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Orissa Minerals Development Company Ltd.

BSE: 590086 Sector: Metals & Mining
NSE: ORISSAMINE ISIN Code: INE725E01024
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Orissa Minerals Development Company Ltd. (ORISSAMINE) - Director Report

Company director report

FOR THE YEAR ENDED 31ST MARCH, 2012

Dear Members,

On behalf of the Board of Directors of the Company, I take great pleasure in presentingthe 94th Annual Report of the Company for the financial year ended 31stMarch, 2012, together with the Audited Statements of Accounts, the Auditors’ Reportand Comments on the Accounts by the Comptroller and Auditor General of India.

1. FINANCIAL RESULTS

The financial results of OMDC for the year 2011-12 in comparison with previousfinancial year 2010-11 are highlighted here in Table I below :

TABLE I

Particulars For the Year ended 31-03-2012 For the Year ended 31-03-2011
(Rs. in Lacs) (Rs. in Lacs)
Income:
Revenue From Operations 152.54 4482.89
Other Income 5965.58 5409.78
Total Income 6118.12 9892.67
Total Expenditure 5416.71 6021.70
Total Expenditure including Prior Period Items & Extraordinary Items 5426.27 6406.73
Profit & Loss after charging all expenses but before providing for depreciation 691.85 3485.94
Depreciation (136.65) 2151.36
Net Profit Before Tax 828.50 1334.58
Provision For Tax (Net) (484.16) (562.58)
Net Profit After Tax 344.34 772.00
Balance B/F from Previous Year 47985.41 47425.64
Profit available for Appropriations 48329.75 48197.64
Appropriations :
General Reserve 34.43 77.20
Proposed Dividend 51.66 115.80
Dividend Tax 8.38 19.23
Surplus carried to Balance Sheet 48235.28 47985.41

The reason of shortfall in revenue was due to the closure of mining operation in allsix(6) mines of OMDC for non availability of forest and environment clearance. This hasconstrained its ability to encash market potential resulting from buoyant marketconditions.

Management has taken measures to obtain requisite forest and environment clearancewhich are at advance stage. Kolha-Roida mines of OMDC has already obtained EnvironmentClearance from Ministry of Environment and Forest (MOEF). OMDC has obtained requisiteForest Clearance (FC) for Dalki Manganese Mines and Bagiaburu Iron Ore Mines and completedalmost all the formalities for environment clearance in regard to remaining mines. TheCompany will endeavour to open rest of the five(5) mines during the financial year2012-13.

2. REVIEW OF THE FINANCIAL PERFORMANCE

During the year under review your Company has recorded sales of Rs.152.54 lacs comparedto Rs.4482.89 lacs in previous financial year 2010-11 showing decrease of 96.60%. However,other incomes of Rs.5965.58 lacs in 2011-12 was increased by 10.27% in comparison toprevious year 2010-11 of Rs.5409.78 lacs. Profit before tax during the financial year2011-12 stood at Rs.828.50 lacs as compared to Rs.1334.58 lacs for the previous financialyear 2010-11 registering a decline of 37.92%. Profit after tax had been Rs.344.44 lacsdipped by 55.40% over Rs.772.00 lacs during the previous financial year 2010-11. The setback to financial performance was basically the closure of function of mining operation.The Company has generated Revenue from sale of Sponge Iron of Rs.1.53 crores only duringthe financial year 2011-12.

Closure of Mines owing to non-availability of forest and environmental clearancecoupled with the restriction imposed on the transportation of minerals have affectedproduction and despatches adversely and this resulted in fall in sales realization by96.60%.

3. DIVIDEND

Based on the financial results, your Board is pleased to recommend for the year adividend of Rs.8.61 per equity share of Rs.10/- each despite of negligible operatingincome. This would involve a cash outgo of Rs.60.04 lacs inclusive of Rs.8.38 lacs towardstax on dividend.

The financial outgo on account of dividend in 2011-12 has been the lowest in last fiveyears basically on account of closure of mining operation due to non-availability offorest and environment clearance. Nevertheless, judicious investment of reserves help theCompany to recommend dividend of Rs.8.61 per equity share of Rs.10/- for the year 2011-12.

4. OUTPUT AND DESPATCH

Closure of all six mines, owing to non availability of forest and environmentalclearance have affected production and dispatches adversely which resulted in severe setback to sales realization by 96.60% resulting in negative growth in profitability.

5. OTHER INCOME

Your Company continued its prudent cash planning during the year and deployed thesurplus funds in fixed deposits as per the Government Guidelines and earned an interestincome of Rs.56.34 crores on fixed deposits against Rs.47.85 crores during the last year2010-11.

6. FUTURE OUTLOOK

The Management of your Company has made a Corporate Business Plan 2012-2022 whichenvisages increase in Iron Ore production from 2 million tonnes to 10 million tonnes andManganese ore from 0.4 million tonnes to 1 million tones, besides installation of 2 MTPAIron Ore Beneficiation Plant and 2 MTPA Pelletisation Plant at Thakurani,District-Keonjhar, Odisha. It is hope that in near future all the six mines of OMDC willcome in operation and the leases will get renewed in favor of OMDC. This will facilitatethe Company to make investments in development of mines and procurement of miningequipments, besides investment in Beneficiation and Pelletisation Plant for whichTechno-economic feasibility report has already been prepared by M/s M.N. Dastur &Company (P) Limited.

