A) Basis of preparation of Financial Statements
 
 These financial statements have been prepared on a going concern basis
 to comply in all material respects with the applicable accounting
 standards notified under section 21 1(3C) of the Companies Act, 1956
 and the relevant provisions of the Companies Act, 1956.
 
 B) Fixed Assets
 
 i. Fixed assets are stated at cost of acquisition (except in case of
 revaluation of certain assets where these are stated at revalued
 amounts) less accumulated depreciation. Cost includes taxes, duties
 (excluding excise duty, service tax and VAT for which Cenvat/VAT credit
 is available), freight and other incidental expenses relating to
 acquisition and installation. In respect of new projects, all direct
 expenses including borrowing costs incurred upto the date of
 commencement of commercial production or when related asset is put to
 use are capitalized.
 
 ii. Discarded fixed assets are stated at lower of net book value (at
 the time of discarding of assets) and net realisable value. Wherever,
 the net book value of the assets can not be reasonably determined, it
 is stated at net realisable value.
 
 C) Recognition of Income/Expenditure
 
 i. Income from sale of products and services is recognised on despatch
 of goods or when the services are rendered and includes income from
 third party exports and export incentives. Gross sales are stated at
 contractual realisable values inclusive of excise duty and are net of
 sales tax and trade discounts.
 
 ii. Income from carbon credits is recognized on the delivery of the
 carbon credits to the customers'' account as evidenced by the receipt of
 confirmation of execution of delivery instructions.
 
 iii. Revenue from fixed price construction contracts is recognized on
 the percentage of completion method, measured by the proportion that
 contract costs incurred for work performed upto the reporting date bear
 to the estimated total contract cost. Contract costs for this purpose
 include:
 
 a.  Costs that relate directly to the specific contract;
 
 b.  Costs that are attributable to contract activity in general and can
 be allocated to the contract; and
 
 c.  Such other costs as are specifically chargeable to the customer
 under the terms of contract.
 
 Foreseeable losses, if any, are provided for immediately.
 
 iv. Off-season expenses relating to sugar and bagasse based
 co-generation units, other than interest, selling and non- operating
 expenses/income incurred/earned during off- season, are deferred and
 are absorbed over the duration of the ensuing operating season.
 
 v. Income/Expenditure relating to prior periods and prepaid expenses
 which do not exceed Rs 10,000/- in each case, are treated as
 Income/Expenditure of current year.
 
 D) Foreign Currency Transactions
 
 i. Transactions denominated in foreign currencies are recorded at the
 exchange rate prevailing at the date of transaction.
 
 ii. Foreign currency monetary items (including forward contracts) are
 translated at year end rates. Exchange differences arising on
 settlement of transactions and translation of monetary items (including
 forward contracts] are recognised as income or expense in the year in
 which they arise.
 
 iii. The premium or discount on forward exchange contracts not relating
 to firm commitments or highly probable forecast transactions and not
 intended for trading or speculative purposes is amortised as expense or
 income over the life of the contracts.
 
 iv. In respect of derivative contracts relating to firm commitments or
 highly probable forecast transactions, provision is made for mark to
 market losses, if any, at the balance sheet date. Gains, if any, on
 such transactions are not recognized till settlement.
 
 E) Inventories
 
 i. Inventories of raw materials, components, stores and spares are
 valued at lower of cost and net realisable value.  By-products used as
 raw material are valued at transfer cost. Cost for the purpose of
 valuation of raw materials and components, stores and spares is
 considered on the following basis:
 
 ii. Finished goods and Work-in-progress are valued at lower of cost and
 net realisable value. The cost of finished goods and work-in-progress
 includes raw material costs, direct cost of conversion and
 proportionate allocation of indirect costs incurred in bringing the
 inventories to their present location and condition. Excise duty is
 included in the value of finished goods.
 
 iii. Patterns, Loose tools, Jigs and Fixtures are written-off equally
 over three years.
 
 iv. By-products (excluding those used as raw materials) and scrap are
 valued at estimated net realisable value.
 
 F) Depreciation
 
 i. Depreciation on fixed assets is provided on the straight line method
 at the rates specified in Schedule XIV of the Companies Act, 1 956
 other than the following assets which are depreciated at higher rates
 on the straight line basis over their estimated useful economic life as
 follows:
 
 ii.  Cost of Leasehold Land is amortised over the lease period.
 
 iii. Fixture and Fittings and improvements to leasehold buildings not
 owned by the Company are amortised over the lease period or estimated
 useful life of such fixture, fittings and improvements, whichever is
 lower.
 
 iv. The additional depreciation on increase in cost on account of
 revaluation of certain assets, is adjusted against the Revaluation
 Reserve and is thus not charged to Profit & Loss Account for the year.
 
 G) Research & Development
 
 Revenue expenditure on research & development is charged under
 respective heads of account. Capital expenditure on research and
 development is included as part of cost of fixed assets and depreciated
 on the same basis as other fixed assets.
 
 H) Investments
 
 Investments are valued at cost inclusive of expenses incidental to
 their acquisition. Long term investments are carried at cost. Provision
 is made for diminution in value, if such diminution is, in the opinion
 of the management, other than temporary in nature. Current investments
 are valued at lower of cost and fair value.
 
 I) Employee Benefits
 
 i.  Short Term Employee Benefits:
 
 All employee benefits payable wholly within 12 months after the end of
 the period in which the employees render the related services are
 classified as short term employee benefits and are recognized as
 expense in the period in which the employee renders the related
 service. The Company recognizes the undiscounted amount of short term
 employee benefits expected to be paid (including compensated absences)
 in exchange for services rendered as a liability.
 
 ii.  Long Term Employee Benefits:
 
 a).  Defined Contribution Plans
 
 Defined contribution plans are retirement benefit plans under which the
 Company pays fixed contributions to separate entities (funds) or
 financial institutions or state managed benefit schemes. The Company''s
 contribution to defined contribution plans is recognized in the Profit
 & Loss account in the financial year to which they relate.  The Company
 operates the following defined contribution plans.
 
