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Notes to Accounts of MOIL Ltd.

Mar 31, 2015

1 Contingent liabilities

(a) Claims against the company not acknowledged as debts -

Rs in lakhs Particulars of claims 31-03-2015 31-03-2014

(i) By employees for wages and other benefits 205.00 159.00

(ii) By Forest Department for payment of transit fee on railing of ore from Tirodi mine 86.08 86.08

(iii) Interest on arbitration award

(iv) Entry tax, central sales tax and value added tax and employees' professional 678.25 562.73

tax 75.37 18.24

(v) Disputed income tax under appeal [Tax already paid Rs.1364.29 (Rs. 1054.06) lakhs] 1569.39 1054.06

(vi) Contingent liability on financial assurance under bank guarantees/letter of credits (Represented by fixed deposits of equivalent amount) 296.30 333.40

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 8856.26 (Rs. 7831.01) lakhs. Advance paid for such contracts is Rs. 78.99 (Rs. 34.13) lakhs.

2 Change in accounting policy - During the year under consideration, the company has changed its accounting policy on depreciation and amortization of fixed assets, in line with Schedule II of Companies Act, 2013. The change has resulted in increase in current year's depreciation by Rs. 548.28 lakhs. According to transition provisions contained in Part C, Schedule II of Companies Act, 2013 an amount of Rs. 117.90 lakhs has been reduced from deferred tax liability and the net amount of Rs. 228.97 lakhs has been charged to retained earnings.

3 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.

Additions to plant and machinery [Note No. 6.1] include vertical shafts at Munsar and Ukwa mines (Rs. 3865.92 lakhs), which are commissioned during the year. Production from these shafts is expected to commence within a time span of eighteen to twenty- four months, after completion of initial development.

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

(b) 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.

(c) Inventory of raw materials includes stock of manganese ore of 145.14 (60.50) MT valuing Rs. 6.49 (Rs. 3.17) lakhs lying in ferro manganese plant site on 31.03.2015.

5 Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. Out of total outstanding of Rs. 11114.77 lakhs as on 31.03.2015,balance of Rs. 288.15 lakhs have been reconciled. In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

6 Documentation in respect of secured loans to employees is pending in some cases.

7 For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 1.49 (Rs. 3.23) lakhs made in accounts is considered adequate.

8 During the financial year 2012-13, the company has detected embezzlement of funds committed by one of its employees to the tune of Rs. 31.03 lakh. The matter has been investigated and no further cases have been detected. Provision is not considered necessary since the amount is recoverable.

9 Income tax deducted at source from interest and rent received by the company amounts to Rs. 2763.59 ( Rs. 2663.53) lakhs. Tax deduction certificates are awaited in some cases.


Mar 31, 2014

1 Contingent liabilities

(a) Claims against the company not acknowledged as debts -

Rs. in lakhs

Particulars of claims 31-03-2014 31-03-2013

(i) By employees for wages and other benefits 159.00 141.00

(ii) By South East Central Railway for payment of arrears of rent of railway 109.68 109.68 sidings

(iii) By Forest Department for payment of transit fee on railing of ore from 86.08 86.08 Tirodi mine

(iv) Interest on arbitration award 562.73 447.21

(v) Entry tax, central sales tax and value added tax and employees'' 18.24 19.80 professional tax

(vi) Disputed income tax under appeal [Tax already paid Rs. 1054.06 1054.06 1267.35 (Rs. 1267.35) lakhs]

(vii) Contingent liability on financial assurance under bank guarantees / 333.40 225.37 letter of credits (Represented by fixed deposits of equivalent amount)

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 7831.01 (Rs. 8509.09) lakhs. Advance paid for such contracts is Rs. 34.13 (Rs. 30.27) lakhs.

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

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

(b) 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.

(c) Inventory of raw materials includes stock of manganese ore of 60.50 (164) MT valuing Rs. 3.17 (Rs. 8.08) lakhs lying in ferro manganese plant site on 31.03.2014.

4 Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. In respect of confi rmations received, the company is under process of scrutinizing and reconciling the balances.

5 Documentation in respect of secured loans to employees is pending in some cases.

6 For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 3.23 (Rs. 3.93) lakhs made in accounts is considered adequate.

