Accounting Policies of Sandur Manganese & Iron Ores Ltd. Company
Mar 31, 2023
1. Corporate information
The Company is engaged in mining of manganese and iron ores in Deogiri village of Sandur taluk, Bellary District, Karnataka. The Company is also engaged in the manufacture of ferroalloys & coke located at Vyasanakere, Hospet. The Company is a public limited Company incorporated and domiciled in India. The Company has its Registered Office at âSatyalaya'', Door No. 266 (old No.80), Behind Taluka Office, Ward No.1, Palace Road, Sandur 583 119, Bellari District, Karnataka and its Corporate Office at No. 9, Sandur House, Ballari Road, Sadashivnagar, Bangalore 560 080.
1.1 Significant accounting policies
(i) Statement of compliance
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended read with Section 133 of the Companies Act, 2013 (referred to as âActâ) and other relevant provisions of the Act.
(ii) Basis of preparation of the standalone financial statements
These standalone financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, except for certain financial instruments which are measured at fair value or amortised cost at the end of each reporting period, as explained in the accounting policies below. This financial statements comply in all material aspects of Indian Accounting Standards (referred to as âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended read with Section 133 of the Companies Act, 2013. All assets and liabilities are classified into current and non current based on the operating cycle of less than twelve months or based on the criteria of realisation/settlement within twelve month period from the balance sheet date.
Accounting policies have been consistently applied except where a new accounting standard is initially adopted or revision to an existing accounting standard, requires a change in the accounting policy hitherto in use.
1.2 Use of estimates and judgements
The preparation of these standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on management''s evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates. Estimates and assumptions are reviewed on a periodic basis. Appropriate changes in estimates are made when the management of the Company becomes aware of the changes in the circumstances surrounding the estimates. Changes in estimates are reflected in the standalone financial statements in the period in which the changes are made and, if material, their effects are disclosed in the notes to the standalone financial statements.
1.3.1 Sale of products
Revenue is measured at amount of transaction price (net of variable consideration) received or receivable when control of the goods is transferred to the customer and there are no unfulfilled performance obligations as per the contract with the customers. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Revenue excludes taxes collected from customer which have to be subsequently remitted to the Government authorities.
Ores
Revenue from sale of ores is recognised on completion of e-auction, receipt of money from the customer and payment of duties/levies collected from customer. In case of sale of sub-grade ores the revenue from sale of ores is recognised on despatch of goods to customers from mines or stock points as applicable when control of the goods is transferred to the customer and there are no unfulfilled performance obligations as per the contract with the customers and realisation is reasonably assured.
Ferroalloys and Coke
Revenue from sale of goods is recognised on dispatch of ferroalloys and coke to customers from plant, when control of the goods is transferred to the customer and there are no unfulfilled performance obligations as per the contract with the customers and realisation is reasonably assured.
Energy
Revenue from sale of energy is recognised on accrual basis based on the energy generated and supplied as per applicable rates from time to time and includes unbilled revenue accrued up to the end of the accounting year.
1.3.2 Rendering of services:
Revenue from sale of services is recognised over the period of time as per the terms of the contract with customers.
1.4 Dividend and interest income
Dividend income from investments is recognised when the Company''s right to receive payment has been established.
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.
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contact involves the use of an identified asset; (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease; and (iii) the Company has the right to direct the use of the asset.
The Company as a lessee
As a lessee, the Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property, plant and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in substance fixed payments. The lease liability is measured at amortised cost using the effective interest method.
The Company applies the recognition exemption for short-term leases and leases of low-value assets. The lease payment for short-term leases having a lease term of up to 12 months and leases of low-value assets, are recognised as an expenses on a straight line basis over the lease term. The Company applied a single discount rate for a portfolio of leases of similar assets in similar economic environment with a similar end date.
The Company as lessor
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
1.6 Foreign currency transactions and balances
Transactions in foreign currency are recorded at exchange rates prevailing on the date of the respective transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognized in the standalone statement of profit and loss and reported within foreign exchange gains/(losses).
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
1.6.1 Functional currency
Functional currency of an entity is the currency of the primary economic environment in which the entity operates. The standalone financial statements are presented in Indian rupees, the national currency of India, which is the functional currency of the Company.
1.7.1 Retirement benefit costs and termination benefits
Employee benefits include provident fund, employee state insurance scheme, pension, gratuity, superannuation and compensated absences.
Payments to defined contribution retirement benefit plans are recognised 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. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the standalone balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to the standalone statement of profit and loss. Past service cost is recognised in the standalone 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 categorised 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 the standalone statement of profit and loss in the line item âEmployee benefits expense''. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the standalone 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 recognised at the earlier of the following dates: (a) when the entity can no longer withdraw the offer of the termination benefit; and (b) when the entity recognises costs for restructuring that is within the scope of Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets and involves the payment of termination benefits.
1.7.2 Short-term and other long-term employee benefits
A liability is recognised 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 recognised 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 recognised 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.
Income tax expense comprises of current tax and deferred tax in accordance with the provisions of Income-tax Act, 1961.
1.8.1 Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before tax'' as reported in the standalone statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
Current tax assets and current tax liabilities are offset when there is legally enforceable right to offset the recognised amounts and there is an intimation to settle the asset and liability on a net basis.
1.8.2 Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the standalone
financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally 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.
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.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period 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 period.
1.8.3 Current and deferred tax for the year
Current and deferred tax are recognised in the standalone statement of profit and 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 recognised in other comprehensive income or directly in equity respectively.
1.9 Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the standalone balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation for the assets at head office and mines (including assets transferred from these locations to any other location) is provided on a written down value method over the prescribed useful lives as per Schedule II to the Companies Act, 2013 after adjustment of the applicable residual values. Depreciation for the assets at plant (including assets transferred from this location to any other location) is provided on a straight line basis over the prescribed useful lives as per Schedule II to the Companies Act, 2013 after adjustment of the applicable residual values. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
Items such as spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment when they meet the definition of property, plant and equipment under Ind AS 16. i.e., Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and
(b) are expected to be used during more than one period. If the above said definition is not met, they are classified as inventories in accordance with Ind AS 2 Inventories.