In order to expand the activities of the Company in all possible areas, keeping in viewthe value addition, your Company has planned to have MOU with M/s KIOCL, PSU underMinistry of Steel, having experience of running Pelletisation Plant. The MOU will helpOMDC to put up 2 million tonnes Beneficiation Plant and 2 million tonnes PelletisationPlant for which formalities have been completed for obtaining single window clearance fromGovernment of Odisha in regard to land, electricity and water.

7. PSU STATUS

You will be happy to know that your Company has been accorded the status of Schedule"B" Central Public Sector Enterprise (CPSE) with effect from 19thMarch, 2010 by Department of Public Enterprises (DPE) in consultation with Ministry ofSteel, Government of India.

8. MOU SIGNED WITH RASHTRIAYA ISPAT NIGAM LIMITED (RINL) FOR THE YEAR 2012-13

Your Company being a PSU has signed Memorandum of Understanding (MOU) with RashtriyaIspat Nigam Limited (RINL) for the year 2012-13 as per the MOU approved by the Task Forceappointed by DPE. The performance of the Company will be evaluated based on theperformance parameter set in MOU. As per MOU, the estimated turnover of 2012-13 is Rs.221crores with gross margin of Rs.185 crores. This was made with the assumption that themining operation in Kolha-Roida mines would be resumed with effect from April 2012 aftergetting environment clearance.

9. REPORT ON THE ACTIVITIES OF THE JOINT VENTURE COMPANY (EAST INDIA MINERALS LIMITED)

Performance of Joint Venture Company East India Minerals Limited (EIML) was alsoaffected during the year because of the ongoing crisis resulted from complete stoppage ofthe mining operation. The revenue earned by EIML during the year 2011-12 through sale ofwind electricity stood at Rs.148.69 lacs against Rs.506.49 lacs during the previous year2010-11. The Company registered loss of Rs.258.79 lacs during the year 2011-12 incomparison to loss of Rs.467.88 lacs in the previous year.

10. STATUS OF RENEWAL OF THE MINING LEASES:

I. DALKI MANGANESE MINES

(1) Name of the Lease/area Dalki Manganese Mines (266.77 Hect) M/s B.P.M.E. Ltd. Lease Expired on 30.09.1994
Renewal of Mining Lease 1. The 3rd Renewal of Mining Lease application was filed on 13.09.1993 for a period of 20 years w.r.t. 01.10.1994 to 30.09.2014. The mining operation was stopped after rejection of renewal application by the State Government vide letter No. 12764/SM dated 24.08.2006. An appeal was filed in Ministry of Tribunal & Ministry of Mines, Government of India, which has been disposed of the appeal on 14.05.2010 setting aside the rejection order of the State Government and directing State Government to maintain the status quo as existing prior to rejection order.
2. The State Government has been requested by the Company to issue permission to start mining operation.
3. Dy. Director of Mines, Joda as well as Director of Mines have sought for some clarifications towards operation of Dalki Manganese Mines. The matter is under consideration at the Government level.
Status of Pending Forest Clearance Forest clearance is available and valid up to 30.09.2014.
1. NPV amount of Rs.4.75 crores as demanded paid to forest department, Government of Odisha.
2. Wild Life Management plan in respect of the area has been approved by PCCF(WL).
3. NOC for Ground Water Management Plan obtained from CGWBA (Central Ground Water Board Authority), GOI.
4. Agreement for drawing water has been signed with the State Irrigation Department.
5. DGPS map for boundary survey has been prepared through ORSAC a Nodal agency of Government of Odisha on paymen of cost. Delineation of the forest land in the M.L area is to be taken up by ORSAC/Empanelled listed agencies (under process)
6. Pillar posting for demarcation of M.L boundaries since completed. Separate pillar posting for forest boundary is under progress confirming to the recent guidelines of the State Government.
Status of Environment Clearance The final presentation before members of Expert Appraisal Committee (EAC) was held on 20.07.2011 and EAC has approved the project. But MOEF has asked the Government of Odisha to register the case against the company for the excess mining.
Action taken by the Company to expedite F.C MOEF has also asked the Board to submit an undertaking not to repeat such violation. The undertaking has been submitted but the State Government is yet to register the case.

II. KOLHA-ROIDA IRON & MANGANESE MINES

(2) Name of the Lease/area Kolha Roida Iron & Manganese Mines (254.952 Hect) M/s B.P.M.E. Ltd.
Lease area expired on 14.08.1996.
Renewal of Mining Lease The 3rd Renewal of Mining Lease application was filed on 14.07.1995 for 20 years w.e.f. 15.08.1996. The mining operation was stopped after rejection of Renewal of Mining Lease application by the State Government vides order No. III (A)/SM- 14/03-16733 dated 16.11.2006. The revision application was filed with Central Tribunal, which has been disposed of the same on 02.02.2009 setting aside the rejection order and directing the State Government to maintain the status quo as existing prior to the rejection order.
Status of Forest Clearance Forest clearance is valid up to 14.08.2016.
1. NPV amount of Rs.5,07,31,350/- has been paid to forest department.
2. Wild life management plan in respect of the lease hold area has been duly approved by the PCCF(Wild Life) and Rs.87,22,000/- has been deposited with the DFO, Keonjhar for the activities to be taken up in the project impact area (as per approved wild life management plan).
3. Ground Water Management Plan has been approved by the CGWB.
4. Agreement for drawing water has been signed with the State Irrigation Department.
5. DGPS Cadastral map has been prepared by the ORSAC, a nodal agency of Govt. of Odisha. Delineation of the forest land in the M.L area is being done with the help of ORSAC.
6. Pillar posting for demarcation of M.L boundary has been done.
Status of Environment Clearance The Environment Project has been cleared by the Expert Appraisal Committee on 21.06.2011. Formal order has been issued by the MOEF on 23.07.2012.
Status of Mining Operation Mining operation in Kolha-Roida has started with effect from 26.07.2012.

