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Auditor Report of Orissa Minerals Development Company Ltd.

Mar 31, 2016

To

The Members Of

The Orissa Minerals Development Company Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of The Orissa Minerals Development Company Limited ("the Company"), which comprise the Balance Sheet as at 31stMarch, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, signed by us under reference to this report and a summary of the significant accounting policies and other explanatory information. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management''s Responsibility for the Standalone Financial Statements

2. 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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds 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 the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. 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 there under.

5. 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.

6. 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.

7. 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.

Basis for Qualified Opinion

8. The title deeds of immovable properties including leasehold were not made available for our examination.

8.1. There being restrictions on movement of the items of inventory, we are unable to ascertain whether these will fetch the value at which these are stated in the financial statements.

8.2. Current assets considered good include Rs. 119.63 lakhs (net of provision) receivable from Bisra Stone Lime & Company Ltd. Based on the available information we are unable to ascertain the timing and extent of ultimate realization of the said amount.

8.3. Current Liabilities include Rs.469.39 lakhs being aggregate amount of outstanding dues on account of legal charges Rs. 57.63 lakhs, Provision for Property Tax Rs. 60.84 lakhs, Dead Rent Rs. 288.68 lakhs and Surface Rent Rs. 62.24 lakhs for which supporting documents were not available for our inspection.

8.4. Balances in respect of Advances, Receivables and Payables are subject to confirmation. The effect of any adjustment, as may be required, on reconciliation with the parties'' confirmation is not currently ascertainable.

8.5. Diminution other than temporary, if any, in the carrying amount of the investment in unquoted shares amounting to Rs. 281 lakhs could not be ascertained due to non-availability of latest financial statements of the investee Company.

Qualified Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

10. As indicated in the Note 35 to the Financial Statements mining operation of the Company is continued to be remained suspended due to non-renewal of the leases and non-receipt of requisite clearances from the Government of Odisha and the Central Government. These conditions indicate the existence of a material uncertainty to resume the mining operations. These financial statements have been prepared on a going concern basis mainly for the initiative taken by the Company''s management for opening of the mines and resumption of mining operations.

Report on Other Legal and Regulatory Requirements

11. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143 of the Act, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. In terms of the Directions and Sub-Direction under section 143(5) of the Act sent to us under cover of letter dated 10th May 2016 of The Principal Director of Commercial Audit, Ranchi, we give in Annexure B, our report on the matters included in the Directions and Sub-Directions as aforesaid.

13. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained, except any report as might have made by the Vigilance department of the Company, all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The provisions of section 164(2) are not applicable to the Company as it is a Government Company.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we refer to our separate report in Annexure C; and

g) The matter described in the Basis for Qualified Opinion paragraph and the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

h) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.

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:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 25to the financial statements.

b) The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

Other Matter

14. The Company has not prepared consolidated statements in accordance with the provisions of section 129 of the Companies Act, 2013.

14.1 This revised Report issued in compliance with Audit Memo No. Annual A/Cs/OMDC/Audit Memo No.1 dated 10.6.16 and Annual A/Cs/OMDC/Audit Memo No.17 dated 10.6.16 issued by the Office of the Principal Director of Commercial Audit, Ranchi supersedes our Audit Report dated 26th May,2016 to the members of The Orissa Minerals Development Company Limited.

ANNEXURE A TOTHEINDEPENDENT AUDITORS'' REPORT

To

the Members of

The Orissa Minerals Development Company Limited

[Referred to in paragraph 10 of the Auditors'' Report of even date]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) The title deeds of immovable properties including leasehold were not made available for our examination.

2. (a) The inventory has been physically verified by the management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

4. According to the information and explanations given to us and the records of the Company examined by us, the Company has not made any investment, advanced any loan, given any guarantee or provided any securities to others.

5. The Company has not accepted any deposits within the meaning of Sections 73 or 76 of the Act and the rules framed there under.

6. The Central Government of India has prescribed maintenance of cost records under sub-section (1) of Section 148 of the Act for the products of the company. However, as the turnover of such products is lower than the prescribed threshold limits, in our opinion, maintenance of cost records is not applicable.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities except provident fund.

The extent of the arrears of statutory dues outstanding as at 31st March 2016, for a period of more than six months from the date they became payable, in respect of share of shortfall of distributable interest on Provident Fund are as follows-

Name of Statute

Nature of due

Amount (Rs in Lacs)

Period to which it relates

Due date of payment

Provident Fund Act, 1952

Share of shortfall of distributable interest

3.83

2012-13

Various

Provident Fund Act, 1952

Contribution to Fund

4.67

February 2014 -August 2015

15th Marth 2014 to 15th September 2015

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax, service tax, duty of excise and value added tax as at 31st March 2016 which have not been deposited on account of a dispute, are as follows-

Name of the statute

Nature of dues

Amount (Rs in Lacs.)

Period to which the amount relates

Forum where the dispute is pending

Mines and Minerals Development Act, 1957

Cost of excess production

539539.24

2000-01 to 2009-10

Mines Tribunal

The Central Sales Tax Act,1956

Central Sales Tax

4.44

2003-04

Sales Tax Tribunal

Odisha Value Added Tax Act, 2004

VAT

21.34

2005-06

Odisha High Court

Odisha Entry Tax Act, 1999

Entry Tax

34.79

2005-06

Odisha High Court

Odisha Entry Tax Act, 1999

Entry Tax

2.31

2006-07

Commissioner of Commercial Taxes (Appeal )

Odisha Entry Tax Act, 1999

Entry Tax

0.88

2007-08

Sales Tax Tribunal

Odisha Value Added Tax Act, 2004

VAT

224.25

2006-07

Commissioner of Commercial Taxes (Appeal )

Finance Act, 1994

Service Tax

7.05

2012-13

Commissioner of Service Tax (Appeal)

Income Tax Act, 1961

Income Tax Interest

28357.89

14539.41

2008-09 to 2012-13

Commissioner of Income Tax (Appeals)

8. The Company has neither taken any loan from financial institution, bank or Government nor issued any debentures.

9. The Company has neither raised any money by public issues of shares or debentures nor obtained any term loans during the year.

10. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and the books and papers made available to us, we have not come across any instance of fraud on or by the Company.

11. In our opinion, the provisions of section 197 read with Schedule V to the Act are not applicable to the Company.

12. The Company being not a Nidhi Company the related statutes are not applicable to the company.

13. According to the information and explanations given to us and the records of the Company examined by us, the requirements of sections 177 and 188 of the Act is not applicable to this Company.

