Accounting Policies of Exotic Coal Ltd. Company

Mar 31, 2010

1. Accounting Conventions:

These accounts are prepared under the historical costing convention, with revenues recognized and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as receivable or payable during the year as a going concern.

2. Fixed Assets:

Fixed Assets are at the cost less accumulated depreciation.

3. Depreciation:

Depreciation on Fixed Assets has been provided on straight line method at the rates prescribed in Schedule XIV of the Companies Act, 1956.

4. Inventories:

Inventories are valued at lower of cost or net realizable value.

5. Sales:

Sales are recorded net of returns, trade discounts, rebates.

6. Miscellaneous Expenditure:

Preliminary expenses are amortized over ten years.

7. In the opinion of the Board of Directors:

a) The Current Assets and Loans and Advances are approximately of the value stated, if realized in ordinary course of Business.

b) All know liabilities have been provided for in full in the books of the accounts of the company.