III. THAKURANI IRON & MANGANESE MINES

(3) Name of the Lease/area Thakurani Iron & Manganese Mines (1546.55 Hect.) M/s B.P.M.E. Ltd. (Revised RML application filed over 778.762 Hect.) Lease expired on 30.09.04
Renewal of Mining Lease 3rd Renewal of Mining Lease application filed on 27.09.2003 for 20 years w.e.f. 01.10.2004 to 30.09.2024 duly recommended by Collector, Keonjhar & Director of Mines, Bhubaneswar. It is under process in the Department of Steel & Mines, Govt. of Odisha.
Status of Forest Clearance 1. Renewal application under F.C Act 1980 vide State Serial No. 14. Dt. 10.11.2003 submitted.
2. After due recommendation by DFO, Keonjhar and RCCF, Rourkela the diversion proposal is now under process in the nodal cell of office of PCCF, Odisha. DGPS map is required to be submitted, which is under process at ORSAC.
Action taken by the Company to expedite F.C 1. NPV amount of Rs.26,00,11,370/- as demanded has been paid to forest department, Govt. of Odisha.
2. Wild Life Management plan in respect of the area has been resubmitted for approval, and it is pending at the level of DFO, Keonjhar.
3. Required land for compensatory afforestation has since been allotted by the District Magistrate; Keonjhar. Rs.99.41 lacs, cost of compensatory afforestation, as demanded, has also been paid by OMDC.
4. NOC under Forest Right Act has been issued by the District Magistrate, Keonjhar.
5. NOC for Ground Water Management Plan has been issued by the CGWBA (Central Ground Water Board Authority), GOI.
6. Agreement for drawing water has been signed with the State Irrigation Department.
7. DGPS map for boundary survey has been prepared through ORSAC a Nodal agency of Govt.of Odisha on payment of cost. Delineation of the forest land in the M.L area is to be taken up by ORSAC/Empanelled listed agencies (under process)
8. Pillar posting for demarcation of M.L boundaries since completed.
Status of Environment The EC project final presentation before members of Expert Appraisal Committee (EAC) was held on 29.11.2011.On hearing the presentation, the EAC sought for some clarification and accordingly OMDC had submitted the clarifications. The final presentation of the same was conducted on 24.05.2012 and the committee requires 1. Approved Wild Life Management Plan 2. Stage -1 Forest Clearance to grant Environment Clearance. These are yet to be approved by the respective department of Govt. of Odisha.

IV. BELKUNDI IRON & MANGANESE MINES

(4) Name of the Lease/area Belkundi Iron & Manganese Mines (1276.79 Hect) M/s O.M.D.C. Ltd. Lease expired on 15.08.2006.
Renewal of application submitted on to Sate Govt. The 3rd Renewal of Mining Lease application was submitted on 13.08.2005.
Status of Pending Forest Clearance Renewal proposal under FC Act, 1980 was submitted vide serial no 156 dated 04.10.2005. The Diversion Proposal is pending with D.F.O., Keonjhar for site inspection report.
Action Taken by the Company to expedite Forest Clearance. 1. NPV amount of Rs.32,72,41,480/- as demanded, has been paid to forest department as per Hon’ble Supreme Court directive following CEC recommendations.
2. Required land for compensatory afforestation has been got allotted from the Dist. Magistrate, Keonjhar. Cost of compensatory afforestation, as demanded of Rs.58.24 lacs has been paid.
3. Wild Life Management plan in respect of the lease hold area has been resubmitted to DFO, Keonjhar after complying to the objections raised by PCCF (Wild Life).
4. NOC for Forest Right Act-2006 has been issued from the office of District Magistrate and Collector, Keonjhar.
5. NOC for Ground Water Management Plan has been obtained from CGWBA (Central Ground Water Board Authority), GOI.
6. Agreement for drawing water has been signed with the State Irrigation Department.
7. DGPS map for boundary survey has been prepared through ORSAC a Nodal agency of Govt.of Odisha on payment of cost. Delineation of the forest land in the M.L area is being taken up by ORSAC/Empanelled agency, which is under process.
8. Pillar posting for demarcation of M.L boundary has been done.
Status of Environment The final presentation before members of Expert Appraisal Committee (EAC) was held on 24.01.2012. On hearing the presentation, the EAC sought for some clarification and accordingly OMDC has represented the case before EAC on 25.07.2012, however issuance of formal order is contingent of 1st stage forest clearance.

