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Orissa Minerals Development Company Ltd.

BSE: 590086 Sector: Metals & Mining
NSE: ORISSAMINE ISIN Code: INE725E01024
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VOLUME 22075
52-Week high 1905.20
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OPEN 851.00
CLOSE 842.30
VOLUME 22075
52-Week high 1905.20
52-Week low 625.20
P/E
Mkt Cap.(Rs cr) 502
Buy Price 828.10
Buy Qty 5.00
Sell Price 836.00
Sell Qty 40.00

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 Ind-AS Financial Statements

We have audited the accompanying standalone Ind-AS financial statements of The OrissaMinerals Development Company Limited ("the Company") which comprise the BalanceSheet as at 31 st March 2018 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equityforthe year then ended signed by us under reference to this report and a summary of thesignificant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The power of the Board of Directors of the Company is suspended in lieu of the ongoingCorporate Insolvency Resolution Process ("CIRP") application filed by anoperational creditor of the Company and admitted by the court. Hence the Company'smanagement including Interim Resolution Professional ("IRP") of the Company areresponsible for the matters stated in Section 134(5) of the Companies Act 2013 ("theAct") with respect to the preparation of these standalone Ind-AS financial statementsthat give a true and fair view of the state of affairs (financial position) Profit orloss (financial performance including other comprehensive income) and cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind-AS) specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standaloneInd-AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind-AS financialstatements based on ouraudit.

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 the Rules made thereunder.

We conducted our audit of the standalone Ind-AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind-AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind-AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Ind-AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind-AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'smanagement including IRP of the Company as well as evaluating the overall presentation ofthe standalone Ind-AS financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind-AS financial statements.

Opinion

In our Opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:

i. In the case of the Balance Sheet of the state of Affairs (financial position) ofthe company as at 31 st March 2018;

ii. In the case of the Statement of Profit and Loss (financial performance includingother comprehensive income) of the Loss for the year ended on that date; and

iii. In the case of the Cash Flow statement of the cash flows for the year ended onthat date.

Emphasis of Matter

i. Reference is invited to the Note No. 36.1 (a) wherein it has been disclosed that anamount of Rs. 1306.89 Lacs is shown under contingent liability in the case of M/s OrissaStevedores Ltd. as per the order of NCLT under Insolvancy & Bankruptcy Code 2016.Also in note 6 of Segment Reporting it has been disclosed that the Hon'ble NationalCompany Law Tribunal ("NCLT") Kolkata Bench admitted the Corporate InsolvencyResolution Process ("CIRP") application filed by an operational creditor M/sOrissa Stevedores Ltd. of The Orissa Minerals Development Co. Ltd. ("theCompany") and appointed an Interim Resolution Professional ("IRP") interms of the Insolvency and Bankruptcy Code 2016 ("the code") to manage theaffairs Of the company vide order dated 20th February 2018 passed in C.P. NO.729/KB/2017.

No impact in the Financial Statements was given in the earlier Financial Years due tonon admission of the whole claim. Further no impact of same has been given in theFinancial Statement for the Financial Year 2017-18 in view of pendency of the CIRP and inview of suspension of the powers of Board of Directors the Powers of adoption of thisfinancial results vested with the IRP. Reference is drawn to Schedule of NCLT Admission inthe financial statement.

ii. Reference is invited to the Note No. 28 and note no. 7 of Segment Reporting whereinit has been stated that pursuant to the Judgement of Hon'ble Supreme Court dated02.08.2017 Dy. Director of Mines Odisha had issued different demand notices dated02.09.2017 23.10.2017 & 13.12.2017 to OMDC for OMDC Leases and to BPMEL for BPMELLeases towards compensation against excess mining amounting Rs. 141856.07 lacs. The amountof Demand for OMDC Leases based on the recalculation made by OMDC is Rs. 23528 lacs afterthe payment made earlier and interest upto 31.03.2018 which has been provided on the booksof accounts. Balance amount of OMDC Mines and total amount of BPMEL Leases are disclosedin Contingent Liability as the matter with BPMEL is subjudice.

iii. Reference is invited to the Note 39 to the Financial Statements mining operationof the Company 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 to resumethe mining operations. These financial statements have been prepared on a going concernbasis mainly for the initiative taken by the Company's management for opening of the minesand resumption of mining operations.

iv. Reference is drawn to Note No.28 to the Financial Statements. Out of total demandby Odisha Government of Rs. 141856.07 lacs an amount of Rs.1479.68 lacs stands paid andfurther amounts of Rs.23528 lacs stands provided in these accounts as per the revisedcalculation towards mining leases. The balance amount including interest Rs.120999 lacshas been shown under contingent liabilities.

