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Notes to Accounts of Orissa Minerals Development Company Ltd.

Mar 31, 2015

Note:1 -Excess/Short found on physical verification

Stocks found excess in physical verification are not considered in the valuation of closing stock for the purpose of account. The value of the stock found excess on physical verification on 31.03.2015 was Rs.0.34 lacs. (Previous year Rs.0.46 lacs)

Note:2-Cash and Bank Balances

Term Deposits with scheduled Banks shown under Cash and Bank balances (Note-15) include Term Deposit Receipts for Rs.262.92 lacs (Previous Year Rs.280.72 lacs) pledged with Banks against Bank Guarantee for IBM, Bhubaneswar for scheme of Mining including Progressive Mine Closure Plan with maturity period up to 1year.

Note:3-Investment of Surplus Found

During the year the surplus funds of the Company have been invested as per Investment Policy of the Company as approved by the Board of Directors as per DPE guidelines.

Note:4-Current Liabilities & Provisions

As per the information available with the Company, none of the agencies/enterprises from whom the Company procures goods or receives services are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence no disclosure there of has been made.

Note: 5 The accounts have been prepared on Going Concern Basis. All Mining Leases are at various stages of approval. In case of two mines i.e. Kolha-Roida and Dalki, the consent to operate and environment clearance have been received. The Management is continuously following up with Govt. Of Odisha, Govt. Of India and other statutory authorities for opening of the mines, requisite clearances so that mining operation is commenced at the earliest. The Company is a profit making concern and having high positive net worth.

Note: 6 Previous year''s figures have been re-grouped and rearranged wherever necessary to conform to this year''s classification.


Mar 31, 2014

The Company has only one class of equity shares having a par value of Rs. 1 /- each. Each share holder is eligible for one vote per share.The dividend proposed by the board of directors is subject to the approval of shareholders, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

Contingent liabilities and commitmentsfto the extent not accounted for)

Contingent Liabilities

Claims against the Company not acknowledge debt

2013-14 2012-13

Claims against the Company not acknowledged as debts 544425.39 ** 23903.34 Central Sales Tax - 35.22 Income Tax - 92.69 Customs / Excise duty - 25.09 Service Tax - 101.76 Others 1310* 1310*

Total 545735.39 25468.10

1 Contingent Liability contain Rs.1310 Lacs due to non-fulfillment of the provisions of minimum guranted quantity of export since 2007-08. The Port Authorities of Haldia Dock Complex auctioned the stock of Iron Ore fines to the tune of 15569.68 M.T. to liquidate their dues towards demurrage imposed on OMDC by Port Authorities as on 15.12.2009.The value of the stock as on the date of disposal was Rs. 122 Lacs. Though Port Authorities have not raised any demand for any demurrage but they have retained the sale proceeds of said stock of Iron ore towards settlement of their claim for demurrage, rent etc. however no claim papers against the Company have been submitted.

2 Claims against the Company not acknowledged as debts of Rs. 544425.39 lacs includes demand received from DDM, Joda circle towards recovery under Sub Section (5) of Section 21 of Mines & Minerals(Development & Regulation) Act, 1957 for Rs. 539539.24 Lacs (Previous Year Nil) towards price of minerals alleged to be raised without lawful Authority in respect of Six Mines. Against the above demand the Company has filed application for stay order with Revisional Authority,Ministry of Mines, Govt. of India.

Pursuant to the amendments of the Orissa Land Reforms Act, the Sub-Collector, Champua had served a Notice against the Company for alleged unauthorized possession of 10.79 acres of leasehold land on the ground that the said land belongs to Adivasis and based on that, the Revenue Inspector asked OMDC to vacate the land. The Company filed an appeal before the Addl. District Magistrate but the appeal was not allowed. During April, 1999 the Company filed a writ application and obtained Stay Order from the Hon''ble High Court of Orissa to maintain the status quo about the possession of the land until further order. No specific liability could be ascertained.

A. Holding Company/Ultimate Holding Company /Fellow Subsidiary Company Ultimate Holding Company-

Rashtriya Ispat Nigam Limited

B. Parent Co/Associates/Group Companies & Joint Ventures:

Holding Company

Eastern Investments Limited.

Fellow Subsidiary Company Associates/Group Companies

The Bisra Stone Lime Company Limited.

C. Joint Venture Company

East India Minerals Limited.

D. Key Management Personnel

Dr. Satish Chandra Managing Director (w.e.f - 29.10.2009 to 15.07.2013 A.N)

Shri Umesh Chandra Managing Director (w.e.f -15.07.2013 A.N)

Shri P.K. Sinha Director(P& P) (w.e.f-04.02.2014 )

E. Enterprise over which Key Management Personnel have significant influence Scott & Saxby Limited.

The Karanpura Development Company Limited

3 Excess /Short found on physical verification

Stocks found excess in physical verification are not considered in the valuation of closing stock for the purpose of account. The value of the stock found excess on physical verification on 31.03.2014 was Rs. 6.74 Lacs. (Previous year 50.54 Lacs)

4 Cash and Bank Balances

Term Deposits with scheduled Banks shown under Cash and Bank balances (Note-15) include, Term Deposit Receipts for Rs. 280.72 lacs (Previous Year Rs. 155.64 lacs) pledged with banker against bank guarantee to IBM, Bhubaneswar for scheme of Mining including Progressive Mine Closure Plan with maturity period upto 1 year.

