Accounting Policies of MSTC Ltd. Company

Mar 31, 2025

1.C MATERIAL ACCOUNTING POLICIES

1.C.1 STATEMENT OF COMPLIANCE AND BASIS OF
PREPARATION

The financial statements of the Company have been
prepared to comply with the Indian Accounting
Standards (''Ind ASs''), including the rules notified under
the relevant provisions of the Companies Act 2013.

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date, regardless of whether that price is
directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or a
liability, the Company takes into account the
characteristics of the asset or liability if market
participants would take those characteristics into
account when pricing the asset or liability at the
measurement date.

Functional Currency and Presentation Currency

The financial statements are prepared in Indian Rupees
(?) which is the Company''s functional currency for all its
operations. All financial information presented in Indian
Rupees (?) has been rounded to the nearest Lakh, unless
otherwise stated.

Current and Non-Current Classification

The Company presents assets and liabilities in the
balance sheet based on current/ non-current
classification. All assets and liabilities have been
classified as current or non-current as per the
Company''s normal operating cycle and other criteria set
out in the schedule III to the Companies Act, 2013 and Ind
AS 1 - ''Presentation of Financial Statements''.

The operating cycle is the time between the acquisition
of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve
months as its operating cycle.

Deferred tax assets and liabilities are classified as nonÂ¬
current assets and liabilities.

Use of estimates and critical judgements

The preparation of accounts in accordance with Ind ASs
requires management to make estimates and
assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent assets and
liabilities at the date of the accounts and reported
amounts of income and expenses during the period.

policies arise in relation to property, plant and
equipment, current asset provisions, deferred tax,
retirement benefits. The detailed accounting policies,
including underlying judgements and methods of
estimations for each of these items are discussed below.
All of these key factors are reviewed on a continuous
basis. Revisions to accounting estimates are recognised
in the period in which estimates are revised and any
future periods affected.

1.C.2 FOREIGN CURRENCY TRANSLATION

Exchange differences arising on the settlement of
monetary items, and on retranslation of monetary items
are included in the Statement of Profit and Loss for the
period. Exchange differences arising on retranslation on
non-monetary items carried at fair value are included in
statement of profit and loss for the period except for
differences arising on the retranslation of non-monetary
items in respect of which gains and losses are
recognised directly in other comprehensive income.

Wherever foreign exchange fluctuations are to be borne
by the customers as per agreement with them, foreign
exchange gain/ loss are not recognised in the books of
the Company.

1.C.3 (a) PROPERTY, PLANT AND EQUIPMENT

An item of property, plant and equipment is recognised
as an asset if it is probable that future economic benefits
associated with the item will flow to the company and its
cost can be measured reliably. This recognition principle
is applied to the costs incurred initially to acquire an item
of property, plant and equipment and also to costs
incurred subsequently to add to, replace part of, or
service it. All other repair and maintenance costs,
including regular servicing, are recognised in the
Statement of Profit and Loss as incurred. When a
replacement occurs, the carrying amount of the
replaced part is derecognised.

The gain or loss arising on disposal of an asset is
determined as the difference between the sale proceeds
and the carrying amount of the asset, and is recognised
in the Statement of Profit and Loss.

Land has an indefinite ecomomic life. The Company can
enjoy the part of the life restricted to years of lease. The
lease rent paid in advance is being amortised over the
period of lease.

1.C.3 (b) Depreciation of property, plant and equipment

Depreciation is provided so as to write off, on a straightÂ¬
line basis, the cost of property, plant and equipment to
their residual value. These charges are commenced
from the date the assets are available for their intended
use and are spread over their estimated useful lives. The
estimated useful lives of assets and residual values are
reviewed regularly and, when necessary, revised. No
further charge is provided in respect of assets that are
fully written down but are still in use.

Depreciation on assets under construction commences
only when the assets are ready for their intended use.

Depreciation is provided to allocate the costs of property,
plant and equipment, net of their residual values, over
their useful life as specified in Schedule II of the
Companies Act, 2013. The estimated useful lives for the
main categories of property, plant and equipment are:

Assets in the course of construction are included under
capital work in progress and are carried at cost, less any
recognized impairment loss. Such capital work-inÂ¬
progress, on completion, is transferred to the appropriate
category of property, plant and equipment.

1.C.3 (c) Intangible Assets

Intangible assets with finite useful lives that are acquired
separately are carried at cost less accumulated
amortization and accumulated impairment losses.
Amortization is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life and
amortization method are reviewed at the end of each
reporting period, with the effect of any changes in
estimate being accounted for on a prospective basis.

An intangible asset is de-recognised on disposal, or
when no future economic benefits are expected from use
or disposal. Further, the management estimates that the
intangible assets are having zero carrying cost at the end
of its useful life i.e. zero residual value.

Softwares acquired separately are capitalised as
software. These are amortized over a period of their
license. In case of perpetual licences the cost is
amortized over a period of five years.

1.C.4 Impairment of Non-Financial Assets

At the end of each reporting period, the Company
reviews the carrying amounts of its property, plant and
equipment and intangible assets to determine whether
there is any indication that the carrying amount of those
assets may not be recoverable through continuing use. If
any such indication exists, the recoverable amount of the
asset is reviewed in order to determine the extent of
impairment loss (if any). Where the asset does not
generate cash flows that are independent from other
assets, the Company estimates the recoverable amount
of the cash generating unit to which the asset belongs.
Intangible assets with an indefinite useful life are tested
for impairment annually and whenever there is an
indication, the asset may be impaired.

Recoverable amount is the higher of fair value less costs
to sell and value in use. In assessing value in use, the
estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted. An
impairment loss is recognised in the Statement of Profit
and Loss as and when the carrying amount of an asset
exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the

carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been
determined had no impairment loss been recognised for
the asset (or cash generating unit) in prior years. A
reversal of an impairment loss is recognised in profit and
loss immediately.

1.C.5 Investment in Subsidiaries and Joint venture

Investment in subsidiaries and Joint venture are carried
at cost in terms of Ind AS 28. Where an indication of
impairment exists, the carrying amount of the
investment is assessed and written down immediately to
its recoverable amount. On disposal of investments in
subsidiaries and joint venture, the difference between
net disposal proceeds and carrying amounts are
recognised in Statement of Profit and Loss.

1.C.6 Financial Instruments

Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the instrument. Financial assets and
liabilities are initially measured at fair value. Transaction
costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value
through profit and loss) are added to or deducted from
the fair value measured on initial recognition of financial
asset or financial liability. The transaction costs directly
attributable to the acquisition of financial assets and
financial liabilities at fair value through profit or loss are
immediately recognised in the Statement of Profit and
Loss. However trade receivables that do not contain a
significant financing component are measured at
transaction cost.

a) Financial assets

I. Financial assets at amortised cost

Financial assets are subsequently measured at
amortised cost if these financial assets are held
within a business model whose objective is to hold
these assets in order to collect contractual cash flows
and the contractual terms of the financial asset give
rise on specified dates to cash flows that are solely
payments of principal and interest on the principal
amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
Effective Interest Rate (EIR) method.

The Effective Interest Rate method is a method of
calculating the amortised cost of a financial

instrument and of allocating interest income or
expense over the relevant period. The Effective
Interest Rate is the rate that exactly discounts future
cash receipts or payments through the expected life
of the financial instrument, or where appropriate, a
shorter period.

II. Financial assets measured at fair value through
Other comprehensive income

Financial assets meeting these criteria are measured
initially at fair value plus transaction costs. They are
subsequently measured at fair value with any gains
or losses arising on remeasurement recognised in
other comprehensive income. However, the interest
income, losses and reversals, and foreign exchange
gains and losses are recognised in the Statement of
Profit and Loss.

III. Financial assets measured at fair value through
profit and loss

Financial assets not measured at amortised cost or
at fair value through other comprehensive income is
carried at fair value through profit and loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised
for financial assets measured at amortised cost and fair
value through other comprehensive income.

Loss allowance equal to the lifetime expected credit
losses is recognised if the credit risk on the financial
instruments has significantly increased since initial
recognition. For financial instruments whose credit risk
has not significantly increased since initial recognition,
loss allowance equal to twelve months expected credit
losses is recognised.

Derecognition of financial assets

associated liability for amounts it may have to pay. If the
Company retains substantially all the risks and rewards
of ownership of a transferred financial asset, the
Company continues to recognize the financial asset and
also recognizes a collateralised borrowing of the
proceeds received.

b) Financial liabilities and equity instruments
Classification

Financial liabilities and equity instruments issued by the
Company are classified according to the substance of
the contractual arrangements entered into and the
definitions of a financial liability and an equity
instrument.

Equity instruments

An equity instrument is any contract that evidences a
residual interest in the assets of the Company after
deducting all of its liabilities. Transaction costs of an
equity transaction are being accounted as a deduction
from equity.

