a.  Basis for Accounting:
 
 The financial statements have been prepared in compliance with all
 material aspects with the notified Accounting Standards by Companies
 (Accounting Standards) Rules, 2006 and the relevant provisions of the
 Companies Act, 1956. Financial statements are prepared in accordance
 with the generally accepted accounting principles, as adopted
 consistently, and are based on historical cost and items of income and
 expenditure are recognized on accrual basis except those with
 significant uncertainties.
 
 b.  Use of Estimates:
 
 The preparation of financial statements requires management to make
 estimates and assumptions, based upon the best knowledge of current
 events and actions that may affect the reported amounts of assets and
 liabilities and disclosures relating to contingent liabilities as at
 the date of financial statements and the reported amounts of incomes
 and expenses during the reporting period. Difference between the actual
 results and estimates are recognized in the period in which the results
 are known/ materialized.
 
 c.  Revenue Recognition:
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 In case of sale of goods, revenue is recognized, when the significant
 risks and rewards of ownership of goods have been passed to the buyer,
 which generally coincides with delivery.  Turnover is disclosed
 inclusive of excise duty and net of sales tax / VAT, discounts and
 returns.
 
 Benefits on account of entitlement to import goods free of duty are
 accounted for in the year of exports made and are included in Turnover.
 
 d.  Fixed Assets:
 
 Fixed assets are stated at cost, net of Cenvat and VAT input credit
 availed, less accumulated depreciation, amortization and impairment
 loss, if any except freehold land which is carried at cost. Cost
 includes all expenditure necessary to bring the asset to its working
 condition for its intended use.
 
 Expenditure during construction period (including financing cost
 relating to borrowed funds for construction or acquisition of fixed
 assets) incurred on projects/ assets, including trial run expenses (net
 of revenue) are treated as Pre-operative expenses, pending allocation
 to the assets, and are included under Capital work-in-progress. These
 expenses are apportioned to related fixed assets on commencement of
 commercial production. Capital work-in-progress is stated at the amount
 expended up to the date of Balance Sheet.
 
 The carrying amounts of fixed assets are reviewed at each balance sheet
 date to assess if they are recorded in excess of their recoverable
 amounts and where carrying values exceed their estimated recoverable
 amount, assets are written down to their recoverable amount.
 
 e.  Intangible Assets:
 
 Intangible assets are stated at cost less accumulated amortization.
 Technical Knowhow and Computer Software are amortized over a period of
 five years. Amortization is done on straight line basis.
 
 f.  Depreciation/Amortization:
 
 Depreciation on fixed assets is provided on Straight Line Method
 (SLM) at the rates and in the manner specified in Schedule XIV to the
 Companies Act, 1956, except in respect of Vehicles, Furniture/ Fixtures
 and Office Equipments at Kanpur Unit where depreciation is provided on
 Written Down Value Method (WDV); in respect of fixed assets of
 Rudrapur and Bilaspur Units where depreciation is provided on Written
 Down Value Method (WDV). In respect of power line payments made to
 Electricity Authorities, useful life is estimated at five years and
 expenditure is amortized accordingly on Straight Line Method.
 Continuous process plants, as specified in Schedule XIV to the
 Companies Act, 1956, are identified based on technical assessment and
 are depreciated at the specified rate. Individual assets, whose actual
 cost does not exceed Rs. 5,000, are depreciated fully within the year
 of acquisition. Premium on Leasehold land is amortized over the period
 of the Lease.
 
 g.  Inventories:
 
 Items of Inventories are valued at lower of cost and net realizable
 value. Cost of inventories is ascertained on the ''weighted average''
 basis. Finished goods* and Goods under process are valued on full
 absorption cost in bringing the inventories to their present location
 and condition.  Waste & Scrap are valued at net realizable value.
 
 (*Excise duty, wherever applicable, is included in finished goods
 inventory valuation.)
 
 h.  Lease Rentals:
 
 Rental charges in respect of assets acquired under finance leases prior
 to 1''st April 2001 are amortized over the useful economic life of the
 asset and excess of lease rentals paid over the amount accrued are
 treated as prepaid lease rentals. No leased assets, except leasehold
 land, were acquired on or after 1''st April 2001.
 
 i.  Foreign Currency Transactions:
 
 Transactions denominated in foreign currency are recorded at the
 exchange rate prevailing on the date of transaction or that
 approximates the actual rate at the date of the transaction.
 
 Exchange differences arising on foreign exchange transactions settled
 during the period are recognized in the Profit & Loss account of the
 period.
 
 Monetary assets and liabilities in foreign currency, which are
 outstanding as at the year-end and not covered by forward contracts,
 are translated at the year-end at the closing exchange rate and the
 resultant exchange differences are recognized in the Profit & Loss
 Account. Non-monetary foreign currency items are carried at cost.
 
 In respect of forward exchange contracts, the difference between the
 forward rate and the exchange rate at the inception of the forward
 exchange contracts is recognized as income/expense over the life of the
 contract. Exchange differences on forward exchange contracts are
 recognized as income or expense along with the exchange differences on
 the underlying assets/liabilities. Profit or loss on
 cancellations/renewals of forward contracts is recognized during the
 year.
 
 j.  Employee Benefits:
 
 Short Term Employee benefits (benefits which are payable within twelve
 months after the end of the period in which the employees render
 service) are measured at cost. Long term employee benefits (benefits
 which are payable after the end of twelve months from the end of the
 month in which the employee render service) and post employment
 benefits (Benefits which are payable after completion of employment)
 are measured on a discounted benefits by the Projected Unit Credit
 method on the basis of annual third party actuarial valuations.
 
 Contribution to Provident Fund, Family Pension Fund and Employee''s
 State Insurance, a defined contribution plan are made to the funds
 administered by the Govt. of India, and are recognized as an expense
 when employees have rendered service entitling them to the
 contributions. The cost of providing leave encashment and gratuity,
 defined benefit plans, are determined using the Projected Unit Credit
 Method, on the basis of actuarial valuation carried out by third party
 actuaries at each balance sheet date. Actuarial gains and losses are
 recognized in the profit and loss account in the year in which they
 arise.
 
 k.  Borrowing Costs:
 
 Borrowing costs that are attributable to 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 its intended use. All other borrowing costs are
 charged to Profit and Loss Account.
 
 l.  Taxation:
 
 Tax expense comprises Current and Deferred Tax.
 
 Current Income Tax is measured at the amount expected to be paid to the
 tax authorities in accordance with the provisions of the Income tax Act
 1961.
 
 Deferred income tax reflects the impact of current year timing
 differences between taxable income and accounting income for the year
 and reversal of timing differences of earlier years.  Deferred charge
 or credit resulting from timing difference is measured based on the
 current tax rates and tax laws that have been enacted or substantively
 enacted as on the Balance Sheet date.  Deferred tax assets are
 recognized and carried forward to the extent there is a reasonable
 certainty that these assets can be realized in future against future
 taxable income. Deferred tax assets/liabilities are reviewed at each
 Balance Sheet date.
 
 Minimum Alternate Tax (MAT) credit is recognized as an asset only when
 and to the extent there is convincing reasons that the company will pay
 normal income tax during the specified period.  MAT credit entitlement
 is reviewed at each balance sheet date.
 
 m.  Provisions, Contingent Liabilities and Contingent Assets:
 
 Provisions involving 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
 will be required to settle the obligations. Contingent Liabilities are
 not recognized but are disclosed in the notes. Contingent Assets are
 neither recognized nor disclosed in the financial statements.
 
 n.  Earnings per Share:
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.