1.  Basis of Accounting
 
 The accompanying financial statements have been prepared under the
 historical cost convention, in accordance with Indian Generally
 Accepted Accounting Principles (GAAP) and the provisions of the
 Companies Act, 1956 (The Act).
 
 2.  Use of Estimates
 
 The preparation of financial statements in conformity with Generally
 Accepted Accounting Principles require estimates and assumptions to be
 made that affect the reported amounts of assets and liabilities and
 disclosure of contingent liabilities on the date of financial
 statements and the reported amounts of revenues and expenses during the
 reporting period. Actual results could differ from these estimates and
 differences between actual results and estimates are recognized in the
 periods in which the results are known/materialize.
 
 3.  Fixed Assets and Depreciation
 
 Fixed Assets are stated at their cost of acquisition or construction
 less accumulated depreciation and impairment losses.
 
 Costs of acquisition comprise all costs incurred to bring the assets to
 their location and working condition up to the date the assets are put
 to use. Costs of construction are composed of those costs that relate
 directly to specific assets and those that are attributable to the
 construction activity in general and can be allocated to specific
 assets up to the date the asset are put to use.
 
 Depreciation on assets is provided, pro-rata for the period of use, by
 the Straight Line Method (SLM) at the SLM rates prescribed in Schedule
 XIV to the Act.
 
 An asset is considered as impaired in accordance with Accounting
 Standard 28 on Impairment of Assets, when at balance sheet date there
 are indications of impairment and the carrying amount of the asset, or
 where applicable the cash generating unit to which the asset belongs,
 exceeds its recoverable amount (i.e. the higher of the assets net
 selling
 
 price and value in use). The carrying amount is reduced to the
 recoverable amount and the reduction is recognized as an impairment
 loss in the profit and loss account.
 
 For the purpose of determining the appropriate depreciation rates to be
 applied to plant and machinery, continuous process plant and machinery
 has been identified on the basis of technical assessment made by the
 Company.
 
 Leasehold land is amortized over the period of the lease, except where
 the lease is convertible to freehold land under lease agreements at
 future dates at no additional cost.
 
 The Company capitalizes software where it is reasonably estimated that
 the software has an enduring useful life. Software is depreciated over
 an estimated useful life of 3 to 5 years.
 
 In respect of mining projects, the Company capitalizes cost of
 acquisition of mining concessions and all costs incurred till mining
 reserves are proved, such as license fees, direct exploration costs and
 indirect incidental costs. Once the determination of mining reserves is
 made, the following conditions must be met in order for these costs to
 remain capitalized;
 
 a.  The economic and operating viability of the project is assessed
 determining whether sufficient reserves exist to justify further
 capitalized expenditure for commercial exploration of the reserves, and
 
 b.  Further exploration and development activity is under way or firmly
 planned for the near future.
 
 These will be amortized once the mine commences commercial production.
 All expenditure related to unsuccessful efforts are charged to the
 profit and loss account when so established.
 
 4.  Investments
 
 Investments are classified as current or long term in accordance with
 Accounting Standard 13 on Accounting for Investments.
 
 Current investments are stated at lower of cost and fair value.  Any
 reduction in the carrying amount and any reversals of such reductions
 are charged or credited to the profit and loss account.
 
 Long term investments are stated at cost. Provision for diminution is
 made to recognize a decline, other than temporary, in the value of such
 investments.
 
 5.  Revenue Recognition
 
 Revenue is recognized when it is earned and no significant uncertainty
 exists as to its realization or collection.
 
 Revenue from sale of goods is recognized on delivery of the products,
 when all significant contractual obligations have been satisfied, the
 property in the goods is transferred for a price, significant risks and
 rewards of ownership are transferred to the customers and no effective
 ownership is retained. Sales are net of sales tax/Value Added Tax.
 Export turnover includes related export benefits. Excise duty recovered
 is presented as a reduction from gross turnover.
 
 Income from Certified Emission Reductions (CER) is recognized as income
 on sale of CERs.
 
 6.  Inventories
 
 Inventories are valued at the lower of cost and net realizable value.
 Cost of inventories comprise all costs of purchase, costs of conversion
 and other costs incurred in bringing the inventories to their present
 location and condition. Cost is determined by the weighted average cost
 method.
 