14. The Company has not made any preferential allotment of shares or fully or partly convertible debentures during the year under audit.

15. According to the information and explanations given to us and the records of the Company examined by us, the Company has not entered into any non-cash transactions, with any director of the Company or persons connected with them, involving acquisition of assets by or from them for consideration other than cash.

16. In our opinion, and according to the information and explanations given to us, not being a non-banking financial company, the Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE- B TOTHEINDEPENDENT AUDITORS''REPORT

To the Members of

The Orissa Minerals Development Company Limited

[Referred to in paragraph 11(h) of the Auditors'' Report of even date]

I. Directions

Sl.

Description

Auditor''s Response

1

Whether the Company has clear title/lease deeds for freehold and leasehold land respectively?

If not please state the area of freehold and leasehold land for which title/lease deeds are not available.

The title deeds of the freehold land of 207.135 acres having a book value of Rs.28,020 and lease deeds for leasehold land of 56.372 acres having a book value of Rs.1,96,77,000 were not made available for our examination.

2

Whether there are any cases of waiver/ write off of debts/ loans/interest etc., if yes, the reasons there for and the amount involved.

No debts/ loans/ interest have been written off/ waived. Provisions have been created for long outstanding balances considered doubtful of recovery.

3

Whether proper records are maintained for inventories lying with third parties & assets received as gift/grant(s) from Govt. or other authorities.

Not applicable.

II. Sub Directions

Sl. Description Auditor''s Response

1 Examine the percentage escalation in salary assumed by 1. management for computation of actuarial liability against gratuity and other employee benefits and report whether the same was reasonable, and source data provided by the Company to the Actuaries for actuarial valuation were correct, complete and valid.

The salary escalation rates considered by the actuaries for computing liabilities towards employee benefit are as follows:

Gratuity

6%

Privilege Leave

5%

Half-pay Leave

5%

As the pay revision of the Company is pending before the Ministry of Steel, we are unable to comment on the adequacy of the rates considered for actuarial valuation of liabilities pertaining to employee benefits.

Further, the Company has created a provision to cover the impact of such pay revision on the accrued liabilities towards employee benefits which, however is not based on actuarial valuation.

2. The source data provided for computation of gratuity liability was for only 511 employees out of total 512 employees of the company.

ANNEXURE- C TOTHEINDEPENDENT AUDITORS''REPORT

To the Members of

The Orissa Minerals Development Company Limited

[Referred to in paragraph 11(h) of the Auditors'' Report of even date]

Report on the Internal Financial Control under Clause (i) of Sub -sections 3 of Section 143 of the Companies Act, 2013("the Act")

1. We have audited the internal financial controls over financial reporting of The Orissa Minerals Development Company Limited("the Company") as of 31st March, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Control

2. The Company''s management is responsible for establishing and maintaining internal financial control based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the "Guidance Note" and the Standard on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintaining and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting includes obtaining an understanding of internal financial control over financial reporting, assessing the risk that a material Weakness exists, and testing and evaluating the design and operating effectiveness of internal controls based on the assessed risk. The procedure selected depends on the auditor''s judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Control over Financial Reporting

6. A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statement for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that

1) pertain to the maintenance of the records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2) provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statement in accordance with generally accepted accounting principles, and that receipts and expenditure of the Company are being made only in accordance with authorization of management and directors of company; and

3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statement.

Inherent Limitations of Internal Financial Control over Financial Reporting

7. Because of inherent limitation of internal financial control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to errors or fraud may occur and not be detected. Also, projections of any evaluations of the internal financial control over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Disclaimer of Opinion

8. According to the information and explanation given to us, the Company is in the process of establishing its internal financial control over financial reporting on criteria considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

9. Because of this reason, we are unable to obtain sufficient appropriate audit evidence to provide a basis for our opinion whether the Company had adequate internal financial controls over financial reporting and whether such internal financial controls were operating effectively as at 31st March, 2016.

10. We have considered the disclaimer reported above in determining the nature, timing, and extent of audit tests applied in our audit of the financial statements of the Company, and the disclaimer does not affect our opinion on the financial statements of the Company.

THE ORISSA MINERAL DEVELOPMENT COMPANY LIMITED_

In their Report, the auditors have made certain observations to which clarifications have been given by your Directors as below:

Sl.

No.

Observations of the Auditor

Management Replies

01

The title deeds of immovable properties including leasehold were not made available for our examination

Records available with the Revenue Department of the State clearly indicate that the title is in the name of OMDC. Copy of the online records is available in OMDC Mines. OMDC is paying Land Tax to State Govt. based on such record.

However steps have been initiated to obtain certified and stamped copies of Title Deeds from the Revenue Department, Government of Odisha.

02

There being restrictions on movement of the items of inventory, we are unable to ascertain whether these will fetch the value at which these are stated in the financial statements

Movement of mines stock inventory is not permitted by statutory authority. On resumption of mines and on obtaining approval from appropriate authority, the available inventory is expected to fetch the value as per the market rate prevailing at that point of time.

03

Current assets considered good include Rs. 119.63 lakhs (net of provision) receivable from Bisra Stone Lime Company Ltd. Based on the available information; we are unable to ascertain the timing and extent of ultimate realization of the said amount.

Continuous persuasion is being made for realization of the dues from BSLC.

04

Current Liabilities include Rs. 469.39 Lakhs being aggregate amount of outstanding dues on account of legal charges Rs. 57.63 lakhs, provision for property Tax Rs. 60.84 lakhs, Dead Rent Rs. 288.68 lakhs and Surface Rent Rs. 62.24 lakhs for which supporting documents were not available for our inspection.

Action has been initiated for logical conclusion for legal charges and surface rent. Action has been already taken for property tax and necessary effect has been given in accounts.

05

Balances in respect of Advance, Receivable and payables are subject to confirmation. The effect of any adjustment, as may be required, on reconciliation with the parties'' confirmation is not currently ascertainable.

Letters sent to the customers on quarterly basis for confirmation of their balances. Action has been initiated for balances not confirmed.

06

Diminution other than temporary, if any, in the carrying amount of the investment in unquoted shares amounting to Rs. 281 lakhs could not be ascertained due to non-availability of latest financial statements of the investee Company

As the case with M/s EIML is subjudice at Company Law Board, Kolkata the financial statements are not available with OMDC.

COMPTROLLER AND AUDITOR GENERAL OF INDIA_

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143 (6) (b) OF THE COMPANIES ACT, 2013 ON THE FINANCIAL STATEMENTS OF THE ORISSA MINERALS DEVELOPMENT COMPANY LIMITED FOR THE YEAR ENDED 31 MARCH 2016.

