STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

1.01 BASIS OF brPARATION OF FINANCIAL STATEMENTS:

The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013 as adopted consistently by the Company. The financial statements have been brpared on a going concern basis under the historical cost convention except for certain fixed assets which are carried at revalued amounts.

1.02 USE OF ESTIMATES:

The brparation of financial statements in conformity with Indian GAAP requires judgements, estimates and assumptions to be made that affect the reported amount of assets and liabilities, 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.

1.03 FIXED ASSETS:

Tangible Assets

Tangible Assets are stated at cost net of Central Value Added Tax and Value Added Tax Credits, less accumulated debrciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use. Tangible assets not ready for the intended use on the date of Balance Sheet are disclosed as "Capital Work-in-Progress".

Intangible Assets

Intangible Assets are stated at cost less accumulated amortisation. Process Development Cost is amortised over a period of ten years. Technical Know-how is amortised over the useful life of the underlying plant. Softwares are ammortised over a period of three years and Indefeasible Right to Use has been ammortised over the period of the  agreement.

1.04 LEASE:

a) Operating Leases: Rentals are expensed with reference to lease terms and other considerations.

b) In respect of Lease transactions the lower of the fair value of the assets and the brsent value of the minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principal component in the lease rental is adjusted against the lease liability and the interest component is charged to the  Statement of Profit and Loss.

1.05 MINING RIGHTS /MINE DEVELOPMENT EXPENDITURE:

Mining Rights/ mine development expenditure includes leases, costs incurred for acquiring / developing properties / rights up to the stage of commercial production and site restoration cost. The site restoration costs are provided upfront and comprises provision for expenses related to abandonment cost of its operational coal mine which includes dismantling of structures / demolition and cleaning of sites, rehabilitation of mining machinery, plantation, physical / biological reclamation, landscaping, biological reclamation of left out Overburden dump, filling up of  decoaled void, post environmental monitoring for 3 years, rehabilitation measures, etc. Actual payments for  restoration are charged directly against the provision. The brsent obligation is revised annually based on technical estimates by internal or external specialists. If the exploration activities are found to be not fruitful, the expenditure on such exploratory work included in mine development expenditure is written off in the year in which it is decided to abandon the project.

Mining Rights/Mine Development Expenditure are debrciated over the useful life of the mine or lease period whichever is shorter.

1.06 DEbrCIATION:

i) Debrciation on Fixed Assets is provided to the extent of debrciable amount on the Straight Line Method. Debrciation is provided over useful life of the assets as brscribed in Schedule II to the Companies Act, 2013 except in respect of following assets where the useful life is different as per technical evaluation than those brscribed in Schedule II:

1.07 IMPAIRMENT OF ASSETS:

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of  recoverable amount.

1.08 INVESTMENT:

Current investments are carried at the lower of cost and quoted / fair value, computed category- wise. Non Current Investments are stated at cost. Provision for diminution in the value of Non Current Investments is made only if such a decline is other than temporary.

1.09 INVENTORY:

The inventories i.e. Raw Materials, Stores and Spares, Finished Goods etc. have been valued at lower of cost and net realisable value. The Cost of Inventories comprise of all costs of purchase, costs of conversion and other costs incurred in bringing them to their respective brsent location and condition. The cost of Raw Materials and Stores & Spares are determined at First-In-First-Out Method and Weighted Average Method respectively. By-products are valued at Net Realisable Value. The cost of Work-in-progress and Finished Stock is determined on absorption costing method. The value of inventories of Finished Goods includes Excise Duty wherever applicable.

1.10 FOREIGN CURRENCY TRANSACTIONS:

i) Transactions denominated in foreign currencies are normally recorded at the exchange rate brvailing on the  date of the transaction.

ii) Monetary items denominated in foreign currencies at the year end are restated at the year end rates. In case of monetary items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference in the Statement of Profit and Loss and the brmium paid on forward contracts has been recognised over the life of the contract.

iii) Non monetary foreign currency items are carried at cost.

iv) Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Statement of Profit and Loss.

1.11 FINANCIAL DERIVATIVES:

In respect of derivative contracts, brmium paid, gains / losses on settlement and losses on restatement are recognised in the Statement of Profit and Loss.

1.12 REVENUE RECOGNITION:

Revenue is recognised only when risk and rewards incidental to ownership are transferred to the customer, it can be reliably measured and it is reasonable to expect ultimate collection. Revenue from operations includes income from  sale of goods, trial run products, services, job work, excise duty and is net of rebates, discounts, sales tax and value  added tax recovered. Interest income is recognised on a time proportion basis taking into account the amount  outstanding and rate applicable. Dividend is considered when the right to receive is established.

