Accounting Policies of MOIL Ltd. Company

Mar 31, 2025

1 Material Accounting Policy Information

1.1 Basis of preparation of financial statements

(a) Statement of compliance

These financial statements are prepared in accordance
with Indian Accounting Standards (Ind AS) under the
historical cost convention on accrual basis (except for
certain financial instruments, which are measured at fair
values), the provisions of the Companies Act, 2013 (''Act'')
to the extent notified and the guidelines issued by the
Securities and Exchange Board of India (SEBI). The Ind
AS are notified under Section 133 of the Act read with
Companies (Indian Accounting Standards) Rules, 2015 as
amended from time to time. The financial statements are
prepared in accordance with the relevant presentation
requirements of the companies Act 2013 and
presentation requirements of Schedule III to Companies
Act 2013, (IND AS compliant Schedule III, as applicable)

(b) Basis of measurement

The financial statements are prepared on historical
cost basis except for the following assets and liabilities,
which have been measured at fair value: -

• Certain financial assets and liabilities which are
classified as fair value through profit and loss or
fair value through other comprehensive income.

• Assets held for sale, at the lower of the carrying
amounts and fair value less cost.

• Defined benefit plans and plan assets.

(c) Functional and presentation currency

The financial statements have been presented in
Indian Rupees (H) which is the country''s functional
currency. All financial information presented in H have
been rounded off to the nearest two decimals of lakh
unless otherwise stated.

(d) Use of estimates, assumptions and management
judgements

In preparing the financial statements in conformity with
Company’s accounting policies, management is required
to make estimates and assumptions that affect reported
amounts of assets and liabilities and the disclosure
of contingent liabilities as at the date of the financial
statements, the amount of revenue and expenses during
the reported period and notes to financial statements.
Actuals may differ from those estimates and the difference
is recognized in the period in which the same is determined.

1.2 Summary of Material Accounting Policies

A summary of the material accounting policies applied in
the preparation of financial statements is given below.
These accounting policies have been applied consistently
to all the periods presented in the financial statements.

1.2.1 Accounting for assets

(a) Property, Plant and equipment
Recognition and measurement

The initial cost at cash price equivalent of property,
plant and equipment purchased comprises its
purchase price, including import duties and non¬
refundable purchase taxes, any directly attributable
costs of bringing the assets to working condition,
location and commissioning, wherever applicable.
Subsequent expenditure is recognized in the
carrying amount of the asset when it is probable
that future economic benefits deriving from the
cost incurred will flow to the company and the cost
of the item can be measured reliably.

Property, plant and equipment are maintained
at cost less accumulated depreciation and
impairment, if any.

Property, plant and equipment not ready for
intended use on the date of Balance Sheet are
disclosed as “Capital Work-in-progress”. Such
items are classified to the appropriate category of
Property, Plant and Equipment when completed
and ready for intended use.

(b) Intangible Assets
Recognition and measurement

Intangible assets are stated at cost less
accumulated amortization and impairment, if any.

Intangible Asset includes-

(i) Cost of leasehold/mining rights obtained
for periods, as specified in the lease deed.

(ii) Cost of purchase of SAP licenses, which is
having a useful life of 5 years.

(iii) Cost of software which is having a useful
life of 3 years.

Intangible assets not ready for intended use
on the Balance Sheet date are disclosed as
“Intangible assets under development”. Such
items are classified into the appropriate category
of Intangible assets, when completed and ready
for the intended use.

(c) Depreciation and amortization

(i) Depreciation is calculated (i) on straight-line
method in case of wind turbine generators &
Solar and (ii) on written down value method
on all other assets, based on useful life of
various assets, as provided in Schedule II to
the Companies Act, 2013, as amended from
time to time. Depreciation is calculated on
pro-rata basis for additions / disposal from
date the asset is available for use or disposal.

(ii) Mining rights are treated as intangible assets
and all related costs including net present value
of diverted forest land thereof are amortized
over their respective estimated useful lives on
straight line basis. Cost of leasehold land is
amortised over the period of lease.

(iii) Software is amortised as per their useful life.

(iv) Exploration and evaluation asset are
treated as intangible assets and all related
costs are amortized over their respective
estimated useful life on straight line basis.

(d) Write-off losses on assets

All assets dismantled/discarded are written off
assuming that scrap value for the same is Nil. If
and when such discarded assets are disposed off
partially or fully, the amounts realized during the
year on account of sale are taken to statement of
profit and loss of that year.

(e) Expenditure during construction period

All expenditure during construction period on
specific projects, identifiable as relating to such
projects, is debited to the said projects up to the
date of completion and commissioning thereof.

(f) Interest during construction period

Interest on loans (including other related
financing costs on loans) pertaining to specific
assets incurred during construction period up to
completion is capitalized.

(g) Impairment of assets

Company assesses, at each balance sheet date,
whether there is any indication that asset may be
impaired. If any such indication exists, Company
estimates the recoverable amount of assets. If
such recoverable amount is less than its carrying
amount, the carrying amount is reduced to its
recoverable amount. The reduction is treated as an
impairment loss and is recognized in the statement
of profit and loss. If there is any indication that
previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and
the asset is reflected at the recoverable amount.

1.2.2 Investments

(a) Non- traded and unquoted investment

Long term investments in shares are carried at
cost. Diminution in value, if any, is provided for,
if it is not of temporary nature.

(b) Investments in liquid debt funds are initially
recognized at the cost of acquisition, any gain/
loss arising on redemption during the financial
year is recognized through statement of profit
and loss. The investment as at the balance sheet
date are recognised in balance sheet as current
investments at Net asset value and any gain/loss
is recognized in statement of profit and loss.

1.2.3 Inventories

Inventories are valued on following basis.

(A) Finished goods

(i) Manganese ore of all grades (except fines,
hutch dust and HIMS rejects):- At cost at
mines including depreciation on mine assets
or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS
rejects: - At cost per tonne on jigging/
processing, transportation, etc., allocated
on technical estimates or net realizable
value, whichever is less.

(iii) Manganese ore at port: - At landed cost at
the port or net realizable value, whichever
is less. Landed cost includes freight,
unloading charges, sampling charges, etc.

Difference between physical and book
stocks are not adjusted, so long as the
overall position of stocks at mines is found
to be excess when compared with overall
book stocks. As and when ore is actually
dispatched, excess or shortage after railing/
shipment against each stack is ascertained
and the same is accounted for in the books
of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD]
(including stock as on 31^st March at
different stages of production, ascertained
by technical estimation as to percentage
of completed units of EMD): -At current
year''s cost of production including plant''s
depreciation or net realizable value,
whichever is less.

(v) (a) Ferro manganese/silico manganese

including stock in cake form as on
31^stMarch, determined by technical
assessment: -At current year''s cost
of production including plant''s
depreciation (less realizable value of slag)
or net realizable price, whichever is less.

(b) Stock in process: -The quantity of
ferro manganese in process cannot
be weighed, seen or assessed and,
hence, no value is assigned.

(c) Stock of slag: - Slag is a molten
mass of impurities generated during
manufacture of ferro manganese, which
is treated as scrap and, accordingly,
valued at net realizable price.

(B) Stores inventory (Stores, spares, timber,
explosives, fuel and lubricants and raw materials

etc.): - At lower of the cost and net realisable
value as per Ind AS 2. The basis for determining
the cost is weighted average method.

(i) Physical verification of all stores, spares,
etc., is conducted at the end of each year.
Difference between physical stock and
book stock is examined and necessary
adjustments are carried out in the
books of accounts.

(ii) In case of ferro manganese plant, stock of
raw materials, except manganese ore at
plant, is valued at lower of cost determined
on weighted average method and net
realisable value. The stock of manganese
ore at plant is valued at lower of current
year''s cost of production and net realizable
value, plus cost of transport and other
charges, if any as per Ind AS 2. Opening and
closing stock of ore at the plant is grouped
under the head “Stock of raw materials”.

(iii) Provision for obsolete Stores and Spares-

Provision is made for 70% of the value
of obsolete stores and spares as at the
end of every Financial Year. The same is
reviewed at year end.

(iv) Provision for non-moving Stores and Spares

Provision is made for 10% of the value of stores
and spares non-moving for more than three
years at the end of every Financial Year.
The same is reviewed at year end.

(C) Physical verification of inventories is carried out
at the end of the year.

(D) Production and inventory of manganese ore as
well as bulk raw materials and ferro manganese
are determined as per weight volume ratio by the
production/technical department and the same
are accounted for accordingly.

1.2.4 Trade receivables

The trade receivables includes both secured and un¬
secured trade receivables that are considered good.

The trade receivables covered by Letter of credit/

Bank Guarantees are considered secured and good.

Trade receivables are recognized initially at fair value

based on amounts exchanged and subsequently at
amortised cost less any impairment as per Ind AS 109.

1.2.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand
and demand deposits, together with other short-term
highly liquid investments (three months or less from
the date of acquisition) that are readily convertible
into known amount of cash and are subject to an
insignificant risk of changes in value.

1.2.6 Assets Held for Sale

Significant judgment is required to apply the
accounting of non-current assets held for sale
under Ind AS 105 - “Non-current assets held for
sale and discontinued operations”. In assessing the
applicability, management has exercised judgment
to evaluate the availability of the asset for immediate
sale, management''s commitment for the sale and
probability of sale within one year to conclude if their
carrying amount will be recovered principally through
a sale transaction rather than through continuing use.

1.2.7 Fair Value Measurements of financial instruments

The Company applies valuation techniques to
determine the fair value of financial instruments
(where active market quotes are not available) and non¬
financial assets. This involves developing estimates and
assumptions consistent with the market participants to
price the instrument. The Company''s assumptions are
based on observable data as far as possible, otherwise
on the best information available. Estimated fair values
may vary from the actual prices that would be achieved
in an arm''s length transaction at the reporting date.

1.2.8 Statement of cash flows

The statement of cash flows is prepared in accordance
with the indirect method prescribed in Ind AS-7:
''Statement of cash flows''.

1.2.9 Stripping Cost
Development stripping cost

Cost of removal of overburden and other mine waste
material during the initial development of a mine/level
in order to access mineral deposits are capitalized as
asset. Depreciation on the same is computed based on
useful life estimated by the management.

Production stripping cost

Overburden and other mine waste materials which are
removed throughout the production phase of mine are
charged off as expense.