The preparation of financial statements of The Orissa Minerals Development Company Limited for the year ended 31 March 2016 in accordance with the financial reporting framework prescribed under the Companies Act, 2013 (Act) is the responsibility of the management of the company. The statutory auditors appointed by the Comptroller and Auditor General of India under section 139(5) of the Act are responsible for expressing opinion on the financial statements under section 143 of the Act based on independent audit in accordance with the standards on auditing prescribed under section 143(10) of the Act. This is stated to have been done by them vide their revised Audit Report dated 20 June 2016 superseding their Audit Report dated 26 May 2016.

I, on the behalf of the Comptroller and Auditor General of India, have conducted a supplementary audit under section 143(6)(a) of the Act of the financial statements of The Orissa Minerals Development Company Limited for the year ended 31 March 2016. This supplementary audit has been carried out independently without access to the working papers of the statutory auditors and is limited primarily to inquiries of the statutory auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit noting significant has come to my knowledge which would give rise to any comments upon or supplement to statutory auditor''s report.

For and on the behalf of the Comptroller and Auditor General of India

(Sushil Kumar Jaiswal)

Principal Director of the Commercial Audit &

Ex- officio Member, Audit Board, Ranchi.

Place : Ranchi

Date : 22th July, 2016


Mar 31, 2015

1. We have audited the accompanying financial statements of The Orissa/Minerals Development Company Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, signed by us under reference to this report and a summary of the significant accounting policies and other explanatory information. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

Management''s Responsibility for the Standalone Financial Statements

2. 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 of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds 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 the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. 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 there under.

5. 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.

6. 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

8. 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 Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, its profit and its cash flows for the year ended on that date.

Emphasis of Matters

9. As indicated in the Note 35 to the Financial Statements mining operation of the Company is continued to be remained suspended due to non-renewal of the leases and non-receipt of requisite clearances from the Government of Odisha and the Central Government. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the Company''s ability to continue its operations pursuant to its main objective. These financial statements have been prepared on a going concern basis mainly for the initiative taken by the Company''s management for opening of the mines and resumption of mining operations.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained, except any report as might have made by the Vigilance department of the Company, all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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 and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, there is no matter which may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors other than Mr. T. Chattopadhyay and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) 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:

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 25 to the financial statements.

b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

12. In terms of the Directions and Sub-Direction of the Comptroller & Auditor General of India under section 143(5) of the Act, we give in the ADDENDUM our report on the matters included in the Directions and Sub-Directions as aforesaid.

Other Matters

This revised report issued in compliance with the Audit Memo No. A. A/cs/OMDC/14-15/01 dated 18.06.2015 issued by the Office of the Principal Director of Commercial Audit, Ranchi supersedes our report dated 29th May 2015 to the members of The Orissa Minerals Development Company Limited.

ANNEXURE TO THE AUDITORS'' REPORT

To the members of The Orissa Minerals Development Company Limited

[Referred to in paragraph 10 of the Auditors'' Report of even date]

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The fixed assets of the Company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. The Company has not accepted any deposits within the meaning of Sections 73 or 76 of the Act and the rules framed there under.

6. We have broadly reviewed the books and records maintained by the company in respect of its products where maintenance of cost records has been specified by the Central Government under sub-section (I) of section 148 of the Companies Act and are of opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of these books and records to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authorities.

The extent of the arrears of statutory dues outstanding as at 31st March 2015, for a period of more than six months from the date they became payable, in respect of share of shortfall of distributable interest on Provident Fund are as follows-

Name of Statute Nature of due Amount Period to which it Due date of (Rs in Lacs) relates payment

Provident Fund Share of shortfall of 6.00 2012-13 - Act, 1952 distributable interest

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of sales-tax, service tax, duty of excise and value added tax as at 31st March 2015 which have not been deposited on account of a dispute, are as follows-

Name of the statute Nature of dues Amount Period to which Forum where the the amount dispute is pending (Rs in Lacs.) relates

The Central Sales Tax Central Sales 4.44 2003-04 Appellate Tribunal Act,1956 Tax

Odisha Value Added VAT 21.34 2005-06 High Court of Orisse Tax Act, 2004

Odisha Entry Tax Act, Entry Tax 34.79 2005-06 High Court of Orissa 1999

Odisha Entry Tax Act, Entry Tax 2.31 2006-07 Commissioner 1999 Appeal

Odisha Entry Tax Act, Entry Tax 0.88 2007-08 Appellate Tribunal 1999

Odisha Value Added VAT 224.25 2006-07 Commissioner Tax Act, 2004 Appellate

Finance Act, 1994 Service Tax 7.05 2012-13 Commissioner Appeal

(c) According to the information and explanations given to us and the records of the Company examined by us, no amounts were required to be transferred to Investor Education and Protection Fund during the year in accordance with the provisions of section 205C of the Companies Act, 1956 and rules made there under and there were no dues in this regard outstanding as at 31st March 2015.

8. The company has no accumulated losses as at 31st March 2015 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

9. The Company has neither borrowed funds from financial institutions nor issued any debentures.

10. According to the information and explanations given to us and the records of the Company examined by us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

11. The company has not obtained any term loans.

12. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and the books and papers made available to us, we have not come across any instance of fraud on or by the Company.



For LB. Jha & Co.,

Chartered Accountants

(Firm Registration number 301088E)



Kamal Kumer Bhanja

Partner

(Membership number 14722)

Kolkata, 3rd July, 2015


Mar 31, 2014

A. Report on the Financial Statements

We have audited the accompanying financial statement of The Orissa Minerals Development Company Limited, which comprise the Balance Sheet as at 31st March, 2014. the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

B. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial Statements that are free from material misstatement, whether due to fraud or error.

C. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standard on Auditing issued by the Institute of Chartered Accountants of India. 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 form material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

D. Opinion

In our opinion and to the best of information and according to the explanations given to us, the financial statement give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date;

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

E. Emphasis of matter

1) Attention is drawn to the Mote 32 to the Financial Statements regarding non-availability of confirmation of balances from Trade Payables/Trade Receivables/Loans & Advances and the adjustment, if any, which may arise on receipt of confirmations is presently not quantifiable and accordingly their consequential impact on the year''s profit and year-end Assets & Liabilities is not ascertainable.

2) We also draw attention to Note 36 to the financial statements which states about preparation of the accounts on a going concern basis inspite of the fact that mining operations of the Company have been stopped for more than three years due to non-receipt of environment/fores''t/other clearances from the Government of Odisha as well as Central Government and the management is regularly following up with the Governments for opening and resumption of mining operations.