Our opinion is not modified on account of above matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Companies Act2013 we give in AnnexureA a statement on the matters specified in paragraphs 3and 4 of the Order to the extent appl icable.

2. We have complied with the Directions and Sub-Direction given by the Comptroller& Auditor General of India under section 143(5) of the Act while conducting the auditand on the basis of information and explanations given to us in this regard by theCompany we give in Annexure B to this report a statement on the matters specifiedin such Directions and Sub-Directions.

3. As required by Section 143 (3) of theAct we reportthat:

a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany 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 andstatement of changes in equity dealt with by this Report are in agreement with the booksof account.

d) In our opinion the aforesaid standalone Ind-AS financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (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) 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 36 to the Standalone Ind AS financialstatements.

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

c. There has been delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

Instance of Delay (Rs. In lacs) Date required to be transferred Date of Transfer
Unpaid/ unclaimed Dividend for 2009.10 16.87 05.11.2017 13.02.2018

For Nandy Haider & Ganguli

Chartered Accountants FRN No.302017E

(CA Kushal Saha)

Partner

M. No.065934

Place : Visakhapatnam

Date : 30th May 2018

ANNEXURE A

TO THE INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF

THE ORISSA MINERALS DEVELOPMENT COMPANY LIMITED

[Referred to in paragraph 1 under head Report on Other Legal and RegulatoryRequirements 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 discrepancies noticed during the course of physical verification havebeen duly adjusted in the accounts. In our opinion the frequency of verification isreasonable.

(c) The title deeds of immovable properties including leasehold were made available forour examination other than the registration of the building of HO located at AG-104 2ndFloor Sourav Abasan Sector-I I Salt Lake City Kolkata-700091 which is not yetcompleted.

2. (a) As per the information the management has conducted the physical verification ofinventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of inventory as compared to bookrecords were not adjusted and have not been properly dealt with in the books of account.However valuation of inventory has been done on the basis of physically verifiedinventory.

3. According to the information and explanations given to us the Company has notgranted any loan secured or unsecured to companies firms limited liability partnershipor other parties covered in the register maintained under section 189 of the Companies Act2013. Accordingly the provision of clauses 3(iii) (a) (b) and (c) of the order is notapplicable to the companies and hence not commented upon.

4. In our opinion and according to information and explanations given to us theCompany has not granted any loan and given guarantee and security to any companies assuch the provision of section 185 and 186 of the Companies Act 2013 not applicable.

5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the publicare not applicable.

6. The Central Government of India has prescribed maintenance of cost records undersub-section (1) of Section 148 of theActforthe 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-tax sales-taxwealth tax service tax Goods and Service Tax duty of customs duty of excise valueadded tax cess and any other statutory dues with the appropriate authorities exceptprovident fund.

The extent of thearrears of statutory dues outstanding as at 31 st March 2018 for aperiod of more than six months from the date they became payable in respect of share ofshortfall of distributable interest on Provident Fund areasfollows-

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 17.68 February 2014 - March 2018 15th of Succeeding Month

(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 2018 which have not been deposited on account of adispute areasfollows-

Name of the statute Nature of dues Amount (Rs in Lacs) Period to which the amount relates Forum where the dispute is pending
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 26.92 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)

8. The Company has not defaulted in repayment of loans and borrowings.

9. Based upon the audit procedures performed and the information and explanations givenby the management the Company has neither raised any money by public issues of shares ordebentures.

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 andinformation and explanations given to us we have not come across any instances ofmaterial fraud by the Company or on the Company by its officers or employees noticed orreported during the year nor we have been informed of any such case by the management.

11. In our opinion and according to the information and explanations given to us theprovisions of section 197 read with Schedule V to the Act are not appl icable to theCompany.

12. As the Company is not a Nidhi Company the Nidhi rules 2014 are not applicable toit. The provisions of clause 3 (xii) of the Order are not appl icable to the 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. According to information and explanations given to us and on an overall examinationof the Balance Sheet of the Company has not made a preferential allotment/ privateplacement of shares or fully or partly convertible debentures during the year underreview and hence reporting requirements under clause 3(xiv) of the order are notapplicable to the Company and not commented upon.