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 profit or loss.
When an item of property, plant and equipment is acquired in exchange for a non-monetary asset or assets, or a combination of monetary and non-monetary assets, the cost of that item is measured at fair value (even if the entity cannot immediately derecognise the asset given up) unless the exchange transaction lacks commercial substance or the fair value of neither the asset received nor the asset given up is reliably measurable. If the acquired item is not measured at fair value, its cost is measured at the carrying amount of the asset given up.
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16''s requirements for cost model.
Depreciation is recognised using the straight line method so as to amortise the cost of investment properties over their useful lives as specified in Schedule II of the Companies Act, 2013. Freehold land and properties under construction are not depreciated. Transfers to, or from, investment properties are made at the carrying amount when and only when there is a change in use.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn
from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the standalone statement of profit and loss in the period in which the property is derecognised.
1.11.1 Intangible assets acquired separately
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.
1.11.2 Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in the standalone statement of profit and loss when the asset is derecognised.
1.11.3 Useful lives of intangible assets
Intangible assets are amortised over their estimated useful life on straight line method as follows:
Software Licenses: Lower of 5 years or license period.
Inventories are valued at the lower of cost and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including all levies, transit insurance and receiving charges. Semi-finished goods and finished goods include appropriate proportion of overheads. Cost is determined as follows:
|
Stores, spares and consumables |
Weighted average rates |
|
Raw materials |
Weighted average rates |
|
Semi-finished goods & finished goods |
Full absorption costing method based on annual cost of production |
1.13 Provisions and contingencies
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
The financial obligation towards mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all the mining leases. The amount so determined is provided in the books of account on the basis of run of mine ore production of the mines of all the mining leases.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
The basic earnings/(loss) per share is computed by dividing the net profit/(loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.
Operating segments are reported in the manner consistent with the internal reporting to the chief operating decision maker (CODM). The Company has identified business segment as its primary segment with secondary information reported geographically.
The Company''s primary segments consist of Mining, Ferroalloys, Coke and energy.
Unallocable represents other income and expenses which relate to the Company as a whole and are not allocated to segments.
As mentioned in para 1.1(ii) above under âBasis of preparation of the standalone financial statements'', the Company based
on the normal time between acquisition of assets and their realisation in cash or cash equivalents, has determined its operating cycle as one year. The above basis is used for classifying the assets and liabilities into current and noncurrent as the case may be.
1.18. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/(loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.19. Financial instruments
Financial assets and 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 Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired.
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets 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 whose objective is achieved by both collecting contractual cash flows on specified dates that are solely
payments of principal and interest on the principal amount outstanding and selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless they are measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in standalone statement of profit and loss.
Financial liabilities
Financial liabilities are measured at amortised cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received net of direct issue 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.
All other borrowing costs are recognised in the standalone statement of profit and loss in the year in which they are incurred.
The Company determines the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the year 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 capitalisation are determined by applying a capitalisation 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.
1.21 Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the standalone statement of profit and loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are deducted from the carrying amount of the asset resulting in reduced depreciation over the life of property, plant and equipment.
1.22 Recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 31 March 2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation ofFinancial Statements- This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2023. The Company has evaluated the amendments and there is no impact on its standalone financial statement.
Mar 31, 2018
1.1 Significant accounting policies
(i) Accounting Convention:
The financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016. For all the periods upto and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with the accounting standards notified under Section 133 of the Companies Act, 2013, read together with Companyâs (Accounts) Rules 2014 (Indian GAAP). These are the Companies first annual financial statements prepared in accordance with Ind AS. The Company has adopted all applicable standards and the adoptions were carried out in accordance with Ind AS 101 - âFirst Time Adoption of Indian Accounting Standardsâ considering April 1, 2016 as the transition date. Pursuant to adoption of Ind AS, the differences in the carrying amounts of assets and liabilities on the transition date under the Indian GAAP and the balances on adoption of Ind AS have been recognised directly in equity. The financial statements for the year ended March 31, 2017 and the Balance Sheet as at the transition date April 1, 2016 and as at March 31, 2017 have been presented under Ind AS for comparative purposes. Accounting policies have been applied consistently to all periods presented in these financial statements.
(ii) Basis of measurement:
The financial statements have been prepared on an accrual basis and in accordance with the historical cost convention, unless otherwise stated. This financial statements comply in all material aspects with Ind AS notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. All assets and liabilities are classified into current and non current based on the operating cycle of less than twelve months all based on the criteria of realisation / settlement within twelve month period from the balance sheet date.
1.2 Use of estimates and judgement
The preparation of 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 amount of assets and liabilities, revenues and expenses and disclosure of contingent liabilities. Such estimates and assumptions are based on managementâs evaluation of relevant facts and circumstances as on the date of financial statements. The actual outcome may diverge from these estimates.
Estimates and assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.
1.3 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.
Ores:
Revenue from sale of ores is recognised on completion of e-auction and receipt of money from the customer. In case of sale of sub-grade ores the revenue from sale of ores is recognised on despatch of goods to customers from plant or stock points as applicable when significant risks and rewards of ownership are considered to be transferred and realisation is reasonably assured.
Ferro alloys:
Revenue from sale of goods is recognised on dispatch of ferro alloys to customers from plant, when significant risks and rewards of ownership are considered to be transferred and realisation is reasonably assured.
Energy/ Power:
Revenue from sale of energy/ power is recognised on accrual basis based on the power generated and supplied as per applicable rates from time to time and includes unbilled revenue accrued up to the end of the accounting year.
1.3.1 Rendering of services:
In case of service income, revenue is recognised when the service is rendered to the customer.
1.4 Dividend and interest income
Dividend income from investments is recognised when the Companyâs right to receive payment has been established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).
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 assetâs net carrying amount on initial recognition.
