1.  BASIS OF PREPARATION OF FINANCIAL STATEMENT
 
 The financial statements are prepared on historical cost convention
 basis in accordance with the generally accepted accounting principles
 and the accounting standards referred to in section 211(3C) of the
 Companies Act, 1956.
 
 2.  RECOGNITION OF INCOME AND EXPENDITURE
 
 The company generally follows mercantile system of accounting and
 recognizes significant items of Income & Expenditure on accrual basis
 except those sums which are not reasonably certain of realisation are
 recognized on cash basis.
 
 3.  FIXED ASSETS
 
 The gross block of Fixed Assets is stated at cost of
 acquisition/construction less CENVAT Credit available thereon,
 including indirect cost related to construction and interest and
 financial costs, if any, related to their acquisition/construction till
 such assets are put to use.
 
 4.  EXPENDITURE DURING CONSTRUCTION PERIOD
 
 Expenditure directly related to particular fixed assets are capitalised
 to those fixed assets. All indirect expenses are allocated to various
 fixed assets on reasonable basis. This is done once the construction
 and erection work is completed, pending which the accumulated amount is
 disclosed as capital work-in-progress etc.
 
 5.  IMPAIRMENT OF ASSETS
 
 The carrying amount of assets are reviewed at each balance sheet date
 on value in use basis to assess whether they are recorded in excess of
 their estimated recoverable amount. If carrying value exceeds the
 estimated recoverable amount, assets are written down to their
 estimated recoverable amount.
 
 6.  DEPRECIATION
 
 a.  Depreciation on fixed assets is calculated, at the rates specified
 in Schedule XIV of the Companies Act, 1956 on the Straight Line Method
 on assets which have been installed and put to use.
 
 b.  The cost of lease hold land has not been amortized over the period
 of the lease, since the lease is for a long period of 99 years intended
 to be renewed on the expiry of the stipulated period.
 
 7.  VALUATION OF INVENTORY
 
 a.  Raw Material including : at cost (on average cost basis) or net
 realisable value, whichever is lower.  Processed Ash
 
 b.  Stores & Spare Parts : at cost (on average cost basis) or net
 realisable value, whichever is lower.
 
 c.  Finished Goods : at cost or net realisable value, whichever is
 lower.
 
 d.  Goods in Process : at approximate cost of inputs and manufacturing
 cost depending on stage of completion.
 
 e.  Stock in Transit : at cost or net realisable value, whichever is
 lower.
 
 f.  The raw material consumed and the inventory of raw material are
 valued on the basis of purchase cost net of excise duty, therefore,
 CENVAT Credit in respect of raw material not consumed but lying in
 stock is shown in Balance Sheet as CENVAT Credit receivable under the
 head of Advances.
 
 g.  The excise duty on stock of finished goods lying in bonded
 warehouse is included in valuation of closing stock of finished goods.
 
 h. The excise duty paid on stock of finished goods cleared but remained
 unsold has been treated as expenditure and included in valuation of
 closing stock of finished goods.
 
 8.  RETIREMENT BENEFITS
 
 a.  Contribution to Provident Fund are made on monthly basis and
 charged to revenue accordingly.
 
 b.  Provision for encashement of leave is accounted for the
 arithmetical valuation on the assumption that such benefits are payable
 to all employees at the end of the financial year.
 
 c.  The accruing liability of Gratuity is covered by Employees Group
 Gratuity Scheme of the Life Insurance Corporation of India and premium
 accounted for the year of accrual. Provision for Gratuity payments to
 the Gratuity fund is based on actuarial valuation.
 
 9.  FOREIGN CURRENCY TRANSACTIONS
 
 Foreign currency transaction are accounted at exchange rates on the
 date transactions take place. Premium on forward cover contract in
 respect of import of raw materials is charged to Profit and Loss
 Account over the period of Contract. Amounts payable and receivable in
 foreign currency as at the Balance Sheet date not covered by forward
 contracts are reinstated at the applicable exchange rates prevailing on
 that date. All exchange differences arising on revenue transactions,
 not covered by forward contracts, are charged to Profit and Loss
 Account.
 
 10.  TAXATION
 
 Tax expense / (Tax saving) is the aggregate of current year tax and
 deferred tax charged/ (or credited) to the Profit and Loss Account of
 the year.
 
 a.  Current tax is the provision made for income tax liability on the
 profits for the year ended 31st March,2008 in accordance with the
 provisions of Income Tax Act, 1961.
 
 b.  Deferred tax is recognized, on timing differences, being the
 differences resulting from the recognition of items in the financial
 statements and in estimating its current income tax provision.
 
 c.  Deferred tax assets are recognized only to the extent that there is
 virtual certainty supported by convincing evidence and on there, to the
 extent that there is reasonable certainty of their realisation.
 
 d.  Deferred tax assets and liabilities are measured using the tax
 rates and the tax laws that have been enacted or substantially enacted
 at the balance sheet date.
 
 11.  BORROWING COSTS
 
 Borrowing Cost are charged to revenue except in cases where costs
 relate to qualifying assets in which case such costs are capitalised as
 a part of cost of respective assets till the date they are put to their
 commercial use.
 
 12.  IMPORT OF RAW MATERIAL
 
 Assessment of Custom Duty on imported raw material has been computed by
 custom department on provisional valuation basis and accounted in books
 of accounts accordingly, pending report of custom approved laboratory.
 Variations in custom duty, if any, are accounted for in the year of
 finalisation.
 
 Payments made against import of raw material and expenditure incurred
 towards this, but material not received at the factory site, has been
 considered as advance against raw material.
 
 13.  EARNINGS PER SHARE (EPS)
 
 The earnings considered in ascertaining the Companys EPS comprises the
 net profit after tax and includes the post tax effect of any extra
 ordinary items. The number of shares used in computing Basic EPS is the
 weighted average number of shares outstanding during the year.
 
 14.  CONTINGENT LIABILITIES
 
 All liabilities have been provided for in the accounts except
 liabilities of a contingent nature, which have been disclosed at their
 estimated value in the notes on accounts.
 
 15.  MISCELLANEOUS EXPENDITURE
 
 Public Issue expenditure will be amortized over a period of ten years
 from the year 2000-2001 in which expansion has been completed.