V. BAGIABURU IRON MINES

(5) Name of the Lease/area Bagiaburu Iron Mines (21.52 Hect) M/s. OMDC Ltd. Lease expired on 30.09.2010
Renewal of Mining Lease Renewal application was submitted on 22.09.2009 vide state serial no. 6589 dated 10.08.2009.
Status of Forest Clearance 1. Renewal of Forest Diversion Proposal under FC Act, 1980 was submitted on 18.09.2009.
2. Number of queries made from the DFO & CCF (Nodal) have been complied. At present the DP is pending in the office of PCCF, Odisha.
Action Taken by the Company to expedite F.C 1. NPV amount of Rs.41,66,343 /- has been paid to forest department.
2. Wild life management plan in respect to the lease hold area has been duly approved by the PCCF (Wild life).
3. Rs.41.50 lacs has been deposited with DFO, Keonjhar for the activities to be taken up by DFO in the project impact area.(as per approved wild life management plan)
4. Required land for compensatory afforestation has been allotted from the District Magistrate, Keonjhar. Rs.2.23 lacs, cost of compensatory afforestation as demanded, has been paid.
5. NOC under Forest Right Act has been issued from the District Magistrate, Keonjhar.
6. DGPS map for boundary survey has been prepared and also authenticated by ORSAC a Nodal agency of Govt.of Odisha.
7. Pillar posting for demarcation of M.L boundary has been done.
Status of Environment The State Expert Appraisal Committee (EAC) has heard the case and recommended approval for EC to Bagiaburu on 04.11.2011. However, it is subject to 1st stage forest clearance for which all formalities have been completed and the case is pending with the PCCF, Nodal, who is to sent the case to the Government for approval.

VI. BHADRASAI IRON & MANGANESE MINES

(6) Name of the Lease/area Bhadrasai Iron & Manganese Mines (998.70 Hect.) M/s O.M.D.C. Ltd.
Renewal of Mining Lease The 3rd Renewal of Mining Lease application was submitted on 22.09.2009 vide State Sl No. 349/09.
Status of Pending Forest Clearance Renewal proposal under FC Act, 1980 submitted on 22.09.2009. At present the Diversion Proposal is pending in the office of DFO, Keonjhar for :
(a) furnishing of site inspection of DFO in part II;
(b) the NOC under FC Act is pending with Collector, Keonjhar for approval in DLC.
Action Taken by the Company to expedite Forest Clearance 1. NPV amount of Rs.12,79,37,610/- has been paid to forest department.
2. Required degraded land have been allotted for compensatory afforestation.
3. Wild Life Management plan in respect of the lease hold area has been resubmitted to DFO, Keonjhar after complying the objections raised by PCCF (Wild Life).
4. Clearance under Forest Right Act-2006 is under process in the office of District Magistrate and Collector, Keonjhar, despite completion of gramsabha in June 2010.
5. NOC for Ground Water Management Plan has been obtained from CGWBA (Central Ground Water Board Authority), GOI.
6. Agreement for drawing water has been signed with the State Irrigation Department.
7. DGPS -map for boundary survey has been prepared through ORSAC a Nodal agency of Govt.of Odisha on payment of cost. Delineation of the forest land in the M.L area is being taken up by ORSAC/Empanelled listed agencies which are under process.
8. Pillar posting for demarcation of M.L boundary has been done.
Status of Environment Clearance A presentation before the members of Expert Appraisal Committee (EAC), MOEF, and Govt. of India was held on 23.12.2011. The EAC sought for some clarification and accordingly OMDC has represented the case before EAC on 21.06.2012, however issuance of formal order is contingent of 1st stage forest clearance.

11 . CORPORATE SOCIAL RESPONSIBILITY (CSR)

Corporate Social Responsibility (CSR) has been identified as an important parameter inthe MOUs drawn by all the PSUs with the Ministry.

Corporate Social Responsibility (CSR) is a tool by which business organizations servethe interests of society by taking responsibility for the impact of their activities oncustomers, employees, shareholders, communities and the environment in all aspects oftheir operations. Accordingly CSR activities of OMDC focus on environmental care,education, health care, drinking water, women’s empowerment, family welfare, socialinitiatives including sports and cultural activities and other social activities. Theseare implemented as per guidelines issued by the Department of Public Enterprises (DPE).

The CSR activities of OMDC encompass the 18 revenue villages falling within OMDCleasehold area. The population covered under the CSR scheme is about 24,000, out of whichabout 65% is from weaker section of society like SC and STs. The schemes run under CSR forthe benefit of the villagers are as follows:

1) Jal Dhara (Drinking Water Supply through pipeline)

2) Gramya Vikash (Village Development)

3) Swalambi Sangathan (Self Help Group)

4) Swasthya Karyakrama (Health Programmes)

5) Matsya Palan (Fish Farming)

6) Mahila Sashaktikaran (Women Empowerment)

7) Gramya Shikhya Yojana (Education)

8) Others

Your Company has decided to spend 5% of profit after tax towards CSR activities as perDPE guidelines.

Brief details of the above projects are given below :

• JAL DHARA (Water Supply)

> Provision for Drinking water supply through provision of pumps and pipelinesarrangement is made by OMDC in villages located within the mining lease areas at MundaSahi, Kemi Hutting of Kundarpani Village, Arjun Basti of Bhuyuan, Roida, Dalki and Sadingvillage of Thakurani Mines. Total 7 borewells with tanks has been provided so far.

> Renovation & excavation of ponds taken up in villages located within themining lease areas at Karakolha and Sading village.

• GRAMYA VIKASH (Village Development)

> Construction of 10 numbers of community toilets has been done in order to meetsanitary needs of villagers at Bhuyuan Roida and Kolha Roida.

> Repair & renovation of bathing ghats & dug wells in Sading and Dalkivillage located within the mining lease area.

> Repairing of 100 KVA electricity supply transformer located at Dalki village.

> 25 Solar powered street lights provided to peripheral villages i.e. Mankad HuttingJhadu Sahi, Dehury Sahi, Patra Sahi of Kolha Roida lease area and Buru Hutting, Sading,Karakhendra in Thakurani lease area located near the Mines. Another 25 numbers of Solarlights are being provided to villages located near the lease area of Thakurani andBelkundi mines.