7 As regards invoicing in respect of manganese ore, earlier, the time lag between dispatch of ore and receipt of quality test report was more. Hence, the policy of accounting differential sales invoices in the year of receipt of quality test report was followed. However, as a result of computerization and automation of processes, the company is in a position to expedite the reports and, in most of the cases, the results are available before the finalization of accounts. Consequently, final sales invoices are raised in the year of dispatch as per quality test reports received upto a cutoff date. In view of this, the company has changed the policy with regard to accounting of differential sales invoices. The change in policy does not have any material effect on the accounts.

8 During the financial year 2012-13, the company has detected embezzlement of funds committed by one of its employees to the tune of Rs. 31.03 (Rs. 31.03) lakh. The matter is investigated by an independent expert and final report is submitted, which is subject to final review and action. Since the amount of terminal benefits due to the employee, which can be applied for recovery of embezzled amount and the amount already deposited are suffi cient to recover the above, provision is not considered necessary.

9 Income tax deducted at source from interest and rent received by the company amounts to Rs. 2663.53 (Rs. 2487.18) lakh. Tax deduction certifi cates are awaited in some cases.

10 Sundry creditors include a sum of Rs. Nil (Rs. Nil) lakhs payable to micro, small and medium enterprises units, in excess of Rs. 1.00 lakh outstanding for more than thirty days.

11 As per guidelines issued by the Department of Public Enterprises applicable from 1st April, 2013 on corporate social responsibility and sustainable development, expenditure on afforestation is included under the head "Expenditure on corporate social responsibility and sustainable development" in Note 14.2 (Other expenses).

12 Transactions with related parties – Disclosures of transactions with related parties as per Accounting Standard 18 are as under.

(i) List of related parties and relationship

1 Shri G.P.Kundargi Key management personnel

2 Shri A.K.Mehra Key management personnel

3 Shri M.P.Chaudhari Key management personnel

4 Shri A.K.Jha Key management personnel

5 SAIL & MOIL Ferro Alloys Pvt. Ltd. Joint venture company

6 RINMOIL Ferro Alloys Pvt. Ltd. Joint venture company

13 Imports of capital goods during the year Rs. 398.71 (Rs. 298.56) lakh.

14 Expenditure in foreign currency for travelling Rs. 28.56 (Rs. 12.53) lakh and miscellaneous expenses Rs. 22.43 lakh (Rs. 16.33) lakh

15 Provisions no longer required to the tune of Rs. 4481.84 lakhs are on account of employee benefits expenses.


Mar 31, 2013

1 Contingent liabilities

(a) Claims against the company not acknowledged as debts -

Rs. in lakhs

Particulars of claims 31-03-2013 31-03-2012

(i) By employees for wages and other benefits 141.00 143.00

(ii) By South East Central Railway for payment of arrears of rent of 109.68 109.68 railway sidings

(iii) By contractors for non-fulfilment of contractual obligations Nil 26.42

(iv) By Forest Department for payment of transit fee on railing of ore 86.08 86.08 from Tirodi mine

(v) Interest on arbitration award 447.21 332.00

(vi) Employees'' professional tax 6.91 6.91

(vii) Entry tax, central sales tax and value added tax 12.89 9.05

(viii) Disputed income tax under appeal [Tax already paid Rs. 1267.35 1267.35 4021.97 (Rs. 4021.97)]

Contingent liability on financial assurance under bank guarantees

(ix) /letter of credits (Represented by fixed deposits of equivalent 225.37 172.30 amount)

(b) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 8509.09 (Rs. 5832.64) lakhs. Advance paid for such contracts is Rs. 30.27 (Nil) lakhs.

2 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.

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

(b) 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.

(c) Inventory of raw materials includes stock of manganese ore of 164 (370) MT valuing Rs. 8.08 (Rs. 17.18) lakhs lying in ferro manganese plant site on 31.03.2013.

4 Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

5 Documentation in respect of secured loans to employees is pending in some cases.

6 For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 3.93 (Rs. 4.22) lakhs made in accounts is considered adequate.

7 During the year, the company has detected embezzlement of funds committed by one of its employees. The amount of embezzlement detected till date is Rs. 31.03 lakh. The matter is being investigated by an independent expert and final report is awaited. Since the amount of terminal benefits due to the employee (which can be applied for recovery of embezzled amount) and amount already deposited are sufficient to recover the above, provision is not considered necessary.

