1.  Basis for Preparation of Financial Statements
 
 The financial statements are prepared and presented under the
 historical cost convention on accrual basis of accounting and in
 accordance with the Generally Accepted Accounting Principles (GAAP) in
 India. GAAP includes provisions of the Companies Act, 1956, Accounting
 Standards (AS) notifi ed by the Government of India under Section 211
 (3C) of the Companies Act, 1956, pronouncements of Institute of
 Chartered Accountants of India and guidelines issued by Securities and
 Exchange Board of India. Except where otherwise stated, the accounting
 principles are consistently applied.
 
 2.  Use of Estimates
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make assumptions
 and estimates, which it believes are reasonable under the circumstances
 that affect the reported amounts of assets, liabilities and contingent
 liabilities on the date of financial statements and the reported
 amounts of revenue and expenses during the period. Actual results could
 differ from those estimates. Difference between the actual results and
 estimates are recognised in the period in which the results are known
 or materialise.
 
 3.  Fixed Assets
 
 (a) Tangible fixed assets are stated at cost of acquisition or
 construction less accumulated depreciation. The cost of fixed asset
 includes non-refundable taxes and levies, freight and other incidental
 expenses related to the acquisition and installation of the respective
 assets. Borrowing cost attributable to acquisition or construction of
 qualifying fixed assets are capitalised to respective assets when the
 time taken to put the assets to use is substantial.
 
 (b) Pre-operative expenditure comprising of revenue expenses incurred
 in connection with project implementation during the period up to
 commencement of commercial production are treated as part of project
 costs and are capitalised. Such expenses are capitalised only if the
 project to which they relate involve substantial expansion of capacity
 or upgradation.
 
 (c) Certain software costs are capitalised and recognised as intangible
 assets in terms of Accounting Standard 26 on Intangible Assets based on
 materiality, accounting prudence and signifi cant economic benefits
 expected to flow there from for a period longer than one year.
 
 (d) Fixed Assets are reviewed for impairment losses whenever events or
 changes in circumstances indicate that the carrying amount may not be
 recoverable. An impairment loss is then recognised for the amount by
 which the carrying amount of the assets exceeds its recoverable amount,
 which is the higher of an assets net selling price and value in use.
 For the purposes of assessing impairment, assets are grouped at the
 lowest levels for which there are separately identifi able cash flows.
 
 (e) Fixed Assets that have been retired from their active use and held
 for disposal, are classifi ed as current assets, and are stated at
 lower of their cost or net realisable value.
 
 4.  Depreciation and Amortisation
 
 (a) Depreciation on fixed assets is provided on straight line method
 on the basis of the depreciation rates prescribed in Schedule XIV of
 the Companies Act, 1956 or based on useful life of the asset as
 estimated by the management, whichever is higher.
 
 (b) Cost of leasehold land (except for lease of long tenure) is
 amortised over the period of the lease. Cost of lease hold land where
 lease period is of long tenure and substantial rights of ownership are
 with lessee, is not amortised.
 
 (c) The Capitalised Software costs are amortised using the
 straight-line method over estimated useful life of 3 to 5 years, as
 estimated at the time of capitalization.
 
 5.  Investments
 
 (a) Long term investments are stated at cost. Provision is made to
 recognise any diminution in value, other than that of a temporary
 nature.
 
 (b) Current investments are carried at lower of cost and fair value.
 Diminution in value is charged to the profit and loss account.
 
 6.  Cash Flow Statement
 
 The Cash Flow Statement is prepared under the Indirect Method as set
 out in AS - 3 Cash Flow Statements issued by the Institute of Chartered
 Accountants of India.
 
 7.  Inventories
 
 Inventories are valued at the lower of cost and net realisable value.
 Provision for impairment is made when there is high uncertainty in
 salability of an item. Cost of inventories is determined on the
 following basis:
 
 (a) Cost of raw material and packing material is determined on moving
 average basis.
 
 (b) Work in process is determined on weighted average basis.
 
 (c) Cost of fi nished goods produced is determined on weighted average
 basis.
 
 (d) Cost of fi nished goods (traded) is determined on moving average
 basis.
 
 8.  Revenue Recognition
 
 (a) Revenue from sale of goods is recognised when the signifi cant
 risks and rewards of ownership of goods are transferred to the
 customer. Sales are net of discounts, VAT/sales tax and returns; excise
 duties collected on sales are shown by way of deduction from sales.
 
 (b) Income from services is recognised when the services are rendered
 or when contracted milestones have been achieved.
 
 (c) Revenue from arrangements which includes performance of obligations
 is recognised in the period in which related performance obligations
 are completed.
 
 (d) Export entitlements are recognised as income when right to receive
 credit as per the terms of the scheme is established in respect of the
 exports made and where there is no signifi cant uncertainty regarding
 the ultimate collection of the relevant export proceeds.
 
 (e) Dividend income is recognised when the right to receive dividend is
 established.
 
 (f) Interest income is recognized using the time-proportion method,
 based on rates implicit in the transaction.
 