15. Based upon the audit procedures performed and the information and explanationsgiven by the management we have not come across any instances where the Company hasentered into any noncash transactions with its directors or persons connected with him.Accordingly the provisions of clause 3 (xv) of the Order are not appl icable to theCompany.

16. In our opinion the Company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company.

For Nandy Haider & Ganguli

Chartered Accountants FRN No.302017E

(CA Kushal Saha)

Partner

M. No.065934

Place: Visakhapatnam

Date: 30th May 2018

ANNEXURE- B

TO THE INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF

THE ORISSA MINERALS DEVELOPMENT COMPANY LIMITED

[Referred to in paragraph 2 under sub head - Report on Other Legal and RegulatoryRequirements of the Auditors' Report of even date]

I. Directions

Description Auditor's Response
1 Whether the Company has clear title/lease deeds for freehold and leasehold land respectively Rs 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.28020 and lease deeds for leasehold land of 56.372 acres having a book value of Rs.17191000.00 were made 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. As per the records and information made available to us no inventory is being held/lying with Third Parties and any assets has not been received as gift/grant from Government or other authorities in the period under audit.

For Nandy Haider & Ganguli

Chartered Accountants FRN No.302017E

(CA Kushal Saha)

Partner

M. No.065934

Place: Visakhapatnam

Date: 30th May 2018

ANNEXURE-C

TO THE INDEPENDENT AUDITORS' REPORT

TO THE MEMBERS OF

THE ORISSA MINERALS DEVELOPMENT COMPANY LIMITED

[Referred to in paragraph 3 (f) under head Report on Other Legal and RegulatoryRequirements of the Auditors' Report of even date]

Report on the Internal Financial Control under Clause (i) of Sub -sections 3 of Section143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financial reporting of TheOrissa Minerals Development Company Limited ("the Company") as of 31 stMarch 2018 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

The Company's management is responsible for establishing and maintaining InternalFinancial Controls 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 Reportingissued by the Institute of Chartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance of adequate Internal Financial Controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable Financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of Internal Financial Controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate Internal Financial Controls over Financial Reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls system over Financial Reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over Financial Reporting includedobtaining an understanding of Internal Financial Controls over Financial Reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the Financial Statements whether due to fraud or error.

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 Controls systemover Financial Reporting.

Meaning of Internal Financial Control over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statement for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that:

1) Pertain to the maintenance of the records that in reasonable detail accurately andfairly reflectthe 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 have amaterial effect on the financial statement.

Inherent Limitations of Internal Financial Control over Financial Reporting

Because of inherent limitation of internal financial control over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to errors or fraud may occur and not be detected. Alsoprojections of any evaluations of the internal financial control over financial reportingto future periods are subject to the risk that the internal financial controloverfinancial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Nandy Haider & Ganguli

Chartered Accountants FRN No.302017E

(CA Kushal Saha)

Partner

M. No.065934

Place: Visakhapatnam

Date: 30th May 2018

COMMENTS OF THE COMPTROLLER AND AUDITOR GENERAL OF INDIA UNDER SECTION 143(6)(b) OF THECOMPANIES ACT 2013 ON THE FINANCIAL STATEMENTS OF THE ORISSA MINERALS DEVELOPMENT COMPANYLIMITED FORTHEYEARENDED31 MARCH 2018

The preparation of financial statements of The Orissa Minerals Development CompanyLimited for the year ended 31 March 2018 in accordance with the financial reportingframework prescribed under the Companies Act 2013 (Act) is the responsibility of themanagement of the company. The Statutory Auditors appointed by the Comptroller and AuditorGeneral of India under Section 139(5) of the Act are responsible for expressing opinion onthe financial statements under Section 143 of the Act based on independent audit inaccordance with the standards on auditing prescribed under Section 143(10) of the Act.This is stated to have been done by them vide their Audit Report dated 30 May 2018.

I on behalf of the Comptroller and Auditor General of India have conducted asupplementary audit under Section 143(6)(a) of the Act of the financial statements of TheOrissa Minerals Development Company Limited for the year ended 31 March 2018. Thissupplementary audit has been carried out independently without access to the workingpapers of the Statutory Auditors and is limited primarilyto inquiries of the StatutoryAuditors and company personnel and a selective examination of some of the accountingrecords. On the basis of my audit nothing significant has come to my knowledge which wouldgive rise to any comment upon or supplement to Statutory Auditors' report.

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

(Indu Agrawal)

Principal Director of Commercial Audit & Ex-officio Member Audit Board Ranchi

Place: Ranchi

Date: 27th July 2018