(T) Provisions, contingent liabilities and contingent assets
(i) 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 an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss.
(ii) Contingent liabilities:
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
(iii) Contingent Assets:
Contingent Assets are disclosed, where an inflow of economic benefits is probable.
(U) Investments
On transition to Ind AS, equity investments are measured at fair value, with value changes recognised in Other Comprehensive Income, except for those mutual fund for which the Company has elected to present the fair value changes in the Statement of Profit and Loss.
The company has accounted for its investments in Subsidiaries and Associates and Joint Venture at cost.
(V) Trade receivables
Trade receivables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method, less provision for expected credit loss.
(W) Trade and other payables
These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are recognised, initially at fair value, and subsequently measured at amortised cost using effective interest rate method.
(X) Operating Cycle
Based on the nature of products/activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non current.
(Y) Rounding of amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest Rupees Thoudands, unless otherwise stated as per the requirement of Schedule III (Division II).
5.1 Acquiring stake in Geomysore Services (India) Private Limited (GMSI) pursuant to a share swap:
In Lieu of acquisition of 6,89,521 equity shares in GMSI @ 1606.09 through swap of DGML Equity shares of 3,35,07,789 with a Face Value of Re. 1/- acquired at Rs.33.05 with premium of Rs. 32.05 per share accounted and balance of 30,852 equity shares of GMSI through swap of DGML 14,99,276 CCD with a Face Value of Re. 1/- acquired at Rs.33.05 with at premium of Rs. 32.05 per share. Accordingly, the Company had made an ‘in-principle approval application to the Bombay Stock Exchange Limited (BSE) for issue of 3,35,07,789 equity shares at an issue price of Rs. 33.05/- per share (including a premium of Rs. 32.05/-) and 14,99,276 Compulsorily Convertible Debentures (CCDs) at an issue price of Rs. 33.05/- per CCD (including a premium of Rs. 32.05/-) to acquire 720,373 equity shares of GMSI at an issue price of Rs. 1606.09/- per share (of face value of Re.1- each). The price per share of the Company and GMSI and the swap ratio were arrived at based on the Valuation Report noted above.
By way of background, GMSI is a multi-metal exploration company based in Bangalore, India and has got a portfolio of mineral prospects which include mineral concession applications over the Kolar Gold Belt and the key Jonnagiri Gold Project in Andhra Pradesh over which it holds a granted and executed Mining Lease (ML).
5.2 acquisition of 31.52% stake in Kalevala Gold Oy, Finland pursuant to a share swap:
During the year 2023-24, the Company acquired 31.52% stake in Kalevala Gold Oy, Finland ("Kalevala") under a share swap transaction. Valuation and share swap ratio were arrived at by an independent registered valuer. In terms of the same, for every 33 ordinary shares of Kalevala, the Company shall be issued 46,900 equity shares of face value of INR 1.00 each as fully paid-up at an issue price of INR 53.47/-per share.
Accordingly, the Company acquired 810 ordinary shares (31.52% stake) of Kalevala from Lionsgold India Holdings Limited, Mauritius and issued 11,51,181 equity shares of the Company at an Issue Price of INR 53.47 per share at a total consideration aggregating INR 6.15 crore.
Kalevala has the rights to acquire mining leases and prospecting licences for gold in the Northeastern part of Finland. The project has a potential of 4 tonnes of gold over the mediumterm which can be further enhanced through exploration. The Company is planning to do a drilling program and conduct a feasibility study in preparation for the mining activity.
acquisition of 60% stake in avelum partner LLC, Kyrgyzstan pursuant to a share swap:
During the year 2023-24, the Company acquired 60% stake in Avelum Partner LLC, Kyrgyzstan ("Avelum") under a share swap transaction. Valuation and share swap ratio were arrived at by an independent registered valuer. In terms of the same, for every 533 shares of Avelum, the Company shall be issued 94 equity shares of face value of INR 1.00 each as fully paid-up at an issue price of INR 53.47/- per share.
Accordingly, the Company acquired 68,250,000 shares of Avelum from Hira Infra Tek Limited, India and issued 1,20,36,585 equity shares of the Company at an Issue Price of INR 53.47 per share.
