1.  Basis of preparation of financial statements The financial
 statements have been prepared to comply in all material respects with
 the Accounting Standards notified by Companies (Accounting Standards)
 Rules, 2006, (as amended and as applicable from time to time) and the
 relevant provisions of the Companies Act, 1956. The financial
 statements have been prepared under the historical cost convention on
 going concern basis. The accounting policies have been consistently
 applied by the Company and are consistent with those used in the
 previous year. Accounting policies not specifically referred to
 otherwise are consistent and in consonance with the generally accepted
 accounting principles in India.
 
 2.  Use of estimates The preparation of financial statements in
 conformity with generally accepted accounting principles requires
 management to make estimates and assumptions that affect the reported
 amounts of assets and liabilities and disclosure of contingent
 liabilities at the date of the financial statements that are based upon
 management''s best knowledge of current events and actions. Difference
 between the actual result and estimates are recognised in the period in
 which the results are known/ materialised.
 
 3.  Revenue recognition Sale of goods
 
 Revenue is recognised to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue can be
 reliably measured.
 
 a) Revenue is recognised in respect of export sales on the basis of
 shipment of goods to customer and in respect of domestic sales on
 dispatch from factory. Quality rebates, claims and other discounts are
 disclosed separately.
 
 b) Domestic Sales includes excise duty. However, excise duty on sales
 is reduced from gross turnover for disclosing net turnover.
 
 c) Power generated at the power plants is primarily consumed by the
 manufacturing units and excess power is sold to SEBs which is included
 in the sales as below:
 
 i) Power generated at Hydel Power unit at Tawa and Thermal Power unit
 at Mandideep are transferred to Graphite unit at MPEB rate.
 
 ii) Excess power generated is sold to SEB''s at rate stipulated by
 SEB''s.
 
 d) Inter-divisional sales comprising of sale of power from power plants
 to Graphite unit is reduced from gross turnover in deriving net
 turnover.
 
 e) Income and Export Incentives / benefits are accounted for on accrual
 basis and as per principles given under AS-9 – Revenue Recognition.
 
 Dividends
 
 Revenue in respect of dividends is recognised when the shareholders''
 right to receive payment is established by the balance sheet
 date.
 
 4.  Valuation of inventories a) Finished goods and work in progress are
 valued at lower of historical cost or net realisable value. Cost of
 inventories comprises
 
 of cost of purchase, cost of conversion and other costs incurred in
 bringing them to their respective present location and condition. By
 products are valued at net realisable value. Cost of finished goods and
 by- products includes excise duty. Cost is determined on a weighted
 average basis.
 
 b) Stores, Spares and Raw Materials are valued at lower of historical
 cost or net realisable value. However materials & other items held for
 use in the production of inventories are not written below cost if the
 finished products in which they will be incorporated are expected to be
 sold at or above cost. Cost is determined on a weighted average basis.
 
 c) Historical cost is determined on the basis of weighted average
 method.
 
 d) Obsolete stocks are identified once every year on the basis of
 technical evaluation and are charged off to revenue.
 
 e) Net realisable value is the estimated selling price in the ordinary
 course of business, less estimated costs of completion and estimated
 costs necessary to make the sale.
 
 5.  Investments Investments that are readily realisable and intended to
 be held for not more than a year are classified as current investments.
 All other investments are classified as long-term investments. Current
 investments are carried at lower of cost and fair value. Long- term
 investments are carried at cost individually. However, provision for
 diminution in value is made to recognise a decline other than temporary
 in the value of the investments in case of long term investments.
 
 6.  Fixed assets Fixed assets are stated at historical cost less
 accumulated depreciation and impairment loss if any. Historical cost
 comprises the purchase price (net of CENVAT / duty credits wherever
 applicable) and all direct costs attributable to bringing the asset to
 its working condition for intended use.
 
 7.  Intangible assets Capital Expenditure on purchase and development
 of identifiable non-monetary assets without physical substance is
 recognised as Intangible Assets in accordance with principles given
 under AS-26 – Intangible Assets. These are grouped and separately shown
 under the schedule of Fixed Assets. These are amortised over their
 respective expected useful lives.
 
 8.  Expenses incurred during construction period Preliminary project
 expenditure, capital expenditure, indirect expenditure incidental and
 related to construction / implementation, interest on borrowings to
 finance fixed assets and expenditure on start-up / commissioning of
 assets forming part of a composite project are capitalised upto the
 date of commissioning of the project as the cost of respective assets.
 
 b) i) On Plant & Machinery other than those mentioned at (a) above, on
 straight line method,
 
 ii) On other fixed assets, on written down value method, in the manner
 and as per rates prescribed in Schedule XIV of the Companies Act, 1956.
 
 c) Cost of acquisition & improvement of lease hold land is amortised
 over the lease period.
 
 d) The Thermal Power Plant and certain Plant & Machinery of Graphite
 Unit of the Company have been considered as Continuous Process Plant
 based on technical opinion and depreciation has been provided for
 accordingly.
 
 e) Assets costing upto Rs.5,000 are fully depreciated in the year of
 purchase.
 
