Basis of Preparation of Financial Statements
 
 The financial statements have been prepared under the historical cost
 convention (except for revaluation of certain fixed assets in the
 earlier year) in accordance with the generally accepted accounting
 principles in India and the provisions of the Companies Act, 1956.
 
 Use of Estimates
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting year. Difference
 between the actual results and estimates are recognised in the year in
 which the results are known/materialised.
 
 Revenue Recognition
 
 Sales represent value of goods sold and revenue from trade related
 activities as reduced by quality claims and rebates but includes excise
 duty and export benefits under DFIA Scheme. Income from services
 represents revenue from IT - Enabled services and job charges rendered
 during the year.
 
 Fixed Assets and Depreciation
 
 Fixed Assets are recorded at cost net of CENVAT, VAT and subsidies less
 depreciation and impairment loss, if any. In earlier years, some of the
 fixed assets have been revalued at their respective fair market value
 and such assets are stated at revalued amount. Depreciation is provided
 on straight-line method at the rates and in the manner prescribed in
 Schedule XIV to the Companies Act, 1956. Depreciation on revalued fixed
 assets is provided on a straght line method over the remaining useful
 life as determined by the valuer. Intangible assets are depreciated on
 straight line basis over the useful life of the assets not exceeding
 ten years. Continuous process plants as defined therein have been taken
 on technical assessment and depreciation is provided accordingly.
 Assets acquired during the year whose cost does not exceed Rs 10,000
 are fully depreciated in the year of acquisition. Depreciation on
 certain assets are provided at a higher rate depending upon their
 useful life.
 
 Depreciation is adjusted in subsequent years to allocate the asset''s
 revised carrying amount after the recognition of an impairment loss, if
 any, on systematic basis over its remaining life. Additional
 depreciation on account of any upward revaluation of assets is charged
 to Business Development Reserve until such reserve exists.
 
 Exchange differences adjusted to the cost of assets are depreciated
 equally over the balance useful life of the assets. Leases relating to
 land are amortized equally over the period of lease. Leased mines are
 depreciated over the estimated useful life of the mine or lease period,
 which ever is lower.
 
 Machinery spares which are used only in connection with an item of
 fixed assets and whose use is not regular in nature are capitalised and
 written off over the estimated useful life of the relevant assets. The
 written down value of such spares is charged to the Profit and Loss
 Account on issue for consumption.
 
 Government Grants
 
 Cash Subsidies relating to specific fixed assets are recorded as
 deduction from the cost of the assets concerned in arriving at its book
 value.
 
 Impairment of Assets
 
 Impairment loss is provided to the extent the carrying amount of assets
 exceeds their recoverable amount. Recoverable amount is the higher of
 an asset''s net selling price or its value in use. Value in use is the
 present value of estimated future cash flow expected to arise from the
 continuing use of an asset and from its disposal at the end of its
 useful life. Net selling price is the amount obtainable from the sale
 of an asset at an arm''s length transaction between knowledgeable
 willing parties, less the costs of disposal.
 
 Investments
 
 Investments are classified into current and long term investments.
 Current investments are stated at the lower of cost or fair value. Long
 term investments are stated at cost. A provision for diminution is made
 to recognize a decline, other than temporary, in the value of long term
 investments. Investments in subsidiary companies are of long term
 strategic value and except as already provided diminution if any in the
 value of these investments is temporary in nature.
 
 Inventories
 
 Inventories comprising Raw Materials and Finished Goods are stated at
 cost or net realizable value, whichever is lower. Cost of Raw Materials
 is arrived at mainly on weighted average basis for every month. The
 cost of Finished Goods include material cost, cost of conversion,
 depreciation, other overheads to the extent applicable and excise duty.
 
 Stock-in-process is valued at cost determined by taking material cost,
 labour charges, and direct expenses.
 
 Stores and Spares are stated at cost less provision, if any, for
 obsolescence. The cost of Loose Tools is written off equally over three
 years.
 
