We have audited the Standalone Financial Statements of MOIL LIMITED ("the Company"), which comprises the Balance Sheet as at 31st March 2024, and the statement of the Profit and Loss (including Other Comprehensive Income), the statement of Changes in Equity and the statement of Cash Flow for the year then ended, and notes to the Financial Statements, including a summary of significant accounting policies and other explanatory information (herein after referred to as "Standalone Financial Statements").
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, the profit and total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Basis for opinion
We conducted our audit of standalone Financial Statements in accordance with the Standards on Auditing (SAs) specified under section 143 (10) of the Companies Act, 2013. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the Financial Statements under the provisions of the Companies Act, 2013 and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.
Emphasis of Matter -
Without qualifying our opinion, we draw attention to the following matters:
1. Point No. 1.2.13 of accounting policy & Note No. 2.27 for recognition of revenue. The revenue includes Royalty, District Mineral Fund (DMF) and National Minerals Exploration Trust contribution (NMET) collected on behalf of third party on actual basis as per contract. However, this treatment is not in line with IND AS 115, which stipulates that revenue must be shown on net basis excluding all collection on behalf of third parties. This has been done by the Company as per industry practice and based on expert opinion obtained.
2. Note No. 2.5 (Investment) with regard to classification of Actual Advance Expenditure (MOIL Share) for proposed Joint Venture with GMDC, amounting to ^765.27 Lakhs. This is disclosed under Investments in the name and style of "MOIL-GMDC JV, yet to be incorporated". This amount should have been classified under Other Non- Current Assets.
3. Note No. 2.2(Capital WIP)& Note No. 3.13 with regard to classification of Actual Advance Expenditure (MOIL Share) for proposed Joint Venture with MPSMCL. This expenditure amounting to ^894.04 Lakhs is being recognized and accounted for as Capital Work in Progress (CWIP) in the financial statements. This MoU has been signed to explore the options of manganese ore mining in different districts of the state of Madhya Pradesh. This amount should have been classified under Other Non- Current Assets.
Other Matter
Pursuant to the observations of Comptroller and Audit General of India under Section 143 (6) (a) of the Companies Act, 2013, the financial statements adopted by the Board of Directors on 15.05.2024 have been revised. The revised financial statements are adopted by the Board of Directors on 30.07.2024. The Impact of revision is disclosed under Note 3.10 (Transaction with Related Parties) to the financial statements. Accordingly, a revised Audit Report is issued now. This Audit report supersedes our earlier report dated 10th June 2024 and the revision made does not have any financial impact on the annual accounts of the company.
Our opinion is not modified in respect of above matter.
Key Audit Matters -
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statement as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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1
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Revenue from Contract with Customer: Refer Note no. 2.27
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Principal Audit Procedures:
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Revenue is considered as a key audit matter because revenue is a key
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Our Audit Procedure comprises of assessing the application
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financial performance measure which could create an incentive to be
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of the provisions of Ind AS 115 in respect of the Company's
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recognised prematurely.
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revenue recognition and appropriateness of the estimated adjustments in the process.
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The revenue recognized by the Company in a particular contract is
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Our audit procedures include:
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dependent on the sale agreement for the respective customer. Revenue from sale of manganese is recognized in financial statements at declared
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• Evaluating the design, the processes and internal controls
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grade of manganese.
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relating to revenue accounting standard;
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Relevant areas for revenue recognition perspective are accuracy of the
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• Evaluating the detailed analysis performed by
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recognized amounts and timing of revenue recognition.
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management on revenue streams by selecting samples for the existing contracts with customers and considering
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The timing of such revenue recognition in case of sale of goods is when
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revenue recognition policy in the current period in
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the control over the same is transferred to the customer, which is mainly
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respect of those revenue streams
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upon delivery.
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• Evaluating the appropriateness of the disclosures
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Revenue includes amounts in respect of royalty, district mineral fund and
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provided under the revenue standard and assessing
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national mineral exploration trust contributions but excludes GST and
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the completeness and mathematical accuracy of the
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any other taxes/cess. Sales are reduced to the extent of the amount of
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relevant disclosures.
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price discount. The Company acts as a principal to its customers and all the performance obligation stands on the Company, therefore revenue is
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• Ensuring the basis of all estimates are commensurate
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accounted on Gross basis.
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with the accounting policy.
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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.
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The system of revenue recognition is found to be appropriate
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2
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Inventory Valuation: Refer Note No. 1.2.3 (Significant Accounting Policy)
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Principal Audit Procedures:
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Verification and valuation of Inventories and related write down, if any,
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Our audit approach involved the following combination
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is a significant area requiring Management's judgment of estimates
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of test of control design, implementations, operating
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and application of accounting policies that have significant effect on
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effectiveness and substantive testing in respect of verification
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the amounts recognized in the Standalone Ind AS Financial Statements.
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and valuation of inventories:
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Accordingly, we consider this as a Key Audit Matter.
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• We evaluated the system of inventory
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Valuation is done on the following basis:
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monitoring and control.
