BASIS OF ACCOUNTING
 
 The financial statements are prepared as a going concern under
 historical cost convention on an accrual basis and comply in all
 material respects with the Generally Accepted Accounting Principles in
 India and the relevant provisions of the Companies Act, 1956, except
 those items covered under Accounting Standard-30 on Financial
 instruments: Recognition and Measurement which are measured at fair
 value.
 
 USE OF ESTIMATES
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires management to make estimates
 and assumptions that afect the reported amounts of assets and
 liabilities and disclosure of contingent liabilities at the date of the
 financial statements and the reported amounts of revenues and expenses
 during the reporting period. Diferences between actual results and
 estimates are recognised in the periods in which the results are
 known/materialise.
 
 FIXED ASSETS
 
 Fixed assets (including research and development assets) are recognised
 at cost of acquisition including expenditure upto the date of
 commissioning, net of cenvat/Value Added Tax less accumulated
 depreciation and impairment loss. Grant received towards fixed assets is
 reduced from the cost of the related assets.
 
 Mine development expenditure includes leases, costs incurred for
 acquiring/developing properties/rights up to the stage of commercial
 production.
 
 IMPAIRMENT OF FIXED ASSETS
 
 The carrying amount of assets are reviewed at each balance sheet date,
 if there is any indication of impairment based on internal/ external
 factors. An asset is treated as impaired when the carrying cost of
 assets exceeds its recoverable value. An impairment loss is recognised
 in the proft and loss account where the carrying amount of an asset
 exceeds its recoverable amount. The impairment loss recognised in prior
 accounting periods is reversed if there has been a change in the
 estimate of recoverable amount.
 
 DEPRECIATION AND AMORTISATION
 
 Depreciation on fixed assets is provided using the straight-line method
 at rates prescribed under Schedule XIV of the Companies Act, 1956
 subject to the following deviations:
 
 Additions and disposals are reckoned on the frst day and the last day
 of the month respectively.
 
 Individual items of plant and machinery and vehicles costing upto Rs.
 25,000/- are wholly depreciated.
 
 In respect of additions arising on account of Insurance spares, on
 additions/extensions forming an integral part of existing plants and on
 the revised carrying amount of the assets identifed as impaired on
 which depreciation has been provided over residual life of the
 respective fixed assets.  Intangible assets are amortised over its
 expected useful life.  Amortisation of leasehold land has been done in
 proportion to the period of lease.
 
 Mine development expenditure is amortised in proportion to the annual
 ore raised to the remaining mineable ore reserves.  In the year of
 abandonment of mine, the residual mine development expenditure is
 written of.
 
 FINANCIAL ASSET INVESTMENTS
 
 i) Investments are recorded as Long Term Investments unless they are
 expected to be sold within one year. Investments in associates are
 valued at cost less provision for impairment if any. Investments are
 reviewed for impairment.
 
 ii) Investments classifed as Held for Trading that have a market price
 are measured at fair value and gains and losses arising on account of
 fair valuation is routed through Proft and Loss account. Investments in
 unquoted equity instruments that do not have a market price and whose
 fair value cannot be reliably measured are measured at cost.
 
 INVENTORIES
 
 Ore, Concentrate, stock in process and fnished products are valued at
 lower of cost and net realisable value on weighted average basis.
 Stores and spares are valued at lower of cost and net realisable value
 on weighted average basis.  Byproducts, aluminum scrap, chemical lead
 scrap, anode scrap and coke fnes are valued at net realisable value.
 Other scraps/residuals are not valued.  l Stock pile of moore cake,
 neutral sand, lime sludge, beta cake, lead sulphate, lead hydroxide and
 copper cadmium cake are valued at Rs. 1 per MT.
 
 REVENUE AND EXPENSES
 
 Revenue on sale of products (net of volume rebates) is recognised on
 delivery of product and/or on passage of title to the buyer.  Sales
 include export beneft. Export benefts are recognised on recognition of
 export sales.
 
 All other revenue and expenses are recognised on accrual basis. Revenue
 relating to interest on staf loans for conveyance, insurance/railway
 claims is recognised when recoverability is certain.
 
 Expenditure on projects is:
 
 - capitalised when projects are crystallised.
 
 - written off in other cases.
 
 Technical know-how, not directly identifiable to any plans, layout of
 buildings/plant and machinery, etc. are written off. Expenditure
 relating to fixed assets not owned by Company is charged to revenue.
 
 Prior period/prepaid expenses exceeding Rs. 0.05 Crore is appropriately
 disclosed.
 
 All revenue expenses on research and development are written off.
 
 FOREIGN CURRENCY TRANSACTIONS
 
 1.  Transactions denominated in foreign currencies are normally
 recorded at the exchange rate prevailing at the time of the
 transaction.
 
