1) BASIS OF PREPARATION OF ACCOUNTS:
 
 The financial statements have been prepared to comply in all material
 aspects with the Accounting Standards notified by the Companies
 (Accounting Standards) Rules, 2006 (as amended) and the relevant
 provisions of the Companies Act, 1956. The financial statements have
 been prepared under the historical cost convention on an accrual basis
 except in respect of fixed assets for which revaluation is carried out.
 Further, insurance & other claims, on the ground of prudence or
 uncertainty in realisation, are accounted for as and when accepted /
 received. The accounting policies applied by the Company are consistent
 with those used in the previous year.
 
 2) USE OF ESTIMATES :
 
 The preparation of financial statements in conformity with Generally
 Accepted Accounting Principles requires management to make estimates
 and assumptions that affect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities as at the balance
 sheet date and the results of operations during the reporting year.
 Although these estimates are based upon management''s best knowledge of
 current events and actions, actual results could differ from these
 estimates.
 
 3) FIXED ASSETS:
 
 Fixed Assets are stated at cost of acquisition inclusive of duties (net
 of CENVAT/VAT), taxes, incidental expenses, erection/ commissioning
 expenses and interest etc. up to the date the asset is ready to be put
 to use. In case of revaluation of fixed assets, the cost as assessed by
 the valuer is considered in the accounts and the differential amount is
 transferred to revaluation reserve.
 
 Exchange differences, in respect of accounting periods commencing from
 1st April 2007, on reporting of long-term foreign currency monetary
 items at rates different from those at which they were initially
 recorded, or reported in previous financial statements, in so far as
 they relate to the acquisition of a depreciable capital asset, are
 added to or deducted from the cost of the asset except for that part of
 exchange difference which is regarded as an adjustment to interest
 costs and are depreciated over the balance life of the respective
 asset.
 
 b) Machinery spares which can be used only in connection with a
 particular item of fixed assets and whose use, as per the technical
 assessment, is expected to be irregular, are capitalised and
 depreciated prospectively over the residual life of the respective
 asset.
 
 c) The carrying amount of assets is reviewed at each balance sheet date
 to determine if there is any indication of impairment thereof based on
 external / internal factors. An impairment loss is recognized wherever
 the carrying amount of an asset exceeds its recoverable amount, which
 represents the greater of the net selling price of assets and their
 ''value in use''. The estimated future cash flows are discounted to their
 present value using a pre-tax discount rate that reflects current
 market assessments of the time value of money and risks specific to the
 asset.
 
 4) DEPRECIATION:
 
 a) The classification of Plant & Machinery into continuous and
 non-continuous process is done as per technical certification and
 depreciation thereon is provided accordingly
 
 b) Depreciation on fixed assets is provided on straight-line method at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956 or at rates determined based on the useful life of the assets
 estimated by the management, whichever is higher.  ,
 
 c) Depreciation on value adjustments made to the fixed assets due to
 change in foreign exchange rates prevailing at the end of the year, is
 provided prospectively from the date of procurement over the balance
 life of the respective assets.
 
 d) Depreciation on revalued assets is provided at the rates specified
 in Section 205 (2) (b) of the Companies Act, 1956.  However, in case of
 fixed assets whose life is determined by the valuer to be less than
 their useful life under Section 205, depreciation is provided at the
 higher rates, to ensure the amortisation of these assets over their
 useful life.
 
 e) Leasehold Land is amortised over the period of lease.
 
 f) in case of impairment, if any, depreciation is provided on the
 revised carrying amount of the assets over their remaining useful life.
 
 5) 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
 at the date of the transaction; and non-monetary items which are
 carried at fair value or other similar valuation denominated in a
 foreign currency are reported using the exchange rates that existed
 when the values were determined.
 
 c) Exchange Differences
 
 Exchange differences, in respect of accounting periods commencing from
 1st April 2007, arising on reporting of long-term foreign currency
 monetary items at rates different from those at which they were
 initially recorded, or reported in previous financial statements, in so
 far as they relate to the acquisition of a depreciable capital asset,
 are added to or deducted from the cost of the asset (except for that
 part of exchange difference which is regarded as an adjustment to
 interest costs) and are depreciated over the balance life of the asset,
 in other cases, such exchange differences are accumulated in a Foreign
 Currency Monetary Items Translation Difference Account and amortised
 over the balance period of such long-term asset/liability but not
 beyond 31st March, 2011, and recognised directly to Profit & Loss
 Account as income or expense after 31 st March, 2011.
 