 Excise duty related to finished goods stock is included under Materials
 (Schedule 14).
 
 7.  Borrowing Costs
 
 Borrowing costs attributable to the acquisition or construction of
 qualifying assets, as defined in Accounting Standard 16 on
 
 Borrowing Costs are capitalized as part of the cost of such asset up
 to the date when the asset is ready for its intended use. Other
 borrowing costs are expensed as incurred.
 
 Interest income earned is disclosed separately, and reduced from Net
 Finance charges (Schedule 17).
 
 8.  Employee Benefits
 
 Employee Benefits such as salaries, allowances, non-monetary benefits
 and employee benefits under defined contribution plans such as
 provident and other funds, which fall due for payment within a period
 of twelve months after rendering service, are charged as expense to the
 profit and loss account in the period in which the service is rendered.
 
 Employee Benefits under defined benefit plans, such as compensated
 absences and gratuity which fall due for payment after a period of
 twelve months from rendering service or after completion of employment,
 are measured by the projected unit credit method, on the basis of
 actuarial valuations carried out by third party actuaries at each
 balance sheet date. The Companys obligations recognized in the balance
 sheet represents the present value of obligations as reduced by the
 fair value of plan assets, where applicable.
 
 Actuarial gains and losses are recognized immediately in the profit and
 loss account.
 
 9.  Foreign Currency Transactions
 
 Foreign currency transactions are recorded at the exchange rates
 prevailing on the date of the transaction.
 
 Monetary foreign currency assets and liabilities (monetary items) are
 reported at the exchange rate prevailing on the balance sheet date.
 Exchange differences relating to long term monetary items are dealt
 with in the following manner:
 
 i. Exchange differences relating to long-term monetary items, arising
 during the year, in so far as they relate to the acquisition of a
 depreciable capital asset are added to/ deducted from the cost of the
 asset and depreciated over the balance life of the asset.
 
 ii. In other cases such differences are accumulated in a Foreign
 Currency Monetary Item Translation Difference Account and amortized to
 the profit and loss account over the balance life of the long-term
 monetary item, however that the period of amortization does not extend
 beyond 31 March 2011.
 
 All other exchange differences are dealt with in the profit and loss
 account.
 
 Non-monetary items such as investments are carried at historical cost
 using the exchange rates on the date of the transaction- also refer
 note A-4 of Schedule 18.
 
 10.  Derivative Financial Instruments
 
 The Company enters into derivative financial instruments such as
 foreign exchange forward contracts, interest rate swaps and currency
 options to manage its exposure to interest rate and foreign exchange
 risks.
 
 Derivatives are initially recognized at fair value at the date a
 derivative contract is entered into and are subsequently re-measured to
 their fair value at each balance sheet date.
 
 The Company designates certain derivatives as either hedges of the fair
 value of recognised assets or liabilities (fair value hedges) or hedges
 of highly probable forecast transactions or hedges of foreign currency
 risk of firm commitments (cash flow hedges). The Company does not enter
 into derivative contracts for trading or speculative purposes.
 
 A derivative is presented under Current Assets, Loans and Advances
 (Schedule 10) or Current Liabilities and Provisions (Schedule 11).
 
 Changes in the fair value of derivatives that are designated and
 qualify as fair value hedges are recorded in the profit and loss
 account immediately, together with any changes in the fair value of the
 hedged item that are attributable to the hedged risk. The change in the
 fair value of the hedging instrument and the change in the hedged item
 attributable to the hedged risk are recognized in the same line of the
 profit and loss account relating to the hedged item.
 
 Changes in the fair value of derivatives that are designated and
 qualify as cash flow hedges are deferred in a Hedging Reserve
 Account. The gain or loss relating to the ineffective portion is
 recognized immediately in profit and loss account. Amounts deferred in
 the Hedging Reserve Account are recycled in the profit and loss account
 in the periods when the hedged item is recognized in the profit and
 loss account, in the same line as the hedged item.
 