5 Balance Confirmation

During the year the Company has sent letters to the parties under Trade receivables/Payables and loans & advances for confirmation of balances, however, in most of the cases confirmation from parties have not been received.

6 Current Liabilities & Provisions

6.01 As per the information available with the Company, none of the agencies/enterprises from whom the Company procures goods or receives services are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence no disclosures thereof have been made.

6.02 A liability of Rs. 785.09 lacs (Previous Year- Rs. 100 /- Lacs) have been created in the books of account and charged off in the statement of Profit and Loss on the basis of judicial judgments against the company as a matter of prudence.

7 The accounts have been prepared on Going Concern Basis. All Mining Leases are at various stages of approval. Incase of two mines i.e. Kolha-Roida and Dalki, the consent to operate and environment clearance have been received. The Company is a profit making concern and having high positive networth.

8 Previous year''s figures have been re-grouped and rearranged wherever necessary to conform to this year''s classification.


Mar 31, 2013

1.1 Stocks found excess in physical verification are not considered in the valuation of closing stock for the purpose of account. The value of the stock found excess on physical verification on 31.03.2013 was Rs.50.54 Lacs.(Previous year Rs.59.76 lacs)

1.2 Term Deposits with Scheduled Banks shown under Cash and Bank balances (Note-15) include, Term Deposit Receipts for Rs.155.64 lacs (Previous Year Rs.246.05 lacs) pledged with Banker against bank guarantee to Indian Bureau of Mines, Bhubaneswar for scheme of Mining including Progressive Mine Closures Plan with maturity period upto 1 year.

1.3 BALANCE CONFIRMATION

During the year the Company has sent letters to the parties under Trade Receivables/Payables and Loans and Advances for confirmation of balances, however, has not received in most cases confirmation from those parties.

2 CURRENT LIABILITIES & PROVISIONS

2.1 As per the information available with the Company, none of the Agencies/Enterprises from whom the Company procures goods or receives services are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence no disclosures thereof have been made.

2.2 A liability of 7100 /- Lacs has been created in the books of accounts and charged off in the Statement of Profit and Loss Account on the basis of judicial judgments of different Courts against the company as a matter of prudence.


Mar 31, 2012

Note 1.01: Related Party Disclosure

LIST OF RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS etc.

A. Holding Company/Ultimate Holding Company /Fellow Subsidiary Company Ultimate Holding Company-

Rashtriya Ispat Nigam Limited

A. Parent Co/Associates/Group Companies & Joint Ventures :

Holding Company

Eastern Investments Limited.

Fellow Subsidiary Company Associates/Group Companies

The Bisra Stone Lime Company Limited.

B. Joint Venture Company

East India Minerals Limited.

C. Key Management Personnel

Dr. Satish Chandra Managing Director (w.e.f 29.10.2009)

D. Enterprise over which Key Management Personnel have significant influence

Scott & Saxby Limited.

The Karanpura Development Company Limited

1. FIXED ASSETS:

1.1 In this Year, the Company has changed its Accounting Policy of method for charging of depreciation on fixed Assets from WDV method to SLM as provided in Schedule XIV of the Companies Act, 1956 giving effect from last 20 Years. The Change in the above Accounting policy has resulted in a surplus of Rs.1141.39 Lakhs relating to the previous years i.e. upto the year ended 31.03.2011. Consequently the Net Profit for the current year is higher by Rs.1141.39 Lakhs. The said surplus amount of Rs.1141.39 Lakhs have been set off against the current year Depreciation of Rs.1004.74 Lakhs and the net effect of Rs.136.65 Lakhs (Rs.1141.39 Lakhs - Rs.1004.74 Lakhs) has been credited to Statement of Profit & Loss for the year ended 31.03.2012. Had the company followed the WDV method of depreciation accounting, the charge for the current year would have been higher by Rs.111.66 Lakhs.

1.2 As per the report dated 15/05/2012 of physical verification of fixed assets done by CA firm an amount of Rs.129.20 lacs has been charged off as Loss in Profit & Loss Account on account of Impairment of assets.

1.3 The company made a payment of Rs.275.00 Lacs and admitted a liability on account of interior and modeling work for Rs.57.29 Lacs for Delhi office which is situated in SCOPE Minar New Delhi for an office space measuring about 2500 sq. ft. These amounts have been shown under short term Loans & advances (Note No. 16). Depreciation or Amortisation will be considered from next year.

2. CURRENT ASSETS, LOANS & ADVANCES.

2.1 INVENTORIES

2.1.1 Quantities of Closing Stock have been taken as per the physical verification done by an outside agency.

Note:

(i) Figures in brackets are for previous year.

(ii) Closing stock of Iron ore does not include the estimated 12,15,000 MT of sub-grade material as per departmental physical verification as on 31.03.2011.

(iii) Figures of closing stock are after adjustment for shortages found as per physical verification.

(iv) The Cost or Sale price, whichever is lower, is considered for valuation of closing stock as on 31.03.2012.

