1.  Basis of preparation of financial statements:
 
 a) The financial statements are prepared in accordance with Generally
 Accepted Accounting Principles (Indian GAAP) under the historical cost
 convention on accrual basis and on principles of going concern. The
 accounting policies are consistently applied by the Company.
 
 b) The financial statements are prepared to comply in all material
 respects with the accounting standards notified by the Companies
 (Accounting Standards) Rules, 2006 and the relevant provisions of the
 Companies Act, 1956.
 
 c) The preparation of the financial statements 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 the actual results and estimates are recognised in
 the period in which the results are known / materialise.
 
 2.  Revenue Recognition:
 
 a) Revenue is recognised to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 b) Sales are recognised when the significant risks and rewards of
 ownership of the goods have passed to the buyer which coincides with
 dispatch of goods to the customers. Sales are inclusive of excise duty,
 sales tax / VAT and delivery charges, if any, and net of Trade
 Discounts. However, duties and taxes relating to sales are reduced from
 gross turnover for disclosing net turnover.
 
 c) Sale of energy is accounted for based on tariff rates agreed with
 respective Electricity Boards.
 
 d) Purchases are net of CENVAT / VAT Credit, Trade Discounts and
 Claims.
 
 e) Interest income is recognised on a time proportion basis taking into
 account the amount outstanding and the rate applicable.
 
 3.  Fixed Assets:
 
 a) Fixed Assets are stated at cost, less accumulated depreciation and
 impairment losses, if any. Cost comprises the purchase price (net of
 CENVAT / duty credits availed or available thereon) and any
 attributable cost of bringing the asset to its working condition for
 its intended use.
 
 b) Depreciation on fixed assets situated at Liluah Unit – I (Howrah),
 Vapi and Vizag is provided on written down value method and on other
 fixed assets is provided on straight line method at the rates and in
 the manner specified in Schedule XIV to the Companies Act, 1956.
 
 c) 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 impairment loss is recognised wherever
 the carrying amount of an asset exceeds its recoverable amount. The
 recoverable amount is the higher of the asset''s net selling price and
 value in use, which is determined by the present value of the estimated
 future cash flows.
 
 d) Cost of the fixed assets that are not yet ready for their intended
 use at the balance sheet date together with all related expenses and
 advances paid to acquire fixed assets are shown under capital work in
 progress.
 
 4.  Investments:
 
 Investments classified as long-term investments are stated at cost.
 Provision is made to recognise any diminution other than temporary in
 the value of such investments. Current investments are carried at lower
 of cost and fair value.
 
 5.  Inventories:
 
 Inventories are valued at lower of cost and net realisable value. Cost
 of inventories comprises material cost on FIFO basis, labour and
 manufacturing overheads incurred in bringing the inventories to their
 present location and condition. Cost of finished goods includes excise
 duty.
 
 6.  Foreign Currency Transactions:
 
 a) Initial Recognition – Foreign currency transactions are recorded in
 the reporting currency, by applying to the foreign currency amount the
 exchange rate between the reporting currency and the foreign currency
 at the date of the transaction.
 
 b) Conversion – Foreign currency monetary items are reported using the
 closing rate. Non-monetary items, which are carried in terms of
 historical cost denominated in a foreign currency, are reported using
 the exchange rate on the date of transaction.
 
 c) Exchange differences – Exchange differences arising on the
 settlement or conversion of monetary current assets and liabilities are
 recognised as income or as expense in the year in which they arise.
 Exchange differences arising on a monetary item that, in substance form
 part of the Company''s net investment in a non-integral foreign
 operation is accumulated in a Foreign Currency Translation Reserve in
 the financial statement until the disposal of the net investment at
 which time they are recognised as income or as expenses.
 
 d) Forward Exchange Contracts – Forward exchange contracts (other than
 those entered into to hedge foreign currency risk of future
 transactions in respect of which firm commitments are made or are
 highly probable forecast transactions) are translated at period end
 exchange rates and the resultant gains and losses as well as the gains
 and losses on cancellation of such contracts are recognised in the
 Profit and Loss Account. Premium or discount on such forward exchange
 contracts is amortised as income or expense over the life of the
 contract.
 
 7.  Derivative Financial Instruments and Hedging
 
 The Company enters into derivative financial instruments to hedge
 foreign currency risk of firm commitments and highly probable forecast
 transactions and interest rate risk. The method of recognising the
 resultant gain or loss depends on whether the derivative is designated
 as Hedging instrument, and if so, the nature of the item being hedged.
 The carrying amount of a derivative is presented as a current asset or
 a liability.
 
 Cash Flow Hedge:
 
 Forward exchange contracts entered into to hedge foreign currency risks
 of firm commitments or highly probable forecast transactions, forward
 rate options, currency and interest rate swap that qualify as cash flow
 hedges are recorded in accordance with the principles of hedge
 accounting enunciated in Accounting Standard (AS) 30 – Financial
 Instruments: Recognition and Measurement issued by the Institute of
 Chartered Accountants of India. The gains or losses on designated
 hedging instruments that qualify as effective hedges are recorded in
 the Hedging Reserve account and are recognised in the statement of
 Profit and Loss in the same period or periods during which the hedge
 transactions affect Profit and Loss Account or are transferred to the
 cost of the hedged non-monetary asset upon acquisition.
 