• SWALAMBI SANGATHAN (Self Help Group-SHG)

> OMDC is taking keen interest in development of people of villages especially thoseliving in the nearby vicinity of mines by assisting them to create Self Help Groups (SHGs)for carrying out various income generating activities like growing of mushroom,vegetables, poultry, nursery and manufacturing of candles.

• SWASTHYA KARYAKRAMA (Health Programme)

> Provided Outdoor & indoor treatment to villagers living in nearby vicinity ofmines at hospital with free supply of food & medicines to the patients admitted in thehospital.

> Provision has been made to help patient suffering from serious diseases likecancer, cardiac, kidney, lever cirrhosis for treatment in house and at other centers.

> Provision has been made to provide disabled people with artificial limb.

> Assistance has been provided to 18 villages within mining lease area for familyplanning programme. Assistance has been provided to 18 villages within mining lease areafor malaria eradication programme.

> A "Hospital on Wheels" is being made ready through a ‘MobileMedical Van’ to carry the medical services to the doorsteps of the villagers.

• MATSYA PALAN (Fish Farming)

> Spawn fish provided by OMDC to the villagers for fish farming at Karakolha villagein Thakurani mines.

• MAHILA SASHATIKARAN (Women Empowerment)

> 50 numbers of bicycles were given to girl students living in villages and studyingin Dalki M. E School of Thakurani Mines and Tirtheswar High School of Roida Mines locatedwithin the mining lease areas for their personal mobility as part of women empowerment.

> Training programme provided to 20 women from the peripheral villages on usage ofsewing machine for teaching tailoring to make them self dependent and free sewing machinewere provided to each of them.

• GRAMYA SHIKHYA YOJANA

> Training on computer provided to students and unemployed youths of 18 villages.

> Construction of class rooms in villages of Dalki, Sading, Karakolha, Bhuyuan Roidaand Kolha Roida located near mines.

> Procurement of steel benches & construction of compound wall of schoolslocated in area near mines.

> Assistance for technical training/ education with 10 persons in batches is beingprovided to ST/SC/OBC (weaker sections of society) to make them employable.

> 1456 students were benefitted by supply of study materials, stationeries tostudents of different schools located near mines to provide thrust to education.

• OTHER

> Three(3) different sport events were organised during the year and sports gearwere given to sport persons from the villages within the mines area.

12. SUSTAINABLE DEVELOPMENT PROGRAMME

In terms of MOU with Rashtriaya Ispat Nigam Limited(RINL) for the year 2012-13 underSustainable Development Programme, the following three projects have been considered to becarried out by OMDC during the year 2012-13.

• Project-1 Build up of water reservoir at Thakurani

• Project-2 Afforestation under Bio Diversity Conservation at Thakurani leaseholdarea

• Project-3 Making of brick from over waste dump.

13. VOLUNTARY RETIREMENT SCHEME

In order to rationalize manpower of the Company, the Management has introduced the"Voluntary Retirement Scheme" with effect from 1.02.2010. It will be effectivetill 31.03.2013. However so far no employee has obtained VRS from OMDC.

14 . SAFETY MEASURES

Safety is an important aspect in functioning of any industry. It is important not onlyfor its employees and workers but also for the environment and the nation. Your Companyhas taken safety measures in accordance with Rules, Regulations and Guidelines underprovision of the Mines Act, 1952 towards safety of the employees engaged in mining andallied activities. Necessary safety devices, tools and implements have been provided tothe concerned employees. Safe practices pertaining to different activities in miningoperations are displayed through participation of workers in safety exhibitions heldlocally as well as on regional basis. ‘Safety Code’ booklet has been made andissued for information and compliance by all employees.

New practices are also regularly adopted by visiting similar mines. Basic and refreshertraining is imparted to the workers in the Company’s vocational training center fordifferent disciplines and operational activities in the mines. The Vocational TrainingCentre at OMDC Mines have received prizes from the Annual Mines Safety Week CelebrationCommittee conducted by DGMS in the region.

Development programs were also taken up for creating awareness, educating the employeesabout safety precautions and updating about the developments in the field.

15 . RESEARCH AND DEVELOPMENT

OMDC is engaged in open cast mining of Iron Ore & Manganese ore in Barbil, district– Keonjhar, Orissa. The focus of the Company is to develop OMDC as a green miningCompany, having technological upgradation and taking all safety measures to have safe andcost effective mining operations. The focus of R&D will be on the following areas :

i) Development of safer and productive mining methods by judicious mechanization.

ii) Introduction of controlled blasting practices for eco-friendly mining in Open CastMines.

iii) Technological development for production of Mn-base value added product.

iv) Development of beneficiation methods and cost effective technologies for theup-gradation of sub-grade ores.

v) Exploration of the deposits, feasibility studies for enhancement and up-gradation ofore reserves as per UNFC code.

vi) Technology up-gradation in specific operations for enhancement of productivity,improvement in safety and reduction in costs.

vii) Deployment of Technical persons for monitoring of security & safe practicesand taking timely corrective measures

16 . PARTICULARS OF EMPLOYEES UNDER SECTION 217 (2A) OF THE COMPANIES ACT, 1956

There was no employee of the Company who received remuneration in excess of the limitsprescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies(Particulars of employees) Rules, 1975, as amended from time to time.

17 . IMPLEMENTATION OF THE RIGHT TO INFORMATION ACT, 2005

The Government of India enacted the Right to Information (RTI) Act, 2005 on June 15,2005. The objective of the Act is to promote transparency and accountability in theadministration and to provide good governance in the Country.