(v) Where physical stock is more than book stock, book stock is considered for valuation of stock. However Surplus stock is valued at Rs.1/- per LOT for the Surplus stock available as on date of closing.

2.1.3 Stocks found excess in physical verification are not considered in the valuation of closing stock for the purpose of account. The value of the stock found excess on physical verification on 31.03.2012 was Rs.59.76 Lacs.

2.1.4 The Excise duty for Rs.2.81 Lacs payable on finished stock in hand as on 31.03.2012 has not consid- ered in valuation of closing stock.

2.2. CASH AND BANK BALANCES

2.2.1 Term Deposits with scheduled Banks shown under Cash and Bank balances (Note-15) include, Term Deposit Receipts for Rs.441.20 lacs (Previous Year Rs.391.41 lacs) pledged with banker against bank guarantee to IBM, Bhubaneswar for scheme of Mining including Progressive Mine Closure Plan.

2.2.2 Considering the Liability for unpaid dividend as on 31.03.2012, an amount of Rs.10.76 Lacs was found less in dividend Bank A/c with State Bank of India, Bikash Bhawan, Salt Lake, Kolkata which is under process of reconciliation.

2.3 Loans & Advances

Steps have been taken for recovery of advances paid towards Income Tax aggregating to Rs.3877.45 Lacs included under short term Loans & advances.

2.4 BALANCE CONFIRMATION

2.4.1 For a substantial portion of Trade receivables, Trade payable and Contractor's balance; letters seeking confirmation of balances although sent have not been confirmed.

2.4.2 The Company has not been able to obtain balance confirmations from the parties under trade payables and trade receivables.

3 CURRENT LIABILITIES & PROVISIONS

3.1 As per the information available with the Company, none of the agencies/enterprises from whom the Company procures goods or receives services; are covered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence no disclosures thereof have been made.

3.2 A liability for loss of Rs.869.96 Lacs has been created in the books of accounts and charged off in Profit and Loss account on the basis of judicial judgments of different Courts.

3.3 The following balances lying as unpaid liability(Under trade payables) are under dispute hence they were not paid or adjusted :

i. VAT credit refundable to customers since 2004-05 Rs.5.16 Lacs.

ii. Interest claimed on PF payment not admitted Rs.1.27 Lakhs.

4. CONTINGENT LIABILITIES Contingent Liabilities not provided for

(Rs. In Lacs)

Current Year Previous Year

Claims Not acknowledged as debt

I. Suits against the Company 23904.65 28395.00

II. Sales Tax/ Income Tax, Excise etc. 25.09 24.00

III. Others 1920.28* 2183.00

* Contingent Liability contain Rs.1310 Lacs due to non-fulfillment of the provisions of minimum granted quantity of export since 2007-08, the Port Authorities of Haldia Dock Complex have auctioned the stock of Iron Ore fines to the tune of 15569.68 M.T. to liquidate their dues towards demurrage imposed on OMDC by Port Authorities as on 15.12.2009.The value of the stock as on the date of disposal was Rs.122 Lacs. Though Port Authorities have not raised any demand for any demurrage but they have retained the sale proceeds of said stock of Iron ore towards settlement of their claim for demurrage, rent etc. however no claim papers against the company have been submitted.

Further, contingent liability contains Rs.873 Lacs in respect of payment of Regional Wildlife Management Plan related to 2009; out of which Rs.262.72 lacs has been paid in current year and the balance amount has not been acknowledged by the company and the company filed suit.

Pursuant to the amendments of the Orissa Land Reforms Act, the Sub-Collector, Champua had served a Notice against the Company for alleged unauthorized possession of 10.79 acres of leasehold land on the ground that the said land belongs to Adivasis and based on that, the Revenue Inspector asked OMDC to vacate the land. The Company filed an appeal before the Addl. District Magistrate but the appeal was not allowed. During April, 1999 the Company filed a writ application and obtained Stay Order from the Hon'ble High Court of Orissa to maintain the status quo about the possession of the land until further order

5. EMPLOYEES RETIREMENT BENEFITS

i) General Description of defined Benefit Scheme -

a) Gratuity : Payable on separation @ 15 days pay for each completed year of service to eligible employees who render continuous service of 5 years or more. Maximum amount in the case of separation is Rs. 10 lacs for each Employees. The gratuity is being covered under "Group Gratuity cum Life Insurance Scheme" with LIC of India and the provision on account of gratuity is being made as per the actuarial valuation.

b) Leave Encashment : (i) Earned Leave: Payable if encashment of leave is applied for during the tenure of service of employee and on separation to eligible employees who have accumulated earned leave. Maximum accumulated leave 300 days is encashable at the time of separation. Liability of Leave salary is provided on the basis of actuarial valuation as per AS-15 (Revised,2005).

(ii) Half Pay Leave: Payable if encashment of leave is applied for during the tenure of service of employee and on separation to eligible employees who have accumulated Half pay leave. Maximum accumulated leave 180 days is encashable at the time of separation. Liability of Leave salary is provided on the basis of actuarial valuation as per AS-15 (Revised, 2005).

