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
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
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.
Defined obligations - Disclosures as per Ind-AS19 : Employee benefits are as under -
A Defined Contribution Plans :
(a) Providend Fund : The Company pays fixed contribution at predetermiend rates to Provident Fund Trust, which invests the funds in permitted securities.
(b) Pension Fund : The Company pays fixed contribution to MOIL Group Superannuation Cash Accumulation Scheme (Defined Contribution) [MOIL GSCA (DC)] Trust which invests the funds in LIC of India.
B Defined Benefit Plans :
(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 recongnised on the basis of actuarial valuation. Eligible amount is paid to the employees on separation by the Trust.
(b) Post Retirement Medical Benefit : The benefit is available to retired employees and their spouse who have opted for the benefit. Liability for the same is recognised on the basis of actuarial valuation.
Characteristics of defined benefit plans:
Defined Benefit Gratuity plan: - To provide funding to cater gratuity benefit to employees as per provisions of The payment of Gratuity Act 1972. Gratuity is calculated as per the provisions of said Act and is limited to maximum H 20 lakhs.
Defined Benefit Leave encashment plan: - To provide funding for terminal encashment benefits of accumulated leave to the credit of employees account at the rate of last drawn salary which is restricted to maximum 300 days leave balance, as per the leave Rules of the Company.
Assumptions and limitations:
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
Note 2.26 Provisions (Contd..)
The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date relevant to currency of benefit payments for a term that matches the liabilities. Salary growth rate is company's long term best estimate as to salary increases and takes account of inflation, seniority, promotion, business plan, HR policy and other relevant factors on long term basis as provided in relevant accounting standard.
Risk:
Management has entrusted four approved fund managers namely Life Insurance Corporation of India, Bajaj Allianz Life Insurance Co. Ltd., Birla Sun Life Insurance and ICICI Prudential Life Insurance for managing the fund for Gratuity i.e. 60% is to be deposited with LIC and maximum 40% with private insurers and Life Insurance Corporation of India for leave encashment. The performance of fund, assumptions, discount rates and net assets value is evaluated for the reporting period by the management. The fund managers are regulated by IRDA and its investment norms specified by Government of India as per Gazette Notification of 2016 as mentioned below. The fund managers follow policies to mitigate risk which includes review of credit rating, exposure concentration, risk of tolerance levels, regulatory compliance standards, standard operating procedure etc. Since majority of funds invested by fund managers are in Government securities and having sovereign guarantees by Government of India, the risk is minimal.
Risk management framework
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Company's risk management framework. The Board of Directors has established the Risk Management framework for developing and monitoring the Company's risk management policies. The Risk management committee regularly reports its activities to the Board of Directors through Audit Committee on regular basis.
The Company's risk management framework is established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management framework and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Board of Directors through Audit Committee monitors the compliance with the Company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company.
A Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks.
(a) Trade receivables
The Company sales are generally based on advance payments and through letters of credit/ Bank guarantees. The trade receivables in the books are mainly on account of credit sales to M/s SAIL MEL Limited (Chandrapur),SAIL Bhilai Steel Plant and Salem Steel, CPSEs under the Ministry of Steel.
Credit loss for trade receivables under simplified approach is detailed as per the below tables
(b) Financial instruments and cash deposits
Credit risk from balances with banks is managed by the Company's treasury department in accordance with DPE guidelines & Company's investment policy. The credit risk of each investment is reviewed by the Company's Board of Directors through Audit Committee on regular basis. The credit risk mitigation measures are in placed and followed regularly.
B. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company's reputation.
Typically the Company ensures that it has sufficient cash on demand to meet the current and the expected operational expenses , including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.
C. Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
(i) Foreign currency risk :
Since majority of the company’s operations are being carried in India and since all the material balances are denominated in its functional currency, the company does not carry any material exposure to currency fluctuation risk.
(ii) Interest rate risk :
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the interest rates on fixed deposits are fixed, the company does not have any interest rate risk. Further as the Company does not have any borrowings. Hence, there is no interest rate risk.
3.4 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.
3.5 I n accordance with paragraph 117 of Ind AS 1 Presentation of Financial Statements, we have made disclosures regarding significant accounting policies, the measurement basis in Accounting policy No.1.1 (b) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements.
3.6 Hedge accounting is not applicable.
(a) Risk management
The primary objective of the Company's capital management is to maximise the shareholder value. The Company’s objectives when managing the capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.
