AS-1 Disclosure of Accounting Policies
 
 The accounts have been prepared using historical cost convention and on
 the basis of going concern, with revenues recognised, expenses
 accounted on accrual basis, unless otherwise stated and in accordance
 with applicable accounting standards.
 
 Use of Estimates:
 
 The preparation of financial statements requires management to make
 estimates and assumptions of some of the reported amounts of assets and
 liabilities, the disclosure of contingent assets and liabilities on the
 date of the financial statements and amounts of revenues and expenses
 during the period reported.
 
 Captive Plantations
 
 Standing Crops are valued at the total amount of expenditure incurred
 (including land development expenditure), adjusted for failed
 plantation costs and incidental revenue realised.
 
 AS-2 Valuation of Inventories
 
 a) Inventories excluding wood from captive plantation are valued at
 cost or net realisable value, whichever is lower. Cost for the purpose
 of valuation is determined by using the weighted average cost, net of
 taxes and duties eligible for credit, except note books where stocks
 are valued at lower of cost and net realisable value on FIFO Basis.
 
 b) Wood from captive plantation is valued at cost (incurred till date
 of felling) or market price whichever is less.
 
 c) Non Moving Stores & Spares.
 
 Stores and spares not drawn for use for more than three years as at the
 end of the year are charged to revenue. Such stores and spares are
 carried at nil value in the books and in the year of issue, charged to
 revenue at nil value.
 
 AS-3 Cash Flow Statements
 
 Cash Flow Statement has been prepared under Indirect Method. Cash and
 Cash Equivalents comprise Cash in Hand, Current and Other Accounts
 (including Fixed Deposits) held with Banks.
 
 AS-4 Events occurring after the Balance Sheet Date
 
 a) Assets and Liabilities are adjusted for events occurring after the
 balance sheet date that provide additional evidence to assist the
 estimation of amounts relating to conditions existing at the balance
 sheet date.
 
 b) Dividends, which are proposed / declared by the Company after the
 Balance Sheet date but before the approval of the Financial Statements,
 are adjusted.
 
 AS-5 Net Profit or Loss for the Period, Prior Period Items and Changes
 in Accounting Policies
 
 Significant items of Extra-ordinary Items, and Prior Period Incomes and
 Expenditures, are accounted in accordance with Accounting Standard 5.
 
 AS-6 Depreciation Accounting
 
 a) Depreciation on fixed assets is provided on straight-line basis at
 the rates and in the manner prescribed in Schedule XIV to the Companies
 Act, 1956.
 
 b) Depreciation on additions / deductions in respect of fixed assets
 are charged pro-rata from / upto the date in which the asset is
 available for use / disposal
 
 c) Depreciation on addition to assets (which are to supplement the
 usage of the parent asset) is provided as detailed below: -
 
 i) In respect of additions to existing Buildings, Depreciation has been
 provided prospectively over the residual life of the parent asset from
 the beginning of the year in which such additions are made.
 
 ii) In respect of additions to existing Plant and Machinery,
 Depreciation has been provided prospectively over the residual useful
 life of the parent asset from the beginning of the year in which such
 addition is made.
 
 iii) In respect of rebuild / upgrade of machinery leading to
 substantial capacity expansion, depreciation is provided on straight
 line basis at the rates and in the manner provided in Schedule XIV to
 the Companies Act, 1956.
 
 d) In respect of modernisation programme leading to replacement of
 existing assets, depreciation is provided over the remaining useful
 life of the assets getting replaced.
 
 e) In respect of Individual Assets costing less than Rs.5000/-, full
 depreciation has been provided in the year of addition.
 
 f) In respect of specific spares
 
 Machinery spares specific to an item of fixed asset costing Rs.3 lakh
 and above per individual unit are treated as addition to fixed asset
 and depreciation provided over the remaining useful life of the parent
 asset. In the year of issue, written down value of such spares are
 charged as depreciation. Spares acquired during the year and issued for
 use during the year is treated as addition to fixed asset and 100%
 depreciation is provided.
 
 g) Pending renewal of agreements with some of the sugar mills,
 depreciation on fixed assets at such Offsite is provided on
 straight-line basis at the rates and in the manner prescribed in
 Schedule XIV to the Companies Act, 1956 considering the continued
 arrangement for procurement of bagasse from sugar mills.
 
 AS-9 Revenue Recognition
 
 a) Sales are accounted net of excise duty, sales tax and sales returns.
 
 b) Other items of revenue are recognised in accordance with the
 Accounting Standard (AS-9).  Accordingly, where there are uncertainties
 in the ascertainment /realisation of income such as interest from
 customers (upon factors such as financial condition of the person from
 whom the same is to be realised) / Liquidated damages recovered from
 suppliers / contractors, the same is not accounted for.
 
 c) Liquidated damages and penalties recovered from
 suppliers/contractors, in relation to fixed assets are credited to
 profit and loss account unless the delay has resulted in extra cost of
 assets, in which case the same are adjusted towards the carrying cost
 of the respective asset.
 
 d) CDM benefits are recognized in the profit and loss account upon
 issue of CER by the Executive Board of CDM and Execution of Emission
 Reduction Purchase Agreement with the Buyer.
 
