1.  Basis of Preparation of Financial Statements
 
 The financial statements have been prepared in accordance with Indian
 Generally Accepted Accounting Principles (GAAP), generally under the
 historical cost convention on accrual basis and exceptions to this
 basis, if any, are herein specifically mentioned. GAAP comprises of
 mandatory Accounting Standards issued by the Institute of Chartered
 Accountants of India (ICAI), the provisions of the Indian Companies
 Act, 1956 and the Guidelines issued by ICAI and Securities and Exchange
 Board of India (SEBI). Accounting policies have been consistently
 adopted except where a change in existing GAAP requires a change in
 accounting policy hitherto in use.
 
 2.  Use of estimates
 
 The preparation of financial statements 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 the
 financial statements and the results of operations during the reporting
 period. Although these estimates are based upon management''s best
 knowledge of current events and actions, actual results could differ
 from these estimates.
 
 3.  Inventories
 
 (a) Valuation of inventories of raw materials, packing materials,
 stores, spares, fuels is at weighted average cost.
 
 (b) Work in Process & Semi-finished goods are valued at cost or net
 realisable value whichever is lower. The value of WIP and Semi-
 finished goods does not include interest and other administrative
 overheads.
 
 (c) Finished goods are valued at cost or net realisable value whichever
 is lower. The value of finished goods includes excise duty and does not
 include interest and other administrative overheads.
 
 (d) Real Estate Projects are valued at cost or net realisable value
 whichever is lower.
 
 4.  Cash and Cash equivalents
 
 Cash and cash equivalents for the purpose of Cash Flow Statement
 comprise cash at bank, in hand (including cheques in hand) and short
 term investment with an original maturity of three months or less.
 
 5.  Fixed Assets
 
 Fixed Assets are valued and shown adopting the following basis:
 
 (a) Fixed assets and Capital work-in-progress of all the cement
 manufacturing facilities are revalued and shown at revalued amounts as
 at 31st March 2004. All other Fixed assets acquired are shown at the
 cost of acquisition.
 
 (b) Fixed assets acquired on hire purchase or on Financial Lease are
 shown at their principal cost, excluding the interest cost included in
 these agreements which is charged to revenue over the tenure of the
 agreement.
 
 (c) Expenditures and outlays of money on uncompleted projects of a
 capital nature are shown as capital works-in-progress until such time
 these projects are completed and commissioned. All costs including
 financing costs incurred on specific projects/acquisition of
 undertakings are charged to the concerned heads.
 
 (d) (i) The company provides depreciation on written down value method
 for Motor Vehicles and for assets acquired prior to 1-4-1982 at Head
 Office and at Sankarnagar.
 
 (ii) Software development costs are capitalised and depreciated along
 with computers on Straight Line method as per Section 205(2)(b) of the
 Companies Act, 1956.
 
 (iii) Ships are depreciated on Straight Line method, over its estimated
 useful life.
 
 (iv) Long term Franchisee Rights are capitalised and amortised over a
 period of ten years.
 
 (v) For all other assets Straight Line method as per Section 205(2)(b)
 of the Companies Act, 1956 is adopted.  
 
 (vi) The depreciation on incremental value arising from the revaluation
 of fixed assets is charged to the Revaluation Reserve Account.  
 
 6 (a) Foreign Currency Transactions Where Foreign Currency loans have
 been availed to acquire fixed assets from outside India, the
 outstanding liability on these loans is stated at the exchange rate of
 the rupee as at the year end or at contracted rates with a
 corresponding adjustment to the carrying cost of the relevant assets.
 Depreciation is charged to accounts on the values so adjusted over the
 remaining life of the asset.  
 
 (b) Foreign Exchange transactions are accounted at the exchange rates
 prevailing at the time of transactions or at contracted rates.  Current
 Assets and all Liabilities (other than for acquiring fixed assets as
 mentioned in 6(a) above), in Foreign currencies are translated at
 values prevailing as at the year end.  Gains/Losses, if any, arising
 therefrom are recognised in the Profit and Loss Account.
 
 (c) Forward Exchange contracts used to hedge Foreign Currency
 Transactions are initially recognised at the spot-rate on the date of
 contract. Forward Exchange contracts remaining unsettled at the end of
 the year are translated at the year end rates. The difference in
 translation of Forward Exchange contracts are recognised in the Profit
 and Loss Account. The discount or premium is amortised over the life of
 the contract.
 
 7.  (a) Sales include excise duty, revenue from trade related
 activities and sales tax deferred as reduced by consideration for
 assignment of Sales Tax deferral liability and is net of rebates,
 discounts and incentives.
 
 (b) Revenue from construction projects under Real Estate and Property
 Development Division is recognised on percentage of completion method.
 
 (c) Revenue on time charter of ships is recognized on a proportionate
 basis.
 
 8.  Research and Development
 
 Research and Development expenses not resulting in any tangible
 property/equipment are charged to revenue.
 
 9.  Borrowing Costs
 
 Interest and other costs in connection with borrowing of funds to the
 extent related/attributed to the acquisition/construction of qualifying
 fixed assets are capitalised upto the date when such assets are ready
 for its intended use and other borrowing costs are charged to Profit
 and Loss Account.
 
 10.  Claims / Incomes arising from price escalation and/or any other
 item of compensation and which are indeterminate are accounted on cash
 basis.
 
 11.  Trade investments and investments in subsidiary companies are long
 term investments and are carried at cost. The other investments are
 carried at lower of cost or realisable value. Provision for diminution
 in value is made wherever necessary in accordance with the mandatory
 Accounting Standard.
 
 12.  Employee Benefits
 
 Retirement benefits are provided by charge to revenue including
 provision for gratuity and superannuation fund determined on an
 actuarial basis for which a trust has been created. The Actuarial gains
 / losses arising on retirement benefits are also recognised in the
 Profit and Loss Account. Unavailed leave balances are accounted based
 on respective employee''s earnings as at the balance sheet date.
 
 13.  Fringe Benefits arising on options vested under Employees Stock
 Options Scheme (ESOS), 2006 are charged to Profit and Loss Account and
 credited to Stock Options Reserve Account. On allotment of shares,
 corresponding amount is transferred from Stock Options Reserve Account
 to Securities Premium Account.
 
 14.  Premium on redemption of Debentures/Bonds
 
 Premium on redemption of Debentures / Bonds is accounted on redemption
 and set-off against the Securities Premium Account.
 
 15.  Tax Expense
 
 (a) Current income tax is measured and accounted based on the amount
 expected to be paid to the tax authorities in accordance with the
 Indian Income Tax Act, 1961 at the tax rates prevailing during the
 year.
 
 (b) Deferred Tax
 
 Deferred tax is measured and accounted based on the tax rates and tax
 laws enacted or substantively enacted at the Balance Sheet date.