1.5 Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
1.5.1 The Company as lessor:
Rental income from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
1.5.2 The Company as lessee:
Rental expense from operating leases is generally recognised on a straight-line basis over the term of the relevant lease. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
1.6 Foreign currency transactions and balances
Transactions in foreign currency are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of profit and loss and reported within foreign exchange gains/ (losses).
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
1.6.1 Functional Currency:
The financial statements are presented in Indian rupees, the national currency of India, which is the functional currency of the Company. Functional currency of an entity is the currency of the primary economic environment in which the entity operates.
1.7 Employee benefits
1.7.1 Retirement benefit costs and termination benefits:
Employee benefits include provident fund, employee state insurance scheme, pension, gratuity, superannuation and compensated absences.
Payments to defined contribution retirement benefit plans are recognised 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. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in profit or 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 categorised 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
- remeasurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the Companyâs 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 recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.
1.7.2 Short-term and other long-term employee benefits:
A liability is recognised 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 recognised 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 recognised 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.
1.8 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1.8.1 Current tax:
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.
1.8.2 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 generally recognised for all taxable temporary differences. Deferred tax assets are generally 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 of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
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.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period 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 period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3 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 recognised in other comprehensive income or directly in equity respectively.
1.9 Property, plant and equipment
Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Companyâs accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Depreciation is recognised so as to write off the cost of assets at head office and mines (including assets transferred to plant from these locations other than freehold land and properties under construction) less their residual values over their useful lives. The Companyâs assets are depreciated on the written down value method and at plant (including assets transferred to other locations from plant) are depreciated on the straight line method over the useful life and in manner prescribed in Schedule II to the 2013 Act. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives.
Items such as spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment when they meet the definition of property, plant and equipment under Ind AS 16. i.e., Property, plant and equipment are tangible items that:
(a) are held for use in the production or supply of goods or services, for rental to others, or for administrative purposes; and (b) are expected to be used during more than one period. If the above said definition is not met, they are classified as inventories in accordance with Ind AS 2 Inventories.
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 profit or loss.
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.10 Investment property
Investment properties are properties held to earn rentals and/ or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16âs requirements for cost model.
An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.
For transition to Ind AS, the Company has elected to continue with the carrying value of its investment property recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.11 Intangible assets
1.11.1 Intangible assets acquired separately:
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.
1.11.2 Derecognition of intangible assets:
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognised in profit or loss when the asset is derecognised.
1.11.3 Useful lives of intangible assets:
Intangible assets are amortised over their estimated useful life on straight-line method as follows: Software Licenses : 5 years
1.11.4 Deemed cost on transition to Ind AS:
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.12 Inventories
Inventories are valued at the lower of cost and the net realisable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including all levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty. Cost is determined as follows:
1.13 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.
The financial obligation towards mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all the mining leases. The amount so determined is provided in the books of account on the basis of run of mine ore production of the mines of all the mining leases.
1.14 Dividends
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
1.15 Earnings per share
The basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average shares considered for deriving basic earnings per share, and also the weighted average number of equity shares that could have been issued on the conversion of all dilutive potential equity shares.
1.16 Segment accounting
Operating segments are reported in the manner consistent with the internal reporting to the chief operating decision maker (CODM). The Company has identified Mining, Ferroalloys & power & steel as operating segments and also additional information about revenue on geographical basis is provided.
The Company has realigned all its operations under four operating segments (i.e.) (a) Mining (b) Ferroalloys & Power (c) Steel and (d) Unallocable based on assessment of the overall risks and rewards.
Unallocable represents other income and expenses which relate to the Company as a whole and are not allocated to segments.
1.17 Operating cycle
As mentioned in para 1 above under Corporate informationâ, the Company is based on the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as one year. The above basis is used for classifying the assets and liabilities into current and non-current as the case may be.
1.18 Cash flow statement
Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.19 Financial instruments
Financial assets and financial liabilities are recognised when the company becomes a party to the contractual provisions of the instruments.
Initial recognition and measurement:
Financial assets and financial 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 of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in statement of profit and loss.
Financial Assets
Subsequent measurement: 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 contractual terms of 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 at fair value through other comprehensive Income-Financial assets are measured at fair value through other comprehensive income (âFVTOCIâ) if these financial assets are held within business model whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
Financial assets at fair value through profit or loss-Financial assets are measured at fair value through profit or loss (âFVTPLâ) unless it is measured at amortised cost or fair value through other comprehensive income on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in the statement of profit and loss.
The classification of financial instruments depends on the objective of the business model for which it is held. Management determines the classification of its financial instruments at initial recognition.
Non-derivative financial assets
Financial assets at amortised cost
A financial asset shall be measured at amortised cost if both of the following conditions are met:
(a)the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(b)the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
They are presented as current assets, except for those maturing later than 12 months after the reporting date which are presented as non-current assets. Financial assets are measured initially at fair value plus transaction costs and subsequently carried at amortised cost using the effective interest method, less any impairment loss.
Amortised cost are represented by trade receivables, security deposits, cash and cash equivalents, employee and other advances and eligible current and non-current assets.
Cash and cash equivalents comprise cash on hand and in banks and demand deposits with banks which can be withdrawn at any time without prior notice or penalty on the principal.
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, in banks and demand deposits with banks, net of outstanding bank overdrafts that are repayable on demand, book overdraft and are considered part of the Companyâs cash management system.
Non-derivative financial liabilities
(i) Financial liabilities at amortised cost
Financial liabilities at amortised cost represented by borrowings, trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest rate method.
1.20 Impairment
a) Financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss. The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivable.
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.
b) Non-financial assets
The Company assesses at each reporting date whether there is any objective evidence that a non financial asset or a group of non financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss. An impairment loss is calculated as the difference between an assetâs carrying amount and recoverable amount. Losses are recognised in profit or loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.
The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. 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 the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the âcash-generating unitâ).
1.21 First-time adoption - mandatory exceptions, optional exemptions
1.21.1 Overall principle:
The Company has prepared the opening balance sheet as per Ind AS of April 1, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company as detailed below.
