1. Material accounting policies information

1.1. Basis of preparation

The Financial Statements comply in all material aspects
with Indian Accounting Standards (Ind AS) notified
under Section 133 of the Companies Act, 2013 (the Act)
[Companies (Indian Accounting Standards) Rules, 2016]
and other relevant provisions of the Act.

1.2. Basis of measurement

The financial statements have been prepared on a going
concern basis using historical cost convention and on an
accrual method of accounting, except for the following:

(i) Certain financial assets and financial liabilities that
are measured at fair value,

(ii) Defined Benefit Plans - Plan assets are measured
at fair value; and

(iii) Derivative financial instruments-

measured at fair value

Figures in the financial statements have been rounded
off to rupees in lakhs.

1.3. Current and non-current classification

The Company presents assets and liabilities in
the balance sheet based on current / non- current
classification.

An asset is classified as current when it satisfies any of
the following criteria:

• it is expected to be realized in, or is intended for
sale or consumption in, the Company's normal
operating cycle.

• it is held primarily for the purpose of being traded;

• it is expected to be realized within 12 months after
the reporting date; or

• it is cash or cash equivalent unless it is restricted
from being exchanged or used to settle a liability
for at least 12 months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when it satisfies any of
the following criteria:

• it is expected to be settled in the Company's
normal operating cycle;

• it is held primarily for the purpose of being traded;

• it is due to be settled within 12 months after the
reporting date; or

• the Company does not have an unconditional right
to defer settlement of the liability for at least 12
months after the reporting date. Terms of a liability
that could, at the option of the counterparty, result
in its settlement by the issue of equity instruments
do not affect its classification.

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

1.4 Revenue recognition

Revenue from operations

Revenue from contracts with customers is recognized
on transfer of control of promised goods or services to
a customer at an amount that reflects the consideration
to which the Company is expected to be entitled to in
exchange for those goods or services. When there is
uncertainty on ultimate collectability, revenue recognition
is postponed until such uncertainty is resolved.

Revenue towards satisfaction of a performance
obligation is measured at the amount of transaction
price (net of variable consideration) allocated to that
performance obligation. The transaction price of
goods sold, and services rendered is net of variable
consideration on account of various discounts and
schemes offered by the Company as part of the
contract. Transaction price excludes taxes and duties
collected on behalf of the government.

This variable consideration is estimated based on the
expected value of outflow. Revenue (net of variable
consideration) is recognized only to the extent that it
is highly probable that the amount will not be subject

to significant reversal when uncertainty relating to its
recognition is resolved.

The Company's revenue from contracts with customers
is mainly from the sale of pellets, pig iron, iron ore fines
and auxiliary services.

Sale of products

Revenue from sale of products is recognized when
control of the goods or services is transferred to the
customer. The performance obligation in case of sale
of product is satisfied at a point in time i.e., when the
material is dispatched to the customer or on delivery to
the customer, as may be specified in the contract.

Rendering of services

Revenue from services is recognized over time
by measuring progress towards satisfaction of
performance obligation for the services rendered and
control transferred to the customer. Contract revenue
is recognized at allocable transaction price which
represents the cost of work performed on the contract
plus proportionate margin, using the percentage of
completion method. Percentage of completion is the
proportion of cost of work performed to-date, to the
total estimated contract costs.

Unbilled revenue represents value of services performed
in accordance with the contract terms but not billed.

A contract asset is the right to consideration in exchange
for goods or services transferred to the customer. If the
Company performs by transferring goods or services to
a customer before the customer pays consideration or
before payment is due, a contract asset is recognized for
the earned consideration when that right is conditional
on Company's future performance.

A contract liability is the obligation to transfer goods
or services to a customer for which the Company has
received consideration (or an amount of consideration is
due) from the customer. If a customer pays consideration
before the Company transfers goods or services to the
customer, a contract liability is recognized when the
payment is made, or the payment is due (whichever is
earlier). Contract liabilities are recognized as revenue
when the Company performs under the contract.

The Company does not adjust the transaction prices for
any time value of money in case of contracts where the
period between the transfer of the promised goods or
services to the customer and payment by the customer
does not exceeds one year.

Other operating income

Revenue arising from incidental and ancillary
activities of the Company are recognized under other
operating income.

Despatch money is recognized as and when services are
rendered and no significant uncertainty exists regarding
the amount of consideration that will be derived from
rendering the services.

Liabilities provided against operations and subsequent
reversal thereon (if any) in excess of respective
expenditure is considered as other operating income.

