BASIS OF ACCOUNTING
 
 The financial statements have been prepared under the historical cost
 convention, except where impairment is made and on accrual basis in
 accordance with accounting principles generally accepted in India and
 the provisions of the Companies Act, 1956. Accounting policies have
 been consistently applied by the Company and are consistent with those
 used in the previous year.
 
 USE OF ESTIMATES
 
 The preparation of the financial statements, in conformity with the
 generally accepted accounting principles, requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period.
 Differences between actual results and estimates are recognised in the
 period in which the results are known / materialised.
 
 REVENUE RECOGNITION
 
 a) Domestic sales are accounted for on transfer of substantial risks
 and rewards which generally coincides with dispatch of products to
 customers and Export sales are accounted for on the basis of dates of
 Bill of Lading. Sales are net of Rebate & Discount.
 
 b) In case of sale of Carbon Credits, (Certified Emission Reductions),
 revenue is recognized on submission of application with UNFCCC after
 execution of agreement with the buyer.
 
 c) Export benefits are accounted for on the basis of application filed
 with the appropriate authority.
 
 d) Dividend income on investments is accounted for when the right to
 receive the payment is established. Interest income is recognised on
 accrual basis.
 
 ACCOUNTING OF CLAIMS
 
 a) Claims receivable are accounted for at the time when reasonable
 certainty of receipt is established. Claims payable are accounted for
 at the time of acceptance.
 
 b) Claims raised by Government Authorities regarding taxes and duties,
 are accounted for based on the merits of each claim. If same is
 disputed by the Company, these are shown as ‘Contingent Liabilities’.
 
 FIXED ASSETS
 
 Fixed Assets are stated at cost, net of Cenvat less accumulated
 depreciation and impairment loss (if any). Cost includes trial run and
 stablisation expenses, interest, finance costs and incidental expenses
 upto the date of capitalization less specific grants received, if any.
 
 INTANGIBLE ASSETS
 
 Intangible Assets are stated at cost of acquisition less accumulated
 amortisation.
 
 DEPRECIATION AND AMORTISATION
 
 Depreciation on Plant and Machinery is provided on Straight Line
 Method, at the rates and in the manner prescribed under Schedule XIV of
 the Companies Act, 1956 as applicable for continuous process plant
 except silos where the general rate of depreciation is considered.
 
 Depreciation on other Fixed Assets has been provided on Written Down
 Value Method at the rates and in the manner prescribed as per Schedule
 XIV of the Companies Act, 1956 including asset constructed on land not
 owned by the Company. However Buildings & Roads inside plant are
 treated as Factory Buildings and depreciation charged accordingly.
 
 The total expenditure on mine exploration and development is amortised
 in the ratio of ore extracted to the total estimated exploitable
 reserves.
 
 Leasehold Land is amortized over the period of Lease.
 
 Assets having individual value below Rs. 5,000 is depreciated @ 100%
 and mobile phones are charged to revenue considering their useful life
 to be less than one year.
 
 Expenditure on major computer software is amortised over the period of
 five years.
 
 IMPAIRMENT OF ASSETS
 
 At the end of each reporting period, the Company determines whether a
 provision should be made for impairment loss on fixed assets by
 considering the indications that an impairment loss may have occurred
 in accordance with Accounting Standard 28 on “Impairment of Assets”
 issued by the ICAI. An impairment loss is charged to the Profit and
 Loss account in the period in which, an asset is identified as
 impaired, when the carrying value of the asset exceeds its recoverable
 value. The impairment loss recognised in the earlier accounting periods
 is reversed, if there has been a change in the estimate of recoverable
 amount.
 
 VALUATION OF INVENTORIES
 
 Raw Material, Fuel (except for coal lying at Port), Packing Materials,
 Stores & Spares is valued at lower of moving weighted average cost (net
 of Cenvat) and net realisable value. Coal lying at Port is valued at
 cost on specific consignment basis plus custom duty.  Loose Tools are
 charged over a period of three years. However, materials held for use
 in the production of inventories are not written down below cost if the
 finished products in which they are used and expected to be sold at or
 above cost.
 
 Work – in – process is valued at weighted average cost.
 
