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 (âActâ) 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 Companyâs 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 Companyâs 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 yearâs cost of production including plantâs 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 yearâs cost of production including plantâs 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 yearâs 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 âStock of raw materialsâ.
(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 Companyâs 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 armâs 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 â 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 â
(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 managementâs 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 yearâs 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 âManufacturing Expensesâ.
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 companyâs 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.
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 (âActâ) 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 ASâs 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 ASâs 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 yearâs cost of production including plantâs 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 yearâs cost of production including plantâs 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 yearâs 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 âStock of raw materialsâ.
(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 â
(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 managementâs 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 yearâs electricity dues totaling to Rs. 2543.76 lakhs in view of favorable verdict of Honâble 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 yearâs 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 âManufacturing Expensesâ.
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 â 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 companyâs 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 Companyâs 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 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(/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 Â
(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 Ã
(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 Ã
(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.
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 æ:-æ 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.
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