 AS-10 Accounting for Fixed Assets
 
 Fixed Assets
 
 a) Fixed Assets are stated at cost of construction or acquisition less
 accumulated depreciation. Costs attributable to bring the fixed assets
 to a working condition are capitalised net of taxes and duties eligible
 for credit.
 
 b) Additional compensation for lands acquired from farmers under Land
 Acquisition Act, 1894 is capitalised with the cost of the land in the
 year of payment based on final award of compensation by appropriate
 authority.
 
 c) Operating software is capitalised with the related fixed assets.
 
 d) Machinery spares specific to an item of fixed asset are treated as
 addition to fixed asset.
 
 Capital Work-in-Progress
 
 Advances paid for acquisition of fixed assets and cost of assets (net
 of taxes and duties eligible for credit) not put to use before the
 year-end are disclosed under Capital Work-in-Progress.
 
 In respect of identified projects, expenditure during construction
 period net of related income is included under capital work in progress
 and the same is allocated to the respective fixed assets that are
 capitalised.
 
 Assets are capitalised when they are ready for use / put to use.
 
 AS-11 Accounting for Effects in Foreign Exchange Rates
 
 a) Foreign currency monetary items such as loans, current assets and
 current liabilities are initially recognized at the exchange rate on
 the date of the transaction. These items are reported at the closing
 rate on the balance sheet date.
 
 b) Forward exchange contracts or other financial instruments, that are
 in substance, a forward exchange contracts entered into for hedging the
 monetary items are initially recognized at the exchange rate on the
 date of inception of the Forward Contract. The company does not enter
 into any forward contracts for trading or speculative purposes.
 
 c) The Premium or Discount arising at the inception of such a Forward
 Contract is amortised as expense or income over the life of the
 contract.
 
 d) Forward contracts are reported at the closing rate on the date of
 the balance sheet.
 
 e) Exchange differences arising on reporting the above items at rates
 different from which they were initially recorded during the period or
 reported in the previous financial statements are recognized as income
 / expenditure in the Profit & Loss Account.
 
 f) Contingent liabilities denominated in foreign currency at the
 balance sheet date are disclosed using the closing rate.
 
 AS-12 Accounting for Government Grants
 
 Capital Grants relating to specific fixed assets are reduced from the
 gross value of the respective fixed assets and other Capital Grants are
 treated as Capital Reserve.
 
 Government grants relating to revenue are recognised on accrual and are
 shown under other income.
 
 AS-13 Accounting for Investments
 
 a) Long-term investments are valued at cost. Provision, if any, is made
 to recognise a decline other than a temporary, in the value of
 long-term investments. Decline in the value of long-term investments is
 determined initially ten years from the date of its purchase and
 thereafter once in a period of five years.
 
 b) Current investments are valued at lower of cost and fair market
 value.  AS-15 Employee Benefits
 
 a) Short term employee benefits are charged at the undiscounted amount
 to Profit and Loss Account in the year in which the related service is
 rendered.
 
 b) Defined benefit plan / long term compensated absence
 
 i) Provident Fund
 
 The Company pays fixed contribution to provident fund at pre -
 determined rates to a separate irrevocable trust approved by the
 Commissioner of Income Tax, which invests the fund in permitted
 securities. The contribution to the fund for the period is recognised
 as expenses and is charged to Profit and Loss Account. While the
 obligation to the Company is limited to such fixed contribution, as per
 the rules of Employees'' Provident Fund (EPF) any deficiency in the rate
 of interest on the contribution based on its return on investment as
 compared to the rate declared for Employees'' Provident Fund by the
 Government under para 60 of the Employees'' Provident Fund Act is to be
 met by the Company. Also as per the rules, any deficiency in the fair
 value of plan assets backing the Provident Fund accumulations compared
 to the amount of such accumulations is to be met by the company.
 
 ii) Gratuity, Employee benefit Scheme and long term compensated
 absence:
 
 Liabilities in respect of defined benefit plan in the form of gratuity,
 Long term compensated balances and employee benefit scheme are
 determined based on actuarial valuation made by an independent actuary
 using projected unit credit method as at the balance sheet date and are
 unfunded.
 
 c) Defined Contribution
 
 Defined contributions towards retirement benefits in the form of
 Pension and Superannuation Fund for the year are charged to Profit and
 Loss Account.
 
