1.  (A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS :
 
 (i) The financial statements have been prepared in compliance with all
 material aspects with the Accounting Standards notified by Companies
 (Accounting Standards) Rules, 2006 (as amended) and the relevant
 provisions of the Companies Act, 1956.
 
 (ii) Financial statements are based on historical cost and are prepared
 on accrual basis,
 
 (iii) Accounting policies have been consistently applied by the Company
 and are consistent with those used in the previous year and except for
 the changes in accounting policy stated in 1 (B).
 
 (iv) The preparation of financial statement in conformity with
 generally accepted accounting principles requires management to make
 estimates and assumptions that affect the reported amounts of assets
 and liabilities and disclosure of contingent liabilities at the date of
 financial statements and the results of operations during the reporting
 period end. Although these estimates are based upon management''s best
 knowledge of current events and actions, actual result could differ
 from these estimates.
 
 1.  (B) CHANGE IN ACCOUNTING POLICY:
 
 During the year, the Company has with retrospective effect changed its
 method of measurement of compensation cost relating to employee stock
 options from intrinsic value method to fair value method for all
 outstanding unvested employee stock options at the beginning of the
 year. Accordingly the Company has recognized an additional expense of
 Rs, 33,21 crores. Amount relating to earlier years of Rs. 24.25 crores
 has been disclosed as exceptional item. Had the Company continued to
 use the earlier method of measurement, the Profit after taxation for
 the current year would have been higher by Rs. 33.21 crores and the
 Employee''s remuneration and benefits and exceptional expenses would
 have been lower by Rs. 8.96 crores and Rs. 24.25 crores respectively,
 
 1.  (C) SIGNIFICANT ACCOUNTING POLICIES :
 
 (a) Fixed Assets:
 
 (i) Fixed Assets are stated at their original cost of
 acquisition/installation (net of Modvat / Cenvat credit availed), net
 of i accumulated depreciation, amortisation and impairment losses,
 except freehold land which is carried at cost less impairment losses.
 
 (ii) Capital work in progress is stated at the amount expended up to
 the date of Balance Sheet.
 
 (iii) Machinery spares which can be used only in connection with a
 particular item of fixed asset and the use of which is irregular, are
 capitalised at cost net of Modvat / Cenvat.
 
 (iv) Expenditure during construction period (including financing cost
 relating to borrowed funds. for construction or acquisition of
 qualifying fixed assets) incurred on projects under implementation are
 treated as Pre-operative expenses, pending allocation to the assets,
 and are included under Capital Work in Progress. These expenses are
 apportioned to fixed assets on commencement of commercial production,
 
 (b) Depreciation and Amortisation :
 
 I, Tangible Assets:
 
 (i) Premium on leasehold land is amortised over the period Of lease.
 
 (ii) Depreciation on all assets, other than 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 to the Companies Act, 1956, as the management
 estimate of useful life coincides with useful life based on the rate
 mentioned in the Schedule XIV or is higher. Continuous process plants,
 are identified based on technical assessment and depreciated at the
 specified rate as per Schedule XIV to the Companies Act, 1956.
 Depreciation on additions to fixed assets is provided on a pro-rata
 basis from the date of acquisition or installation, and in the case of
 a new project, from the date of commencement of commercial production.
 Depreciation on assets sold, discarded, demolished or scrapped, is
 provided upto the date on which the said asset is sold, discarded,
 demolished or scrapped.
 
 In respect of an asset for which impairment loss is recognised,
 depreciation is provided on the revised carrying amount of the assets
 over its remaining useful life,
 
 (iii) Machinery spares which are capitalised are depreciated over the
 useful life of the related fixed asset, The written down value of such
 spares is charged to the Profit and Loss Account, on issue for
 consumption,
 
 (iv) The cost of fixed assets, constructed by the Company, but
 ownership of which belongs to Government/Local Authorities, is
 amortised at the rate of depreciation specified in Schedule XIV to the
 Companies Act, 1956.
 
 (v) Expenditure on Power Lines, ownership of which belongs to the State
 Electricity Boards, is amortised over the period as permitted in the
 Electricity Supply Act, 1948 -¦/ 2003 as applicable,
 
 (vi) Expenditure on Marine Structures, ownership of which belongs to
 the Maritime Boards, is amortised over the period of agreement.
 
 II.  Intangible Assets:
 
 (i) Expenditure to acquire Water Drawing Rights from Government/Local
 Authorities/other parties, is amortised on straight line method over
 the period of rights to use the facilities ranging from ten to thirty
 years.
 
 (ii) Expenditure on computer software ,is,amortised on .straight line
 metaQf over the period of expected benefit not exceeding five years.
 
 (c) Impairment of assets :
 
 The carrying amounts of assets are reviewed at each Balance Sheet date
 if there is any indication of impairment based on internal / external
 factors. An impairment loss is recognised wherever the carrying amount
 of an asset exceeds its recoverable amount. The recoverable amount is
 greater of the asset''s net selling price and value in use. In assessing
 value in use, the estimated future cash flows are discounted to their
 present value using a pre-tax discount rate that reflects current
 market assessments of the time value of money and risks specific to the
 assets. A previously recognised impairment loss is increased or
 reversed depending on changes in circumstances.
 
