1.  BASIS FOR PREPARATION OF ACCOUNTS
 
 The Financial Statements have been prepared to comply with all material
 aspects in respect with the notified Accounting Standards by Companies
 Accounting Standard Rules, 2006 and the relevant provision of the
 Companies Act, 1956.  Accounting policies have been consistently
 applied by the Company.
 
 2.  USE OF ESTIMATES
 The preparation of financial statements in conformity with the
 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 at the date of
 the financial statements and the results of operations during the
 reporting period end. Although these estimates are based upon
 management''s best knowledge of current events and actions, actual
 results could differ from these estimates.
 
 3.  SIGNIFICANT ACCOUNTING POLICIES AND PRACTICES
 
 a) REVENUE RECOGNITION
 
 1) Revenue is recognised only when it can be reliably measured and it
 is reasonable to accept ultimate collection.
 
 2) Sales
 
 Domestic Sales are accounted exclusive of Excise, net of Central Sales
 Tax, VAT, sales return and rate difference, if any. Exports sales are
 accounted on the basis of dates of Bill of Lading. Sales do not include
 Inter Division transfer.
 
 3) Export Benefits
 Incomes in respect of Duty Drawback and Duty Entitlement Pass Book
 Scheme (DEPB) in respect of exports made during the year are accounted
 on accrual basis. Profit or losses on transfer of DEPB licenses are
 accounted in year of the sales. Duty free imports of material under
 Advance License matched with the export made against the said licenses
 
 4) Dividend income is recognised on the basis of dividend declared by
 the companies.
 
 b) FOREIGN CURRENCY TRANSACTIONS
 
 (i) Transactions in foreign currencies are recorded in Indian Rupees
 using the rates of exchange prevailing
 
 on the dates of the transactions. At each balance sheet date, recorded
 monetary balances are reported in Indian Rupees at the rates of
 exchange prevailing at the balance sheet date. All realised and
 unrealised exchange adjustment gains and losses are dealt with in the
 profit and loss account.
 
 (ii) In order to hedge exposure to foreign exchange risks arising from
 Export or Import foreign currency, bank
 borrowings and trade receivables, the Company enters into forward
 contracts. In case of forward exchange contracts, the cost of the
 contracts is amortised over the period of the contract. Any profit or
 loss arising on the cancellation or renewal of a forward exchange
 contract is recognised as income or expenses for the year.
 
 (iii) Exchange difference is calculated as the difference between the
 foreign currency amount of the contract
 translated at the exchange rate at the reporting date, or the
 settlement date where the transaction is settled during the reporting
 period and the corresponding foreign currency amount translated at the
 later of the date of inception of the forward exchange contract and the
 last reporting date. Such exchange differences are recognized in the
 profit and loss account in the reporting period in which the exchange
 rates change.
 
 (iv) 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.
 
 c) FIXED ASSETS
 
 (i) Fixed assets are stated at cost of acquisition or construction less
 accumulated depreciation, including
 borrowing cost as specified in point (i) till such assets are ready for
 its intended use, less specific grants received and Cenvat Credit
 availed if any.
 
 (ii) Fixed assets in the course of work-in-progress for production or
 administrative purposes are carried at
 cost less any impairment loss.  Work in Progress includes expenditure
 pending for capitalization.
 Cost includes land and building improvement costs, related acquisition
 expenses and construction costs incurred during the period of
 construction. Depreciation of these assets, on the same basis as the
 other property assets, commences when the assets are ready for their
 intended use.
 
 (iii) The cost of self-constructed assets includes cost of materials
 plus any other directly attributable costs of
 bringing the assets to working condition for its intended use.
 
 d) EXPENDITURE ON NEW PROJECTS AND SUBSTANTIAL EXPANSION
 
 Expenditure directly relating to construction activity (net of income,
 if any) is capitalized. Indirect expenditure incurred during
 construction period capitalized as part of the indirect construction
 cost to the extent to which the expenditure is indirectly related to
 construction or is incidental thereto. Other indirect expenditure
 (Including borrowing costs) incurred during the construction period,
 which is not related to the construction activity nor is incidental
 thereto is charged to Profit & Loss Account Income earned during
 construction period deducted from the total of the indirect
 expenditure.
 
