1.  General:
 
 The Accompanying financial statements have been prepared under the
 historical cost convention, in accordance with Indian Generally
 Accepted Accounting Principles (GAAP) and the provisions of the
 Companies Act, 1956.
 
 2.  Revenue Recognition:
 
 Revenue is recognized when it is earned and no significant uncertainty
 exists as to its realization or collection.
 
 Revenue from sale of goods is recognized on delivery of the products,
 when all significant contractual obligations have been satisfied, the
 property in the goods is transferred for price, significant risks and
 rewards of ownership is retained.  Sales are net of sales tax/Value
 added tax. Excise duty recovered is presented as a reduction from gross
 turnover.
 
 3.  Fixed Assets and Depreciation :
 
 Fixed assets are stated at their cost of acquisition or construction
 less accumulated depreciation. Costs of acquisition comprise all costs
 incurred to bring the assets to their location and working condition up
 to the date the assets are put to use. Cost of construction are
 composed of those costs that relate directly to specific assets and
 those that are attributable to the construction activity in general and
 can be allocated to the specific assets up to the date the assets are
 put to use.
 
 Depreciation on assets is provided pro-rata for the period of use, by
 the straight line method (SLM) at the prescribed in Schedule XIV to the
 Companies Act, 1956.
 
 4.  Inventories:
 
 Inventories are valued at the lower of cost or net realizable value.
 Cost of inventories comprises all cost of purchase, costs of conversion
 and other costs incurred in bringing the inventories to their present
 location and condition. Cost is determined by weighted average cost
 method.
 
 The liability towards excise duty on finished goods lying in excise
 godown amounting to Rs. 2,70,42,857/- is provided in the books and
 therefore the stock is valued inclusive of excise duty payable thereon
 in accordance with the provisions of AS-2 Valuation of Inventories.
 However this has no impact on the profit of the year.
 
 5.  Foreign Currency Transactions :
 
 Foreign currency transactions are recorded at the exchange rate
 prevailing on the date of the transaction. Monetary foreign currency
 assets and liabilities are reported at the exchange rate prevailing on
 the balance sheet date. Exchange differences are dealt with in the
 Profit & Loss account.
 
 6.  Borrowing costs:
 
 Borrowing costs attributable to the acquisition or construction of
 qualifying assets, as defined in Accounting Standard 16 on Borrowing
 Costs are capitalized as part of the cost of such asset up to the date
 when the asset is ready for its intended use. Other borrowing costs are
 expensed as incurred.
 
 7.  Employee Benefits:
 
 Employee benefits such as salaries, allowances, non-monetary benefits
 and employee benefits under defined contribution plans such as
 provident fund, which fall due for payment within a period of twelve
 months after rendering services are charged as expenses to the Profit &
 Loss account in the period in which the service is rendered.
 
 8.  Income Tax:
 
 Income taxes are accounted for in accordance with Accounting Standard
 22 on Accounting for Taxes on Income.  Taxes Comprise both current
 and deferred tax.
 
 Minimum alternative tax (MAT) paid in accordance to the tax laws, which
 gives rise to future economic benefits in the form of adjustment of
 future income tax liability, is considered as an asset if there is
 convincing evidence that the Company will pay normal income tax after
 setting off of brought forward losses. Accordingly, MAT is recognised
 as an asset in the balance sheet when it is probable that the future
 economic benefit associated with it will flow to the Company and the
 asset can be measured reliably.
 
 Current tax is measured at the amount expected to be paid/recovered
 from the revenue authorities, using the applicable tax rates and tax
 laws.
 
 The tax effect of timing differences that result between taxable income
 and accounting income and are capable of reversal in one or more
 subsequent periods are recorded as a deferred tax asset or deferred tax
 liability. Deferred tax assets and liabilities are recognized for
 future tax consequences attributable to timing differences. During the
 year, deferred tax liability of Rs.6,16,70,721/- has been provided in
 the current year''s Profit & Loss Account.
 
 Tax on distributed profits payable in accordance with the provisions of
 section 115 O of the Income Tax Act, 1961 is in accordance with the
 guidance note on Accounting for Corporate Dividend Tax regarded as a
 tax on distribution of profits and is not considered in determination
 of profits for the year.
 
 9.  Earnings Per Share (EPS):
 
 The company reports basic Earnings per share (EPS) in accordance with
 Accounting Standard 20 on Earnings per share. Basic EPS is computed
 by dividing the net Profit or Loss for the year attributable to equity
 share holders 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 period attributable to equity shareholders and
 the weighted average number of shares outstanding during the period are
 adjusted for the effects of all dilutive potential equity shares.
 
 10.  Cash Flow Statement:
 
 The Cash flow statement is prepared by the Indirect Method set out in
 Accounting Standard 3 on Cash flow Statement and presents the cash
 flows by operating, investing and financing activities of the Company.
 
 Cash and Cash equivalents presented in the cash flow statement consist
 of cash on hand and demand deposits with banks.
 
 11.  Contingent Liabilities:
 
 Contingent liabilities as defined in Accounting Standard 28 on
 Provisions, Contingent Liabilities and Contingent Assets are
 disclosed by way of notes to the accounts. Disclosure is not made if
 the possibility of an outflow of future economic benefits will be
 required to settle the obligation.
 
 12.  Segmenting Reporting:
 
 The Company is primarily engaged in the business of manufacture and
 sale of iron and steel products. The primary segment of the company is
 steel which in the context of which in the context of Accounting
 Standard 17 on Segment Reporting constitute reportable segments.
 However the company has captive power generation for manufacture of
 ingots. The unutilized power is sold to power traders and the revenue
 so generated is included in the sales.
 
 13.  Investments:
 
 Long-term investments are stated at cost, less provision for other than
 temporary diminution in value, if any.
 
 14.  Operating Lease:
 
 Operating lease payments are recognized as expense in the profit and
 loss account on a straight line basis over the lease term.