A) Basis of Preparation of Financial Statements :
 
 The financial statements have been prepared under the historical cost
 convention in accordance with the generally accepted accounting
 principles and the provisions of the Companies Act, 1956 as adopted
 consistently by the Company. All income & expenditure items having a
 material bearing on the financial statements are recognized on accrual
 basis, except in respect of insurance claims, liquidated damages, where
 the exact quantum cannot be ascertained.
 
 B) Income Recognition :
 
 a) Revenue in respect of sale of goods is recognised on dispatch of
 goods from the factory on the basis of excise invoice. The sales are
 inclusive of excise duty but net of value added tax. Further the
 materials returned/rejected are accounted for in the year of
 return/rejection.
 
 b) For services rendered the Company recognizes revenue on the basis of
 Completed Contract Method.
 
 c) Export incentives & other miscellaneous incomes are recognized on
 accrual basis except dividend on investments which are accounted in the
 year of receipt.
 
 C) Fixed Assets :
 
 a) Valuation Of Fixed Assets
 
 Fixed Assets are stated at cost of acquisition including any
 attributable cost for bringing the assets to its working condition and
 exclusive of cenvat credit on capital account. Further in case of
 impairment of assets, the fixed assets are carried at cost or
 recoverable amount whichever is less.
 
 b) Depreciation
 
 Depreciation on Fixed Assets is provided on straight-line method at the
 rates and in the manner prescribed under Schedule XIV of the Companies
 Act, 1956.
 
 D) Valuation of Inventories:
 
 a) Raw materials are valued at cost or net realisable value whichever
 is lower. Cost is computed using first in first out method.
 
 b) Work in progress includes the cost of purchase, appropriate share of
 cost of conversion and other overheads incurred in bringing the
 inventories to its present location and condition.
 
 c) Finished goods includes cost of purchase, cost of conversion and
 other overhead incurred in bringing the inventory to its present
 location and condition. Obsolete/ slow moving inventories are
 adequately provided for.
 
 d) Other stores and spares/consumable are valued at cost after
 providing for cost of obsolescence, if any.
 
 E) Investments:
 
 Long-term investments are valued at cost, less any diminution in value
 that is other than temporary. Current investments are valued at lower
 of cost and fair value. Income thereon is accounted for as and when
 realised.
 
 F) Miscellaneous Expenditure:
 
 Miscellaneous expenditure is written off to the Profit and Loss Account
 over a period of up to ten years depending upon the nature and expected
 future benefit of such expenditure. However deferred revenue
 expenditure comprising of foreign currency convertible bond issue
 expense is written off to the Profit and Loss Account over a period of
 up to five years.
 
 G) Foreign exchange transactions:
 
 a) Foreign currency transactions during the year are recognized at the
 rate of exchange prevailing on the date of transaction. All exchange
 differences are dealt with in the Profit and Loss Account except those
 relating to acquisition of fixed assets acquired from outside India,
 which are adjusted in the cost of the assets. Foreign currency current
 assets, current liabilities and loans other than for financing fixed
 assets and, outstanding at the year end are translated at the rates of
 exchange prevailing at the close of the year and the resultant
 gain/losses are recognized in the Profit and Loss Account of the year.
 
 b) In respect of forward exchange contract entered for speculation
 purpose and expired during the year, the difference in forward exchange
 booking rate and spot rate on the date of expiry of contract is dealt
 in the Profit and Loss Account. In respect of forward exchange contract
 entered for speculative purpose and carried forward in next accounting
 period, the difference between the forward exchange booking rate and
 closing interbank rate including premium upto maturity prevailing at
 the close of the year are dealt in the Profit and Loss Account.
 
 c) In the case of foreign branches, being non-integral foreign
 operations, revenue items are converted at the rate prevailing as on
 the date of transactions during the year. All assets and liabilities
 are converted at rates prevailing at the end of the year. Any exchange
 difference arising on conversion is recognized in the foreign
 fluctuation translation reserve.
 
 d) The company has not restated its various foreign currency monetary
 assets and liabilities consisting of debtors, creditors and FCCB
 deposits at the closing rates of exchange. Accordingly net monetary
 gains aggregating to Rs 2,255.37 Lakhs (net of deferred tax Rs.
 1,121.82 Lakhs) have not been provided in the financial statement.
 Additionally, the mark to market losses pertaining to forward contracts
 amounting to Rs 42.00 Lakhs (net of deferred tax of Rs. 20.89 Lakhs)
 have also not been provided in the financial statements.
 
