A) GENERAL
 
 1 The accounts are prepared on the basis of the Historical Cost
 Convention and in accordance with generally accepted accounting
 principles and provisions of the Companies Act, 1956.
 
 2 The company follows mercantile system of accounting and recognises
 income and expenditure on accrual basis. Interest on unpaid call money
 is accounted for as and when received.
 
 3 Sales include sale of by-products and are net of sales tax if any and
 includes subsidy.
 
 4 Investments are valued at cost of acquisition. Only permanent
 diminution in the value of investments meant to be held for long term
 is recognised.
 
 B) EXCISE DUTY
 
 Liability for excise duty payable on finished products has been
 accounted in respect of goods lying at the end of the year and added to
 the value of closing stock.
 
 C) FIXED ASSETS
 
 (a) Fixed Assets are stated at cost of acquisition including taxes,
 duties, freight and other incidental expenses related to acquisition
 and installation of the concerned assets and net off cenvat.
 
 (b) Impairment of Assets :
 
 The carrying amount of assets are reviewed at each Balance sheet date
 if there is any indication of impairment based on internal / external
 factors.
 
 If the carrying amount of the asset exceeds its estimated recoverable
 amount, an impairment loss is recognised in the Profit & Loss account
 to the extent the carrying amount exceeds recoverable amount.
 
 Reversal of impairment losses recognised in prior years is recorded
 when there is an indication that the impairment losses recognised for
 the assets, no longer exists or have decreased.
 
 D) DEPRECIATION
 
 Depreciation is provided on straight-line method, at the rates
 prescribed in Schedule XIV to the Companies Act, 1956 on a pro-rata
 basis commencing from the month of addition, except in case of plant
 and factory building of edible oil refinery and solvent extraction unit
 and Sulphuric acid plants where the depreciation is provided on written
 down value method.
 
 E) INVESTMENTS
 
 Investments are stated at cost less any diminution in their value,
 which is other than temporary.
 
 F) INVENTORIES
 
 Inventories are valued as under :
 
 Raw materials, Packing materials, Work in process
 
 : at lower of cost on FIFO basis or net realizable value. Raw materials
 held for use in production of inventories are not written down below
 cost except in the cases where material prices have declined, and it is
 estimated that the cost of the finished products will exceed their net
 realizable value.
 
 Finished goods : at cost or net realisable value whichever is lower.
 The cost is computed on weighted average method and includes cost of
 materials, cost of conversion and other costs incurred in acquiring the
 inventory and bringing them to their present location and condition.
 
 Stores & spares : at Cost on FIFO basis.
 
 G) BORROWING COST
 
 Borrowing costs directly attributable to the acquisition or
 construction of fixed assets are capitalised as part of cost of the
 assets, upto the date the asset is put to use. Other Borrowing cost are
 charged to Profit & loss account in the year in which they are
 incurred.
 
 H) SUBSIDY RECEIVABLE
 
 Subsidy receivable is accounted on the basis of actual sales and the
 deductions if any from the same, made by the Certifying Authority, are
 accounted as and when the same are communicated to the Company.
 
 I) REVENUE RECOGNITION
 
 1.  Sales are recognised, net of returns and trade discounts, on
 despatch of goods to customers.
 
 2.  Sales includes sale of bye-products and are net of sales tax if any
 and includes subsidy.
 
 3.  Revenue in respect of insurance / other claims are recognised only
 when it is reasonably certain that the ultimate collection will be
 made.
 
 J) FOREIGN CURRENCY TRANSACTIONS
 
 Foreign currency transactions are accounted for at the exchange rates
 prevailing on the date of such transactions where these are not covered
 by forward contracts. Liabilities in foreign currencies as on the date
 of balance sheet are converted at the exchange rate prevailing on that
 date.
 
 Exchange difference in respect of liabilities incurred to acquire fixed
 assets prior to April 1, 2007, are adjusted to the carrying amount of
 such fixed assets and in other cases, are recognised as income or
 expense in the period in which they arise.
 
 K) PROVISION FOR RETIREMENT BENEFITS
 
 i) Short term Employee benefits
 
 Short term employee benefits are recognised as an expenses at the
 amount disclosed in the profit and loss account for the period in which
 the related service is rendered.
 
 ii) Post employment benefits
 
 Post employment benefits is determined using the projected unit credit
 method, with actuarial valuation being carried out at Balance sheet
 date. Actuarial gains and losses are recognised in full in the profit
 and loss account for the period in which they occur.
 
 Defined benefit plans : The Government provident fund scheme is funded
 defined benefits scheme and the employee gratuity fund scheme is an
 unfunded defined benefit scheme.
 
 iii) Long Term Employee benefits
 
 The obligation for Long Term benefits such as Long Term Compensated
 absence, is defined benefit which is unfunded.
 
 L) TAXES ON INCOME
 
 1.  Tax expense consists of both current as well as deferred tax
 liability. Current tax represents amount of Income tax payable
 including the tax payable u/s 115JB, if any, in respect of taxable
 income for the year.
 
 2.  Minimum alternate tax credit is recognised as an asset only when
 and to the extent there is convincing evidence that the Company will
 pay normal Income tax within the specified period.
 
 3.  Deferred Tax is recognised on timing difference between the
 accounting income and the taxable income for the year that originates
 in one period and are capable of reversal in one or more subsequent
 period. Such Deferred Tax is quantified using the tax rates and laws
 enacted or substantitively enacted as on the Balance Sheet date.
 
 M) Earning per share
 
 The Company reports basic & diluted earnings per share (EPS) in
 accordance with accounting standard 20 on earnings per share. Basic EPS
 is computed by dividing the net profit or loss for the year by the
 weighted average number of equity shares outstanding during the year.
 Diluted EPS is computed by dividing the net profit or loss for the year
 by the weighted average number of equity shares outstanding during the
 year as adjusted for the effects of all dilutive potential equity
 shares, except where the results are anti - dilutive.