Other income

• Interest income from a financial asset is recognized
when it is probable that the economic benefits will
flow to the company and the amount of income
can be measured reliably. Interest income is
accrued on a time basis, with reference to the
principal outstanding and at the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial asset to that
asset's net carrying amount on initial recognition.

• Refunds of statutory duties and taxes, Export Duty
and cess, are accounted for upon determination
by the appropriate authority of the department
concerned provided reasonable certainty exist for
its ultimate realization.

• Insurance and Railway claims are
accounted for on receipt

1.5. Property, plant and equipment

Freehold land is carried at historical cost. All other
items of Property, Plant and Equipment are stated at
historical cost less any accumulated depreciation and
accumulated impairment losses (if any). Historical cost
includes expenditure that is directly attributable to the
acquisition of the items.

Subsequent costs are included in the assets'
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow to
the Company and the cost of the item can be measured
reliably. The carrying amount of any component
accounted for as a separate asset is de-recognized
when replaced. All other repairs and maintenance are
charged to Profit or Loss during the reporting period in
which they are incurred.

Carrying amount of an item of property, plant and
equipment shall be reduced by government grants in
accordance with Ind AS 20.

Derecognition of property, plant and equipment

Property, plant and equipment are derecognised upon
disposal or when no future economic benefits are
expected to arise from the continued use of the asset.

Any gains and losses on disposal or retirement of an
item of property, plant and equipment computed as the
difference between the net disposal proceeds and the
carrying amount of the asset is included in the statement
of profit and loss when the asset is derecognized.

Capital Work in progress consists of costs incurred
on projects and other capital works under
feasibility/ commission stage. Cost includes related
incidental expenses.

Impairment is recognized for projects for which there is
no further improvement and are considered as doubtful.

Depreciation methods, estimated useful lives and
residual value: Depreciation is calculated using the
Straight-Line Method to allocate their cost, net of their
residual values, over their estimated useful lives.

The useful lives have been determined based on
technical evaluation done by the management's expert
which are higher than those specified by Schedule II to
the Companies Act, 2013, in order to reflect the actual
usage of the assets. The assets' residual values and
useful lives are reviewed, and adjusted if appropriate, at
the end of each reporting period.

The life of property, plant & equipment in Captive Power
Plant has been estimated for 15 years from 1st April
2014 and for Blast Furnace Unit has been estimated
for 10 years from 1st April 2016 by expert committee
constituted by the Management during the current year.

Other assets are depreciated in accordance with useful
life of the assets as indicated in Part C of Schedule II of
Companies Act, 2013.

1.6. Intangible assets

Intangible assets acquired separately are measured on
initial recognition at cost. Subsequently, all intangible
assets with finite useful life are measured at cost less
accumulated amortization and accumulated impairment
losses, if any. Intangible assets are amortised over their
estimated useful life on a straight-line basis.

Recognition of intangible assets:

An Intangible Asset shall be recognized if it demonstrates
all of the following criteria:

i. It is probable that the expected future economic
benefits that are attributable to the asset will
flow to the entity

ii. The cost of the asset can be measured reliably

Intangible assets are amortized over their respective
estimated useful lives on a straight line basis, from the date
that they are available for use. The estimated useful life of
an identifiable intangible asset is based on a number of
factors including the effects of obsolescence, demand,
competition and other economic factors (such as the
stability of the industry and known technological advances)
and the level of maintenance expenditures required to
obtain the expected future cash flows from the asset.

The estimated useful lives of intangible assets for the
current and comparative period for computer software
ranges from 3-10 years.

Expenditure on research activities is recognised as an
expense in the period in which it is incurred.

Subsequent costs are included in the assets carrying
amount only when it is probable that future economic
benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably.

Derecognition of intangible asset

Intangible Assets are derecognised upon disposal or
when no future economic benefits are expected to arise
from the continued use of the asset. Any gains or losses
arising from derecognition of an intangible asset are
measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are
recognized in the statement of profit and loss when the
asset is derecognized.

Recognition of intangible asset under development:

An Intangible asset under development phase shall be
recognized if it demonstrates all of the following criteria:

i. Technical feasibility of completing the intangible
asset so that it will be available for use or sale.

ii. Intention to complete the intangible asset and
use or sell it.

iii. Ability to use or sell the intangible asset.

iv. Entity can demonstrate the existence of a market
for the output of the intangible asset or the
intangible asset itself or, if it is to be used internally,
the usefulness.

v. Availability of adequate technical, financial
and other resources to complete the
development and to use.

vi. Measure reliably the expenditure attributable to
the intangible asset

Recognition of costs as an asset is ceased when the
project is complete and available for its intended use,
or if these criteria are no longer applicable. Where
development activities do not meet the conditions for
recognition as an asset, any associated expenditure is
treated as an expense in the period in which it is incurred.