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(a) Finished Goods-Manganese Ore of all grades (except Manganese Ore
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• It was observed that inventory has been physically
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Fines, Hutch Dust and HIMS rejects) - Valued At cost at mines including depreciation on mine assets or net realizable value, whichever is less.
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verified by the Management during the year.
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• We have also tested the values considered in respect of
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(b) Manganese Ore Fines, Hutch Dust and HIMS rejects - Valued At cost
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Net realisable value, cost of products and have verified
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per tonne on jigging / processing , transportation etc. allocated on
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these on sample basis with the inventory valuation and
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technical estimates or net realizable value, whichever is less.
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accounting entries posted in this regard.
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(c) Manganese Ore at port - At landed cost at the port or net realizable
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• We have obtained a copy of inventory verification
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value, whichever is less. Landed cost includes freight, unloading
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report, cost sheet and price lists that have been taken
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charges, sampling charges etc.
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into consideration while arriving at the final closing
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(d) Electrolytic manganese di-oxide [EMD] (including stock as on 31st March
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value of inventory.
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at different stages of production, ascertained by technical estimation as a
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The system of inventory valuation and recording of stock
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percentage of completed units of EMD) - At current year's cost of production including plant's depreciation or net realizable value, whichever is less.
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level is found to be appropriate
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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(e) 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.
(f) Stock in process - The quantity of Ferro Manganese/SilicoManganese in process cannot be weighed, seen or assessed and hence, no value is assigned.
(g) 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.
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3
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Deferred tax:
As disclosed in Note 3.8, the Company has recognised deferred tax assets in respect of certain deductions on account of provision for Leave Encashment, provision for Post-Retirement Medical Benefit, provision for Doubtful Debts and provision for Bonus to the extent that it is probable that they will get tax benefits in future. This requires management judgement in estimating future taxable income and is accordingly a key audit matter.
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Principal Audit Procedures:
Our audit procedures included the following:
• Obtaining an understanding of the management's process for estimating the recoverability of the deferred tax assets and identifying key controls in the process.
• Obtaining and analysing the future projections of taxable profits estimated by management, assessing the key assumptions used, including the analysis of the consistency of the actual results obtained by the various segments with those projected in the previous year
We have reviewed the assumptions made by management for uncertain current and deferred tax positions to assess whether appropriate current and deferred tax provisions have been recognized and are based on the most probable outcome.
We found the disclosures relating to the income tax and deferred tax balances to be appropriate.
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4
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Valuation of Defined Benefit Plan Obligations:
Accounting for defined benefit plans is based on actuarial assumptions which require measuring the obligation, evaluating the planned assets and calculating the corresponding actuarial gain or loss. All future cash flows are discounted to present value for arriving at the obligation. Significant estimates including the discount rates, the inflation rates, escalation of salary and the mortality rate are made in valuing the company's defined benefits obligations. The Company engages external actuarial specialist to assist them in selecting appropriate assumptions and calculate the obligations. The effect of these matters is a part of the risk assessment and valuation of the Defined Benefit Obligations has a high degree of estimation as it is based on assumptions.
The Company has recognized long term Employee Benefit Liabilities, consisting of Terminal Leave Obligation & Gratuity and Defined Benefit Obligations Receivable (net of plan asset against funded obligation) and Post-Employment Benefits.
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Principal Audit Procedures:
Our audit procedures include:
• Evaluating the key assumptions applied viz discount rates, inflation rate, mortality rate
• The controls over the review and approval of actuarial assumptions, the completeness and accuracy of data provided to external actuary, and the reconciliation to data used in expert's calculation were tested.
• Discussing with the Management about the liability accrued due to defined benefit plan and assessing if there was any inconsistency in the assumptions.
• Adequacy of the Company disclosure as per Ind AS 19 in the notes is verified.
Based on the audit procedures involved, we observe that
the assumptions made by the management in relation to the
valuation were supported by available evidence.
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Sr.
No.
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Key Audit Matter
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Auditor's Response
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5
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Provision for Post-Retirement medical benefit:
As disclosed in Note 2.26(c) the Company, as per office memorandum from Government of India (Ministry of Heavy Industries and Public enterprises) is required to create corpus fund for medical benefit of employees post retirement.
The valuation provision of the same requires assumptions which are based upon market conditions, discount rate, life expectancy of employees and other dependants to be considered for setting aside fund for medical benefit.
The setting of these assumptions is complex and requires the exercise of significant management judgement with the support of external actuary.
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Principal Audit Procedures:
In testing the valuation, we have examined the reports of external actuarial specialist to review the key actuarial assumptions used, both financial and demographic, and considered the methodology utilized to derive these assumptions.
Furthermore, we have examined the sensitivity analysis adopted by the external party viz. actuarial on the key assumptions in valuing the defined benefit obligations.
We would like to comment that the methodology and assumption applied in relation to determination of liability is Acceptable.