 AS-16 Borrowing cost
 
 Borrowing costs, attributable to qualifying assets, are capitalised up
 to the date the asset is ready for use / put to use. All other
 borrowing costs are charged to revenue.
 
 AS-17 Segment Reporting
 
 a) The company has identified two business segments viz. Paper and
 Energy. Revenue and expenses have been identified to respective
 segments on the basis of operating activities of the enterprise.
 Revenue and expenses which relate to the enterprise as a whole and are
 not allocable to a segment on a reasonable basis have been disclosed as
 unallocable revenue and expenses.
 
 b) Segment assets and liabilities represent assets and liabilities in
 respective segments. Other assets and liabilities that cannot be
 allocated to a segment on a reasonable basis have been disclosed as
 unallocable assets and liabilities.
 
 c) Inter segment revenue / expenditure is recognized at cost.
 
 d) Geographical segments have been considered for Secondary Segment
 Reporting by treating sales in India and foreign currency as reportable
 geographical segments.
 
 AS-18 Related Party Transactions
 
 Remuneration to Key Managerial Personnel, other than Independent
 Non-executive Directors, is disclosed as ''Related Party Transactions''
 in the Notes to Accounts.
 
 AS-19 Leases
 
 Rentals are expensed with reference to lease terms and other
 considerations.  AS-20 Earnings per Share
 
 a) Basic Earnings per share is computed with reference to the Weighted
 Average number of Shares, based on monthly rests.
 
 b) Diluted Earnings per share is computed based on fully paid-up value
 of the Shares issued, as if Calls-in- Arrears has been received.
 
 AS-22 Accounting for Taxes on Income
 
 Income-tax expense is accounted in accordance with AS 22 - Accounting
 for taxes on Income which includes current taxes and deferred taxes.
 Deferred taxes reflect the impact of current year timing differences
 between taxable income and accounting income for the year and reversal
 of timing differences of earlier years. Deferred tax assets are
 recognised only to the extent that there is reasonable certainty that
 sufficient future taxable income will be available.
 
 AS-26 Intangible Assets
 
 General:
 
 a) Intangible assets are stated at cost less accumulated amortisation.
 
 b) Computer software being intangible asset is amortised over a period
 of four years.  Research and Development:
 
 a) Expenditure relating to capital items are treated as fixed assets
 and depreciated at applicable rates.
 
 b) Expenditure on Research is recognised as an expense under respective
 natural heads, as and when incurred.
 
 AS-28 Impairment of Assets
 
 The Company determines the Impairment of Assets based on Cash
 Generating Units. For this purpose, the Cash Generating Units have been
 based on segments of operations, viz., ''Paper & Pulp'' and ''Energy''. The
 impairment loss will be provided if the carrying amount exceeds
 recoverable amount.
 
 AS-29 Provisions, Contingent Liabilities and Contingent Assets
 
 a) A present obligation, which could be reliably estimated, is provided
 for in the accounts, if it is probable that an outflow of resources
 embodying economic benefits will be required for its settlement.
 
 b) Contingent Liabilities are disclosed by way of notes in the Balance
 Sheet.
 
 c) Contingent Assets are neither recognised nor disclosed.
 
 AS-30 Accounting of Derivative Financial Instruments
 
 The Company uses foreign currency forward contracts to hedge its risks
 associated with foreign currency fluctuations relating to certain firm
 commitments and forecast transactions. The Company designates these
 hedging instruments as cash flow hedges applying the recognition and
 measurement principles set out in the Accounting Standard 30 Financial
 Instruments : Recognition and measurement (AS - 30).
 
 Hedging instruments are initially measured at fair value, and are
 remeasured at subsequent reporting dates.  Changes in the fair value of
 these derivatives that are designated and effective as hedges of future
 cash flows are recognized directly in hedge reserve account and the
 ineffective portion is recognized immediately in profit and loss
 account.
 
 Changes in the fair value of derivative financial instruments that do
 not qualify for hedge accounting are recognized in profit and loss
 account as they arise.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated, or exercised, or no longer qualifies for hedge
 accounting. If a hedged transaction is no longer expected to occur, the
 net cumulative gain or loss recognized in hedge reserve account is
 transferred to profit and loss account for the period.
 
 The gain / loss on the hedging instrument in respect of a forecasted
 transaction / firm commitment in respect of a non financial asset /
 liability is recognized in the hedge reserve account. Upon the forecast
 transaction / firm commitment subsequently resulting in the recognition
 of a non financial asset / liability, the associated gain / loss
 recognized in the hedge reserve account is transferred to the initial
 cost / carrying cost of the non financial asset / liability.
 
 Premium on forward exchange contracts designated as hedging instruments
 is amortized as expense/income or adjustment to initial carrying cost
 of the hedged item over the life of the contract.