1 Accounting Convention
 
 The financial statements are prepared to comply in all material aspects
 with all the applicable accounting principles in India, the applicable
 accounting standards, notified under section 211(3C) of the Companies
 Act, 1956 and the relevant provisions of the Companies Act, 1956. The
 financial statements have been prepared in accordance with historical
 cost convention.
 
 2 Use of Estimates
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities on the date of the financial statements and the reported
 amount of revenues and expenses during the reporting period. Difference
 between the actual results and estimates are recognised in the period
 in which the results are known / materialised.
 
 3 Fixed Assets and Depreciation
 
 All fixed assets are stated at cost of acquisition less accumulated
 depreciation. Assessment of indication of impairment of an asset is
 made at the year end and impairment loss, if any, is recognised.
 
 Expenditure on assets, other than plant and machinery and furniture
 hired out to employees and at camp offices, is charged to revenue.
 
 Machinery spares that can be used only in connection with an item of
 fixed assets and their use is expected to be irregular are capitalised
 and amortised over a period of 15 months on straight line basis.
 Replacement of such spares is charged to revenue.
 
 Depreciation is provided on the straight line method at the rates and
 in the manner specified in Schedule XIV of the Companies'' Act, 1956,
 where such rates are not lower than the rates determined on the basis
 of management ''s estimate of economic useful life of the asset.
 Depreciation on addition to / deduction from assets during the year is
 provided on pro- rata basis.
 
 4 Intangibles
 
 Intangible Assets are stated at cost of acquisition less accumulated
 amortisation. Cost of computer software is being amortised over a
 period of six years.
 
 5 Foreign Currency Transactions
 
 Foreign currency transactions are recorded at the exchange rate
 prevailing on the relevant date. The exchange difference resulting from
 the settled transactions is recognised in the profit and loss account.
 Year end balances of monetary items are restated at the year-end
 exchange rates and the resultant net gain or loss is adjusted in the
 profit and loss account.
 
 Premium or discount on forward contract is amortised over the life of
 such contract and is recognised as income or expenses in the respective
 period.
 
 6 Investments
 
 Long term investment are stated at cost, less adjustment for any
 diminution, other than temporary, in the value thereof.  Current
 investments are stated at lower of cost and market value.
 
 7 Inventories
 
 Inventories of spares and consumables is stated at lower of cost or net
 realisable value. Inventories of mining business being used/usable more
 than a period of 1 year is charged as consumption over its
 conusmption/usage period on a pro rata basis. Mining inventory is
 estimated to be consumed/usable over 36 months from the procurement of
 such inventory.
 
 8 Retirement Benefits
 
 a Defined Benefit Schemes
 
 Short-term employee benefits 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.
 
 Post employment and other long term employee benefits are recognised as
 an expense in the profit and loss account for the year in which the
 employee has rendered services. The expense is recognized at the
 present value of the amount payable determined using actuarial
 valuation techniques. Actuarial gains and losses in respect of post
 employment and other long term benefits are charged to the profit and
 loss account.
 
 b Defined Contribution Schemes
 
 The contributions required in respect of Provident Fund Scheme
 maintained by the Company, are recognised in the profit and loss
 account on accrual basis.
 
 9 CENVAT Credit
 
 CENVAT credit availed on capital goods is reduced from the cost of the
 capital goods. CENVAT claimed on services is reduced from the cost of
 such services. The unutilised CENVAT balance is shown as asset in loans
 and advances.
 
 10 Revenue Recognition a Services
 
 Revenue from services are recognised in the period in which services
 are rendered on percentage completion method.  
 
 b Interest
 
 Revenue is recognised on a time proportion basis taking into account
 the amount outstanding and the rate applicable.
 
 c Dividend
 
 Revenue is recognised when the right to receive dividend is
 established.
 
 11 Taxes on Income
 
 Provision for current tax is made after taking into consideration
 benefits admissible under the provisions of the Income Tax Act, 1961.
 Deferred tax resulting from timing differences between taxable and
 accounting income is accounted for using the tax rates and laws that
 are enacted or substantively enacted as on the balance sheet date. The
 deferred tax asset is recognised and carried forward only to the extent
 that there is a virtual certainty that the asset will be realised in
 future.
 
 12 Provisions, Contingent Liabilities and Contingent Assets
 
 Provisions involving substantial degree of estimation in measurement
 are recognised when there is a present obligation as a result of past
 events and it is probable that there will be an outflow of resources.
 Contingent Liabilities are not recognised but are disclosed in the
 notes. Contingent Assets are neither recognised nor disclosed in the
 financial statements.