A) ACCOUNTING CONVENTION
 
 The financial statements have been prepared in accordance with the
 accounting principles generally accepted in India (Indian GAAP) and
 comply with the Companies (Accounting Standards) Rules,2006 issued by
 the Central Government and relevant provisions of Companies Act,1956
 and are based on the historical cost convention.
 
 B) USE OF ESTIMATES
 
 Preparation of financial statements in conformity with the generally
 accepted accounting principles require management to make estimates and
 assumptions that affect the reported amounts of assets and liabilities
 on the date of the financial statements and the reported amount of
 revenues and expenses during the reporting period.  Difference between
 the actual result and estimates, are recognised in the period in which
 the results are known/materialised.
 
 C) REVENUE RECOGNITION
 
 i) SALES
 
 a) Revenue is recognized when it is earned and no significant
 uncertainty exists as to its realization or collection. Revenue from
 sale of goods is recognized on delivery of the products, when all
 significant contractual obligations have been satisfied , the property
 in the goods is transferred for a price , significant risks and rewards
 of ownership are transferred to the customers and no effective
 ownership is retained.
 
 b) Sales is inclusive of excise, export incentives/licenses, profit or
 loss on forward exchange contracts on sales and exclusive of VAT/ sales
 tax and trade discount.
 
 c) Excise duty paid for captive consumption of goods, where cenvat
 credit is not available, is shown as excise expense.  
 
 ii) DIVIDEND INCOME
 
 Dividend income from Investment is accounted for when the right to
 receive is established.  iii) EXPORT BENEFITS/INCENTIVES
 
 The benefits are accounted on the accrual basis.
 
 D) FIXED ASSETS, DEPRECIATION AND EXPENDITURE DURING CONSTRUCTION
 PERIOD
 
 i) Fixed assets are stated at cost of acquisition & installation, net
 of cenvat and VAT credits availed, if any, less accumulated
 depreciation and impairment loss, if any. Borrowing costs incurred
 during the period of Construction/acquisition of assets is added to the
 cost of Fixed Assets. Major expenses on modification /alterations
 increasing efficiency/capacity of the plant are also capitalised.
 
 ii) a) Depreciation on fixed assets is provided on Straight Line Method
 at the rates and in the manner prescribed in Schedule XIV of the
 Companies Act 1956, (as amended).
 
 b) Incremental cost arising on account of translation of foreign
 currency liabilities up to 31.03.2007 for acquisition of fixed assets,
 depreciation has been provided over the residual life of the respective
 assets.
 
 c) In respect of major alterations/modifications forming an integral
 part of existing assets, depreciation is provided at the rate arrived
 on the basis of useful life of such assets after such
 alterations/modifications or at the rate prescribed under Schedule XIV,
 whichever is higher on the total value of such assets.
 
 iii) Impairment of Assets
 
 The carrying amount of assets is reviewed at each Balance Sheet date
 for any indication of impairment based on internal/external factors.
 An impairment loss is recognised wherever the carrying amount of fixed
 assets exceeds its recoverable amount. The recoverable amount is
 measured as the higher of the net selling price and the value in use
 determined by the present value of estimated future cash flows.
 
 E) INVESTMENTS
 
 Investments are classified into current and long term investments. Long
 term investments are carried at cost. A provision for diminution in
 value of long term investments is made for each investment
 individually, if such decline is other than temporary. Current
 investments are stated at the lower of cost and fair value , computed
 categorywise.
 
 F) INVENTORIES
 
 Inventories are valued as under:
 
 i) RAW MATERIALS, PACKING
 
 MATERIALS AND STORES& SPARES.
 
 Valued at lower of cost or net realizable value and for this purpose
 cost is determined on weighted average basis. Due provision for
 obsolescence is made.
 
 ii) FINISHED GOODS & WORK IN PROGRESS
 
 At cost or net realisable value, whichever is lower. Cost is determined
 on absorption basis. Due provision for obsolescence is made.
 
 iii) By Products At net realisable value
 
 G) EMPLOYEE BENEFITS
 
 a) Short Term Employee Benefits
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classified as short term employee benefits.  Benefits
 such as salaries, wages, short term compensated absences etc., and the
 expected cost of bonus, ex-gratia are recognised in the period in which
 the employee renders the related service.
 
 b) Post-Employment Benefits 
 
 (i) Defined Contribution Plans
 
 State governed provident fund scheme and employees state insurance
 scheme are defined contribution plans. The contribution paid / payable
 under the schemes is recognised during the period in which the
 employees renders the related services.  
 
 (ii) Defined Benefit Plans
 
 The employee''s gratuity fund scheme and compensated absences is
 Company''s defined benefit plans.
 
 The present value of the obligation under such defined benefit plan is
 determined based on actuarial valuation using the Projected Unit Credit
 Method, which recognises each period of service as giving rise to
 additional unit of employee benefits entitlement and measures each unit
 separately to build up the final obligation.
 