The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board of Directors and senior management monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders' equity.
For the purpose of the Company's capital management, capital(Equity) includes issued equity share capital and other equity attributable to the equity holders. The company has no external borrowings as on 31st March 2024.
3.12 Expenditure of capital nature for exploration- MOIL GMDC JVC yet to be incorporated: moil has entered into MoU with Gujrat Mineral Development Corporation Limited (GMDC), a Gujrat State Enterprise, in October,2019 to explore the possibility of mining of manganese ore in the state of Gujrat. For detailed exploration and analysis, MOIL has also entered into MoU with Mineral Exploration Corporation Limited (MECL), a CPSE under administrative control of Ministry of Mines. Exploration of core drilling has already been completed and results indicate availability of manganese ore quantum of about 9.51 million(MT). After completion of exploration work, techno-Economic Feasibility Report (TEFR) has been prepared which indicates that the project is technically and economically viable, considering the viability of project, the Board has approved the proposal for formation of JV with GMDC. Department of Investment and Public Assets Management (DIPAM) and NITI Ayog have approved the proposal for the establishment of Joint Venture (JV) Company between MOIL limited and Gujrat Mineral Development Corporation Limited (GMDC). Now, MOIL is in the process of singing a Joint Venture (JV) agreement with GMDC. MOIL has incurred H 765.27 lakhs (H 754.02 lakhs) in this project till date. As MOIL GMDC JVC is yet to be incorporated, consolidated financial statement is not required to be prepared.
3.13 Tripartite MoU with Govt. of Madhya Pradesh and Madhya Pradesh State Mining Corporation Limited: moil has signed a tripartite MoU with Govt. of Madhya Pradesh and Madhya Pradesh State Mining Corporation Limited to explore the manganese-bearing area in the State of Madhya Pradesh. Govt. of Madhya Pradesh has reserved 487 sq. km and 850 sq. km areas in the Chhindwara and Balaghat Districts respectively for exploration. MOIL has completed exploration core drilling in the Chhindwara area where manganese ore has been established in one area. Exploration in Balaghat District is under process. MOIL has incurred H 894.04 lakhs (H 104.33 lakhs) in this project till date.
Exploration by core drilling has been completed in Chhindwara area out of which two areas have got positive intersection of manganese ore. Out of 16 identified blocks in Balaghat, MOIL has completed exploration in two blocks, out of which one area has got positive intersection of manganese ore. Further, the Board has also accorded approval for signing of JV agreement with Madhya Pradesh State Mining Corporation Limited.
3.14 MoU with Chhattisgarh Mineral Development Corporation Limited (CMDC): moil Limited has signed MoU with Chhattisgarh Mineral Development Corporation to explore the possibility of manganese and associate minerals in the State of Chhattisgarh. Govt. of Chhattisgarh has reserved 218 sq. km. in Balrampur District for exploration. MOIL is going to start exploration shortly.
3.15 Amalgamation of Munsar-Parsoda Mining Lease: Govt. of Maharashtra has granted the amalgamation of the following mining lease of Munsar mine over as area of 193.27 Ha. In Village Munsar, Chargaon, Khairi, Kandri Parsoda,-Tehsil Ramtake, District Nagpur for mining of manganese ore for a period up to 31.05.2032 vide Order No. MNG-0123/C.R.18/Ind-9(A), dated 18.01.2024 and corrigendum dated 25.01.2024.
3.16 Contingent liabilities and Commitments :
(i) Contingent Liabilities
(a) Claims against the company not acknowledged as debts -
Disputed statutory demands (Income tax, entry tax, central sales tax and value added tax, service tax, central excise duty and employees' profession tax) H 48117.08 lakhs (H 44992.28 lakhs).
(b) Other money for which the company is contingently liable Other claims - legal cases, etc. H 12577.11 lakhs (H 5794.56 lakhs).
(ii) Capital Commitment
Estimated amount of contracts remaining to be executed on capital account and not provided for is H 26392.97 lakhs (H 37,771.85 lakhs). Advance paid for contracts is H 3393.23 lakhs (H 2359.59 lakhs).
(iii) Other Commitments:
Estimated amount of long term contractual revenue services covered under other commitments remain to be executed and not provided for is H 17,441.52 lakhs (H 14,328.45 lakhs).