 (d) Investments:
 
 Investments that are intended to be held for more than a year, from the
 date of acquisition, are classified as long-term investments and are
 carried at cost. However, provision for diminution in value of
 investments is made to recognise a decline, other than temporary, in
 the value of the investments. Investments other than long-term
 investments being current investments are valued at cost or fair value
 whichever is lower, determined on an individual basis.
 
 (e) Inventories:
 
 Inventories are valued as follows:
 
 Coal, fuel, packing materials, raw materials, stores and spares:
 
 Lower of cost less provision for slow and non-moving inventory, if any,
 and net realizable value. However, materials and other items held for
 use in the production of inventories are not written down below cost if
 the finished products in which they will be incorporated are expected
 to be sold at or above cost. Cost is determined on a moving weighted
 average basis.
 
 Work-in-progress, finished goods and trial run inventories:
 
 Lower of cost and net realizable value. Cost includes direct materials
 and labour and a proportion of manufacturing overheads based on normal
 operating capacity. Cost of finished goods includes excise duty, Cost
 is determined on a monthly moving weighted average basis.
 
 (f) Provisions / Contingencies:
 
 A provision is recognised for a present obligation as a result of past
 events if it is probable that an outflow of resources will be required
 to settle the obligation and in respect of which a reliable estimate
 can be made. Provisions are not discounted to its present value and are
 determined based on best estimate of the amount required to settle the
 obligation at the Balance Sheet date. A contingent liability is
 disclosed, unless the possibility of an outflow of resources is remote.
 
 (g) Foreign Currency Conversion :
 
 Foreign currency transactions are recorded at the rates of exchange
 prevailing on the date of transaction,
 
 Foreign currency monetary items are reported using the closing rate.
 Non-monetary items which are carried in terms of
 
 historical cost denominated in a foreign currency are reported using
 the exchange rate at the date of the transaction.
 
 Exchange differences arising on the settlement of monetary items or on
 reporting Company''s monetary items at rates different
 
 from those at which they were initially recorded during the year, or
 reported in previous financial statements, are recognised as
 
 income or as expenses in the year in which they arise.  (h) Revenue
 recognition :
 
 Revenue is recognised to the extent that it is probable that the
 economic benefits will flow to the Company and the revenue
 
 can be reliably measured
 
 (i) Revenue is recognised when the significant risks and rewards of
 ownership of the goods have passed to the buyer.  Accordingly, domestic
 sales are accounted on dispatch of products to customers and Export
 sales are accounted on the basis of date of Bill of Lading. Sales are
 disclosed net of sales tax / VAT, discounts and returns, as applicable.
 Sales exclude self consumption of cement.
 
 (ii) Benefit on account of entitlement to import goods free of duty
 under the Duty Entitlement Pass Book under Duty Exemption Scheme is
 recognised in the year of export.
 
 (iii) Sales include the amount of remission and subsidy due in
 accordance with the respective incentive schemes.
 
 (iv) Interest income is recognised on a time proportion basis taking
 into account the amount outstanding and the rate applicable. Dividend
 income is recognised when right to receive the payment is established
 by the Balance Sheet date.  
 
 (i) Mines Reclamation Expenses:
 
 The Company provides for the expenses to reclaim the ''quarries used for
 mining, The total estimate of reclamation expenses is apportioned over 
 the estimate of mineral reserves and a provision is made based on the 
 minerals extracted during the year.
 
 Mines reclamation expenses are incurred on an on going basis and until
 the closure of the mine. The actual expenses may vary based on the nature 
 of reclamation and the estimate of reclamation expenditure, 
 
 (j) Employee Benefits.
 
 (i) Defined Contribution Plan
 
 Employee benefits in the form of contribution to Superannuation Fund,
 Provident Fund managed by Government Authorities, Employees State
 Insurance Corporation and Labour Welfare Fund are considered as defined
 contribution plan and the same is charged to the Profit & Loss Account
 of the year when the contributions to the respective funds are due.
 
 (ii) Defined Benefit Plan
 
 Retirement benefits in the form of gratuity, shipping staff gratuity,
 post retirement medical benefit and death and disability benefit are
 considered as defined benefit obligations and are provided for on the
 basis of an actuarial valuation, using the projected unit credit
 method, as at the date of the Balance Sheet, Actuarial gains / losses,
 if any, are immediately recognised in the Profit and Loss Account.
 
 Employee ''Benefit, in form of .contribution to Provident Fund managed
 by a Trust set up by the Company, is charged to Profit and Loss Account
 as and when the contribution is due, The deficit, if any, in the
 accumulated corpus of the Trust at the period end for which the Company
 is liable, is recognised as a provision in the Profit and Loss Account.
 
 (iii) Other long-term benefits
 
 Long-term compensated absences are provided for on the basis of an
 actuarial valuation, using the projected unit credit method, as at the
 date of the Balance Sheet. Actuarial gains / losses, if any, are
 immediately recognised in the Profit and Loss Account.
 
