a) Basis of Accounting
 
 The financial statements are prepared under historical cost convention
 on going concern and on accrual basis and are in compliance with the
 accounting standards notified under Section 211(3C) of the Companies
 Act, 1956 and the relevant provisions thereof.
 
 The financial statements are presented in accordance with Generally
 Accepted Accounting Principles in India, Accounting Standards notified
 under Section 211 (3C) of the Companies Act, 1956 and the relevant
 provisions thereof.  The accounts presentation under Indian Generally
 Accepted Accounting Principles (GAAP) requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and the disclosures of contingent liabilities as at the
 balance sheet date.
 
 b) Revenue Recognition 
 
 i).  Sale of goods
 
 Revenue from the sale of goods is recognised in the profit and loss
 account when the significant risks and rewards of ownership have been
 transferred to the buyer. Revenue includes consideration received or
 receivable, excise duty but net of discounts and other sales related
 taxes.
 
 ii).  Sale of power
 
 Revenue from the sale of power is recognised based on bills raised to
 Power Transmission Company.
 
 iii).  Dividend and Interest income
 
 Dividend income is recognised when the companys right to receive
 dividend is established. Interest income is recognised on accrual basis
 based on interest rates implicit in the transactions.
 
 c) Fixed Assets
 
 All fixed assets are valued at cost less depreciation/amortisation. The
 cost of an asset includes the purchase cost of materials, including
 import duties and non refundable taxes, and any directly attributable
 costs of bringing an asset to the location and condition of its
 intended use. Interest on borrowings used to finance the construction
 of fixed assets are capitalised as part of the cost of the asset until
 such time that the asset is ready for its intended use.
 
 d) Depreciation
 
 Assets given on lease are depreciated on a straight line basis applying
 the rates specified in Schedule XIV to the Companies Act, 1956 or based
 on the lease period whichever is higher.  Freehold land is not
 depreciated. Premium paid on leasehold land and land development
 expenses are amortised over the period of lease. Other fixed assets are
 depreciated on a straight line basis applying the rates specified in
 Schedule XIV to the Companies Act, 1956 or based on estimated useful
 life whichever is higher. Intangible assets are amortised over a period
 of three to five years. The estimated useful life for each category is
 as under:
 
 i) Buildings                               : 30 to 61 Years
 
 ii) Plant& Machinery                       : 14 to 21 Years
 
 iii) Furniture fixture, Air Conditioners 
      and Office equipment                  : 5 Years
 
 iv) Computers                              : 3 Years
 
 v) Vehicles                                : 5 Years
 
 e) Investments
 
 Long term investments are carried at cost less provision for permanent
 diminution (if any) in value of such investments.Current investments
 are carried at lower of cost and fair value
 
 f) Inventories
 
 Raw materials are valued at cost comprising purchase price, freight and
 handling, non refundable taxes and duties and other directly
 attributable costs.
 
 Finished products are valued at lower of cost and net realisable value.
 
 Stores and spares are valued at cost comprising of purchase price,
 freight and handling, non refundable taxes and duties and other
 directly attributable costs.
 
 Value of inventories are generally ascertained on the weighted
 average basis.
 
 g) Foreign Currency Transactions
 
 Foreign Currency transactions are recorded on initial recognition in
 the reporting currency i.e. Indian rupees, using the exchange rates
 prevailing on the date of the transaction. Monetary assets and
 liabilities in currencies other than the reporting currency and foreign
 exchange contracts remaining unsettled are remeasured at the rates of
 exchange prevailing at the balance sheet date. Exchange difference
 arising on the settlement of monetary items, and on the remeasurement
 of monetary items, are included in profit and loss for the year.
 
 Foreign Currency forward contracts, other than those entered into to
 hedge foreign currency risk on unexecuted firm commitments or highly
 probable forecast transactions are treated as foreign currency
 transactions and accounted accordingly as per Accounting Standard (AS)
 11 - Effects of Changes in Foreign Exchange Rates. The difference
 between the contract rate and spot rate on the date of transaction is
 recognised as premium/discount and recognised over the life of the
 contract.  Exchange differences arising from remeasurement of contracts
 are included in the profit
 
 and loss for the year. Gains and losses arising on account of roll
 over/cancellation of forward contracts are recognised as
 income/expenses in the preoperative expenses.
 