(c) Superannuation Benefit: The Company pays fixed contribution @13% on (Basic IDA) on a/c of Superannuation fund only for the executives. This is deposited with a separate trust maintained by The Orissa Minerals Development Company Limited, which invests the fund in permitted securities.

The superannuation benefit at the rate of two-third of the total accumulated contribution is payable to the executives on separation from the Company. The balance one-third of the benefit is payable to such executive in annuity form. The company has no other liabilities apart from its contribution to the fund.

(d) Provident Fund : Head Office Employee

Company pays fixed contribution to Provident Fund, at predetermined rates, to a separate trust i.e. The Orissa Minerals Development Company Limited Provident Institution, which invests the Funds in permitted securities. On Contribution, the trust is required to pay a minimum rate of interest, to the members, as specified by Govt. of India. The obligation of the company is limited to the shortfall in the rate of interest on the Contribution based on its return on investments as compared to the declared rate.

Mines Employee

Company pay fixed contribution of Provident Fund at the rate of 12% on (Basic IDA) to RPFC.

The company has been taking necessary steps with the RPFC authority to merge the fund of H.O. employee to the RPFC, however due to some regulatory restriction the same could not be maintained as yet.

6. In view of the nature of operation, direct allocation of expenses and Capital employed between Iron ore and Manganese could not be determined. Hence the expenses and capital employed has been allocated in the ratio of 90:10.However, with respect to Sponge iron actual expenses are allocated.

7. Disclosure regarding related parties for the year 2011-12

OTHER RELATED PARTIES WITH WHOM THE COMPANY HAD TRANSACTIONS, etc.

i) Key Management Personnel:

a) Dr.Satish Chandra (from 29.10.09 A.N) Managing Director

ii) Employees' Benefit Plan where there is significant influence:

a) The Orissa Mineral Limited Employees Gratuity Fund.

b) The Orissa Minerals Development Company Limited Superannuation Fund.

c) The Orissa Minerals Development Company Limited Provident Institution

8. Previous year's figures have been re-grouped and rearranged wherever necessary.


Mar 31, 2011

1. Contingent Liabilities not provided for :-

(Rs. In Lacs)

Current Year Previous Year Claims Not acknowledged as debt

I. Suits against the company 28395.00 26820.00

II. Sales Tax/Income Tax etc. 24.00 917.00

III. Others 2183.00* 1310.00

*Contingent Liability contain 1310 Lacs due to non-fulfilment of the provisions of minimum granted quantity of export since 2007-08, the Port Authorities of Haldia Dock Complex have auctioned the stock of Iron Ore Fines to the tune of 15569.68 M.T. to liquidate their dues towards demurrage imposed on OMDC by Port Authorities as on 15.12.2009.The value of the stock as on the date of disposal was Rs. 122 Lacs. Though Port Authorities have not raised any demand for any demurrage but they have retained the sale proceeds of said stock of Iron ore towards settlement of their claim towards demurrage, rent, however there is no claim against the company.

There was a demand in 2009 for Rs. 873 Lacs regarding Regional Wildlife Management Plan, which was not acknowledged by the company as it was not tenable in the eye of Law.

2. Pursuant to the amendments of the Orissa Land Reforms Act, Sub-Collector, Champua had served a Notice against the Company for alleged unauthorised possession of 10.79 acres of leasehold land on the ground that the said land belongs to Adivasis and based on that, the Revenue Inspector asked OMDC to vacate the land. The Company filed an appeal before the Addl. District Magistrate. The appeal was not allowed. During April, 1999 the Company filed a writ application and obtained Stay Order from the Hon'ble High Court of Orissa to maintain the status quo about the possession of the land until further order.

3. Lease Matters

a) Status of grant of renewal of mining lease of area totaling 4365.262 hectres including lease rights granted to erstwhile Bharat Process and Mechanical Engineers Ltd. (BPEML), which is under liquidation covering 2068.272 hectre is detailed below :

LEASE AREA

STATUS

Thakurani Iron & Mn. Mines (1546.55 hects.) M/s. B.P.M.E.Ltd (Revised RML application submitted over 778.762 hects.)

The validity of 2nd RML period was up to 30.09.2004. 3rd RML application was filed for 20 years w.e.f 01.10.2004. The application is under process in the steel and mines Department Govt. of Orissa. The mining operation was stopped due to suspension order issued by state Forest Department and IBM. The suspension order by IBM was lifted on 17/09/2010.We have deposited an amount of Rs.26,00,11,370/- towards NPV as per Hon'ble Supreme Court's directive following CEC recommendations. The State Forest Dept. has permitted for operation in non forest only on 17/09/2010. by lifting the suspension order. The FDP and TWP in respect of the lease hold area is under process in the office of the Regional Chief Conservator of Forest, Raurkela. However,

DDM, Joda categorically seeking environmental clearance in respect of the area so as to allow for working in the non forest area only. Accordingly work could not be resumed over the area. The TOR in respect of the leasehold area has been duly accepted by EAC of MOEF, GOI. The EIA and EMP report has already been submitted with OSPCB. The Public Hearing for environment clearance scheduled on 25.02.2011 was conducted successfully.