 10. Impairment of assets
 
 Assets are grouped at the lowest levels for which there are separately
 identifiable cash flows (i.e. cash generating units). For the purpose
 of assessing impairment at each Balance Sheet date, Assets within a
 Cash Generating Unit are reviewed for impairment wherever events or
 changes in circumstances indicate that the carrying amount may not be
 recoverable. An impairment loss is recognised for the amount at which
 the assets under individual Cash Generating Unit are carried in the
 books exceeds its recoverable amount being the higher of the assets net
 selling price and its value in use. Value in use is based on the
 present value of the estimated future cash flows relating to the
 assets.
 
 Previously recognised impairment losses, relating to assets other than
 goodwill, are reversed where the recoverable amount increases because
 of favourable changes in the estimates used to determine the
 recoverable amount since the last impairment was recognised. A reversal
 of an asset impairment loss is limited to its carrying amount that
 would have been determined (net of depreciation or amortisation) had no
 impairment loss been recognised in prior years.
 
 11. Foreign exchange transactions / translation
 
 a) 1. Export and Import transactions are accounted for at the
 prevailing conversion rates.
 
 2.  Monetary items denominated in foreign currencies (except financial
 instruments designated as Hedging Instruments) and outstanding at the
 year end are translated at year end conversion rates.
 
 3.  Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the profit and loss
 account.
 
 b) Pursuant to The Institute of Chartered Accountants of India (ICAI)
 announcement Accounting for Derivatives” on the early adoption of
 Accounting Standard AS 30 Financial Instruments: Recognition and
 Measurement”, the Company had early adopted the AS-30 in earlier
 financial years, to the extent that such adoption does not conflict
 with existing mandatory accounting standards and other authoritative
 pronouncements, Company law and other regulatory requirements.
 
 The Company uses various financial instruments to hedge its exposure to
 movements in foreign exchange rates. A financial instrument is
 designated as an effective hedge after the management objectively
 evaluates at the inception of each contract as to whether the
 instrument is effective in offsetting the cash flows attributable to
 the hedged risk. The same evaluation is carried out at the end of each
 reporting period. In the absence of such hedge being identified or
 being continued to be identified as an effective hedge, the value
 thereof is taken to profit & loss Account.
 
 Exchange differences relating to cash flow hedge are accumulated in a
 hedging reserve account. Amounts from hedging reserve account are
 transferred to profit & loss account when
 
 i) the forecast transaction materialises,
 
 ii) the hedging instrument expires or is sold, terminated or exercised
 (except for the replacement or rollover of a hedging instrument into
 another hedging instrument where such replacement or rollover is part
 of the Company''s hedging strategy),
 
 iii) the hedge no longer meets the criteria for hedge accounting in AS
 30,
 
 iv) the Company revokes the designation.
 
 Hedge effectiveness of financial instruments designated as Hedging
 instruments is evaluated at the end of each financial reporting period.
 
 12. Research and development
 
 Revenue Expenditure on research and development including salaries,
 consumables and power & fuel is charged to Profit and Loss Account
 under respective heads of expenditure. Capital expenditure is shown as
 addition to fixed assets.
 
 13. Employees benefits Expenses and liabilities in respect of employee
 benefits are recorded in accordance with Accounting Standard 15 –
 Employee Benefits.
 
 a) Provident fund & ESI The Company makes contribution to statutory
 provident fund and Employee State Insurance in accordance with
 Employees Provident Fund and Miscellaneous Provisions Act, 1952 and
 Employee State Insurance Act, 1948 which is a defined contribution plan
 and contribution paid or payable is recognised as an expense in the
 period in which services are rendered by the employee.
 
 b) Gratuity Gratuity is a post employment benefit and is in the nature
 of a defined benefit plan. The liability recognised in the balance
 sheet in respect of gratuity is the present value of the defined
 benefit/obligation at the balance sheet date less the fair value of
 plan assets, together with adjustment for unrecognised actuarial gains
 or losses and past service costs. The defined benefit/obligation is
 calculated at or near the balance sheet date by an independent actuary
 using the projected unit credit method. Actuarial gains and losses
 arising form past experience and changes in actuarial assumptions are
 charged or credited to the Profit and Loss Account in the year to which
 such gains or losses relate.
 
 c) Leave Encashment Liability in respect of leave encashment becoming
 due or expected after the balance sheet date is estimated on the basis
 of an actuarial valuation performed by an independent Actuary using the
 projected unit credit method.
 
 d) Superannuation Benefit The Company makes contribution to
 superannuation fund which is a post employment benefit in the nature of
 a defined contribution plan & contribution paid or payable is
 recognised as an expense in the period in which services are rendered
 by the employee.
 
 e) Other Short Term Benefits Expense in respect of other short term
 benefits is recognised on the basis of the amount paid or payable for
 the period during which services are rendered by the employee.
 
