(a) Basis of preparation of Financial Statements
 
 The accounts have been prepared under the historical cost convention
 and in accordance with the provisions of the Companies Act'' 1956 and
 Accounting Standards notified vide Companies (Accounting Standards)
 Rules'' 2006. Accounting policies unless specifically stated to be
 otherwise'' are conistent and in consonance with generally accounting
 principles.
 
 (b) Use of Estimates
 
 The preparation of financial statements require the management to make
 estimates and assumption that affect the reported amount of assets and
 liabilities and disclosures relating to contingent liabilities and
 assets as at the balance sheet date and the reported amounts of income
 and expenses during the year. Difference between the actual results and
 the estimates are recognised in the year in which the results become
 known/materialise.
 
 (c) Fixed Assets and Depreciation
 
 a) Fixed assets are stated at cost of acquisition/construction. Cost
 includes borrowing cost and pre-operative expenses as allocated to the
 fixed assets.
 
 b) Capital Word-in-progress includes Marchinery to be installed''
 Construction and Erection Materials'' Advances etc.
 
 (d) Depreciation
 
 a) Depreciation has been provided for as per Schedule XIV of the
 Companies Act'' 1956'' on written down value method and in respect of
 plant and Marchinery acquired on or after 1.4.76'' on straight-line
 method. Certain plants have been considered as continuous process on
 technical evaluation.
 
 b) Marchinery Spares which can be used only in connection with an item
 of fixed asset and whose use is expected to be irregular are amortised
 over the useful life of the respective fixed assets and the amount
 amortised is included under stores and spares consumed.
 
 (e) Impairment of Fixed Assets
 
 Fixed Assets are reviewed at each balance sheet date for impairment. In
 case events and circumstances indicate any impairment'' recoverable
 amount of fixed assets is determined. An impairment loss is recognised''
 whenever the carrying amounts of assets exceeds recoverable amount. The
 recoverable amount is the greater of assets net selling price or its
 value in use. In assessing the value in use'' the estimated future cash
 flows from the use of assets are discounted to their present value at
 appropriate rate. An impairment loss is reversed if there has been
 change in the recoverable amount and such loss either no longer exists
 or has decreased. Impairment loss/reversal thereof is adjusted to the
 carrying value of the respective assets.
 
 (f) Investments
 
 Long-term investments are stated at cost less provisions'' if any'' for
 diminution in the values thereof'' other than temporary.
 
 (g) Inventories
 
 i) Inventories are valued at cost or estimated net realisable value''
 whichever is lower. The value of inventories other than raw materials
 is determined on weighted average basis. The value of raw materials is
 determined by first in first out method. Cost of raw materials includes
 expenses incurred for procuring the same. Cost in respect of finished
 goods'' stock in process and wrapper represents manufacturing cost and
 does not include interest'' selling and distribution and certain
 administrative overheads.
 
 ii) Customs duty on materials in bond and excise duty on finished goods
 lying in the factory as at the year-end is considered as cost for
 valuation of stocks.
 
 (h) Revenues and Other Income
 
 i) Revenue is being recognised on accrual basis.
 
 ii) All expenses'' claims'' Interest on overdue debts/demands and other
 incomes to the extent ascertainable and considered payable or
 receivable as the case may be'' have been accounted for.
 
 (i) Sales
 
 Sales are recognised on passing of the property in the goods as per the
 terms of the sales'' irrespective of actual delivery. Sales include
 excise duty and incidental charges but rebates'' discounts and Sales
 Tax/Value Add Tax (VAT) are excluded there from.
 
 (j) Foreign Currency Transactions
 
 Transactions in foreign currencies are accounted for at the exchange
 rate prevailing on the date of the transaction.  Foreign currency
 monetary assets and liabilities at the year end are translated using
 closing exchange rates. The loss or gain thereon and also on the
 exchange differences on settlement of foreign currency transactions
 during the year are recognised as income or expenses and are adjusted
 to the profit and loss account under respective heads of accounts.
 
 Exchange differences arising with respect to forward contracts other
 than those entered into'' to hedge foreign currency risk on unexecuted
 firm commitments or of highly probable forecast transactions are
 recognized in the year in which they arise and the difference between
 the forwards rate and exchange rate at the date of transaction is
 recognized as income / expense over the life of the contract.
 
 Keeping in view the announcement of Institute of Chartered Accountants
 of India dated March 29''2008 regarding accounting for derivatives'' mark
 to market losses on all other derivatives contracts (other than forward
 contracts dealt as above) outstanding as at the year end'' are
 recognized in the accounts.
 
 (k) Employee Benefits
 
 Employee benefits are accrued in the year services are rendered by the
 employees. Contribution to defined contribution schemes such as
 Provident Fund etc. are recognized as and when incurred. Long term
 employee benefits under defined benefit scheme such as contribution to
 gratuity'' leave etc.are determined at close of the year at present
 value of the amount payable using actuarial valuation techniques.
 Actual gains and losses are recognised in the year when they arise.
 
 (I) Income Taxes
 
 Provision for tax is made for both current and deferred taxes. Current
 tax is provided on the taxable income using the applicable tax rates
 and tax laws. Deferred tax assets and liabilities arising on account of
 timing differences'' which are capable of reversal in subsequent years
 are recognised using tax rates and tax laws'' which have been enacted or
 substantively enacted. Deferred tax assets other than in respect of
 carried forward losses or unabsorbed depreciation are recognised only
 to the extent that there is a reasonable certainty that sufficient
 future taxable income will be available against which such deferred tax
 assets will be realized. In case of carry forward of unabsorbed
 depreciation and tax losses'' deferred tax assets are recognized only if
 there is virtual certainty that such deferred tax assets can be
 realized against future taxable profits.
 
 (m) Provision'' Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent liabilities are disclosed by way of notes to accounts.
 Contingent assets are neither recognised nor disclosed in the financial
 statements.
 
 (n) Borrowing Cost
 
 Borrowing costs'' that are attributable to the acquistion or
 construction of qualifying asset'' 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 use. All other borrowing
 costs are charged to revenue.