2. Material Accounting Policies

2.1 Basis of Accounting

The financial statements are prepared under historical
cost convention from the books of accounts maintained
under accrual basis except for certain financial
instruments which are measured at fair value and in
accordance with the Indian Accounting Standards
prescribed under Companies Act, 2013.

2.2 Application of Indian Accounting Standards (Ind-
AS)

The Company adopted Indian Accounting Standards
(Ind AS) from April 1,2016 and accordingly the financial
statements have been prepared in accordance with
the recognition and measurement principles as notified
by MCA under the Companies (Indian Accounting
Standards) Rules, 2015 (“Ind AS Rules”), as amended
and other relevant provisions of the Companies Act,
2013.

The Company has complied all the Ind AS as applicable
and relevant to the Company.

2.3 (i) Use of Estimates

The preparation of the Company’s financial statements
requires management to make judgements, estimates

and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities, and
the accompanying disclosures, and the disclosure
of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes
that require a material adjustment to the carrying
amount of assets or liabilities affected in future periods.
Revision to accounting estimates are recognised in
the period on which the estimates are revised and, if
material their effects are disclosed on the notes to the
financial statements.

(ii) Changes in Accounting Policies and Errors

a) Any change in Accounting Policy is applied
retrospectively, unless impracticable, adjusting
the opening balance of each affected component
of equity for the earlier prior period presented and
the other comparative amount disclosed for each
period presented.

b) Errors/omissions discovered in the current year
relating to prior periods are treated immaterial and
adjusted during the current year, if all such errors
and omissions in aggregate does not exceed 1%
of total Revenue from Operation (Net of statutory
levies) as per the last audited financial statement
of the company

2.4 Current and Non-current Classification

The Company presents assets and liabilities in
the Balance sheet based on current/non-current
classification. An asset are treated as current by the
company when:

a) its expects to realize the asset, or intends to sell or
consume it in its normal operating cycle;

b) it holds the assets primarily for the purpose of
trading;

c) it expects to realize the asset within twelve months
after the reporting date; or

d) the asset is cash or cash equivalent (as defined
under Ind AS 7) unless the asset is restricted from
being exchanged or used to settle a liability for at
least twelve months after the reporting period.

Except the above, all other assets are classified as Non¬
current.

A liability is treated as current by the company when:

a) its expects to settle the liability realize the asset, or
intends to sell or consume it in its normal operating
cycle;

b) it expects to settle the liability in its normal operating
cycle;

c) it holds the liability primarily for the purpose of
trading;

d) the liability is due to be settled within twelve months
after the reporting period; or

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

Except the above, all other liabilities are classified as
non-current.

2.5 Revenue Recognition

Revenue is measured at the fair value of the
consideration received or receivable and fair value has
been defined taking into account contractually defined
terms of payment. Operating revenue recognized is
net of all promotional expenses and discounts, rebates
and/or any other incentive to customers.

(i) Sale of Products

An entity shall account for a sale contract with a
customer only when all of the following criteria are met:

(a) the parties to the contract have approved the
contract (in writing, orally or in accordance with
other customary business practices) and are
committed to perform their respective obligations;

(b) the entity can identify each party's rights regarding
the goods to be transferred;

(c) the entity can identify the payment terms for the
goods to be transferred;

(d) the contract has commercial substance i.e the risk,
ownership, timing or amount of the entity's future
cash flows etc is expected to change as a result of
the contract; and

(e) it is probable that the entity will collect the
consideration to which it will be entitled in exchange
for the goods that will be transferred to the customer.

In case of sale of Copper Concentrate, Copper
Reverts, Anode Slime etc. and tolling of Copper
Concentrate of Khetri and Malanjkhand origin,
sales / tolling at the end of the accounting period
are recorded on provisional basis as per standard
parameters for want of actual specifications and
differential sales value are recorded only on receipt
of actual. This is as per consistent practice followed
by the company.

(ii) Sale of Services

Income from conversion of job work is accounted for
on the basis of actual quantity dispatched. When the
outcome of a transaction involving the rendering of
services can be estimated reliably, revenue associated
with the transaction shall be recognized by reference
to the stage of completion (Percentage of Completion
Method) of the transaction at the end of the reporting
period.

