(a) Basis of Accounting
 
 The financial statements are prepared on an accrual basis of accounting
 and in accordance with the generally accepted accounting principles in
 India, provisions of the Companies Act, 1956 (the Act) and comply in
 material aspects with the accounting standards notified under Section
 21 1 (3C) of the Act, read with Companies (Accounting Standards) Rules,
 2006
 
 (b) Use of Estimates
 
 The preparation of financial statements requires estimates and
 assumptions to be made that affect the reported amount of assets and
 liabilities and disclosure of contingent 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.
 
 (c) Revenue Recognition
 
 Income from fuel handling and service charges is recognised on the
 basis of services rendered as per the terms of contract.
 
 Revenue on trading of coal is recognised on transfer of property to the
 buyers for consideration.
 
 Service income represents income from support services recognised as
 per the terms of the service agreements entered into with the
 respective parties.
 
 Profit on sale/redemption of investments is accounted on
 sale/redemption of such investments. Income from mutual fund scheme
 having fixed maturity plans is accounted on declaration of dividend or
 on maturity of such investments.
 
 (d) Foreign Currency Transactions
 
 (i) Foreign currency transactions are accounted at the exchange rates
 prevailing on the date of the transactions. Exchange differences
 arising on reporting of short term foreign currency monetary items at
 rates different from those at which they were initially recorded are
 recorded in the Profit and Loss account.
 
 (ii) In respect of long term foreign currency monetary items, the
 Company has availed the option to adjust the cost of the asset towards
 the exchange differences arising on reporting of long term foreign
 currency monetary items at rates different from those at which they
 were initially recorded, in so far as they relate to depreciable
 capital asset and depreciating the same over the balance life of asset.
 With respect to exchange differences arising on other long term foreign
 currency monetary items, the same is accumulated in Foreign Currency
 Monetary Item Translation Difference Account and amortised over the
 balance period of such long term monetary item but not beyond March 31,
 2011
 
 (iii) Non-monetary items denominated in foreign currency are stated at
 the rate prevailing on the date of transaction
 
 (e) Fixed Assets and Capital Work-in-progress
 
 (i) The gross block of fixed assets is stated at cost of acquisition or
 construction, including any cost attributable in bringing the assets to
 their working condition for their intended use.
 
 (ii) All project related expenditure viz, civil works, machinery under
 erection, construction and erection materials, pre- operative
 expenditure incidental/attributable to construction of project,
 borrowing cost incurred prior to the date of commercial operation and
 trial run expenditure are shown under Capital Work-in-Progress. These
 expenses are net of recoveries and income (net of tax) from surplus
 funds arising out of project specific borrowings.
 
 (f) Intangible Assets
 
 (i) Intangible assets are recognized where it is probable that the
 future economic benefit attributable to the assets will flow to the
 Company and its cost can be reliably measured
 
 (ii) Expenditure incurred on acquisition of intangible assets which is
 not put to use at the reporting date is disclosed under capital
 work-in-progress.
 
 (g)   Depreciation/Amortisation
 
 (i)    Tangible Assets:
 
 Fixed assets are depreciated under the straight line method as per the
 rates and in the manner prescribed under Schedule XIV of the Companies
 Act, 1956.
 
 (ii) Intangible Assets:
 
 Software expenses are amortised over a period of three years
 
 (h) Investments
 
 Long-term investments are stated at cost less provision for diminution
 other than temporary, if any, in the value of such nvestments. Current
 investments are valued at lower of cost and fair value.
 
 (i) Employee benefits
 
 (i) Short term employee benefits
 
 All employee benefits payable wholly within twelve months of rendering
 the service are classified as short term employee benefits. The
 undiscounted amount of short term employee benefits expected to be paid
 in exchange for the services rendered by employees are charged off to
 the Profit and Loss account/Capital Work-in-progress, as applicable
 
 (ii) Defined Contribution Plans:
 
 Contributions to defined contribution schemes such as provident fund,
 superannuation, etc are charged off to the Profit and Loss
 account/Capital Work-in-progress, as applicable, during the year in
 which the employee renders the related service.
 
 (iii) Defined Benefit Plans:
 
 The Company also provides employee benefits in the form of gratuity and
 leave encashment, the liability for which as at the year end is
 determined by independent actuary based on actuarial valuation using
 the projected unit credit method Such defined benefits are charged off
 to the Profit and Loss account/Capital Work-in-progress, as applicable.
 Actuarial gains and losses are recognized immediately in the Profit and
 Loss Account/Capital Work-in-progress, as applicable
 
 (j) Employee Stock Option Scheme (ESOS)
 
 The employees of the Company and independent directors are entitled for
 grant of stock option (equity shares), based on the eligibility
 criteria set in ESOS plan of the Company. The employee compensation
 expenses are accounted on the basis of intrinsic value method. The
 excess, if any, of quoted market price over the exercise price on the
 date of grant would be recognised as compensation cost over the vesting
 period. The Company recognises compensation cost on the basis of
 estimated number of stock options expected to vest. Subsequently, if
 there are any indications resulting in a difference in the number of
 stock option expected to vest, the Company revises its previous
 estimate and accordingly recognises/(reverses) compensation cost on
 employee service.
 
 (k) Borrowing Costs
 
 Borrowing costs that are attributable to the acquisition or
 construction of qualifying assets are capitalised as part of the cost
 of such assets. A qualifying asset is one that necessarily takes
 substantial period of time to get ready for intended use. All other
 borrowing costs are charged to revenue.
 
 (l) Accounting for Taxes on Income
 
 Provision for current tax is made after taking into consideration
 benefits admissible under the provisions of the Income Tax Act, 1 961.
 Deferred tax resulting from timing differences between book and
 taxable profit 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 and carried forward only to the extent
 that there is a reasonable certainty that the assets will be realised
 in future. However in respect of unabsorbed depreciation or carry
 forward loss, the deferred tax asset is recognised and carried forward
 only to the extent that there is a virtual certainty that the assets
 will be realised in future.
 
 (m) Provisions
 
 Provisions are recognised when the Company has a present legal
 obligation, as a result of past events, for which it is probable that
 an outflow of economic benefits will be required to settle the
 obligation and a reliable estimate can be made for the amount of the
 obligation.
 
 (n) Impairment of Assets
 
 The Company assesses at each balance sheet date whether there is any
 indication that an asset may be impaired. If any such indication
 exists, the Company estimates the recoverable amount of the asset. If
 such recoverable amount of the asset or recoverable amount of the cash
 generating unit to which the asset belongs is less than its carrying
 amount, the carrying amount is reduced to its recoverable amount. The
 reduction is treated as an impairment loss and is recognised in the
 Profit and Loss Account.