1.2.10 Income Tax

Income tax comprises current and deferred tax.
Income tax expense is recognized in the statement
of profit and loss except to the extent it relates
to items directly recognized in equity or in other
comprehensive income.

(a) Current income tax

Current income tax for the current period
is measured at the amount expected to be
recovered from or paid to the taxation authorities
based on the taxable income for the period. The
tax rates and tax laws used to compute the
current tax amount are those that are enacted or
substantively enacted by the reporting date and
applicable for the period. The Company offsets
current tax assets and current tax liabilities,
where it has a legally enforceable right to set off
the recognized amounts and where it intends
either to settle on a net basis or to realize the
asset and liability simultaneously.

(b) Deferred income tax

Deferred income tax is recognized using the
balance sheet approach. Deferred income tax
assets and liabilities are recognized for deductible
and taxable temporary differences arising between
the tax base of assets and liabilities and their
carrying amount in financial statements, except
when the deferred income tax arises from the
initial recognition of goodwill or an asset or liability
in a transaction that is not a business combination
and affects neither accounting nor taxable profits
or losses at the time of the transaction. Deferred
income tax assets are recognized to the extent
that it is probable that taxable profit will be
available against which the deductible temporary
differences and the carry forward of unused tax
credits and unused tax losses can be utilized.

Deferred income tax liabilities are recognized
for all taxable temporary differences. The
carrying amount of deferred income tax assets
is reviewed at each reporting date and reduced

to the extent that it is no longer probable that
sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to
be utilized. Deferred income tax assets and
liabilities are measured at the tax rates that are
expected to apply in the period when the asset
is realized or the liability is settled, based on tax
rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.

1.2.11 Government Grants

Government grants are recognised when there is
reasonable assurance that the Company will comply
with the conditions attaching to them and that the
grants will be received.

Government grants are recognised in statement
of profit and loss on a systematic basis over the
periods in which the Company recognises as
expenses the related costs for which the grants are
intended to compensate.

Where the Grant relates to an asset value, it is
recognised as deferred income, and amortised over
the expected useful life of the asset. Other grants
are recognised in the statement of Profit & Loss
concurrent to the expenses to which such grants
relate/ are intended to cover.

Where the Company receives non-monetary grants,
the asset and the grant are recorded gross at fair
amounts and released to the income statement over
the expected useful life and pattern of consumption
of the benefit of the underlying asset.

1.2.12 Earnings per share

Basic earnings per share is computed dividing the net
profit after tax by the weighted average number of
equity shares outstanding during the year.

Diluted EPS is computed dividing the net profit
after tax by the weighted average number of equity
considered for deriving basic EPS.

1.2.13 Exploration and evaluation

Exploration and evaluation assets comprise capitalized
costs which is generally the expenditure incurred
associated with discovering the manganese ore/ other
minerals by carrying out topographical, geological,
geochemical and geophysical studies, exploratory

drilling, trenching, sampling, expenditure for activities
in relation to evaluation of technical feasibility and
commercial viability etc. However, if the reserves are
not determined the expenditure is charged to profit
and loss as research and development expenditure.
The carrying value of capital expenditure is reviewed
for impairment every year by the management.

1.2.14 Revenue from operations

Revenue from contracts with customers is recognized
when control of the goods is transferred to the
customer at an amount that reflects the consideration
to which the Company expects to be entitled in
exchange for those goods.

All revenue from sale of goods is recognised at a point
in time. Revenue is recognized in the books of accounts
only after dispatch of goods based on railway receipt/
lorry receipt/delivery challan.

Contract asset: A contract asset is the right to
consideration in exchange for goods or services
transferred to the customer. If the Company performs
by transferring goods or services to a customer before
the customer pays consideration or before payment
is due, a contract asset is recognised for the earned
consideration that is conditional.

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

(A) Manganese ore sales

(i) Debit notes / Credit notes are raised
for variation in quality on the basis of
laboratory analysis reports. Analysis
reports received in subsequent year up
to a cut-off date are considered in year of
dispatch. Accordingly, debit / credit notes
are raised and accounted for in the same
year. In respect of analysis reports received
after the cut-off date, the invoices for the
same are raised in subsequent year.

(ii) Sales include amounts in respect of royalty,
district mineral fund and national mineral
exploration trust contributions but excludes
GST and any other taxes/cess. Sales are
reduced to the extent of the amount of price
discount. The Company acts as a principal
to its customers and all the performance
obligation stands on the Company, therefore
revenue is accounted on Gross basis.

(iii) Manganese ore fines, hutch, dust and
HIMS rejects generated during operations
are recognised as production as and when
they are sold and corresponding sales is
treated as revenue from mining products.

(iv) The company is appointed for export of
manganese ore allowed under STE category
vide notification no 60/2023 dated 13^th
February, 2024 by Government of India.

(B) Sale of electricity to M. P. Electricity Distribution
Company Limited

Revenue from wind power is recognised over the
time on the basis of energy injected into the grid,
at tariff rate agreed in power purchase agreement.

(C) Obsolete stores, spares and scrap:

Revenue is recognised on the basis of control
passes to the customer on the date of realisation.

.2.15 Other income

(A) Interest income from sundry debtors is
recognized as under -

(i) In as far as the realization is supported by
letter of credit or Bank Guarantees through
bank from the debtors, where there is
certainty of its realization, the recognition
is made on accrual basis.

Interest billed to customers for credit terms
beyond current financial year is recognized
in the year to which it pertains.

(ii) In as far as the realization is not supported by
letter of credit or Bank Guarantees through
bank and directly billed by the company
where its realization is uncertain, based on
management''s experience, as and when actual
realization made, is recognized as income.

(B) Interest income on deposits and advances is
recognized on accrual basis.

(C) Memorandum records have been kept in respect
of replaced/worn-out parts/scrap capital items.
When they are disposed off, proceeds are taken
as miscellaneous receipt of that year.

(D) Income from mutual fund is recognised based
on the NAV prevailing on the date of disposal or
as on Balance sheet date through statement of
profit and loss.

(E) Other receipts in the nature of income are
accounted for on the basis of certainty of
realisation, otherwise on receipt basis.

(F) Unclaimed SD/EMD/outstanding or payables
to vendors for more than five years from the
date of completion of the defect liability period,
if any, are reviewed on case to case basis. If no
claims are pending, such liabilities are written
back in the accounts. Future claims if arising in
subsequent year would be accounted for in the
year in which claims are settled.

1.2.16 Captive consumption
Manganese ore

Manganese ore, fines, HIMS rejects issued as raw
material for production of EMD/ferro manganese
is valued at current year''s cost of production and
fines/HIMS rejects are valued at per tonne rate, as
adopted for valuation of stock. Consumption of the
ore is accounted on average cost. Value of ore issued
is reduced from ore raising/operating expenses
and is considered as raw material consumption in
“Manufacturing Expenses”.

Electricity

Power generated at wind turbine generator and
solar power plant''s units consumed at mine/plant, is
charged to respective units at the cost of generation.

1.2.17 Sales tax, income tax, GST etc.

(a) In respect of sales tax, income tax, GST etc., the
amount payable or receivable as per assessment
order is accounted for in the year in which
the said order is received and accepted by the
company, irrespective of the year to which
the order relates.

(b) Set off / input tax credit is claimed on sales tax/
GST on purchases. Difference between set off /
input tax credit claimed and actual set off / input
tax credit allowed is accounted for in the year
in which the assessment order is received and
accepted by the company.

1.2.18 Employee benefits

(a) Short term employee benefits

Short term employee benefits are recognized
as expense at the undiscounted amount in the
statement of profit and loss in the year in which
the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits
like provident fund, gratuity, leave encashment,
pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity,
leave encashment and post-retirement
medical facilities are recognized as an
expense in the statement of profit and
loss in the year in which the employee
has rendered services. The expenses are
recognized at the present value of the
amounts payable, determined by using
actuarial valuation techniques. Actuarial
gains and losses in respect of these post¬
employment benefits are charged to the
statement of profit and loss under OCI.

(a) Gratuity: The Group Gratuity Cash
Accumulation Scheme is funded by
the Company and is managed by
MOIL Gratuity Trust as per Payment
of Gratuity Act,1972. Liability for
gratuity is recognised on the basis
of actuarial valuation. Eligible
amount is paid to the employees on
separation by the Trust.

(b) Leave Benefits: The accumulated
earned leave, half pay leave/sick leave
is payable on separation, subject
to maximum permissible limit. The
liability for the same is recognised on
the basis of actuarial valuation.

(c) Medical Benefits: Post

retirement benefits like medical
facilities are available

(i) for all retired non-executive
employees and executive employees
separated before 01.01.2007 at
the Company''s hospital and under
the health insurance policy under
Group Medical Insurance Coverage
Scheme (GMICS).

(ii) for non-executive employees and
executive employees retired on or
after 01.01.2007, the company is
operating Post Retirement Medical
Scheme under Defined Contribution
Plan. The defined contribution plan
for PRMS is administered by a single
PRMS trust that is legally separate
from the company.

Provisions / Liabilities are made based
on the Actuarial valuation at each
reporting date. Actuarial gain / loss
relating to this scheme are recognized
in Other Comprehensive Income.

(ii) Defined contribution plans

Defined contribution plans (provident
fund, pension), post-employment benefit
plans, under which the company pays fixed
contributions into separate entities (funds).
The company''s contribution to defined
contribution plans is recognized in the
statement of profit and loss of the year to
which it relates.

(a) Provident Fund: The Company
contributes to employee''s provident
fund (EPF) at a specified rate
approved by the Government to the
exempted trust (partially exempted)
under the defined contribution plan.
The trust is paying interest on the
contributions to members account, at
a rate as approved by the Trustees.

(b) Pension Fund: Company contributes
to Life Insurance Corporation of India
and National Pension Scheme (NPS)

at fixed rate of 10% of Basic plus
DA approved by the Government,
towards the superannuation
benefit of employees.

1.2.19 V.R.S. expenditure

The company charges full amount of the expenditure
in statement of profit and loss in the year of incurrence.

