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 (') which is the country’s functional
currency. All financial information presented
in ' 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.

Capital Work-in-progress

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 under development

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 software
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/ mining rights 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) De-recognition

All assets dismantled/discarded are written
off when no future economic benefits are
expected to arise from the continued use
of the asset 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. Similar items are
grouped and actual sales realisation
per tonne is considered for estimating
weighted average cost and net
realisable value.

(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
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 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. 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

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 Foreign Currency Transactions

Transactions in foreign currency are translated
into the respective functional currencies using
the exchange rates prevailing at the dates of
the respective transactions. Foreign exchange
gains and losses resulting from the settlement of
such transactions and from the translation at the
exchange rates prevailing are recognized in the
statement of profit and loss.

1.2.15 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
as GSTR 1 filing 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) Manganese ore exported as canalizing
agent is recorded at net margin
according to Purchase and Sales
contract entered, as per realization of
export proceeds.

(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.

1.2.16 Other income

(A) Interest income from trade receivable 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.

1.2.17 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.

1.2.18 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.

1.2.19 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-em ploy ment benefits li ke 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 (PRMS) 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.

1.2.20 V.R.S. expenditure

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

1.2.21 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.

1.2.22 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.

1.2.23 Pre-paid expenses

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