A.  BASIS OF ACCOUNTING:
 
 The financial statements are prepared under the historical cost
 convention on an accrual basis, in accordance with relevant
 requirements of the Companies Act, 1956 and applicable Accounting
 Standards notified by the Companies (Accounting Standards) Rules, 2006.
 
 All assets and liabilities have been classified as current or
 non-current as per the Company''s normal operating cycle and other
 criteria set out in the Schedule VI to the Companies Act, 1956.
 
 B.  USE OF ESTIMATES:
 
 The preparation of financial statements in conformity with the
 generally accepted accounting principles requires estimates and
 assumptions to be made that affect the reported amounts of assets and
 liabilities on the date of financial statements and the reported
 amounts of revenues and expenses during the reported period.
 Difference between the actual results and estimates are recognised in
 the period in which the results are known or materialise.
 
 C.  FIXED ASSETS AND DEPRECIATION:
 
 a.  Fixed Assets are stated at cost net of credits under Cenvat/ VAT
 Schemes. All costs relating to the acquisition including freight and
 installation of Fixed Assets are capitalised and also include interest
 on borrowings upto the date of capitalisation.
 
 b.  Depreciation:
 
 (i) Depreciation on Buildings, Plant and Machinery, Moulds and a part
 of Other Assets has been provided on straight line method at the rates
 and on the basis as specified in Schedule XIV to the Companies Act,
 1956, and in respect of vehicles and a part of Other Assets where,
 based on management''s estimate of the useful life of the assets, higher
 depreciation has been provided on straight line method at the rate of
 20%.
 
 (ii) Assets acquired/purchased costing less than Rupees Five Thousand
 have been depreciated at the rate of 100%.
 
 (iii) Depreciation on Renewable Energy Saving Devices, viz., Windmills,
 is being charged on Reducing Balancing Method, as Continuous Process
 Plant at the rates and on the basis as specified in Schedule XIV to the
 Companies Act, 1956.
 
 (iv) Leasehold Land is amortised over the period of the lease.
 
 (v) Intangible Assets are amortised over 5 years commencing from the
 year in which the expenditure is incurred.
 
 D.  IMPAIRMENT OF ASSETS:
 
 The Company assesses at each Balance Sheet date whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount of the asset.  If
 such recoverable amount of the asset or the recoverable amount of the
 cash generating unit to which the asset belongs is less than its
 carrying amount, the carrying amount is reduced to its recoverable
 amount. The reduction is treated as an impairment loss and is
 recognised in the Statement of Profit and Loss. If at the Balance Sheet
 date there is an indication that if a previously assessed impairment
 loss no longer exists, the recoverable amount is reassessed and the
 asset is reflected at the recoverable amount.
 
 E.  INVESTMENTS:
 
 Investments that are readily realisable and are intended to be held for
 not more than one year from the date on which such investments are
 made, are classified as current investments. All other investments are
 classified as long-term investments. Current investments are carried at
 lower of cost or fair value. Long-term investments are carried at cost.
 However, provision for diminution is made to recognise a decline, other
 than temporary, in the value of the investments, such reduction being
 determined and made for each investment individually.
 
 F.  INVENTORIES:
 
 Inventories consisting of stores and spares, raw materials, stock-in-
 process, stock-in-Trade and finished goods are valued at lower of cost
 and net realisable value.
 
 The cost is computed on FIFO basis except for stores and spares which
 are on Weighted Average Cost basis and is net of credits under
 Cenvat/VAT Schemes.
 
 Stock in process and Finished Goods inventories include materials,
 labour costand other related overheads.
 
 G.  REVENUE RECOGNITION:
 
 Sale of goods and services are recognised when risks and rewards of
 ownership are passed on to the customers which generally coincides with
 delivery and when the services are rendered. Sales include Excise Duty
 but exclude VAT and warranty claims.
 
 H.  EXCISE DUTY:
 
 Excise Duty has been accounted on the basis of both payments made in
 respect of goods despatched and also provision made for goods lying in
 bonded warehouses.
 
 I.  RESEARCH AND DEVELOPMENT:
 
 Revenue expenditure on Research and Development is charged to the
 Statement of Profit and Loss of the year in which it is incurred.
 Capital expenditure on Research and Development is included as
 additions to Fixed Assets.
 
 J. TAXATION:
 
 Provision for Current Tax is made on the basis of estimated taxable
 income for the current accounting period and in accordance with the
 provisions of the Income Tax Act, 1 961.
 