 Foreign Currency Transactions
 
 Transaction denominated in foreign currencies are normally recorded at
 the exchange rate prevailing at the time of the transaction.  Monetary
 items denominated in foreign currencies at the year end are restated at
 year end rates. In case of monetary items which are covered by forward
 exchange contracts, the difference between the year end rate and rate
 on the date of contract is recognized as exchange difference and the
 premium paid on forward contracts is recognized over the life of the
 contract.
 
 Non-monetary foreign currency items are carried at cost. Any income or
 expenses on account of exchange difference either on settlement or on
 translation is recognized in the Profit and Loss Account.
 
 Exchange difference arising on a monetary item that, in substance,
 forms part of an enterprise''s net investments in a non-integral foreign
 operation are accumulated in a foreign currency translation reserve.
 
 Derivative Instruments
 
 Gain or loss in respect of Financial Derivatives are accounted in
 Profit and Loss Account. In addition where there are contracts for
 termination or winding up of financial derivatives, they are also given
 effect in the Profit and Loss Account.
 
 Retirement Benefits
 
 Contribution payable to recognized Provident Fund and Superannuation
 Scheme which are defined contribution scheme is charged to Profit and
 Loss Account. Gratuity and Leave Encashment which are defined benefits
 are accrued based on actuarial valuation as at the Balance Sheet date.
 The Company has opted for a Group Gratuity Scheme and the contribution
 is charged to the Profit and Loss Account each year.
 
 Deferred Revenue Expenditure
 
 In terms of Accounting Standard 26 - Intangible Assets issued by the
 Institute of Chartered Accountants of India, the carrying amounts of
 Deferred Revenue Expenditure are amortized / written off over the
 number of years in which the benefits are expected to accrue to the
 Company as per the accounting policy followed by the Company.
 
 However, expenditure incurred during the year, on such items which do
 not meet the definition of Intangible Assets as per the said Standard 
 are charged off to the Profit and Loss Account except VRS expenditure 
 which is amortized as per the existing Accounting Policy.
 
 Intangible Assets
 
 Intangible Assets are stated at cost of acquisition less accumulated
 amortization/depreciation.
 
 On amalgamation/acquisition the excess of consideration over the value
 of net assets acquired is treated as goodwill arising on amalgamation 
 and is written off over a period of five years.
 
 Borrowing costs
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalized as part of cost of
 such assets. The capitalization rate is the weighted average of the
 borrowing cost applicable to the borrowings of the Company that are
 outstanding during the year. All other borrowing costs are recognized
 as an expense in the year in which they are incurred.
 
 Leases
 
 Leases entered into before 1st April, 2001 are treated as operating
 leases and lease rental paid are charged to Profit and Loss Account.
 Leases entered into on or after 1st April, 2001 are accounted for in
 accordance with Accounting Standard - 19 Leases issued by the Institute
 of Chartered Accountants of India.
 
 Taxation
 
 Income Tax expenses comprises of current tax and deferred tax charge or
 credit. The deferred tax assets and/ or liabilities are calculated by
 applying tax rates and tax laws that have been enacted at the Balance
 Sheet date. Deferred tax assets arising mainly on account of brought
 forward losses and unabsorbed depreciation (due to amalgamation) under
 tax laws, are recognized, only if there is virtual certainty of its
 realization, supported by convincing evidence. Deferred tax assets on
 account of other timing difference are recognized only to the extent
 there is a reasonable certainty of its realization. At each Balance
 Sheet date, the carrying amount of deferred tax assets are reviewed to
 re-assess realization.
 
 Provisions, Contingent Liabilities and Contingent Assets
 
 In accordance with Accounting Standard - 29 Provisions, Contingent
 Liabilities and Contingent Assets, issued by the Institute of Chartered
 Accountants of India, provisions are recognised in the accounts in
 respect of present probable obligations, the amount of which can be
 reliably estimated.
 
 Contingent Liabilities are disclosed in respect of possible obligations
 that arise from past events but their existence is confirmed by the
 occurrence or non occurrence of one or more uncertain future events not
 wholly within the control of the Company.