1.21.2 Accounting for Investment in Subsidiary:
The Company has availed the optional exemption under âInd AS 101 First time Adoption of Indian Accounting standardsâ with respect to Investments in subsidiary. Accordingly, the previous GAAP carrying amount of such investments as on transition date has been taken as deemed cost.
121.3 Deemed cost for property, plant and equipment, investment property, and intangible assets:
The Company has elected to continue with the carrying value of all of its plant and equipment, investment property, and intangible assets recognised as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
1.22 New standards and interpretations not yet adopted
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1, 2018. The Company is evaluating the effect of this on the financial statements.
Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, the Ministry of Corporate Affairs notified Ind AS 115 Revenue from Contracts with Customers. The standard replaces Ind AS 11 Construction Contracts and Ind AS 18 Revenue.
The new standard applies to contracts with customers. The core principle of the new standard is that an entity should recognise revenue to depict transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further, the new standard requires enhanced disclosures about the nature, timing and uncertainty of revenues and cash flows arising from the entityâs contracts with customers. The new standard offers a range of transition options. An entity can choose to apply the new standard to its historical transactions and retrospectively adjust each comparative period. Alternatively, an entity can recognise the cumulative effect of applying the new standard at the date of initial application - and make no adjustments to its comparative information. The chosen transition option can have a significant effect on revenue trends in the financial statements. A change in the timing of revenue recognition may require a corresponding change in the timing of recognition of related costs.
The standard is effective for annual periods beginning on or after April 1, 2018. The Company is currently evaluating the requirements of Ind AS 115, and has not yet determined the impact on the financial statements.
Mar 31, 2017
1.1. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
1.2. Use of estimates
The Company uses prudent and reasonable assumptions and estimates in the preparation of its financial statements, and these are reflected in the reported amounts of income and expenses during the year, and the reported balances of assets and liabilities, and disclosures relating to contingent liabilities, as at the date of the financial statements.
1.3. Fixed assets
Fixed assets are capitalised at acquisition cost including directly attributable cost of bringing the asset to its working condition for the intended use. Certain assets have been revalued as on 31 March, 1985 and the resultant surplus has been added to the cost of the assets.
1.4. Depreciation/Amortisation
Depreciation amount for assets is the cost of an asset, or the amount substituted for cost, less its estimated residual value.
The Companyâs assets at head office and mines (including assets transferred to plant from these locations) are depreciated on the written down value method and at plant (including assets transferred to other locations from plant) are depreciated on the straight line method over the useful life and in manner prescribed in Schedule II to the 2013 Act.
Intangible assets are amortised over their estimated useful life on straight-line method as follows:
Mining lease rights - useful life of the mine or lease period, whichever is shorter.
Computer software- 5 years
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changes, if any.
1.5. Impairment of fixed assets
The carrying values of assets / cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists.
If the carrying amount of the assets exceed the estimated recoverable amount, an impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss.
The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss.
1.6. Foreign currency transactions
Initial recognition
Transactions in foreign currency entered into by the Company are recorded on the basis of the exchange rate prevailing as on the date of transaction or at rates that closely approximate the rate at the date of transaction.
Measurement at the balance sheet date
Monetary assets and liabilities of the Company, denominated in foreign currency, outstanding at the balance sheet date are restated at rates prevailing at the year-end.
Treatment of exchange differences
Exchange differences arising on settlement / restatement of foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.
1.7. Investments:
All long term investments are valued at cost. However, provision for diminution in value is made to recognise a decline, other than temporary, in the value of investments.
Current investments are carried individually, at lower of cost and fair value.
1.8. Inventories
Inventories are valued at lower of cost and net realisable value.
The method of determination of cost of various categories of inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates;
(b) Raw materials: Monthly weighted average rates; and
(c) Work-in-progress and finished goods: Full absorption costing method based on annual cost of production.
1.9. Revenue recognition
Revenue from sale of goods is recognised on dispatch of goods to customers from plant or stock points as applicable when significant risks and rewards of ownership are considered to be transferred and realisation is reasonably assured. In case of service income, revenue is recognised when the service is rendered to the customer.
Revenue from sale of power is recognised on accrual basis based on the power generated and supplied as per applicable rates from time to time and includes unbilled revenue accrued up to the end of the accounting year.
1.10. Other Income
Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
1.11. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.12. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.13. Leases
A lease is classified as an Operating Lease, if it does not transfer substantially all the risks and rewards incidental to ownership. Lease rentals are charged to statement of profit and loss on straight-line basis over the lease term, estimated by the management.
1.14. Employee benefits:
Employee benefits include provident fund, employee state insurance scheme, pension, gratuity, superannuation and compensated absences.
a) Short term employee benefits:
The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the period when the employees render the service. These benefits include performance incentive/ bonus and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service.
The cost of short-term compensated absences is accounted as under:
(i) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(ii) in case of non-accumulating compensated absences, when the absences occur.
b) Long-term employee benefits:
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the balance sheet date less the fair value of the plan assets out of which the obligations are expected to be settled.
c) Defined Contribution Plan:
The Companyâs contribution to provident fund (including pension) and employee state insurance scheme are considered as defined contribution plans and are charged as an expense based on the amount of contribution required to be made and when services are rendered by the employees.
d) Defined Benefit Plan:
For defined benefit plans in the form of gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.
1.15. Segment accounting:
Segments are identified based on the types of products and the internal organisation and management structure. The Company has identified business segment as its primary segment with secondary information reported geographically.
The Companyâs primary segments consist of Mining, Ferroalloys & Power and Steel.
Unallocable represents other income and expenses which relate to the Company as a whole and are not allocated to segments.
1.16. Earnings per share
The basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.
1.17. Taxation Current tax
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961.
Minimum Alternate Tax (MAT)
MAT paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax in the future years. Accordingly, MAT is recognised as an asset in the Balance Sheet where it is highly probable that the future economic benefit associated with it will flow to the Company and the asset can be measured reliably.