 (g) Revenue in respect of other income is recognised when a reasonable
 certainty as to its realisation exists.
 
 9.  Employees Retirement and Other Benefits
 
 (a) The accruing liability on account of gratuity (retirement benefit
 in the nature of defi ned benefits plan), is actuarially valued every
 year. The current service cost, interest cost, expected return on plan
 assets and the actuarial gain / loss are expensed to the profit and
 loss account of the year as Employees Costs.
 
 (b) The Companys contribution in case of defi ned contribution plans
 (Provident Fund, Superannuation benefit and other funds ) is charged
 to profit and loss account as and when it is incurred as Employee
 Costs.
 
 (c) Long term compensation plan to employees (being deferred
 compensation paid 12 months or more after the end of the period in
 which it is earned) are expensed out in the period to which the costs
 relate at present value of the benefits under the plan.
 
 (d) The liability for compensated absences and leave encashment is
 provided on the basis of actuary valuation, as at Balance Sheet date.
 
 10.  Government Grants
 
 (a) Government grants are recognised when there is reasonable assurance
 that the grant will be received and all relevant conditions are
 complied with.
 
 (b) Grants received by way of investment subsidy scheme in relation to
 total investment are credited to capital reserve and are treated as
 part of owners fund.
 
 (c) Grants that compensate expenses are recognized on receipt basis and
 are shown as deduction from the related expenses for which they are
 intended to compensate.
 
 11.  Borrowing Costs
 
 Borrowing costs consist of interest and other costs that the Company
 incurs in connection with the borrowing of funds and exchange
 differences arising from foreign currency borrowings to the extent that
 they are regarded as an adjustment to interest costs.
 
 12.  Cenvat Credit
 
 Cenvat (Central value added tax) credit in respect of Excise, Custom
 and Service tax is accounted on accrual basis on purchase of eligible
 inputs, capital goods and services. The balance of cenvat credit is
 reviewed at the end of each year and amount estimated to be
 un-utilisable is charged to the profit and loss account for the year.
 
 13.  Stores and Spares
 
 Stores and spares (other than spares acquired with fixed assets) are
 charged to the profit and loss account as and when purchased.
 
 14.  Software Costs
 
 Expenditure incurred for procuring, developing, improving and
 maintaining software programs are charged to the profit and loss
 account as and when incurred, except when capitalised in accordance
 with Note 3 (c) above.
 
 15.  Research and Development
 
 Research and Development expenses are charged to revenue. Capital
 expenditure on research and development is reported as fixed assets
 under the relevant head. Depreciation on research and development fi
 xed assets is included under depreciation expense.
 
 16.  Leases
 
 Lease rentals in respect of assets taken on operating lease are charged
 to the profit and loss account on accrual and on straight line basis
 over the lease term.
 
 17.  Accounting for Tax
 
 (a) Current Tax is accounted on the basis of estimated taxable income
 for the current accounting year and in accordance with the provisions
 of Income Tax Act, 1961.
 
 (b) Deferred Tax resulting from timing differences between accounting
 and taxable profit for the period is accounted by using tax rates and
 laws that have been enacted or substantially enacted as at the balance
 sheet date. Deferred tax assets are recognised only to the extent there
 is reasonable certainty that the assets can be realized in future. Net
 deferred tax liability is arrived at after setting off deferred tax
 assets.
 
 18.  Foreign Currency Transactions and Balances
 
 (a) Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of the transaction.
 
 (b) The net gain or loss on account of exchange differences arising on
 settlement of foreign currency transactions are recognised as income or
 expense of the period in which they arise.
 
 (c) In case of forward contracts, to which AS 11, The Effects of
 Changes in Foreign Exchange Rate applies, the difference between the
 forward rate and the exchange rate on the date of the contract is
 recognised as income or expense over the life of the contract. Exchange
 differences on such a contract are recognised in the profit and loss
 account in the period in which the exchange rates change. Derivatives
 not covered under AS 11 are marked to market at balance sheet date and
 resulting loss, if any, is recognised in the profit and loss account
 in view of the principle of prudence as per Announcement on Accounting
 of Derivatives by Institute of Chartered Accountants of India dated
 29-Mar-2008.
 
 (d) Monetary assets and liabilities denominated in foreign currencies
 as at the balance sheet date are reported using the rate prevailing as
 on that date. The resultant exchange differences are recognised in the
 profit and loss account. The Company has not exercised the option for
 capitalisation or amortisation of exchange differences on long term
 foreign currency monetary items as provided by notifi cation dated
 31-Mar-2009, issued by the Ministry of Corporate Affairs.
 
 (e) Investments in shares of foreign subsidiaries and other entities
 are expressed in reporting currency at the rates of exchange prevailing
 at the time when the original investments were made.
 
 19.  Provisions, 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.
 Liabilities which are of contingent nature are not provided but are
 disclosed at their estimated amount in the notes forming part of the
 accounts. Contingent assets are neither recognised nor disclosed in the
 financial statements.