1.13 CUSTOMS:

Liability on account of Customs Duty on Imported materials in transit or in bonded warehouse is accounted in the year in which the goods are cleared from customs. ... _

1.14 BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets (net of income earned on deployment of funds) are capitalised as part of the cost of such assets. A qualifying asset is one that takes  necessarily substantial period of time to get ready for its intended use. All other borrowing costs are charged to  Statement of Profit and Loss.

1.15 DEFERRED LIABILITIES:

Sales Tax payable under the Deferral Scheme of Incentives is provided for on the basis of Net Present Value.

1.16 EMPLOYEE BENEFITS:

i) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss / Preoperative expenditure of the year in which the related service is rendered.

ii) Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss / Preoperative expenditure for the year in which the employee has rendered services. The expense is recognized at the brsent value of the amount payable determined using actuarial valuation techniques based on projected unit credit method. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit and Loss / Preoperative expenditure.

1.17 brLIMINARY AND ISSUE EXPENSES:

Preliminary and Issue Expenses are adjusted against the Securities Premium Account.

1.18 SEGMENT ACCOUNTING:

i) Segment Accounting Policies :

Segment accounting policies are in line with the accounting policies of the Company. However, the following  specific accounting policies have been followed for segment reporting:

a) Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment including inter-segment revenue.

b) Expenses that are directly identifiable with / allocable to segments are considered for determining the  Segment Result. The expenses which relate to the Company as a whole and not allocable to segments are included under "Unallocable expenditure".

c) Income which relates to the Company as a whole and not allocable to segments is included in "Unallocable  Corporate Income".

d) Segment Assets and Liabilities include those directly identifiable with the respective segments. Unallocable corporate assets and liabilities rebrsent the assets and liabilities that relate to the Company as a whole and  not allocable to any segment. Unallocable assets mainly comprise investments, unallocable loans and  advances and deferred revenue expenditure. Unallocable liabilities include mainly loan funds and interest liabilities.

ii) Inter-Segment Transfer Pricing :

Segment Revenue resulting from transactions with other business segments is accounted on the basis of market  price.

1.19 PROVISION FOR DOUBTFUL TRADE RECEIVABLES AND LOANS AND ADVANCES:

Provision is made in the accounts for doubtful trade receivables and loans and advances in cases where the  management considers the trade receivables, loans and advances, to be doubtful of recovery.

1.20 PROVISION FOR CURRENT AND DEFERRED TAX:

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 reasonable certainty that the assets will be realised in future. In the case of unabsorbed debrciation and carry forward tax losses, all deferred tax asset are recognised only if there is virtual certainty that they can be realised against future taxable profits.

1.21 PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS:

Provision involving substantial degree of estimation in measurement is recognized when there is a brsent  obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities  are not recognised but are disclosed in the financial statements. Contingent Assets are neither recognized nor  disclosed in the financial statements.

NOTE: 1 The Exceptional item rebrsents additional levy @ Rs. 295 per MT amounting to Rs.9161.53 lacs on the coal extracted till 31st March, 2014, in pursuance of the order dated 24th September, 2014 of Hon'ble Subrme Court .

NOTE:2 Expenditure related to Corporate Social Responsibility as per Sec 135 of the Companies Act, 2013 read with Schedule VII.

a) Gross amount Rs. 161.84 lacs required to be spent by the Company during the year.

b) Amount spent during the year Rs. 101.12 lacs and Rs. 60.72 lacs short spend

The above Loan/Investment have been given/made for business purpose. Corporate Guarantee given by the Company for the purpose of loans.

As per our Report of even date

For CHATURVEDI & SHAH

Chartered Accountants

(Registration No. : 101720W)

R. KORIA Partner Membership No.:35629

ARBIND JAYASWAL

Managing Director DIN : 00249864

For and on behalf of Board of Directors

For AGRAWAL CHHALLANI & CO.  

Chartered Accountants  

(Registration No. : 100125W)

ASHUTOSH MISHRA Company Secretary Membership No.:A23011

 P.K.BHARDWAJ Executive Director & Chief Financial Officer DIN : 03451077

S. R. CHHALLANI

Partner

Membership No.:30154

PLACE : Nagpur,

DATE : 29th May, 2015