Basis of preparation of accounts:
 
 The financial statements have been prepared on the basis of going
 concern, and the historic cost convention, to comply in all material
 aspects with applicable accounting principles in India, the Accounting
 Standards issued by the Institute of Chartered Accountants of India and
 the relevant provisions of the Companies Act, 1956
 
 Fixed Assets:
 
 Fixed Assets are shown at cost or valuation less depreciation. Cost
 comprises of the purchase price and other attributable expenses
 including cost of barrowings till the date of Capitalization in the
 case of assets involving material investment and substantial lead time.
 
 Depreciation:
 
 Depreciation is provided for on straight line method at the rates
 specified in Schedule XIV to the Companies Act, 1956, as amended from
 time to time.
 
 Inventories:
 
 Finished goods are valued at cost or market value whichever is lower
 inclusive of excise duty. Semi- finished goods are valued at cost or
 net realizable value whichever is lower. Stores and spares, raw
 material and coal are valued at weighted average cost which includes
 cost of transportation, insurance, unloading and other incidental
 expenses. Material in transit is valued at cost plus insurance and
 other incidental expenses.
 
 Revenue Recognition:
 
 Revenue is recognized to the extent that it is probable that the
 economic benefits will flow to the company and the revenue can be
 reliably measured.
 
 Sale of goods:
 
 Revenue is recognized when the significant risks and rewards of
 ownership of the goods have passed to the buyer.
 
 Interest:
 
 Revenue is recognized on a time proportion basis taking into account
 the amount outstanding and the rate applicable.
 
 Dividend:
 
 Revenue is recognized when the shareholders'' right to receive payment
 is established by the balance sheet date.
 
 Retirement Benefits:
 
 Retirement benefits to employees are provided for by means of Provident
 Fund, Gratuity and Leave Encashment. Liability towards Gratuity and
 Leave Encashment are determined based on the management valuation as on
 the Balance Sheet date.
 
 Taxes on Income:
 
 Provision for current tax is made for the amount of tax payable in
 respect of taxable income for the year under Income Tax Act, 1961.
 Deferred tax is recognized on timing difference being the difference
 between taxable incomes and accounting income that originate in one
 period and are capable of reversal in subsequent periods, subject to
 consideration of prudence.