Dalki Mn. Mines (266.77 Hects.) M/s. B.P.M.E.Ltd

Lease period expired on 30.09.1994. The 3rd RML application filed for 20 years w.e.f 01.10.1994. The forest clearance obtained from MOEF, Govt. of India is valid up to 30.09.2014.The mining operation has been stopped after rejection of RML application by the state Govt. vide letter no.12764/SM dated 24.08.2006. The revision application filed with Ministry of Mines, Govt. of India was disposed off 14/05/2010 setting aside the rejection order of the state Govt. and directed to maintain the status quo prior to rejection order. The Office of the Director of Mines has given its views on the subject which is pending with Dept. of Steel and Mines, Govt. of Orissa. The application for obtaining Environment Clearance in view of enhancement of production and renewal of mining lease is under process. The Public Hearing for environment clearance on 25/02/2011 was conducted successfully.

Kolha Roida Iron & Mn. Mines (254.952 hects.) M/s.

B.P.M.E.Ltd.

The lease period expired on 14/08/1996. The 3rd RML application was filed for 20years w.e.f 15.08.1996. The Forest Clearance is valid up to 14.08.2016. The mining operation had been stopped after rejection of RML application by the State Govt. vide order No. III(A)/SM-14/03-16733 dated 16.11.2006. The Revision Application filed with Central Tribunal has been disposed off on dated 02.02.2009 setting aside the rejection order directing the state Govt. to maintain the status quo prior to the rejection order which was duly complied by Steel & Mines Dept. Govt. Of Orissa on dated 21.01.2010. On receiving the aforesaid order necessary steps are being taken to restore mining operation. The matter regarding resumption of mining activity in the lease hold area has been disposed off by Hon'ble high court, Orissa with a clear directive to take up the same by fresh tendering. However, DDM, Joda is insisting for our environmental clearance for commencement of mining operations. The application for obtaining environmental clearance for enhancement of production and renewal of mining lease is under process in MOEF, Govt. Of India and Public Hearing for the purpose was conducted on 03.11.2010 successfully. The NPV amount of Rs. 5,07,31,350/-has been deposited with DFO, Keonjhar in compliance to the Hon'ble Supreme Court direction following CEC recommendations.

Belkundi Iron & Mn. Mines (1276.79 hect.) M/s. O.M.D.Co. Ltd

Lease period expired on 15.08.2006. The 3rd renewal was filed for 20 years w.e.f 16.08.2006. The application has been duly recommended by Collector, Keonjhar & Director of Mines, Orissa. Same is under process in the department of Steel & Mines, Govt. Of Orissa. The Forest Clearance was co-terminus with lease period ending on 15.08.2006. Application for renewal of forest diversion proposal (FDP) is under process in the office of DFO Keonjhar, The required non forest land/degraded forest land for compensatory Afforestation have been identified under Telkoi Tahsil and allotted in our favour. The NPV amount of Rs. 32,72,41,480/- has been deposited with DFO Keonjhar in compliance to the Hon'ble supreme Court direction following CEC recommendations. The Public Hearing for environment clearance on 25/02/2011 was conducted successfully.

Bagiaburu Iron Mines (21.52 hects.) M/s. O.M.D.Co.Ltd

The lease period of expired on 30.09.2010. The forest clearance co-terminus with lease period also expired on 30.09.2010. The RML application under M C Rule, 1960 & F C Act 1980 has been filed with in the stipulated time and the same is under process in the office of the collector. Keonjhar & DFO Keonjhar respectively. The required non forest land has already been allotted in our favour. The FDP & TWP has been forwarded by DFO, Keonjhar to RCCF, Raurkela by DFO Keonjhar. The NPV amount of Rs. 32,39,010/- has been deposited with DFO Keonjhar in compliance to the Hon'ble supreme Court direction following CEC recommendations. The Public Hearing for environment clearance on 25/02/2011 was conducted successfully.

Bhadrasai Iron & Mn. Mines (998.70 hects.) M/s. O.M.D.Co.Ltd

The lease period expired on 30.09.2010. The Forest Clearance co-terminus with lease period also expired on 30.09.2010. The RML application under M C Rule, 1960 & F C Act 1980 has been filed with in the stipulated time and the same is under process in the office of the collector. Keonjhar & DFO Keonjhar respectively. The required non forest land/degraded forest land for Compensatory Afforestation have been identified under Telkoi Tahsil and on verification & recommendation by the Forest & Revenue department of the district, same shall be allowed in our favour. The NPV amount of Rs. 12,79,37,610/- has been deposited with DFO Keonjhar in compliance to the Hon'ble supreme Court direction following CEC recommendations. The application for obtaining environment clearance for enhancement of production and renewal of mining lease is under process in MOEF, Govt. Of India. The public hearing to this effect was conducted on dated 03.11.2010 successfully.

b) The accounts has been prepared on Going Concern Basis, all Mining Lease are various stages of approval.