8 Income tax deducted at source from interest and rent received by the company amounts to Rs. 2487.18 (Rs. 2192.54) lakhs. Tax deduction certificates are awaited in some cases.

9 Sundry creditors include a sum of Rs. Nil (Rs. Nil) lakhs payable to micro, small and medium enterprises units, in excess of Rs. 1.00 lakh outstanding for more than thirty days.

10 Transactions with related parties - Disclosures of transactions with related parties as per Accounting Standard are as under.

(i) List of related parties and relationship

1 Shri KJ.Singh Key management personnel

2 Shri G.P.Kundargi Key management personnel

3 Shri A. K. Mehra Key management personnel

4 Shri M.A.V. Goutham Key management personnel

5 Shri M.P. Chaudhari Key management personnel

6 SAIL & MOIL Ferro Alloys Pvt. Ltd. Joint venture company

7 RINMOIL Ferro Alloys Pvt. Ltd. Joint venture company

11 Imports of capital goods during the year Rs. 298.56 (515.34) lakh.

12 Expenditure in foreign currency for travelling Rs. 12.53 (Rs. 26.78) lakh and miscellaneous expenses Rs. 16.33 (15.00) lakh

13 Corresponding figures for previous year have been shown in brackets and regrouped, wherever necessary, to make them comparable.


Mar 31, 2010

1 Contingent liabilities

(a) Claims against the company not acknowledged as debts -

Rupees in lakhs

Particulars 31-03-2010 31-03-2009

(i) Claims for wages and other benefits to 40.48 28.66 employees

(ii) Claims by South East Central Railway for 109.68 109.68 payment of arrears of rent pertaining to railway sidings

(iii) Claims by contractors for non-fulfilment of 26.42 26.42 contractual obligations |

(iv) Claims by Forest Department for payment of 72.28 Nil transit fee on production of ore at Tirodi mine

(v) Claims by Forest Department for payment of net Present value in respect of leases already 97.34 Nil granted

(b) Income tax assessments are completed upto assessment year 2007-08. Income tax payments made/refunds adjusted by the department against the disputed demands are shown under loans and advances. Adjustment of these advances against disputed demand is made only after final settlement of appeals, pending at various levels. Demands made by the department, which are disputed by the company, and payments made against these demands, are as under - Assess- Disputed Amount Balance as Pending with ment year demand paid on 31st Mar* 10

Rs.-Lakhs Rs.-Lakhs Rs.

2007-08 83.03 83.03 Nil Commissioner of Income Tax (Appeals)

There will not be any additional financial implications over and above the provisions already made as per companys assessment.

(c) Company has given financial assurance of Rs. 181.67 (Rs. 170.93) lakhs to IBM by way of bank guarantees, towards progressive mine closure plans. Fixed deposit receipts of identical amount are held by banks/Government departments against these bank guarantees.

(d) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 904.01 (Rs. 1631.99) lakhs. Advance paid for such contracts is Rs. Nil (Rs. 10.18) lakhs.

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

3 (a) Production and inventor) of manganese ore is arrived on weight-volume ratio basis (b) Inventories of bulk raw materials and finished goods in respect of ferro manganese plant are determined as per weight-volume ratio by the production/technical. department and the same are accounted for accordingly.

(c.) Inventory of raw materials includes stock of manganese ore of 292 (266) MT valuing Rs. 11.15 (Rs. 6.36) lakhs lying in ferro manganese plant site on 31.03.10.

4 Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

5 Documentation in respect of secured loans to employees is pending in some cases.

6 The company has made provision of Rs. 1238.39 (Rs. 2115.88) lakhs for superannuation benefits to employees based on Board approval for which Ministrys approval is awaited.

7 For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 4.20 (Rs. 4.20) lakhs made in accounts is considered adequate.

8 Income tax deducted at source from interest and rent received by the company amounts to Rs. 1626.85 (Rs. 2198.43) lakhs.

9 Sundry creditors include a sum of Rs. Nil (Rs. Nil) lakhs payable to S.S.I.units, in excess of Rs. 1.00 lakh outstanding for more than thirty days.

