A.  BASIS OF PREPARATION
 
 These financial statements have been prepared in accordance with the
 generally accepted accounting principles in India under the historical
 cost convention on accrual basis. These financial statements have been
 prepared to comply in all material aspects with the accounting
 standards notified under Section 211(3C) [Companies (Accounting
 Standards) Rules, 2006, as amended] and the other relevant provisions
 of the Companies Act, 1956 (The ''Act'').
 
 All assets and liabilities have been classified as current or
 non-current as per the Company''s normal operating cycle and other
 criteria set out in the Schedule VI to the Companies Act, 1956. Based
 on the nature of products and the time between the acquisition of
 assets for processing and their realisation in cash and cash
 equivalents, the Company has ascertained its operating cycle as 12
 months for the purpose of current/non-current classification of assets
 and liabilities.
 
 B.  CHANGE IN ACCOUNTING POLICY
 
 The Company has exercised the option as set out in paragraph 46A of the
 Accounting Standard 11 on ''The Effects of Changes in Foreign Exchange
 Rates'' (AS 11), pursuant to the Notification dated 29th December, 2011.
 Accordingly, exchange differences arising on restatement of long-term
 foreign currency loans obtained for the purpose of acquisition of
 depreciable capital assets, which were until now being recognised in
 the Profit and Loss Statement, is adjusted in the cost of depreciable
 asset, which would be depreciated over the balance life of the
 asset.[Refer Note 1(F) below]
 
 Had the Company continued to follow the earlier accounting policy, net
 loss on foreign currency transactions / translation would have been
 higher by Rs.1,665.98 Lakhs and depreciation on tangible fixed assets
 would have been lower by Rs.5.87 Lakhs, with corresponding decrease in
 profit before tax for the year by Rs.1,660.11 Lakhs.  Also, Net Block
 of Tangible Fixed Assets and Capital Work-in-Progress relating to
 Graphite and Carbon Segment as at 31st March, 2012 would have been
 lower by Rs. 898.93 Lakhs and Rs.761.18 Lakhs respectively.
 
 C.  FIXED ASSETS:
 
 (a) Fixed Assets (comprising both tangible and intangible assets) are
 stated at cost of acquisition including taxes, duties, freight and
 other incidental expenses related to acquisition and installation, and
 inclusive of borrowing cost, where applicable, and adjustments for
 exchange differences referred to in Note 1(F) below. Pre-operative
 expenses for major projects are also capitalised, where appropriate.
 
 Subsequent expenditure related to an item of fixed assets are added to
 its book value only if they increase the future benefits from the
 existing asset beyond its previously assessed standard of performance.
 
 (b) Depreciation includes amortisation. Depreciation on tangible fixed
 assets including those utilised in Research and Development activities,
 is provided on straight-line basis in accordance with Schedule XIV to
 the Companies Act, 1956. Leasehold Land is amortised on straight-line
 basis over the primary lease period. Intangible assets (Computer
 Software) are amortised on a straight-line basis over a period of five
 years.
 
 (c) Machinery Spares, which are irregular in use and associated with
 particular asset, are treated as fixed asset and the cost is amortised
 over its utility period.
 
 (d) Impairment Loss, if any, is recognised wherever the carrying amount
 of the fixed assets exceeds the recoverable amount (i.e. the higher of
 the assets'' net selling price and value in use).
 
 D.  INVESTMENTS:
 
 (a) Investments that are readily realisable and are intended to be held
 for not more than one year from the date on which such investments are
 made, are classified as current investments. All other investments are
 classified as long-term investments. Long-term Investments are stated
 at cost less write down for any diminution, other than temporary, in
 carrying value. Current Investments are stated at lower of cost and
 fair value. Fair value is determined on the basis of realisable or
 market value.
 
 (b) Earnings from Investments, where appropriate, are accrued or taken
 into revenue in full on declaration or receipts.
 
 E.  INVENTORIES
 
 Inventories are valued at lower of cost and net realisable value. The
 costs are ascertained under weighted average formula. The cost of
 finished goods and work-in-progress comprises raw materials, direct
 labour, other direct costs and related production overheads. Net
 realisable value is the estimated selling price in the ordinary course
 of business, less the estimated costs of completion and the estimated
 costs necessary to make the sale.
 
 F.  FOREIGN CURRENCY TRANSACTIONS
 
 Transactions in foreign currencies are recorded at exchange rates
 prevailing on the date of the transaction. Monetary items denominated
 in foreign currency are restated at the exchange rate prevailing on the
 Balance Sheet date.  Foreign currency non-monetary items carried in
 terms of historical cost are reported using the exchange rate at the
 date of transactions.
 
 With regard to long-term foreign currency monetary items obtained for
 the purpose of acquisition of depreciable capital assets, exchange
 differences are adjusted in the cost of depreciable asset, which would
 be depreciated over the balance life of the asset and in other cases,
 such difference is accumulated in a Foreign Currency Monetary Item
 Translation Difference Account and amortised over the balance period of
 such long term asset/liability.
 