1.7. Investment properties

Property that is held for long-term rental yields or for
capital appreciation or both, and that is not occupied
by the Company, is classified as Investment Property.
Investment Property is measured initially at its cost,
including related transaction costs and where applicable
borrowing costs. Subsequent expenditure is capitalised
to the asset's carrying amount only when it is probable
that future economic benefits associated with the
expenditure will flow to the Company and the cost of
the item can be measured reliably. All other repairs and
maintenance costs are expensed when incurred.

When part of an Investment Property is replaced, the
carrying amount of the replaced part is derecognized.

Investment Properties are depreciated using Straight
Line Method over their estimated useful lives. The
useful life is determined based on technical evaluation
performed by the management's expert.

1.8. Leases

As a lessee

The company's lease assets satisfying the criteria of
the right to control the use of an identified asset for a
period of time in exchange for consideration providing
substantially all of the economic benefits through the

period of the lease are recognized as a lease liability with
a corresponding 'right-of use' (ROU) asset at inception
of contract except for leases with a term of twelve
months or less (short-term leases) and low value leases.

For these short-term and low value leases, the Company
recognizes the lease payments as an operating expense
on a straight-line basis over the term of the lease.

Payment made towards short term leases (leases for
which non-cancellable term is 12 months or less) and
low value assets (lease of assets worth less than H 5
Lakhs) are recognized in the statement of Profit and
Loss as rental expenses over the tenor of such leases.

Certain lease arrangements include the options to
extend or terminate the lease before the end of the
lease term. ROU assets and lease liabilities includes
these options when it is reasonably certain that they
will be exercised.

The right-of-use assets are initially recognized at cost,
which comprises the initial amount of the lease liability
adjusted for any lease payments made at or prior to the
commencement date of the lease plus any initial direct
costs less any lease incentives. They are subsequently
measured at cost less accumulated depreciation and
impairment losses.

Right-of-use assets are depreciated from the
commencement date on a straight-line basis over
the shorter of the lease term and useful life of the
underlying asset.

Right of use assets are evaluated for recoverability
whenever events or changes in circumstances indicate
that their carrying amounts may not be recoverable.
For the purpose of impairment testing, the recoverable
amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash
flows that are largely independent of those from
other assets. In such cases, the recoverable amount
is determined for the Cash Generating Unit (CGU) to
which the asset belongs.

The lease liability is initially measured at amortized cost
at the present value of the future lease payments that
are not paid. The lease payments are discounted using
the interest rate implicit in the lease or, if not readily
determinable, using the incremental borrowing rates in
the country of domicile of these leases. Lease liabilities
are remeasured with a corresponding adjustment to the
related right of use asset if the Company changes its

assessment if whether it will exercise an extension or a
termination option or when there is a change in future
lease payments arising from a change in an index or rate.

Lease payments included in the measurement of the
lease liability comprise:

• Fixed lease payments (including in-substance fixed
payments), less any lease incentives receivable;

• Variable lease payments that depend on an index
or rate, initially measured using the index or rate at
the commencement date;

• The amount expected to be payable by the lessee
under residual value guarantees;

• The exercise price of purchase options, if the lessee
is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if
the lease term reflects the exercise of an option to
terminate the lease.

Lease liability and ROU asset have been separately
presented in the Balance Sheet and lease payments
have been classified as financing cash flows.

As a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms of
the lease transfer substantially all the risks and rewards
of ownership to the lessee, the contract is classified
as a finance lease. All other leases are classified as
operating leases.

When the Company is an intermediate lessor, it accounts
for its interests in the head lease and the sublease
separately. The sublease is classified as a finance or
operating lease by reference to the right-of-use asset
arising from the head lease.

For operating leases, rental income is recognized on a
straight-line basis over the term of the relevant lease.

1.9. Mining rights

Mining rights are treated as Intangible Assets and all
related costs thereof are amortized on the basis of
annual production to the total estimated mineable
reserves or mining lease tenure whichever is earlier. In
circumstances where a mining property is abandoned,
the cumulative capitalized costs relating to the property
are written off in the period in which it occurs i.e. when
the Company determines that the mining property will
not provide sufficient and sustainable returns relative to

the risks and the Company decides not to proceed with
the mine development.

All expenditure associated with the acquisition of
mining rights including related professional fee,
payment towards statutory forest clearance before
execution of Mining Lease Deed and before technical
feasibility and commercial viability of extracting mineral
resources are demonstrable, treated as "Mining rights
under acquisition" and are disclosed under the head
"Intangible assets under development".