10 Transactions with related parties - Disclosures of transactions with related parties as per Accounting Standard 18 are as under.

(i) List of related parties with whom transactions have taken place and relationship

1 Shri K.J.Singh Key management personnel

2 Shri M.A.V. Goutham Key management personnel

4 Shri A. K. Mehra Key management personnel

5 Shri G.P.Kundargi Key management personnel

6 SAIL & MOIL Ferro Alloys Pvt. Ltd. Joint venture company

7 RILMOIL Ferro Alloys Pvt. Ltd. Joint venture company

11 Imports of capital goods, stores/spares and raw materials - Rs. Nil (Rs. 87.24) lakh.

12 Expenditure in foreign currency for traveling - Rs. 7.00 (Rs. 6.47) lakh.

13 Corresponding figures for previous year have been regrouped to make them comparable with those of the year under review. Figures in brackets in the schedules indicate corresponding figures of the previous year.


Mar 31, 2009

1. Contengent liabilites

Claims against the company not acknowledhed as debts-

(a) For wages and other benefits to employees - Rs. 29.66(Rs.27.85) lakhs.

(b) Claims by South East Central Railway for payment of arrears of rent pertaining to railway siding disputed by the Company amounting to Rs. 109.68 (Nil) lakh.

(c) Claims by contractors for non-fulfillment of contractual obligations Rs.25.42 (Rs.29.75) lakhs.

(d) Income tax assessments are completed upto assessment year 2006-07. Imcome tax payments made/refunds adjusted by the department against the disputed demands are shown under loans and advences. Adjustment of these advances against disputed demand is made only after final settlement of appeals at various levels.

Demands made by the department, which are disputed by the company, and payments made against these demands are as under--

Assessment Disputed Amount Balance us Pending with year demand paid on 31st Mar09 Rs. Rs. Rs.

2005-06 4746760 4746760 Nil Income Tax Appellate Tribunal (ITAT)

2006-07 1744410 1744410 Nil A.O and Commissioner of Income Tax (Appeals)

There will not be any additional financial implications over and above the provisions already made as per companys assessment.

(a) Company has given financial assurance of Rs. 170.93 (Rs. 156.42) lakhs to IBM by way of bank gurantees, towards progressive mine closure, in respect of progressive mine closure plans.

(f) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 1631.99 (Rs.4024.48) lakhs. Advance paid for such contracts is Rs. 10.18 lakhs (Rs.278.25 lakhs).

2. Land measuring 761.60 Sq. Mtrs. belonging to the company is acquired by Nagpur Improvement Trust for its integrated Road Development Plant. Writ pelition filed by the company seeking compensation is admitted by the High Court, Nagpur. Pending writ potition, no adjustment is done in books.

3. Letters for year-end balance confirmation of sundry deblors and sundry creditors have been sent to the parfies. In respect of confirmations received, the companys under.

process of scrutinizing and reconclling the balances.

4. For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 4.20 (Rs.4.48) lakhs made in accounts is considered adequats.

5. Two of Companys customers had lodged claims for supply of one during 1989-90 to 1992-93 which, according to them, was not as per specifications. The matter wasa under arbitration and the arbiteator has given award after close of the financial year. holding the company liable for payment of damages and other costs. The company is taking further action in the matter. As per Accounting Standard 4 on Contingancies and Events accurring after Balance Sheet date issued by the institute of Chartered Accountants of India. liability of Rs. 639.15 lakhs has been created in the accounts for the year.

6. (a) Production and incentory of manganese ore is arrived on weight-valune ratio basis

(b) Inventories of bulk raw materials and finished goods in respect of ferro manganese plant are determined as per weight- volume ratio by the production/technical department and the same are accounted for accordingly.

(c) Inventory of raw materials includes stock of manganess ore of 256 (97) tonnes valuing Rs. 6.36 (Rs. 1.84) lakhs lying in ferro manganese plant site as on 31.03.09.

7. Documentation in respect of secured loans to employees is pending in some cases.

8. Due to non-fulfillment of contracted quantity, cases of various defaulting customers have been reviewed oncase to case basis and the EMD of Rs.386.52 (Rs.27.68) lakh has been forfeited.