Similarly, the Company acquired 36,750,000 shares of Avelum from Med Edu Care Marketing Management, Dubai (represented by Dr Phani Bhushan Potu, Sole Proprietor) and issued 64,81,238 equity shares of the Company at an Issue Price of INR 53.47 per share.
Thus, the Company had acquired 105,000,000 shares of Avelum (60% stake) under a share swap transaction by issuing 1,85,17,823 equity shares of face value of INR 1/- each at an Issue Price of INR 53.47/- per share at a total consideration aggregating INR 99.01 crore.
"Avelum is operating an existing gold mine located in the eastern part of Kyrgyzstan which requires considerable expansion and setting up of a processing plant to reach its full capacity. The Mine has a potential resource of 6 tonnes of gold which can be extracted over the next 8 - 10 years with a potential to enhance the resource base. Avelum is planning to expand the mining and production capacity in the shortterm."
32 Fair Value Measurement
Financial Instrument by category and hierarchy
The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
The following methods and assumptions were used to estimate the fair values :
i. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.
ii. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counter party. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.
iii. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instrument by valuation technique Level 1: Quoted (unadjusted) price in active markets for identical assets or liabilities.
Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: Techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.
33 FINANCIAL RISK MANAGEMENT OBJECTIVE AND POLICIES
In the course of business, the company is exposed to certain financial risk that could have considerable influence on the Company's business and its performance. These include market risk ( including currency risk, interest risk and other price risk), credit risk and liquidity risk. The Board of Directors review and approves risk management structure and policies for managing risks and monitors suitable mitigating actions taken by the management to minimise potential adverse effects and achieve greater predictability to earnings.
In line with the overall risk management framework and policies, the treasury function provides service to the business, monitors and manages through an analysis of the exposures by degree and magnitude of risks. It is the Company's policy that no trading in derivatives for speculative purposes may be undertaken. The company uses derivative financial instruments to hedge risk exposures in accordance with the Company's policies as approved by the board of directors.
i. Market Risk:
Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of financial instruments. The value of a financial instrument may change as a result of changes in the liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy. The Company does, time to time, evaluate the recoverability of its financial assets and liabilities and provides the estimated loss in the same financial year of recognition. The Company is not an active investor in equity markets.
ii. Equity price risk
Equity price risk is related to the change in market reference price of the investments in quoted equity securities. The fair value of some of the Company's investments exposes the company to equity price risks. At the reporting date, the company do not held any quoted equity securities.
iii. Credit Risk
Customer credit risk is managed by each business unit subject to the Company's established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on customer profiling, credit worthiness and market intelligence. Trade receivables consist of a Goverenment/Institutionals & Other customers, spread across India. Outstanding customer receivables are regularly monitored. The average credit period is in the range of 0 - 180 days. However in select cases credit is extended which is backed by security deposit/bank guarantee/ letter of credit and other firms. The Company's Trade receivables consist of a large number of customers, across India hence the Company is not exposed to concentration risk.
The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates.
iv. Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company has obtained fund and non-fund based working capital limits from various banks. Furthermore, the Company access to funds from debt markets through commercial paper programs and short term working capital loans.
v. Interest Rate Risk Management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the Company's position with regard to interest income and interest expenses and to manage the interest rate risk, treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial instruments in its total portfolio. Currently the company has no exposure to interest rate risk.
vi. Foreign Currency Risk
The fluctuation in foreign currency exchange rates may have potential impact on the profit and loss account, where any transaction has more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the entity.
Considering the countries and economic environment in which the Company operates, its operations are subject to risks arising from fluctuations in exchange rates in those countries. The risks primarily relate to fluctuations in U.S. dollar and Euro, against the respective functional currencies (INR). The Company does not have any foreign currency trade payables and receivables.
The foreign exchange risk management policy of the Company requires it to manage the foreign exchange risk by transacting as far as possible in the functional currency. The Company does not use derivative financial instruments for trading or speculative purposes. No Forward contracts were entered into by the company either during the year or previous years since the company has very minimum exposure to foreign currency risk.
34 Capital management
The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company's Risk Management Committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.