Your Company is proactively complying with the provisions of the Right to InformationAct, 2005. All the relevant manuals pertaining to RTI Act, 2005 have been hoisted on thewebsite. The queries are regularly replied through a Public Information Officer (PIO) andassisted by Assistant Public Information Officer (APIO) of Head Office. All theinformation sought under the Act have been furnished within the stipulated time period.Whenever delay is likely due to collection of information, an interim reply is alwayssent.

During the year, 23 applications have been received, out of which, 17 applications havebeen disposed of upto 31st March, 2012. The rest of the other applications areunder process for disposal within prescribed time period.

Statutory reports and returns like Monthly Returns, Quarterly Returns, Annual Returns,and other reports as required under the RTI Act were complied and forwarded to theMinistry on time.

18 . PROGRESSIVE USE OF HINDI

Your Company has became PSU with effect from 19th March, 2010 and since thenit is promoting use of Rajbhasa in the Company and its mines which is located in Schedule"C" area where use of Rajbhasa is not compulsory under the Official LanguageAct, 2003. OMDC follows the directives issued from time to time by the Department ofOfficial Language, Ministry of Home Affairs and Ministry of Steel, Government of India forthe Progressive use of Official Language, Hindi. Your Company has taken steps to bringawareness among employees about official usage of Hindi Language. OMDC has observed Hindiweek from 17th September to 23rd September, 2011 by way oforganizing competitions such as essay writing, singing Hindi songs, reciting short Hindipoems etc. A "Rajbhasa Sikshan Board" is placed at the entrance of RegisteredOffice of OMDC to appraise the employees with new Hindi words every day.

19. EMPOWERMENT OF WOMEN

The Company continues to accord due importance to gender equality linked to ability. AWomen Grievance Cell is functioning in the Company to redress grievance of womenemployees. OMDC employ 167 women employees, which constitutes 22% of its total workforceof 759 employees as on 31st March, 2012. To ensure empowerment of women,"Gender Budgeting Cells" with women representatives have been constituted. Allnecessary measures/statutory provisions for safeguarding the interests of women employeesin matters like payment of wages, hours of work, health, safety and welfare aspects,maternity benefits etc. are being followed by the Company.

Based on Hon’ble Supreme Court directives, conduct rules of the Company have beenamended by incorporating suitable clause for prohibiting sexual harassment of women atwork place. A complaints Committee has been constituted to deal with complaints made byvictims of sexual harassment.

20. WELFARE OF WEAKER SECTIONS

Your Company’s mines are located in Barbil District, Keonjhar which is mainlytribal area of Odisha. So your Company has diligently followed the guidelines issued bythe Government of India from time to time in regard to reservation in services forSCs/STs/OBCs/Physically Handicapped /Ex-serviceman, etc. OMDC runs 22 bedded hospital inThakurani mines and 8 bedded hospital in Roida mines in Barbil

District, Keonjhar to provide treatment free of costs to all employees and to thevillages located in and around its mining lease areas.

OMDC has made tap water provision in seven villages out of 18 villages falling inmining areas. These villages are mainly inhabited by the local tribal people. Steps arealso being taken to provide tap water in the remaining villages falling in mines area.

The Company undertakes program for malaria eradication, pulse polio etc through thehospitals of OMDC to the villages located around its mining activities.

Occupational Health Surveillance covering facilities like X-Ray, PathologicalLaboratory, Audiometry, ECG, Lungs function test, dental clinic etc. is conducted by OMDCfrom time to time for the villagers in and around mining activities of the Company.

21. MANPOWER

OMDC was having 102 Executives and 657 Non-Executives as on 31st March,2012. In cadre of executives, more than 90% in E-0 to E-4. Efforts are being made torecruit the executives in E-5 and above grades which is necessary to strengthen the middleand higher level cadre to take the Company forward. However, much success has not beenachieved due to closure of mining operation and 1997 wage structure which is to be revisedon resumption of the mining operation.

• Strength of SCs & STs as on 31st March, 2012

1. Total number of employees = 759
2. Scheduled Castes amongst them = 97 (Executive 4 and Non Executive 93)
3. Scheduled Tribes amongst them = 284 (Executive 2 and Non Executive 282)
4. OBC = 155
5. Total SCs, STs and OBC = 536

22. INDUSTRIAL RELATIONS

Industrial relations in your Company and at Mines continued to be cordial and peacefulduring the year 2011-12. The system of Permanent Negotiation Mechanism (PNM) has beenintroduced in the Company and its mines for discussing various issues for smoothfunctioning of the Organisation and expeditious decisions for the settlement ofgrievances. No IR incidents reported during the year.

23 . VIGILANCE

Vigilance activities during the year continued with special emphasis on preventivevigilance and analysis of existing system improvement. It was the endeavor of theVigilance department to aid and assist the management in improving systems and proceduresso as to ensure transparency in decision making. Various guidelines issued by CVC andMinistry were widely circulated among the employees.

Your Company has its Vigilance Department headed by Chief Vigilance Officer of HSCL.The functions of Vigilance Department include both preventive and punitive actions for allthe mines of the Company and for the registered office at Kolkata. Your Company’sVigilance Department is continuing its efforts for systematic improvements in order tobring more and more transparency in its working procedure. Your Company’s VigilanceDepartment has conducted various training programmes, interactive sessions for creatingVigilance awareness among the employees.

