2. Material Accounting Policies
A. Statement of compliance
Financial Statements have been prepared in accordance
with the accounting principles generally accepted in
India including Indian Accounting Standards (Ind AS)
prescribed under the section 133 of the Companies
Act, 2013 read with rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 (as amended
from time to time) and presentation and disclosures
requirement of Division II of revised Schedule III of the
Companies Act 2013, (Ind AS Compliant Schedule III), as
applicable to financial statement.
Accordingly, the Company has prepared these Financial
Statements which comprise the Balance Sheet as at
31st March 2025, the Statement of Profit and Loss, the
Statement of Cash Flows and the Statement of Changes in
Equity for the year ended as on that date, and accounting
policies and other explanatory information (together
hereinafter referred to as “Financial Statements”).
These financial statements are approved for issue by the
Board of Directors on 28.04.2025.
B. Basis of preparation & presentation
The Financial Statements have been prepared on the
historical cost convention, on the accruel basis except
for certain financial instruments measured at fair value
at the end of each reporting year, as explained in the
accounting policies below.
Fair value is the price that would be received on sell of 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 in 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. Fair value
for measurement and/or disclosure purposes in these
financial statements is determined on such a basis,
except leasing transactions that are within the scope of
Ind AS116, fair value of plan assets within scope the of
Ind AS 19 and measurements that have some similarities
to fair value but are not fair value, such as net realizable
value in Ind AS 2 or value in use in Ind AS 36.
In addition, for financial reporting purposes, fair value
measurements are categorized into Level 1,2, or 3 based
on the degree to which the inputs to the fair value
measurements are observable and the significance of
the inputs to the fair value measurements in its entirety,
which are described as follows:
Level 1 inputs are quoted prices (unadjusted) in
active markets for identical assets or liabilities that
the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices
included within level 1, that are observable for the
asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the
asset or liability.
The financial statements are prepared in Indian Rupee
which is also the functional currency of the company
and all values are rounded to the nearest lakhs except
otherwise indicated.
Current and non-current classification
The company presents the 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 realised 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 realised within 12 months after
the reporting date; or
I t 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;
I t 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 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.
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 12 months
as its operating cycle.
Deferred tax assets and liabilities are classified as
non-current only.
C. Revenue Recognition
i. Sale of Goods
The Company recognises revenue when control over
the promised goods or services is transferred to the
customer at an amount that reflects the consideration to
which the Company expects to be entitled in exchange
for those goods or services.
The Company has generally concluded that it is the
principal in its revenue arrangements as it typically
controls the goods or services before transferring them
to the customer.
Revenue is adjusted for variable consideration such as
discounts, rebates, refunds, credits, price concessions,
incentives, or other similar items in a contract when
they are highly probable to be provided. The amount
of revenue excludes any amount collected on behalf
of third parties.
The Company recognises revenue generally at the point
in time when the products are delivered to customer
which is when the control over product is transferred
to the customer.
Contract Balances
• Contract assets
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 recognised for the
earned consideration.
• Trade receivables
A receivable is recognised when the goods
are delivered and to the extent that it has an
unconditional contractual right to receive cash
or other financial assets (i.e., only the passage
of time is required before payment of the
consideration is due).
Trade receivables is derecognised when the
Company transfers substantially all the risks and
rewards of ownership of the asset to another party
including discounting of bills on a non-recourse basis.
• Contract liabilities
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 recognised when the payment
is made or the payment is due (whichever is earlier).
Contract liabilities are recognised as revenue
when the Company performs under the contract
including Advance received from Customer.
• Refund liabilities
A refund liability is the obligation to refund some or
all of the consideration received (or receivable) from
the customer and is measured at the amount the
Company ultimately expects it will have to return
to the customer including volume rebates and
discounts. The Company updates its estimates of
refund liabilities at the end of each reporting period.
ii. Interest income
Interest income from a financial asset is recognised
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, by 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.
D. Leases
The Company assesses at contract inception whether a
contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
Company as lessor
Leases in which the Company does not transfer
substantially all the risks and rewards incidental to
ownership of an asset are classified as operating leases.
Rental income arising is accounted for on a straight-line
basis over the lease terms. Initial direct costs incurred in
negotiating and arranging an operating lease are added to
the carrying amount of the leased asset and recognised
over the lease term on the same basis as rental income.
Contingent rents are recognised as revenue in the period
in which they are earned.
Company as lessee
The Company applies a single recognition and
measurement approach for all leases, except for
short-term leases and leases of low-value assets.
The Company recognises lease liabilities to make lease
payments and right-of-use assets representing the right
to use the underlying assets.