Advances received from the customers are reported
as customer's deposits unless the above conditions for
revenue recognition are met.

(iii) Other Operating Revenues

a. Sale of Scrap

Sale of Scrap is accounted for on delivery of
material.

b. Interest from Customers

In case of credit sales, interest up to the date of
Balance Sheet on all outstanding bills is accounted
for on accrual basis.

c. Interest from Contractors against mobilisation
advance for mining operations

Interest up to the date of Balance Sheet on all
mobilisation advances for mining operations is
accounted for on accrual basis.

d. Penalty and Liquidated Damages

Penalty and liquidated damages are accounted for
as and when these are realised by the company as
per contract terms.

(iv) Other Income

a. Claims

Claims are recognized in the Statement of Profit

& Loss (Net of any payable) including receivables
from Government towards subsidy, cash incentives,
reimbursement of losses, etc, when there is certainty
of realisation of such claim and that can be measured
reliably.

b. Dividend and Interest from Investments

Dividend income from Investments is recognised in the
Statement of Profit and Loss when the right to receive
the dividend has been established and it is certain 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
using Effective Interest Method. When it is probable
that the economic benefits will flow to the Company
and the amount of income can be measured reliably.

c. Profit on Sale of Investment

Profit on sale of investment is recognised upon
transfer of title by the company and is determined as
the difference between the sales price and the then
carrying value of the investment.

d. Provisions not required written back

Provisions/Liabilities created from business activities in
earlier years no longer required are accounted for.

e. Others

Any other income is recognised on accrual basis.

2.6 Employees Benefit

Retirement benefit costs and termination benefits

Payments to defined contribution retirement
benefit plans are recognized as an expense when
employees have rendered service entitling them to the
contributions.

For defined benefit retirement benefit plans, the cost
of providing benefits is determined using the projected
unit credit method, with actuarial valuations being
carried out at the end of each annual reporting period.
Re-measurement, comprising actuarial gains and
losses, the effect of the changes to the asset ceiling
(if applicable) and the return on plan assets (excluding
interest), is reflected immediately in the statement of
financial position with a charge or credit recognized
in other comprehensive income in the period in
which they occur. Re-measurement recognized in
other comprehensive income is reflected immediately

in retained earnings and will not be reclassified to
Statement of Profit or Loss. Past service cost is
recognized in Statement of 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 categorized as follows:

i. Service cost (including current service cost, past
service cost, etc.);

ii. Net interest expense or income; and

iii. Re-measurement.

The company presents the first two components of
defined benefit costs in profit or loss in the line item
‘employee benefits expense’.

The retirement benefit obligation recognized in the
statement of financial position represents the actual
deficit or surplus in the company defined benefit plans.
Any surplus resulting from this calculation is limited to
the present value of any economic benefits available
in the form of refunds from the plans or reductions in
future contributions to the plans.

A liability for a termination benefit is recognized at the
earlier of when the company can no longer withdraw the
offer of the termination benefit and when the company
recognises any related restructuring costs.

Short-term and other long-term employee benefits

A liability is recognized for benefits accruing to
employees in respect of wages and salaries, annual
leave and sick leave in the period the related service
is rendered at the undiscounted amount of the benefits
expected to be paid in exchange for that service.

Liabilities recognized in respect of short-term employee
benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the
related service.

Liabilities recognized in respect of other long-term
employee benefits are measured at the present value
of the estimated future cash outflows expected to be
made by the company in respect of services provided
by employees up to the reporting date.

Deficit in Provident Fund

Deficit, if any, in the accounts of Provident Fund of
each Trust is accounted for as a charge to Revenue.

2.7 Borrowing Cost

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost
of the asset. All other borrowing costs are expensed in
the period in which they occur. Borrowing costs consist
of interest expenses calculated using the effective
interest method and other costs that an entity incurs
in connection with the borrowing of funds. Borrowing
cost also includes exchange differences to the extent
regarded as an adjustment to the borrowing costs

2.8 Taxation

Income tax expense represents the sum of current tax
and deferred tax.