4. In terms of the Memorandum of Understanding (MOU) dated 24.04.1992 between the Company and Usha Rectifier Corporation (I) Limited (now Usha India Limited) and an agreement dated 04.10.1993 between the Company and East India Minerals Limited (EIML), the Joint Venture Company (JVC), certain facilities in the form of land for construction of plant, railways siding etc. were provided to EIML on right to use basis, initially for a period of 20 years depending upon the leasehold rights of the company, as consideration towards of 26% of the paid up equity shares of the JVC. As per the terms of the MOU as well as the agreement, permission for mining in the leasehold areas was also extended to the JVC against establishment charges to be paid by them for such permission, Necessary charges payable by EIML in this regard has been taken into income as establishment charges. Minerals raised by EIML in terms of the said arrangement NIL M.T. (Previous Year 2,04,158 M.T.) however has not been included to arrive at Company's production and therefore not shown under quantitative information vide para 9A below.

5. Dividend received during the year Rs. NIL (Previous Year Rs.281Lacs) from the Joint Venture Company (EIML) upto 31.03.2011.No further dividend has been declared by EIML.

6. Disclosures, as required under Accounting Standard (AS) – 15 (revised ) on 'Employee Benefits', in respect of defined benefit obligations are :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The scheme is funded with Life Insurance Corporation of India in form of "Group Gratuity cum Life Insurance Scheme".

The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave and half pay leave for encashment. This is an unfunded plan.

The following tables summaries the components of net benefit/ expense recongnised in the profit and loss account and balance sheet for the respective plans.

7. Retirement and Other Employee Benefits : Defined Contribution Plan:

Superannuation Benefit : Payable on separation to eligible executives of the Company. This fund is also being managed by the LIC of India as per scheme. The Company makes annual contribution to the fund and apart from this the Company has no liability whatsoever on this account.

8. STOCK ANALYSIS

The Closing Stock of Iron Ore includes sub grade stock of estimated 12,15,000 MT based upon Physical Verification conducted by the company as on 31.03.2011. The same is subject to third party verification and any variation on such verification shall be accounted for in the current year. The said material was not accounted for earlier as the same was considered unsalable and has now been taken into account due to emerging market for sub-grade.

The Closing Stock of Manganese Ore includes 13143 MT surplus (Old Stock Retrieved) as compared to Book Records based upon Physical Verification as on 31.03.2011 conducted by third party appointed by the company.

The Closing Stock of Iron Ore includes 19379 MT surplus (Old Stock Retrieved) as compared to Book Records based upon Physical Verification as on 31.03.2011 conducted by third party appointed by the company.

The Closing Stock of Sponge Iron includes 298 MT surplus (Old Stock Retrieved) as compared to Book Records based upon Physical Verification as on 31.03.2011 conducted by third party appointed by the company.

The stock is valued at Cost or Net Realisable Value which over is lower.

9. (a) Outstanding balances in respect of Sundry Debtors, Loans and Advances (including balances from associate companies), Sundry Creditors, Advance from Customer Security Deposits etc. are subject to confirmation/ reconciliation and consequential adjustments if any.

(b) As per the information available with the Company, none of the parties from whom the Company procures goods or receives services are enterprises covered under the Micro, Small and Medium Enterprises Development Act, 2006. Hence no disclosures thereof have been made.

10. As per practice followed by the company, dividend amount deposited with the bank is discharged through warrants/ECS/Bank drafts, the amounts involved are directly debited at the time issuing such drafts, however drafts, if any remaining un-encashed at the end of the year could not be ascertained and balances remaining in the concerned bank accounts are reflected as unpaid dividend balances.

11. The Company has made provision and expenditure as per guidelines of Central Government towards CSR Programme and incurred expenses of Rs.198.07 Lacs for 2009-10 and for 2010-11 Rs.46.00 Lacs.

12. Restructuring of OMDC

(i) As communicated by the Ministry of Steel, Government of India vide their letter no. 8(14)/2007- RMII (Pt.File)(Vol III) dated 30.09.2009, the Union Cabinet in their meeting held on 10th September, 2009 has approved the 'Restructuring Scheme' of Bird Group of Companies including The Orissa Minerals Development Company Ltd. (OMDC). The said Restructuring Scheme has also been approved by the Board as well as Shareholders of the company.

(ii) As per approved Restructuring Scheme, Eastern Investments Limited (EIL) has acquired additional 96219 number of equity shares of OMDC from President of India & LICI. With such additional acquisition of shares the total holding of EIL in OMDC has gone up to 3,00,089 Equity Shares (50.01%) and thus, OMDC became a subsidiary Company of EIL w.e.f. 19th March, 2010.

(iii) EIL being a Government Company, by virtue of the holding of Government of India in EIL to the tune of 66.79% of its total paid up capital, OMDC also becomes a Government Company being subsidiary of EIL as per provision of Section 617 of the Companies Act, 1956.

(iv) In accordance with the approved Restructuring Scheme, the employees of the Sister Concerns i.e. Karanpura Development Co. Ltd. (KDCL) and Scott & Saxby Limited (SSL) had been adjusted in OMDC. As per approval of the Board, the expenses for implementation of the approved Restructuring Scheme, as a whole, is being incurred by the Company for its Sister Concerns. During the financial year 2010-11, the Company has incurred Rs. 6.52 lacs (Rupees Six lacs fifty two thousand only) under the said allotment and the same has been debited to Profit & Loss Account.