Right-of-use assets
The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation
and accumulated impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease
liabilities recognised, initial direct costs incurred, and
lease payments made at or before the commencement
date less any lease incentives received. Unless the
Company is reasonably certain to obtain ownership
of the leased asset at the end of the lease term, the
recognised right-of-use assets are depreciated on a
straight-line basis over the shorter of its estimated useful
life and the lease term.
If ownership of the leased asset transfers to the
Company at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation
is calculated using the estimated useful life of the asset.
Right-of-use assets are subject to impairment test.
Lease liabilities
At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease term.
The lease payments include fixed payments (including
in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under
residual value guarantees.
The variable lease payments that do not depend on
an index or a rate are recognised as expense in the
period on which the event or condition that triggers the
payment occurs.
I n calculating the present value of lease payments, the
Company uses the incremental borrowing rate at the
lease commencement date if the interest rate implicit
in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities
is increased to reflect the accretion of interest and
reduced for the lease payments made. In addition,
the carrying amount of lease liabilities is remeasured
if there is a modification, a change in the lease term, a
change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate
used to determine such lease payments) or a change
in the assessment of an option to purchase the
underlying asset.
Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition
exemption to its short-term leases (i.e., those leases
that have a lease term of 12 months or less from the
commencement date and do not contain a purchase
option). It also applies the lease of low-value assets
recognition exemption to leases that are considered
of low value (i.e., below ' 5,00,000). Lease payments
on short-term leases and leases of low-value assets
are recognised as expense on a straight-line basis over
the lease term.
E. Foreign currencies
The functional currency of the Company is determined
on the basis of the primary economic environment
in which it operates. The functional currency of the
Company is Indian National Rupee (INR).
The transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognised
at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting year, monetary
items denominated in foreign currencies are retranslated
at the rates prevailing at that date.
Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at
the rates prevailing at 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 retranslated.
Exchange differences on monetary items are recognised
in Statement of Profit and Loss in the year in which they
arise except for:
• exchange differences on foreign currency
borrowings relating to assets under construction
for future productive use, which are included in
the cost of those assets when they are regarded as
an adjustment to interest costs on those foreign
currency borrowings;
• exchange differences on transactions entered into
in order to hedge certain foreign currency risks
F. Borrowing Costs
Borrowing costs directly attributable to the acquisition
and 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.
All other borrowing costs are recognized in the Statement
of Profit and Loss in the period in which they are incurred.
The Company determines the amount of borrowing
costs eligible for capitalization as the actual borrowing
costs incurred on that borrowing during the period less
any interest income earned on temporary investment
of specific borrowings pending their expenditure on
qualifying assets, to the extent that an entity borrows
funds specifically for the purpose of obtaining a qualifying
asset. In case if the Company borrows generally and uses
the funds for obtaining a qualifying asset, borrowing costs
eligible for capitalization are determined by applying a
capitalization rate to the expenditures on that asset.
Borrowing Cost includes exchange differences arising
from foreign currency borrowings to the extent they are
regarded as an adjustment to the finance cost.
G. Employee benefits
Retirement benefit costs and termination benefits
Payments to defined contribution retirement benefit
plans are recognized as an expense when employees
have rendered service entitling them to the contributions.
For defined benefit retirement benefit plans, the cost
of providing benefits is determined using the projected
unit credit method, with actuarial valuations being
carried out at the end of each annual reporting period.
Re-measurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding
interest), is reflected immediately in the Balance
sheet with a charge or credit recognized in other
comprehensive income in the period in which they occur.
Re-measurement recognized in other comprehensive
income is reflected immediately in retained earnings and
will not be reclassified to Statement of profit and loss.
Past service cost is recognised in Statement of profit and
loss in the period of a plan amendment. Net interest is
calculated by applying the discount rate at the beginning
of the period to the net defined benefit liability or asset.
Defined benefit costs are categorized as follows:
• service cost (including current service cost,
past service cost, as well as gains and losses on
curtailments and settlements);
• net interest expense or income; and
• re-measurement
The Company presents the first two components of
defined benefit costs in profit or loss in the line item
‘Employee benefits expenses’. Curtailment gains and
losses are accounted for as past service costs.
The retirement benefit obligation recognized in the
Balance sheet represents the actual deficit or surplus
in the Company’s defined benefit plans. Any surplus
resulting from this calculation is limited to the present
value of any economic benefits available in the form
of refunds from the plans or reductions in future
contributions to the plans.
A liability for a termination benefit is recognized at the
earlier of when the entity can no longer withdraw the
offer of the termination benefit and when the entity
recognizes any related restructuring costs.
Short-term and other long-term employee benefits
A liability is recognized for benefits accruing to employees
in respect of wages and salaries, annual leave and sick
leave in the period the related service is rendered at the
undiscounted amount of the benefits expected to be
paid in exchange for that service.
Liabilities recognized in respect of short-term employee
benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the
related service.