 (k) Miscellaneous Expenditure :
 
 Expenses included under the head ''Miscellaneous Expenditure'' are
 amortised over the period of estimated future benefits not exceeding
 ten years.
 
 (l) Employee Stock Compensation cost:
 
 The Company measures compensation cost relating to employee stock
 option using the fair value method. Discount on Equity Shares as
 compensation expenses under the Employee Stock Option Scheme, is
 amortised in accordance with Employee Stock Option Scheme and Employee
 Stock Purchase Scheme Guidelines, 1999 issued by Securities and
 Exchange Board of India (SEBI) and the Guidance Note on Accounting for
 Employee Share-based payments, issued by the Institute of Chartered
 Accountants of India.
 
 (m) Borrowing Costs and Share Issue Expenses:
 
 (i) Borrowing cost attributable to acaulsition and construction of
 assets that necessarily takes substantial period of time are
 capitalised as part of the cost of such assets up to the date when such
 assets are ready for intended use,
 
 (ii) Expenses on issue of Shares, Debentures and Bonds as well as
 Premium on Redemption of Debentures are adjusted to Securities Premium
 Account in accordance with Section 78 of the Companies Act, 1956.
 
 (iii) Borrowing cost such as discount or premium and ancillary costs in
 connection with arrangement of borrowings excluding debenture and
 bonds, are amortised over the period of borrowings.
 
 (iv) Other borrowing costs are charged as expense in the year in which
 these are incurred.
 
 (n) Taxation:
 
 Tax expense comprises of current, deferred tax and fringe benefit tax,
 Current income tax is measured at the amount expected to be paid to the
 tax authorities in accordance with the Income-tax Act, 1961. Deferred
 income tax reflects 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 is measured based
 on the tax rates and the tax laws enacted or substantively enacted at
 the balance sheet date. Deferred tax assets are recognised only to the
 extent there is reasonable certainty that sufficient future taxable
 income will be available against which these assets can be realised in
 future whereas in case of existence of carry forward of losses or
 unabsorbed depreciation, deferred tax assets are recognised only if
 there is virtual certainty of realisation backed by convincing
 evidence.
 
 The carrying amount of deferred tax assets are reviewed at each balance
 sheet date, The Company writes-down the carrying amount of a deferred
 tax asset to the extent that it is no longer reasonably certain or
 virtually certain, as the case may be, that sufficient future taxable
 income will be available against which deferred tax asset can be
 realised. Any such write-down is reversed to the extent that it becomes
 reasonably certain or virtually certain, as the case may be, that
 sufficient future taxable income will be available.
 
 Leases:
 
 Where the Company is the lessee
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased item, are classified as
 operating leases. Operating lease payments are recognized as an expense
 in the Profit and Loss account on a straight-line basis over the lease
 term.
 
 Where the Company is the lessor
 
 (i) Assets given under finance lease are recognised as a receivable at
 an amount equal to the net investment in the lease.  Lease rentals are
 apportioned between principal and interest on the Internal rate of
 return (IRR) method. The principal amount received reduces the net
 investment in the lease and interest is recognised as revenue. Initial
 direct cost such as legal costs, brokerage costs, etc. are recognised
 immediately in the Profit and Loss Account,
 
 (ii) Assets subject to operating leases are included in fixed assets.
 Lease income is recognised in the Profit and Loss Account on a
 straight-line basis over the lease term. Costs, including depreciation
 are recognised as an expense in the Profit and Loss Account, Initial
 direct costs such as legal costs, brokerage costs, etc. are recognised
 immediately in the Profit and Loss Account.
 
 (o) Segment Reporting Policies :
 
 (i) Identification of segments :
 
 The Company has only one business segment ''Cementations Materials'' as
 its primary segment, The analysis of geographical segments is based on
 the areas in which major operating divisions of the Company operate,
 
 (ii) Segment Policies :
 
 The Company prepares its segment information in conformity with the
 accounting policies adopted for preparing and presenting the financial
 statements of the Company as a whole.
 
 (p) Cash and Bank balances:
 
 (i) Cash and Bank balances in the Balance Sheet comprise cash at bank
 including fixed deposits, cheques in hand and cash in hand, r
 
 (ii) Cash and cash equivalents for the purposes of cash flow statement
 comprise cash at bank and in hand and short-term investments with an
 original maturity of three months or less.
 
 (q) Government grants and subsidies :
 
 (I) Grants and subsidies from the Government are recognized when there
 is reasonable certainty that the grant/subsidy will be received and all
 attaching conditions will be complied with,
 
 (ii) When the grant or subsidy relates to an expense item, it is
 recognised as income over the periods necessary to match them on a
 systematic basis to the costs, which it is intended to compensate.
 
 (iii) Where the grant or subsidy relates to an asset, its value is
 deducted from the gross value of the asset concerned in arriving at the
 carrying amount of the related asset.
 
 (iv) Government grants of the nature of Promoters'' contribution are
 credited to capital reserve and treated as a part of Shareholders''
 Funds.
 
 (r) Earnings Per Share :
 
 Basic earnings per share are calculated by dividing the net profit or
 loss for the period attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the period.