Deferred tax
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. Deferred tax assets are reviewed at each balance sheet date for their realisability.
Current and deferred tax relating to items directly recognised in reserves are recognised in reserves and not in the statement of profit and loss.
1.18. Provisions and contingencies:
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent liabilities are not recognised but are disclosed in the notes.
The financial obligation towards mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all the mining leases. The amount so determined is provided in the books of account on the basis of run of mine ore production of the mines of all the mining leases.
Contingent assets are neither recognised nor disclosed in the financial statements.
1.19. Operating cycle
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 of the 2013 Act. Normal operating cycle is based on the time between the acquisition of assets for processing and their realisation into cash and cash equivalents.
Mar 31, 2015
1.1. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
1.2. Use of estimates
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
1.3. Fixed assets
Fixed assets are capitalised at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31 March,
1985 and the resultant surplus has been added to the cost of the
assets.
1.4. Depreciation/Amortisation
Depreciation amount for assets is the cost of an asset, or the amount
substituted for cost, less its estimated residual value.
The Company's assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
over the useful life and in manner prescribed in Schedule II to the
2013 Act.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
1.5. Impairment of fixed assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company's fixed assets. If any indication exists, an impairment loss is
recognised when the carrying amount exceeds greater of net selling
price and value in use.
1.6. Foreign currency transactions
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction. Foreign exchange rate
fluctuations relating to monetary assets and liabilities are restated
at the year-end rates. The net loss or gain arising on
restatement/settlement, if any, is adjusted to the statement of profit
and loss.
In respect of forward exchange contracts, the premium or discount
arising at the inception of such a forward exchange contract is
amortised as expense or income over the life of the contract. Exchange
differences on such contracts are recognised in the statement of profit
and loss of the reporting period in which the exchange rates change.
1.7. Investments
All long term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried individually, at lower of cost and fair
value.
1.8. Inventories
Inventories are valued at lower of cost and net realisable value.
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates;
(b) Raw materials: Monthly weighted average rates; and
(c) Work-in-progress and finished goods: Full absorption costing method
based on annual cost of production.
1.9. Revenue recognition
Revenue from sale of goods is recognised on dispatch of goods to
customers from plant or stock points as applicable when significant
risks and rewards of ownership are considered to be transferred and
realisation is reasonably assured. In case of service income, revenue
is recognised when the service is rendered to the customer.
1.10. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.11. Employee benefits
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related services are rendered by the employees.
Post employment benefits are recognised as an expense in the statement
of profit and loss of the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determined using
the market yields of government bonds, at the balance sheet date, at
the discounting rate.
Other long-term employee benefits are recognised as an expense in the
statement of profit and loss of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of the balance sheet, at the
discounting rate.
Actuarial gains and losses in respect of past employment and other long
term benefits are charged to the statement of profit and loss on
accrual basis.
1.12. Segment accounting
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary segment with secondary information
reported geographically.
The Company's primary segments consist of Mining, Ferroalloys & Power
and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
1.13. Earnings per share
The basic earnings/ (loss) per share is computed by dividing the net
profit/ (loss) attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The number of shares used in computing diluted earnings per share
comprises the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.14. Taxation Current tax
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income-tax Act, 1961.
Minimum Alternate Tax (MAT)
MAT paid in accordance with the tax laws, which gives rise to future
economic benefits in the form of adjustment of future income tax
liability, is considered as an asset if there is convincing evidence
that the Company will pay normal income tax in the future years.
Accordingly, MAT is recognised as an asset in the Balance Sheet where
it is highly probable that the future economic benefit associated with
it will flow to the Company and the asset can be measured reliably.
Deferred tax
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences of items other than
unabsorbed depreciation and carry forward losses only to the extent
that reasonable certainty exists that sufficient future taxable income
will be available against which these can be realised. However, if
there are unabsorbed depreciation and carry forward of losses and items
relating to capital losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that there
will be sufficient future taxable income available to realise the
assets. Deferred tax assets are reviewed at each balance sheet date for
their realisability.
Current and deferred tax relating to items directly recognised in
reserves are recognised in reserves and not in the statement of profit
and loss.
1.15. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed in the
notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
1.16. Operating cycle
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 of the 2013 Act. Normal operating
cycle is based on the time between the acquisition of assets for
processing and their realisation into cash and cash equivalents.
The Company has only one class of equity share. Each holder of equity
shares is entitled to one vote per share. The Company declares and pays
dividend in Indian rupees. The dividend proposed by Board of Directors
is subject to approval by the shareholders at the ensuing Annual
General Meeting. In the event of liquidation of the Company, the equity
shareholders are entitled to receive only residual assets of the
Company. The distribution will be in proportion to the number of equity
shares held by the shareholder.
Mar 31, 2014
1.1. Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
Section 211(3C) of the Companies Act, 1956 ("the 1956 Act") (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 ("the 2013 Act") in terms of General Circular 15/2013 dated
September 13, 2013 of the Ministry of Corporate Affairs) and the
relevant provisions of the 1956 Act/ the 2013 Act, as applicable. The
financial statements have been prepared on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
1.2. Use of estimates
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
1.3. Fixed assets
Fixed assets are capitalised at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31st March,
1985 and the resultant surplus has been added to the cost of the
assets.
1.4. Depreciation/Amortisation
The Company''s assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
at the rates and in manner prescribed in Schedule XIV to the 1956 Act.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
Individual assets costing less than ^5,000/- are depreciated in full in
the year of its purchase.
1.5. Impairment of fixed assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company''s fixed assets. If any indication exists, an impairment loss is
recognised when the carrying amount exceeds greater of net selling
price and value in use.
1.6. Foreign currency transaction
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction. Foreign exchange rate
fluctuations relating to monetary assets and liabilities are restated
at the year-end rates. The net loss or gain arising on
restatement/settlement, if any, is adjusted to the statement of profit
and loss.
In respect of forward exchange contracts, the premium or discount
arising at the inception of such a forward exchange contract is
amortised as expense or income over the life of the contract. Exchange
differences on such contracts are recognised in the statement of profit
and loss of the reporting period in which the exchange rates change.