9. Value of Imports for capital goods, stores/spares and raw materials is Rs. 57.24 (Rs.8.03) lakh.

10. Expenditure in foreign currency for travelling is Rs.6.47 (Rs.4.55) lakh.

11. The Company has taken a decision that prepaid expenses for and item of expenses below Rs. 100000/- should be charged to revenue in the year of payment.

Hitherto, the Company was bifurcating such payments into revenue and prepaid expenses. The impact due to change is not material.

12.Income tax deducted at source from interest and rent received by the company amounts to Rs. 2198.43 (Rs. 545.95) lakhs.

13. Interest billed on customers amounting to Rs. 39.28 (rs. Nil) lakhs relating to next, financial year has not been included in sundry debtors.

14. Closing stock value of ferro manganess and E.M.D. includes excise duty and education case liability of Rs. 89.21 (Rs.92.56) lakhs.

15. Wage agreement with unionized workers and staff has expired on 31.7.2007. Similarly pay recision for Executives is due from 1.1.2007. The Company has made necessary provision towards this liability, based on MOU signed with the recognized Union and D.PE. guidelines for 2nd pay revision of Executives.

16. Sundry creditors include a sum of Rs. Nil (Rs. Nil) lakhs payable to S.S.I unit, in excess of Rs. 1.00 lakh outstanding for more than thirty days. SSI units are identified based on the information avallable with the company.

17. Corresponding figures for previous year have been regroupe to make them comparable with those of the year under review. Figures in brackets in the schedules indicate corresponding figures of the previous year.


Mar 31, 2008

1 Contingent liabilities Claims against the company not acknowledged as debts-

(a) For wages and other benefits to employees-Rs. 27.85 (Rs. 58.14) lakhs.

(b) Two of the companys customers have lodged claims for supply of ore which, according to them, are not as per specifications. The claim for Rs. 454.00 (Rs. 454.00) lakhs on account of quality has been repudiated as the supplies to these customers are governed by regular sales contracts, which do not provide for such liability.

(c) Claims by contractors for non-fulfillment of contractual obligations Rs. 29.75 (Rs. 26) lakhs.

(d) Income tax assessments are completed upto assessment year 2005-06. Income tax payments made/refunds adjusted by the department against the disputed demands are shown under loans and advances. Adjustment of these advances against disputed demand is made only after final settlement of appeals, pending at various levels.

(e) Income Tax Department has raised a demand of Rs175.32 lakhs towards tax on perquisites of employees including interest thereon for the financial year 2001-02 to 2005-06. Company has paid Rs. 61.12 lakhs towards tax on perquisite of employees, under protest.

(f) Company has given financial assurance of Rs. 166.42 (Rs. 156.86) lakhs to IBM by way of bank guarantees, towards progressive mine closure, in respect of progressive mine closure plans.

(g) Estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 4024.48 (Rs. 2453.87) lakhs. Advance paid for such contracts is Rs. 278.25 lakhs (Rs. 456.54 lakhs).

2. 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 writ petition, no adjustment is done in books.

3. Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

4. For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 4.48 (Rs. 4.99) lakhs made in accounts is considered adequate.

5. (a) Production and inventory of manganese ore is arrived on weight-volume ratio basis

(b) Inventories of bulk raw materials and finished goods in respect of ferro manganese plant are determined as per weight-volume ratio by the production/technical department and the same are accounted for accordingly.

(c) Inventory of raw materials includes stock of manganese ore of 97 (1427) tonnes valuing Rs. 1.84 (Rs. 25.36) lakhs lying in ferro manganese plant site as on 31.03.08.

6. Documentation in respect of secured loans to employees is pending in some cases.

7. Unclaimed balances of Rs. Nil (Rs. 12.52) lakhs in sundry creditors accounts have been transferred to miscellaneous income during current year as there is no possibility of such claims getting materialized.

8. Due to non-fulfillment of contracted quantity, cases of various defaulting customers have been reviewed on case to case basis and the EMD of Rs. 27.68 (Rs. 427.80) lakh has been forfeited.

