits, all of which are
 administered by the respective Government authorities, and has no
 further obligation beyond making its contribution, which is expensed in
 the year to which it pertains.
 
 B Defined Benefit Plans :
 
 The gratuity scheme is administered through the Life Insurance
 Corporation of India [ LIC ]. The liability for the defined benefit
 plan of Gratuity is determined on the basis of an actuarial valuation
 by an independent actuary at the year end, which is calculated using
 projected unit credit method.
 
 Actuarial gains and losses which comprise experience adjustment and the
 effect of changes in actuarial assumptions are recognised in the Profit
 and Loss Account.
 
 C Leave Liability :
 
 The leave encashment scheme is administered through Life Insurance
 Corporation of Indias Employees Group Leave Encashment cum Life
 Assurance [ Cash Accumulation ] Scheme. The employees of the company
 are entitled to leave as per the leave policy of the company. The
 liability on account of accumulated leave as on last day of the
 accounting year is recognised [ net of the fair value of plan asset as
 at the balance sheet date ] at present value of the defined obligation
 at the balance sheet date based on the actuarial valuation carried out
 by an independent actuary using projected unit credit method.
 
 15 Employee Seperation Costs :
 
 The compensation paid to the employees under Voluntary Retirement
 Scheme is expensed in the year of payment.
 
 16 Provision for Bad and Doubtful Debts / Advances :
 
 Provision is made in accounts for bad and doubtful debts / advances
 which in the opinion of the management are considered doubtful of
 recovery.
 
 17 Taxes on Income :
 
 A Tax expenses comprise of current and deferred tax.
 
 B Current tax is measured at the amount expected to be paid on the
 basis of reliefs and deductions available in accordance with the
 provisions of the Income Tax Act, 1961.
 
 C Deferred tax reflects the impact of current year timing differences
 between accounting and taxable income and reversal of timing
 differences of earlier years. Deferred tax is measured based on the tax
 rates and laws that have been enacted or substantively enacted as of
 the balance sheet date. Deferred tax assets are recognised only to the
 extent there is reasonable certainty that sufficient future taxable
 income will be available against which such deferred tax assets can be
 realised and are reviewed at each balance sheet date.
 
 18 Provision for Product Expiry Claims :
 
 Provision for product expiry claims in respect of products sold during
 the year is made based on the managements estimates.
 
 19 Leases :
 
 Leases are classified as operating leases where the lessor effectively
 retains substantially all the risks and benefits of the ownership of
 the leased assets. Operating lease payments are recognised as expenses
 in the Profit and Loss Account as and when paid.
 
 20 Government Grants :
 
 A Government grants are recognised in accordance with the terms of the
 respective grant on accrual basis considering the status of compliance
 of prescribed conditions and ascertainment that the grant will be
 received.  B Government grants related to revenue is recognised on a
 systematic basis in the Profit and Loss Account over the period during
 which the related costs intended to be compensated are incurred.  C
 Government grants of the nature of incentive provided by the government
 without related costs are credited to capital reserve.
 
 21  Provisions, Contingent Liabilities and Contingent Assets :
 
 Provision is recognised when the company has a present obligation as a
 result of past events and it is probable that the outflow of resources
 will be required to settle the obligation and in respect of which
 reliable estimates can be made. A disclosure for contingent liability
 is made when there is a possible obligation, that may, but probably
 will not require an outflow of resources.  When there is a possible
 obligation or a present obligation in respect of which the likelihood
 of outflow of resources is remote, no provision / disclosure is made.
 Contingent assets are not recognised in the financial statements.
 Provisions and contingencies are reviewed at each balance sheet date
 and adjusted to reflect the correct management estimates.