1.7. Investments:
All long term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried individually, at lower of cost and fair
value.
1.8. Inventories
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates
(b) Raw materials: On monthly weighted average rates
(c) Work-in-progress and finished goods: Full absorption costing method
based on annual cost of production.
1.9. Revenue recognition
Revenue from sale of goods is recognised on despatch of goods to
customers from plant or stock points as applicable when significant
risks and rewards of ownership are considered to be transferred and
realisation is reasonably assured. In case of service income, revenue
is recognised when the service is rendered to the customer.
1.10. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.11. Employee benefits:
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
Post employment benefits are recognised as an expense in the statement
of profit and loss of the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determined using
the market yields of government bonds, at the balance sheet date, at
the discounting rate.
Other long-term employee benefits are recognised as an expense in the
statement of profit and loss of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of the balance sheet, at the
discounting rate.
Actuarial gains and losses in respect of past employment and other long
term benefits are charged to the statement of profit and loss on
accrual basis.
1.12. Segment accounting:
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary segment with secondary information
reported geographically.
The Company''s primary segments consist of Mining, Ferroalloys & Power
and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
1.13. Earnings per share
The basic earnings/ (loss) per share is computed by dividing the net
profit/ (loss) attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The number of shares used in computing diluted earnings per share
comprises the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.14. Taxation Current tax
Current tax expense is determined in accordance with the provisions of
the Income-tax Act, 1961.
Deferred tax
Deferred tax assets and liabilities are measured using the tax rates
which have been enacted or substantively enacted at the balance sheet
date. Deferred tax expense or benefit is recognised, subject to
consideration of prudence, on timing difference being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax in the
future years. Accordingly, MAT is recognised as an asset in the balance
sheet where it is highly probable that the future economic benefit
associated with it will flow to the Company and the asset can be
measured reliably.
1.15. Provisions and contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed in the
notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
1.16. Operating cycle
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 revised Schedule VI to the 1956 Act. Normal
operating cycle is based on the time between the acquisition of assets
for processing and their realisation into cash and cash equivalents.
(ii) Rights, preferences and restrictions attached to equity shares:
The Company has only one class of equity shareholders. Each holder of
equity shares is entitled to one vote per share. The Company declares
and pays dividend in Indian rupees. The dividend proposed by Board of
Directors is subject to approval by the shareholders at the ensuing
Annual General Meeting. In the event of liquidation of the Company, the
equity shareholders are entitled to receive only residual assets of the
Company. The distribution will be in proportion to the number of equity
shares held by the shareholder.
Mar 31, 2013
1.1. Basis of accounting and preparation of financial statements
The Company adopts the historical cost concept (except revaluation of
fixed assets) and accrual basis, in accordance with generally accepted
accounting principles (GAAP) of India, for the preparation of its
financial statements. The financial statements are prepared to comply
in all material aspects with the applicable accounting principles in
India, the applicable accounting standards notified under Section 211
(3C) of the Companies Act, 1956 (Act) and the relevant provisions of
the Act.
1.2. Use of estimates
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
1.3. Fixed assets
Fixed assets are capitalised at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31 st March,
1985 and the resultant surplus has been added to the cost of the
assets.
1.4. Depreciation/Amortisation
The Company''s assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
at the rates and in manner prescribed in Schedule XIV to the Act.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
Individual assets costing less than Rs. 5,000/- are depreciated in full
in the year of its purchase.
1.5. Impairment of fixed assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company''s fixed assets. If any indication exists, an impairment loss is
recognised when the carrying amount exceeds greater of net selling
price and value in use.
1.6. Foreign currency transaction
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction. Foreign exchange rate
fluctuations relating to monetary assets and liabilities are restated
at the year-end rates. The net loss or gain arising on
restatement/settlement, if any, is adjusted to the statement of profit
and loss.
In respect of forward exchange contracts, the premium or discount
arising at the inception of such a forward exchange contract is
amortised as expense or income over the life of the contract. Exchange
differences on such contracts are recognised in the statement of profit
and loss of the reporting period in which the exchange rates change.
1.7. Investments:
All long term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried at lower of cost and fair value.
1.8. Inventories
Inventories are valued at lower of cost and net realisable value.
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates;
(b) Raw materials: On monthly weighted average rates;
(c) Work-in-progress and finished goods: Full absorption costing method
based on annual cost of production.
1.9. Revenue recognition
Revenue from sale of goods is recognised on despatch of goods to
customers from plant or stock points as applicable when significant
risks and rewards of ownership are considered to be transferred and
realisation is reasonably assured. In case of service income, revenue
is recognised when the service is rendered to the customer.
1.10. Cash flow statement
Cash flows are reported using the indirect method, whereby profit/
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.11. Employee benefits:
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
Post employment benefits are recognised as an expense in the statement
of profit and loss of the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determined using
the market yields of government bonds, at the balance sheet date, at
the discounting rate.
Other long-term employee benefits are recognised as an expense in the
statement of profit and loss of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of the balance sheet, at the
discounting rate.
Actuarial gains and losses in respect of past employment and other long
term benefits are charged to the statement of profit and loss on
accrual basis.
1.12 Segment accounting:
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary segment with secondary information
reported geographically.
The Company''s primary segments consist of Mining, Services, Ferroalloys
& Power and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
1.13. Earnings per share
The basic earnings/ (loss) per share is computed by dividing the net
profit/ (loss) attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
The number of shares used in computing diluted earnings per share
comprises the weighted average shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
1.14. Taxation
Current tax
Current tax expense is determined in accordance with the provisions of
the Income-tax Act, 1961.
Deferred tax
Deferred tax assets and liabilities are measured using the tax rates
which have been enacted or substantively enacted at the balance sheet
date. Deferred tax expense or benefit is recognised, subject to
consideration of prudence, on timing difference being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
Minimum Alternate Tax (MAT)
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustment of
future income tax liability, is considered as an asset if there is
convincing evidence that the Company will pay normal income tax in the
future years. Accordingly, MAT is recognised as an asset in the balance
sheet where it is probable that the future economic benefit associated
with it will flow to the Company and the asset can be measured
reliably.
