(a) Basis for Accounting
 
 The financial statements are prepared under the historical cost
 convention on an accrual basis of accounting in accordance with the
 generally accepted accounting principles, Accounting Standards notifi
 ed under Section 211(3C) of the Companies Act, 1956 and the relevant
 provisions thereof.
 
 (b) Revenue Recognition
 
 (i) Sales comprises sale of goods and services, net of trade discounts.
 
 (ii) Export incentive under the Duty Entitlement Pass Book Scheme has
 been recognised on the basis of credits afforded in the pass book.
 
 (c) Employee Benefits
 
 (i) Short-term employee benefi ts are recognised as an expense at the
 undiscounted amount in the Profit and Loss Account of the year in
 which the related service is rendered.
 
 (ii) Post employment benefi ts are recognised as an expense in the
 Profit and Loss Account for the year in which the employee has
 rendered services. The expense is recognised at the present value of
 the amount payable towards contributions. The present value is
 determined using the market yields of government bonds, at the balance
 sheet date, as the discounting rate.
 
 (iii) Other long-term employee benefi ts are recognised as an expense
 in the Profit and Loss Account for the period in which the employee
 has rendered services. Estimated liability on account of long-term
 benefi ts is discounted to the current value, using the market yield on
 government bonds, as on the date of balance sheet.
 
 (iv) Actuarial gains and losses in respect of post employment and other
 long-term benefi ts are charged to the Profit and Loss Account.
 
 (v) In respect of the Employee Separation Scheme (ESS), the increase in
 the net present value of the future liability for pension payable to
 employees, who have opted for retirement under the Employee Separation
 Scheme of the Company, is charged to the Profit and Loss Account.
 
 (d) Fixed Assets
 
 All fixed assets are valued at cost less depreciation. Pre-operation
 expenses including trial run expenses (net of revenue) are capitalised.
 Borrowing costs during the period of construction is added to the cost
 of eligible fixed assets.
 
 Blast Furnace relining is capitalised. The written down value of the
 asset consisting of lining/relining expenditure embedded in the cost of
 the furnace is written off in the year of fresh relining.
 
 (e) Depreciation
 
 (I) Capital assets whose ownership does not vest in the Company is
 depreciated over their estimated useful life or five years, whichever
 is less.
 
 (II) In respect of other assets, depreciation is provided on a straight
 line basis applying the rates specifi ed in Schedule XIV to the
 Companies Act, 1956 or rates based on estimated useful life whichever
 is higher. However, asset value upto ? 25,000 is fully depreciated in
 the year of acquisition. The details of estimated life for each
 category of asset is as under :
 
 (i) Buildings — 30 to 62 years
 
 (ii) Plant and Machinery — 4 to 21 years
 
 (iii) Railway Sidings — 21 years
 
 (iv) Vehicles and Aircraft — 5 to 18 years
 
 (v) Furniture, Fixtures and office Equipment — 4 to 5 years
 
 (vi) Intangibles (Computer Software) — 5 to 10 years
 
 (vii) Development of property for development of mines and collieries
 are depreciated over the useful life of the mine or lease period
 whichever is less, subject to maximum of 10 years
 
 (viii) Blast Furnace relining is depreciated over a period of 10 years
 (average expected life).  
 
 (ix) Freehold land is not depreciated.
 
 (x) Leasehold land is amortised over the life of the lease.  
 
 (xi) Roads — 30 to 62 years
 
 (f) Foreign Currency Transactions
 
 Foreign Currency Transactions (FCT) and forward exchange contracts used
 to hedge FCT are initially recognised at the spot rate on the date of
 the transaction/contract. Monetary assets and liabilities relating to
 foreign currency transactions and forward exchange contracts remaining
 unsettled at the end of the year are translated at year end rates.
 
 The company has opted for accounting the exchange differences arising
 on reporting of long term foreign currency monetary items in line with
 Companies (Accounting Standards) Amendment Rules 2009 relating to
 Accounting Standard 11 (AS-11) notifi ed by Government of India on 31st
 March, 2009. Accordingly the effect of exchange differences on foreign
 currency loans of the company is accounted by addition or deduction to
 the cost of the assets so far it relates to depreciable capital assets
 and in other cases by transfer to Foreign Currency Monetary Items
 Translation Difference Account to be amortised over the balance period
 of the long- term monetary items or period upto 31st March, 2011
 whichever is earlier.
 
 The differences in translation of FCT and forward exchange contracts
 used to hedge FCT (excluding the long term foreign currency monetary
 items accounted in line with Companies (Accounting Standards) Amendment
 Rules 2009 on Accounting Standard 11 notifi ed by Government of India
 on 31st March, 2009) and realised gains and losses, other than those
 relating to fixed assets are recognised in the Profit and Loss
 Account. The outstanding derivative contracts at the balance sheet date
 other than forward exchange contracts used to hedge FCT are valued by
 marking them to market and losses, if any, are recognised in the Profi
 t and Loss Account.
 
 Exchange difference relating to monetary items that are in substance
 forming part of the Companys net investment in non integral foreign
 operations are accumulated in Foreign Exchange Fluctuation Reserve
 Account.
 
 (g) Investments
 
 Long term investments are carried at cost less provision for diminution
 other than temporary, if any, in value of such investments.  Current
 investments are carried at lower of cost and fair value.
 
 (h) Inventories
 
 Finished and semi-finished products produced and purchased by the
 Company are carried at lower of cost and net realisable value.
 
 Work-in-progress is carried at lower of cost and net realisable value.
 
 Coal, iron ore and other raw materials produced and purchased by the
 Company are carried at lower of cost and net realisable value.
 
 Stores and spare parts are carried at cost. Necessary provision is made
 and charged to revenue in case of identifi ed obsolete and non-moving
 items.
 
 Cost of inventories is generally ascertained on the weighted average
 basis. Work-in-progress and finished and semi-finished products are
 valued on full absorption cost basis.
 
 (i) Relining Expenses
 
 Relining expenses other than expenses on Blast Furnace relining are
 charged as an expense in the year in which they are incurred.
 
 (j) Research and Development
 
 Research and Development costs (other than cost of fixed assets
 acquired) are charged as an expense in the year in which they are
 incurred.
 
 (k) Deferred Tax
 
 Deferred Tax is accounted for by computing the tax effect of timing
 differences which arise during the year and reverse in subsequent
 periods.