Financial Liabilities

The Company''s financial liabilities include Trade and
other payables and borrowings including bank
overdrafts are initially measured at fair value, net of
transaction costs, and are subsequently measured at
amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when,
and only when, the Company''s obligations are
discharged, cancelled or they expire.

Offsetting financial instruments

Financial assets and liabilities are offset and the net
amount reported in the Balance Sheet when there is a
legally enforceable right to offset the recognised
amounts and there is an intention to settle on a net basis
or realize the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course of business and in the event of default, insolvency
or bankruptcy of the counterparty.

1.C.7 CASH AND CASH EQUIVALENTS

For the purpose of presentation in the statement of cash
flows, cash and cash equivalent includes cash on hand,
highly liquid investments with original maturities of three
months or less that are readily convertible to known
amounts of cash, cash at bank, and bank overdraft and
which are subject to an insignificant risk of changes in
value. Bank overdrafts are shown within borrowings in
current liabilities in the Balance Sheet.

1.C.8 INVENTORIES

Stock in trade including material-in-transit is valued at
cost or estimated net realisable value whichever is less.

1.C.9 REVENUE RECOGNITION

Revenue is recognized when the performance obligation
towards transfer of goods and services to a customer is
satisfied.

SERVICE CHARGES

Remuneration for transaction in Marketing Department
through facilitator mode and for conducting sales/
procurement on behalf of Principals, by way of auctions,
tenders, or any other means, are accounted for as
service charges.

(a) Service charges are accounted for as income at
contracted rates on:

i. Tender/Auction sale on behalf of Public Sector
Undertakings, Defence and other Government
Departments/ other clients on issuance of sale
orders / delivery orders.

ii. On satisfactory completion of e-sales.

In respect of (i) & (ii), service charges are
accounted for on bid price of auction with
adjustments, if any, on the basis of actual
delivery by the Principals, in case service charges
are payable on percentage basis.

iii. On occurrence of event, in case of service
contract on event basis including development,
maintenance of e-portal and software.

iv. In case of E-Procurement Service charges are
booked, where service charges are collectable
from the Principal, on completion of event.

(b) Transaction fees collected from bidders are
accounted on successful conduct of event.

(c) Service charges accrued in respect of purchase as
facilitator are accounted for at the contracted rate
on the basis of date of bill of lading / railway receipt /
lorry receipt as the case may be. For imported
materials, value is ascertained either at forward
cover rate or at FEDAI spot rate prevailing on the last
date of the Financial Year. Final adjustment is made
on actual payment. In case of indigenous materials,
value is ascertained on the basis of actual payment
at contracted rate.

E-AUCTION REGISTRATION

E-auction Registration fees collected from buyers is
considered as income of the current year if the validity of
registration is upto one year. In case of lifelong

registration, the amount so collected is distributed in five
years equally.

OTHER INCOME

Revenue is recognised on accrual basis except in the
following items which are accounted on actual
realization since realizability of such items is uncertain in
accordance with the provisions of the accounting
standards:

i) Decrees pending for execution/contested dues and
interest thereon, if any.

ii) Interest on overdue recoverables where realizability
is uncertain.

iii) Liquidated damages on suppliers or contractors.

iv) Refund of Income-Tax/Sales Tax/VAT and interest
thereon.

v) Dividend income is recognised when right to receive
payment is established

1.C.10 BORROWING COST

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.

Other income earned on the temporary investment of
specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs
eligible for capitalisation.

All other borrowing costs are recognised in profit and loss
in the period in which they are incurred.

1.C.11 EMPLOYEE BENEFITS

(a) Short term benefits

Short term employee benefits are accounted for at their
undiscounted amount in the accounting period in which
the services are rendered by the employees are
recognised as an expense in the Statement of Profit and
Loss during the period in which the employee renders the
related service.

(b) Leave encashment

The liabilities for earned leave and commuted leave are
not expected to be settled wholly within 12 month after
the end of the period in which the employees render
related service. They are therefore measured as the
present value of expected future payments to be made
in respect of services provided by employees up to the
end of the reporting period based on actuarial valuation
using the projected unit credit method.

The benefits are discounted using the market yield at the
end of the reporting period that have terms of
approximating to the terms of related obligations.
Remeasurement as a result of experience adjustments
and changes in actuarial assumptions are recognised in
profit and loss. The facility is funded through LIC of India.

(c) Post-employment obligation

Defined Contribution Plan -

i. Provident Fund

Provident Fund is administered by a Trust recognised by
Income Tax Authorities and contribution to this Fund is
charged to revenue. Pensioner''s Benefits are secured
through Employees'' Pension Scheme 1995.

Defined Contribution Plan -

ii. Pension

The pension plan is administered through an
independent trust, and contributions to this fund are
charged to revenue. The fund is managed through the
LIC of India / NPS. The contribution amount is governed by
directives from the Ministry of Steel, in accordance with
Department of Public Enterprises (DPE) guidelines.

Defined Benefit Plan -
i. Service Gratuity

The liabilities or assets recognised in the Balance Sheet in
respect of defined gratuity plan is the present value of the
defined benefits obligation at the end of the reporting
period less the fair value of plan assets. The defined
benefits obligations are calculated annually by actuaries
using projected unit credit method. The present value of
defined benefits obligations is determined by
discounting the estimated future cash outflows by
reference to market yields at the end of the reporting
period on Government bonds that are terms
approximating to the terms of the related obligations.

Remeasurement gains and losses arising from
experience adjustments and changes in actuarial
assumptions are recognised in the period in which they
occur, directly in other comprehensive income. They are
included in retained earnings in the statement of
changes in equity.

Group Gratuity Life Assurance Scheme of Life Insurance
Corporation of India and is administered through a
separate irrevocable trust created by the Company for
this purpose.

ii. Post Retirement medical benefit

The Company provides post retirement healthcare
benefits to their retirees. The entitlement to these benefits
is usually conditional on the employee remaining in
service up to the retirement age and the completion of
minimum service period. The expected cost of these
benefits is accrued over the period of employment using
the same accounting methodology as used for defined
benefit plans. Re-measurement gains and losses arising
from experience adjustments and changes in actuarial
assumptions are charged or credited in other
comprehensive income in the period in which they arise.
The fund is administered through a separate trust
created for this purpose.

1.C.12 TAXATION

Tax expense for the year comprises current and deferred
tax.

(i) Current tax

The tax currently payable is based on taxable profit for
the year. Taxable profit differs from profit before tax for
the year as reported in the Statement of Profit and Loss
because it excludes items of income or expense that are
taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The
Company''s liability for current tax is calculated using tax
rates and tax laws that have been enacted or
substantively enacted in the country where the
Company operates by the end of the reporting period.

(ii) Deferred tax

Deferred tax liabilities are the amount of income taxes
payable in future periods in respect of taxable temporary
differences. Deferred tax assets are the amount of
income tax recoverable in in future in respect of
deductible temporary differences, carry forward of
unused tax losses and carry forward of unused tax
credits. Deferred tax assets are recognised to the extent
that it is probable that future taxable profits will be
available against which the deferred tax assets can be
utilised.

Minimum Alternate Tax credit is recognised as deferred
tax asset only when and to the extent there is convincing
evidence that the Company will pay normal income tax
during the specified period. Such asset is reviewed at
each Balance Sheet date and the carrying amount of the
MAT credit asset is written down to the extent there is no

longer a convincing evidence to the effect that the
Company will pay normal income tax during the
specified period.

The carrying amount of deferred tax assets is reviewed at
the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the deferred
tax asset to be utilised.

Deferred tax assets and liabilities are offset to the extent
that they relate to taxes levied by the same tax authority
and there are legally enforceable rights to set off current
tax assets and current tax liabilities within that
jurisdiction.

Current and deferred tax are recognised as an expense
or income in the Statement of Profit and Loss, except
when they relate to items credited or debited either in
other comprehensive income or directly in equity, in
which case the tax is also recognised in other
comprehensive income or directly in equity.

Mar 31, 2024

1.A General Information

MSTC Limited (the "Company") is a Miniratna Category-I Company was incorporated under the Companies Act, 1956 on 9^th September, 1964. It is domiciled in India, having registered office at Plot No.- CF-18/2, Street No.-175, Action Area 1C, New Town, Kolkata-700156 and limited by shares (CIN: L27320WB1964GOI026211). Pursuant to Initial Public Offer equity shares of MSTC Limited are listed and traded on both BSE Limited and National Stock Exchange of India Limited w.e.f. 29^th March, 2019. The core activity of the Company has been divided into two Operational Divisions, i.e. e-Commerce and Trading.The Company undertakes trading activities, disposal of ferrous and non-ferrous scrap, surplus stores, minerals, agri and forest produces etc. mostly from Public Sector Undertakings Govt. Departments and leading private sector entities and other e-commerce services. The mode of disposal includes e-auction, e-tender, e-reverse auction etc. Besides, MSTC also e-auctions coal from Coal India Ltd, Singareni Coalfields Ltd etc. Apart from these MSTC also provides e-procurement and other platform development and maintenance solutions. The trading division handles domestic trade of mainly bulk industrial raw material. It looks after sourcing, purchase and sales of industrial raw materials like Heavy Melting Scrap, Low Ash Metallurgical Coke, HR Coil, Crude Oil, Naptha, Coking Coal, Steam Coal etc. for supply to Indian industries in steel, infrastructure, power sector etc.

