1.  Basis of preparation of Financial Statements
 
 The financial statements are prepared under historical cost convention
 on accrual basis of accounting and in accordance with generally
 accepted accounting principles.
 
 2.  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 period.
 
 Difference between the actual results and estimates are recognised in
 the period in which the results materialise or are known.
 
 3.  Fixed assets
 
 Fixed assets are recorded at cost of acquisition or construction. They
 are stated at historical cost less accumulated depreciation and
 impairment loss, if any.
 
 4.  Depreciation
 
 Depreciation on fixed assets is provided for on straight-line basis in
 accordance with the Companies Act, 1956 (refer note 5 of schedule 17).
 
 5.  Impairment loss
 
 Impairment loss is provided to the extent that the carrying amount(s)
 of assets exceed their recoverable amount(s). Recoverable amount is the
 higher of an assets net selling price and its value in use. Value in
 use is the present value of estimated future cash- flows expected to
 arise from the continuing use of the asset and from its disposal at the
 end of its useful life. Net selling price is the amount obtainable from
 sale of the asset in an arms length transaction between knowledgeable,
 willing parties, less the costs of disposal.
 
 6.  Investments
 
 Long-term investments are carried at cost. Provision is made to
 recognize a diminution, other than temporary, in the carrying amount of
 long-term investments.
 
 7.  Inventories
 
 Items of inventory are valued at cost or net realisable value, which
 ever is lower. Cost is determined on the following basis:
 
 Raw materials, stores and spares - Weighted average
 
 Process stocks and finished goods - At material cost plus appropriate
 value of overheads
 
 Trading goods - FIFO
 
 8.  Retirement and other employee benefits
 
 a.  The Company contributes towards Provident fund, Family pension fund
 and Superannuation fund which are defined contribution schemes.
 Liability in respect thereof is determined on the basis of contribution
 required to be made under the statutes / rules.
 
 b.  Gratuity liability, a defined benefit scheme, and provision for
 leave encashment is accrued and provided for on the basis of actuarial
 valuations made at the year end.
 
 9.  Foreign currency transactions
 
 Transactions in foreign currency are recorded at the original rates of
 exchange in force at the time the transactions are effected. At the
 year-end, monetary items denominated in foreign currency and forward
 exchange contracts are reported using closing rates of exchange.
 Exchange differences arising thereon and on realisation / payment of
 foreign exchange are accounted, in the relevant year, as income or
 expense.
 
 In case of forward exchange contracts, or other financial instruments
 that are in substance forward exchange contracts, the premium or
 discount arising at the inception of the contracts is amortised as
 expense or income over the life of the contracts. Gains / losses on
 settlement of transactions arising on cancellation / renewal of forward
 exchange contracts are recognised as income or expense.
 
 10. Borrowing costs
 
 Borrowing costs that are attributable to the acquisition, construction
 or production of qualifying assets are capitalised as part of the cost
 of such assets. A qualifying asset is one that necessarily takes a
 substantial period of time to get ready for its intended use. All other
 borrowing cost are charged to revenue.
 
 11. Revenue recognition
 
 Revenue (income) is recognised when no significant uncertainty as to
 its determination or realisation exists. Turnover includes carbon
 credits which are recognised on delivery thereof or sale of rights
 therein as the case may be, in terms of the contracts with the
 respective buyers.
 
 12. Taxes on income
 
 Tax expense comprises of both current and deferred tax at the
 applicable enacted / substantively enacted rates. Current tax
 represents the amount of income-tax payable / recoverable in respect of
 the taxable income / loss for the reporting period. Deferred tax
 represents the effect of timing differences between taxable income and
 accounting income for the reporting period that originate in one period
 and are capable of reversal in one or more subsequent periods.
 
 13. Provisions and contingencies
 
 A provision is recognised when the Company has a legal and constructive
 obligation as a result of a past event, for which it is probable that
 cash outflow will be required and a reliable estimate can be made of
 the amount of the obligation. A contingent liability is disclosed when
 the Company has a possible or present obligation where it is not
 probable that an outflow of resources will be required to settle it.
 Contingent assets are neither recognised nor disclosed.
 
 14. Employee stock option
 
 Measurement and disclosure of the employee share-based payment plans is
 done in accordance with the Guidance Note on Accounting for Employee
 Share-based Payments, issued by The Institute of Chartered Accountants
 on India. Compensation expense is amortised over the vesting period of
 the option on a straight line basis. The Company measures compensation
 cost relating to employee stock options using the intrinsic value
 method.
 
 15. Intangible assets
 
 Intangible assets are stated at cost of acquisition less accumulated
 amortisation. Computer Software which are capitalised, are amortised
 over a period of 6 years on straight-line basis.