1 Basis of Accounting
 
 The Financial Statements are prepared under the historical cost
 convention, on the accrual basis of accounting and comply with the
 provisions of Companies Act, 1956, accounting principles generally
 accepted in India and Accounting Standards issued by The Institute of
 Chartered Accountants of India (ICAI) to the extent applicable. There is
 change in Accounting policy of the company in the current year in order
 to comply with the requirement of Revised Schedule VI. Operating Cycle
 of the company is less than 12 months , hence period of twelve months
 has been considered as the operating cycle of the company and the same
 is considered for bifurcation of current & non current items. In order
 to comply with the Revised Schedule VI, previous years'' figures have
 been regrouped/reclassified .
 
 2 Revenue Recognition
 
 a) Sales including export sales and trading sales are recognized when
 goods are dispatched from the factory and are recorded at net of
 shortages, claims settled, rate differences, rebate allowed to
 customers.
 
 b) Export Sales are booked at the rate on the date of transaction and
 the resultant gain or loss on realization or on translation is
 accounted as Foreign Exchange Rate Fluctuation and is dealt with in
 the statement of Profit and Loss Account.
 
 3 Fixed Assets and Depreciation
 
 Fixed assets, other than Plant & Machinery, are valued and stated at
 cost less accumulated depreciation calculated on the basis of Written
 Down Value Method on prorata basis and at the rates prescribed in
 Schedule XIV to the Companies Act, 1956. In case of Plant & Machinery,
 depreciation has been provided on Straight Line Method (SLM) basis.
 Depreciation of  96,613/- has been debited to Revaluation Reserve
 Account out of total depreciation of  12,70,026/-.
 
 4 Inventories
 
 Inventories of Raw Materials, Stores and Spares, Packing material,
 Coal, Goods in process and Finished goods are stated at Cost or Net
 Realizable Value whichever is lower, as certified by Management. Cost
 comprises of cost of purchases, cost of conversion and other costs
 incurred in bringing the inventories to their present location and
 condition. Costing formula used is First-in-First-out (FIFO).
 
 5 Investments
 
 Investments are classified as Long Term Investments. Long term
 investments are stated at Cost. Provision is made for diminution in the
 value of Long term Investments to recognize a decline, if any other
 than temporary in nature.
 
 6 Use of Estimates
 
 The preparation of financial statements requires management to make
 estimates and assumptions that affect the reported amount of assets,
 liabilities, revenue and expenses and disclosure of contingent
 liabilities on the date of financial statements. The recognition,
 measurement, classification or disclosure of an item or information in
 the financial statements has been made relying on these estimates.
 
 7 Impairment of Assets
 
 Consideration is given at each Balance Sheet date to determine whether
 there is any indication of impairment of the carrying amounts of the
 Company''s assets. If any indication exists, an asset''s recoverable
 amount is estimated.  An impairment loss is recognized wherever the
 carrying amount of an assets exceeds its recoverable amount. The
 recoverable amount is the greater of the net selling price and value in
 use.
 
 8 Employee Benefits
 
 a) Short term employee benefits are recognized as an expense at
 undiscounted amount in the Profit & Loss Account of the year in which
 the related service is rendered.
 
 b) Post employment and other long term employee benefits are recognized
 as an expense in the Profit & Loss Account in the year of payment.