 All direct capital expenditure on expansion is capitalized. As regards
 indirect expenditure on expansion only that portion is capitalized
 which represents the marginal increase in such expenditure as a result
 of capital expansion.  The same is treated as pre-operative expenditure
 pending allocation to fixed assets in progress and is shown Capital
 Work-in-Progress. The same is transferred to fixed assets on
 progressive basis and is capitalized along with fixed assets on
 commencement of commercial activities.
 
 e) INTANGIBLE ASSETS
 Intangible assets are recognized at acquisition cost when the asset is
 identifiable , non-monetary in nature, without physical substance and
 it is probable that such expenditure is to result in future economic
 benefits to the entity.
 
 f) IMPAIRMENT OF ASSETS
 
 At each balance sheet date, the Company reviews the carrying amounts of
 its tangible and intangible assets to determine whether there is any
 indication that those assets have suffered an impairment loss. If any
 such indication exists, the recoverable amount of the asset is
 estimated in order to determine the extent of the impairment loss, if
 any. Where it is not possible to estimate the recoverable amount of an
 individual asset, the Company estimates the recoverable amount of the
 cash-generating unit to which the asset belongs. An intangible asset is
 tested for impairment annually whenever there is an indication that
 asset may be impaired.
 
 Recoverable amount is the higher of net selling price and value in use.
 In assessing 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 the
 risks specific to the asset for which the estimates of future cash
 flows have not been adjusted.
 
 If the recoverable amount of an asset (or cash-generating unit) is
 estimated to be less than its carrying amount, the carrying amount of
 the asset (or cash-generating unit) is reduced to its recoverable
 amount. Impairment losses are recognized as an expense immediately.
 
 Where an impairment loss subsequently reverses, the carrying amount of
 the asset (or cash generating unit) is increased to the revised
 estimate of its recoverable amount, but only to the extent that the
 increased carrying amount does not exceed the carrying amount that
 would have been determined had no impairment loss been recognized for
 the asset (or cash generating unit) in prior years. A reversal of an
 impairment loss is recognized as income immediately.
 
 g) DEPRECIATION
 
 Except for freehold land, leasehold land and Capital work-in-progress
 and other assets as stated below depreciation is charged on Straight
 Line Method (SLM) as per rate and in the manner prescribed under
 Schedule XIV of the Companies Act, 1956.
 
 Intangible assets are amortized over useful life of assets as per
 management perception as under:- 
 
 (i) ETP waste Rights - 5 Years 
 
 (ii) Software - 5 Years
  
 (iii) License - 5 Years
 
 Leasehold land is amortized over the available balance lease period.
 Depreciation is not provided on freehold land and capital
 work-in-progress.
 
 When assets are disposed or retired, their cost and accumulated
 depreciation are removed from the financial statements.
 
 The gain or loss arising on the disposal or retirement of an asset is
 determined as the difference between sales proceeds and the carrying
 amount of the asset and is recognized in profit and loss account for
 the relevant financial year.
 
 h) INVESTMENTS
 
 Long term investments are stated at cost less amount written off, where
 there is a diminution in its value of long term nature. Current
 investments are stated at lower of cost and fair value. Gain or loss
 arising from sale or disposal of such investment is accounted at the
 time of actual sale or disposal.
 
 i) INVENTORIES
 
 Inventories are stated at the lower of cost and net realizable value.
 
 Cost of Raw Material is determined on a monthly moving weighted average
 basis.
 
 Stores and Consumables are valued at cost (net of CENVAT) or net
 realizable value whichever is lower.
 
 Finished goods are valued at cost or net realizable value whichever is
 lower. Cost comprises direct materials and where applicable, direct
 labour costs, those overheads that have been incurred in bringing the
 inventories to their present location and condition and excise duty
 payable on finished goods.
 
