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Orissa Minerals Development Company Ltd.

BSE: 590086 Sector: Metals & Mining
NSE: ORISSAMINE ISIN Code: INE725E01024
BSE 15:52 | 17 Jan 1970.40 -6.05
(-0.31%)
OPEN

1945.00

HIGH

1997.85

LOW

1945.00

NSE 15:45 | 17 Jan 1970.25 -7.20
(-0.36%)
OPEN

1980.00

HIGH

1997.45

LOW

1950.00

OPEN 1945.00
PREVIOUS CLOSE 1976.45
VOLUME 1712
52-Week high 2449.90
52-Week low 1616.45
P/E 377.47
Mkt Cap.(Rs cr) 1,182
Buy Price 1970.40
Buy Qty 7.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1945.00
CLOSE 1976.45
VOLUME 1712
52-Week high 2449.90
52-Week low 1616.45
P/E 377.47
Mkt Cap.(Rs cr) 1,182
Buy Price 1970.40
Buy Qty 7.00
Sell Price 0.00
Sell Qty 0.00

Orissa Minerals Development Company Ltd. (ORISSAMINE) - Auditors Report

Company auditors report

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 OrissaMinerals Development Company Limited ("the Company") which comprise theBalance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the CashFlow Statement for the year then ended signed by us under reference to this report and asummary of the significant accounting policies and other explanatory information. Thesefinancial statements are the responsibility of the Company’s management. Ourresponsibility 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 inSection 134(5) of theCompanies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including theAccounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

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

4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and theRules made thereunder.

5. We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 availablefor our examination.

8.1. There being restrictions on movement of the items of inventory we are unable toascertain whether these will fetch the value at which these are stated in the financialstatements.

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 weare 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 outstandingdues on account oflegal charges Rs. 57.63 lakhs Provision for Property Tax Rs. 60.84lakhs Dead Rent Rs. 288.68 lakhs and Surface Rent Rs. 62.24 lakhs for which supportingdocuments were not available for our inspection.

8.4. Balances in respect of Advances Receivables and Payables are subject toconfirmation. The effect of any adjustment as may be required on reconciliation with theparties’ confirmation is not currently ascertainable.

8.5. Diminution other than temporary if any in the carrying amount of the investmentin unquoted shares amounting to Rs. 281 lakhs could not be ascertained due tonon-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 explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2016 and its profit and its cashflows for the year ended on that date.

Emphasis of Matter

10. As indicated in the Note 35 to the Financial Statements mining operation of theCompany is continued to be remained suspended due to non-renewal of the leases andnon-receipt of requisite clearances from the Government of Odisha and the CentralGovernment.These conditions indicate the existence of a material uncertainty toresumethemining operations. These financial statements have been prepared on a goingconcern basis mainly for the initiative taken by the Company’s management for openingof 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 ("theOrder") issued by the Central Government of India in terms of Section 143 of the Actwe give in Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.

12. In terms of the Directions and Sub-Direction under section 143(5) of the Act sentto us under cover of letter dated 10th May 2016 of The Principal Director ofCommercial Audit Ranchi we give in Annexure B our report on the matters included in theDirections 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 Vigilancedepartment of the Company all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit.

b) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby 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 Statementdealt with bythis Report are in agreement with the books of account.

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

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

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

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

h) The qualification relating to the maintenance of accounts and other mattersconnected 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 inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialposition in its financial statements – Refer Note 25to the financial statements.

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

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

Other Matter

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

14.1 This revised Report issued in compliance with Audit Memo No.Annual A/Cs/OMDC/AuditMemo No.1 dated 10.6.16 and Annual A/Cs/OMDC/Audit Memo No.17 dated 10.6.16 issued by theOffice of the Principal Director of Commercial Audit Ranchi supersedes our Audit Reportdated 26th May2016 to the members of The Orissa Minerals Development CompanyLimited.

For L.B. Jha & Co.
Chartered Accountants
(Firm Registration number 301088E)
(Kamal Kumar Bhanja)
Partner
Kolkata 20th June 2016 (Membership number 14722)

ANNEXURE A

TO THE INDEPENDENT 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 includingquantitative details and situation of fixed assets.

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

(c) The title deeds of immovable properties including leasehold were not made availablefor 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 bookrecords 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 orother 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 theCompany examined by us the Company has not made any investment advanced any loan givenany guarantee or provided any securities to others.

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

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

7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositing theundisputed statutory dues including employees’ state insurance income-taxsales-tax wealth tax service tax duty of customs duty of excise value added tax cessand 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 aperiod of more than six months from the date they became payable in respect of share ofshortfall 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 theCompany examined by us the particulars of dues of sales-tax service tax duty of exciseand value added tax as at 31st March 2016 which have not been deposited on account of adispute 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 Act1956 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 orGovernment nor issued any debentures.

9. The Company has neither raised any money by public issues of shares or debenturesnor obtained any term loans during the year.

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

11. In our opinionthe provisions of section 197 read with Schedule V to the Act arenot applicable to the Company.

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

13. According to the information and explanations given to us and the records of theCompany examined by us the requirements of sections 177 and 188 of the Act is notapplicable to this Company.

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

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

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

For L.B. Jha & Co.
Chartered Accountants
(Firm Registration number 301088E)
(Kamal Kumar Bhanja)
Partner
Kolkata 20th June 2016 (Membership number 14722)

ANNEXURE- B

TO THE INDEPENDENT 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? The title deeds of the freehold land of 207.135 acres having a book value of Rs.28020 and lease deeds for leasehold land of 56.372 acres having a book value of Rs.19677000 were not made available for our examination.
If not please state the area of freehold and leasehold land for which title/lease deeds are not available.
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 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. 1. 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.

 

For L.B. Jha & Co.
Chartered Accountants
(Firm Registration number 301088E)
(Kamal Kumar Bhanja)
Partner
Kolkata 20th June 2016 (Membership number 14722)

ANNEXURE- C

TO THE INDEPENDENT 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 ofSection 143 of the Companies Act 2013("the Act")

1. We have audited the internal financial controls over financial reporting of TheOrissa Minerals Development Company Limited("the Company") as of 31stMarch 2016 in conjunction with our audit of the financial statements of the Company forthe year ended on that date.

Management’s Responsibility for Internal Financial Control

2. The Company’s management is responsible for establishing and maintaininginternal financial control based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin 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 adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the "Guidance Note" and the Standard on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial 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 andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintaining and if suchcontrols operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includesobtaining an understanding of internal financial control over financial reportingassessing the risk that a material Weakness exists and testing and evaluating the designand operating effectiveness of internal controls based on the assessed risk. The procedureselected depends on the auditor’s judgment including the assessment of the risk ofmaterial 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 toprovide a basis for our audit opinion on the Company’s internal financial controlssystem over financial reporting.

Meaning of Internal Financial Control over Financial Reporting

6. A Company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statement for external purposes in accordance withgenerally accepted accounting principles.

A Company’s internal financial control over financial reporting includes thosepolicies and procedures that

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

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

3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to errors or fraud may occur and not be detected.Also projections of any evaluations of the internal financial control over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe 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 theprocess of establishing its internal financial control over financial reporting oncriteria considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

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

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

For L.B. Jha & Co.
Chartered Accountants
(Firm Registration number 301088E)
(Kamal Kumar Bhanja)
Partner
Kolkata 20th June 2016 (Membership number 14722)