Our opinion is not qualified in respect of the above matters.

F. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. we have 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 appeals.

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. The provision of clause (g) of sub-section ( l ) of Section 274 of the Act is not applicable to the Company, vide notification GSR - 829 (Z) dated 21.10.2003 issued by the Department of Company Affairs, Govt. of India, New Delhi.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under Section 441A of the Act nor has it issued any Rules under the said Section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in Paragraph F.l of our report of even date)

1. [a] The Company has maintained proper records to show full particulars including quantitative details and situation of the fixed assets.

[b] The Fixed Assets have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

[c] In our opinion, and according to the information and explanations given to us, the Company has not disposed off a substantial part of its fixed assets during the year.

2. [a] As explained to us, stock of stores have been physically verified during the year by the management. Stock of Finished Goods and Raw Materials has been physically verified by an outside agency on behalf of the Company. In our opinion, the frequency of verification is reasonable.

[b] In our opinion, the procedures of physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

[c] In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material,

3. The Company has not granted/taken any loans secured unsecured to/from companies, firm or other parties covered in the register maintained under Section 301 of the act.

4. In our opinion and according to the information and explanations given to us and based on our review, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of services. There was no sale of goods made during the year. Further, on the basis of our examination on the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instances of major weaknesses in the aforesaid internal control procedure and continuing failure on the part of the management to take corrective course of action in this regard.

5. In our opinion and according to the information and explanations given to us, during the year there were no transactions that were need to be entered into the register in pursuance of Section 301 of Act.

6. The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, and based on our review, the Company has an internal audit system which need to be strengthened to make it commensurate with the size and nature of its business.

8. We have made an overall review of the books of account maintained by the Company, pursuant to the rules made by the Central Government of India, for the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. [a] According to the information and explanations given to us and records of the Company

exammed by us. the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable to it.

There are no arrears of outstanding statutory dues other than share of shortfall of distributable interest on Provident Fund as at the last day of the financial year for a period of more than 6 months from the date they became payable:

Name of Statute Nature of due Amount Period to Due date of (Rs. in lacs) which it payment relate

P.F. Act. Share of short fall 3.00 (Estd.) 2012-13 * of distributable interest

*P.F A/cs. yet to be audited after which the dues would be deposited to the P.F Fund.

[b] According to the information and explanations given to us records of the Company examined by us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess as at March 31, 2014 which have not been deposited on account of disputed except as follows:-

Name of Nature of Period to which it Statute dues pertains

Sales Tax CST 2003-2004 Act

Orissa Entry Entry Tax 2005-2008 Tax Act

Sales Tax O-VAT 2005-06 Act

Sales Tax O-VAT 2006-07 Act

Name of Forum where dispute is Amount Statute pending (Rs. in Lac)

Sales Tax Tribunal 4.44 Act

Orissa Entry Additional 30.11 Tax Act Commissioner (Appeal)

Sales Tax High Court of Orissa 21.34 Act

Sales Tax Commissioner (Appeal) 224.26 Act 10. The Company does not have any accumulated losses. The Company has neither incurred cash losses during the financial year covered by our audit nor in the immediately preceding financial year.

11. According to the records of the Company as examined by us and the information and explanations given to us, the Company has not accepted any deposits/loans from any financial institutions/banks nor it has issued any debentures.

12. Based on our examination of documents and records and according to the information and explanations given by the management, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, and according to explanations received from the management, the provisions of any special statutes relating to a chit fund or a nidhi/mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information given to us, the Company has not availed any Term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion, and according to the information and explanations given to us, there are no funds raised on a short- term basis, which have been used for long-term investment:

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year nor has any debentures outstanding as at 31st March.2014.

20. The Company has not raised any money by way of any public issue during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For L.B.JHA & Co. Chartered Accountants Firm Registration Number: 301088E

(A.K. Gandhi) Place: Kolkata Partner Date:30.05.2014 Membership No 16350


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statement of The Orissa Minerals Development Company Limited , which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

B. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial Statements that are free from material misstatement, whether due to fraud or error.

C. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standard on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 qualified audit opinion.

D. Basis for "Qualified Opinion"

Attention is drawn to the Note 30(2.3) to the Financial Statements regarding non availability of confirmation of balances from Trade Payables/Trade Receivables/Loans & Advances and the adjustment, if any, which may arise on receipt of confirmations with their consequential impact on the year''s profit and year-end Assets & Liabilities is not ascertainable.

E. Qualified Opinion

In our opinion and to the best of information and according to the explanations given to us, the financial statement give "except for the effects of the matter described in the Basis for Qualified Opinion paragraph" the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date;

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

F. Emphasis of matter

We also draw attention to Note 30(8) to the financial statements which states about preparation of the accounts on a going concern basis inspite of the fact that mining operations of the Company have been stopped for more than two years due to non receipt of environment/forest/other clearances from the Government of Odisha as well as Central Government and the management is regularly following up with the Governments for opening and resumption of mining operations. Our opinion is not Qualified in respect of this matter.

G. Report on Other Legal and Regularly Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by Section 227(3) of the Act, we report that:

a. We have 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 appears from our examination of those books;

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

e. The provision of clause (g) of sub-section (1) of Section 274 of the Act is not applicable to the Company vide notification GSR - 829 (Z) dated 21.10.2003 issued by the Department of Company Affairs, Govt, of India, New Delhi.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under Section 441 of the Act nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company

1. [a] The Company has maintained proper records to show full particulars including quantitative details and situation of the fixed assets.

[b] The Fixed Assets have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

[c] In our opinion, and according to the information and explanations given to us, the Company has not disposed off a substantial part of its fixed assets during the year.

2. [a] As explained to us, stock of stores have been physically verified during the year by the management. Stock of Finished Goods and Raw Materials has been physically verified by an outside agency on behalf of the Company. In our opinion, the frequency of verification is reasonable.

[b] In our opinion the procedures of physical verification of inventory followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

[c] In our opinion the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification between the physical stock and book records were not material and the same have been dealt with in the books of account.

3. The Company has not granted/taken any loans secured unsecured to/from companies, firm or other parties covered in the register maintained under section 301 of the act.

4. In our opinion and according to the information and explanations given to us and based on our review, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets, there was no sale of goods made during the year. Further, on the basis of our examination on the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have we been informed of any instances of major weakness in the aforesaid internal control procedure and continuing failure on the part of the management to take corrective course of action in this regard.

5. In our opinion and according to the information and explanations given to us, during the year there were no transactions that were need to be entered into the register in pursuance of Section 301 of Act.

