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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.

 
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