When the technical feasibility and commercial viability
of extracting minerals resources are demonstrable,
and the development of the deposit is intended by
the management, the cumulative capitalized cost
is re-classified as Mining Rights. No amortisation
is charged on the Mining Rights before the start of
commercial production.

Subsequent expenditure is capitalized only when it
increases the future economic benefits embodied in the
specific asset to which it relates. All other expenditure is
recognized in the Statement of Profit and Loss.

1.10. Impairment of non-financial assets

Non-financial assets are tested for impairment whenever
events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment
loss is recognized for the amount by which the asset's
carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset's fair
value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped
at the lowest levels for which there are separately
identifiable cash inflows which are largely independent
of the cash inflows from other assets or groups of assets
(cash generating units). Non-financial assets other than
goodwill that suffered impairment are reviewed for
possible reversal of the impairment at the end of each
reporting period. Intangible assets acquired free of
charge or for a nominal amount, by way of government
grant, shall be recognized at a nominal amount

Intangible assets which are not yet available for use are
tested for impairment at least annually and whenever
there is an indication at the end of a reporting period
that the asset may be impaired.

Fair value less costs of disposal is the price that would
be received to sell the asset in an orderly transaction
between market participants and does not reflect the
effects of factors that may be specific to the Company
and not applicable to entities in general.

Value in use is determined as the present value of the
estimated future cash flows expected to arise from the
continued use of the asset in its present form and its
eventual disposal. The cash flows are discounted 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 estimates of future cash
flows have not been adjusted.

Any reversal of the previously recognised impairment
loss is limited to the extent that the asset's carrying
amount does not exceed the carrying amount that
would have been determined if no impairment loss had
previously been recognised.

1.11. Financial instruments

Finacial assets

The Company classifies its financial assets in the
following measurement categories:

i) Those to be measured subsequently at fair value
(either through Other Comprehensive Income, or
through Profit or Loss), and

ii) Those measured at amortized cost.

The classification depends on the entity's business
model for managing the financial assets and the
contractual terms of the cash flows.

For assets measured at fair value, gains and losses are
recorded either in Profit or Loss or Other Comprehensive
Income. For investments in debt instruments, this will
depend on the business model in which the investment
is held. For investments in equity instruments, this
depends on whether the Company has made an
irrevocable election at the time of initial recognition to
account for the equity investment at fair value through
Other Comprehensive Income.

Measurement

At initial recognition, the Company measures a financial
asset at its fair value plus, in the case of a financial asset not
at fair value through Profit or Loss, transaction costs that
are directly attributable to the acquisition of the financial
asset. Transaction costs of financial assets carried at fair
value through Profit or Loss are expensed in Profit or Loss.
However, trade receivables that do not contain a significant
financing component are measured at transaction price.

Debt instrument

Subsequent measurement of debt instruments depends
on the Company's business model for managing the
asset and the cash flow characteristics of the asset.

There are three measurement categories when an
instrument is classified as debt instrument:

(i) Amortized cost: Assets that are held for collection
of contractual cash flows where those cash flows
represent solely payments of principal and
interest, are measured at amortized cost. A gain
or loss on a debt investment that is subsequently
measured at amortized cost and is not part of a
hedging relationship is recognized in Profit or Loss
when the asset is de-recognized or impaired.

(ii) Fair value through other comprehensive income
(FVOCI) : Assets that are held for collection of
contractual cash flows and for selling the financial
assets, where the assets' cash flows represent solely
payments of principal and interest, are measured at
Fair Value through Other Comprehensive Income
(FVOCI). Movements in the carrying amount are taken
through OCI except for the recognition of impairment
gains or losses, interest revenue and foreign exchange
gains and losses which are recognized in Profit and
Loss. When the financial asset is de-recognized, the
cumulative gain or loss previously recognized in
OCI is reclassified from equity to Profit or Loss and
recognized in other gains/ (losses).

(iii) Fair value through profit or loss (FVTPL): Assets
that do not meet the criteria for amortized cost or
FVOCI are measured at FVTPL. A gain or loss on
a debt investment that is subsequently measured
at Fair Value through Profit or Loss and is not part
of a hedging relationship is recognized in Profit or
Loss and presented net in the Statement of Profit
and Loss within other gains/(losses) in the period
in which it arises.

Changes in the fair value of financial assets at Fair Value
through Profit or Loss are recognized in other gain/
(losses) in the Statement of Profit and Loss. Impairment
losses (and reversal of impairment losses) on equity
investments measured at FVOCI are not reported
separately from other changes in fair value.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following
financial assets:

a) Financial assets that are debt instruments and are
measured at amortised cost.

b) Financial assets that are debt instruments and are
measured as at FVOCI

c) Trade receivables or any contractual right to
receive cash or another financial asset that
result from transactions that are within the
scope of Ind AS 115.