 Exchange differences arising on the settlement or reporting of monetary
 items, not covered above, at rates different from those at which they
 were initially recorded, or reported in previous financial statements,
 are recognised as income or expenses in the period in which they arise.
 
 d) Forward Exchange Contracts not intended for trading or speculation
 purposes
 
 The premium or discount arising at the inception of forward exchange
 contracts is amortised as expense or income over the life of the
 contract. Exchange differences on such contracts are recognised in the
 statement of Profit & Loss in the period in which the exchange rates
 change. Any profit or loss arising on cancellation or renewal of
 forward exchange contract is recognised as income or as expense for the
 year. However, exchange differences in respect of accounting period
 commencing from 1st April, 2007 arising on the forward exchange
 contracts undertaken to hedge the long term foreign currency monetary
 item, in so far as they relate to the acquisition of depreciable
 capital asset, are added to or deducted from the cost of asset, in
 other cases, such exchange differences are accumulated in Foreign
 Currency Monetary Items Translation Difference Account and amortised
 over the balance period of such long term asset/ liability but not
 beyond 31st March, 2011, and recognised directly to Profit & Loss
 Account as income or expense after 31st March, 2011.
 
 e) Derivative Instruments
 
 In terms of the announcement made by the Institute of Chartered
 Accountants of India, the accounting for derivative contracts (other
 than those covered under AS-11) is done based on the marked to market
 principle on a portfolio basis, and the net loss after considering the
 offsetting effect of the underlying hedged item, is charged to the
 Profit & Loss Account. Net gains are ignored as a matter of prudence.
 
 6) INVESTMENTS:
 
 Investments that are readily realizable and intended to be held for not
 more than a year are classified as current investments. All other
 investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value determined on
 an individual investment basis. Long-term investments are carried at
 cost. However, provision for diminution in value is made to recognise a
 decline ''other than temporary'' in the value of the investments.
 
 7) INVENTORIES:
 
 Inventories are valued as follows :
 
 Raw materials, components, stores and spare parts:
 
 At the lower of cost and net realizable value. However, materials and
 other items held for use in the production of inventories are not
 written down below cost if the finished products in which they will be
 incorporated are expected to be sold at or above cost. Cost is
 determined on a weighted average basis.
 
 Work-in-process and finished goods:
 
 At the lower of cost and net realizable value. Cost includes direct
 materials and labour and a part of manufacturing overheads based on
 normal operating capacity. Cost of finished goods includes excise duty.
 Cost is determined on a weighted average basis.
 
 By-Products and Saleable Scraps are measured at its net realizable
 value.
 
 Net realizable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and sale
 thereof.
 
 8) BORROWING COSTS :
 
 Borrowing costs relating to the acquisition / construction of
 qualifying assets are capitalized until the time all substantial
 activities necessary to prepare the qualifying assets for their
 intended use are complete. A qualifying asset is one that necessarily
 takes substantial period ot time to get ready for its intended use. All
 other borrowing costs including exchange differences to the extent they
 are regarded as an adjustment to interest costs, are charged to
 revenue.
 
 9) EXCISE DUTY & CUSTOM DUTY :
 
 Excise duty is accounted for at the point of manufacture of goods and
 accordingly is considered for valuation of finished goods stock lying
 in the factories as on the balance sheet date. Similarly, customs duty
 on imported materials in transit / lying in bonded warehouse is
 accounted for at the time of import / bonding of materials.
 
 10) EARNING PER SHARE :
 
 Basic earnings per share is calculated by dividing the net profit or
 loss for the year attributable to equity shareholders (after deducting
 preference dividends and attributable taxes) by the weighted average
 number of equity shares outstanding during the year.
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the year attributable to equity shareholders and the
 weighted average number of shares outstanding during the year are
 adjusted for the effects of all dilutive potential equity shares.
 