 14. Leases Where the Company is the lessee
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of the ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognised as an expense
 in the Profit and Loss account on a straight line basis over the lease
 term.
 
 Where the Company is the lessor
 
 Assets subject to operating leases are included in fixed assets. Lease
 income is recognised in the Profit and Loss Account on a straight-line
 basis over the lease term. Costs, including depreciation are recognised
 as an expense in the Profit and Loss Account.  Initial direct costs
 such as legal costs, brokerage costs, etc. are recognised immediately
 in the Profit and Loss Account.
 
 15. Segment accounting & reporting Identification of segments
 
 The Company''s operating businesses are organised and managed separately
 according to the nature of products manufactured and services provided,
 with each segment representing a strategic business unit that offers
 different products.
 
 Allocation of common costs
 
 Common allocable costs are allocated to each segment on reasonable
 basis.
 
 Unallocated items
 
 Unallocable assets and liabilities represents the assets and
 liabilities not allocable to any segment as identified as per the
 Accounting Standard.
 
 Segment policies
 
 The Company prepares its segment information in conformity with the
 accounting policies adopted for preparing and presenting
 the financial statements of the Company as a whole.
 
 16. Taxes on income
 
 Tax expense comprises of current and deferred. Provision for Current
 Tax is made in accordance with the provisions of Income Tax Act, 1961.
 
 In accordance with Accounting Standard AS-22 ''Accounting for Taxes on
 Income'' as notified by Companies Accounting Standard Rules, 2006
 Deferred Tax Liability/ Asset arising from timing differences between
 book and income tax profits is accounted for at the current rate of tax
 to the extent these differences are expected to crystallise in later
 years. However, deferred Tax Assets are recognised only if there is a
 reasonable/ virtual certainty of realisation thereof. Deferred tax is
 measured based on the tax rates and the tax laws enacted or
 substantively enacted at the balance sheet date.
 
 17. Government grant & subsidies
 
 Grants and subsidies from the government are recognised when there is
 reasonable assurance that the grant/subsidy will be received and all
 attaching conditions will be complied with.
 
 When the grant or subsidy relates to an expense item, it is recognised
 as income over the periods necessary to match them on a systematic
 basis to the costs, which it is intended to compensate.
 
 Where the grant or subsidy relates to an asset, its value is deducted
 from the gross value of the asset concerned in arriving at the carrying
 amount of the related asset.
 
 18. Borrowing cost
 
 Borrowing costs directly attributable to the acquisition, construction
 or production of an asset that necessarily takes a substantial period
 of time to get ready for its intended use or sale are capitalised as
 part of the cost of the respective asset. All other borrowing costs are
 expensed in the period they occur. Borrowing costs consist of interest
 and other costs that an entity incurs in connection with the borrowing
 of funds.
 
 19. Provisions, contingent liabilities and contingent assets
 
 A provision is recognised when there is a present obligation as a
 result of a past event and it is probable that an outflow of resources
 embodying economic benefits will be required to settle the obligation
 and a reliable estimate can be made of the amount of obligation. A
 contingent liability is recognised for:
 
 a) a present obligation that arises from past events but is not
 recognised as a provision because either the possibility that an
 outflow of resources embodying economic benefits will be required to
 settle the obligation is remote or a reliable estimate of the amount of
 the obligation cannot be made.
 
 b) a possible obligation that arises from past events and the existence
 of which will be confirmed only by the occurrence or non- occurrence of
 one or more uncertain future events not wholly within the control of
 the Company.
 
 c) Contingent assets are neither accounted for nor disclosed in the
 financial statements.
 
 20.  Miscellaneous expenditure
 
 Expenditure incurred on issuance of foreign currency convertible bonds
 are being amortised over a period of five years from the date of the
 issue of said bonds being the tenor of such bonds.
 
 21. Earning per share
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders (after
 deducting preference dividends and attributable taxes) by the weighted
 average number of equity shares outstanding during the period. Partly
 paid equity shares are treated as a fraction of an equity share to the
 extent that they were entitled to participate in dividends relative to
 a fully paid equity share during the reporting period. The weighted
 average number of equity shares outstanding during the period is
 adjusted for events of bonus issue, bonus element in a rights issue to
 existing shareholders, share split, and reverse share split
 (consolidation of shares).
 
 For the purpose of calculating diluted earnings per share, the net
 profit or loss for the period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 22. Cash and cash equivalents
 
 Cash and cash equivalents for the purposes of cash flow statement
 comprise cash at bank and in hand and cheques in hand.