 All other derivative contracts including forward contracts entered into
 to hedge foreign currency risks on unexecuted firm commitments and
 highly probably forecast transactions, are recognised in the financial
 statements at fair value as on the Balance Sheet date in pursuance of
 the announcement of the Institute of Chartered Accountants of India
 dated March 29,2008 on accounting of derivatives.
 
 h) Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition, construction
 of qualifying assets are capitalised as part of the cost of such assets
 till such time the asset is ready for its intended use or sale. A
 qualifying asset is an asset that necessarily takes a substantial
 period of time to get ready for its intended use. All other borrowing
 costs are recognised as an expense in the profit and loss account in
 the period in which they are incurred.  i) Employee Benefits
 
 i).  Short term benefits
 
 Short term employee benefits are recognised as an expense at the
 undiscounted amount in the profit and loss account of the year in which
 the related service is rendered.
 
 ii).  Post employment benefits
 
 Defined Contribution plans
 
 Defined contribution plans are those plans where the Company pays fixed
 contributions to a separate entity.  Contributions are paid in return
 for services rendered by the employees during the year. The company has
 no legal or constructive obligation to pay further contributions if the
 fund does not hold sufficient assets to pay employee benefits. The
 contributions are expensed as they are incurred in line with the
 treatment of wages and salaries.
 
 In respect of contribution of provident fund to the trust set up by the
 Company, since the Company is obligated to meet interest shortfall, if
 any, with respect to covered employees, such employee benefit plan is
 classified as Defined Benefit Plan in accordance with the Guidance on
 implementing Accounting Standard (AS) 15 (Revised) on Employee
 Benefits.
 
 Defined Benefit Plans
 
 Defined benefit plans are arrangements that provide guaranteed benefits
 to employees, either by way of contractual obligations or through a
 collective agreement. This guarantee of benefits represents a future
 commitment of the Company and, as such, a liability is recognised. The
 present value of these defined benefit obligations are ascertained by
 independent actuarial valuation as per the requirement of Accounting
 Standards 15 - Employee Benefits. The liability recognised in the
 balance sheet is the present value of the defined benefit obligations
 on the balance sheet date less the fair value of the plan assets (for
 funded plans), together with adjustments for unrecognised past service
 costs. All actuarial gains and losses are recognised in Profit and Loss
 Account in full in the year in which they occur.
 
 j) Taxes on Income
 
 Current Taxes
 
 Provision for Current tax is determined on the basis of taxable income
 and tax credits computed in accordance with the provisions of the
 Income Tax Act, 1961.
 
 Deferred Taxes
 
 Deferred tax assets and liabilities are recognised by computing the tax
 effect on timing differences which arise during the year and reverse in
 the subsequent periods.  Deferred tax assets 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
 can be realised.  
 
 k) Leases
 
 Amounts due under finance leases are recorded as receivables at the
 amount of the Companys net investment in the leases. Finance lease
 income is allocated to accounting periods so as to reflect a constant
 period rate of return on the Companys net investments standing in
 respect of the leases.
 
 Rental income from operating leases is recognised on a straight line
 basis over the terms of the relevant leases.
 
 l) Earnings Per Share
 
 The Company reports basic and diluted earnings per share in accordance
 with Accounting Standard (AS) 20- Earnings Per Share. Basic earnings
 per equity share have been computed by dividing net profit after tax
 attributable to equity share holders by the weighted average numbers of
 equity shares outstanding during the year. Diluted earnings during the
 year adjusted for the effects of all dilutive potential equity shares
 per share is computed using the weighted average number of equity
 shares and dilutive potential equity shares outstanding during the
 year.
 
 m) Impairment
 
 Wherever events or changes in circumstances indicate that the carrying
 value of fixed assets may be impaired, the company subjects such assets
 to a test of recoverability, based on discounted cash flows expected
 from use or disposal of such assets. If the assets are impaired, the
 company recognises an impairment loss as the difference between the
 carrying value and value in use.
 
 n) 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 not recognised but are disclosed in the
 notes. Contingent Assets are neither recognised nor disclosed in the
 financial statements.
 
 o) Government Grants
 
 Government grants which are given with reference to the total
 investments in an undertaking and no repayment is ordinarily expected
 in respect thereof, the grants are treated as capital reserve which can
 be neither distributed as dividend nor considered as deferred income.