1.2.20 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under
construction some labour quarters, for which
the company is receiving subsidy from the
Welfare Commissioner. Since the land on which
such quarters are constructed is surrendered
to the Welfare Commissioner and the property
(quarters constructed) vests with the Welfare
Commissioner, the entire expenditure incurred
by the company is charged to and the subsidy
received is also credited to revenue in the
year in which the expenditure is incurred/
subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like
school bus, ambulance, water supply scheme,
etc., under welfare schemes is debited to relevant
asset account in the year in which expenditure is
incurred. Amount of subsidy received is credited
to the same asset head in the year of receipt and
depreciation is then charged on such reduced
value of the asset from that year.

1.2.21 Claims by the company

Amount of claims lodged with insurance company/
railways are accounted for on the basis of amount
claimed during the year on assessing reasonable
certainty of their realisation and the difference, if any,
is adjusted on settlement of the claims.

1.2.22 Pre-paid expenses

Expenses are treated as prepaid only where amount
exceed H 5.00 lakh in each case.

---

Mar 31, 2024

1 Material Accounting Policy Information

1.1 Basis of preparation of financial statements

(a) Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis (except for certain financial instruments, which are measured at fair values), the provisions of the Companies Act, 2013 (''Act'') to the extent notified and the guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are notified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. The financial statements are prepared in accordance with the relevant presentation requirements of the companies Act 2013 and presentation requirements of Schedule III to Companies Act 2013, (IND AS compliant Schedule III, as applicable)

(b) Basis of measurement

The financial statements are prepared on historical cost basis except for the following assets and liabilities, which have been measured at fair value: -

• Certain financial assets and liabilities which are classified as fair value through profit and loss or fair value through other comprehensive income.

• Assets held for sale, at the lower of the carrying amounts and fair value less cost.

• Defined benefit plans and plan assets.

(c) Functional and presentation currency

The financial statements have been presented in Indian Rupees (H) which is the Company''s functional currency. All financial information presented in H have been rounded off to the nearest two decimals of lakh unless otherwise stated.

(d) Use of estimates, assumptions and management judgements

In preparing the financial statements in conformity with Company''s accounting policies, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements, the amount of revenue and expenses during the reported period and notes to financial statements. Actuals may differ from those estimates and the difference is recognized in the period in which the same is determined.

1.2 Summary of Material Accounting Policies

A summary of the significant accounting policies applied in the preparation of financial statements is given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

1.2.1 Accounting for assets

(a) Property, Plant and equipment

Recognition and measurement

The initial cost at cash price equivalent of property, plant and equipment purchased comprises its purchase price, including import duties and nonrefundable purchase taxes, any directly attributable costs of bringing the assets to working condition, location and commissioning, wherever applicable.

Property, plant and equipment are maintained at cost less accumulated depreciation and impairment, if any.

Property, plant and equipment not ready for intended use on the date of Balance Sheet are disclosed as "Capital Work-in-progress". Such items are classified to the appropriate category of Property, Plant and Equipment when completed and ready for intended use.

(b) Intangible Assets

Recognition and measurement

Intangible assets are stated at cost less accumulated amortization and impairment, if any.

Intangible Asset includes-

(i) Cost of leasehold/mining rights obtained for periods, as specified in the lease deed.

(ii) Cost of purchase of SAP licenses, which is having a useful life of 5 years.

(iii) Cost of software which is having a useful life of 3 years.

Intangible assets not ready for intended use on the Balance Sheet date are disclosed as "Intangible assets under development". Such items are classified into the appropriate category of Intangible assets, when completed and ready for the intended use.

(c) Depreciation and amortization

(i) Depreciation is calculated (i) on straight-line method in case of wind turbine generators & Solar and (ii) on written down value method on all other assets, based on useful life of various assets, as provided in Schedule II to the Companies Act, 2013, as amended from time to time. Depreciation is calculated on pro-rata basis for additions / disposal from date the asset is available for use or disposal.

(ii) Mining rights are treated as intangible assets and all related costs including net present value of diverted forest land thereof are amortized over their respective estimated useful lives on straight line basis. Cost of leasehold land is amortised over the period of lease.

(iii) Software is amortised as per their useful life.

(d) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are taken to statement of profit and loss of that year.

(e) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(f) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period up to completion is capitalized.

(g) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.2.2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

Investments in liquid debt funds are initially recognized at the cost of acquisition, any gain/loss arising on redemption during the financial year is recognized through statement of profit and loss. The investment as at the balance sheet date are recognised in balance sheet as current investments at Net asset value and any gain/loss is recognized in statement of profit and loss.

1.2.3 Inventories

Inventories are valued on following basis.

(A) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects):- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects: - At cost per tonne on jigging/ processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port: - At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or

shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD]

(including stock as on 31^st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD): -At current year''s cost of production including plant''s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese

including stock in cake form as on 31^stMarch, determined by technical assessment: -At current year''s cost of production including plant''s depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process: -The quantity of

ferromanganese/silico manganese in process cannot be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag: - Slag is a molten

mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(B) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials etc.): - At lower of the cost and net realisable value as per Ind AS 2. The basis for determining the cost is weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is examined and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at lower of cost determined on weighted average method and net realisable value. The stock of manganese ore at plant is valued at lower of current year''s cost of production and net realizable value, plus cost of transport and other charges, if any as per Ind AS 2. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

(iii) Provision for obsolete Stores and Spares-

Provision is made for 70% of the value of obsolete stores and spares as at the end of every Financial Year. The same is reviewed at year end.

(iv) Provision for non-moving Stores and Spares

Provision is made for 10% of the value of stores and spares non-moving for more than three years at the end of every Financial Year. The same is reviewed at year end.

(C) Physical verification of inventories is carried out at the end of the year.

(D) Production and inventory of manganese ore as well as bulk raw materials and ferro manganese are determined as per weight volume ratio by the production/technical department and the same are accounted for accordingly.

1.2.4 Trade receivables

The trade receivables include both secured and un-secured trade receivables that are considered good. The trade receivables covered by Letter of credit/Bank Guarantees are considered secured and good.

1.2.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term highly liquid investments (three months or less from the date of acquisition) that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in value.

1.2.6 Fair Value Measurements of financial instruments

The Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with the market participants to price the instrument. The Company''s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

1.2.7 Statement of cash flow

The statement of cash flow is prepared in accordance with the indirect method prescribed in Ind AS-7: ''Statement of cash flow''.

1.2.8 Stripping Cost Development stripping cost

Cost of removal of overburden and other mine waste material during the initial development of a mine/level in order to access mineral deposits are capitalized as asset. Depreciation on the same is computed based on useful life estimated by the management.

Production stripping cost

Overburden and other mine waste materials which are removed throughout the production phase of mine are charged off as expense.

1.2.9 Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

(a) Current income tax

Current income tax for the current period is measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.

(b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or losses at the time of the transaction. Deferred income tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred income tax liabilities are recognized for all taxable temporary differences. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

1.2.10 Government Grants

Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Where the Grant relates to an asset value, it is recognised as deferred income, and amortised over the expected useful life of the asset. Other grants are recognised in the statement of Profit & Loss concurrent to the expenses to which such grants relate/ are intended to cover.

Where the Company receives non-monetary grants, the asset and the grant are recorded gross at fair amounts and released to the income statement over the expected useful life and pattern of consumption of the benefit of the underlying asset.

1.2.11 Earnings per share

Basic earnings per share is computed dividing the net profit after tax by the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed dividing the net profit after tax by the weighted average number of equity considered for deriving basic EPS.

1.2.12 Exploration and evaluation

Exploration and evaluation expenditure of revenue nature is treated as research and development expenditure and charged to statement of profit and loss in the year of incurrence. However, expenditure of capital nature relating to research and development is treated in the same way as non-current assets.

The carrying value of capital expenditure is reviewed for impairment every year by the management.

1.2.13 Revenue from operations

Revenue from contracts with customers is recognized when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods.

All revenue from sale of goods is recognised at a point in time. Revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

Contract asset: A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

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

(A) Manganese ore sales

(i) Debit notes / Credit notes are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, debit / credit notes are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the invoices for the same are raised in subsequent year.

(ii) Sales include amounts in respect of royalty, district mineral fund and national mineral exploration trust contributions but excludes GST and any other taxes/cess. Sales are reduced to the extent of the amount of price discount. The Company acts as a principal to its customers and all the performance obligation stands on the Company, therefore revenue is accounted on Gross basis.

(iii) Manganese ore fines, hutch, dust and HIMS rejects generated during operations are recognised as production as and when they are sold and corresponding sales is treated as revenue from mining products.

(B) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue from wind power is recognised over the time on the basis of energy injected into the grid, at tariff rate agreed in power purchase agreement.

(C) Obsolete stores, spares and scrap:

Revenue is recognised on the basis of control passes to the customer on the date of realisation.

1.2.14 Other income

(A) Interest income from sundry debtors is recognized as under -

(i) In as far as the realization is supported by letter of credit or Bank Guarantees through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit or Bank Guarantees through bank and directly billed by the company where its realization is uncertain, based on management''s experience, as and when actual realization made, is recognized as income.

(B) Interest income on deposits and advances is recognized on accrual basis.

(C) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

(D) Income from mutual fund is recongnised based on the NAV prevailing on the date of disposal or as on Balance sheet date through statement of profit and loss.

(E) Other receipts in the nature of income are accounted for on the basis of certainty of realisation, otherwise on receipt basis.

(F) Unclaimed SD/EMD/outstanding or payables to vendors for more than five years from the date

of completion of the defect liability period, if any, are reviewed on case to case basis. If no claims are pending, such liabilities are written back in the accounts. Future claims if arising in subsequent year would be accounted for in the year in which claims are settled.

1.2.15 Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year''s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/ operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator and solar power plant''s units consumed at mine/plant, is charged to respective units at the cost of generation.

1.2.16 Sales tax, income tax, GST etc.

(a) In respect of sales tax, income tax, GST etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off / input tax credit is claimed on sales tax/GST on purchases. Difference between set off / input tax credit claimed and actual set off / input tax credit allowed is accounted for in the year in which the assessment order is received and accepted by the company.

1.2.17 Employee benefits

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity, leave encashment and post-retirement medical

facilities are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss under OCI.

Benefits like medical facilities (in-patient) are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

(ii) Defined contribution plans

Defined contribution plans (provident fund, pension), post-employment benefit plans, under which the company pays fixed contributions into separate entities(funds). The company''s contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates.

