1. Significant Accounting Policies:
 
 (a) Accounting convention
 
 The financial statements are prepared under the historical cost
 convention and in accordance with the applicable Accounting Standards
 issued by The Institute of Chartered Accountants of India
 
 (b) Fixed assets and depreciation
 
 i) Cost of leasehold land is being amortized over the period of lease
 
 ii) Depreciation on all assets, except Vehicles, is provided on the
 Straight Line Method in accordance with the provisions of Section
 205(2)(b) of the Companies Act,1956 and on Vehicles on the Written
 Down Value Method in accordance with the provisions of Section 205
 (2)(a) of the Companies Act 1956 in the manner and at the rates
 specified in Schedule XIV of the Companies Act, 1956 Continuous process
 plants, as defined in the said schedule, are identified as such based
 on a technical assessment, and depreciation is provided accordingly
 Cost of fixed assets for the purpose of computation of depreciation is
 taken net of Modvat/Cenvat credits Depreciation on additions to fixed
 assets is provided on a pro-rata basis from the month of acquisition or
 installation Depreciation on assets sold, discarded, demolished or
 scrapped is provided upto the month in which the said asset is sold,
 discarded, demolished or scrapped
 
 iii) Cost of roads, though constructed by the Company, ownership of
 which belongs to Government/Local Authorities, is being amortized at
 the rates of depreciation specified for roads in Schedule XIV to the
 Companies Act, 1956
 
 iv) Assets of small value i e Rs 5000 or less and of non-durable nature
 are written off in the year of purchase
 
 (c) Inventories
 
 i) Coal, Fuel, Packing Materials and Stores & Spares are valued at cost
 on FIFO basis or net realizable value, whichever is lower
 
 ii) Raw Materials are valued at cost or net realizable value whichever
 is lower Cost is arrived at on FIFO basis Limestone raised in own mines
 are valued at cost
 
 iii) Material-in-process are valued at cost or net realizable value,
 whichever is lower
 
 iv) Finished goods are valued at cost or net realizable value,
 whichever is lower including excise duty
 
 v) Goods in transit are stated at cost accrued upto the date of Balance
 Sheet
 
 (d) Retirement benefits
 
 i) The Company's contributions to the provident fund and superannuation
 fund are charged to revenue every year
 
 ii) Provision for gratuity has been made under the Payment of Gratuity
 Act, 1972 on an actuarial basis
 
 (e) Leave encashment
 
 Provision for leave encashment is made on the basis of an actuarial
 valuation
 
 (f) Sales
 
 Sales of goods is recognised at the point of despatch to customers
 Sales include excise duty but exclude sales tax and usual trade
 discounts, rebates, etc
 
 (g) Foreign currency transactions
 
 Transactions involving foreign currencies are recorded at the rate of
 exchange prevailing at the time of transactions.
 
 Foreign currency liabilities incurred for the acquisition of fixed
 assets are translated at exchange rates prevailing on the last working
 day of the accounting period or on forward cover rates, as applicable.
 
 The net variation arising out of the said translation and roll over
 charges, if any, are adjusted to the cost of fixed assets.
 
 Depreciation on such net variations is provided prospectively over the
 residual useful life of the asset.
 
 Other foreign currency assets and liabilities are similarly translated
 and the gain/loss arising on such translation is adjusted in the profit
 and loss account However, where there is forward cover for such
 assets/liabilities, gain/loss is recognised over the period of contract.
 
 (h) Lease transactions
 
 In respect of equipment taken on lease, lease rentals payable have been
 segregated into cost of asset and interest component by applying an
 implicit internal rate of return. The cost component is amortised over
 the remaining useful life of the asset and the interest component is
 charged as period cost. Lease payments in excess o< or less than the
 total cost for the period are carried as prepaid sums or liabilities
 respectively.
 
 (i) Write-off of miscellaneous expenditure
 
 i) Preliminary expenses and expenses relating to the public issue are
 being written-off over a period of 10 years from the date of
 commencement of commercial production.
 
 ii) Management fees/pre-payment premium charged by lenders for
 restructuring/pre-payment of loans are being written-off over the
 period benefit thereof accrues to the Company.
 
 iii) Expenditure incurred on prospecting for mines are being written
 off over a period of 5 years i.e. the period over which benefit thereof
 accrues to the Company.