3.17 Land at Bobbili : The land at Bobbili was purchased by MOIL from APIIC for setting up of Ferro/Silico Manganese plant. A Joint Venture Company was formed with RINL. Techno economic feasibility report (TEFR) was prepared by MECON in 2009. Based on the viability of project as suggested in the TEFR certain initial formalities such as environmental clearances, soil testing etc. were carried out and global tenders were floated for supply of main furnace and equipment. The tenders could not be finalized due to technical reasons and in the interim period the tariff of electricity units was increased from H 2.50/kwh to H 5.00/kwh by the A.P Electricity Board. In view of the above, revised TEFR was prepared by MECON in 2013 which indicated that the project was not be viable in view of the power tariff increase and the reduction in market prices of the Ferro/Silico Manganese. The abnormal increase in power tariff caused the delay in implementation of the project for such a long time. Management has made sincere efforts to implement the project. However, the project could not be materialized.
MOIL requested APIIC for allotment of land at Appiconda, Vishakhapatnam by swapping arrangement against land purchased by MOIL at Bobbili. Even after physical meeting with APIIC officials, till date no communication has been received from APPIC. Hence, financial impact of such swapping is not ascertainable. The management is exploring the possibility to use the land for alternate purpose depending upon viability. In view of above, H 908.73 lakhs (cost of land H 898.92 lakhs and wdv of Building H 9.81 lakhs) has been considered as contingent liability under Note No.3.16(i) (b).
3.18 Bank guarantees are issued to Regional Controller of Mines, Pollution Control Board and others for H 4164.27 lakhs ( H 9567.77 lakhs) towards mining plan/ lease and others activities. The bank guarantees are backed by Bank deposits against which MOIL Ltd. has created charge as per section 77 of Companies Act,2013. Bank deposits of H 1800.00 lakhs has also been earmarked for Mine closure expenditure
3.19 Letters for balance confirmation of trade receivables and trade payables have been sent to the parties. Out of total trade receivable outstanding of H 20939.08 lakhs as on 31.03.2024, H 11546.66 lakhs have been confirmed. Out of total trade payable of H 3810.83 lakhs as on 31.03.2024, H 746.90 lakhs have been confirmed. In respect of confirmations received, the company is in the process of scrutinizing and reconciling the balances.
3.20 Corporate Social Responsibility (CSR)
As per Section 135 of the Companies Act,2013 read with guidelines issued by Department of Public Enterprises, GOI, the Company is required to spend , in every financial year, at least 2% of the average net profit of the Company made during the 3 immediate preceding financial years in accordance with its CSR policy. The details of CSR expenses for the year are as under : .....
3.21 Revenue is recognized on the basis of energy injected by wind turbine generator of 15.2MW capacity into grid for sale, at tariff rate agreed in power purchase agreement.
3.22 Power is generated at 4.8MW wind turbine generator units and are captively consumed at mine/plant.
3.23 Power is generated by solar power generating panels at head office, Munsar, Tirodi, Ukwa and Balaghat are used for captive consumption at HO/mine/plant.
3.24 Company had written back provision amounting to H 281.66 lakhs relating to arbitration award but unclaimed since FY 1995-96 and shown the same as exceptional item in previous FY 2022-23.
3.25 EPS as on 31.03.2024 (31.03.2023) is calculated on weighted average paid-up share capital.
3.35 (i) The Company do not have any Benami property, where any proceeding has been initiated or pending against the Company for holding
any Benami property.
(ii) The Company do not have any transactions with companies struck off.
(iii) The Company do not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company have not any such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
(viii) The Company doesn't have any Borrowings during the year and has never been declared wilful defaulter by any bank or financial Institutions or any other lender.
3.36 Corresponding figures for previous year have been shown in brackets and regrouped/rearranged wherever necessary, to make them comparable.
Note No. 1 to 3.36 forms an integral part of financial statements.
As per our report of even date For and on behalf of the Board of Directors
For M/s TACS & Co.
Chartered Accountants
Firm's Registration Number : 115064W
Rakesh Tumane Neeraj Pandey
Director (Finance) Company Secretary
DIN : 06639859 M.No F5632
CA Gaurav B. Sharma Ajit Kumar Saxena
Partner Chairman-cum- Managing Director
Membership Number: 121121 DIN : 08588419
UDIN:24121121BKGYPC1057
Place : New Delhi Date : 30th July, 2024
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