 Gains or losses on the ineffective transactions are immediately
 recognised in the Profit and Loss Account. When a forecasted
 transaction is no longer expected to occur, the gains and losses that
 were previously recognised in the Hedging Reserve are transferred to
 the statement of Profit and Loss immediately.
 
 8.  Government Grants:
 
 Government Grants are recognised when there is a reasonable assurance
 that the Company will comply with the conditions attached thereto and
 the grants will be received. Government Grants in the form of
 promoter''s contribution are credited to Capital Reserve. Capital grants
 relating to specific fixed assets are reduced from the gross value of
 the respective fixed assets.  Government Grants related to revenue are
 recognised on a systematic basis in the Profit and Loss Account over
 the period to match them with the related cost.
 
 9.  Employees, Retirement Benefits:
 
 a) Defined Contribution Plan
 
 Short term employee benefits are recognised as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 b) Defined Benefit Plan:
 
 Liability with regard to long-term employee benefits is provided for on
 the basis of an actuarial valuation at the Balance Sheet date.
 Actuarial gain / loss is recognised immediately in the statement of
 profit and loss. The Company has an Employees Gratuity Fund managed by
 the Life Insurance Corporation of India.
 
 c) Short-term Compensated Absences are provided for based on estimates.
 
 10.Project Development Expenses
 
 Expenditure incurred on development and during preliminary stages of
 the Company''s new projects are carried forward.  However, if any
 project is abandoned, the expenditure relevant to such project is
 written off through the normal heads of expenses in the year in which
 it is so abandoned.
 
 11.Borrowing Costs
 
 a) Borrowing costs that are directly attributable to the acquisition,
 construction or production of qualifying assets are capitalised for the
 period until the asset is ready for its intended use. A qualifying
 asset is an asset that necessarily takes substantial period of time to
 get ready for its intended use.
 
 b) Other Borrowing costs are recognised as expense in the period in
 which they are incurred.
 
 12.Discount on Issue of Debentures
 
 Discount on issue of Deep Discount Debentures is amortised during the
 tenure of the debentures i.e. 20 years from the date of allotment.
 
 13.Research & Development Expenses:
 
 Revenue expenditure on Research and Development is charged as an
 expense through the normal heads of account in the year in which the
 same is incurred. Capital expenditure incurred on equipment and
 facilities that are acquired for research and development activities is
 capitalised and is depreciated according to the policy followed by the
 Company.
 
 14.Expenditure during Construction and on New Projects:
 
 In the case of new industrial units and substantial expansion of
 existing units, all pre-operative expenditure specifically for the
 project, incurred up to the completion of the project, is capitalised
 and added pro-rata to the cost of fixed assets.
 
 15.Taxes on Income:
 
 Tax expense comprises of current tax and deferred tax.
 
 a) Current tax is measured at the amount expected to be paid to the tax
 authorities, computed in accordance with the applicable tax rates and
 tax laws. In case of tax payable as per provisions of MAT under section
 115JB of the Income Tax Act, 1961, deferred MAT Credit entitlement is
 separately recognised under the head Loans and Advances. Deferred MAT
 credit entitlement is recognised and carried forward only if there is a
 reasonable certainty of it being set off against regular tax payable
 within the stipulated statutory period.
 
 b) Deferred tax liabilities and assets are recognised at substantively
 enacted rates on timing difference between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods. Deferred tax asset is
 recognised only to the extent there is reasonable certainty with
 respect to reversal of the same in future years as a matter of
 prudence.
 
 16. Leases:
 
 Assets taken on lease, under which all the risks and rewards of
 ownership are effectively retained by the lessor, are classified as
 operating lease. Operating Lease payments are recognised as an expense
 in the Profit & Loss Account on a straight line basis over the lease
 term.
 
 17. Earnings per Share:
 
 a) Basic earnings per share is 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.
 
 b) 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.
 
 18. Provisions, Contingent Liabilities and Contingent Assets
 
 a) Provision involving substantial degree of estimation in measurements
 is recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 
 b) Contingent Liabilities are shown by way of notes to the Accounts in
 respect of obligations where, based on the evidence available, their
 existence at the Balance Sheet date is considered not probable.
 
 c) A Contingent Asset is not recognised in the Accounts.
 
 19. Miscellaneous Expenditure:
 
 Share Issue expenses related to issue of equity are adjusted against
 the Securities Premium Account.
 
 20. Prior Period items :
 
 Prior Period and Extraordinary items and Changes in Accounting Policies
 having material impact on the financial affairs of the Company are
 disclosed.
 
 21. Material Events occurring after Balance Sheet date are taken into
 consideration.