1.B RECENT ACCOUNTING DEVELOPEMENTS Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31^st March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.

1.C MATERIAL ACCOUNTING POLICIES

1.C.1 STATEMENT OF COMPLIANCE AND BASIS OF

PREPARATION

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured at fair value at the end of each reporting period by Ind ASs. The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind ASs''), including the rules notified under the relevant provisions of the Companies Act, 2013.

Fair value is the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Functional Currency and Presentation Currency The financial statements are prepared in Indian Rupees (?) which is the Company''s functional currency for all its operations. All financial information presented in Indian Rupees (?) has been rounded to the nearest Lakh, unless otherwise stated.

Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the schedule III to the Companies Act, 2013 and Ind AS 1 - ''Presentation of Financial Statements''.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Use of estimates and critical judgements

The preparation of accounts in accordance with Ind ASs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accounts and reported amounts of income and expenses during the period.

Actual results could differ from those estimates. The most significant techniques for estimation are described in the accounting policies below. Critical accounting judgements and the key sources of estimation or uncertainty in applying the Company''s accounting policies arise in relation to property, plant and equipment, current asset provisions, deferred tax, retirement benefits. The detailed accounting policies, including underlying judgements and methods of estimations for each of these items are discussed below. All of these key factors are reviewed on a continuous basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and any future periods affected.

Type of Asset	Estimated Useful life (Years)
Office Equipments	5
Vehicles	8
Furnitures and Fixtures	10
Partition and Cubicles	10
Building	60
Building (Other than RCC)	30
Air Conditioners	10
Electrical Installation & Equipments	10
Computers & EDP Equipments	3
Servers	6
Machinery	15

1.C.2 FOREIGN CURRENCY TRANSLATION

In preparing the financial statements of the Company, transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated. Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the Statement of Profit and Loss for the period. Exchange differences arising on retranslation on non-monetary items carried at fair value are included in statement of profit and loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income.

Wherever foreign exchange fluctuations are to be borne by the customers as per agreement with them, foreign exchange gain/ loss are not recognised in the books of the Company. 1.C.3 (a) PROPERTY, PLANT AND EQUIPMENT

An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits associated with the item will flow to the company and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the Statement of Profit and Loss as incurred. When a replacement occurs, the carrying amount of the replaced part is derecognised.

Property, plant and equipment are stated at cost, less accumulated depreciation and impairment losses. Cost includes all direct costs and expenditures incurred to bring the asset to its working condition and location for its intended use. The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset, and is recognised in the Statement of Profit and Loss.

Land has an indefinite ecomomic life. The Company can enjoy the part of the life restricted to years of lease. The lease rent paid in advance is being amortised over the period of lease. 1.C.3 (b) Depreciation of Property, Plant and Equipment

Depreciation is provided so as to write off, on a straight-line basis, the cost of property, plant and equipment to their residual value. These charges are commenced from the date the assets are available for their intended use and are spread over their estimated useful lives. The estimated useful lives of assets and residual values are reviewed regularly and, when necessary, revised. No further charge is provided in respect of assets that are fully written down but are still in use. Depreciation on assets under construction commences only when the assets are ready for their intended use.

Depreciation is provided to allocate the costs of property, plant and equipment, net of their residual values, over their useful life as specified in Schedule II of the Companies Act, 2013. The estimated useful lives for the main categories of property, plant and equipment are:

Assets in the course of construction are included under capital work in progress and are carried at cost, less any recognized impairment loss. Such capital work-in-progress, on completion, is transferred to the appropriate category of property, plant and equipment.

1.C.3 (c) Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Further, the management estimates that the intangible

assets are having zero carrying cost at the end of its useful life

i.e. zero residual value.

Softwares acquired separately are capitalised as software. These are amortized over a period of their license. In case of perpetual licences the cost is amortized over a period of five years.

1.C.4 IMPAIRMENT OF NON-FINANCIAL ASSETS

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication, the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. An impairment loss is recognised in the Statement of Profit and Loss as and when the carrying amount of an asset exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised in profit and loss immediately.

1.C.5 INVESTMENT IN SUBSIDIARIES AND JOINT VENTURE Investment in subsidiaries and Joint venture are carried at cost in terms of Ind AS 27. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and carrying amounts are recognised in Statement of Profit and Loss. 1.C.6 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised when

the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit or loss are immediately recognised in the Statement of Profit and Loss. However trade receivables that do not contain a significant financing component are measured at transaction cost.

(a) Financial assets

i. Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method.

The Effective Interest Rate method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The Effective Interest Rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

ii. Financial assets measured at fair value through Other comprehensive income

comprehensive income. However, the interest income, losses and reversals, and foreign exchange gains and losses are recognised in the Statement of Profit and Loss.

iii. Financial assets measured at fair value through profit and loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through profit and loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.

Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition. For financial instruments whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised.

Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay. If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognize the financial asset and also recognizes a collateralised borrowing of the proceeds received.

(b) Financial liabilities and equity instruments Classification

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Transaction costs of an equity transaction are being accounted as a deduction from equity.

Financial Liabilities

The Company''s financial liabilities include Trade and other payables and borrowings including bank overdrafts are

initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

1.C.7 CASH AND CASH EQUIVALENTS For the purpose of presentation in the statement of cash flows, cash and cash equivalent includes cash on hand, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, cash at bank, and bank overdraft and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.C.8 INVENTORIES

Stock in trade including material-in-transit is valued at cost or estimated net realisable value whichever is less.

1.C.9 REVENUE RECOGNITION

Revenue is recognized when the performance obligation towards transfer of goods and services to a customer is satisfied.

Service Charges

Remuneration for transaction in Marketing Department through facilitator mode and for conducting sales/ procurement on behalf of Principals, by way of auctions, tenders, or any other means, are accounted for as service charges.

(a) Service charges are accounted for as income at contracted rates on:

i. Tender/Auction sale on behalf of Public Sector

Undertakings, Defence and other Government Departments/ other clients on issuance of sale orders / delivery orders.

ii. On satisfactory completion of e-sales.

In respect of (i) & (ii), service charges are accounted for on bid price of auction with adjustments, if any, on

the basis of actual delivery by the Principals, in case service charges are payable on percentage basis.

iii. On occurrence of event, in case of service contract on event basis including development, maintenance of e-portal and software.

iv. In case of E-Procurement Service charges are booked, where service charges are collectable from the Principal, on completion of event.

(b) Transaction fees collected from bidders are accounted on successful conduct of event.

(c) Service charges accrued in respect of purchase as facilitator are accounted for at the contracted rate on the basis of date of bill of lading / railway receipt / lorry receipt as the case may be. For imported materials, value is ascertained either at forward cover rate or at FEDAI spot rate prevailing on the last date of the Financial Year. Final adjustment is made on actual payment. In case of indigenous materials, value is ascertained on the basis of actual payment at contracted rate.

E-auction Registration

E-auction Registration fees collected from buyers is considered as income of the current year if the validity of registration is upto one year. In case of lifelong registration, the amount so collected is distributed in five years equally. Other Income

Revenue is recognised on accrual basis except in the following items which are accounted on actual realization since realizability of such items is uncertain in accordance with the provisions of the accounting standards:

i) Decrees pending for execution/contested dues and interest thereon, if any.

ii) Interest on overdue recoverables where realizability is uncertain.

iii) Liquidated damages on suppliers or contractors.

iv) Refund of Income-Tax/Sales Tax/VAT and interest thereon.

v) Dividend income is recognised when right to receive payment is established

1.C.10 BORROWING COST

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other income earned on the temporary investment of specific

borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit and loss in the period in which they are incurred.

1.C.11 EMPLOYEE BENEFITS

(a) Short term benefits

Short term employee benefits are accounted for at their undiscounted amount in the accounting period in which the services are rendered by the employees are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

(b) Leave encashment

The liabilities for earned leave and commuted leave are not expected to be settled wholly within 12 month after the end of the period in which the employees render related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period based on actuarial valuation using the projected unit credit method.

The benefits are discounted using the market yield at the end of the reporting period that have terms of approximating to the terms of related obligations. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in profit and loss. The facility is funded through LIC of India.

(c) Post-employment obligation Defined Contribution Plan

i. Provident Fund

Provident Fund is administered by a Trust recognised by Income Tax Authorities and contribution to this Fund is charged to revenue. Pensioner''s Benefits are secured through Employees'' Pension Scheme 1995.

ii. Pension

Pension plan is administered through an independent trust and contribution to this Fund is charged to revenue. The fund is being managed through of Life Insurance Corporation of India The contribution amount is governed by of Ministry of Steel directives in terms of DPE guidelines in this.