6. The Company has not accepted any deposits under the provisions of Sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, and based on our review, the Company has an internal audit system which need to be strengthened to make it commensurate with the size and nature of its business.

8. We have made an overall review of the books of account maintained by the Company, pursuant to the rules made by the Central Government of India, for the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate and complete.

9. [a] According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable to it.

10. The Company does not have any accumulated losses. The Company has neither incurred cash losses during the financial year covered by our audit nor in the immediately preceeding financial year.

11. According to the records of the Company as examined by us and the information and explanations given to us, the Company has not accepted any deposits/loans from any financial institutions/banks nor it has issued any debentures.

12. Based on our examination of documents and records and according to the information and explanations given by the management, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, and according to explanations received from the management, the provisions of any special statutes relating to a chit fund or a nidhi/mutual benefit fund/ societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions during the year.

16. In our opinion, and according to the information given to us, the Company has not availed any term loans.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion, and according to the information and explanations given to us, there are no funds raised on a short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. In our opinion and according to the information and explanations given to us, the Company has not issued any debentures during the year nor has any debentures outstanding as at 31s* March,2013.

20. The Company has not raised any money by way of any public issue during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, nor noticed or reported during the year, have we been informed of such a case by the management.

For L.B.JHA & Co.

Chartered Accountants

Firm Registration Number: 301088E

(A.K. Gandhi)

Place: Kolkata Partner

Date:24th May, 2013 Membership No 16350


Mar 31, 2012

1. We have audited the attached Balance Sheet of The Orissa Minerals Development Company Limited as at 31st March 2012 and also the Statement of Profit and Loss of the Company for the year ended on that date and Cash Flow Statement for the year ended on that date annexed thereto.

2. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

3. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for expressing our opinion on financial statements of the company.

4. As required by the Companies (Auditor's report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment ) Order, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such examination of the books and record of the company as we considered appropriate and according to the information and explanations given to us, we enclosed in "Annexure-A", a statement on the matters specified in paragraphs 4 and 5 of the said order:

5. Further to our comments in Annexure A, We report that;

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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.

iii) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report together with Notes on Accounts and Significant Accounting Policies of the Company comply with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act, 1956.

v) On the basis of written declaration received from the Directors which were taken on record by the Board of Directors, none of the Directors of the Company is disqualified from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts of the Company together with the Significant Accounting Policies read with Notes on Accounts (Part A & B) give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India :-

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2012.

(b) in case of the Statement of Profit & Loss of the profit for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

(i) (a) Whether the Company is maintaining proper records showings full particulars, including quantitative details and situation of fixed assets.

(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of Accounts.

(c) If a substantial part of Fixed Assets have been disposed off during the year, whether it has affected the going concern.

(ii) (a) Whether physical verification of inventory has been conducted at reasonable intervals by the Management.

(b) Are the procedures of physical verification of inventory followed by the Management reasonable and adequate in relation to the size of the company and the nature of its businessRs. If not, the inadequacies in such procedures should be reported.

(c) Whether the company is maintaining proper records of Inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of accounts.

(iii) (a) Has the company either granted or taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act Rs. If so, give the number of parties and amount involved in the transactions.

(b) Whether the rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, are prima facie prejudicial to the interest of the company.

(c) Whether payment of the principal amount and interest are also regular.

(d) If overdue amount is more than one lakh, whether reasonable steps have been taken by the company for recovery/ payment of the principal and interest.

(iv) Is there an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods Rs. Whether there is a continuing failure to correct major weaknesses in internal control.

(v) (a) Whether transactions that need to be entered into a register in pursuance of Section 301 of the Act have been so entered.

(b) Whether each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. (This information is required only in case of transactions exceeding the value of five lakh rupees in respect of any party and in any one of financial year)

(vi) In case the company has accepted deposits from the public, whether the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the rules framed there under, where applicable, have been complied with, if not the nature of contravention should be stated, if an order has been passed by the Company Law Board whether the same has been complied with or not.

(vii) In the case of listed companies and / or other companies having a paid up capital and reserve exceeding Rs. 50 lakh as at the commencement of the financial year concerned, having an average annual turnover exceeding five crore rupees for the period of three consecutive financial year immediately preceding the internal audit system commensurate with its size and nature of its business.

(viii) Where maintenance of cost records has been prescribed by the Central Government under clause (d) of sub- section (1) of Section 209 of the Act, whether such accounts and records have been made and maintained.

(ix) (a) Is the company regular in depositing undisputed statutory dues including Provident Fund. Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty Cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period more than six months from the date they became payable, shall be indicated by the auditor.

(b) In case dues of sales tax / income tax / custom tax/wealth tax/excise duty/cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending may please be mentioned.

(A mere representation to the department shall not constitute the disputes.)

(x) Whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty percent of its net worth and whether it has incurred cash losses in such financial year and in the financial year immediately preceding such financial year also.

(xi) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders. If yes, the period and amount of default to be reported.

(xii) Whether adequate documents and records are maintained is cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities, if not, the deficiencies to be pointed out.

(xiii) Whether the provisions of any special statute applicable to chit fund have been duly complied with. In respect of nidhi/ mutual benefit fund / societies :

(a) Whether the net owned funds to deposit liability ratio is more than 1.20 as on the date of Balance Sheet.

(b) Whether the company has complied with the prudential norms on income recognition and provisioning against sub- standard /default/loss assets.

(c) Whether the company has adequate procedures for appraisal of credit proposals / requests, assessment of credit need and repayment capacity of the borrowers.

(d) Whether the repayment schedule of various loans granted by nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount.

(xiv) If the company is dealing or trading in shares, securities, debentures and other investments, whether proper records have been maintained of the transactions and contracts and whether timely entries have been made therein; also whether the shares, securities, debentures and other securities have been held by the company in its own name except to be extent of the exemption if any, granted under Section 49 of the Act.

(xv) Whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof any prejudicial to the interest of the company.

(xvi) Whether term loans were applied for the purpose for which the loans were obtained.

(xvii) Whether the funds raised on short term basis have been used for long term investment and vice-versa, if yes, the nature and amount is to be indicated.

(xviii) Whether the company has made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act and if so, whether the price at which shares have been issued is prejudicial to the interest of the company.

(xix) Whether securities have been created in respect of debenture issued.

(xx) Whether the management has disclosed on the end use of money raised by public issues and the same has been verified.

(xxi) Whether any fraud on or by the company has been noticed or reported during the year. If yes, the nature and the amount involved is to be indicated.