The Company follows 'simplified approach' for recognition
of impairment loss allowance on trade receivables,
contract assets and lease receivables. The application of
simplified approach does not require the Company to track
changes in credit risk. Rather, it recognises impairment loss
allowance based on lifetime ECLs at each reporting date,
right from its initial recognition.

At each reporting date, for recognition of impairment
loss on other financial assets and risk exposure,
the Company determines whether there has been
a significant increase in the credit risk since initial
recognition. If credit risk has not increased significantly,
12-month ECL is used to provide for impairment loss.
However, if credit risk has increased significantly, lifetime
ECL is used. If, in a subsequent period, credit quality of
the instrument improves such that there is no longer a
significant increase in credit risk since initial recognition,
then the Company reverts to recognising impairment
loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is a portion of
the lifetime ECL which results from default events that
are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows
that are due to the Company in accordance with the
contract and all the cash flows that the entity expects to
receive, discounted at the original effective interest rate.

De-recognition of financial assets

A financial asset is derecognized only when: -

(i) The Company has transferred the rights to receive
cash flows from the financial asset or

(ii) Retains the contractual rights to receive the
cash flows of the financial asset but assumes a
contractual obligation to pay the cash flows to one
or more recipients.

Where the entity has transferred an asset, the Company
evaluates whether it has transferred substantially all
risks and rewards of ownership of the financial asset. In
such cases, the financial asset is derecognized. Where
the entity has not transferred substantially all risks and
rewards of ownership of the financial asset, the financial
asset is not derecognized.

Where the entity has neither transferred a financial asset
nor retains substantially all risks and rewards of ownership
of the financial asset, the financial asset is derecognized
if the Company has not retained control of the financial
asset. Where the Company retains control of the financial
asset, the asset is continued to be recognized to the
extent of continuing involvement in the financial asset.

Financial liabilities

The Company classifies its financial liabilities
in the following

(i) Those to be measured subsequently at fair value
through Profit or Loss

(ii) Those to be measured at amortized cost.
Measurement

All financial liabilities are recognised initially at fair value
and, in the case of financial liabilities at amortised cost,
net of directly attributable transaction costs.

The measurement of financial liabilities depends on
their classification, as described below:

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss
include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair
value through profit or loss.

Financial liabilities are classified as held for trading if
they are incurred for the purpose of repurchasing in
the near term. This category also includes derivative
financial instruments entered into by the Company that
are not designated as hedging instruments in hedge
relationships as defined by Ind AS 109.

Gains or losses on liabilities held for trading are
recognised in the statement of profit and loss.

Financial liabilities designated upon initial recognition
at fair value through profit or loss are designated as such
at the initial date of recognition, and only if the criteria
in Ind AS 109 are satisfied. For liabilities designated as
FVTPL, fair value gains/ losses attributable to changes in
own credit risk are recognized in OCI.

These gains/losses are not subsequently transferred to
statement of profit and loss. However, the Company
may transfer the cumulative gain or loss within equity.
All other changes in fair value of such liability are
recognised in the statement of profit and loss. The
Company has not designated any financial liability as at
fair value through profit or loss.

Financial liabilities at amortised cost

After initial recognition, interest-bearing loans
and borrowings and trade and other payables are
subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in the statement
of profit and loss when the liabilities are derecognised
as well as through the EIR amortization process.

Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation
is included as finance costs in the statement of
profit and loss.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another
from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the
derecognition of the original liability and the recognition
of a new liability. The difference in the respective carrying
amounts is recognised in the statement of profit and loss.

Derivative financial instruments

Initial recognition and subsequent measurement

In order to hedge its exposure to foreign exchange, the
Company enters into forward contracts. The Company
does not hold derivative financial instruments for
speculative purposes.

Such derivative financial instruments are initially
recognized at fair value on the date on which a
derivative contract is entered into and are subsequently
remeasured at fair value at the end of each
reporting period.

Positive balance in derivatives are presented under
financial Assets after Loans and negative balance in
derivates are presented as financial liabilities after trade
payables as a separate line item.

Any gains or losses arising from changes in the fair
value of derivatives are taken directly to Statement of
Profit and Loss.

Equity instrument

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

The earlier recognised impairment is reversed when
the circumstance that previously caused impairment
recognition no longer exists or when there is clear
evidence of an increase in net realisable value due to
changes in economic circumstances.