 Deferred Tax for timing differences between the book and tax profits
 for the year is accounted for, using the tax rates and laws that have
 been enacted or substantially enacted on the Balance Sheet date. The
 Deferred Tax Asset is recognised and carried forward only to the extent
 that there is a reasonable certainty except for carry forward losses
 and unabsorbed depreciation which is recognised on virtual certainty
 that the assets will be adjusted in future.
 
 K. LEASES:
 
 Lease payments under operating leases are recognised as expenses on
 straight line basis over the lease term in accordance with the period
 specified in respective agreements.
 
 L. EMPLOYEE BENEFITS:
 
 The Company''s contribution to the Provident Fund is remitted to a Trust
 established for this purpose based on fixed percentage of the eligible
 employees'' salary and charged to the Statement of Profit and Loss. The
 Company is liable for annual contributions and any shortfall in the
 fund assets, based on the Government specified minimum rate of return
 and recognises such contributions and shortfall, if any, as an expense
 in the year incurred. The Company also contributes to Regional
 Provident Fund on behalf of some of its employees who are not part of
 the above Trust and such contributions are charged to the Statement of
 Profit and Loss.
 
 The Company also contributes to a government administered Pension Fund
 on behalf of its employees, which are charged to the Statement of
 Profit and Loss.
 
 Superannuation benefits to employees, as per Company''s Scheme, have
 been funded with Life Insurance Corporation of India (LIC) and the
 contribution is charged to the Statement of Profit and Loss.
 
 Liabilities with regard to Gratuity are determined under Group Gratuity
 Scheme with LIC and the provision required is determined as per
 Actuarial Valuation as at the Balance Sheet date, using the Projected
 Unit Credit Method.
 
 Shortterm employee benefits are recognised as an expense as per the
 Company''s Scheme based on expected obligation on undiscounted basis.
 Other longterm employee benefits are provided based on the Actuarial
 Valuation done at the year end, using the Projected Unit Credit Method.
 
 Actuarial gain/loss are charged to the Statement of Profit and Loss and
 not deferred.
 
 M. FOREIGN CURRENCY TRANSACTIONS:
 
 Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing at the time of the transaction.
 
 Monetary items denominated in foreign currencies at the year end are
 restated at year end rates. In case of monetary items which are covered
 by forward exchange contracts, the difference between the year end rate
 and the contracted rate is recognised as exchange difference. Premium
 paid on forward contracts has been recognised over the life of the
 contract.
 
 In respect of branches, which are integral foreign operations, all
 transactions are translated at rates prevailing at the time of
 transaction or that approximates the actual rate as at the date of
 transaction. Branch monetary assets and liabilities are restated at the
 year end rates. Any income or expense on account of exchange rate
 difference either on settlement or on translation is recognised in the
 Statement of Profit and Loss.
 
 N. DERIVATIVE TRANSACTIONS:
 
 The Company uses derivative financial instruments, such as Forward
 Exchange Contracts, Currency Swaps and Interest Rate Swaps, to hedge
 its risks associated with foreign currency fluctuations and interest
 rates. Currency and interest rate swaps are accounted in accordance
 with their contract. At every period end all outstanding derivative
 contracts are fair valued on a marked-to-market basis and any loss on
 valuation is recognised in the Statement of Profit and Loss, on each
 contract basis. Any gain on marked-to-market valuation on respective
 contracts is not recognised by the Company, keeping in view the
 principle of prudence as enunciated in AS-1 Disclosure on Accounting
 Policies.
 
 O.  BORROWING COSTS:
 
 Borrowing costs that are attributable to the acquisition of or
 construction of qualifying assets are capitalised as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue.
 
 P. WARRANTY:
 
 Provision for product warranties is recognised based on management
 estimate regarding possible future outflows on servicing the customers
 during the warranty period. These esti mates are computed on scientific
 basis as per past trends of such claims.
 
 Q. PROVISIONS AND CONTINGENT LIABILITIES:
 
 A provision is recognised when there is a present obligation as a
 result of a past event where it is probable that an outflow of
 resources will be required to settle the obligation, in respect of
 which a reliable esti mate can be made. Contingent liability is
 disclosed for (i) Possible obligations which will be confirmed only by
 future events not wholly within the control of the Company or (ii)
 Present obligations arising from past events where it is not probable
 that an outflow of resources will be required to settle the obligation
 or a reliable estimate of the amount of the obligation cannot be made.
 Contingent Assets are not recognised in the financial statements since
 this may result in the recognition of income that may never be
 realized.