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6
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Property, Plant & Equipment and Intangible Assets
During the year the Company has incurred capital expenditure on various Property, Plant and Equipment including the capitalisation of work in progress based on its readiness for intended use as determined by the management. The estimates of useful lives and residual value of Property, Plant and Equipment is a significant area which involves management judgement, technical assessment, consideration of historical experience, anticipated technical changes etc.
Considering the materiality in the context of the Balance Sheet of the Company and the level of management judgement and estimates required, the above matter has been determined as a key audit matter
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Principal Audit Procedures:
Our audit procedure included but was not limited to the
following:
• Assessing the nature of additions made to PPE and capitalisation of capital work in progress on a test check basis to test whether they meet the recognition criteria as per Ind-AS 16 -Property, Plant and Equipment, including its readiness for intended use as determined by the management.
• Understanding, evaluating and testing the design and operating effectiveness of key controls relating to capitalization of various cost incurred.
• Reviewing the judgement and assessment of the management including the nature of underlying cost capitalized, determination of realizable value of the assets, appropriateness of assets lives applied in the calculation of depreciation.
• We have test checked the depreciation calculation
• We observe that the management has regularly reviewed the judgements and estimation.
• We have also assessed the adequacy and appropriateness of the disclosures in the standalone financial statements.
Based on the audit procedures involved, we observe that the
assumptions made by the management were acceptable.
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Information other than the Standalone Financial Statements and Auditor's Report thereon
The Company's Management and Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board's Annual Report including Annexures to Board's Report, Business Responsibility Report, Corporate Governance Report and Shareholder's Information, Corporate Social Responsibility but does not include the Financial Statements and our Audit Report thereon.
• Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.
• In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained during the course of the audit or otherwise appears to be materially misstated.
• If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to communicate the matter to those charged with governance, as applicable under relevant laws and regulations.
• We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation and presentation of these Standalone Financial Statement that give a true and fair view of the financial position, financial performance including other comprehensive income, statement of changes in equity and cash flow of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standard (Ind AS) specified under section 133 of the Act, read with Rule 7 issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of Standalone Financial Statementsthat give a true and fair view and are free from material misstatements, whether due to fraud or error.
In preparing the Standalone Financial Statements, Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Company's Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor's Responsibility for the Audit of Standalone Financial Statements
Our responsibility is to express an opinion on these standalone financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken based on these Financial Statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
i. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
ii. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the entity has adequate internal financial controls system in place and the operating effectiveness of such controls.
iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
iv. Conclude on the appropriateness of management's and Board of Director's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
v. Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other Legal and regulatory requirements:
1. As required by section 143(3) of the Act, based on our audit,
we report that;
a. We have sought and obtained all the information and explanations, which, to the best of our knowledge and belief were necessary for the purpose of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.
c. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income and Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, subject to Emphasis of Matter stated above.
e. In terms of Notification no. G.S.R. 463 (E) dated 05th June 2015 issued by the Ministry of Corporate Affairs, provisions of Section 164(2) of the Act regarding disqualifications of the Directors, are not applicable as it is a Government Company.
f. With respect to the adequacy of the internal financial controls with reference to Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company's
internal financial controls with reference to Standalone Financial Statement.
g. With respect to the other matters to be included in the Auditor's Report in accordance with the requirements of section 197(16) of the Act, as amended:
h. As per notification number G.S.R. 463 (E) dated 5th June, 2015 issued by the Ministry of Corporate Affairs, section 197 of the Act as regards the managerial remuneration is not applicable to the Company, since it is a Government Company
i. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The company has disclosed the impact of pending litigations as at March 31, 2024 on its financial position in its standalone financial statements-Refer Note 3.16 (i) (a) & (b) to the Standalone Financial Statements.
ii. There are no long term contracts including derivative contracts for which provision for material foreseeable losses is required.
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
iv. a) The Management has represented that, to the
best of its knowledge and belief, as disclosed in the notes to the accounts, no funds (which are material either individually or in aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other persons or entities, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like in behalf of the Ultimate Beneficiaries.
b) The Management has represented, that, to the best of its knowledge and belief, as disclosed in the notes to accounts, no funds (which are material either individually or in the aggregate) have been received by the Company from any
persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of rule 11(e) of the Companies (Audit and Auditors) Rules, 2014, as provided under (a) & (b) above contain any material misstatement.
2. The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act;
3. Based on our examination which includes test checks, it appears that the Company has used an accounting software (SAP) for maintaining its books of accounts which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we did not come across any instance of audit trail feature being tampered with.
4. As required under section 143(5) of the Companies Act, 2013 we give in the Annexure "B" a statement on directions issued by the Comptroller &Auditor General of India after complying with the suggested methodology of audit, action taken thereon and its impact on the accounts and Standalone Financial Statement of the Company.
5. As required by the Companies (Auditor's Report) Order, 2020 ("the Order"), issued by the Central Government in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "C" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
FOR TACS & CO.
CHARTERED ACCOUNTANTS (FRN. 115064W)
CA GAURAV B SHARMA
(PARTNER)
Date: 30/07/2024 M. No. 121121
Place: New Delhi UDIN: 24121121BKGYPC1057
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