 Exchange differences arising on settlement of transactions and/or
 restatements of all other monetary items are recognised in the Profit
 and Loss Statement.
 
 G.  DERIVATIVE INSTRUMENTS
 
 The Company uses derivative financial instruments such as forward
 exchange contracts, currency swaps etc. to hedge its risks associated
 with foreign currency fluctuations relating to the underlying
 transactions, highly probable forecast transactions and firm
 commitments. In respect of Forward Exchange Contracts, covered under AS
 11, the premium or discount arising at the inception of such contract
 is amortised as expense or income over the life of contract.
 
 Other derivative contracts outstanding at the Balance Sheet date are
 marked to market and resulting loss, if any, is provided for in the
 financial statements.
 
 Any profit or losses arising on cancellation of instruments are
 recognised as income or expenses for the period.
 
 H.  REVENUE
 
 Revenue is recognised on completion of sale of goods and rendering of
 services. Sales are inclusive of excise duty less discounts as
 applicable. Export entitlements are recognised after completion of
 related exports on prudent basis.
 
 I.  CONSTRUCTION CONTRACTS
 
 Revenue in respect of construction contracts is recognised on the basis
 of percentage of completion method.  Stages of completion are
 determined based on completion of a physical proportion of the contract
 work. Anticipated loss on such contracts is provided for in the period
 of incurrence.
 
 J.  BORROWING COSTS
 
 Borrowing costs, if any, attributable to the acquisition and
 construction of qualifying assets are added to the cost up to the date
 when such assets are ready for their intended use. Other borrowing
 costs are recognised as expense in the period in which these are
 incurred.
 
 K.  RESEARCH AND DEVELOPMENT EXPENDITURE (R & D)
 
 Revenue expenditure on R & D is expensed in the period in which it is
 incurred. Capital expenditure on R & D is capitalised.
 
 L.  EMPLOYEE BENEFITS:
 
 (a) Short-term Employee Benefits
 
 The undiscounted amount of Short-term Employee Benefits expected to be
 paid in exchange for the services rendered by employees is recognised
 during the period when the employee renders the service.
 
 (b) Post Employment Benefit Plans
 
 Contributions under Defined Contribution Plans payable in keeping with
 the related schemes are recognised as expense for the year.
 
 For Defined Benefit Plans, the cost of providing benefits is determined
 using the Projected Unit Credit Method, with actuarial valuations being
 carried out at each Balance Sheet date. Actuarial gains and losses are
 recognised in full in the Profit and Loss Statement for the period in
 which they occur. Past service cost is recognised immediately to the
 extent that the benefits are already vested, and otherwise is amortised
 on a straight-line basis over the average period until the benefits
 become vested. The retirement benefit obligation recognised in the
 Balance Sheet represents the present value of the defined benefit
 obligation as adjusted for unrecognised past service cost, and as
 reduced by the fair value of Plan Assets. Any asset resulting from this
 calculation is limited to the present value of any economic benefits
 available in the form of refunds from the plan or reductions in future
 contributions to the plan.
 
 (c) Other Long-term Employee Benefits (unfunded)
 
 The cost of providing Other Long-term Employee Benefits is determined
 using Projected Unit Credit Method, with actuarial valuation being
 carried out at each Balance Sheet date. Actuarial gains and losses and
 past service cost are recognised immediately in the Profit and Loss
 Statement for the period in which they occur.  Other long-term employee
 benefit obligation recognised in the Balance Sheet represents the
 present value of related obligation.
 
 M.  PROVISIONS AND CONTINGENT LIABILITIES
 
 The Company recognises a provision when there is a present obligation
 as a result of a past event that probably requires an outflow of
 resources and a reliable estimate can be made of the amount of the
 obligation. A disclosure for a contingent liability is made when there
 is a possible obligation or a present obligation that probably will not
 require an outflow of resources or a present obligation where reliable
 estimate of which cannot be made. Where there is a possible obligation
 or a present obligation and the likelihood of outflow of resources is
 remote, no provision or disclosure for contingent liability is made.
 
 N.  TAXATION
 
 Current tax is provided as the amount of tax payable in respect of
 taxable income for the year, measured using the applicable tax rules
 and laws.
 
 Deferred tax is provided on timing differences between taxable income
 and accounting income measured using tax rates and tax laws that have
 been enacted or substantively enacted by the Balance Sheet date.
 
 Deferred tax assets are recognised only if there is a
 virtual/reasonable certainty, as applicable, in keeping with Accounting
 Standard 22 on ''Accounting for Taxes on Income'' that there will be
 sufficient future taxable income available to realise such assets.
 Deferred tax assets are reviewed for the appropriateness of their
 respective carrying amount at each Balance Sheet date.
 
 Minimum Alternative 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 during the specified period. Such assets is reviewed
 at each Balance Sheet date and the carrying amount of the MAT credit
 asset is written down to the extent there is no longer a convincing
 evidence to the effect that the Company will pay normal income tax
 during the specified period.