The Company contributes to employee''s provident fund (EPF) at a specified rate approved by the Government to the exempted trust (partially exempted) under the defined contribution plan. The trust is paying interest on the contributions to members account, at a rate as approved by the Trustees.

Company contributes to Life Insurance Corporation of India at fixed rate of 10% approved by the Government, towards the superannuation benefit of employees (pension scheme).

1.2.18 V.R.S. expenditure

The company charges full amount of the expenditure in statement of profit and loss in the year of incurrence.

1.2.19 Accounting for subsidies from Welfare Commissioner (a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the

Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/ subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

1.2.20 Claims by the company

Amount of claims lodged with insurance company/ railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

1.2.21 Pre-paid expenses

Expenses are treated as prepaid only where amount exceed ^5.00 lakh in each case.

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Mar 31, 2023

Corporate and General Information

MOIL Limited (referred to as "the Company”) is domiciled and incorporated in India. The Company is a Schedule "A” Miniratna Category - I Central public sector undertaking. The Company is one of the largest manganese ore producers of the country. The registered office of the Company is situated at 1-A, Katol Road, Nagpur-440013, in Maharashtra. The securities of the Company are listed on the National Stock Exchange and Bombay Stock Exchange under scrip code MOIL and 533286 respectively.

1 Significant Accounting Policies

1.1 Basis of preparation of financial statements

(a) Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis (except for certain financial instruments, which are measured at fair values), the provisions of the Companies Act, 2013 (''Act'') to the extent notified and the guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are notified under Section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. The financial statements are prepared in accordance with the relevant presentation requirements of the companies Act 2013 and presentation requirements of Schedule III to Companies Act 2013, (IND AS compliant Schedule III, as applicable)

(b) Basis of measurement

The financial statements are prepared on historical cost basis except for the following assets and liabilities, which have been measured at fair value:-

• Certain financial assets and liabilities which are classified as fair value through profit and loss or fair value through other comprehensive income.

• Assets held for sale, at the lower of the carrying amounts and fair value less cost.

• Defined benefit plans and plan assets.

(c) Functional and presentation currency

The financial statements have been presented in Indian Rupees (H) which is the Company''s functional currency. All financial information presented in H have been rounded off to the nearest two decimals of lakh unless otherwise stated.

(d) Use of estimates, assumptions and management judgements

In preparing the financial statements in conformity with Company''s accounting policies, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements, the amount of revenue and expenses during the reported period and notes to financial statements. Actuals may differ from those estimates and the difference is recognized in the period in which the same is determined.

1.2 Summary of Significant Accounting Policies

A summary of the significant accounting policies applied in the preparation of financial statements is given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

1.2.1 Accounting for assets

(a) Property, Plant and equipment

Recognition and measurement

The initial cost at cash price equivalent of property, plant and equipment purchased comprises its purchase price, including import duties and non-refundable purchase taxes, any directly attributable costs of bringing the assets to working condition, location and commissioning, wherever applicable.

Property, plant and equipment are maintained at cost less accumulated depreciation and impairment, if any.

Property, plant and equipment not ready for intended use on the date of Balance Sheet are disclosed as "Capital Work-in-progress”. Such items are classified to the appropriate category of Property, Plant and Equipment when completed and ready for intended use.

(b) Intangible Assets

Recognition and measurement

Intangible assets are stated at cost less accumulated amortization and impairment, if any.

Intangible Asset includes-

(i) Cost of leasehold/mining rights obtained for periods, as specified in the lease deed.

(ii) Cost of purchase of SAP licenses, which is having a useful life of 5 years.

(iii) Cost of software which is having a useful life of 3 years.

Intangible assets not ready for intended use on the Balance Sheet date are disclosed as "Intangible assets under development”. Such items are classified into the appropriate category of Intangible assets, when completed and ready for the intended use.

(c) Depreciation and amortization

(i) Depreciation is calculated (i) on straight-line method in case of wind turbine generators & Solar and (ii) on written down value method on all other assets, based on useful life of various assets, as provided in Schedule II to the Companies Act, 2013, as amended from time to time. Depreciation is calculated on pro-rata basis for additions / disposal from date the asset is available for use or disposal.

(ii) Mining rights are treated as intangible assets and all related costs including net present value of diverted forest land thereof are amortized over their respective estimated useful lives on straight line basis. Cost of leasehold land is amortised over the period of lease.

(iii) Software is amortised as per their useful life.

(d) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are taken to statement of profit and loss of that year.

(e) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(f) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period up to completion is capitalized.

(g) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.2.2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

Investments in liquid debt funds are initially recognized at the cost of acquisition, any gain/loss arising on redemption during the financial year is recognized through statement of profit and loss. The investment as at the balance sheet date are recognised in balance sheet as current investments at Net asset value and any gain/loss is recognized in statement of profit and loss.

1.2.3 Inventories

Inventories are valued on following basis.

(A) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects):- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects: - At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port:- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock as on 31^st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD): -At current year''s cost of production including plant''s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including

stock in cake form as on 31^st March, determined by technical assessment: -At current year''s cost of production including plant''s depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process: -The quantity of ferromanganese/silico manganese in process cannot be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag: - Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(B) Stores inventory

(Stores, spares, timber, explosives, fuel and lubricants and raw materials etc.): - At lower of the cost and net realisable value as per Ind AS 2. The basis for determining the cost is weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is examined and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at lower of cost determined on weighted average method and net realisable value. The stock of manganese ore at plant is valued at lower of current year''s cost of production and net realizable value, plus cost of transport and other charges, if any as per Ind AS 2. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials”.

(iii) Provision for obsolete Stores and Spares-

Provision is made for 70% of the value of obsolete stores and spares as at the end of every Financial Year. The same is reviewed at year end.

(iv) Provision for non-moving Stores and Spares

Provision is made for 10% of the value of stores and spares non-moving for more than three years at the end of every Financial Year. The same is reviewed at year end.

(C) Physical verification of inventories is carried out at the end of the year.

(D) Production and inventory of manganese ore as well as bulk raw materials and ferro manganese are determined as per weight volume ratio by the production/ technical department and the same are accounted for accordingly.

1.2.4 Trade receivables

The trade receivables include both secured and un-secured trade receivables that are considered good. The trade receivables covered by Letter of credit/Bank Guarantees are considered secured and good.

1.2.5 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term highly liquid investments (three months or less from the date of acquisition) that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in value.

1.2.6 Fair Value Measurements of financial instruments

The Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with the market participants to price the instrument. The Company''s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

1.2.7 Statement of cash flow

The statement of cash flow is prepared in accordance with the indirect method prescribed in Ind AS-7: ''Statement of cash flow''.

1.2.8 Stripping Cost Development stripping cost

Cost of removal of overburden and other mine waste material during the initial development of a mine/level in order to access mineral deposits are capitalized as asset. Depreciation on the same is computed based on useful life estimated by the management.

Production stripping cost

Overburden and other mine waste materials which are removed throughout the production phase of mine are charged off as expense.

1.2.9 Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

(a) Current income tax

Current income tax for the current period is measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.

(b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or losses at the time of the transaction. Deferred income tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred income tax liabilities are recognized for all taxable temporary differences. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

1.2.10 Government Grants

Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Where the Grant relates to an asset value, it is recognised as deferred income, and amortised over the expected useful life of the asset. Other grants are recognised in the statement of Profit & Loss concurrent to the expenses to which such grants relate/ are intended to cover.

Where the Company receives non-monetary grants, the asset and the grant are recorded gross at fair amounts and released to the income statement over the expected useful life and pattern of consumption of the benefit of the underlying asset.

1.2.11 Earnings per share

Basic earnings per share are computed using the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed dividing the net profit after tax by the weighted average number of equity considered for deriving basic EPS.

1.2.12 Exploration and evaluation

Exploration and evaluation expenditure of revenue nature is treated as research and development expenditure and charged to statement of profit and loss in the year of incurrence. However, expenditure of capital nature relating to research and development is treated in the same way as non-current assets.

The carrying value of capital expenditure is reviewed for impairment every year by the management.

1.2.13 Revenue from operations

Revenue from contracts with customers is recognized when control of the goods is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods.

All revenue from sale of goods is recognised at a point in time. Revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

Contract asset: A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.

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

(A) Manganese ore sales

(i) Debit notes / Credit notes are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, debit / credit notes are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the invoices for the same are raised in subsequent year.

(ii) Sales include amounts in respect of royalty, district mineral fund and national mineral exploration trust contributions but excludes GST and any other taxes/cess. Sales are reduced to the extent of the amount of price discount. The Company acts as a principal to its customers and all the performance obligation stands on the Company, therefore revenue is accounted on Gross basis.

(iii) Manganese ore fines, hutch, dust and HIMS rejects generated during operations are recognised as production as and when they are sold and corresponding sales is treated as revenue from mining products.

(B) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue from wind power is recognised over the time on the basis of energy injected into the grid, at tariff rate agreed in power purchase agreement.

(C) Obsolete stores, spares and scrap:

Revenue is recognised on the basis of control passes to the customer on the date of realisation.

1.2.14 Other income

(A) Interest income from sundry debtors is recognized as under -

(i) In as far as the realization is supported by letter of credit or Bank Guarantees through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit or Bank Guarantees through bank and directly billed by the company where its realization is uncertain, based on management''s experience, as and when actual realization made, is recognized as income.

(B) Interest income on deposits and advances is recognized on accrual basis.

(C) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

(D) Income from mutual fund is recongnised based on the NAV prevailing on the date of disposal or as on Balance sheet date through statement of profit and loss.

(E) Other receipts in the nature of income are accounted for on the basis of certainty of realisation, otherwise on receipt basis.

1.2.15 Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year''s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses”.

Electricity

Power generated at wind turbine generator and solar power plant''s units consumed at mine/plant, is charged to respective units at the cost of generation.

1.2.16 Sales tax, income tax, GST etc.

(a) In respect of sales tax, income tax, GST etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off / input tax credit is claimed on sales tax/GST on purchases. Difference between set off / input tax credit claimed and actual set off / input tax credit allowed is accounted for in the year in which the assessment order is received and accepted by the company.

1.2.17 Employee benefits

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity, leave encashment and post-retirement medical facilities are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are

recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss under OCI.

Benefits like medical facilities (in-patient) are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

(ii) Defined contribution plans

Defined contribution plans (provident fund, pension), post-employment benefit plans, under which the company pays fixed contributions into separate entities(funds). The company''s contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates.