Liabilities recognized in respect of other long-term
employee benefits are measured at the present value
of the estimated future cash outflows expected to be
made by the Company in respect of services provided by
employees up to the reporting date.
H. Taxation
Income tax expense represents the sum of the tax
currently payable and deferred tax.
Current tax
Current tax is the amount of expected tax payable
based on the taxable profit for the year as determined
in accordance with the applicable tax rates and the
provisions of the Income Tax Act, 1961.
Deferred tax
Deferred tax is recognised on temporary 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.
Deferred tax liabilities are recognised for all taxable
temporary differences. Deferred tax assets are
recognised for all deductible temporary differences to
the extent that it is probable that taxable profits will
be available against which those deductible temporary
differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary
difference arises from the initial recognition (other than
in a business combination) of assets and liabilities in a
transaction that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities are
not recognised if the temporary difference arises from
the initial recognition of goodwill.
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 asset to be recovered. Unrecognised deferred tax
assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable
that future taxable profits will allow the deferred tax
asset to be recovered.
Minimum Alternate Tax (MAT) paid in accordance with
the tax laws, which gives future economic benefits
in the form of adjustment to future income tax
liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax.
Accordingly, MAT is recognised as an asset in the Balance
Sheet when it is highly probable that future economic
benefit associated with it will flow to the Company.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply in the year in which the
liability is settled or the asset realised, based on tax rates
(and tax laws) that have been enacted or substantively
enacted by the end of the reporting year.
Deferred tax assets and deferred tax liabilities are offset
if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred
taxes relate to the same taxable entity and the same
taxation authority.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss,
except when they relate to items that are recognised
in other comprehensive income or directly in equity,
in which case, the current and deferred tax are also
recognized in other comprehensive income or directly
in equity respectively. Where current tax or deferred
tax arises from the initial accounting for a business
combination, the tax effect is included in the accounting
for the business combination.
Deferred tax assets and liabilities are off set when they
relate to income taxes levied by the same taxation
authority and the relevant entity intends to settle its
current tax assets and liabilities on a net basis.
I. Property, Plant and Equipment
The cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
any import duties and other taxes (other than those
subsequently recoverable from the tax authorities),
any directly attributable expenditure on making the
asset ready for its intended use, including relevant
borrowing costs for qualifying assets and any expected
costs of decommissioning. Expenditure incurred after
the property, plant and equipment have been put into
operation, such as repairs and maintenance, are charged
to the Statement of Profit and Loss in the year in which
the costs are incurred. Major shut-down and overhaul
expenditure is capitalised as the activities undertaken
improves the economic benefits expected to arise
from the asset.
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
Any gain or loss arising on the disposal or retirement of
an item of property, plant and equipment is determined
as the difference between the sales proceeds and
the carrying amount of the asset and is recognised in
Statement of Profit and Loss.
Assets in the course of construction are capitalised in
the assets under Capital work in progress. At the point
when an asset is operating at management’s intended
use, the cost of construction is transferred to the
appropriate category of property, plant and equipment
and depreciation commences. Costs associated with
the commissioning of an asset and any obligatory
decommissioning costs are capitalised where the asset
is available for use but incapable of operating at normal
levels, revenue (net of cost) generated from production
during the trial period is capitalised.
The Company has elected to continue with the carrying
value for all of its property, plant and equipment as
recognised in the financial statements on transition to
Ind AS, measured as per the previous GAAP and use that
as its deemed cost as at the date of transition.
Depreciable amount for assets is the cost of an asset,
or other amount substituted for cost, less its estimated
residual value. Depreciation is recognized so as to
write off the cost of assets (other than freehold land
and properties under construction) less their residual
values over their useful lives, using straight-line method
as per the useful life prescribed in Schedule II to the
Companies Act, 2013 except in respect of following
categories of assets, in whose case the life of the
assets has been assessed as under based on technical
advice taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions
of the asset, past history of replacement, anticipated
technological changes, manufacturers warranties and
maintenance support, etc.
When significant parts of property, plant and
equipment are required to be replaced at intervals, the
Company depreciates them separately based on their
specific useful lives.
The Company reviews the residual value, useful lives and
depreciation method annually and, if expectations differ
from previous estimates, the change is accounted for as
a change in accounting estimate on a prospective basis.
J. Intangible assets
Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised on a straight-line basis over
their estimated useful lives. The estimated useful life
and amortisation 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.
Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated
impairment losses.
Mining assets are amortised using unit of production
method over the entire lease term.
Mining Assets
Acquisition/ Stripping Cost
The cost of Mining Assets capitalised includes costs
associated with acquisition of licenses and rights to
explore, stamp duty, registration fees and other such
costs. Bid premium and royalties payable with respect
to mining operations is contractual obligation. The said
obligations are variable and linked to market prices.