Current tax

The current tax payable is based on taxable profit for
the year as determined from net profit before tax as
represented in Statement of Profit and Loss and Other
Comprehensive Income, in line with different provisions
under Income Tax Act 1961.Current tax is calculated
using tax rates that have been enacted or substantively
enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognized 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 recognized for all
taxable temporary differences. Deferred tax assets
are generally recognized 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 utilized.

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.

accordingly. Price differences, if any, are adjusted
in the year of finalization of bills.

In respect of expenditure during construction/
development of a new unit/project in a new
location, all direct capital expenditure as well as
all indirect expenditure incidentals to construction
are capitalized allocating to various items of PPE
on an appropriate basis. Expansion programme
involving construction concurrently run with normal
production activities in an existing unit, all direct
capital expenditure in relation to such expansion
are capitalized but indirect expenditure are charged
to revenue. Borrowing costs that are attributable
to the acquisition or construction of qualifying
asset are capitalized as part of the cost of such
assets. A qualifying asset is one that necessarily
takes substantial period of time to get ready for its
intended use.

Expenses incurred for implementation of new
projects are carried forward against respective
projects till execution. Expenses rendered in
fructuous projects abandoned subsequently are
provided for in the Statement of Profit & Loss.

Physical verification of PPE is conducted every year
so that all the units/offices are covered once in a
block of three years interval. Shortage/(Excesses),
if any, identified on such physical verification is duly
adjusted in the books of accounts in the year of
identification.

Minina Properties (Mine Development
Expenditure)

In case of underground mines: The expenditure
on development of a new mine in all cases and
subsequent development of a working mine, is
capitalized and depleted on the basis of ore raised
during the year and the mineable ore reserves
estimated at end of every financial year based
on actual average percentage of ore recovered,
considering level-wise production from stopes.

In case of working mines, where development
activities are going on simultaneously: Expenses
are apportioned between capital and revenue on
the basis of in-house technical estimates. Once
a level is declared as ready for production any
ore generated from that level is considered as
production ore level.

In respect of open cast mines: The expenditure

on removal of waste and overburden, is capitalized
and the same is depleted in relation to actual ore
production during the year on the stripping ratio
which is re-assessed periodically based on the
estimated ore reserve as well as the quantity
of waste excavation in respect of open cast
mines. Subsequently, If any ore is reclaimed from
overburden, the same is included in inventory at a
value based on opening rate of mine development
expenditure with a corresponding credit in Mining
Properties (Mine Development Expenditure).

Expenditure incurred on development of new
deposits are capital in nature and is included in
mine development expenditure. If subsequently
the development activities are found to be not
viable, the expenditure on such development work
included in Mining Properties (mine development
expenditure) is written off in the year in which it is
decided to abandon the project.

If a working mine is closed due to economic reasons,
the un-depleted value of Mine Development
Expenditure related to that mine is provided in the
books of accounts in the year in which it is decided
to close or suspend operation of the mine. If later on,
the closed / suspended mines are re-opened and
the company remains the owner of the mines, the
unamortized Mining Properties (Mine Development
Expenditure) which was fully provided in the year of
closure will be written back in the books of accounts
in the year of re-opening and the company will
be depleting it year wise based on the estimated
remaining life of that mine.

Depreciation and Amortization

The company has used the exemption available
in Ind AS 101 with respect to recognition of Plant,
Property and Equipment (PPE) and Intangible
Assets at their carrying value being deemed cost.

The depreciable amount of an item of PPE is
allocated on a straight line basis over its useful
life prescribed in Part C of Schedule II of the
Companies Act,2013 or actual useful life of assets
assessed by the Technical Committee of the
company, whichever is lower. The residual value
and the useful life of an asset are reviewed, at
each financial year-end. Component of an item
of PPE with a cost that is significant in relation to
the total cost of that item is depreciated separately
if its useful life differs from that of the asset. The

Company has chosen a benchmark of ^ 100 lakh
as material value for identification of a separate
component. Depreciation on all such items have
been provided from the date they are 'available for
use' till the date of sale and includes amortization of
intangible assets and lease hold assets. Freehold
land is not depreciated. The residual value of all
such items is taken at 5% of the original cost of
individual asset.