Defined Benefit Plan i. Service Gratuity

benefits obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on Government bonds that are terms approximating to the terms of the related obligations.

The net interest cost is calculated by applying the discounted rate to the net balance of defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity.

Changes in the present value of defined benefit obligation resulting from amendments and curtailments are recognised immediately in profit or loss as past service cost. The Gratuity obligation is funded through Group Gratuity Life Assurance Scheme of Life Insurance Corporation of India and is administered through a separate irrevocable trust created by the Company for this purpose. ii. Post Retirement medical benefit The Company provides post retirement healthcare benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to the retirement age and the completion of minimum service period. The expected cost of these benefits is accrued over the period of employment using the same accounting methodology as used for defined benefit plans. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in other comprehensive income in the period in which they arise. The fund is administered through a separate trust created for this purpose.

1.C.12 TAXATION

Tax expense for the year comprises current and deferred tax.

(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax for the year as reported in the Statement of Profit and Loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company''s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted in the country where the Company operates by the end of the reporting period.

(ii) Deferred tax

Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amount of income tax recoverable in in future in respect of deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deferred tax assets can be utilised.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognised as an expense or income in the Statement of Profit and Loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.

1.C.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised in the Balance Sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. When appropriate, provisions are measured on a discounted basis.

Constructive obligation is an obligation that derives from an entity''s actions whereby an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and as a result, the entity has

created a valid expectation on the part of those other parties that it will discharge those responsibilities.

Contingent liabilities are disclosed by way of notes. These are reviewed at each Balance Sheet date and are adjusted to reflect the current estimate of management.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.

1.C.14 SEGMENT REPORTING

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures. The Company undertakes trading activities, and also acts as e-commerce service provider. Based on the ''management approach'' as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates Company''s performance and allocates resources on an analysis of various performance indicators by operating segments. In terms of above the Company has identified Marketing and e-Commerce as its two Primary Reportable Business Segments. Revenue and identifiable operating expenses in relation to segments are categorised based on items that are individually identifiable to that segment. Rest of the items of revenue and expenses, which cannot be specifically allocated under specific segments are separately disclosed as unallocated.

1.C.15 CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGEMENTS The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed in the paragraphs that follow.

(i) Useful economic lives and impairment of other assets The estimated useful life of property, plant and equipment (PPE) and intangible asset is based on a number of factors

including the effects of obsolescence, usage of the asset and other economic factors (such as known technological advances).

The Company reviews the useful life of PPE and intangibles at the end of each reporting date and any changes could affect the depreciation rates prospectively.

The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property plant and equipment for impairment, factors leading to significant reduction in profits, such as the Company''s business plans and changes in regulatory environment are taken into consideration.

(ii) Contingencies and commitments

In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Company. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on management''s assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such liabilities are disclosed in the notes but are not provided for in the financial statements.

Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the Company''s financial position or profitability.

(iii) Actuarial Valuation

The determination of Company''s liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depend on assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

(iv) Fair Value measurements and valuation processes Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the notes to the financial statements.

(v) Recognition of deferred tax assets for carried forward tax losses and unused tax credit

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company''s

future taxable income against which the deferred tax assets can be utilised. In addition significant judgement is required in assessing the impact of any legal or economic limits. 1.C.16 Restatement of material error / omissions:

Errors/omissions discovered in the current year relating to prior periods are treated as immaterial and adjusted during the current year, if all such errors and omissions in each case does not exceed the overall material limit specified in MSTC policy for determination of materiality of events or information in terms of SEBI LODR Regulations i.e. lower of the following:

(a) Two percent of turnover, as per the last audited consolidated financial statements of the Company;

(b) Two percent of net worth, as per the last audited consolidated financial statements of the Company, except in case the arithmetic value of the net worth is negative;

(c) Five percent of the average of absolute value of profit or loss after tax, as per the last three audited consolidated financial statements of the Company;

In respect to the above, the average of absolute value of profit or loss is required to be considered by disregarding the ''sign'' (positive or negative) that denotes such value as the said value/figure is required only for determining the threshold for ''materiality'' of the event and not for any commercial consideration.

1.C.17 PROVISION OF TRADE RECEIVABLES

i. The Company has a provisioning policy in place which provides for quarterly review and provision as per the policy, which is as following:

Sl No.	Particulars	Amount of provisioning
1	Trade Receivables (e-Commerce Business)	Outstanding more than 2 years - 50% Outstanding more than 3 years - balance amount
2	Trade Receivables (Associate supply Business)	In this model since actual funding for procurement is done by MSTC''s associate supplier, there is no scope for business loss to the account of MSTC. Hence no provisioning against such trade receivables is envisaged.
3	Trade Receivables (110% BG backed Business)	Since the transaction is entirely covered by Bank Guarantee, no provisioning against such trade receivables is envisaged.
4	Trade Receivables (Cash & carry business)	The policy provides for provisioning at various stages depending upon the age and quantum of security available (pledged stock) for concerned trade receivable.

ii. The Company has done trading under "Back-to-Back Arrangement with Associate Suppliers". As per the arrangement the payment to suppliers will be released only on realization of Trade Receivables. Hence the Company treats these Trade Receivables as Secured.

Mar 31, 2023

1.A GENERAL INFORMATION

MSTC Limited (the "Companyâ) is a Miniratna Category-1 Company incorporated under the Companies Act, 1956 on 9^th September, 1964. It is domiciled in India, having registered office at Plot No.- CF-18/2, Street No.-175, Action Area 1C, New Town, Kolkata-700156 and limited by shares (CIN L27320WB1964G0I026211). Pursuant to Initial Public Offer equity shares of MSTC Limited are listed and traded on both BSE Limited and National Stock Exchange of India Limited w.e.f. 29^th March, 2019. The core activity of the Company has been divided into two Operational Divisions, i.e., e-Commerce and Trading. The Company undertakes trading activities, disposal of ferrous and non-ferrous scrap, surplus stores, minerals, agri and forest produces etc. mostly from Public Sector Undertakings, Govt. Departments and leading private sector entities and other e commerce services. The mode of disposal includes e-auction, e-tender, e-reverse auction etc. Besides, MSTC also e-auctions coal from Coal India Ltd, Singareni Coalfields Ltd etc. Apart from these MSTC also provides e-procurement and other platform development and maintenance solution. The trading division handles domestic trade of mainly bulk industrial raw material. It looks after sourcing, purchase and sales of industrial raw materials like Heavy Melting Scrap, Low Ash Metallurgical Coke, HR Coil, Crude Oil, Naptha, Coking Coal, Steam Coal etc. for supply to Indian industries in steel, infrastructure, power sector etc.

l.B RECENT ACCOUNTING DEVELOPMENTS

Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31^st March, 2023 MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from 1^st April, 2023, as below:

Ind AS 1 - Presentation of Financial Statements

The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information included in an entity''s financial statements, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.

Ind AS 12 - Income Taxes

The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition give rise to equal taxable and deductible temporary differences. The Company does not expect this amendment to have any significant impact in its financial statements.

l.C SIGNIFICANT ACCOUNTING POLICIES

l.C.l BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured atfairvalueat the end of each reporting period by Ind ASs. The financial statements of the Company have been prepared to comply with the Indian Accounting Standards (''Ind ASs''), including the rules notified under the relevant provisions of the Companies Act, 2013.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. Inestimatingthefairvalueofan asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Functional Currency and Presentation Currency

The financial statements are prepared in Indian Rupees (?) which is the Company''s functional currency for all its operations. All financial information presented in Indian Rupees (?) has been rounded to the nearest Million, unless otherwise stated.

Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - ''Presentation of Financial Statements''.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Deferred tax assets and liabilities are classified as non-current assetsand liabilities.

Use of estimates and critical Judgements

The preparation of accounts in accordance with Ind ASs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accounts and reported amounts of income and expenses duringthe period.

Actual results could differ from those estimates. The most significant techniques for estimation are described in the accounting policies below. Critical accountingjudgments and the key sources of estimation or uncertainty in applying the Company''s accounting policies arise in relation to property, plant and equipment, current asset provisions, deferred tax, retirement benefits. The detailed accounting policies, including underlying judgments and methods of estimations for each of these items are discussed below. All of these key factors are reviewed on a continuous basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and any future periods affected.

1.C.2 FOREIGN CURRENCYTRANSLATION

items that are measured in terms of historical cost in a foreign currency are not translated.

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the Statement of Profit and Loss for the period. Exchange differences arising on retranslation on non-monetary items carried at fair value are included in statement of profit and loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income.

Wherever foreign exchange fluctuations are to be borne by the customers as per agreement with them, foreign exchange gain/ loss is not recognised in the books of the Company.

1.C.3 (a) PROPERTY, PLANT AND EQUIPMENT

An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits associated with the item will flow to the company and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the Statement of Profit and Loss as incurred. When a replacement occurs, the carrying amount of the replaced part is derecognised.

The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.