The Company contributes to employee''s provident fund (EPF) at a specified rate approved by the Government to the exempted trust (partially exempted) under the defined contribution plan. The trust is paying interest on the contributions to members account, at a rate as approved by the Trustees.

Company contributes to Life Insurance Corporation of India at fixed rate of 10% approved by the Government, towards the superannuation benefit of employees (pension scheme).

1.2.18 V.R.S. expenditure

The company charges full amount of the expenditure in statement of profit and loss in the year of incurrence.

1.2.19 Accounting for subsidies from Welfare Commissioner (a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

1.2.20 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

1.2.21 Pre-paid expenses

Expenses are treated as prepaid only where amount exceed ?5.00 lakh in each case.

1.2.22 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case to case review of sundry debtors outstanding for more than two years Debts outstanding from private parties for more than three years or balance dues on account of levy of penalty which are considered doubtful of recovery are invariably provided.

1.2.23 Research and development expenditure

Research and development expenditure is charged to statement of profit and loss in the year of incurrence. However, expenditure of capital nature relating to research and development is treated in the same way as non-current assets.

1.2.24 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

1.2.25 Net present value for diversion of forest land for nonforest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

1.2.26 Restatement of prior period financials on material error/ omissions

The value of error and omissions is construed to be material for restating the opening balances of assets and liabilities and equity for the prior period presented if the amount in each case of prior period income/expenses exceeds 1% of the turnover of the previous year.

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Mar 31, 2018

1 Significant Accounting Policies

1.1 Basis of preparation of financial statements

(a) Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis (except for certain financial instruments, which are measured at fair values), the provisions of Companies Act, 2013 (‘Act’) to the extent notified and the guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

(b) Basis of measurement

The financial statements are prepared on historical cost basis except for the following assets and liabilities, which have been measured at fair value:-

- Certain financial assets and liabilities which are classified as fair value through profit and loss or fair value through other comprehensive income.

- Assets held for sale, at the lower of the carrying amounts and fair value less cost.

- Defined benefit plans and plan assets.

(c) Functional and presentation currency

The financial statements have been presented in Indian Rupees (Rs.) which is the Company’s functional currency. All financial information presented in Rs. have been rounded off to the nearest two decimals of lakhs unless otherwise stated.

(d) Use of estimates, assumptions and management judgements

In preparing the financial statements in conformity with Company’s accounting policies, management is required to make estimates and assumptions that affect reported amounts of assets and liabilities and the disclosure of contingent liabilities as at the date of the financial statements, the amount of revenue and expenses during the reported period and notes to financial statements. Actuals may differ from those estimates and the difference is recognized in the period in which the same is determined.

1.2 Summary of Significant Accounting Policies

A summary of the significant accounting policies applied in the preparation of financial statements is given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.

1.2.1 Accounting for assets

(a) Property, Plant and equipment

Recognition and measurement

The initial cost at cash price equivalent of property, plant and equipment purchased comprises its purchase price, including import duties and non-refundable purchase taxes, any directly attributable costs of bringing the assets to working condition and location.

Property, plant and equipment are maintained at cost less accumulated depreciation and impairment, if any.

(b) Intangible Assets

Recognition and measurement

Intangible assets are stated at cost less accumulated amortization and impairment, if any. Intangible Asset includes-

(a) Cost of leasehold rights obtained for periods, as specified in lease deed.

(b) Cost of purchase of SAP licenses, which is having useful life of 5 years.

(c) Cost of MS office software which is having useful life of 3 years and are amortised accordingly.

(c) Depreciation and amortization

Depreciation is calculated (i) on straight line method in case of wind turbine generators and (ii) on written down value method on all other assets, based on useful life of various assets, as provided in Schedule II to Companies Act, 2013, as amended from time to time. Depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land,is amortised over the period of lease.

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

(d) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are taken to statement of profit and loss of that year.

(e) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(f) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

(g) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

1.2.2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

No investments are listed and as such there is no diminution in the value of any investment except the investment in joint ventures for which adequate provision for loss is made.

1.2.3 Inventories

Inventories are valued on following basis.

(A) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects):- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects: - At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port: - At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/ shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :-At current year’s cost of production including plant’s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31stMarch, determined by technical assessment :- At current year’s cost of production including plant’s depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process:-The quantity of ferro manganese/silico manganese in process can not be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag :- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(B) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At lower of the cost and net realisable value as per Ind AS 2. The basis for determining the cost is weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is examined and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at lower of cost determined on weighted average method and net realisable value. The stock of manganese ore at plant is valued at lower of current year’s cost of production and net realizable value, plus cost of transport and other charges, if any as per Ind AS 2. Opening and closing stock of ore at the plant is grouped under the head “Stock of raw materials”.

(C) Physical verification of inventories is carried out at the end of the year.

(D) Production and inventory of manganese ore as well as bulk raw materials and ferro manganese are determined as per weight volume ratio by the production/technical department and the same are accounted for accordingly.

1.2.4 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other short-term highly liquid investments (original maturity less than 3 months) that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in value.

1.2.5 Fair Value Measurements of financial instruments

The Company applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with the market participants to price the instrument. The Company’s assumptions are based on observable data as far as possible, otherwise on the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm’s length transaction at the reporting date.

1.2.6 Stripping Cost

Development stripping cost

Cost of removal of overburden and other mine waste material during the initial development of a mine/level in order to access mineral deposits are capitalized as asset. Depreciation on the same is computed based on useful life estimated by the management.

Production stripping cost

Overburden and other mine waste materials which are removed throughout the production phase of mine are charged off as expense.

1.2.7 Income Tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

(a) Current income tax

Current income tax for the current period is measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.

(b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or losses at the time of the transaction. Deferred income tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.

Deferred income tax liabilities are recognized for all taxable temporary differences. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

1.2.8 Government Grants

Government grants are recognised when there is reasonable assurance that the Company will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognised in statement of profit and loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the grants are intended to compensate.

Where the Grant relates to an asset value, it is recognised as deferred income, and amortised over the expected useful life of the asset. Other grants are recognised in the statement of Profit & Loss concurrent to the expenses to which such grants relate/ are intended to cover.

Where the Company receives non-monetary grants, the asset and the grant are recorded gross at fair amounts and released to the income statement over the expected useful life and pattern of consumption of the benefit of the underlying asset

.

1.2.9 Earnings per share

Basic earnings per share are computed using the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed dividing the net profit after tax by the weighted average number of equity considered for deriving basic EPS.

1.2.10 Exploration and evaluation

Exploration and evaluation expenditure is treated as research and development expenditure and charged off to statement of profit and loss.

1.2.11 Revenue from operations – Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(A) Manganese ore sales

(i) Supplementary invoices are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, supplementary invoices are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the same are raised in subsequent year.

(ii) Sales include royalty, district mineral fund and national mineral exploration trust contributions.

(iii) Manganese ore fines, hutch, dust and HIMS rejects generated during operations are recognised as production as and when they are sold and corresponding sales is treated as revenue from mining products.

(B) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD,ferro manganese and slag include excise duty and education cess applicable thereon.

(C) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

1.2.12 Other income

(A) Interest income from sundry debtors is recognized as under –

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management’s experience, as and when actual realization made, is recognized as income.

(B) Interest income on deposits and advances is recognized on accrual basis.

(C ) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

1.2.13 Captive consumption

Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year’s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in “Manufacturing Expenses”.

Electricity

Power generated at wind turbine generator units consumed at mine/plant, is charged to respective units at the cost of generation.

1.2.14 Salestax, income tax, GST etc.

1.2 In respect of sales tax, income tax, GST etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

1.3 Set off / input tax credit is claimed on sales tax/GST on purchases. Difference between set off / input tax credit claimed and actual set off / input tax credit allowed is accounted for in the year in which the assessment order is received and accepted by the company.

1.2.15 Employee benefits

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity, leave encashment and post-retirement medical facilities are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss.

Benefits like medical facilities (in-patient) are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

(ii) Defined contribution plans

Defined contribution plans (provident fund, pension) are post-employment benefit plans, under which the company pays fixed contributions into separate entities(funds).The company’s contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates.

The Company contributes to employees provident fund (EPF) at a specified rate approved by the Government to the exempted trust (partially exempted) under the defined contribution plan. The exempted trust is paying interest on the contributions to members account, at a rate over and above the minimum rate of interest prescribed by the Government.

Company contributes to Life Insurance Corporation of India at fixed rate of 10% approved by the Government, towards the superannuation benefit of employees (pension scheme).

1.2.16 V.R.S. expenditure

The company charges full amount of the expenditure in statement of profit and loss in the year of incurrence.

1.2.17 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/ subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

1.2.18 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

1.2.19 Pre-paid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 1.00 lakh in each case.

1.2.20 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case to case review of sundry debtors outstanding for more than two years Debts outstanding from private parties for more than three years or balance dues on account of levy of penalty which are considered doubtful of recovery are invariably provided.

1.2.21 Research and development expenditure

Research and development expenditure is charged to statement of profit and loss in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

1.2.22 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

1.2.23 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

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Mar 31, 2017

1 Basis of preparation of financial statements

(a) These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial instruments which are measured at fair values, the provisions of Companies Act, 2013 (‘Act’) to the extent notified and the guidelines issued by the Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

(b) The company has adopted all the Ind AS’s and the adoption was carried out in accordance with IndAS 101 ( first time adoption of Ind AS). The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was previous GAAP. Reconciliations and descriptions of the transition effect have been summarized in the Notes to Financial Statements. Accordingly, the date prescribed for first time adoption of Ind AS’s being 1st April 2015 the financial statements are restated in line with Ind AS for previous year.

(c) Accounting policies have been consistently applied except in case of newly issued Accounting Standards which are initially adopted or a revision to an existing Accounting Standard which requires a change in accounting policy hitherto in use.

2 Accounting for assets

(a) Valuation of Property, Plant and equipment

Property, plant and equipment are maintained at cost less accumulated depreciation.

(b) Valuation of Intangible Assets

Intangible assets are stated at cost less accumulated amortization and impairment, if any

(c) Depreciation and amortization

Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, based on useful life of various assets, as provided in Schedule II to Companies Act, 2013, as amended from time to time. Depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of lease.