9. Value of imports for capital goods, stores/spares and raw materials is Rs. 8.03 (Rs. 32.34) lakh,

10. Expenditure in foreign currency for travelling is Rs. 4.55 (Rs. 10.25) lakh.

11. The Company has adopted Accounting Standard -15 (Revised 2005) Employees Benefits in the current year. In accordance with the stipulation of the Standard, the Company has adjusted Rs. 1560.33 lakhs (net of deferred tax asset aggregating to Rs. 803.45 lakhs) towards the additional liability of Deferred Benefit obligation in respect of gratuity and leave encashment upto 31st March2007, against the balance of General Reserve as at last April2007.

12. As Per AS-15 Framed By The Institute of Chartered Accountants of India, an amount of Rs. 579.75 lakhs, which includes unamortized carried forward balance of Rs. 384.91 lakhs as on 31.03.2007 and Rs. 194.84 lakhs paid during current year (Previous year Rs. 433.59) lakhs has been charged to profit and loss account towards expenditure incurred on voluntary retirement scheme Due to change in the policy, Rs. 358.95 lakhs has been additionally charged to Profit & loss account during the year 2007-08.

13. Income tax deducted at source from interest and rent received by the company amounts to Rs. 845.95 (Rs. 432.98) lakhs.

14. lnterest billed on customers amounting to Rs.Nil (Rs.27.17)lakhs relating to next financia lyear has not been included in sundry debtors.

15. Closing stock value of ferro manganese and E.M.D. includes excise duty and education cess liability of Rs.92.66(Rs.97.59) lakhs.

16. Wage agreement with unionized workers and staff has expired on 3 1.7.2007. Similarly pay revision for Executives is due from 1.1 ,2007.The Company has made necessary provision towards this liability, based on fair estimate.

17. Sundry creditors include a sum of Rs. Nil (Rs. 4.09) lakhs payable to (Maharashtra Carbon Pvt. Ltd., Chandrapur), S.S.I.unit, in excess of Rs. 1.00 lakh outstanding for more than thirty days. SSI units are identified based on the information available with the company.

18. The Company has proposed to enter into power agreement with MPSEB, on the line approved by Madhya Pradesh Energy Regulatory Commission(MPERC). Pending finalization of agreement, power generated by the company has been put into the state Power Grid. Accordingly an amount of Rs.40.47 lakhs has been recognized as income from sale of Energy.

19. Expenditure on account of Electricity consumption of Balaghat Mine/Ferro Manganese Plant was grossed up and correspondingly revenue is shown under "Other Income" for the quantum of Electricity generated by Wind Turbine Generators during 2006-07. As per opinion obtained from the Institute of Chartered Accountants of India and suggested by the Institute to treat this as captive consumption during the year 2007-08 , the grossing up practice of Electricity charges has been discontinued and accordingly Accounting policy has been revised. However, Electricity charges are grossed up for segment reporting.

20. Corresponding figures for Previous year have been regrouped to make them comparable with those of the year under review. Figures in brackets in the schedules indicate corresponding figures of the previous year. Schedule No. 1 to 21 form an integral part of financial statements.


Mar 31, 2007

1. Contingent liabilities

Claims against the company not acknow-ledged as debts -

(a) For wages and other benefits to empl-oyees Rs. 58.14 (Rs. 65.78) lakhs.

(b) Two of the Companys customers have lodged claims for supply of ore which, according to them, are not as per speci-fications. The claim for Rs. 454.00 (Rs. 454.00) lakhs on account of quality has been repudiated as the supplies to these customers are governed by regular sales contracts, which do not provide for such liability.

(c) Claim by contractors for nonfulfillment of contractual obligations Rs. 26.00 (Rs. Nil) Lakhs.

2. 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 writ petition, no adjustment is done in books.

3. The Company made a contribution of Rs. 686.23 (Rs. 510.00) lakhs to Gratuity Trust, being the amount equal to the payment made by Trust to Life Insurance Corporation of India towards Group Gratuity [Cash Accumulation) Scheme. In line with the accounting policy, an amount of Rs. 76.48(Rs. 229.65) lakh is paid directly to employees retired under voluntary retirement scheme and charged to profit and loss account.

4. Letters for year-end balance confirmation of sundry debtors and sundry creditors have been sent to the parties. Confirmations are awaited. In respect of confirmations received, the company is under process of scrutinizing and reconciling the balances.

5. For anticipated loss on disposal of obsolete stores/spares, provision of Rs. 4.99 (Rs. 3.93) lakhs is considered adequate.