Included in property, plantand equipmentare loose plantand tools which are stated at cost less amounts written off related to their expected useful lives and estimated scrap value and also spares, against which impairment provisions are made where necessary to coverslow movingand obsolete items.

Land has an indefinite ecomomic life. The Company can enjoy the part of the life restricted to years of lease. The lease rent paid in advance is being amortised overthe period of lease.

1.C.3 (b) Depreciation of property, plant and equipment

l.C.3(c) Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis overtheir estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate beingaccountedforon a prospective basis.

An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Further, the management estimates that the intangible assets have zero carrying cost at the end of its useful life i.e., zero residual value.

Softwares acquired separately are capitalised as software. These are amortized over a period of their license. In case of perpetual licences the cost is amortized over a period of five years.

assets and residual values are reviewed regularly and, when necessary, revised. No further charge is provided in respect of assets thatare fully written down butare still in use.

Depreciation on assets under construction commences only when the assets are ready fortheir intended use.

Depreciation is provided to allocate the costs of property, plant and equipment, net of their residual values, over their useful life as specified in Schedule II of the Companies Act, 2013. The estimated useful lives for the main categories of property, plantand equipmentare:

type of Asset	Estimated Useful life (Years)
Office Equipments	5
Vehicles	8
Furnitures and Fixtures	10
Partition and Cubicles	10
Building	60
Building (Other than RCC)	30
Air Conditioners	10
Electrical Installation & Equipments	10
Computers & EDP Equipments	3
Servers	6
Machinery	15

1.C.4 IMPAIRMENT OF NON-FINANCIAL ASSETS

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whetherthere is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication, the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. An impairment loss is recognised in the Statement of Profit and Loss as and when the carrying amount of an asset exceeds its recoverable amount.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised in profit and loss immediately.

1.C.5 INVESTMENT IN SUBSIDIARIES AND JOINT VENTURE

Investment in subsidiaries and Joint venture are carried at cost in terms of Ind AS 27. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint ventures, the difference between net disposal proceeds and carrying amounts are recognised in Statement of Profit and Loss.

1.C.6 FINANCIAL INSTRUMENTS

Financial assets and financial liabilities are recognised when the Company becomesa party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit or loss are

immediately recognised in the Statement of Profit and Loss. However, trade receivables that do not contain a significant financing component are measured at transaction cost.

a) Financial assets

I. Financial assets at amortised cost

Financial assets aresubsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method.

The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

II. Financial assets measured at fair value through Other Comprehensive Income

Financial assets meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognised in other comprehensive income. However, the interest income, losses and reversals, and foreign exchange gains and losses are recognised in the Statement of Profit and Loss.

III. Financial assets measured at fair value through profit and loss

Financial assets not measured at amortised cost or at fair value through other comprehensive income is carried at fairvalue through profitand loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.

Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition. For financial

instruments whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised.

Derecognition of financial assets

b) Financial liabilities and equity instruments Classification

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Transaction costs of an equity transaction are being accounted as a deduction from equity.

Financial Liabilities

The Company''s financial liabilities include Trade and other payables and borrowings including bank overdrafts are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled orthey expire.

Offsetting financial Instruments

Financial assets and liabilities are setoff and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

1.C.7 CASH AND CASH EQUIVALENTS

For the purpose of presentation in the statement of cash flows, cash and cash equivalent includes cash on hand,

highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, cash at bank, and bank overdraft and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.C.8 INVENTORIES

Stock in trade including material-in-transit is valued at cost or estimated net realisable value whichever is less.

1.C.9 REVENUE RECOGNITION

Revenue is recognized when the performance obligation towards transfer of goods and services to a customer is satisfied.

Sales

i) High sea sales are booked on the basis of date of issuance of high sea sale letter. As regards value, sales are booked either at contracted forward exchange rates, if booked, or provisionally on the basis of FEDAI spot exchange rates prevailing on the last date of the financial year, where forward cover was not taken, which includes C&F/ CIF price, usance interest followed by final adjustment on due date of payment in subsequent financial year.

ii) In case of indigenous material, sales are accounted for on the basis of date of transport documents and as regards value, based on the value of invoices. In case of sale on door delivery basis sales are booked on sales invoice dates.

iii) In case of export, sales are accounted for on the basis of date of shipment. As regards value, sales are booked either at contracted forward exchange rates, if booked, or at the FEDAI rate on the date of shipment as per custom clearance document, followed by final adjustment on actual realisation of export proceeds.

Service Charges

Remuneration for transactions in Marketing Department through facilitator mode and for conducting sales/ procurement on behalf of Principals, by way of auctions, tenders, or any other means, are accounted for as service charges.

(a) Service charges are accounted for as income at contracted rates on:

i. Tender/Auction sale on behalf of Public Sector Undertakings, Defence and other Government Departments/ other clients on issuance of sale orders/ delivery orders.

ii. On satisfactory completion of e-sales.

In respect of (i) & (ii), service charges are accounted for on bid price of auction with adjustments, if any, on the basis of actual delivery by the Principals, in case service charges are payable on percentage

basis.

iii. On occurrence of event, in case of service contract on event basis including development, maintenance of e-portal and software.

iv. In case of E-Procurement Service charges are booked, where service charges are collectable from the Principal, on completion of event.

(b) E-Procurement transaction fees collected from bidders are accounted on successful conduct of event.

(c) Service charges accrued in respect of purchase as facilitator are accounted for at the contracted rate on the basis of date of bill of lading / railway receipt/ lorry receipt as the case may be. For imported materials, value is ascertained either at forward cover rate or at FEDAI spot rate prevailing on the last date of the Financial Year. Final adjustment is made on actual payment. In case of indigenous materials, value is ascertained on the basis of actual payment at contracted rate.

E-Auctlon Registration

Other Income

Revenue is recognised on accrual basis except in the following items which are accounted on actual realization since realisibility of such items is uncertain in accordance with the provisions of the accountingstandards:

i) Decrees pending for execution/contested dues and interest thereon, if any.

ii) Interest on overdue recoverables where realisability is uncertain.

iii) Liquidated damages on suppliers or contractors.

iv) Refund of Income-Tax/Sales Tax/VAT and interest thereon.

v) Dividend income is recognised when right to receive payment is established

Purchases

i) Imported materials are accounted for as purchase on the basis of date of bill of lading. As regards value, purchase are booked on the basis of actual remittance and where such remittance are outstanding at the close of the year, on the basis of contracted forward exchange rates, if booked, or FEDAI spot exchange rates prevailing on the last date of the financial year, in case forward cover is not taken, as the case may be. Purchase value includes material value, freight, insurance etc. and usance interest followed by final adjustments on actual payment in subsequent

financial year.

ii) In case of indigenous materials, purchases are booked on the basis of transport documents and as regards value, based on the value of invoices.

1.C.10 BORROWING COST

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially readyfortheir intended use orsale.

Other income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligiblefor capitalisation.

All other borrowing costs are recognised in profit and loss in the period in which they are incurred.

l.C.ll EMPLOYEE BENEFITS

(a) Short term benefits

Short term employee benefits are accounted for at their undiscounted amount in the accounting period in which the services are rendered by the employees are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

(b) Leave encashment

The liabilities for earned leave and commuted leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period based on actuarial valuation using the projected unit credit method.

The benefits are discounted using the market yield at the end of the reporting period that have terms of approximating to the terms of related obligations. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in profit and loss. The facility is funded through LIC of India.

i. Provident Fund

Provident Fund is administered by a Trust recognised by Income Tax Authorities and contribution to this Fund is charged to revenue. Pensioner''s Benefits are secured through Employees'' Pension Scheme 1995.

ii. Pension

Pension plan is administered through an independent trust and contribution to this Fund is charged to revenue. The fund is being managed through of Life Insurance Corporation of

India. The contribution amount is governed by of Ministry of Steel directives in terms of DPEguidelines in this.

Defined Benefit Plan -

i. Service Gratuity

The liabilities or assets recognised in the Balance Sheet in respect of defined gratuity plan is the present value of the defined benefits obligation at the end of the reporting period less the fair value of plan assets. The defined benefits obligations are calculated annually by actuaries using projected unit credit method. The present value of defined benefits obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on Government bonds that are terms approximating to the terms of the related obligations.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in thestatement of changes in equity.

ii. Post Retirement Medical Benefit

The Company provides post retirement healthcare benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to the retirement age and the completion of minimum service period. The expected cost of these benefits is accrued over the period of employment using the same accounting methodology as used for defined benefit plans. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in other comprehensive income in the period in which they arise. The fund is administered through a separate trust created forthis purpose.

1.C.12 TAXATION

Tax expense for the year comprises current and deferred tax. (i) Current tax

deductible in other years and it further excludes items that are never taxable or deductible. The Company''s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted in the country where the Company operates by the end of the reporting period.

(ii) Deferred tax

Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amount of income tax recoverable in future in respect of deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deferred tax assets can be utilised.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and thecarryingamountofthe MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal incometaxduringthespecified period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within thatjurisdiction.