Intangible Asset includes

(a) Cost of Leasehold rights obtained for 20 years.

(b) Cost of acquisitions of SAP licenses, which is having useful life of 5 years

(c) Cost of MS office software is having useful life of 3 years ,

which are amortised accordingly.

(d) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(e) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(f) Expenditure on underground development undertaken at new mines or at existing mines, leading to infrastructural facilities of permanent nature (based on technical assessment), which is capitalized in the year of commencement of production, is amortized over period of ten years.

(g) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

(h) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

(i) Land measuring 761.60 Sq. Mtrs. belonging to the company is acquired by Nagpur Improvement Trust for its Integrated Road Development Plan. Writ petition filed by the company seeking compensation is admitted by the High Court, Nagpur. Pending outcome of writ petition, no adjustment is done in books.

(j) During the year under consideration no assets have been impaired.

3 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

No investments are listed and as such there is no diminution in the value of any investment except the investment in joint ventures for which adequate provision for loss is made.

4 Valuation of Inventories

Inventories are valued on following basis.

(A) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects):- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects:- At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port: - At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :-At current year’s cost of production including plant’s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31stMarch, determined by technical assessment:-At current year’s cost of production including plant’s depreciation(less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process:-The quantity of ferromanganese/silico manganese in process cannot be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag:- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(B) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At lower of the cost and net realisable value as per IND AS 2. The basis for determining the cost is weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at lower of cost determined on weighted average method and net realisable value. The stock of manganese ore at plant is valued at lower of current year’s cost of production and net realizable value, plus cost of transport and other charges, if any as per IND AS 2. Opening and closing stock of ore at the plant is grouped under the head “Stock of raw materials”.

(C) Physical verification of inventories is carried out at the end of the year.

(D) Production and inventory of manganese ore as well as bulk raw materials and ferro manganese are determined as per weight volume ratio by the production/technical department and the same are accounted for accordingly.

(E) Inventory of raw materials includes stock of manganese ore of 225.86 (18.53) MT valuing Rs. 12.80 (Rs.0.96) lakhs lying in ferro manganese plant site on 31.03.2017.

(F) For anticipated loss on disposal of obsolete stores/spares, provision of Rs.Nil (Rs.1.43) lakhs made in accounts is considered adequate.

5 Revenue from operations -Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/ lorry receipt/delivery challan.

(A) Manganese ore sales

(i) Supplementary invoices are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, supplementary invoices are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the same are raised in subsequent year.

(ii) Sales include royalty, district mineral fund and national mineral exploration trust contributions.

(B) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(C) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

6 Other income

(A) Interest income from sundry debtors is recognized as under –

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management’s experience, as and when actual realization made, is recognized as income.

(B) Interest income on deposits and advances is recognized on accrual basis.

(i) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

(ii) Other income includes Rs. 2323.07 lakhs receivable on account of refund due of electricity duty for ferro manganese plant for earlier years and Rs. 220.69 lakhs is adjusted against current year’s electricity dues totaling to Rs. 2543.76 lakhs in view of favorable verdict of Hon’ble Supreme Court of India.

7 Captive consumption

Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year’s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in “Manufacturing Expenses”.

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

8 Sales tax, income tax, etc.

a. In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

b. Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

c. Income tax deducted at source from interest and rent received by the company amounts toRs.1728.96 (Rs. 2440.46) lakhs. Tax deduction certificates are awaited in some cases.

d. Deferred tax assets/liability – Disclosures as per Ind AS12 : Income Taxes are as under.

e. Income tax expense comprises of current and deferred income tax of current year in the statement of profit and loss. Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

9 Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity and leave encashment are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss.

Benefits like medical facilities are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

Defined obligations - Disclosures as per Ind AS19 : Employee benefits are as under.

(ii) Defined contribution plans

Defined contribution plans (provident fund, pension) are post-employment benefit plans, under which the company pays fixed contributions into separate entities (funds).The company’s contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates.

Company, as per the consistently followed accounting policy, contributes to Employees Provident Fund (EPF) at a specified rate approved by the Government and to the exempted trust (partially exempted) under the defined contribution plan. The exempted trust is paying interest on the contributions to members account, at a rate over and above the minimum rate of interest prescribed by the Government.

Company contributes to Life Insurance Corporation of India at fixed specified rate as approved by the Government, towards the superannuation benefit of employees (pension scheme).

10 V.R.S. expenditure

The company charges full amount of the expenditure in statement of profit and loss in the year of incurrence.

11 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

12 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

13 Pre-paid expenses

Expenses are treated as prepaid only where the payments exceed Rs.1.00 lakh in each case.

14 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case to case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years or balance dues on account of levy of penalty which are considered doubtful of recovery are invariably provided.

15 Research and development expenditure

Research and development expenditure is charged to statement of profit and loss in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

16 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

17 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

18 The company has bought back 34812196 equity shares at a price of Rs.248 each amounting to Rs.86334.25Lakhs during the financial year under consideration.

19 Final Dividend on shares is recorded as a liability on the date of approval by the shareholders. Interim dividend is recorded as a liability on the date of declaration by the Company’s Board of Directors.

20 Cash flows are reported using the indirect method, in preparation of statement of cash flow.

(i) Documentation in respect of loans to employees is pending in some cases and is classified as unsecured.

Letters for year-end balance confirmation of trade receivables and trade payables have been sent to the parties. Out of total outstanding of Rs.28295.26 lakhs as on 31.03.2017, balances of Rs.11757.14 lakhs have been reconciled.

In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

---

Mar 31, 2016

1 Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at cost less accumulated depreciation.

(b) Depreciation and amortization

Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, based on useful life of various assets, as provided in Schedule II to Companies Act,2013, as amended from time to time. Depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land, is amortized over the period of lease.

Expenditure on underground development undertaken at new mines or at existing mines, leading to infrastructural facilities of permanent nature (based on technical assessment), which is capitalized in the year of commencement of production, is amortized over period of ten years.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period up to completion is capitalized.

(f) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3 Valuation of closing stock Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects):- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects:- At cost per tonne on jigging/processing, transportation, etc., allo-catedontechnicalestimatesornetrealizablevalue,whicheverisless.

(iii) Manganese ore at port:- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock as on 31^st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :-At current year''s cost of production including plant''s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31^stMarch, determined by technical assessment:-At current year''s cost of production including plant''s depreciation(/ess realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process:-The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag:- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year''s cost of production or net realizable value, whichever is less, p/us cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

4 Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/ lorry receipt/delivery Chillan.

(a) Manganese ore sales

(i) Supplementary invoices are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, supplementary invoices are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the same are raised in subsequent year.

(ii) Sales include royalty, district mineral fund and national mineral exploration trust contributions.

(b) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5 Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under -

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management''s experience, as and when actual realization made, is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6 Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year''s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7 Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8 Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plans

Post-employment benefits like gratuity and leave encashment are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss.

Benefits like medical facilities are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

(ii) Defined contribution plans

Defined contribution plans (provident fund, pension) are post-employment benefit plans, under which the company pays fixed contributions into separate entities(funds).The company''s contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates.

9 V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realization and the difference, if any, is adjusted on settlement of the claims.

12 Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs.1.00 lakh in each case.

13 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14 Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

16 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt to necessary permission from the concerned authorities.

17 Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/crediting prior period adjustments account.

18 Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss statement or by specific mention in the Directors'' Report.

---

Mar 31, 2015

1 Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at cost less accumulated depreciation.

(b) Depreciation and amortization

Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, based on useful life of various assets, as specified in Schedule II to Companies Act, 2013, as amended from time to time. Depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land is amortised over the period of lease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

(f) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3 Valuation of closing stock Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects :- At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :- At current year's cost of production including plant's depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31stMarch, determined by technical

assessment:-At current year's cost of production including plant's depreciation(less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process :- The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and, hence, no value is assigned.

(c) Stock of slag Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year's cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

4 Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoices are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, supplementary invoices are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the same are raised in subsequent year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5 Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under -

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management's experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6 Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year's cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7 Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8 Employee benefits :

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the statement of profit and loss in the year in which the related service is rendered.

(b) Post-employment benefits

Post-employment benefits consist of benefits like provident fund, gratuity, leave encashment, pension and medical facilities.

(i) Defined benefit plan

Post-employment benefits like gratuity and leave encashment are recognized as an expense in the statement of profit and loss in the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of these post-employment benefits are charged to the statement of profit and loss.

Benefits like medical facilities are covered by an insurance policy and amount of insurance premium is charged to the statement of profit and loss in the year in which it is incurred.

(ii) Defined contribution plan

Defined contribution plans (provident fund, pension) are post-employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The company's contribution to defined contribution plans is recognized in the statement of profit and loss of the year to which it relates

9 V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10 Accounting for subsidies from Welfare Commissioner (a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/ subsidy is received.

(c) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

12 Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 1.00 lakh in each case.

13 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14 Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

16 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

17 Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/crediting prior period adjustments account.

18 Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss statement or by specific mention in the Directors' Report.

---

Mar 31, 2014

1 Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at cost less accumulated depreciation.

(b) Depreciation

Company is charging 100% depreciation on fixed assets up to the value of Rs. 5000 as prescribed in Schedule XIV to Companies Act. Such assets are fully depreciated in the year of addition, irrespective of the date of addition.

Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from time to time, on pro- rata basis. However, depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of lease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specifi c projects, identifi able as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specifi c assets incurred during construction period upto completion is capitalized.

(f) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is refl ected at the recoverable amount.

2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3 Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fi nes, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fi nes, hutch dust and HIMS rejects :- At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock in process as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :- At current year''s cost of production including plant''s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31st March, determined by technical assessment :- At current year''s cost of production including plant''s depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process :- The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and hence, no value is assigned.

(c) Stock of slag :- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year''s cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

4 Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoices are raised for variation in quality on receipt of laboratory analysis reports. Analysis reports received in subsequent year up to a cut-off date are considered in year of dispatch. Accordingly, supplementary invoices are raised and accounted for in the same year. In respect of analysis reports received after the cut-off date, the same are raised in subsequent year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5 Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under –

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management''s experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6 Captive consumption

Manganese ore

Manganese ore, fi nes, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year''s cost of production and fi nes/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7 Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8 Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post-employment benefits

(i) Defi ned benefit plans

Post-employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the profi t and loss account

(ii) Defi ned contribution plans

Defi ned contribution plans are post-employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The company''s contribution to defi ned contribution plans is recognized in the profit and loss statement of the year to which it relates.