 Hedge accounting is discontinued when the Company revokes the hedging
 relationship, the hedging instrument expires or is sold, terminated, or
 exercised, or no longer qualifies for hedge accounting. In case of fair
 value hedges the adjustment to the carrying amount of the hedged item
 arising from the hedged risk is amortized to the profit and loss
 account from that date. In case of cash flow hedges any cumulative gain
 or loss deferred in the Hedging Reserve Account at that time is
 retained and is recognized when the forecast transaction is ultimately
 recognized in the profit and loss account. When a forecast transaction
 is no longer expected to occur, the cumulative gain or loss that was
 deferred is recognized immediately in the profit and loss account.
 
 11.  Income Tax
 
 Income taxes are accounted for in accordance with Accounting Standard
 22 on Accounting for Taxes on Income. Taxes comprise both current and
 deferred tax.
 
 Current tax is measured at the amount expected to be paid/ recovered
 from the revenue authorities, using the applicable tax rates and tax
 laws. Minimum Alternate Tax (MAT) credit entitlement available under
 the provisions of Section 115 JAA of the Income Tax Act, 1961 is
 recognized to the extent that the credit will be available for
 discharge of future normal tax liability.
 
 The tax effect of the timing differences that result between taxable
 income and accounting income and are capable of reversal in one or more
 subsequent periods are recorded as a deferred tax asset or deferred tax
 liability. Deferred tax assets and liabilities are recognized for
 future tax consequences attributable to timing differences. They are
 measured using the substantively enacted tax rates and tax laws.
 
 The carrying amount of MAT credit and deferred tax assets at each
 balance sheet date is reduced to the extent that it is no longer
 reasonably certain that sufficient future taxable income will be
 available against which the assets can be realized.
 
 Where certain expenses or credits which are otherwise required to be
 charged to the profit and loss account are adjusted directly to
 reserves in accordance with a court order or as permitted by
 Law/Accounting Standards, in such cases the tax benefits or charge,
 arising from the admissibility or taxability of such expenses or income
 for tax purpose is also recognized in the reserves.
 
 Tax on distributed profits payable in accordance with the provisions of
 Section 1150 of the Income Tax Act, 1961 is in accordance with the
 Guidance Note on Accounting for Corporate Dividend Tax regarded as a
 tax on distribution of profits and is not considered in determination
 of profits for the year.
 
 12.  Earnings Per Share
 
 The Company reports basic and diluted Earnings per share
 
 (EPS) in accordance with Accounting Standard 20 on Earnings per
 Share. Basic EPS is computed by dividing the net profit or loss for
 the year attributable to equity shareholders by the weighted average
 number of equity shares outstanding during the year. Diluted EPS is
 computed by dividing the net profit or loss for the year attributable
 to equity shareholders by the weighted average number of equity shares
 outstanding during the year as adjusted for the effects of all dilutive
 potential equity shares, except where the results are anti-dilutive.
 
 13.  Operating Leases
 
 Operating lease receipts and payments are recognized as income or
 expense in the profit and loss account on a straight-line basis over
 the lease term.
 
 14.  Cash Flow Statement
 
 The Cash Flow Statement is prepared by the indirect method set out in
 Accounting Standard 3 on Cash Flow Statements and presents the cash
 flows by operating, investing and financing activities of the Company.
 
 Cash and Cash equivalents presented in the Cash Flow Statement consist
 of cash on hand and unencumbered, highly liquid bank balances.
 
 15.  Securities Expenses
 
 Expenses on issue of securities are written off to the Securities
 Premium Account in accordance with Section 78 of the Act.
 
 Premium payable on redemption of bonds is provided for over the life of
 the bonds. The Securities Premium Account is applied in providing for
 premium on redemption in accordance with Section 78 of the Act. On
 conversion of the bonds to equity the provision for the redemption
 premium is reversed.
 
 16.  Stock Based Compensation
 
 The compensation cost of stock options granted to employees is
 calculated using the intrinsic value of the stock options. The
 compensation expense is amortized uniformly over the vesting period of
 the option.
 
 17.  Contingent Liabilities
 
 Contingent liabilities as defined in Accounting Standard 29 on
 Provisions, Contingent Liabilities and Contingent Assets are
 disclosed by way of notes to the accounts. Disclosure is not made if
 the possibility of an outflow of future economic benefits is remote.
 Provision is made if it is probable that an outflow of future economic
 benefits will be required to settle the obligation.