For N. C. Banerjee & Co.,

Chartered Accountants

FRN 302081E

(Arnob Paul)

Partner

Mem. No. 06490

Place : KOLKATA

Dated : 18 May 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of The Orissa Minerals Development Company Limited as at 31st March 2011 and also the Profit and Loss Account of the above company for the year ended on that date and annexed thereto and Cash Flow Statement for the period ended on that date. This report dated 26th July 2011 supersedes our earlier given on 27th May 2011.

2. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

3. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for expressing our opinion on financial statements of the company.

4. As required by the Companies (Auditor's report) Order, 2003 called as CARO 2003, vide notification no. GSR 480(E) dated 12th June, 2003, issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

5. Further to our comments in the annexure referred to above, we report that :

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report together with Notes on Accounts {Schedule – 20(II)} and other notes appearing in various schedules and Significant Accounting Policies {Schedule – 20(I)} of the Company comply with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act.

v) On the basis of written declaration received from the Directors which were taken on record by the Board of Directors, none of the Directors of the Company is disqualified from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts of the Company together with the Significant Accounting Policies [Schedule – 20(I)] and read with Notes on Accounts [Schedule – 20(II)] particularly to the note No. 3 & 3b the accounts has been prepared on going concern basis as all mining lease are in various stages of approval, Note No. 18 regarding restructuring expenses of Rs. 6.52 lakhs is not related normal course of business of the company.

The company, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India :-

(a) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

(b) in case of the Profit & Loss Account, of the Profit for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

COMPANIES (AUDITORS' REPORT) ORDER, 2003 QUERIES COMMENTS

(i) (a) Whether the Company is maintaining proper records showings full particulars, including quantitative details and situation of fixed assets.

The Company has in this year prepared a fixed asset register with the help of our side agency which require further improvement and reconciliation. The register contain full particulars including quantitative details and situations of fixed assets.

(b) Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of Accounts.

The fixed Assets have been physically verified by the out-side agency with the help of the management. They have indicated obsolete fixed assets but no value has been indicated. The same could not be properly delt in books of account.

(c) If a substantial part of Fixed Assets have been disposed off during the year, whether it has affected the going concern.

No substantial parts of fixed assets have been disposed off during the year. The company is a mining company as on 31st March 2011 all mining lease has expired and at various stages of approval. The accounts has been prepared on going concern basis.

(ii) (a) Whether physical verification of inventory has been conducted at reasonable intervals by the Management.

Physical verification of spare parts has been done at reasonable intervals. Incase of Raw materials and finished goods verification is done by third party.

(b) Are the procedures of physical verification of inventory followed by the Management reasonable and adequate in relation to the size of the company and the nature of its business? If not, the inadequacies in such procedures should be reported.

The procedure of physical verification of spare parts has been done by the management. Third party verification is done by the management for raw materials and finished goods which required improvement.

(c) Whether the company is maintaining proper records of Inventory and whether any material discrepancies were noticed on physical verification and if so, whether the same have been properly dealt with in the books of accounts.

The Company maintains proper records of stores. In case Raw material and finished product physical verification has been done by third party there is a wide difference between book stock and physical stock which required management attention. Sub grade stock of finished product has been accounted for during the year.

(iii) (a) Has the company either granted or taken loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Act? If so, give the number of parties and amount involved in the transactions.

Loan given to associate companies the Register has been maintained under Section 301 of the Companies Act. Scott and Saxby Rs. 104.42 lacs and KDCL Rs. 28.77 lacs.

(b) Whether the rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, are prima facie prejudicial to the interest of the company.

Interest rate and other terms and condition of loan giver are not prejudicial to the interest of the company.

(c) Whether payment of the principal amount and interest are also regular.

No payment of Principal and Interest has been made during the year.

(d) If overdue amount is more than one lakh, whether reasonable steps have been taken by the company for recovery/ payment of the principal and interest.

Steps have been taken but no Recovery from Associate Companies Scott and Saxby and KDCL Both the sister concern are under liquidation.

(iv) Is there an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods? Whether there is a continuing failure to correct major weaknesses in internal control.

In our opinion and according to the information and explanation given to us there are adequate internal control procedures commensurate with the size of the company and the nature of the business for the purchase of inventory and fixed assets but there is scope of improvement.

(v) (a) Whether transactions that need to be entered into a register in pursuance of Section 301 of the Act have been so entered.

According the information and explanations given to us. we are of the opinion that the transactions that needed to be entered in to the register maintained under section 301 of the Companies Act. 1956 have been so entered.

(b) Whether each of these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. (This information is required only in case of transactions exceeding the value of five lakh rupees in respect of any party and in any one of financial year).

According the information and explanations given to us, where each of such transaction exceeding Rupees five lacs in value have been made at the price which are prima facie reasonable having regard to the prevailing market price at the relevant time.

(vi) In case the company has accepted deposits from the public, whether the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA of the rules framed there under, where applicable, have been complied with. If not the nature of contravention should be stated, if an order has been passed by the Company Law Board whether the same has been complied with or not.

The company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Companies Act, 1956, read with the directives issued by the Reserve Bank of India.

(vii) In the case of listed companies and/or other A firm of Chartered Accountant has been appointed companies having a paid-up capital and reserve exceeding Rs. 50 lakh as at the commencement of the financial year concerned, having an average annual turnover exceeding five crore rupees for the period of three consecutive financial year immediately preceding the internal audit system commensurate with its size and nature of its business.

as Internal Auditors of the company. In our opinion there is scope for Improvement. Internal audit must take initiative in helping the management to take appropriate measures considering all aspects which are reported by them. Internal Audit system commensurate with the size and nature of its business.

(viii) Where maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Act, whether such accounts and records have been made and maintained.

Maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 is not applicable to this Company.

(ix) (a) Is the company regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees" State Insurance, income tax, sales tax, wealth tax, custom duty, excise duty cess and any other statutory dues with the appropriate authorities and if not, the extent of the arrears of outstanding statutory dues as at the last day of the financial year concerned for a period more than six months from the date they became payable, shall be indicated by the auditor.

According to the information and explanation made available to us. undisputed statutory dues including Provident Fund, Income Tax. Sales Tax. Royalty etc are deposited on regular basis to the appropriate authorities. As explained there is no undisputed amount payable in respect of the aforesaid dues as on 31st March 2011 outstanding for a period of more than six months from the date they had become payable.

(b) In case dues of sales tax/income tax/ custom tax/wealth tax / excise duty/ cess have not been deposited on account of any dispute, then the amounts involved and the forum where dispute is pending may please be mentioned.