1.15. Provisions and contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed in the
notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
1.16. Operating cycle
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 revised Schedule VI to the Companies Act, 1956.
Normal operating cycle is based on the time between the acquisition of
assets for processing and their realisation into cash and cash
equivalents.
Mar 31, 2012
1.1. Basis of accounting and preparation of financial statements
The Company adopts the historical cost concept (except revaluation of
fixed assets) and accrual basis, in accordance with generally accepted
accounting principles (GAAP) of India, for the preparation of its
financial statements. The financial statements are prepared to comply
in all material aspects with the applicable accounting principles in
India, the applicable accounting standards notified under Section 211
(3C) of the Companies Act, 1956 (Act) and the relevant provisions of
the Act.
1.2. Use of estimates
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
1.3. Fixed assets
Fixed assets are capitalised at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31st March,
1985 and the resultant surplus has been added to the cost of the
assets.
1.4. Depreciation/Amortisation
The Company's assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
at the rates and in manner prescribed in | Schedule XIV to the Act.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
Individual assets costing less than Rs. 5,000/- are depreciated in full
in the year of its purchase.
1.5. Impairment of fixed assets
Consideration is given at each balance sheet date to determine whether
there is any indication of impairment of the carrying amount of the
Company's fixed assets. If any indication exists, an impairment loss is
recognised when the carrying amount exceeds greater of net selling
price and value in use.
1.6. Foreign currency transaction
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction.
Foreign exchange rate fluctuations relating to monetary assets and
liabilities are restated at the year-end rates.
The net loss or gain arising on restatement/settlement, if any, is
adjusted to the statement of profit and loss. In respect of forward
exchange contracts, the premium or discount arising at the inception of
such a forward exchange contract is amortised as expense or income over
the life of the contract. Exchange differences on such contracts are
recognised in the statement of profit and loss of the reporting period
in which the exchange rates change.
1.7. Investments
All long term investments are valued at cost. However, provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried at lower of cost and fair value.
1.8. Inventories
Inventories are valued at lower of cost and net realisable value.
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates;
(b) Raw materials: On monthly weighted average rates;
(c) Work-in-progress and finished goods: Full absorption costing method
based on annual cost of production.
1.9. Revenue recognition
Revenue from sale of goods is recognised on despatch of goods to
customers from plant or stock points as applicable when significant
risks and rewards of ownership are considered to be transferred and
realisation is reasonably assured. In case of service income, revenue
is recognised when the service is rendered to the customer.
1.10.Employee benefits
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the year in
which the related service is rendered.
Post employment benefits are recognised as an expense in the statement
of profit and loss of the year in which th mployee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determine using the
market yields of government bonds, at the balance sheet date, at the
discounting rate.
Other long-term employee benefits are recognised as an expense in the
statement of profit and loss of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of the balance sheet, at the
discounting rate.
Actuarial gains and losses in respect of past employment and other long
term benefits are charged to the statement of profit and loss on
accrual basis.
1.11. Segment Accounting
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary segment with secondary information
reported geographically.
The Company's primary segments consist of Mining, Services, Ferroalloys
& Power and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
1.12. Taxation Current tax
Current tax expense is determined in accordance with the provision of
the Income-tax Act, 1961.
Deferred tax
Deferred tax assets and liabilities are measured using the tax rates
which have been enacted or substantively enacted at the balance sheet
date. Deferred tax expense or benefit is recognised, subject to
consideration of prudence, on timing difference being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
1.13.Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent liabilities are not recognised but are disclosed in the
notes.
Contingent assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2011
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles under the historical cost convention
(except revaluation of fixed assets) on an accrual basis and in
accordance with the requirements of the Companies Act, 1956.
i) Use of estimates:
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
ii) Fixed Assets:
Fixed assets are capitalized at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31st March,
1985 and the resultant surplus has been added to the cost of the
assets.
iii) Depreciation/Amortisation:
The Company's assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
at the rates and in manner prescribed in Schedule XIV to the Companies
Act, 1956.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
Individual assets costing less than 5,000/- are depreciated in full in
the year of its purchase.
iv) Impairment of Fixed Assets:
Consideration is given at each Balance Sheet Date to determine whether
there is any indication of impairment of the carrying amount of the
Company's fixed assets. If any indication exists, an impairment loss is
recognized when the carrying amount exceeds greater of net selling
price and value in use.
v) Foreign Currency Transaction:
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction.
Foreign exchange rate fluctuations relating to monetary assets and
liabilities are restated at the year-end rates.
The net loss or gain arising on restatement/ settlement, if any, is
adjusted to the profit and loss account. In respect of forward
exchange contracts, the premium or discount arising at the inception of
such a forward exchange contract is amortized as expense or income over
the life of the contract. Exchange differences on such contracts are
recognised in the statement of Profit and Loss of the reporting period
in which the exchange rates change.
vi) Investments:
All long term investments are valued at cost. However provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried at lower of cost and fair value.
vii) Inventories:
Inventories are valued at lower of cost and net realizable value.
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates.
(b) Raw materials: On monthly weighted average rates.
(c) Work-in-progress and finished goods: Full absorption costing method
based on annual cost of production.
viii) Revenue Recognition:
Revenue from sale of goods is recognized on despatch of goods to
customers from plant or stock points, as applicable when significant
risks and rewards of ownership are considered to be transferred. In
case of service income, revenue is recognized when the service is
rendered to the customer.
ix) Employee Benefits:
(a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
(b) Post employment benefits are recognised as an expense in the profit
and loss account of the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determined using
the market yields of government bonds, at the balance sheet date, at
the discounting rate.
(c) Other long-term employee benefits are recognised as an expense in
the profit and loss account of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of balance sheet, at the discounting
rate.