Your Company is in the process of implementation of the Integrity Pact in itsOrganization. It has taken steps to achieve adoption of E-Commerce including e-procurementand e-payments to the extent possible in their organization. E -Payments are being made tovendors and Statutory Bodies (Sales Tax, Service Tax, Income Tax etc.) through electronicfund transfer (NEFT/RTGS mode) in OMDC. Tender documents are being uploaded on OMDCwebsite which can be downloaded by the bidders. This gives equal opportunity to all theeligible bidders and brings transparency in the tendering system. It has also taken stepsto sign Memorandum of Understanding (MOU) with the Transparency International India (TII)with the commitment to implement the Integrity Pact in all such transactions in OMDC inletter and spirit.

The Company observed its Vigilance Awareness Week from 31st October, 2011 to5th November, 2011. Throughout this week, the Company conducted variousprogrammes like pledge ceremony, seminar, essay competition, quiz competition, interactivesession etc. in order to create Vigilance awareness among the employees. Banners weredisplayed at the prime location of the office premises during the Vigilance AwarenessWeek, 2011. During Vigilance Awareness Week, Senior Officials of OMDC including MD and CVOaddressed the officers and employees in various programmes organized by the VigilanceDepartment.

24. GRIEVANCE REDRESSAL MECHANISM (GRM)

Grievance Redressal Mechanism (GRM) is in place in your Company at unit level and atCorporate level. Nodal officers have been notified for this purpose.

I. Public Grievances:

The system of redressing Public Grievance has been streamlined, and its scope broadenedto include complaints of suppliers, customers etc. However, all the Head of Departmentshave been advised to accord due priority for redressal of public grievances as per timeframe in each department.

II. Employees’ Grievance:

In order to provide easily accessible machinery for settlement of grievances leading toincreased satisfaction and resultant improved productivity and efficiency of theOrganisation, steps has been initiated for redressing grievances of executive andnon-executive employees to promote harmonious relationship between employees and themanagement.

III. Status of Public/ Employees’ Grievances from 01.04.11 to 31.03.12

Sl. No. Type of Grievances Grievances outstanding as on 01.04.2011 No. of Grievances received during the period 01.04.2011 to 31.03.2012 No. of cases disposed of during the period 01.04.2011 to 31.03.2012 No. of cases pending as on 31.03.2012
1 Public Grievances Nil Nil Nil Nil
2 Staff Grievances 2 2 4 Nil

25. IMPLEMENTATION OF THE PERSONS WITH DISABILITIES ACT, 1995

The Ministry of Steel and all the PSU’s under it follows the Government rules withregard to the implementation of the provisions of the Disabilities Act, 1995. OMDC willimplement all the instructions pertaining to persons with Disabilities Act, 1995, as andwhen recruitment/ promotion takes place. OMDC has indicated vacancy for Persons withDisability and is planning to fill up the post in 2012-13.

26. ADOPTION OF "SEVEN STEP MODEL FOR CITIZEN CENTRIC-SEVOTTAM" AS PERRECOMMENDATION OF THE 2ND ADMINISTRATIVE REFORMS COMMISSION.

The Ministry of Steel has brought out its "Citizen Charter" and this isperiodically updated in tune with the changing requirements and expectations from thestakeholders. OMDC has initiated necessary steps to implement the "SevottamGuidelines- September, 2011" as issued by the Departments of Administrative Reformsand Public Grievances especially the "Seven Step Model of Sevottam"

27. COMPLIANCE WITH LAW/ LEGAL REQUIREMENTS

In terms of the guidelines issued by the Government, a Quarterly Report on the progressof Arbitration cases is being put up to the Board of Directors for information. AnInternal Reporting System has been introduced indicating the progress of the case invarious Courts and the status of the cases as at the beginning of the year and also at theend of the year. The Company has taken measures to ensure legal compliances from all thedepartmental heads and the annual legal compliance report are placed before the Board forreview.

28. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

I. Energy Conservation

The Company consumes purchased electricity. Adequate steps are being taken by theCompany to reduce the electricity consumption.

II. Technology absorption

The Company has not absorbed any new technology during the year for its operationalactivities.

III. Foreign Exchange Earnings and Outgo:

There was no transaction in foreign exchange during the year.

29. ENVIRONMENT MANAGEMENT

Your Company is taking measure to protect the environment and conserve the resources asper the Environment Management Plan made for each mine and the Company’s CorporatePlan 2012-22. Mining of minerals, particularly by the open cast method, affects theenvironment, resulting in degradation of land and flora & fauna, besides causingwater, air & noise pollution which are the biggest health concern for the employeesand people, living in and around the mining zone. OMDC, having realized the impact ofmining on habitat has taken a lead for massive afforestation in the company’s leaseareas with the emphasis on reclamation of mines, and rehabilitation of spoil dumps. Thesesteps will be supported by the measures to beneficiate the sub-grade material to preventsoil degradation resulting from stacking of such materials.

OMDC is also taking measures to improve water bodies to meet not only drinking waterrequirement of the multitude falling in the mining areas, but also to check air pollutionto ensure mining free of air pollution. This will help to improve the mining environmentand to make OMDC an eco-friendly mining company.

Strategy for Afforestation

OMDC has undertaken the job of plantation in mining zone falling under its control. Aspecial cell has been created for ensuring plantation on continuous basis. TheCompany’s approach towards afforestation incorporates the following :

i) General afforestation in and around mines with appropriate species and scientifictechniques suitable areas.

ii) Specific afforestation on mine spoil dump

iii) Rejuvenation of mine spoil dumps.

Integrated Bio-Technological Approach

Scientific studies will be initiated for evaluating physic Biotechnical character inOMDC spoil dumps alongwith technological intervention to achieve appropriate ecosystemrestoration.

