i.  Basis of Accounting
 
 The financial statements have been prepared under the Historical Cost
 Convention on accrual basis and in accordance with the generally
 accepted accounting principles (GAAP) and Accounting Standards as
 specif ed in Companies (Accounting Standards) Rules, 2006 as prescribed
 by the Central Government
 
 Pursuant to the announcement of the Institute of Chartered Accountants
 of India (ICAI) on Accounting for Derivatives on the early adoption
 of Accounting Standard (AS-30) Financial Instruments: Recognition and
 Measurement, the Company has early adopted the standard w.e.f 1 April
 2007 to the extent that the adoption does not conf ict with the
 existing mandatory accounting and other authoritative pronouncements,
 Company Law and other regulatory requirements.
 
 ii.  Use of Estimates
 
 The preparation of the financial statements in accordance with the
 generally accepted accounting principles requires the management to
 make estimates and assumptions that af ect the reported amounts of
 assets and liabilities, disclosure of contingent liabilities as at the
 date of the financial statements and the reported amount of revenue and
 expenses of the year. Actual results could dif er from those estimates.
 Any revision of such accounting estimate is recognized prospectively in
 current and future periods.
 
 iii.  Fixed Assets
 
 (a) Fixed assets are stated at original cost of acquisition /
 installation (net of cenvat credit availed) net of accumulated
 depreciation, amortization and impairment losses except freehold land
 which is carried at cost.  The cost of fixed assets includes cost of
 acquisition, construction and installation, taxes, duties, freight,
 other incidental expenses related to the acquisition, trial run
 expenses (net of revenue) and borrowing cost incurred during
 pre-operational period.
 
 (b) Capital Work-In-Progress is stated at the amount expended upto the
 date of Balance Sheet including pre- operative expenditure and advances
 on capital account.
 
 (c) Cost of Software includes license fees, cost of implementation and
 system integration and capitalized as intangible assets in the year in
 which the relevant software is put to use.
 
 iv.  Borrowing Costs
 
 Borrowing costs attributable to the acquisition or construction of
 qualifying assets are capitalized as part of cost of such assets. All
 other borrowing costs are charged to revenue.
 
 v.  Depreciation
 
 (a) Depreciation on fixed assets is provided on Straight Line M ethod
 at the rates prescribed in Schedule XIV to the Companies Act, 1956
 except for certain Plant and Machinery which are depreciated on the
 basis of estimated useful lives of 13 – 15 years. The rates of
 depreciation derived from these estimated useful lives are higher than
 those prescribed in Schedule XIV to the Companies Act, 1956.
 
 (b) For determining the appropriate rate of depreciation on Plant and
 Machinery, continuous process plant has been identif ed on the basis of
 technical opinion by the Company / Expert.
 
 (c) Software is amortized over a period of f ve years from the date of
 its use based on Management''s estimate of useful life.
 
 vi.  Investments
 
 Investments intended to be held for more than a year, from the date of
 acquisition, are classif ed as long-term and are stated at cost.
 Provision for diminution in value of investments is made to recognize a
 decline other than temporary in nature. Current Investments are stated
 at cost or fair value, whichever is lower.
 
 vii.  Revenue Recognition
 
 (a) Revenue from sale of goods is recognized on transfer of signif cant
 risks and rewards of ownership to the customers, which is generally on
 dispatch of goods. Export Sales are accounted for on the basis of date
 of bill of lading. Gross Sales include excise duty, value added tax,
 incentive, adjustments for price variation, liquidated damages and
 exchange rate variations related to export realization.
 
 (b) Export benefits: Duty Entitlement Pass Book (DEPB), Focus Market
 and Focus Product are accounted on accrual basis. Target Plus /Duty
 Free Entitlement Certif cate scheme of EXIM policy are recognized when
 utilized.
 
 (c) Revenue from Services is recognized when the services are
 completed.
 
 (d) Dividend income is recognized when the right to receive the
 dividend is unconditional.
 
 viii. Inventories
 
 Inventories are valued at lower of cost and net realizable value. The
 basis of determining cost for various categories of inventories is as
 follows;
 
 (i) Raw Materials, Stores and Spares – Moving weighted average basis.
 