Current and deferred tax are recognised as an expense or income in the Statement of Profit and Loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.

1.C.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

created a valid expectation on the part of those other parties that it will discharge those responsibilities.

Contingent liabilities are disclosed by way of notes. These are reviewed at each Balance Sheet date and are adjusted to reflect the current estimate of management.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.

1.C.14 SEGMENT REPORTING

1.C.15 CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS

The preparation of the financial statements in conformity with Ind AS requires management to makejudgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(i) Useful economic lives and impairment of other assets

The estimated useful life of property, plant and equipment (PPE) and intangible asset is based on a number of factors including the effects of obsolescence, usage of the asset and

other economic factors (such as known technological advances).

The Company reviews the useful life of PPE and intangibles at the end of each reporting date and any changes could affect the depreciation rates prospectively.

The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits, such as the Company''s business plans and changes in regulatory environment are taken into consideration.

(II) Contingencies and Commitments

(Ill) Actuarial Valuation

(Iv) Fair Value measurements and valuation processes

Some of the Company''s assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the notes to thefinancial statements.

(v) Recognition of deferred tax assets for carried forward tax losses and unused tax credit

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilised. In addition significant judgement is required in assessing the impact of any legal or economic limits.

Mar 31, 2021

1. A General Information

MSTC Limited (the "Company") is a Miniratna Category-I Company was incorporated under the Companies Act, 1956 on 9th September, 1964. It is domiciled in India, having registered office at 225 C, AJC Bose Road, Kolkata-700020 and limited by shares (CIN:L27320WB1964GOI026211). Pursuant to Initial Public Offer equity shares of MSTC Limited are listed and traded on both BSE Limited and National Stock Exchange of India Limited w.e.f. 29th March, 2019. The Company undertakes trading activities, e-commerce and also disposal of ferrous and non-ferrous scrap, surplus stores, minerals, agri and forest produces etc. mostly from Public Sector Undertakings and Govt. Departments. The core activity of the Company has been divided into two Operational Divisions, i.e. e-Commerce and Trading. The e-Commerce division undertakes disposal of Scrap, surplus stores, e-sales of minerals, agri and forest produces, and e procurement. The list of Principals includes Ministry of Defence, State Governments, PSUs like Indian Oil Corporation Ltd., Oil and Natural Gas Corporation Ltd, Bharat Sanchar Nigam Ltd, Hindustan Petroleum Corporation Ltd. etc. The mode of disposal includes e-auction, e-tender, e-reverse auction etc. Besides, MSTC also e-auctions coal from Coal India Ltd, Singareni Coalfields Ltd etc. Apart from these MSTC also provides e-procurement solution. The trading division handles import/export and domestic trade of mainly bulk industrial raw material. It looks after sourcing, purchase and sales of industrial raw materials like Heavy Melting Scrap, Low Ash Metallurgical Coke, HR Coil, Crude Oil, Naptha, Coking Coal, Steam Coal etc. for supply to Indian industries. The end customers are Coal/Steel Industries, Oil sector, State owned Power Companies etc.

1.B RECENT ACCOUNTING DEVELOPEMENTS

On 24th March, 2021, the Ministry of Corporate Affairs ("MCA") through a notification, amended Schedule III of the Companies Act, 2013 revising Division I, II, and III of schedule III. These amendments are applicable from 1st April, 2021. The amendments primarily relate to:

a. Change in existing presentation requirement for certain items in the Balance Sheet, for e.g. Lease liabilities, security deposits, current maturities of long term borrowings, effect of prior period error on share capital.

b. Additional disclosure requirements in specified formats, for e.g. age analysis of trade receivables, trade payables, capital work in progress, intangible assets, share holding of promoters etc.

c. Disclosure if funds have been utilised other than for the specific purpose for which it has borrowed from banks and financial institutions.

d. Additional regulatory information for example compliance with layers of companies, title deed of immovable properties, financial ratios, loans and advances to key managerial persons, etc.

e. Disclosures related to corporate social responsibility (CSR), undisclosed income and crypto or virtual currency.

1.C SIGNIFICANT ACCOUNTING POLICIES 1.C.1 BASIS OF PREPARATION

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured at fair value at the end of each reporting period by Ind ASs. The financial statements of the Company have been preapared to comply with the Indian Accounting Standards (''Ind ASs''), including the rules notified under the relevant provisions of the Companies Act, 2013.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Functional Currency and Presentation Currency

The financial statements are prepared in Indian Rupees (?) which is the Company''s functional currency for all its operations. All financial information presented in Indian Rupees (?) has been rounded to the nearest Million, unless otherwise stated.

Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the schedule III to the Companies Act, 2013 and Ind AS 1 - ''Presentation of Financial Statements''.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.

Use of estimates and critical judgements

The preparation of accounts in accordance with Ind ASs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accounts and reported amounts of income and expenses during the period.

Type of Asset	Estimated Useful life (Years)
Office Equipment	5
Vehicles	8
Furnitures and Fixtures	10
Partition and Cubicles	10
Building	60
Air Conditioners	10
Computers	3
Servers	6

deferred tax, retirement benefits. The detailed accounting policies, including underlying judgments and methods of estimations for each of these items are discussed below. All of these key factors are reviewed on a continuous basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and any future periods affected.

1.C.2 FOREIGN CURRENCY TRANSLATION

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the Statement of Profit and Loss for the period. Exchange differences arising on retranslation on non-monetary items carried at fair value are included in statement of profit and loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income.

Wherever foreign exchange fluctuations are to be borne by the customers as per agreement with them, foreign exchange gain/ loss are not recognised in the books of the Company.

1.C.3 (a) PROPERTY, PLANT AND EQUIPMENT

An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits associated with the item will flow to the company and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the Statement of Profit and Loss as incurred. When a replacement occurs, the carrying amount of the replaced part is derecognised.

The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset, and is recognised in the Statement of Profit and Loss.

Included in property, plant and equipment are loose plant and tools which are stated at cost less amounts written off related to their expected useful lives and estimated scrap value and also spares, against which impairment provisions are made where necessary to cover slow moving and obsolete items.

Land has an indefinite ecomomic life. The Company can enjoy the part of the life restricted to years of lease.The lease rent paid in advance is being amortised over the period of lease.

1.C.3 (b) Depreciation of property, plant and equipment

Depreciation on assets under construction commences only when the assets are ready for their intended use.

Depreciation is provided to allocate the costs of property, plant and equipment, net of their residual values, over their useful life as specified in Schedule II of the Companies Act, 2013. The estimated useful lives for the main categories of property, plant and equipment are:

1.C.3 (c) Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Further, the management estimates that the intangible

assets are having zero carrying cost at the end of its useful life i.e. zero residual value.

Softwares acquired separately are capitalised as software.These are amortized over a period of their license. In case of perpetual licences the cost is amortized over a period of five years.

1.C.4 Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication, the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. An impairment loss is recognised in the Statement of Profit and Loss as and when the carrying amount of an asset exceeds its recoverable amount.

1.C.5 Investment in Subsidiaries and Joint venture

Investment in subsidiaries and Joint venture are carried at cost in terms of Ind AS 27. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and carrying amounts are recognised in Statement of Profit and Loss.

1.C.6 Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit or loss are immediately recognised in the Statement of Profit and Loss.

a) Financial assets

I. Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method.

II. Financial assets measured at fair value through Other comprehensive income

Financial assets meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognised in other comprehensive income. However, the interest income, losses and reversals, and foreign exchange gains and losses are recognised in the Statement of Profit and Loss.

III. Financial assets measured at fair value through profit and loss

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through profit and loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.

Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition. For financial

instruments whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised.

Derecognition of financial assets

b) Financial liabilities and equity instruments Classification

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Transaction costs of an equity transaction are being accounted as a deduction from equity.

Financial Liabilities

The Company''s financial liabilities include Trade and other payables and borrowings including bank overdrafts are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or they expire.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

1.C.7 CASH AND CASH EQUIVALENTS

cash at bank, and bank overdraft and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.C.8 INVENTORIES

Stock in trade including material-in-transit is valued at cost or estimated net realisable value whichever is less.

1.C.9 REVENUE RECOGNITION

Revenue is recognized when the performance obligation towards transfer of goods and services to a customer is satisfied.

SALES

i) High sea sales are booked on the basis of date of issuance of high sea sale letter. As regards value, sales are booked either at contracted forward exchange rates, if booked, or provisionally on the basis of FEDAI spot exchange rates prevailing on the last date of the financial year, where forward cover was not taken, which includes C&F / CIF price, usuance interest followed by final adjustment on due date of payment in subsequent financial year.

SERVICE CHARGES

Remuneration for transaction in Marketing Department through facilitator mode and for conducting sales/ procurement on behalf of Principals, by way of auctions, tenders, or any other means, are accounted for as service charges.

(a) Service charges are accounted for as income at contracted rates on:

i. Tender/Auction sale on behalf of Public Sector Undertakings, Defence and other Government Departments on issuance of sale orders / delivery orders.

ii. On satisfactory completion of e-sales.