9 V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11 Claims by the company

Amount of claims lodged with insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

12 Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 1.00 lakh in each case.

13 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14 Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

16 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

17 Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/crediting prior period adjustments account.

18 Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss account or by specific mention in the Directors'' Report.

---

Mar 31, 2013

1 Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at cost less accumulated depreciation.

(b) Depreciation

Company is charging 100% depreciation on fixed assets up to the value of Rs. 5000 as prescribed in Schedule XIV to Companies Act. Such assets are fully depreciated in the year of addition, irrespective of the date of addition.

Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and

(ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from time to time, on pro-rata basis. However, depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of lease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

(f) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that asset may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

2 Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3 Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects :- At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD] (including stock in process as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :- At current year''s cost of production including plant''s depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31st March, determined by technical assessment :- At current year''s cost of production including plant''s depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b)Stock in process :- The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and hence, no value is assigned.

(c) Stock of slag :- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year''s cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials"

4 Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoice are raised for variation in quality and/or quantity on receipt of analysis report. These bills are raised in the year of receipt of analysis report and the adjustment is made in the same year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/silico manganese/ slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5 Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under -

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management''s experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6 Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year''s cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses"

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7 Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8 Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post-employment benefits

(i) Defined benefit plans

Post-employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the profit and loss account

(ii) Defined contribution plans

Defined contribution plans are post- employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The company''s contribution to defined contribution plans is recognized in the profit and loss statement of the year to which it relates.

9 V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10 Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11 Claims by the company

Amount of claims lodged with insurance company/ railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

12 Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 1.00 lakh in each case.

13 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14 Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

16 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

17 Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/ crediting prior period adjustments account.

18 Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss account or by specific mention in the Directors'' Report.

---

Mar 31, 2012

1. Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at cost less accumulated depreciation.

(b) Depreciation

Company is charging 100% depreciation on fixed assets up to the value of Rs 5000 as prescribed in Schedule XIV to Companies Act. Such assets are fully depreciated in the year of addition, irrespective of the date of addition.

Depreciation is calculated

(i) on straight line method in case of Wind Turbine Generators and

(ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from time to time, on pro-rata basis. However, depreciation for full month is calculated when any asset is first put to use on any day during that month.

Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of lease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

(f) Impairment of assets

Company assesses, at each balance sheet date, whether there is any indication that assets may be impaired. If any such indication exists, Company estimates the recoverable amount of assets. If such recoverable amount is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the profit and loss account. If there is any indication that previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount.

2. Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3. Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects: At cost per tonne on jigging/ processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD]

(including stock in process as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD): At current year's cost of production including plant's depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31st March, determined by technical assessment : At current year's cost of production including plant's depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process : The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and hence, no value is assigned.

(c) Stock of slag : Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials): At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year's cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

4. Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoice are raised for variation in quality and/or quantity on receipt of analysis report. These bills are raised in the year of receipt of analysis report and the adjustment is made in the same year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5. Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under –

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management's experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6. Captive consumption

Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year's cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7. Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8. Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post-employment benefits

(i) Defined benefit plans

Post-employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the profit and loss account

(ii) Defined contribution plans

Defined contribution plans are post- employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The company's contribution to defined contribution plans is recognized in the profit and loss statement of the year to which it relates.

9. V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10. Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11. Claims by the company

Amount of claims lodged with insurance company/ railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

12. Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs 1.00 lakh in each case.

13. Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14. Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15. Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves of all mines. The same are provided in accounts, on year to year basis, after taking into consideration overall production of all mines.

16. Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

17. Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/ crediting prior period adjustments account.

18. Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss account or by specific mention in the Directors' Report.

---

Mar 31, 2011

1. Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at original cost.

(b) Depreciation

Company is charging 100% depreciation on fixed assets up to the value of Rs. 5000 as prescribed in Schedule XIV to Companies Act. Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from time to time, on pro-rata basis. However, depreciation for full month is calculated when any asset is first put to use on any day during that month. Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of lease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest on loans (including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

2. Investments

Long term investments in shares are carried at cost. Diminution in value, if any, is provided for, if it is not of temporary nature.

3. Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects :- At cost per tonne on jigging/ processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/ shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide [EMD]

(including stock in process as on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD) :- At current year's cost of product ion including plant's depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/silico manganese including stock in cake form as on 31st March, determined by technical assessment :- At current year's cost of production including plant's depreciation (less realizable value of slag) or net realizable price, whichever is less.

(b) Stock in process :- The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and hence, no value is assigned.

(c) Stock of slag :- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and, accordingly, valued at net realizable price.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials) :- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current year's cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

4. Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoice are raised for variation in quality and/or quantity on receipt of analysis report. These bills are raised in the year of receipt of analysis report and the adjustment is made in the same year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/silico manganese/slag sales

Sales of EMD, ferro manganese and slag include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited

Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

5. Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under –

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on management's experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off, proceeds are taken as miscellaneous receipt of that year.

6. Captive consumption Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current year's cost of production and fines/ HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

7. Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amount payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

8. Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post-employment benefits

(i) Defined benefit plans

Post-employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined by using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the profit and loss account.

(ii) Defined contribution plans

Defined contribution plans are post- employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The company's contribution to defined contribution plans is recognized in the profit and loss statement of the year to which it relates.

9. V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

10. Accounting for subsidies from Welfare Commissioner

(a) Labour quarters

The company has constructed / under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc., under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

11. Claims by the company

Amount of claims lodged with insurance company/ railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted on settlement of the claims.

12. Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 100000 in each case.

13. Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

14. Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

15. Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves. The same are provided in accounts, on year to year basis, after taking into consideration the production.

16. Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities.

17. Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/ crediting prior period adjustments account.

18. Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss account or by specific mention in the Directors' Report.

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Mar 31, 2010

1 Accounting for fixed assets

(a) Valuation of fixed assets

Fixed assets are maintained at original cost.

(b) Depreciation

Company is charging f 00% depreciation on fixed assets up to the value of Rs. 5000 as prescribed in Schedule XIV to Companies Act. Depreciation is calculated (i) on straight line method in case of Wind Turbine Generators and (ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from time to time, on pro-rata basis. However, depreciation for full month is calculated when any asset is first put to use on any day during tint month.

Cost of leasehold land, including net present value of diverted forest land, is amortised over the period of tease.

(c) Write-off losses on assets

All assets dismantled/discarded are written off assuming that scrap value for the same is Nil. If and when such discarded assets are disposed off partially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenditure during construction period

All expenditure during construction period on specific projects, identifiable as relating to such projects, is debited to me said projects up to the date of completion and commissioning thereof.

(e) Interest during construction period

Interest onloans, including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

2 Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganese ore of all grades (except fines, hutch dust and HIMS rejects) :- At cost at mines including depreciation on mine assets or net realizable value, whichever is less.

(ii) Manganese ore fines, hutch dust and HIMS rejects :- At cost per tonne on jigging/processing, transportation, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese ore at port ¦:-¦ At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, sampling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excess when compared with overall book stocks. As and when ore is actually dispatched, excess or shortage after railing/shipment against each stack is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-oxide (including stock in process on 31st March at different stages of production, ascertained by technical estimation as to percentage of completed units of EMD):- At current years cost of production including EMD planfs depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganese/si lico manganese including stock in cake form on 31st March, determined by technical assessment:- At current years cost of production, including ferro manganese plants depreciation or net realizable value, whichever is less.

(b) Stock in process :- The quantity of ferro manganese/silico manganese in process cannot be weighed, seen or assessed and hence, no value is assigned.

(c) Stock of slag :- Slag is a molten mass of impurities generated during manufacture of ferro manganese, which is treated as scrap and. accordingly, not valued. It is accounted for as other income, in the year in which sale takes place.

(b) Stores inventory (Stores, spares, timber, explosives, fuel and lubricants and raw materials):- At cost on weighted average method.

(i) Physical verification of all stores, spares, etc., is conducted at the end of each year. Difference between physical stock and book stock is investigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of terro manganese plant, stock of raw materials, except manganese ore at plant, is valued at cost on weighted average method. The stock of manganese ore at plant is valued at current years cost of production or net realizable value, whichever is less, plus cost of transport and other charges, if any. Opening and closing stock of ore at the plant is grouped under the head "Stock of raw materials".

3 Sales

Sales invoices are raised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganese ore sales

(i) Supplementary invoice are raised for variation in quality and/or quantity on receipt of analysis report. These bills are raised in the year of receipt of . analysis report and the adjustment is made in the same year.

(ii) Sales include royalty.

(b) EMD/ferro manganese/stlico manganese sales

Sales of EMD and ferro manganese include excise duty and education cess applicable thereon.

(c) Sale of electricity to M. P. Electricity Distribution Company Limited Revenue is recognized on the basis of energy injected into grid for sale, at tariff rate agreed in power purchase agreement.

4 Other income

(a) Interest income from sundry debtors is recognized in line with AS-9 of the Institute of Chartered Accountants of India as under -

(i) In as far as the realization is supported by letter of credit through bank from the debtors, where there is certainty of its realization, the recognition is made on accrual basis.

Interest billed to customers for credit terms beyond current financial year is recognized in the year to which it pertains.

(ii) In as far as the realization is not supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on managements experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accrual basis.

(c) Memorandum records have been kept in respect of replaced/worn-out parts/scrap capital items. When they are disposed off. proceeds are taken as miscellaneous receipt of that year.

5 Captive consumption

Manganese ore

Manganese ore. fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at currenU years cost of production and fines/HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore issued is reduced from ore raising/operating expenses and is considered as raw material consumption in "Manufacturing Expenses".

Electricity

Power generated at wind turbine generator units and consumed at mine/plant, are charged to respective units at the cost of generation.

6 Sales tax, income tax, etc.

(a) In respect of sales tax, income tax. etc., the amounts payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, irrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accepted by the company.

7. Employee benefits:

(a) Short term employee benefits

Short term employee benefits are recognized as expense at the undiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post-employment benefits

(i) Defined benefit plans

Post-employment and other long term employee benefits are recognized as an expense in the profit and loss account for the year in which the employee has rendered services. The expenses are recognized at the present value of the amounts payable, determined using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long term benefits are charged to the profit and loss account

(ii) Defined contribution plans

Defined contribution plans are post-employment benefit plans, under which the company pays fixed contributions into separate entities (funds). The companys contribution to defined contribution plans is recognized in the profit and loss statement in the financial year to which it relates.