 For finished goods of Export Oriented Units (EOUs) where prima facie
 finished goods of EOUs are meant for export and no excise duty is
 leviable, therefore no excise duty is added in finished goods
 valuation. However in case of EOU also Excise duty is included in
 valuation of finished goods in proportion to DTA sales. Net realizable
 value represents the estimated selling price less all estimated costs
 of completion and costs to be incurred in marketing, selling and
 distribution.
 
 Work in progress is valued at cost or net realizable value whichever is
 less. Cost comprises direct materials and appropriate portion of direct
 labour costs, manufacturing overheads and depreciation.
 
 j) BORROWING COSTS
 
 Borrowing Costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised as part of the cost
 of such assets, wherever applicable, till the assets are ready for
 their intended use. A qualifying asset is one which necessarily takes
 substantial period to get ready for intended use. All other borrowing
 costs are charged to revenue account. Capitalisation of borrowing cost
 is suspended when active development is interrupted.
 
 k) PRIOR YEAR EXPENSES AND INCOME
 
 Transactions pertaining to period prior to Current Accounting Year are
 adjusted through prior year adjustments, if any.
 
 l) EMPLOYEE BENEFITS
 
 Contribution to Defined Contribution schemes such as Provident Fund,
 etc. are charged to the Profit and Loss account as incurred. The
 Company also provides for retirement / post-retirement benefits in the
 form of gratuity and leave encashment. Such benefits (Defined benefit
 plans) are provided for based on valuations, as at the balance sheet
 date, made by independent actuaries. Termination benefits are
 recognized as an expense as and when incurred.
 
 m) EXCISE DUTY
 
 Excise duty (including Education Cess) on Finished Goods are shown
 separately in Manufacturing and other expenses and included in the
 valuation of finished goods.
 
 n) CENVAT
 
 CENVAT Credit of raw materials and other consumables is accounted at
 the time of purchase and the same is being adjusted to the cost of raw
 materials and other consumables.
 
 o) ACCOUNTING FOR TAXES ON INCOME
 
 Current tax is determined as the amount of tax payable in respect of
 taxable income for the year.
 
 Deferred tax is recognized, on timing difference, being the difference
 between taxable incomes 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 recognized if there is virtual certainty that
 sufficient future taxable income will be available against which such
 assets can be realized.  Other deferred tax assets are recognized only
 to the extent there is reasonable certainty of realization in future.
 Such assets are reviewed at each Balance sheet date to reassess
 realization.
 
 Deferred tax assets and liabilities are measured using the tax rates
 and tax laws that have been enacted or substantively enacted by the
 balance sheet date.
 
 p) PROVISIONS AND CONTINGENT LIABILITIES
 
 A provision is recognized when it is more likely than not that an
 obligation will result in an outflow of resources.  Provisions are not
 discounted to their present value and are determined based on
 management''s estimation of the obligation required to settle the
 obligation at the balance sheet date. These are reviewed at each
 balance sheet date and adjusted to reflect current management
 estimates.
 
 Contingent Liabilities are disclosed for all possible obligations that
 are not remote and all present obligations of which outflow of economic
 resources is not estimable.
 
 q) FINANCIAL DERIVATIVES HEDGING TRANSACTIONS
 
 In respect of derivative contracts, premium paid, gains / losses on
 settlement and provision for losses for cash flow hedges are recognized
 in the profit and loss account, in view of Announcement made by ICAI in
 respect of AS 30 and AS 1.
 
 r) LEASES
 
 All lease are classified into operating and finance lease at the
 inception of the lease. Leases that transfer substantially all risks
 and rewards from lessor to lessees are classified as finance lease and
 others being classified as operating lease.
 
 There are no finance lease transactions entered in to by the Company.
 
 Rent Expense and Rent Income represent operating leases which are
 recognized as an expense in the statement of Profit and Loss Account on
 a Straight Line basis over the lease terms.