 The obligation is measured at the present value of the estimated future
 cash flows. The discount rates used for determining the present value
 of the obligation under defined benefit plans, is based on the market
 yields on Government Securities as at the Balance Sheet date, having
 maturity periods approximating to the terms of related obligations.
 Actuarial gains and losses are recognised immediately in the Profit and
 Loss account.
 
 In case of funded plans, the fair value of the plan assets is reduced
 from the gross obligations under the defined benefit plans, to
 recognise the obligation on net basis.
 
 Gains or losses on the curtailment or settlement of any defined
 benefits plans are recognised when the curtailment or settlement
 occurs. Past service cost is recognised as expense on a straight-line
 basis over the average period until the benefits become vested.  c)
 Long term employee benefits
 
 The obligation for long term employee benefits such as long term
 compensated absences, is recognised in the same manner as in case of
 defined benefit plans as mentioned in b) (ii) above.
 
 H) BORROWING COSTS
 
 Borrowing costs whether specific or general, utilized for acquisition,
 construction or production of qualifying assets are capitalised as part
 of cost of such assets till the activities necessary for its intended
 use are complete. General borrowing costs are capitalised at the
 weighted average of such borrowings outstanding during the year. All
 other borrowing costs are charged in statement of Profit & Loss of the
 year in which incurred.
 
 I) TAXES ON INCOME
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the year. Deferred tax is recognised, on timing
 difference, being the difference between taxable income and accounting
 income that originate in one period and are capable of reversal in one
 or more subsequent periods. Where there is unabsorbed depreciation or
 carry forward losses, deferred tax assets are recognised only if there
 is virtual certainty that sufficient future taxable income will be
 available against which such assets can be realised. Other deferred tax
 assets are recognised only to the extent there is reasonable certainty
 of realisation in future. Such assets are reviewed at each Balance
 Sheet date to reassess realisation.
 
 J) FOREIGN CURRENCY TRANSACTIONS
 
 i) Transactions denominated in foreign currencies are normally recorded
 at the exchange rate prevailing at the time of the transaction.
 
 ii) Monetary items denominated in foreign currency at the year end are
 translated at the exchange rates prevailing at the Balance Sheet date.
 
 
 iii) Premium or discount arising at the inception of the forward
 exchange contract is amortised as income or expense over the period of
 the contract. Any profit or loss arising in renewal or cancellation of
 forward exchange contracts is recognised as income or expense during
 the year.
 
 iv) Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the Profit and Loss
 Account.
 
 K) DERIVATIVE INSTRUMENTS AND HEDGE ACCOUNTING
 
 The Company uses foreign currency contracts and currency options to
 hedge its risks associated with foreign currency fluctuations relating
 to certain firm commitments and highly probable forecast transactions.
 The Company does not hold derivative financial instruments for
 speculative purposes. The Company has applied to such contracts the
 principles of recognition set out in the Accounting Standard (AS 30) on
 ‘Financial Instruments - Recognition and Measurement''. Changes in the
 fair value of the contracts that are designated and effective as
 cashflow hedge is directly recorded in the Hedge Reserve Account and is
 recognized in the Statement of Profit and Loss in the same period or
 periods during which the hedged transaction affects profit and loss.
 Gains or losses on the ineffective transactions are recognized
 immediately in the Profit and Loss Account.
 
 L) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 Provisions are recognised when the company has present obligation as a
 result of past events, for which it is probable that an outflow of
 resources embodying economic benefits will be required to settle the
 obligation and a reliable estimate can be made for the amount of the
 obligation.
 
 Contingent Liabilities are disclosed by way of notes to financial
 statements.
 
 Contingent Assets are neither recognised nor disclosed in the financial
 statements.
 
 Provisions and contingent liabilities are reviewed at each Balance
 Sheet date.
 
 M) CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE
 
 All contingencies and events occurring after the Balance Sheet date
 which have a material effect on the financial position of the Company
 are considered for preparing the financial statements.
 
 N) RESEARCH AND DEVELOPMENT EXPENSES
 
 Expenditure relating to capital items is debited to Fixed Assets and
 depreciated at applicable rates. Revenue expenditure is charged to
 Profit and Loss Account of the period in which they are incurred.
 
 O) GOVERNMENT GRANTS
 
 i) The grants/subsidies received in the nature of promoters''
 contribution are treated as capital receipts and credited to Capital
 Reserve.  
 
 ii) The grants /subsidies relating to specific fixed assets are shown
 as deduction from the cost of the respective assets concerned in
 arriving at its book value.
 
 iii) Grant in the form of revenue subsidy is treated as revenue receipt
 and credited to ‘Other Income'' in Profit and Loss Account.
 
 P) EXCISE DUTY
 
 Finished Goods lying at factories have been valued at inclusive of
 Excise Duty. The claim of Cenvat for Excise Duty paid on inputs is
 accounted on the basis of claim. The Cenvat claim for Excise paid on
 capital goods is accounted when the claim is allowed.