In respect of (i) & (ii), service charges are accounted for on bid price of auction with adjustments, if any, on the basis of actual delivery by the Principals, in case service charges are payable on percentage basis.

iii. On occurrence of event, in case of service contract on event basis.

iv. In case of E-Procurement Service charges are booked, where service charges are collectable from the Principal, on completion of event.

(b) E-Procurement transaction fees collected from bidders are accounted on successful conduct of event.

(c) Service charges accrued in respect of purchase as facilitator are accounted for at the contracted rate on the basis of date of bill of lading / railway receipt / lorry receipt as the case may be. For imported materials, value is ascertained either at forward cover rate or at FEDAI spot rate prevailing on the last date of the Financial Year. Final adjustment is made on actual payment. In case of indigenous materials, value is ascertained on the basis of actual payment at contracted rate.

E-AUCTION REGISTRATION

E-auction Registration fees collected from buyers is considered as income of the current year if the validity of registration is upto one year. In case of life long registration, the amount so collected is distributed in five years equally. OTHER INCOME

i) Decrees pending for execution/contested dues and interest thereon, if any.

ii) Interest on overdue recoverables where realisability is uncertain.

iii) Liquidated damages on suppliers or contractors.

iv) Refund of Income-Tax/Sales Tax/VAT and interest thereon.

v) Dividend income is recognised when right to receive payment is established

PURCHASES

(i) Imported materials are accounted for as purchase on the basis of date of bill of lading. As regards value, purchase are booked on the basis of actual remittance and where such remittance are outstanding at the close of the year, on the basis of contracted forward exchange rates, if booked, or FEDAI spot exchange rates prevailing on the last date of the financial year, in case forward cover is not taken, as the case may be. Purchase value includes material value freight, insurance etc. and usuance interest followed by final adjustments on actual payment in subsequent financial year.

(ii) In case of indigenous materials, purchases are booked on the basis of transport documents and as regards value, based on the value of invoices.

1.C.10 BORROWING COST

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost

of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit and loss in the period in which they are incurred.

1.C.11 EMPLOYEE BENEFITS

(a) Short term benefits

Short term employee benefits are accounted for at their undiscounted amount in the accounting period in which the services are rendered by the employees are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

(b) Leave encashment

The liabilities for earned leave and commuted leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render related service. They are therefore measured as the present value of expected future payments to be made inrespect of services provided by employees up to the end of the reporting period based on actuarial valuation using the projected unit credit method.

The benefits are discounted using the market yield at the end of the reporting period that have terms of approximating to the terms of related obligations. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in profit and loss.The facility is funded through LIC of India.

i. Provident Fund

Provident Fund is administered by a Trust recognised by Income Tax Authorities and contribution to this Fund is charged to revenue. Pensioner''s Benefits are secured through Employees'' Pension Scheme 1995.

ii. Pension

Pension plan is administered through an independent trust and contribution to this Fund is charged to revenue.The fund is being managed through Life Insurance Corporation of India. The contribution amount is governed by Ministry of Steel directives in terms of DPE guidelines .

Defined Benefit Plan -i. Service Gratuity

estimated future cash outflows by reference to market yields at the end of the reporting period on Government bonds that are terms approximating to the terms of the related obligations.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity.

ii. Post Retirement medical benefit

The Company provides post retirement healthcare benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to the retirement age and the completion of minimum service period. The expected cost of these benefits is accrued over the period of employment using the same accounting methodology as used for defined benefit plans. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in other comprehensive income in the period in which they arise. The fund is administered through a separate trust created for this purpose.

1.C.12 TAXATION

Tax expense for the year comprises current and deferred tax.

(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax for the year as reported in the Statement of Profit and Loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company''s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted in the country where the Company operates by the end of the reporting period.

(ii) Deferred tax

Deferred tax liabilities are the amount of income taxes payable in future periods in respect of taxable temporary differences.Deferred tax assets are the amount of income tax recoverable infuture in respect of deductible temporary differences, carry forward of unused tax losses and carry forward of unused tax credits. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deferred tax assets can be utilised.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognised as an expense or income in the Statement of Profit and Loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.

1.C.13 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Contingent liabilities are disclosed by way of notes. These are reviewed at each Balance Sheet date and are adjusted to reflect the current estimate of management.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefits is probable.

1.C.14 SEGMENT REPORTING

1.C.15 CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS

The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(i) Useful economic lives and impairment of other assets

The estimated useful life of property, plant and equipment (PPE) and intangible asset is based on a number of factors including the effects of obsolescence, usage of the asset and other economic factors (such as known technological advances).

The Company reviews the useful life of PPE and intangibles at the end of each reporting date and any changes could affect the depreciation rates prospectively.

The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits, such as the Company''s business plans and changes in regulatory environment are taken into consideration.

(ii) Contingencies and commitments

(iii) Actuarial Valuation

(iv) Fair Value measurements and valuation processes

(v) Recognition of deferred tax assets for carried forward tax losses and unused tax credit

1.C.16 PROVISION OF TRADE RECEIVABLES

i. The Company has a provisioning policy in place which provides for quarterly review and provision as per the policy.

ii. The Company has done trading under "Back to Back Arrangement with Associate Suppliers". As per the arrangement the payment to suppliers will be released only on realization of Trade Receivables. Hence the Company treats these Trade Receivables as Secured.

Mar 31, 2018

1.A Significant Accounting Policies

1.A.1 Basis of Preparation

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured at fair value at the end of each reporting period by Ind ASs. The financial statements of the Company have been preapared to comply with the Indian Accounting Standards (âInd ASsâ), including the rules notified under the relevant provisions of the Companies Act 2013.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.

Functional Currency and Presentation Currency

The financial statements are prepared in Indian Rupees (?) which is the Companyâs functional currency for all its operations. All financial information presented in Indian Rupees (?) has been rounded to the nearest lakhs, unless otherwise stated.

Current and Non-Current Classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the schedule III to the Companies Act, 2013 and Ind AS 1 - âPresentation of Financial Statementsâ.

The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Use of estimates and criticaljudgements

The preparation of accounts in accordance with Ind ASs requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the accounts and reported amounts of income and expenses during the period.

Actual results could differ from those estimates. The most significant techniques for estimation are described in the accounting policies below. Critical accounting judgments and the key sources of estimation or uncertainty in applying the Companyâs accounting policies arise in relation to property, plant and equipment, current asset provisions, deferred tax, retirement benefits. The detailed accounting policies, including underlying judgments and methods of estimations for each of these items are discussed below. All of these key factors are reviewed on a continuous basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and any future periods affected.

1.A.2 Foreign Currency Translation

Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in the Statement of Profit and Loss for the period. Exchange differences arising on retranslation on non-monetary items carried at fair value are included in statement of profit and loss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognised directly in other comprehensive income.

Wherever foreign exchange fluctuations are to be borne by the customers as per agreement with them, foreign exchange gain/ loss are not recognised in the books of the Company.

1.A.3 (a) Property, Plant and Equipment

An item of property, plant and equipment is recognised as an asset if it is probable that future economic benefits associated with the item will flow to the company and its cost can be measured reliably. This recognition principle is applied to the costs incurred initially to acquire an item of property, plant and equipment and also to costs incurred subsequently to add to, replace part of, or service it. All other repair and maintenance costs, including regular servicing, are recognised in the Statement of Profit and Loss as incurred. When a replacement occurs, the carrying amount of the replaced part is derecognised.

The gain or loss arising on disposal of an asset is determined as the difference between the sale proceeds and the carrying amount of the asset, and is recognised in the Statement of Profit and Loss.

Included in property, plant and equipment are loose plant and tools which are stated at cost less amounts written off related to their expected useful lives and estimated scrap value and also spares, against which impairment provisions are made where necessary to cover slow moving and obsolete items.

1.A.3(b) Depreciation of Property, Plant and Equipment

Depreciation is provided so as to write off, on a straight-line basis, the cost of property, plant and equipment to their residual value. These charges are commenced from the date the assets are available for their intended use and are spread over their estimated useful economic lives. The estimated useful lives of assets and residual values are reviewed regularly and, when necessary, revised. No further charge is provided in respect of assets that are fully written down but are still in use.

Depreciation on assets under construction commences only when the assets are ready for their intended use.

Depreciation is provided to allocate the costs of property, plant and equipment, net of their residual values, over their useful life as specified in Schedule II of the Companies Act, 2013. The estimated useful lives for the main categories of property, plant and equipment are:

1.A.3 (c) Intangible Assets

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Further, the management estimates that the intangible assets are having zero carrying cost at the end of its useful life i.e. zero residual value.

1.A.4 Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount of the asset is reviewed in order to determine the extent of impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Intangible assets with an indefinite useful life are tested for impairment annually and whenever there is an indication, the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. An impairment loss is recognised in the Statement of Profit and Loss as and when the carrying amount of an asset exceeds its recoverable amount.