An item of PPE is derecognized upon disposal or
when no future economic benefits are expected to
arise from the continued use of the asset. Certain
consumable items of small value whose useful life
is very limited are directly charged to revenue in the
year of purchase.

From the date Ind AS came into effect, the carrying
amount of an asset is depreciated over the
remaining useful life of the asset as per estimate
of remaining useful life. Wherever, the remaining
useful life of an asset is nil, the carrying amount
is recognized in the opening balance of retained
earnings after retaining the residual value.

2.9(b) Intangible Assets

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost
less any accumulated amortisation (calculated on
a straight-line basis over their useful lives) and
accumulated impairment losses, if any.

Internally generated intangibles, excluding
capitalised development costs, are not capitalised.
Instead, the related expenditure is recognised in the
statement of profit and loss and other comprehensive
income in the period in which the expenditure is
incurred. An internally generated intangible asset
arising from development is recognized if all the
conditions stipulated in “Ind AS 38-Intangible Asset”
are met. The useful lives of intangible assets are
assessed as either finite or indefinite. Intangible
assets with finite lives are amortised over their
useful economic lives and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with
a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected

useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes
in accounting estimates. The amortisation expense
on intangible assets with finite lives is recognised in
the statement of profit and loss.

An intangible asset with an indefinite useful life is
not amortised but is tested for impairment at each
reporting date and its useful life is reviewed in each
reporting period to determine whether events and
circumstances continue to support an indefinite
useful life estimate.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised in the
statement of profit and loss.

Mining rights are treated as intangible assets and
all related costs thereof are amortised over their
respective estimated useful life on straight line
basis.

Intangible Assets other than Software are amortized
over estimated useful life which is equivalent to
license period, generally not more than 5 years.

Cost of Software recognized as intangible asset, is
amortised on straight line method over a period of
legal right to use with a nil residual value. Otherwise
the cost of software will be charged in the year of
incurrence.

2.10 Capital Work in Progress

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

2.11 Accounting Policy for Accounting of Incidental
Ore raised during construction/ expansion/
development of Mines

In case of Sale of Products processed out of
Incidental Ore raised during Mine construction /
expansion/development, the derived realiasable value
of ore raised is credited to Capital Work in Progress
/ Mining Properties (Mine Development Expenditure)
as the case may be, with a corresponding charge
to the Statement of Profit/(Loss), under the head

'Cost of Materials Consumed' with sub-head “Value
of Ore Raised during Mine construction/expansion/
development” by the same amount. The sale proceeds
of such sale is included in aggregate Turnover in the
Statement of Profit /(Loss).

In case of Incidental Ore raised during Mine
construction /expansion/ development not
processed and is held as stock on the closing date,

the cost of ore or derived realiasable value whichever
is lower, is credited to Capital Work in Progress/Mining
Properties (Mine Development Expenditure) with
corresponding debit to cost of Inventory as the case
may be. However, Inventory under this head should not
be accumulated for a period more than six months.

2.12 Overhauling Expenses

Revenue expenditure attributable to overhaul of
smelter and/ or refinery is charged off to the Statement
of Profit & Loss in the year of incurrence.

2.13 Mine Closure Expenditure

Financial implications towards final mine closure
plans under relevant Acts and Rules are technically
estimated and Mine Closure Liability is created based
on the estimated life of the mines over the period by
charging the same to Statement of Profit and Loss.

2.14 Non-Current Assets Held for Sale

The company classifies a non-current asset (or disposal
group of assets) as held for sale if its carrying amount
will be recovered principally through a sale transaction
rather than through continuing use. Immediately
before the initial classification of the asset (or disposal
group) as held for sale, the carrying amounts of the
asset (or all the assets and liabilities in the group) are
to be measured in accordance with applicable Indian
Accounting Standards. The sale should be expected to
qualify for recognition as a completed sale within one
year from the date of classification except as permitted
by Ind AS 105.

2.15 Inventories

Stocks of stores and spare parts, loose tools and
materials-in-transit are valued at the lower of the net
realizable value and cost. The raw materials are also
valued at the lower of the net realizable value and
weighted average cost to the unit if the finished goods
in which they will be incorporated are expected to be
sold below cost. Loose tools when issued are charged
off to revenue.