 - Provident Fund Plan & Employee Pension Scheme:
 
 The Company makes specified monthly contributions towards Employee
 Provident Fund/ Employee Pension Scheme to fund administered and
 managed by the Government of India / funds (set up by the Company and
 administered through Trusts). The Company has an obligation to make
 good the shortfall, if any, between the return on investments of the
 Trusts and notified interest rate.
 
 - Employee State Insurance
 
 The Company makes specified monthly contributions towards Employees
 State Insurance Scheme.
 
 - Superannuation Scheme
 
 The Company has taken Group Superannuation Policies with Life Insurance
 Corporation of India for superannuation payable to specific employees.
 Contribution towards aforesaid fund is charged to the Profit & Loss
 account in the financial year to which it relates.  b).  Defined
 Benefit Plans
 
 Defined benefit plans are retirement benefit plans under which the
 Company pays certain defined benefits to the employees at the time of
 their retirement/ resignation/ death based on rules framed for such
 schemes. Company operates following defined benefit plans:
 
 - Gratuity
 
 The Company provides for gratuity obligations through a defined benefit
 retirement plan (the ''Gratuity Plan''] covering all employees. The
 Gratuity Plan provides a lumpsum payment to vested employees at
 retirement or termination of employment based on the respective
 employee salary and years of employment with the Company. The Company
 provides for its liability under the Gratuity Plan based on actuarial
 valuation.
 
 - Earned Leaves / Sick Leaves
 
 The Company provides for the liability at year end on account of
 unveiled accumulated leaves on the basis of actuarial valuation.
 
 iii.  Employee Stock Options:
 
 Compensation cost in respect of stock options granted to eligible
 employees is recognised using the intrinsic value of the stock options
 and is amortised over the vesting period of such options granted.  
 
 J) Borrowing costs
 
 Borrowing costs attributable to the acquisition of qualifying assets
 are capitalised upto the period such assets are ready for its intended
 use. All other borrowing costs are charged to Profit & Loss Account.
 
 K) Government Grants Recognition
 
 Government grants are recognised where: 
 
 i.  There is reasonable assurance of complying with the conditions
 attached to the grant.
 
 ii.  Such grant/benefit has been earned and it is reasonably
 certain that the ultimate collection will be made.  Presentation in
 Financial Statements: 
 
 i.  Government grants relating to specific fixed assets are adjusted
 with the value of the fixed assets.
 
 ii.  Government grants in the nature of promoters'' contribution, i.e.
 which have reference to the total investment in an undertaking or by
 way of contribution towards total capital outlay, are credited to
 capital reserve.  iii. Government grants related to revenue items are
 either adjusted with the related expenditure/revenue or shown under
 Other Income, in case direct linkage with cost/income is not
 determinable.
 
 L) Accounting for assets acquired under lease
 
 In respect of plant & machinery acquired on lease before 1st April
 2001, the principal value of the lease (including sale value on the
 expiry of lease), representing fair value of the assets, is amortised
 over technically estimated lives of such assets and unamortised value
 of such lease rentals are stated separately under Fixed Assets. Lease
 rentals of other assets, acquired before 1st April 2001 are charged off
 in the period in which these accrue.  
 
 M) Taxes on Income
 
 i. Current tax on income is determined on the basis of taxable income
 computed in accordance with the applicable provisions of the Income
 Tax Act, 1961.
 
 ii. Deferred tax is recognised for all timing differences between the
 accounting income and the taxable income for the year, and quantified
 using the tax rates and laws enacted or substantively enacted as on the
 Balance Sheet date.
 
 iii. Deferred tax asset is recognised and carried forward only to the
 extent that there is a reasonable certainty that sufficient future
 taxable income will be available against which such deferred tax assets
 can be realized, except in the case of unabsorbed depreciation or carry
 forward of losses under the Income Tax Act, 1961, deferred tax asset is
 recognized only to the extent that there is virtual certainty supported
 by convincing evidence that sufficient future taxable income will be
 available against which such deferred tax assets can be realized.
 
 iv. Minimum Alternate Tax (MAT) credit is recognized as an asset only
 when and to the extent there is convincing evidence that the Company
 will be in a position to avail of such credit under the provisions of
 the Income Tax Act, 1961.
 
 N) Intangible Assets
 
 Intangible assets are recognised as per the criteria specified in
 Accounting Standard (AS) 26 Intangible Assets and are amortised on
 straight line basis as follows:
 
 O) Impairment of Asset
 
 Impairment of individual assets/cash generating unit (a group of assets
 that generates identified independent cash flows) is identified using
 external and internal sources of information and impairment loss if
 any, is determined and recognised in accordance with the Accounting
 Standard (AS) 28 Impairment of Assets.
 
 P) Provisions, Contingent liabilities and Contingent assets Provisions
 are recognised for liabilities that can be measured only by using a
 substantial degree of estimation, if 
 
 i) the Company has a present obligation as a result of a past event.
 
 ii) a probable outflow of resources is expected to settle the
 obligation and
 
 iii) the amount of the obligation can be reliably estimated.
 Reimbursement expected in respect of expenditure required to settle a
 provision is recognised only when it is virtually certain that the
 reimbursement will be received.  Contingent Liability is disclosed in
 the case of i) a present obligation arising from a past event, when it
 is not probable that an outflow of resources will be required to settle
 the obligation.
 
 ii) a possible obligation, unless the probability of outflow of
 resources is remote.  Contingent Assets are neither recognised
 nor disclosed.