a) GENERAL
 
 Method of Accounting
 
 The financial statements are based on historical cost convention
 (except for revaluation of certain Fixed Assets) and prepared in
 accordance with Generally Accepted Accounting Principles prevalent in
 India (Indian GAAP) and in compliance with the mandatory Accounting
 Standards notified by the Companies (Accounting Standards) Rules, 2006
 and the provisions of the Companies Act, 1956.
 
 Use of Accounting Estimates
 
 The preparation of the financial statements in conformity with Indian
 GAAP requires management to make estimates and assumptions that affect
 the balances of assets and liabilities and disclosures relating to
 contingent liabilities as at the reporting date of the financial
 statements and amounts of income and expenses during the year of
 account. Examples of such estimates include provision for doubtful
 debts, income taxes and future obligations under employee retirement
 benefit plans. Management periodically assesses whether there is an
 indication that an asset may be impaired and makes provision in the
 accounts for any impairment losses estimated. Actual results could
 differ from those estimates and are given effect to as and when
 determine.
 
 b) FIXED ASSETS
 
 Fixed Assets are stated at cost/valuation less accumulated depreciation
 and amortization. Direct costs inclusive of inward freight, duties and
 taxes, incidental expenses including interest relating to acquisition
 and cost of improvements thereon are capitalised until fixed assets are
 ready for its intended use. Capital Work in Progress indicates the cost
 of fixed assets not ready for their intended use as at the reporting
 date of the financial statements.
 
 c) INVESTMENTS
 
 Long term Investments are stated at cost with appropriate provision for
 diminution in value and the carrying value is reduced accordingly.
 Current Investments are stated at lower of cost and fair value.
 
 d) INVENTORIES
 
 Inventories are valued at cost or estimated net realizable value
 whichever is lower.
 
 Cost for the purpose of Raw materials and stores and spares comprise of
 the respective purchase costs including non-reimbursable duties and
 taxes.
 
 Costs in respect of work-in progress and finished goods comprises of
 their respective costs including appropriate overheads and excise duty
 wherever applicable. Cost of inventories is determined on weighted
 average basis.
 
 Machinery spares which can be used only in connection with an item of
 fixed assets and whose use is expected to be irregular are amortised
 over the life of the principal assets.
 
 Scrap is valued at estimated net realisable value.
 
 e) SALES
 
 Sales are inclusive of Excise duty, packing charges and freight
 recovered thereon and exclusive of sales tax, rebates and discounts.
 
 f) FOREIGN EXCHANGE TRANSACTIONS
 
 A.  Transactions in foreign currency are initially accounted at the
 exchange rate prevailing on the date of the transaction, and adjusted
 appropriately, with the difference in the rate of exchange arising on
 actual receipt/payment during the year.
 
 B.  At each Balance Sheet date
 
 i) Foreign currency monetary items are reported using the closing rate
 of exchange on the balance sheet date
 
 ii) Foreign currency non-monetary items are reported using the exchange
 rate at which they were initially recognized
 
 In respect of forward exchange contracts
 
 iii) Premium or discount on the contract is amortised over the term of
 the contract
 
 iv) Exchange differences on the contract are recognized as profit or
 loss in the period in which they arise
 
 g) DEPRECIATION:
 
 A.  Depreciation on fixed assets is provided at the rates specified in
 Schedule XIV of the Companies Act, 1956, as per the following method:
 
 a) Under Straight line method in respect of
 
 All assets (excepting Transport vehicles, Furniture and office
 Equipment) at Visakha Cement Works (VCW), Durga Cement Works (DCW) and
 Assets acquired under modernisation scheme at Jayanthipuram Mines.
 
 b) In respect of assets other than those mentioned above, under written
 down value method.
 
 B.  Depreciation on increase in value of fixed assets due to
 revaluation is provided under the straight line method at the rates
 prescribed in Schedule XIV and is transferred from Asset Revaluation
 Reserve to the Profit and Loss Account.
 
 C.  Plant and Machineries have been considered as continuous process
 plant on the basis of technical assessment.
 
 D.  In respect of inter unit transfer of assets, depreciation is
 computed on the same basis as in the Transferor unit.
 
 h) IMPAIRMENT OF ASSETS
 
 At the date of each Balance Sheet, the company evaluates internally,
 indications of the impairment if any, to the carrying amount of its
 fixed and other assets. If any indication does exist, the recoverable
 amount is estimated at the higher of the realizable value and value in
 use, as considered appropriate. If the estimated recoverable amount is
 less than the carrying amount, an impairment loss is recognized.
 