1.A.5 Investment in Subsidiaries and Joint Venture

Investment in subsidiaries and Joint venture are carried at cost. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and joint venture, the difference between net disposal proceeds and carrying amounts are recognised in Statement of Profit and Loss.

1.A.6 Financial Instruments

Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. The transaction costs directly attributable to the acquisition of financial assets and financial liabilities at fair value through profit or loss are immediately recognised in the Statement of Profit and Loss.

a) Financial assets

I. Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method.

The effective interest rate method is a method of calculating the amortised cost of a financial instrument and of allocating interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts future cash receipts or payments through the expected life of the financial instrument, or where appropriate, a shorter period.

II. Financial assets measured at fair value through Other comprehensive income

Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on remeasurement recognised in other comprehensive income. However, the interest income, losses & reversals, and foreign exchange gains and losses are recognised in the Statement of Profit and Loss.

III. Financial assets measured at fair value through profit or loss

Financial asset not measured at amortised cost or at fair value through other comprehensive income is carried at fair value through profit or loss.

Impairment of financial assets

Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through other comprehensive income.

Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition. For financial instruments whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised.

Derecognition of financial assets

b) Financial liabilities and equity instruments

Classification

Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.

Financial Liabilities

The Companyâs financial liabilities include Trade and other payables and borrowings including bank overdrafts are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method.

Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Companyâs obligations are discharged, cancelled or they expire.

Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

1.A.7 Cash and Cash Equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalent includes cash in hand, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, cash at bank, and bank overdraft which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the Balance Sheet.

1.A.8 Inventories

Stock in trade including material-in-transit is valued at cost or estimated net realisable value whichever is less.

1.A.9 Revenue Recognition

i) Decrees pending for execution/contested dues and interest thereon, if any.

ii) Interest on overdue recoverables where realisability is uncertain.

iii) Liquidated damages on suppliers or contractors.

iv) Refund of Income-Tax/Sales Tax/VAT and interest thereon.

v) Dividend income is recognised when right to receive payment is established

Sales

i) High sea sales are booked on the basis of date of issuance of high sea sale letter. As regards value, sales are booked either at contracted forward exchange rates, if booked, or provisionally on the basis of FEDAI spot exchange rates prevailing on the last date of the financial year, where forward cover was not taken, which includes C&F / CIF price, usuance interest followed by final adjustment on due date of payment in subsequent financial year.

Service Charges

Remuneration for transaction in Marketing Department through facilitator mode and for conducting sales/procurement on behalf of Principals, by way of auctions, tenders, or any other means, are accounted for as service charges.

(a) Service charges are accounted for as income at contracted rates on:

i. Tender/Auction sale on behalf of Public Sector Undertakings, Defence and other Government Departments on issuance of sale orders / delivery orders.

ii. On satisfactory completion of e-sales.

In respect of (i) & (ii), service charges are accounted for on bid price of auction with adjustments, if any, on the basis of actual delivery by the Principals, in case service charges are payable on percentage basis.

iii. On occurrence of event, in case of service contract on event basis.

iv. In case of e-Procurement Service charges are booked, where service charges are collectable from the Principal, on completion of event.

(b) E-Procurement transaction fees collected from bidders are accounted on successful conduct of event.

(c) Service charges accrued in respect of purchase as facilitator are accounted for at the contracted rate on the basis of date of bill of lading / railway receipt / lorry receipt as the case may be. For imported materials, value is ascertained either at forward cover rate or at FEDAI spot rate prevailing on the last date of the Financial Year. Final adjustment is made on actual payment. In case of indigenous materials, value is ascertained on the basis of actual payment at contracted rate.

E-Auction Registration

E-auction Registration fees collected from buyers is considered as income of the current year if the validity of registration is upto one year. In case of life long registration, the amount so collected is distributed in five years equally. Purchases

(i) Imported materials are accounted for as purchase on the basis of date of bill of lading. As regards value, purchase are booked on the basis of actual remittance and where such remittance are outstanding at the close of the year, on the basis of contracted forward exchange rates, if booked, or FEDAI spot exchange rates prevailing on the last date of the financial year, in case forward cover is not taken, as the case may be. Purchase value includes material value freight, insurance etc. and usance interest followed by final adjustments on actual payment in subsequent financial year.

(ii) In case of indigenous materials, purchases are booked on the basis of transport documents and as regards value, based on the value of invoices.

1.A.10 Borrowing Cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

1.A.11 Employee Benefits

(a) Short term benefits

Short term employee benefits are accounted for at their undiscounted amount in the accounting period in which the services are rendered by the employees are recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

(b) Leave encashment

The liabilities for earned leave and commuted leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render related service. They are therefore measured as the present value of expected future payments to be made inrespect of services provided by employees up to the end of the reporting period based on actuarial valuation using the projected unit credit method.

The benefits are discounted using the market yield at the end of the reporting period that have terms of approximating to the terms of related obligations. Remeasurement as a result of experience adjustments and changes in actuarial assumptions are recognised in profit or loss.The facility is funded through LIC of India.

Defined Contribution Plan- Provident Fund

Provident Fund is administered by a Trust recognised by Income Tax Authorities and contribution to this Fund is charged to revenue. Pensionerâs Benefits are secured through Employeesâ Pension Scheme 1995.

Defined Benefit Plan-

(a) Service Gratuity

The liabilities or assets recognised in the Balance Sheet in respect of defined gratuity plan is the present value of the defined benefits obligation at the end of the reporting period less the fair value of plan assets. The defined benefits obligations are calculated annually by actuaries using projected unit credit method. The present value of defined benefits obligations is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on Government bonds that are terms approximating to the terms of the related obligations.

Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.

(b) Post Retirement medical benefit

The Company provides post retirement healthcare benefits to its retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to the retirement age and the completion of minimum service period. The expected cost of these benefits is accrued over the period of employment using the same accounting methodology as used for defined benefit plans. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in other comprehensive income in the period in which they arise. The fund is administered through a separate trust created for this purpose.

1.A.12 Taxation

Tax expense for the year comprises current and deferred tax.

(i) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax for the year as reported in the Statement of Profit and Loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Companyâs liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted in the country where the Company operates by the end of the reporting period.

(ii) Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. In contrast, deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the deferred tax assets can be utilised.

Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be utilised.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognised as an expense or income in the Statement of Profit and Loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.

1.A.13 Provisions, Contingent Liabilities and Contingent Assets

Constructive obligation is an obligation that derives from an entityâs actions whereby an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.

Contingent liabilities are disclosed by way of notes. These are reviewed at each Balance Sheet date and are adjusted to reflect the current estimate of management.

Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic benefit is probable.

1.A.14 Segment Reporting

Ind AS 108 establishes standards for the way that public business enterprises report information about operating segments and related disclosures. The Company undertakes trading activities, and also acts as e-commerce service provider. Based on the âmanagement approachâ as defined in Ind AS 108, the Chief Operating Decision Maker (CODM) evaluates Companyâs performance and allocates resources on an analysis of various performance indicators by operating segments. In terms of above the Company has identified Marketing and e-Commerce as its two Primary Reportable Business Segments. Revenue and identifiable operating expenses in relation to segments are categorised based on items that are individually identifiable to that segment. Rest of the items of revenue and expenses,which cannot be specifically allocated under specific segments are separately disclosed as unallocated.

1.A.15 Critical Accounting Estimates, Assumptions and Judgments

The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses, and disclosures of contingent assets and liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates.

(i) Useful economic lives and impairment of other assets

The Company reviews the useful life of PPE and intangibles at the end of each reporting date and any changes could affect the depreciation rates prospectively.

The Company also reviews its property, plant and equipment for possible impairment if there are events or changes in circumstances that indicate that the carrying value of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits, such as the Companyâs business plans and changes in regulatory environment are taken into consideration.

(ii) Contingencies and commitments

In the normal course of business, contingent liabilities may arise from litigation, taxation and other claims against the Company. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on managementâs assessment of specific circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability. Such liabilities are disclosed in the notes but are not provided for in the financial statements.

Although there can be no assurance regarding the final outcome of the legal proceedings, the Company does not expect them to have a materially adverse impact on the Companyâs financial position or profitability.

(iii) Actuarial Valuation

The determination of Companyâs liability towards defined benefit obligation to employees is made through independent actuarial valuation including determination of amounts to be recognised in the Statement of Profit and Loss and in other comprehensive income. Such valuation depend on assumptions determined after taking into account inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

(iv) Fair Value measurements and valuation processes Some of the Companyâs assets and liabilities are measured at fair value for financial reporting purposes. In estimating the fair value of an asset or a liability, the Company uses market-observable data to the extent it is available. Where Level 1 inputs are not available, the Company engages third party valuers, where required, to perform the valuation. Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the notes to the financial statements.

(v) Recognition of deferred tax assets for carried forward tax losses and unused tax credit

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilised. In addition significant judgement is required in assessing the impact of any legal or economic limits.

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