(A mere representation to the department shall not constitute the disputes.)

According to the information and explanations made available to us, details of disputes dues as on 31.03.2011 are as follows :

Name of Nature of Forum Amount Statue Dues where dispute (Rs.) is pending

Orissa VA Sales Tax High court 26,67,117

Central Sales Tax Asstt. 10,43,975 Sales Tax Commissioner

Asstt. 7,72,68,197 Commissioner

Asstt. 50,20,858 Commissioner

Orissa Entry Tax Add. 34,79,287 Entry Tax Commissioner

Asstt. 22,68,182 Commissioner

(x) Whether in case of a company which has been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the financial year immediately preceding such financial year also.

There is no accumulated loss.

(xi) Whether the company has defaulted in repayment of dues to a financial institution or bank or debenture holders. If yes, the period and amount of default to be reported.

The Company has not accepted any deposits/ loans from any other financial institutions or debenture holders.

(xii) Whether adequate documents and records are maintained is cases where the company has granted loans and advances on the basis of security by way of pledge of shares, debenture and other securities, if not, the deficiencies to be pointed out.

According to the information and explanations made available to us, no loans or advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) Whether the provisions of any special statute applicable to chit fund have been duly complied with. In respect of nidhi/mutual benefit fund/societies :

(a) Whether the net owned funds to deposit liability ratio is more than 1.20 as on the date of Balance Sheet.

(b) Whether the company has complied with the prudential norms on income recognition and provisioning against sub-standard / default / loss assets.

(c) Whether the company has adequate procedures for appraisal of credit proposals / requests, assessment of credit need and repayment capacity of the borrowers.

(d) Whether the repayment schedule of various loans granted by nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount.

Not Applicable

(xiv) If the company is dealing or trading in shares, securities, debentures and other investments, whether proper records have been maintained of the transactions and contracts and whether timely entries have been made therein; also whether the shares, securities, debentures and other securities have been held by the company in its own

Not Applicable

name except to be extent of the exemption if any, granted under Section 49 of the Act.

(xv) Whether the company has given any guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof and prejudicial to the interest of the company

No

(xvi) Whether term loans were applied for the purpose for which the loans were obtained.

NIL

(xvii) Whether the funds raised on short term basis have been used for long term investment and vice-versa. If yes, the nature and amount is to be indicated.

NIL

(xviii) Whether the company has made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act and if so, whether the price at which shares have been issued in prejudicial to the interest of the company.

No such allotment has been made.

(xix) Whether securities have been created in respect of debenture issued.

No debenture issued.

(xx) Whether the management has disclosed on the end use of money raised by public issues and the same has been verified.

Not Applicable

(xxi) Whether any fraud on or by the company has been noticed or reported during the year. If yes, the nature and the amount involved is to be indicated.

No fraud was reported by the Management and we have not come across any fraud case during our course of Audit during the year.

For SARMA & CO.

Chartered Accountants

Sd/-

(P. K. Ghosh)

Partner

Place : Kolkata (M. No. 002553)

(FRN. No. 302052E)

Date : 26th July 2011.


Mar 31, 2010

1. We have audited the attached Balance Sheet of The Orissa Minerals Development Company Limited as at 31st March 2010 and also the Profit and Loss Account of the above company for the year ended on that date and annexed thereto and Cash Flow Statement for the period ended on that date.

2. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

3. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform our audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for expressing our opinion on financial statements of the company.

4. As required by the Companies (Auditors report) Order, 2003 called as CARO 2003, vide notification no. GSR 480(E) dated 12th June, 2003, issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

5. Further to our comments in the annexure referred to above, we report that :

i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii) 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.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report together with Notes on Accounts (Schedule – 18B) and other notes appearing in various schedules and Significant Accounting Policies (Schedule – 18A) of the Company comply with the Accounting Standards referred in sub-section (3C) of Section 211 of the Companies Act.

v) On the basis of written declaration received from the Directors which were taken on record by the Board of Directors, none of the Directors of the Company is disqualified from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts of the Company together with the Significant Accounting Policies (Schedule – 18A) and read with Notes on Accounts (Schedule – 18B) particularly to the note No. 17 regarding restructuring expenses Rs.36.19 lacs is not related to normal course of business of the company, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India :- (a) in case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010.

(b) in case of the Profit & Loss Account, of the Profit for the year ended on that date; and

(c) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

COMPANIES (AUDITORS REPORT) ORDER, 2003

QUERIES COMMENTS

(i) (a) Whether the Company is maintaining proper The Company has maintained proper record showing records showings full particulars, including full particulars including quantitative details and quantitative details and situation of fixed situations of fixed assets. assets.

(b) Whether these fixed assets have been The fixed Assets have not been physically verified physically verified by the management at by departmental Head and no discrepancies has been reasonable intervals; whether any material determined by the management. discrepancies were noticed on such verification and if so, whether the same have been properly dealt with in the books of Accounts.

(c) If a substantial part of Fixed Assets have No substantial parts of fixed assets have been been disposed off during the year, whether disposed off during the year. it has affected the going concern.

(ii) (a) Whether physical verification of inventory Physical verification of inventory has been made at has been conducted at reasonable intervals reasonable intervals. by the Management.

(b) Are the procedures of physical verification The procedure and interval of physical verification of of inventory followed by the Management inventory followed by the Management are reasonable and adequate in relation to the reasonable and adequate in relation to the size of size of the company and the nature of its the Company and nature of its business. business? If not, the inadequacies in such procedures should be reported.

(c) Whether the company is maintaining proper The Company maintains proper records of inventory. records of Inventory and whether any The discrepancies noticed on verification between material discrepancies were noticed on the physical stock and book record were not material physical verification and if so, whether the and it has been properly dealt with in the accounts. same have been properly dealt with in the books of accounts.

(iii) (a) Has the company either granted or taken Loan given to associate companies, the Register has loans, secured or unsecured to/from been maintained under Section 301 of the Companies companies, firms or other parties covered Act. Scott and Saxby Rs. 104.42 lacs and KDCL Rs. in the register maintained under section 301 28.77 lacs. of the Act? If so, give the number of partiesand amount involved in the transactions.

(b) Whether the rate of interest and other terms Interest rate and other terms and condition of loan and conditions ofloans given ortaken by are not prejudicial to the interest of the company. the company, secured or unsecured, are prima facie prejudicial to the interest of the company.

(c) Whether payment of the principle amount No payment of Principal and Interest has been made and interest are also regular. during the year.

