2. Significant Accounting Policies:
2.2 Basis of preparation
The financial statements of the company have been prepared in accordance with Indian accounting
standards (Ind AS) as notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015 (as amended from time to time) and presentation requirements of
Division II of Schedule III to the Companies Act, 2013.
2.3 Use of Estimates
The preparation of the financial statements in conformity with IND AS requires the Management to make
estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating
to contingent liabilities as at the date of the financial statements and reported amounts of income and
expenses during the period. The Company believes that the estimates used in the preparation of the financial
statements as prudent and reasonable. Accounting estimates could change from period to period. Actual
results could differ from those estimates.
2.4 Revenue Recognition:
i) Revenue is recognized to the extent that is probable that the economic benefits will flow to the company
and the revenue can be reliably measured.
ii) Sale of products is recognized when the significant risk and reward of ownership of the goods have been
passed to the buyer. Revenue is measured at fair value of the consideration received or receivable, after
deduction of any taxes or duties collected on behalf of the government which are levied on sales such as
VAT, GST, etc.
iii) Dividend income, if any, is recognized when the company's right to receive dividend is established by the
reporting date.
iv) Interest income from financial assets is recognized at the effective interest rate applicable on initial
recognition.
v) Scrap sales is recognized at the fair value of consideration received or receivable upon transfer of
significant risk and rewards. It comprises of invoice value of goods and after deducting applicable taxes
on sale.
vi) Operating Lease rentals are accounted on the straight-line basis over the lease term.
2.5 Depreciation:
Depreciation on Tangible assets is provided on the straight-line method over the useful lives of assets as per
the rates specified under Schedule II of the Companies Act, 2013 on pro-rata basis.
2.6 Property, Plant and Equipment (PPE):
i) Property, Plant and Equipment are stated at cost of acquisition net of accumulated depreciation/
amortization and impairment losses if any, except free hold land which is carried at cost less impairment
losses if any. The cost comprises purchase prices, borrowing cost if capitalization criteria are met and
directly attributable cost of bringing the asset to its working condition for the intended use.
ii) The Company identifies the significant parts of plant and equipment separately which are required to be
replaced at intervals. Such parts are depreciated separately based on their specific useful lives. The cost
of replacement of significant parts are capitalized and the carrying amount of replaced parts are de¬
recognized. When each major inception/ overhauling is performed, its cost is recognized in the carrying
amount of the item of property, plant and equipment as a replacement if the recognition criteria are
satisfied. Any remaining carrying amount of the cost of the previous inspection/ overhauling (as distinct
from physical parts) is de- recognized.
iii) Other expenses on fixed assets, including day-to-day repair and maintenance expenditure and cost of
replacing parts that does not meet the capitalization criteria in accordance with IND AS 16 are charged to
the Statement of Profit and Loss for the period during which such expenses are incurred.
iv) PPEs are eliminated from the financial statements on disposal or when no further benefit is expected
from its use or disposal. Gains or losses arising from disposal of plant, property and equipment are
measured as the difference between the net disposal proceeds and the carrying amount of such assets
are recognized in the statement of profit and loss.
v) During the course of the year, the company has revalued its Property, plant and equipment based on the
valuation report issued by the Valuer as defined by the Companies Act Rules.
2.7 Impairment of Non - Financial Assets:
i) The carrying values of non-financial assets are reviewed for impairment at each Balance Sheet date, if
there is any indication of impairment based on internal and external factors.
ii) Non-financial assets are treated as impaired when the carrying amount of such asset exceeds its
recoverable value. After recognition of impairment loss, the depreciation /amortization for the said assets
is provided for remaining useful life based on the revised carrying amount, less its residual value if any,
on straight line basis.
iii) An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified
as impaired.
iv) An impairment loss is reversed when there is an indication that the impairment loss may no longer exist
or may have decreased.
2.8 Foreign Exchange Transactions:
Foreign Currency Transactions are translated into the functional currency using exchange rates at the date
of the transaction. Foreign exchange gains and losses from settlement of these transactions and from
translation of monetary assets and liabilities at the reporting date exchange rates are recognized in the
statement of Profit and Loss. Non- monetary items which are carried at historical cost denominated in foreign
currency are reported using the exchange rates at the time of transaction.
During the year, the company has not entered into any foreign exchange contract under review.
2.9 Borrowing Cost:
All borrowing costs are charged to revenue except to the extent they are attributable to qualifying assets,
which are capitalized. During the year under review, there was no borrowing attributable to qualifying assets
and hence no borrowing cost was capitalized.
2.10 Segment Accounting:
The company is principally engaged in a single business segment viz., Trading of coal.
2.11 Current versus non-current classification:
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period
All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle;
- It is held primarily for the purpose of trading;
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve Months after the
reporting period.
All other liabilities are classified as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realzation in cash
and cash equivalents. The Company has evaluated and considered its opeating cycle as 12 months. Deferred
tax assets / liabilities are classified as non-current assets/ liabilities.
2.12 Inventories:
i) Inventories are valued at cost or net realizable value whichever is lower. Cost includes the cost incurred
in bringing the inventories to their present location and condition.
ii) Raw materials, stores and spares are valued at cost or net realizable value whichever is lower. Cost
includes the cost incurred in bringing the inventories to their present location and condition. For cost
calculation of Raw materials as it is not ordinarily inter changeable specific identification method is used.
For cost calculation of stores and spares weighted average method is used.
iii) For valuation of finished goods / stock-in-process, cost includes material, direct labour, overheads (other
than abnormal amount of wasted materials, storage costs, selling and Administrative overheads)
wherever applicable.
2.13 Taxes on Income:
• Provision for current tax is made in accordance with the Income Tax Act, 1961.
• In accordance with the IND AS 12, Deferred Tax Liability / Asset arising from timing differences between
book and income tax profits is accounted for at the current rate of tax to the extent these differences are
expected to crystallize in later years. However, Deferred Tax Assets are recognized only if there is a
reasonable / virtual certainty of realization thereof.
|