8. V.R.S. expenditure

The company charges full amount of the expenditure in profit and loss account in the year of incurrence. 9. Accounting for subsidies from Welfare Commissioner

(a) Labour quartets

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters are constructed is surrendered to the Welfare Commissioner and the property (quarters constructed) vests with the Welfare Commissioner, the entire expenditure incurred by the company is charged to and the subsidy, received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc.. under welfare schemes is debited to relevant asset account in the year in which expenditure is incurred. Amount of subsidy received is credited to the same asset head in the year of receipt and depreciation is then charged on such reduced value of the asset from that year.

10 Claims by the company

Amount of claims lodged with insurancexompany/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainty of their realisation and the difference, if any, is adjusted oh settlement of the claims.

11 Prepaid expenses

Expenses are treated as prepaid only where the payments exceed Rs. 100000 in each case.

12 Provision for doubtful debts

Provision for bad and doubtful debts is made based on a case-to-case review of sundry debtors outstanding for more than two years. Debts outstanding from private parties for more than three years are invariably provided.

13 Research and development expenditure

Research and development expenditure is charged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

14 Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available ore reserves. The same are provided in accounts, on year to year basis, after taking into consideration the annual production.

15 Net present value for diversion of forest land for non-forest purposes

The liability is recognized on receipt of necessary permission from the concerned authorities. -

16 Prior period expenses

Corrections of fundamental errors of commission or omission in earlier year(s) are done by debiting/crediting prior period adjustments account.

17 Significant events occurring after balance sheet date

Impact of significant events after the date of balance sheet and approval thereof is given effect to either by moderation of the balance sheet and profit and loss account or by specific mention in the Directors Report.

---

Mar 31, 2009

I. According for fixed assets

(a) Valuation of fixed assets:

Fixed assets are maintained at original cost.

(b) Deprecision:

Company is charging 100% depreciation on fixed assets up to the value of Rs. 5000 as prescribed in Schedule XIV to Companies Act. Depreciation is calculated

(i) on straight line method in case of Wind Turbine Generation and (ii) on written down value method on all other assets, at the rates prescribed by the Schedule XIV, as amended from to time. on pro-rata basis.

However, depreciation for full month is calculated when any assets is first put to use on any day during that month.

Cost of leasehold land is amorlised over the period of lease.

(c) Write-off leases on assets:

All assets dismanted/discarded are written off assuming that scrap value for the same is Nil. if and when such discarded assets are disposed off pertially or fully, the amounts realized during the year on account of sale are credited to profit and loss account of that year.

(d) Expenduture during construction period:

All exponditure during constuction period of specific projects, identifiable as relating to such projects, is debited to the said projects up to the date of compistion and commissioning thereof.

(e) Interest during construction period:

Interest on loans (Including other related financing costs on loans) pertaining to specific assets incurred during construction period upto completion is capitalized.

2.Valuation of closing stock

Inventories are valued on following basis.

(a) Finished goods

(i) Manganess one of all grades (except, fines, hutch dust and HMS rejects):- At cost at mines including depreciation on mine assets or net reatizable value, whichever is less.

(ii) Manganess one fines, hutch dust and HMS rejects:- At cost per tonne on igging/processing, transportarion, etc., allocated on technical estimates or net realizable value, whichever is less.

(iii) Manganese one at part :- At landed cost at the port or net realizable value, whichever is less. Landed cost includes freight, unloading charges, samplling charges, etc.

Difference between physical and book stocks are not adjusted, so long as the overall position of stocks at mines is found to be excass when compared with overall bock stocks. As and when one is actually dispatched, excess of shortahe after railling/shipment against each stock is ascertained and the same is accounted for in the books of the company in that year.

(iv) Electrolytic manganese di-aside (including stock in process on 31st March at different stages of produtio, ascertained by technical estimation as to percentage of completed units of EMD) :- At current years cost of production including EMD plants depreciation or net realizable value, whichever is less.

(v) (a) Ferro manganess/silico manganess including stock in cake from on 31st March, determined by technical assessment :- At At current years cost of production including ferro manganese plants depreciation or net realizable value, whichever is less.

(b) Stock in process:- The quality of feno manganese/silico manganese in process cannot be weighed, seen of assessed and hence, no value is assigned.

(c) Stock of slag:- Slag is a molten mass of impurities produced in manufacture of ferro manganese and is treated as scrap. Due to uncertainties involved in its salw, it cannot be valued. Hence, it is accounted for in the year in which sale takes places and shown under other income.

(b) Stores inventory (Stores, spares, limber, explosives, fuel and lubricants and raw materials) :- At cost om weighted average method.

(i)Physical verification of all stones, spares, etc., is conducted at the and of each year. Difference between physical stock and bock stock is inventigated and necessary adjustments are carried out in the books of accounts.

(ii) In case of ferro manganess plant, stock of raw materials, except manganese are at plant, are valued at cost on weighted average method. The stock of manganess one at plant is valued at current years cost of production or net realizable value, whichever is less, plus cost of transport and other charges, If any, Opening and closing stock of one at the plant is grouped under the head "Stock of raw materials".

3. Sales

Sales Invoices are reised and revenue is recognized in the books of accounts only after dispatch of goods based on railway receipt/lorry receipt/delivery challan.

(a) Manganess Ore sales:-

(I) Supplementary Invoice are raised for variation in quality and/or quality on receipt of analysis report. These bills are raised in the year of receipt of analysis report and the adjustment is made in the same year.

(ii) Sales include royality.

(b) EMD/Ferro manganise/stillce manganase sales:-

Sales of EMD and Ferro manganese include excise duty and education cess applicable thereon

(c) Sales of Bectricity to Utilities:

Revenue is recognized on the basis of Energy injecte into grid, at tarift rate agreed in the power purchase agreement.

4. Other Income

(a) Interest Income from sunday debtors is recohnized in line with AS-9 of the Institute of Chartered Accountants of India as under-

(i) In as for as the realization is supported by letter of credit through bank from the deblors, where these is certainty of its realization, the recognition is made on accnual basis.

(ii) In as for as the realization is supported by letter of credit through bank and directly billed by the company where its realization is uncertain, based on managements experience, as and when actual realization made is recognized as income.

(b) Interest income on deposits and advances is recognized on accual basis.

(c) Memorandum records have been kept in respect of replaced/wom-out parts/scrap capital items. When they are disprseed off, proceeds are taken as miscallanceous receipt of that year.

5. Captive consumption

Manganese ore

Manganese ore, fines, HIMS rejects issued as raw material for production of EMD/ferro manganese is valued at current years cost of production and fines.HIMS rejects are valued at per tonne rate, as adopted for valuation of stock. Consumption of the ore is accounted on average cost. Value of ore lssued is reduced from ore raising/operating expenses and is cosidered as raw material consumption in "Manufacturing Expenses".

6. Sales tax, income tax, etc.

(a) In respect of sales tax, income tax, etc., the amounts payable or receivable as per assessment order is accounted for in the year in which the said order is received and accepted by the company, inrespective of the year to which the order relates.

(b) Set off is claimed on sales tax on purchases. Difference between set off claimed and actual set off allowed is accounted for in the year in which the assessment order is received and accounted for by the company.

7. Employes Benefits:

(a) Short term Employes Banefits:

Short term employes benefits are recognized as expense at the undeiscounted amount in the profit and loss account in the year in which the related service is rendered.

(b) Post Employment Benefits:

(i) Defined benefit plans

Post employment and other long term employee benefits are recognized as an expense in the profit an expense in the profit and loss account for the year in which the employes has rendered services. The expenses are recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the profit and loss account.

(ii) Defined contribution plams

Defined contribution plans are post- employment benefit plans, under which the company pays fixed contributions into seperate enbities (funds). The companys contribution to defined contribution plans are recognized in the profit and loss statement in the financial year to which they relate.

8. Y.R.S. Experatiture

The company charges full amount of the expenditure in profit and loss account in the year of incurrence.

9. Accounting for subsities from Welfore Commissioner

(a) Labour quarters

The company has constructed/under construction some labour quarters, for which the company is receiving subsidy from the Welfare Commissioner. Since the land on which such quarters and constructed is surrendered to the Welfare Commissioner and the property (quarter constructed) wests with the Welfare Commissioner, the entire expenditure incurned by the company is charged to and the subsidy received is also credited to revenue in the year in which the expenditure is incurred/subsidy is received.

(b) Welfare assets

Entire expenditure for acquisition of assets like school bus, ambulance, water supply scheme, etc, under welfare schemes is debited to relevent assets account in the year in which expenditurs is incurred. Amount of subsidy received is credited to the same assets head in the year of receipt and depreciation is then charged on such reduced valued of the asset from that year.

10. Claims by the company

Amount of claims lodged with Insurance company/railways are accounted for on the basis of amount claimed during the year on assessing reasonable certainly of their realisation and the differance, if any, is adjusted on settlement of the claims.

11. Procision for doubtful debts

Provision for bed and doubtful debts is made based on a case-to-case review of sunday debtors outstanding for more than two years. Debts cutstanding from privats parties for more than three years are invariably provided.

12. Research and development expenditure

Research and development expenditure is chrged to profit and loss account in the year of incurrence. However, expenditure on fixed assets relating to research and development is treated in the same way as other fixed assets.

13. Mine closure expenditure

Financial implications towards final mine closure plans under relevant Acts and Rules are technically estimated, based on total available one reserves. The same is provided in accounts, on year to year basis, after taking into consideration the annual production.

14. Net present value for diversion of forest land for non-forest purposes

The liability is recognised on receipt of necessary permission from the concerned authorities and this amount is amirised over the lease period of the respective leases.

15. Prior perfod expernses

Conections of fundamental errors of commission of amission in earlier year(s) are done by debittiong/creditiong prior period adjustment account.

16. Significant events accurring after balance sheet date

Impact of significant events after the date of balance sheet and approvel thereof is given effects to either by moderation of the balance sheet and profit and loss accounts or by specific mention in the Directors Report.

17. Prepaid Expenses

Prepaid expenses of an item expenses of Rs. 1.00.000/- and below are charged to revenue in the year of payment.