Note:
The related party relationships and transactions have been determined by management of the Company on the basis of the requirements of the Ind AS 24 “ Related Party Disclosures” and the same have been relied upon by the auditors.
The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year.
Related parties have been identified by the Management. Actual re-imbursement of expenses/taxes paid on behalf of related parties is not considered as a related party transactions for disclosure purpose.
39 Contribution to political parties during the year 2023-24 is Rs. Nil (previous year Rs. Nil).
40 There are no amounts due and outstanding to be credited to Investor Education & Protection Fund as at March 31, 2024.
41 Disclosure pertaining to Immovable properties
i) As the company doesn't own any immovable properties the disclosure regarding the title deeds not held in the name of the company, Valuation and revaluation of assets and others disclosure which are need to be reported under Revised Schedule III, as amended by the Companies Act, 2013 are not applicable.
ii) The Company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets during the current or previous year.
42 Wilful defaulter
The Company has not been declared wilful defaulter by any bank or financial institution or government or any government authority
43 Compliance related to number of layers prescribed under clause (87) of Section 2 of the Act is has been complied by the Company.
44 Utilisation of Borrowings availed from Banks and Financial Institutions
The company has not obtained any borrowings from banks and financial institutions have been applied for the purposes for which such loans were taken.
45 Crypto Currency / Virtual Currency
The company has not done any transaction in Crypto or Virtual currency.
46 The company has not entered into any Scheme's of arrangements with the competent authority in terms of Sec. 230 to 237 of the Companies Act, 2013.
47 Details of pending charge creation / satisfaction registration with ROC.
The Company does not have any charges or satisfaction which are yet to be registered with ROC beyond the statutory period.
48 Loans or Advances in the nature of loans are granted to promoters, directors, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person, that are:
51 No proceedings were initiated or pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988.
52 Disclosure on transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961, is not applicable to the Company, since no such event occurred during the year.
53 Segmental Reporting
The Company is mainly engaged in the business of gold exploration and mining. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz; Gold Mining & Exploration. hence, there are no separate reportable segments as per Ind AS 108.
54 Utilization of borrowed funds and share premium:
A) The company has not granted/advance/invested funds in any entities or to any other person including foreign entities during the year with the understanding that the:
i) Intermediary shall directly or indirectly lend or invest in any manner whatsoever by or on behalf of the company (Ultimate beneficiaries).
ii) Provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries."
B) The company has not received any funds during the year from any person's entities including foreign entities with the understanding that the company shall
i) Directly or indirectly lend or invest in any manner whatsoever by or on behalf of the funding entity (Ultimate beneficiaries).
ii) Provide any gurantee, security or the like to or on behalf of the ultimate beneficiaries.
55 Relationship with Struck off Companies
There are no companies which are struck off in MCA.
56 rule 11(g) of Companies (Audit and Auditors) rules, 2014
The Company has used accounting softwares for maintaining its books of account for the financial year ended March 31,2024 which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the softwares.
57 In the opinion of the Board :
i) The current assets, loans and advances will realise in the ordinary course of business, at least the amount at which these are stated in the Balance Sheet. The balances of Trade Receivables, Trade Payables and Loans and Advances are subject to confirmation and consequential adjustment, if any.
ii) Provision for all known liabilities have been made.
58 The company has not taken any facilities from banks/financial institutions against current assets hence disclosure regarding review and reporting of filings and submission of Quarterly returns or statements with banks/financial institutions are in agreement with books of accounts are not available.
59 Figures of previous year have been regrouped, rearranged, reclassified where ever necessary to make them comparable with that of current year.
As per our report of even date For and on behalf of Board of Directors
For V K Beswal & Associates Deccan Gold Mines Limited
Chartered Accountants Firm Registration No 101083W
Kailasam Sundaram Modali Hanuma Prasad
CA Nishit S. Agrawal Chairman Managing Director
Partner DIN: 07197319 DIN: 01817724
M No-159882
UDIN No. : 24159882BKCATT3977 K.Karunakaran S.Subramanium
Place : Mumbai Chief Financial Officer WTD & CS
Date : 30-May-2024 PAN: AITPK0276F DIN: 06389138
Place : Bengaluru Date : 30.05.2024
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