61st annual report 2016-17odia.omcltd.in/portals/0/pdf/61st annual report,11.05... · 2018. 7....

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THE ODISHA MINING CORPORATION LIMITED ( A G O L D C AT E G O R Y S TAT E P S U ) C I N : U 1 3 1 0 0 O R 1 9 5 6 S G C 0 0 0 3 1 3

2016-1761ST ANNUAL REPORT

Report of the Board of Directors 2016-17

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BOARD OF DIRECTORS(AS ON 09.10.2017)

Sri Sanjeev Chopra, lAS, ChairmanSri Raj Kumar Sharma, lASSri Vijay Arora, lASSri A. K. K. Meena, lASSri Deepak Mohanty, IFSSri R. Vineel Krishna, lAS, Managing DirectorSri C.R. DasSri D.K. RoySri G.S. KhuntiaSri C.R. PradhanSri S.P. PadhiSri Satyajit Mohanty, Director (Finance)Dr. Santanu Rath, Director (Personnel)

COMPANY SECRETARYSri S. R. Mohapatra

AUDITORSM/s. SRB & Associates,Chartered Accountants,Bhubaneswar.

BANKERSANDHRA BANKSTATE BANK OF INDIABANK OF INDIAUNION BANK OF INDIABANK OF BARODAINDIAN BANK

REGISTERED OFFICEOMC HOUSE, UNIT-V,BHUBANESWAR-751 001Ph.(0674) 2393431, 2390882,Fax.(0674) 2391629, 2396889Website: www.omcltd.inCIN:U13100OR1956SGC000313

REGIONAL OFFICESJAJPUR ROADDAITARIGANDHAMARDANBANGURKOIRABARBILRAYAGADAANGUL


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contentReport Of The Board Of Directors 2016-171. Financial Highlights2. Performance Highlights 3. Corporate Governance, Board’s Composition, Category of Directors and

their Meetings4. Important Activities of Geology Section During the FY 2016-175. Expansion / Diversification6. Diversification with Subsidiary Companies, Joint Ventures and Associate

Companies7. Environmental Protection, Energy Conservation and Sustainable

Development 8. Business Review/ State of the Company’s Affairs9. Changes in the Nature of the Business10. Material Changes and Commitments Affecting the Financial Position of

the Company11. External Risk Factors to the Corporation12. Details of Significant and Material Orders Passed by the Regulators or

Courts or Tribunals Impacting the Going Concern Status and Company’s Operations in Future

13. Details in Respect of Adequacy of Internal Financial Controls with Reference to the Financial Statements

14. Certification of Internal Financial Controls over Financial Statements15. Management Discussion and Analysis16. Industries Scenario17. Statutory Auditors18. C&AG Audit19. Cost Auditors20. Explanations or Comments by The Board on every Qualification, Reservation

Made by the Auditors 21. Secretarial Audit Report22. Fixed Deposits23. Share Capital24. Extract of the Annual Return25. Corporate Social Responsibility (CSR)26. Donations27. Peripheral Development Expenses28. The Conservation of Energy, Technology Absorption, Foreign Exchange

Earnings and Out Go.29. Particulars of Loans, Guarantees or Investments Under Section 186.30. Nomination, Remuneration & Stakeholders Relationship Committee31. Particulars or Contracts with Related Party Transactions32. Declaration by an Independent Director.33. Details of Establishment Of Vigil Mechanism for Directors and Employees

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34. Particulars of Employees35. Directors’ Responsibility Statement36. Human Resources Development and Staff Welfare37. Human Resources38. System Management39. Security System40. Legal41. Economy42. Memorandum of Understanding43. AcknowledgementAnnexure 1Annexure 2Annexure 3Annexure 4Annexure 5Annexure to Annual Report on CSR ActivitiesAnnexure 6Annexure 7 Annexure 8Comments of the Comptroller and Auditor General of India Under Section 143(6) (b) of the Companies Act, 2013 Independent Auditor’s Report Annexure – A to the Auditor’s ReportAnnexure – B to the Auditor’s ReportAnnexure – C to the Auditor’s Report Annexure – D to the Auditors’ ReportBalance Sheet as at March 31, 2017, 2016 and April 1, 2015Statement of Profit and Loss for the periods ended March 31, 2017 and 2016Statement of Cash Flow for the periods ended March 31, 2017 and 2016 Statement of Changes in Equity for the periods ended March 31, 2017 and 2016Standalone Ind AS Accounting PoliciesReconciliation between previous GAAP and Ind AS Comments of the Comptroller and Auditor General of India Under Section 143(6) (b) of the Companies Act, 2013 Independent Auditor’s Report Annexure – A to the Auditor’s ReportConsolidated Balance Sheet as at March 31, 2017, 2016 and April 1, 2015Consolidated Statement of Profit and Loss for the periods ended March 31, 2017 and 2016 Consolidated Statement of Cash Flow for the periods ended March 31, 2017 and 2016 Consolidated Statement of Changes in Equity for the periods ended March 31, 2017 and 2016 Consolidated Ind AS Accounting PoliciesReconciliation between previous GAAP and Ind AS

