A.  BASIS OF PREPARATION OF FINANCIAL STATEMENTS
 
 a) The financial statements are prepared on the historical cost
 convention on accrual basis and in accordance with the generally
 accepted accounting principles and the provisions of the Companies Act,
 1956 and the applicable accounting standards.
 
 b) Financial statements for the year ended 31st March, 2012 have been
 prepared based on revised Schedule VI of the Companies'' Act, 1956.
 The adoption of revised Schedule VI does not impact recognition and
 measurement principles of individual items within this Financial
 Statements.  However, it has significant impact on presentation and
 disclosures made in the Financial Statements. The company has
 accordingly reclassified the previous year''s figures to meet the
 requirements applicable for the current year.
 
 c) Losses in the last financial year have further eroded net worth of
 the company. The losses have arisen primarily due to extremely volatile
 and sharp foreign exchange movements and unabated rise in borrowing
 costs during the year. Despite the perceptible slowdown, the company,
 with its focus on process innovation, development of value added
 products and new applications continue to improve the operating
 performance matrix and return on capital. The modified draft
 rehabilitation proposal submitted by the company is in advanced
 consideration by the Lenders.  Availability of additional long term
 finances to fund the business plan and the planned capital expenditure
 along with the initiatives on operations will enable the company to
 further enrich product mix, enlarge customer base and strengthen the
 revenue streams which in turn, the management believe, would help in
 managing the business risks successfully despite the current uncertain
 economic outlook.
 
 The financial statements have been prepared on going concern basis and
 no adjustment is required to the carrying amount of the assets and
 liabilities.
 
 B.  USE OF ESTIMATES
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles 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 revenue and
 expenses during the reporting period. Differences between the actual
 results and estimates are recognized in the period in which the results
 are known / materialized.
 
 C.  FIXED ASSETS
 
 Fixed Assets are stated at cost (net of cenvat credit availed) less
 accumulated depreciation. The cost of fixed asset includes cost of
 acquisition, taxes, duties, freight, incidental expenses related to
 acquisition, construction and installation, allocated pre-operative
 expenditure and borrowing cost during the preoperational period.
 
 D.  DEPRECIATION
 
 The depreciation on fixed assets is provided on straight line method at
 the rates prescribed in schedule XIV to the Companies Act, 1956.
 Premium on leasehold land is not amortized as the lease is for long
 period.
 
 E.  IMPAIRMENT OF ASSETS
 
 If the carrying amount of fixed assets exceeds the recoverable amount
 on the reporting date, the carrying amount is reduced to the
 recoverable amount. The recoverable amount is measured as the higher of
 the net selling price and the value in use determined by the present
 value of estimated future cash flows.
 
 F.  INVESTMENTS
 
 Long Term Investments are stated at cost less provision for diminution
 in the value which is other than temporary. Current Investments are
 carried at lower of the cost and fair value.
 
 G.  FOREIGN CURRENCY TRANSACTIONS / TRANSLATION
 
 a) Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing on the date of transaction. Any fluctuation on
 account of realisation/payment is accounted as an exchange fluctuation.
 Foreign Currency transactions remaining unsettled at the end of the
 year are converted at the year end rates. Exchange differences are
 dealt within the Statement of Profit and Loss.
 
 b) Forward contracts are entered into to hedge the foreign currency
 risk of the underlying transaction. The premium or discount on all such
 contracts arising at the inception of each contract is amortised as
 income or expense over the life of the contract. Exchange differences
 on forward contracts are recognised as income or expense in the
 Statement of Profit and Loss of the year / period. Any profit or loss
 arising on the cancellation and renewal of forward contract are
 recognised as income or expense for the year / period.
 
 H.  REVENUE RECOGNITION
 
 Sales are recognized when risks and rewards of ownership are passed on
 to the customers. Export sales are accounted for on the basis of date
 of bill of lading. Sales are inclusive of excise duty and net of sales
 tax and sales during trial run. Exports benefits are accounted on
 accrual basis.
 
 I.  INVENTORIES
 
 Raw Materials are valued at lower of cost or net realisable value. Cost
 is determined on weighted average basis.
 
 Stores and Spares are valued at cost determined on weighted average
 basis or net realizable value, except for those which have a longer
 usable life, which are valued on the basis of their remaining useful
 life.
 
 Semi Finished and Finished Goods are valued at lower of cost or net
 realisable value. Cost includes raw material, labour, manufacturing
 expenses, allocable overheads and depreciation. Scrap is valued at net
 realizable value.
 
 J. EMPLOYEE BENEFITS
 
 a) Defined Benefit and Other Long Term Benefit plan :
 
 Post employment and other long term employee benefits are recognized as
 an expense in the statement of profit and loss for the year in which
 the employee has rendered services. The expense is recognized at the
 present value of the amount payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long term benefits are charged to the Statement of
 Profit and Loss.
 
 b) Short Term Employee Benefits:
 
 Short-term employee benefits are recognized as an expense at the
 undiscounted amount in the statement of profit and loss of the year in
 which the related service is rendered.
 
 K. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
 
 A provision is made based on a reliable estimate when it is probable
 that an outflow of resources embodying economic benefits will be
 required to settle an obligation. Contingent liabilities, if material,
 are disclosed in the notes. Contingent assets are not recognized or
 disclosed in the financial statements.
 
 L. BORROWING COSTS
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalized as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for its intended use. All other
 borrowing costs are recognized as an expense in the period in which
 they are incurred.