(d) Actuarial gains and losses in respect of past employment and other
long term benefits are charged to the profit and loss account.
x) Segment Accounting:
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary reporting segment with secondary
information reported geographically.
The Company's primary segments consist of Mining, Services, Ferroalloys
& Power and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
xi) Taxation:
Tax Expense / (Credit) comprise Current Tax and Deferred Tax.
(A) Current Tax
Current tax expense is determined in accordance with the provisions of
the Income-tax Act, 1961.
(B) Deferred Tax
Deferred tax assets and liabilities are measured using the tax rates
which have been enacted or substantively enacted at the balance sheet
date. Deferred tax expense or benefit is recognised, subject to
consideration of prudence, on timing differences being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
xii) Provisions and Contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to present
value and are determined based on best estimate required to settle the
obligation at the Balance Sheet date. These are reviewed at each
Balance Sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised but are disclosed in the
notes to accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2010
1) Accounting policies
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles under the historical cost convention
(except revaluation of fixed assets) on an accrual basis and in
accordance with the requirements of the Companies Act, 1956.
i) Use of estimates:
The Company uses prudent and reasonable assumptions and estimates in
the preparation of its financial statements, and these are reflected in
the reported amounts of income and expenses during the year, and the
reported balances of assets and liabilities, and disclosures relating
to contingent liabilities, as at the date of the financial statements.
ii) Fixed Assets:
Fixed assets are capitalized at acquisition cost including directly
attributable cost of bringing the asset to its working condition for
the intended use. Certain assets have been revalued as on 31st March,
1985 and the resultant surplus has been added to the cost of the
assets.
iii) Depreciation/Amortisation:
The Companys assets at head office and mines (including assets
transferred to plant from these locations) are depreciated on the
written down value method and at plant (including assets transferred to
other locations from plant) are depreciated on the straight line method
at the rates and in manner prescribed in Schedule XIV to the Companies
Act,-1956.
Mining lease rights are amortised over the useful life of the mine or
lease period, whichever is shorter.
Individual assets costing less than Rs.5,000/- are depreciated in full
in the year of its purchase.
iv) Impairment of Fixed Assets:
Consideration is given at each Balance Sheet Date to determine whether
there is any indication of impairment of the carrying amount of the
Companys fixed assets. If any indication exists, an impairment loss is
recognized when the carrying amount exceeds greater of net selling
price and value in use.
v) Foreign Currency Transaction:
Foreign exchange transactions are recorded at the exchange rates
prevailing on the date of transaction.
Foreign exchange rate fluctuations relating to monetary assets and
liabilities are restated at the year-end rates.
The net loss or gain arising on restatement/ settlement, if any, is
adjusted to the profit and loss account.
In respect of forward exchange contracts, the premium or discount
arising at the inception of such a forward exchange contract is
amortized as expense or income over the life of the contract. Exchange
differences on such contracts are recognised in the statement of Profit
and Loss of the reporting period in which the exchange rates change.
vi) Investments:
All long term investments are valued at cost. However provision for
diminution in value is made to recognise a decline, other than
temporary, in the value of investments.
Current investments are carried at lower of cost and fair value.
vii) Inventories:
Inventories are valued at lower of cost and net realizable value.
The method of determination of cost of various categories of
inventories is as follows:
(a) Stores and spare parts: Monthly weighted average rates.
(b) Raw materials: On monthly weighted average rates.
(c) Finished Goods: Full absorption costing method based on annual cost
of production.
viii) Revenue Recognition:
Revenue from sale of goods is recognized on despatch of goods to
customers from plant or stock points, as applicable when significant
risks and rewards of ownership are considered to be transferred. In
case of service income, revenue is recognized when the service is
rendered to the customer.
ix) Employee Benefits:
(a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
(b) Post employment benefits are recognised as an expense in the profit
and loss account of the year in which the employee has rendered
services. The expense is recognised at the present value of the amount
payable towards contributions. The present value is determined using
the market yields of government bonds, at the balance sheet date, at
the discounting rate.
(c) Other long-term employee benefits are recognised as an expense in
the profit and loss account of the period in which the employee has
rendered services. Estimated liability on account of long-term benefits
is discounted to the present value, using the market yields on
government bonds, as on the date of balance sheet, at the discounting
rate.
(d) Actuarial gains and losses in respect of past employment and other
long term benefits are charged to the profit and loss account.
x) Segment Accounting:
Segments are identified based on the types of products and the internal
organisation and management structure. The Company has identified
business segment as its primary reporting segment with secondary
information reported geographically.
The Companys primary segments consist of Mining, Services, Ferroalloy
& Power and Steel.
Unallocable represents other income and expenses which relate to the
Company as a whole and are not allocated to segments.
xi) Taxation:
Tax Expense / (Credit) comprise Current Tax and Deferred Tax.
(a) Current Tax
Current tax expense is determined in accordance with the provisions of
the Income-tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
give rise to future economic benefits in the form of adjustment of
future income 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 probable that the future economic benefit associated with it will
follow to the Company and the asset can be measured reliably.
(b) Deferred Tax
Deferred tax assets and liabilities are measured using the tax rates
which have been enacted or substantively enacted at the balance sheet
date. Deferred tax expense or benefit is recognised, subject to
consideration of prudence, on timing differences being the difference
between taxable income and accounting income that originate in one
period and are capable of reversing in one or more subsequent periods.
xii) Provisions and Contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow ov resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to
present value and are determined based on best estimate required to
settle the obligation at the Balance Sheet date. These are reviewed at
each Balance Sheet date and adjusted to reflect the current best
estimates. Contingent Liabilities are not recognised but are disclosed
in the notes to accounts.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
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Company History
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Sandur Manganese & Iron Ores Ltd. Key Financial Ratios
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Sandur Manganese & Iron Ores Ltd. Results
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Sandur Manganese & Iron Ores Ltd. Financial Data
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Sandur Manganese & Iron Ores Ltd. Reports
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Sandur Manganese & Iron Ores Ltd. Corporate Announcements
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