 11) 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.
 
 Sale of Goods
 
 Revenue from sale of goods is recognized when significant risks and
 rewards of ownership of the goods have passed to the buyer, which
 generally coincides with delivery. Sales are net of returns, claims,
 trade discounts, Sales Tax and VAT etc.
 
 Interest
 
 Revenue is recognised on a time proportion basis taking into account
 the amount outstanding and the rate applicable.
 
 12) RETIREMENT AND OTHER EMPLOYEE BENEFITS :
 
 a) Retirement benefits in the form of Provident and Superannuation
 Funds are defined contribution schemes and these contributions are
 charged to Profit & Loss Account in the year when these become due to
 the respective funds.
 
 b) Gratuity liability is a defined benefit obligation and is provided
 for on the basis of an actuarial valuation, as per projected unit
 credit method made at the Balance Sheet date.
 
 c) Short term compensated absences are provided for based on estimates.
 Long term compensated absences are provided for based on actuarial
 valuation, as per projected unit credit method.
 
 d) Actuarial gains/losses are immediately taken to the Profit & Loss
 Account and are not deferred.
 
 13) TAXATION :
 
 Tax expense comprises of current and deferred tax. Current income tax
 is measured at the amount expected to be paid to the tax authorities in
 accordance with the Income Tax Act, 1961. Deferred income taxes reflect
 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 tax is measured based on the tax rates and tax laws enacted or
 substantially enacted at the balance sheet date.  Deferred tax assets
 and deferred tax liabilities are offset, if a legally enforceable right
 exists to set off current tax assets against current tax liabilities
 and the deferred tax assets and deferred tax liabilities relate to the
 taxes on income levied by same governing taxation laws. Deferred tax is
 recognised, subject to consideration of prudence, on timing
 differences, being differences between taxable and accounting income
 that originate in one period and are capable of reversal in one or more
 subsequent period(s).  Deferred tax assets are recognised only to the
 extent that there is reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realised.  If the Company has unabsorbed depreciation or carry
 forward tax losses, deferred tax assets are recognised only if there is
 virtual certainty supported by convincing evidence that such deferred
 tax assets can be realised against future taxable profits.
 
 At each Balance Sheet date, the Company re-assesses unrecognised
 deferred tax assets. It recognises unrecognised deferred tax assets to
 the extent that it has become reasonably certain or virtually certain,
 as the case may be, that sufficient future taxable income will be
 available against which such deferred tax assets can be realised.
 
 The carrying amount of deferred tax assets are reviewed at each Balance
 Sheet date. The Company writes-down the carrying amount of a deferred
 tax asset to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realised. Any such write-down is reversed to the extent that it becomes
 reasonably certain or virtually certain, as the case may be, that
 sufficient future taxable income will be available.
 
 14) SEGMENT REPORTING :
 
 Identification of Segments
 
 The Company''s operating businesses are organized and managed separately
 according to the nature of products and services provided, with each
 segment representing a strategic business unit that offers different
 products and serves different markets. The analysis of geographical
 segments is based on the areas in which customers of the Company are
 located.
 
 Unallocable items
 
 The unallocable items consist of general corporate incomes and expenses
 which are not allocable to any business segment.
 
 15) LEASES:
 
 Finance leases, which effectively transfer to the Company substantially
 all the risks and benefits incidental to ownership of the leased item,
 are capitalized at the lower of the fair value and present value of the
 minimum lease payments at the inception of the lease term and disclosed
 as leased assets.
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the Profit & Loss Account on a straight-line basis over the lease
 term.
 
 16) CASH AND CASH EQUIVALENTS :
 
 Cash and cash equivalents as indicated in the Cash flow statement
 comprise of cash at bank and in hand and short-term investments with an
 original maturity of three months or less.
 
 17) PROVISION:
 
 A provision is recognized when the Company has a present obligation as
 a result of past events and it is probable that an outflow of resources
 will be required to settle such obligation, in respect of which a
 reliable estimate can be made. Provisions are not discounted to its
 present value and are determined based on best estimate required to
 settle the obligation at the balance sheet date. These are reviewed at
 each Balance Sheet date and adjusted to reflect the current best
 estimates.