13. For Obtaining Forest Clearance for mining leases, NPV amounting Rs. 8174.60 Lacs has been deposited with District Forest Officer as per terms of MOEF. The said amount has been capitalised during the Year. The amount is to be amortised over the remaining period of the Forest Clearance from the date of payment. Accordingly the total amount amortised during the year is Rs. 1917.51 Lacs which includes Rs. 199 Lacs in respect of the period before 01.04.2010.

14. The Company has provided Rs. 286.56 Lacs (P.Y Nil) for Site Reclamation Fund during the Year.

15. The Company has provided in the Accounts of Rs 825 Lacs (P.Y Nil) for Salary and Wages revision during the Year for which the approval of the Government is awaited.

17. Impairment of Asset has been carried out during the year resulting in impairment loss of 105.94 lakhs.

18. The Company has given advance to a Public Sector Undertaking for office premises at NewDelhi of Rs.275.00 Lacs( P Y Nil) which has not been capitalized as Registration is pending.

19. The capital commitment of the Company is Rs. 95 Lacs (Rs.218 Lacs).

20. Consequent upon observation of the Statutory Auditor and the Comptroller & Auditor General of India during the course of audit under section 619(4) of the Companies Act, 1956 on the Accounts of the Company for the year ended 31st March, 2011 as adopted by the Board of Directors on 27th May, 2011 and Auditor's Report dated 27th May, 2011 certain changes have been made in the Accounts and Notes on Accounts. These changes have resulted in decrease in Profit after Tax by Rs. 1440.15 lacs, decrease in current liabilities and provisions by Rs.1009.02 lacs, decrease in current assets by Rs. 2143.31 lacs, decrease in net fixed assets by Rs. 96.74 lacs and increase in contingent liability of Rs 873 lacs.

21. Previous year's figures have been re-grouped and rearranged wherever necessary.


Mar 31, 2010

01. Contingent Liabilities not provided for :-

(Rs. In Crore)

Current Year Previous Year

Claims Not acknowledged as debt

I. Suits against the company 268.20 268.20

II. Sales Tax/Income Tax etc. 9.17 9.17

III. Others 13.10 -

02. Pursuant to the amendments of the Orissa Land Reforms Act, Sub-Collector, Champua had served a Notice against the Company for alleged unauthorized possession of 10.79 acres of leasehold land on the ground that the said land belongs to Adivasis and based on that, the Revenue Inspector asked OMDC to vacate the land. The Company filed an appeal before the Addl. District Magistrate. The appeal was not allowed. During April, 1999 the Company filed a writ application and obtained Stay Order from the Honble High Court of Orissa to maintain the status quo about the possession of the land until further order

03. Lease Matters

Status of grant of renewal of mining lease of area totaling 4365.262 hectres including lease rights granted to erstwhile Bharat Process and Mechanical Engineers Ltd. (BPMEL), which is under liquidation covering 2068.272 hectre is detailed below :

a) 1546.55 hectre (BPMEL-Thakurani) : The 2nd RML period expired on 30.09.2004. Renewal application filed for 20 years w.e.f. 01.10.2004. The application is under process in the Steel & Mines department, Govt of Orissa. The Mining Operation has been stopped due to suspension order issued by l.B.M. & State forest dept. The renewal application for forest diversion proposal is under process in the Office of D.F.O, Keonjhar.Application for grant of Temporary Working Permission is under process in the Forest Dept. The application for obtaining Envt. Clearance for enhanced production is under process in MOEF, Govt. of India.

b) 266.77 hectre (BPMEL-Dalki) : Lease period expired on 30.09.1994. Renewal application filed for 20 years w.e.f. 01.10.1994. The forest clearance obtained from MOEF, Govt. of India is valid upto 30.09.2014. The mining operation has been stopped after rejection of RML application by the State Govt. vide letter No. 12764/SM dtd. 24.08.2006. The revision application & stay petition filed with Ministry of Mines, Govt. of India. The hearing on stay petition has been completed on 26.03.2007. GovL of India, Ministry of Mines has passed an interim stay order on the operation of the impugned order dated 24.08.2006 passed by the State Govt. rejecting the 3rd RML application till disposal of the revision application which is pending with the central tribunal. The application for obtaining Envl. Clearance for enhanced production is under process in MOEF, Govt. of India.

c) 254.952 hectre (BPMEL-Roida) : The lease period expired on 14.08.1996.The renewa application filed for 20 years w.e.f. 15.08.1996.The forest clearance granted is valid up to 14.08.2016. The Mining operation has been stopped after rejection of RML application by the State Govt. .The revision application has been disposed off by the State Govt. setting aside the impugned order No. III(A)/SM-14/03-16733 dtd. 16.11.2006 of the State Govt. directing to maintain the status quo operating prior to the date of passing of the impugned order.On receiving the aforesaid order necessary steps are being taken to restore the Mining operation. Mining operation is likely to resume in May 2010. The application for obtaining Envt. Clearance for enhanced production is under process in MOEF, Govt. of India.

d) 1276.79 hectre (OMDC-Belkundi) : Lease period expired on 15.08.2006. The renewa application filed for 20 years w.e.f. 16.08.2006. The application has been duly recommended by Collector, Keonjhar & Director of Mines, Orissa. Same is under process in the departmen of Steel & Mines, Govt. of Orissa. The forest clearance was co-terminus with lease period ending 15.08.2006. Application for renewal of forest diversion proposal is under process in the office of D.F.O. Keonjhar. The Mining Operation has been stopped due to suspension order issued by State Forest Dept.. Application for grant of Temporary Working Permission is under process in the Forest Dept. The application for obtaining Envt. Clearance for enhanced production is under process in MOEF, Govt. of India.

