A Basis of preparation of financial statements
 
 1.  The financial statements have been prepared under the historical
 cost convention and in accordance with the generally accepted
 accounting principles, the mandatory Accounting Standards issued by the
 Institute of Chartered Accountants of India and the relevant provisions
 of the Companies Act, 1956 as adopted consistently by the Company.
 
 2.  The company generally follows mercantile system of accounting and
 recognizes significant items of income and expenditure on accrual
 basis.
 
 B Investments
 
 All investments being long term & non-trade are valued at cost.
 Provision for diminution is made to recognise the decline other than
 temporary, in the value of investments.
 
 C Fixed assets
 
 Fixed Assets are accounted at acquisition cost (net of CENVAT / VAT
 wherever applicable) less accumulated depreciation. Depreciation has
 been provided on straight-line basis at the rates specified under
 rules/Schedule XIV to the Companies Act, 1956, prevailing at the time
 of acquisition of the asset. The lands acquired under lease, other than
 the cost of development and extraction of mineral rights, are amortised
 equally over the lease period and such amount is included in
 Depreciation.
 
 D Inventories
 
 1.  Raw materials, stores, spares, coal, packing materials, etc. are
 valued at cost, computed on a moving weighted average basis including
 the cost incurred in bringing the inventories to their present location
 and condition or net realizable value whichever is lower.
 
 2.  Process Stock is valued at weighted average cost, including the
 cost of conversion. The cost of conversion includes direct costs,
 including a systematic allocation of production and administration
 overheads.
 
 3.  Finished goods are valued at cost or net realisable value whichever
 is lower. Cost includes cost of conversion and other costs incurred in
 bringing the inventory to their present location and condition
 including excise duty.
 
 E Sales
 
 Net Sales exclude Excise Duty, Education Cess, Secondary and Higher
 education Cess and VAT / CST.
 
 F Income from Wind Mills
 
 1.  Under wheeling and banking arrangement:
 
 Units generated from windmills are adjusted against the consumption of
 power at factories. The monetary value of the units so adjusted,
 calculated at the prevailing EB rates net of wheeling charges has been
 included in power & fuel. The value of unadjusted units as on the
 Balance Sheet date has been included in Advances recoverable in cash or
 in kind under the schedule loans and advances.
 
 2.  Under Power purchase agreement:
 
 Units generated from windmills are sold to State Electricity Board at
 agreed rates and the income is included in Value of power generated
 from wind mills.
 
 G Employee Benefits
 
 1.  Short-term employee benefits viz., Salaries and Wages are
 recognized as an expense at the undiscounted amount in the profit and
 loss account for the year in which the related service is rendered.
 
 2.  Defined Contribution plan viz., Contributions to Provident fund and
 Superannuation fund are recognized as an expense in the profit and loss
 account for the year in which the employees have rendered services. The
 company contributes monthly to Provident fund administered by the
 Government at 12% of employees basic salary. The company also
 contributes annually for superannuation a sum equivalent to 15% of the
 employees eligible annual basic salary subject to a maximum of Rs.1
 Lac per annum to funds administered by trustees and managed by LIC of
 India. There are no other obligations other than the above defined
 contribution plans.
 
 3.  Defined Benefit Plan:
 
 Gratuity:
 
 The Company has its own approved Gratuity Fund. It is in the form of
 lump sum payments to vested employees on resignation, retirement, death
 while in employment or on termination of employment of an amount
 equivalent
 
 to 15 Days basic salary for each completed year of service. Vesting
 occurs upon completion of five years of continuous service. The company
 makes annual contributions to funds administered by trustees and
 managed by LIC of India, based on the Actuarial Valuation by an
 independent external actuary as at the Balance sheet date using the
 projected unit credit method.
 
 Leave Encashment:
 
 The company has a policy of encashing unavailed leave for its
 employees. The obligation for the leave encashment is recognised based
 on an independent external actuarial valuation as at the Balance Sheet
 date.  The expense is recognized at the present value of the amount
 payable determined based on actuarial valuation using projected unit
 credit method.
 
 H Provisions, Contingent liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Unprovided contingent liabilities are disclosed in the Accounts by way
 of Notes. Contingent Assets are not recognised.
 
 I Research & Development Expenditure
 
 Expenditure on Research & Development of revenue nature incurred by the
 Company is charged to Profit & Loss Account under the respective
 revenue heads, while those of capital nature are treated as fixed
 assets.
 
 J Borrowing costs
 
 Borrowing Costs that are directly attributable to the acquisition and
 construction of qualifying assets are capitalised as part of the cost
 of those assets as per AS-16. All other borrowing costs are charged to
 revenue.
 
 K Foreign currency transactions
 
 1.  Transactions in Foreign Currency are accounted at the exchange
 rates prevailing at the time of transaction.
 
 2.  Covered liabilities in foreign currencies are accounted at the rate
 at which they have been covered. Uncovered liabilities in Foreign
 Currency are accounted at the rates as on the Balance Sheet date.
 
 3.  The difference between the forward rate and the exchange rate at
 the inception of a forward exchange contract is recognised as income or
 expense over the life of the contract.
 
 4.  Exchange difference in respect of uncovered foreign currency
 liabilities are recognised in the profit and loss account.
 
 L Earnings per share
 
 Net profit after tax is divided by the weighted average number of
 equity shares including un-allotted Bonus shares outstanding during the
 year.
 
 M Government Grants
 
 Revenue related grants are recognised on accrual basis wherever there
 is reasonable certainty and are disclosed under other income.
 Receivables of such grants are shown under Loans and advances. Capital
 related grants are accounted upon fulfilment of conditions attached
 thereto.
 
 N Income-tax
 
 The tax provision is considered as stipulated in AS-22 (Accounting for
 Taxes on income) and includes current and deferred tax liability. The
 company recognises the deferred tax liability based on the accumulated
 timing difference using the current tax rate.
 
 O Segment Reporting
 
 The company identifies business segment as the primary segment as per
 AS-17. Under the primary segment, there are two reportable segments
 viz., Cement and Power generation from Windmills. These were identified
 considering the nature of the products, the differing risks and
 returns. The valuation of inter segment transfers are based on
 prevailing market prices.
 
 The company caters mainly to the needs of the domestic market and thus
 there are no reportable geographical segments.
 
 P Miscellaneous Expenditure
 
 Mining development expenditure and amount spent for installation of fly
 ash handling equipments in Thermal power stations in connection with
 collection of fly ash which are expected to yield enduring benefits are
 held under Miscellaneous Expenditure and amortised over the expected
 beneficial period, not exceeding five years.