 Finished Goods are valued at lower of weighted average cost and Net
 Realisable Value. Cost for this purpose includes direct cost,
 attributable overheads and excise duty.
 
 CONTINGENCIES / PROVISIONS
 
 A provision is recognised when an enterprise has a present obligation
 as a result of past event; it is probable that an outflow of resources
 embodying economic benefit will be required to settle the obligation,
 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 required to settle the obligation at the Balance Sheet date.
 These are reviewed at each Balance Sheet date and adjusted to reflect
 the current best estimates. A contingent liability is disclosed, unless
 the possibility of an outflow of resources embodying the economic
 benefit is remote.
 
 INVESTMENTS
 
 Investments classified as long term investments are stated at cost.
 Provision is made to recognise any diminution, other than temporary, in
 the value of such investments. Current Investments are carried at lower
 of cost and fair value.
 
 FOREIGN EXCHANGE TRANSACTIONS
 
 Transactions in foreign currencies are accounted at the exchange rate
 prevailing on the date of transaction. Gains and losses resulting from
 the settlement of such transactions and from the translation of
 monetary assets and liabilities denominated in foreign currencies, are
 recognized in the profit and loss account. In case of forward contracts
 (non speculative), the exchange differences are dealt with in the
 profit and loss account over the period of contracts. Exchange
 difference arises on a monetary items in substance form part of
 enterprises net investment in non integral foreign operation is
 accumulated in a foreign currency translation reserve till the disposal
 of the net Investment.
 
 EXPENDITURE DURING CONSTRUCTION PERIOD
 
 In case of new projects and substantial expansion of existing
 factories, expenditure incurred including trial production expenses net
 of revenue earned, prior to commencement of commercial production are
 capitalised.
 
 EMPLOYEE BENEFITS
 
 i) Defined Contribution Plan
 
 Contribution to defined contribution plans are recognised as expense in
 the Profit and Loss Account, as they are incurred.
 
 ii) Defined Benefit Plan
 
 Company’s liabilities towards gratuity and leave encashment are
 determined using the projected unit credit method as at Balance Sheet
 date. Actuarial gains / losses are recognised immediately in the Profit
 and Loss Account. Long term compensated absences are provided for based
 on actuarial valuation
 
 BORROWING COSTS
 
 Borrowing costs, which are directly attributable to acquisition,
 construction or production of a qualifying asset, are capitalised as a
 part of the cost of the asset. Other borrowing costs are recognised as
 expenses in the period in which they are incurred.
 
 SEGMENT REPORTING POLICIES:
 
 Primary Segment is identified based on the nature of products and
 services, the different risks and returns and the internal business
 reporting system. Secondary segment is identified based on geographical
 area in which major operating divisions of the Company operate.
 
 OPERATING LEASE:
 
 The leases where the lessor effectively retains substantially all the
 risks and benefits of ownership of the leased items, are classified as
 operating leases. Operating lease payments are recognized as expenses
 in the Profit and Loss Account.
 
 EARNING PER SHARE:
 
 Basic earning per share is calculated by dividing the net profit or
 loss for the year attributable to equity shareholders by the weighted
 average number of equity shares outstanding during the year. For the
 purpose of calculating diluted earnings per share, the net profit or
 loss for the year attributable to equity shareholders and the weighted
 average number of shares outstanding during the year are adjusted for
 the effects of all dilutive potential equity shares.
 
 INCOME TAXES
 
 Tax expense comprises of current tax and deferred tax. Current tax and
 Deferred tax are accounted for in accordance with Accounting Standard
 22 on “Accounting For Taxes on Income”, issued by the ICAI. Current tax
 is measured at the amount expected to be paid to the tax authorities,
 using the applicable tax rates. Deferred income taxes reflect the
 impact of the current period timing differences between taxable income
 and accounting income for the period and reversal of timing differences
 of earlier years / period. Deferred tax assets are recognised only to
 the extent that there is reasonable certainty that sufficient future
 taxable income will be available except that deferred tax assets
 arising on account of unabsorbed depreciation and losses are recognised
 if there is virtual certainty that sufficient future taxable income
 will be available to realise the same.