6. (a) Production and inventory of manganese ore are arrived on weight-volume ratio basis.

(b)lnventories of bulk raw materials and finished goods in respect of Ferro Manganese Pl-ants are determined as per weight-volume ratio by the production/technical department and the same are accounted for accordingly.

(c)lnventory of raw materials includes stock of manganese ore of 1427 (1019) tonnes valuing Rs.25.36 (Rs.16.00) lakhs lying in ferro manganese plant site as on 31/03/07.

7. Documentation in respect of secured loans to employees is pending in some cases.

8. Unclaimed balances of Rs. 12.52 (Rs. 7.35) lakhs in sundry creditors accounts have been transferred to miscellaneous income during current year as there is no possibility of such claims getting materialized.

9. In view of rise in demand from customers for manganese ore vis-a-vis their off take in earlier years, company has insisted for deposit of EMD we.f the year 2005-06 to ensure fulfillment of contracts. As per decision taken by the managment during current year cases of various defaulting customer have been reviewed on case to case basis and the EMD of Rs. 427.80 lakhs has been forfeited. This includes Rs. 329.1 7 lakhs pertaining to financial year 2005-06, which been shown under prior period adjustments.

10. The Govt, of Madhya Pradesh enacted Madhya Pradesh Gramin Avsanrachana Tatha Sadak Vikas Adhniyam 2005 effective 30 th September 05 and raised a demand of Rs. 246.95 lakhs for period up to 31st march 06.

The compant challanged the demand in Honble jabalpur High court and stay has been granted which is still inforce. Further the company has not received any demand from Madhya Pradesh for the year 2006-07 pending settlement of the issue the company decided to collect the ammount form customer effective 30 th sept 05 and raised demand for Rs. 1111.11 lakhs on customer till 31st march 07 which is shown as liability.

11. Value of imports for capital goods, stores/spares and raw materials is Rs. 32.34 (Rs. Nil) lakh.

12. Exports during the year at FOB is Rs. Nil (Rs. Nil) lakhs.

13. (a) Earning in foreign exchange for export of manganese ore is Rs. Nil (Rs. Nil) during the year.

(b)Expenditure in foreign currency for traveling is Rs.l 0.25 (Rs. 2.68) lakh.

14. As per AS-15 framed by the Institute of Chartered Accountants of India, provision for leave encashment benefit has been calculated on the basis of actuarys valuation. Provision of Rs. 199.61 (Rs.l55.38)lakhs has been made during the year.

15. As per AS-1 8 framed by the Institute of Chartered Accountants of India, disclosures of transactions with related parties, as defined in the accounting standard, are given below:

(i) List of related parties with whom transactions have taken place and relationship

1) Shri K.L Mehrotraa Key management personnel 2) Shri B.B.Choudhary Key management personnel 3) Shri M.A.V.Goutham Key management personnel 4) Shri C.P.N.Pathak Key management personnel

(ii) Transactions during the year with related parties

1 Remuneration paid Rs. 3164658 (Rs.4381 792)

2 Reimbursement of traveling expenses Rs. 3390967 (Rs. 3395634)

(iii) Sitting fees to part-time Directors Rs. 45500 (Rs. 77000)

16 Income Tax deducted at source from interest and rent received by the Company amounts to Rs. 432.58 (Rs. 255.37) lakhs.

17 Interest billed on customers amounting to Rs. 27.1 3 (Rs.27.55] lakhs relating to next financial year has not been included in sundry debtors.

18 Closing stock value of Ferro Manganese, and E.M.D. includes excise duty and education cess liability of Rs. 97.59 (Rs. 120.72) lakhs.

19 Anamount of Rs. 38.79 (Rs. 2.90) lakh has been provided towards anticipated liability on account of pay revision of officers governed by CDA/IDA pay pattern.

20 Sundry creditors include a sum of Rs. 4.09 (Rs. Nil) lakhs payable to Maharshtra Corbon Pvt. Ltd., Chandrapur, S.S.I. units in excess of Rs. 1.00 lakh outstanding for more than 30 days.

21 Corresponding figures for previous year have been regrouped to make them comparable with those of the year under review. Figures in brackets in the schedules indicate corresponding figures of the previous year.

 
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