30. AUDITORS

On the advice of the Comptroller and Auditor General of India, New Delhi, your Companyappointed the under mentioned firm of Chartered Accountants as Statutory Auditor of yourCompany for the year 2011-12 :

Sl. No. Name of the Auditor Address of the Auditor
1. N.C Banerjee & Co. 13, Park Side Road, Ground Floor, Kolkata – 700 026

The Statutory Auditors Report on the Accounts of the Company for the Financial Yearended 31st March, 2012 is enclosed to the Directors’ Report.

31. COMMENTS BY THE COMPTROLLER AND AUDITOR GENERAL OF INDIA (C&AG) ON THE ACCOUNTSOF THE COMPANY FOR THE YEAR ENDED 31ST MARCH, 2012

The Comptroller and Auditor General of India (C&AG) had conducted SupplementaryAudit under Section 619(3)(b) of the Companies Act, 1956 of the financial statements ofThe Orissa Minerals Development Company Limited for the year ended 31st March,2012. The comments of Comptroller & Auditor General of India under Section 619(4) ofthe Companies Act, 1956 on the Accounts of the Company for the year 2011-12 forms part ofthis report.

32. CHANGES IN ACCOUNTING POLICIES OF THE ORISSA MINERALS DEVELOPMENT COMPANY LTD.(OMDC) AT PER WITH THE ACCOUNTING POLICIES OF HOLDING COMPANY, RASHTRIYA ISPAT NIGAMLIMITED. (RINL).

During the year, there is change in Accounting Policies of OMDC in line with theAccounting Policies of its Holding Company, Rashtriya Ispat Nigam Limited, RINL. Due tochange in Accounting Policy the depreciation on Fixed Assets is calculated on StraightLine Method as provided in Schedule XIV of the Companies Act, 1956 giving effect from last20 years. The cumulative impact of such change is of Rs.1,141.39 lacs being excessdepreciation charged till 31.03.2011, which has been set off against the current yeardepreciation of Rs.1,004.74 lacs (Net effect credited to Statement of Profit & LossRs.136.65 lacs).

33. IMPLEMENTATION OF REVISED SCHEDULE VI

In compliance with General Circular No. 62/2011 dated 05.09.2011 of Ministry ofCorporate Affairs Government of India, the Company has prepared the Annual Accounts forthe Financial Year 2011-12 as per revised Schedule VI of the Companies Act, 1956.

34. REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management Discussions and Analysis as required in terms of Clause 49(F) ofthe Listing Agreement is enclosed and forms part of the report.

35. CORPORATE GOVERNANCE

A report on Corporate Governance along with the certificate from a Practising CompanySecretary regarding compliance of the conditions of Corporate Governance pursuant toClause 49 of the Listing Agreement with the Stock Exchanges also forms part of thisDirectors’ Report.

Certificate attested by the CEO/CFO is also enclosed forming part of the CorporateGovernance Report along with a declaration signed by MD regarding Code of Conduct forMembers of the Board and Senior Management.

36. DIRECTORATE

Shri E. K. Bharat Bhushan, Additional Secretary & Financial Adviser, Ministry ofSteel was appointed as Additional Director on the Board of the Company w.e.f 02.08.2012pursuant to the order of the Ministry of Steel, Government of India.

Shri U.P. Singh, Joint Secretary, Ministry of Steel ceased to be Director of thecompany w.e.f 02.08.2012 pursuant to the order of Ministry of Steel, Government of India.

The Board places on record its deep appreciation for the valuable contribution made byShri U.P. Singh during his tenure on the Board of the company.

37. DEPOSIT

The Company has not accepted any deposit pursuant to Section 58A of the Companies Act,1956.

38. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 217 (2AA) of the Companies Act, 1956, your Directors confirm:

(i) that in the preparation of the annual accounts, the applicable accounting standardshad been followed along with proper explanation relating to material departures;

(ii) that the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit or loss of the Company for that period;

(iii) that the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors had prepared the annual accounts on a going concern basis.

39. LISTING

The Company’s shares are listed at The Calcutta Stock Exchange Limited, NationalStock Exchange and also traded in Bombay Stock Exchange under permitted category. Thelisting fee is paid upto 31st March, 2013.

40. DEPOSITORY SYSTEM

The Company’s shares are under compulsory demat mode. The Company has entered intoagreement with National Securities Depository Limited (NSDL) and Central DepositoryServices (I) Limited (CDSL).There is satisfactory progress in the process ofdematerialisation. Members still having certificates in physical form are requested todematerialise their holdings for operational convenience.

41 . ACKNOWLEDGEMENT

Your Directors take this opportunity to express their grateful appreciation for thecontinued support and guidance received from the Government of India especially theMinistry of Steel, Ministry of Mines, Ministry of Environment and Forest, Ministry ofCorporate Affairs and from Government of West Bengal and Odisha and other Departments ofGovernment of India.

Your Directors place on records their thanks to the support extended by the valued andesteemed Customers, Shareholders, Stakeholder, Railway Department, Banks and theSuppliers. We believe that our long term success is dependent on our strong customerrelationship and responsiveness. Directors also wish to convey their appreciation to allthe employees of the organization for their valuable contributions and support.

For and on behalf of the Board.
Registered Office :
"Sourav Abasan", 2nd Floor,
AG-104, Sector-II, Salt Lake City,
Kolkata-700091 (A.P. Choudhary)
Date : 11th August, 2012. Chairman