 Accordingly the Net Profit for the year and the net worth as at March
 31, 2011 are lower by Rs. 2,213.38 Lakhs.
 
 The company is of the view that these favorable foreign exchange
 fluctuations are temporary in nature.
 
 However, the above is in contravention to Accounting Standard – 11
 (Revised) The Effects of Changes in Foreign Exchange Rates issued by
 The Institute of Chartered Accountants of India and is also
 inconsistent with the accounting policy regularly followed by the
 Company.
 
 H) Retirement Benefits :
 
 i) Short Term Employee Benefits :
 
 All Employee benefits payable wholly within twelve months of rendering
 the service are classified as short term employee benefits and they are
 recognized in the period in which employee renders the related service
 except Leave Encashment .
 
 ii) Post – employment Benefits :
 
 a) Defined Contribution Plans
 
 Defined contribution fund are government administered provident fund
 scheme, employee state insurance scheme for all employees. The
 Company''s contribution to defined contribution plans are recognized in
 the Profit & Loss Account in the financial year to which they relate.
 
 b) Defined Benefit Gratuity Plan
 
 The Company operates a defined gratuity plan for all employees with
 Life Insurance Corporation of India. The Company''s contribution of
 premium to gratuity scheme is recognized in the Profit & Loss Account
 in the financial year to which they relate.
 
 I) Taxation :
 
 a) Current Ta x :
 
 Current Tax provision is computed for the current income based on tax
 liability after considering allowances and exemptions.
 
 b) Deferred Ta x Provision :
 
 Deferred Tax arising from timing difference between the book profit and
 tax profit is accounted for, at the future rate of tax, to the extent
 of temporary timing differences that originate in one period and are
 capable of reversal in one or more subsequent periods.
 
 Deferred Tax Assets are not recognized on unabsorbed depreciation and
 carry forward losses unless there is a virtual certainty that
 sufficient future taxable income will be available against which such
 deferred tax assets can be realised.
 
 J) Contingent Liabilities:
 
 Contingent liabilities are not provided for in the accounts but are
 separately disclosed by way of a note.
 
 K) Borrowing Costs:
 
 Borrowing Costs are accounted on accrual basis.
 
 L) Earning Per Share:
 
 Earning per share is calculated by dividing the profit attributable to
 the Equity Shareholders by the weighted average number of equity share
 outstanding during the year.
 
 M) Lease Accounting
 
 Assets taken on operating lease:
 
 Lease rentals on assets taken on operating lease are recognised as
 expense in the Profit and Loss Account on an accrual basis over the
 lease term.
 
 Assets given on operating lease:
 
 Lease rentals are accounted on accrual basis in accordance with the
 respective lease agreements.
 
 N) Provisions:
 
 Provisions are recognized when the Company has a 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 of the amount can be made.
 Provisions required to settle are reviewed regularly and are adjusted
 where necessary to reflect the current best estimate of the obligation.
 Where the Company expects provisions to be reimbursed, is recognized as
 a separate asset, only when such reimbursement is virtually certain.
 
 O) Impairment of Assets:
 
 At Balance Sheet date, an assessment is done to determine whether there
 is any indication of impairment in the carrying amount of the Company''s
 fixed assets. If any such indication exists, the asset''s recoverable
 amount is estimated. An impairment loss is recognized whenever the
 carrying amount of an asset exceeds its recoverable amount.
 
 An assessment is also done at each Balance Sheet date whether there is
 any indication that an impairment loss recognized for an asset in prior
 accounting period may no longer exists or may have decreased. If any
 indication exists the assets recoverable amount is estimated. The
 carrying amount is increased to revised estimate of its recoverable
 amount but so that the increased carrying amount does not exceeds the
 carrying amount that would have been determined had no impairment loss
 been recognized for the asset in the prior years. A reversal of
 impairment loss is recognized in the Profit & Loss Account.
 
 After recognition of impairment loss or reversal of impairment loss as
 applicable, the depreciation charge for the assets is adjusted in
 future periods to allocate the asset''s revised carrying amount, less
 its residual value (if any), on straight line basis over its remaining
 useful life.