(d) If overdue amount is more than one lakh, Steps has been taken but no recovery from Associate whether reasonable steps have been taken Companies Scott and Saxby and KDCL. by the company for recovery/ payment of the principal and interest.

(iv) Is there an adequate internal control In our opinion and according to the information and

procedure commensurate with the size of explanation given to us there are adequate internal

the company and the nature of its business, control procedures commensurate with the size of for the purchase of inventory and fixed the company and the nature of the business for the assets and for the sale of goods? Whether purchase of inventory and fixed assets but there is there is a continuing failure to correct major scope of improvement. weaknesses in internal control.

(v) (a) Whether transactions that need to be According to the information and explanations given entered into a register in pursuance of to us, weare of the opinion that the transactions that Section 301 of the Act have been so entered. needed to be entered in to the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) Whether each of these transactions have According to the information and explanations given

been made at prices which are reasonable to us, where each of such transaction exceeding

having regard to the prevailing market prices Rupees five lacs in value have been made at the at the relevant time. price which are prima facie reasonable having regard to the prevailing market price at the relevant time. (This information is required only in case of transactions exceeding the value of five lakh rupees in respect of any party and in any one of financial year).

(vi) In case the company has accepted deposits The company has not accepted any deposits from from the public, whether the directives issued the public withinthe meaning of Section 58A and by the Reserve Bank of India and the 58AA of the Companies Act, 1956, read with the provisions of sections 58A and 58AA of the directives issued by the Reserve Bank of India. rules framed there under, where applicable, have been complied with. If not the nature of contravention should be stated, if an order has been passed by the Company Law Board whether the same has been complied with or not.

(vii) In the case of listed companies and/or other A firm of Chartered Accountant has been appointed companies having a paid-up capital and as Internal Auditors of the company. In our opinion reserve exceeding Rs.50 lakh as at the there is scope for improvement. commencement of the financial year concerned, having an average annual turnover exceeding five crore rupees for the period of three consecutive financial year immediately preceding the internal audit system commensurate with its size and nature of its business.

(viii) Where maintenance of cost records has Maintenance of cost records under Section 209(1)

been prescribed by the Central Government (d) of the Companies Act, 1956 is not applicable to under clause (d) of sub-section (1) of Section this Company. 209 of the Act, whether such accounts and records have been made and maintained.

(ix) (a) Is the company regular in depositing According to the information and explanation made

undisputed statutory dues including available to us, undisputed statutory dues including Provident Fund, Investor Education and Provident Fund, Income Tax, Sales Tax, Royalty etc.

Protection Fund, Employees State are deposited on regular basis to the appropriate

Insurance, income tax, sales tax, wealth tax, authorities. As explained there is no undisputed

custom duty, excise duty cess and any other amount payable in respect of the aforesaid dues as

statutory dues with the appropriate on 31st March 2010 outstanding for a period of more

authorities and if not, the extent of the arrears than six months from the date they had become of outstanding statutory dues as at the last payable. day of the financial year concerned for a period more than six months from the date they became payable, shall be indicated by the auditor.

(b) In case dues of sales tax/income tax/ custom According to the information and explanations made

tax/ wealth tax / excise duty/ cess have not available to us, details of disputes dues as on

been deposited on account of any dispute, 31.03.2010 are as follows : then the amounts involved and the forum Name of Nature of Forum Amount where dispute is pending may please be Statue Dues where dispute (Rs.) mentioned. is pending

(A mere representation to the department Orissa VAT Sales Tax High court 26,67,117

shall not constitute the disputes.) Central Sales Tax Asstt. 10,43,975 Sales Tax Commissioner

Asstt. 7,72,68,197

Commissioner

Asstt. 50,20,858

Commissioner

Orissa Entry Tax Add. 34,79,287 Entry Tax Commissioner

Asstt. 22,68,182

Commissioner

(x) Whether in case of a company which has There is no accumulated loss. been registered for a period not less than five years, its accumulated losses at the end of the financial year are not less than fifty per cent of its net worth and whether it has incurred cash losses in such financial year and in the financial year immediately preceding such financial year also.

(xi) Whether the company has defaulted in The Company has not accepted any deposits/ loans

repayment of dues to a financial institution from banks or any other financial institutions or or bank or debenture holders. If yes, the debenture holders. The company had repaid the bank period and amount of default to be reported. loan.

(xii) Whether adequate documents and records According to the information and explanations made are maintained in cases where the company available to us, no loans or advances have been has granted loans and advances on the granted by the Company on the basis of security by basis of security by way of pledge of shares, way of pledge of shares, debentures and other debenture and other securities, if not, the securities. deficiencies to be pointed out.

(xiii) Whether the provisions of any special statute Not Applicable applicable to chit fund have been duly complied with. In respect of nidhi/mutual benefit fund/societies :

(a) Whether the net owned funds to deposit liability ratio is more than 1.20 as on the date of Balance Sheet.

(b) Whether the company has complied with the prudential norms on income recognition and provisioning against sub -standard / default / loss assets.

(c) Whether the company has adequate procedures for appraisal of credit proposals / requests, assessment of credit need and repayment capacity of the borrowers.

(d) Whether the repayment schedule of various loans granted by nidhi is based on the repayment capacity of the borrower and would be conducive to recovery of the loan amount.

(xiv) If the company is dealing or trading in shares, Not Applicable securities, debentures and other investments, whether proper records have been maintained of the transactions and contracts and whether timely entries have been made therein; also whether the shares, securities, debentures and other securities have been held by the company in its own name except to be extent of the exemption if any, granted under Section 49 of the Act.

(xv) Whether the company has given any guarantee No for loans taken by others from bank or financial institutions, the terms and conditions whereof and prejudicial to the interest of the company

(xvi) Whether term loans were applied for the NIL purpose for which the loans were obtained.

(xvii) Whether the funds raised on short term basis NIL have been used for long term investment and vice-versa. If yes, the nature and amount is to be indicated.

(xviii) Whether the company has made any No such allotment has been made. preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act and if so, whether the price at which shares have been issued in prejudicial to the interest of the company.

(xix) Whether securities have been created in No debenture issued. respect of debenture issued.

(xx) Whether the management has disclosed on Not Applicable the end use of money raised by public issues and the same has been verified.

(xxi) Whether any fraud on or by the company No fraud was reported by the Management and we

has been noticed or reported during the year. have not come across any fraud case during our If yes, the nature and the amount involved course of Audit during the year. is to be indicated.



For SARMA & CO. Chartered Accountants

Sd/-

(P. K. Ghosh)

Partner Place : Kolkata (M. No. 002553)

Date : 24th May 2010.

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