Finished goods and work-in-process are valued at the
lower of the net realizable value and weighted average
cost to the unit. The cost is exclusive of financing
cost, such as, interest, bank charges, administration
overhead, etc. Ore is valued at cost since its realisable
value cannot be ascertained.

The value of slag under work-in-process is taken at
equivalent value to the extent credited to the process,
where the said products have been generated. The
reverts under work- in-process are valued at lower
of cost (equivalent value of concentrate) and net
realizable value.

The stock of anode slime arising from treatment and
refining processes are stated at realizable value based
on the yearend London Metal Exchange price for gold
and silver after making due adjustments of their physical
recovery and the treatment and refining charges.

The inventories out of inter-unit transfers (material
in transit) at the close of the year are valued and
accounted in the books of the transferor unit on the
basis of cost-plus transportation to the transferee unit
or net realisable value whichever is lower.

Imported materials are valued at the lower of the net
realizable value and weighted average cost. In the
event where final price is not determined valuation is
made on provisional cost. Variations are accounted for
in the year of finalization.

Provision is made in the accounts every year, for
non-moving stores and spares (other than insurance
spares) which have not moved for more than five years.
Insurance spares are fully provided for on the expiry of
the life of the relevant Property Plant and Equipments.

Physical verification of Semi-Finished and In-Process
(WIP) and Finished Goods is conducted departmentally
in all the units at reasonable intervals during the year
by a duly approved committee. Also, physical stock
verification of WIP and Finished Goods is undertaken
by a duly approved committee at the end of every
financial year alongwith an independent agency once
in a block of three years. In respect of Stores and
Spares, physical verification is carried out by external
agencies once in every year covering all the units.
Shortage/(Excesses), if any, identified on such physical
verification is duly adjusted in the books of accounts in
the year of identification

2.16 Government Grants

All government grants are recognized as deferred
income and it will be taken to Statement of Profit and
Loss over the period of time in accordance with the
pattern in which the obligations are met.

2.17 Impairment of Assets (Other than Financial

Assets)

The Company assesses at the end of each reporting
period whether there is any indication that an asset
may be impaired. If any such indication exists, the
Company estimates the recoverable amount of
the asset. If the recoverable amount of an asset (or
cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized immediately
in Statement of Profit and Loss, unless the relevant
asset is carried at a revalue amount, in which case the
impairment loss is treated as a revaluation decrease.

Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not been
adjusted.

When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment loss
been recognized for the asset (or cash-generating
unit) in prior years. A reversal of an impairment loss
is recognized immediately in profit or loss, unless the
relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.

2.18 Foreign Exchange Transactions

Transactions in currencies other than the company's
functional currency (foreign currencies) are recognized
at the rates of exchange prevailing at the dates of the
transactions.

At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at

the rates prevailing at that date. Non-monetary items
carried at fair value that are denominated in foreign
currencies are re-translated at the rates prevailing at
the date when the fair value was determined. Non¬
monetary items that are measured in terms of historical
cost in a foreign currency are not retranslated.

Foreign currency monetary items (except overdue
recoverable where realizability is uncertain) are
converted using the closing rate as defined in the Ind
AS-21- The effects of changes in Foreign Exchange
Rates. Non-monetary items are reported using the
exchange rate at the date of the transaction. The
exchange difference gain/loss is recognized in the
Statement of Profit and Loss.

In case of long term foreign currency monetary items
outstanding as of 31^st March 2016,liability in foreign
currency loans relating to acquisition of fixed assets is
converted using the closing rate as defined in Ind AS
21-The effects of changes in Foreign Exchange Rates
and the difference in exchange is recognized in terms
of exemptions given in paragraph D13AA of Appendix D
to Ind AS-101, where the effect of exchange differences
on foreign currency loans of the company is accounted
for by addition or deduction to the cost of the assets so
far it relates to the depreciable capital assets and shall
be depreciated over the balance life of the assets.

Other long term foreign currency monetary items are
accumulated in 'Equity Component of Foreign Currency
asset/liability Account' and amortized over the balance
period of the asset/liability by recognition as income or
expense in each of such periods as stated under Para
29A of Ind As 21.