The Company has accounted for the same as expenditure
on accrual basis as and when related liability arises as per
respective agreements/ statute.
Exploration and evaluation
Exploration and evaluation expenditure incurred after
obtaining the mining right or the legal right to explore
are capitalised as exploration and evaluation assets
(intangible assets) and stated at cost less impairment.
Exploration and evaluation assets are assessed for
impairment when facts and circumstances suggest that
the carrying amount of an exploration and evaluation
asset may exceed its recoverable amount.
The Company measures its exploration and evaluation
assets at cost and classifies as Property, plant and
equipment or intangible assets according to the nature
of the assets acquired and applies the classification
consistently. To the extent that tangible asset is
consumed in developing an intangible asset, the amount
reflecting that consumption is capitalised as a part of
the cost of the intangible asset.
Exploration expenditure includes all direct and allocated
indirect expenditure associated with finding specific
mineral resources which includes depreciation and
applicable operating costs of related support equipment
and facilities and other costs of exploration activities:
General exploration costs - costs of surveys and studies,
rights of access to properties to conduct those studies
(e.g., costs incurred for environment clearance, defense
clearance, etc.), and salaries and other expenses of
geologists, geophysical crews and other personnel
conducting those studies.
Costs of exploration drilling and equipping exploration
- Expenditure incurred on the acquisition of a license
interest is initially capitalised on a license-by-license
basis. Costs are held, undepleted, within exploration
and evaluation assets until such time as the exploration
phase on the license area is complete or commercial
reserves have been discovered.
Stripping cost
Developmental stripping costs in order to obtain access
to quantities of mineral reserves that will be mined
in future periods are capitalised as part of mining
assets. Capitalisation of developmental stripping costs
ends when the commercial production of the mineral
reserves begins.
Production stripping costs are incurred to extract the
minerals in the form of inventories and/or to improve
access to an additional component of an mineral body
or deeper levels of material. Production stripping costs
are accounted for as inventories to the extent the benefit
from production stripping activity is realised in the form
of inventories.
Other production stripping cost incurred are expensed in
the statement of profit and loss.
Developmental stripping costs are presented within
mining assets. After initial recognition, stripping assets
are carried at cost less accumulated amortisation and
impairment. The expected useful life of the identified
component of mineral is used to depreciate or amortise
stripping cost.
Mines restoration, rehabilitation and environmental
costs: Provision is made for costs associated with
restoration and rehabilitation of mining sites as soon as
the obligation to incur such costs arises. Such restoration
and closure costs are typical of extractive industries and
they are normally incurred at the end of the life of the mine.
The costs are estimated on the basis of mine closure plans
and the estimated discounted costs of dismantling and
removing these facilities and the costs of restoration are
capitalised. The provision for decommissioning assets is
based on the current estimates of the costs for removing
and decommissioning production facilities, the forecast
timing of settlement of decommissioning liabilities and
the appropriate discount rate. A corresponding provision
is created on the liability side. The capitalised asset
is charged to profit and loss over the life of the asset
through amortisation over the life of the operation and
the provision is increased each period via unwinding the
discount on the provision. Management estimates are
based on local legislation and/or other agreements are
reviewed periodically.
The actual costs and cash outflows may differ from
estimates because of changes in laws and regulations,
changes in prices, analysis of site conditions and changes
in restoration technology. Details of such provisions are
set out in note 21.
K. Impairment of Non-financial assets
At the end of each reporting period, the Company reviews
the carrying amounts of its tangible and intangible
assets to determine whether there is any indication
that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of
the asset is estimated in order to determine the extent
of the impairment loss (if any). Where it is not possible
to estimate the recoverable amount of an individual
asset, the Company estimates the recoverable amount
of the cash-generating unit to which the asset belongs.
Where a reasonable and consistent basis of allocation
can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units
for which a reasonable and consistent allocation basis
can be identified.
Intangible assets with indefinite useful lives and
intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an
indication that 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.
If the recoverable amount of an asset (or cash-generating
unit) is estimated to be less than its carrying amount, the
carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment
loss is recognized immediately in the Statement of
Profit and Loss.
The carrying amounts of the Company’s non-financial
assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount
is estimated in order to determine the extent of the
impairment loss, if any
L. Inventories
Inventories are stated at the lower of cost and net
realisable value.
Cost of raw materials include cost of purchase and other
costs incurred in bringing the inventories to their present
location and condition. Cost of semi-finished /finished
goods and work in progress include cost of direct
materials and labor and a proportion of manufacturing
overheads based on the normal operating capacity but
excluding borrowing costs. Cost of traded goods include
purchase cost and inward freight.
Costs of inventories are determined on weighted average
basis. Net realizable value represents the estimated
selling price for inventories less all estimated costs of
completion and costs necessary to make the sale.
|