 2.  Monetary items denominated in foreign currencies at the year end
 are restated at year end rates. In case of monetary items which are
 hedged by derivative instruments, the valuation is done as per
 “Accounting Standard - 30”, Financial Instruments: Recognition and
 Measurement”. The fair value of foreign currency contracts are
 calculated with reference to current forward exchange rates for the
 contracts with similar maturity profile.
 
 3.  Non-monetary foreign currency items are carried at cost.
 
 4.  Any income or expense on account of exchange difference either on
 settlement or on translation is recognised in the Profit and Loss
 account.
 
 DERIVATIVE FINANCIAL INSTRUMENT
 
 In order to hedge its exposure to foreign exchange, interest rate and
 commodity price risks, the Company enters into forward, option and
 other derivative financial instruments. The Company does not hold
 derivative financial instruments for speculative purposes. Derivative
 financial instruments are initially recorded at their fair value on the
 date of the derivative transaction and are re-measured at their fair
 value at subsequent balance sheet dates.
 
 Changes in the fair value of derivatives that are designated and
 qualify as fair value hedges are recorded in the income statement.  The
 hedged item is recorded at fair value and any gain or loss is recorded
 in the Income statement and is offset by the gain or loss from the
 change in the fair value of the derivative.
 
 Changes in the fair value of derivatives that are designated and
 qualify as cash flow hedges are recorded in equity. Amounts deferred to
 equity are recycled in the income statement in the periods when the
 hedged item is recognised in the income statement.
 
 Derivative financial instruments that do not qualify for hedge
 accounting are marked to market at the balance sheet date and gains or
 losses are recognised in the income statement immediately.
 
 Hedge accounting is discontinued when the hedging instrument expires or
 is sold, terminated or exercised, or no longer qualifies for hedge
 accounting. Any cumulative gain or loss on the hedging instrument
 recognised in equity is kept in equity until the forecast transaction
 occurs. If a hedged transaction is no longer expected to occur, the net
 cumulative gain or loss recognised in equity is transferred to net
 profit or loss for the year.
 
 Derivatives embedded in other financial instruments or other host
 contracts are treated as separate derivatives when their risks and
 characteristics are not closely related to those of host contracts and
 the host contracts are not carried at fair value with unrealised gains
 or losses reported in the income statement.
 
 BORROWING COST
 
 Borrowing costs that are attributable to the acquisition/construction
 of qualifying assets are capitalised as part of cost of such asset till
 such time, as the asset is ready for its intended use. All other
 borrowing costs are recognised as an expense in the period in which
 they are incurred.
 
 EMPLOYEE BENEFITS (i) Short-term
 
 Short-term employee benefits including termination benefits are
 recognised as an expense at the undiscounted amount incurred during the
 year.
 
 (ii) Long-term
 
 a) Defned contribution plan and family pension scheme:
 
 The Companys Contribution to the recognised Provident Fund and family
 pension scheme paid / payable during the year is recognised to the
 Profit and Loss Account. The shortfall, if any, between the return
 guaranteed by the statute and actual earnings of the Fund is provided
 for by the Company and contributed to the Fund.
 
 b) Defned Beneft plan: Gratuity
 
 The Company accounts for the net present value of its obligations for
 gratuity benefts based on an independent external actuarial valuation
 carried out annually and determined using the projected unit credit
 method. The Company makes annual contributions to funds administered by
 trustees and managed by insurance company for amounts notifed by the
 said insurance company. Actuarial gains and losses are immediately
 recognised in the Proft and Loss Account.
 
 c) Other Long term beneft plan: Compensated absences
 
 The Company has a scheme for Leave encashment for employees, the
 liability for which is determined on the basis of an actuarial
 valuation carried out at the end of the year.
 
 VOLUNTARY RETIREMENT EXPENSES
 
 Voluntary retirement expenses are charged to the proft and loss
 account.
 
 TAXATION
 
 The Companys income taxes include taxes on the Companys taxable
 profts, adjustment attributable to earlier periods and changes in
 deferred taxes.
 
 Provision for current tax is made after taking into account rebate and
 relief available under the Income-tax Act, 1961.
 
 Deferred tax resulting from timing diference between book and taxable
 proft is accounted for using the tax rates and laws that have been
 enacted or substantively enacted as on the balance sheet date. The
 deferred tax asset is recognised only to the extent that there is a
 reasonable certainty that the future taxable proft will be available
 against which the deferred tax asset can be realised.
 
 DIVIDEND
 
 Dividend payment including tax thereon is appropriated from profts for
 the year and provision is made for proposed fnal dividend and tax
 thereon subject to consent of the shareholders at the annual general
 meeting.
 
 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.