 (ii) Work / Goods in Process and Finished Goods – Cost of Direct
 Material, Labour and other manufacturing expenses.
 
 (iii) Excise duty liability is included in the valuation of closing
 inventory of Finished Goods.
 
 ix.  Foreign Currency Transactions
 
 (a) Foreign exchange transactions are converted into Indian Rupees at
 the prevailing rate on the date of transactions. Current monetary
 assets and liabilities are translated at the exchange rate prevailing
 on the last day of the year. Non monetary items are carried at cost.
 
 (b) Gains or losses arising out of remittance / translations at the
 year- end are credited / debited to the profit and loss account and
 where it relates to acquisition of fixed assets, are adjusted to the
 carrying cost of such assets except treatment as per amendment to AS-11
 ef ective till March 31, 2012 (Refer note no 5 (b)).
 
 (c) Premium / discount on forward exchange contracts not relating to 
 firm commitments or highly probable forecasted transactions and not
 intended for trading or speculation purposes is amortized as income or
 expense over the life of the contract.
 
 x.  Derivative Instruments and Hedge Accounting
 
 The Company uses foreign currency forward contracts to hedge its risk
 associated with foreign currency fluctuations relating to certain firm
 commitments and forecasted transactions. The Company designates these
 hedging instruments as cash f ow hedges and applying the recognition
 and measurement principles set out in Accounting Standard 30 Financial
 Instruments: Recognition and Measurement (AS 30). The gain or loss on
 the ef ective hedges is recorded in Hedging Reserve Account until the
 transaction is complete. The gain or loss is accounted in profit and
 Loss Account upon completion of the transaction or when the hedge
 instrument expires or terminates or ceases to qualify for hedge
 accounting.
 
 xi.  Employee benefits
 
 a) Short term employee benefits are recognized as an expense at the
 undiscounted amount in the profit and Loss account of the year in which
 the related services are rendered.
 
 b) Post employment and other long term benefits are recognized as an
 expense in the profit and loss account of the year in which the
 employee has rendered services. The expense is recognized at the
 present value of the amounts payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long-term benefits are charged to the profit and
 Loss account.
 
 c) Payments to def ned contribution retirement benefit schemes are
 charged as expenses as and when they fall due.
 
 xii.  Employee Stock Options Scheme
 
 In respect of employee stock options granted pursuant to the Company''s
 Stock Option Scheme, the intrinsic value of the options (excess of
 market price of the share over the exercise price of the option) is
 treated as discount and accounted as employee compensation cost over
 the vesting period.
 
 xiii. Accounting for Taxes on Income
 
 (a) Current tax is determined as the amount of tax payable in respect
 of taxable income of the year computed as per the Income Tax Act, 1961.
 
 (b) Deferred tax is recognized subject to consideration of prudence, on
 timing dif erence, being the dif erence between taxable income and
 accounting income that originate in one period and are capable of
 reversal in one or more subsequent periods and measured using
 prevailing enacted or substantively enacted tax rates.
 
 xiv. Operating Lease
 
 Lease of assets under which all the risks and rewards of ownership are
 ef ectively retained by the lessor are classif ed as operating leases.
 Lease payments under operating leases are recognized as an expense on
 accrual basis in accordance with the respective lease agreements.
 
 xv.  Research and Development
 
 Capital expenditure on research and development is treated in the same
 manner as fixed assets. Revenue expenditure on research and development
 is charged to profit and Loss Account.
 
 xvi. Impairment of Assets
 
 At each Balance Sheet date, the Company reviews the carrying amount of
 fixed assets to determine whether there is any indication that those
 assets suf ered impairment loss. If any such indication exists, the
 recoverable amount of the assets is estimated in order to determine the
 extent of impairment loss. The recoverable amount is higher of the net
 selling price and value in use, determined by discounting the estimated
 future cash flows expected from the continuing use of the asset to
 their present value.