e) 21.52 hectre (OMDC-Bagiaburu) : The lease period valid up to 30.09.2010. The fores clearance is co-terminus with lease period ending 30.09.2010. At present the mine is in operation within broken-up forest land. The RML application under M.CRule 1960 & F.CAc 1980 has been filed before the stipulated date. The application for obtaining Envt. Clearance for enhanced production is under process in MOEF, Govt. of India.

f) 998.70 hectre (OMDC-Roida) : The lease period valid up to 30.09.2010. The forest clearance is co-terminus with lease period ending 30.09.2010. The mining operation is continuing within broken up forest area and non-forest area. The RML application under M.C.Rule 1960 & F.CAc 1980 has been filed before stipulated date . The application for obtaining Envt. Clearance fo enhanced production is under process in MOEF, Govt of India.

04. In terms of the Memorandum of Understanding (MOU) dated 24.04.1992 between the Company and Usha Rectifier Corporation (I) Limited (now Usha India Limited) and an agreement dated 04.10.1993 between the Company and East India Minerals Limited (EIML), the Joint Venture Company (JVC) certain facilities in the form of land for construction of plant, railways siding etc. were provided to EIML on right to use basis, initially for a period of 20 years depending upon the leasehold rights of the company, as consideration towards of 26% of the paid up equity shares of the JVC. As per the terms of the MOU as well as the agreement, permission for mining in the leasehold areas was also extended to the JVC against establishment charges to be paid by them for such permission, Necessary charges payable by EIML in this regard has been taken into income as establishment charges. Minerals raised by EIML in terms of the said arrangement 2,04,158 M.T. (Previous Year 5,15,968 M.T.) however has not been included to arrive at Companys production and therefore not shown under quantitative information vide para 9A below.

05. Dividend received during the year Rs.2.81crore (Previous Year Rs.1.41 crore) from the Joint Venture Company (EIML) upto 31.03.2010.No further dividend has been declared by EIML.

06. (a) Outstanding balances in respect of Sundry Debtors, Loans and Advances (including balances from associate companies), Sundry Creditors, Advance from Customer Security Deposits etc.are subject to confirmation/ reconciliation and consequential adjustments if any.

(b) The Company does not have any Sundry Creditors due more than 100 thousands and remaining outstanding for more than 30 days. Current Year NIL (previous year-NIL) for SSI unit.

07. As per practice followed by the company, dividend amount deposited with the bank is discharged through warrants/ECS/Bank drafts, the amounts involved are directly debited at the time issuing such drafts, however drafts, if any remaining un-encashed at the end of the year are reflected as unpaid dividend balances.

08. The amount outstanding for forest clearance Rs.13.18 crore (P.Y. Rs. 13.18 Crores) has been kept as Security Deposit subject to the approval of mining lease renewal obtained from State Government.

09. The Company has made expenditure as per guidelines of Central Government towards CSR Programme and incurred Rs.0.25 Crore.

10. Restructuring of OMDC

(i) As communicated by the Ministry of Steel, Government of India vide their letter no. 8(14)/2007- RMII(Pt.File)(Vol III) dated 30.09.2009, the Union Cabinet in their meeting held on 10th September, 2009 has approved the ‘Restructuring Scheme of Bird Group of Companies including The Orissa Minerals Development Company Ltd. (OMDC). The said Restructuring Scheme has also approval of the Board as well as Shareholders.

(ii) As per approved Restructuring Scheme, Eastern Investments Limited (EIL) has acquired additional 96219 number of equity shares of OMDC from President of India & LICI. With such additional acquisition of shares the total holding of EIL in OMDC has gone up to 3,00,089 Equity Shares (50.01%) and thus, OMDC became a subsidiary Company of EIL w.e.f. 19th March, 2010.

(iii) EIL being a Government Company, by virtue of the holding Government of India in EIL to the tune of 66.79% of its total paid up capital, OMDC also becomes a Government Company being subsidiary of EIL as per provision of Section 617 of the Companies Act, 1956.

(iv) In accordance with the approved Restructuring Scheme, the employees of the Sister Concerns i.e. The Karanpura Development Co. Ltd. (KDCL) and Scott & Saxby Limited (SSL) had been adjusted in OMDC. As per approval of the Board, the expenses for implementation of the approved Restructuring Scheme, as a whole, is being incurred by the Company for its Sister Concerns. During the financial year 2009-10, the Company has incurred Rs. 36.19 lacs (Rupees thirty six lacsand nineteen thousand only) under the said allotment and the same has been debited to Profit & Loss Account.

11. In the current year, the Company had written down the value of certain Plant and Machinery by Rs. 0.13 Crores. This amount is disclosed in the Profit and Loss Account under Impairment Loss.

12. The capital commitment of the Company is Rs. 2.18 Crores.

13. Previous years figures have been re-grouped and rearranged wherever necessary.

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