 Reversal of impairment losses recognized in prior years is recorded
 when there is an indication that the impairment losses recognized for
 the asset no longer exist or have decreased. However, the increase in
 carrying amount of an asset due to reversal of an impairment loss is
 recognized to the extent the carrying amount would have been determined
 (net of depreciation) had no impairment loss being recognized for the
 asset in prior years.
 
 i) EMPLOYEES BENEFITS
 
 a) Short Term Employee Benefits:
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classified as short term employee benefits. Benefits
 such as salaries, wages, short term compensated absences, etc., and the
 expected cost of bonus, ex-gratia are recognized in the period in which
 the employee renders the related service.
 
 b) Post-Employment Benefits:
 
 1.  Defined Contribution Plans: Contributions to Provident Fund Scheme
 and Employees State Insurance Scheme which are in the nature of defined
 contribution plans are charged to the Profit and Loss account as and
 when incurred during the year in which the employee renders the related
 service.
 
 2.  Defined Benefit Plans:
 
 (i) Provident Fund contributions are also made by the company to a
 Trust under a defined benefit plan. The amount of contribution by the
 company and the employees, together with interest thereon at a rate not
 lower than the rate fixed by the Government on similar funds
 administered by it, is payable to the employees on cessation of their
 service with the company. The contribution to be made by the company is
 determined each year based on the Fund available and the liability at
 each Balance Sheet date as per the calculations made by an independent
 Actuary. Such contribution is accounted on accrual accordingly.
 
 (ii) The company also provides for retirement/post-retirement benefits
 in the form of gratuity and leave encashment. Such benefits are
 provided for based on valuations, as at the Balance Sheet date, made by
 independent actuaries.  Termination benefits are recognized as an
 expense as and when incurred.
 
 Actuarial gains and losses are recognized immediately in Profit and
 Loss Account as income or expense.
 
 j) TAXES ON INCOME
 
 a) Provision for current tax is made on estimated taxable income using
 the applicable tax rates and the provisions specified under the Income
 Tax Act, 1961.
 
 b) The deferred tax arising on account of timing differences between
 the taxable income and accounting income which are capable of reversal
 in one or more subsequent periods is recognised using the tax rates and
 laws that have been enacted or substantively enacted as of the Balance
 Sheet date.
 
 c) Deferred tax asset is recognised to the extent there is reasonable
 certainty that these would be realised in future against sufficient
 future taxable income
 
 d) In case of unabsorbed depreciation and carried forward tax losses,
 deferred tax asset is recognised only if there is virtually certainty
 that such deferred tax asset can be realized against future taxable
 profits.
 
 k) BORROWING COSTS
 
 Borrowing costs incurred in connection with the funds borrowed for
 acquisition/ erection of assets that necessarily take a substantial
 period of time to get ready for intended use are capitalized as part of
 cost of such assets. All other borrowing costs are charged to revenue.
 
 l) PROVISIONS, CONTINGENCIES AND CONTINGENT ASSETS
 
 Provisions involving substantial degree of estimation in measurement
 are recognized when there is a present obligation as a result of past
 events, and it is probable that there will be an outflow of resources
 and a reliable estimate can be made of the amount of the obligation.
 Contingent assets are neither recognized nor disclosed in the financial
 statements. Contingent liabilities are not provided for and are
 disclosed by way of notes after a careful evaluation of the concerned
 facts and issues involved thereon.
 
 (iii) Probable liability, if any, that may arise as a result of
 non-compliance with the requirements of Jute Packaging Materials
 (Compulsory Use of Packaging Commodities) Act, 1987 up to the Year
 1997-98, consequent on differing divergent decisions of different
 courts and also the representations of industry before the Government,
 as the same is not ascertainable at this stage.
 
 (iv) Excise authority, although accepted payment of their dues in
 installments in terms of the BIFR Order (MS-08), has subsequently filed
 an appeal in AAIFR against the said order in respect of reliefs for
 interest etc. granted to the Company. The Company has challenged the
 same and the matter is pending before Hon’ble High Court at Delhi.
 Pending this, the amount is presently not ascertainable in this
 respect.
 
 Note: In the opinion of the Management, the above claims/demands are
 not tenable and future cash outflows in respect of the same are
 determinable on final decisions of the matter.