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7375787981848688909293

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168170173175

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1. Financial Highlights

In accordance with the notification issued by the Ministry of Corporate Affairs, the Group has adopted Indian Accounting Standards notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1st April,2016 with a transition date of 1st April,2015.

Dear Members,Your Directors take pleasure in presenting the Sixty First Annual Report of your Company along with the audited statement of accounts (including the consolidated accounts and the reports and comments thereon) for the year ended on 31st March 2017.

Sri Sanjeev Chopra,IAS, Chairman


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Sl. No. Particulars FY 2016-2017 (` in crores)

FY 2015-2016 (` in crores)

A Revenue from Operations 2,331.43 1,548.08

B Other Income 374.14 481.22

C Total Revenue (A+B) 2,705.57 2,029.30

D Changes in inventories 17.94 (170.37)

E Employee benefit expenses 250.65 160.09

F Finance Costs 8.83 33.24

G Excise Duty 8.11 1.66

H Other Expenditures 1,023.09 997.21

I Depreciation and amortization expenses 76.44 9.23

J Total Expenditure (D + E + F + G + H + I) 1,385.06 1,031.06

K Profit/ (Loss) before tax (C – J) 1,320.51 998.25

L LESS : Provision for Income Tax & DTA 544.12 360.16

M Net profit/(loss) after tax (K – L) 776.39 638.09

N LESS : Other comprehensive income 6.15 8.20

O Total comprehensive income (M – N) 770.24 629.89

P LESS : Transfer to General Reserve 89.25 62.34

Q Available Profit for the period (O - P) 680.99 567.54

R ADD : Balance of profit b/f from previous year 3,462.19 3,496.44

S Sub Total (Q + R) 4,143.18 4,063.98

LESS :

T Interim Dividend 500.00 500.00

U Corporate Dividend Distribution Tax 101.79 101.79

V Balance carried forward to Next Year (S – T – U) 3,541.39 3,462.19

W ADD : General Reserve on year end 2,308.03 2,218,78

X Cumulative Profit on year end (V + W) 5,849.42 5,680.97

Y ADD : Capital Reserve 17.71 17.71

Z Reserves and Surplus (X + Y) 5,867.13 5,698.68

Table 1.1 Financial Highlights

The financial highlights for the Financial Year (‘FY’) under review as compared to the previous year are indicated below in brief.

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During the FY 2016-17, the company earned a Profit Before Tax (PBT) of `1,320.51 Crore (previous year `998.25 Crore) which is an increase of 32.28 % and Profit after Tax (PAT) of ̀ 776.39 Crore (previous year ` 638.09 Crore) ) which is an increase of 21.67 % compared to its previous financial year’s performance.

Other Comprehensive Income during the year was ` (6.15) Crore [Previous Year ` (8.20)] Crore. The Total Comprehensive Income for the Financial Year was ` 770.24 Crore. (Previous Year ` 629.89 Crore) which increased by 22.28%.

The carry forward Profit stood at ̀ 3,541.39 Crore at the end of FY 2016-17 as against ` 3,462.19 Crore at the end of the previous financial year 2015-16. The increase in carry forward profit during the FY 2016-17 was mainly on account of increase in Sales Turnover.

The Reserves & Surplus position of the Company as on 31-Mar-2017 was ` 5,867.13 Crore (previous year ` 5,698.68 Crore) which increased by ` 168.45 Crore compared to last year.

A. Profitability and Reserve & Surplus

2. PERFORMANCE HIGHLIGHTS


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Comparison of PBT and PAT (excluding other Comprehensive income) earned by the Company

1600

1400

1200

1000

800

600

400

200

0

1383 14501487

1321

998

896 868977

776638

2012-13 2013-14

PBT PAT

2014-15 2016-172015-16

Graph 2.A.1. Comparison of PBT and PAT (excluding other comprehensive income)

earned by the Company

Graph 2.A.2. Reserve & Surplus

6000

5800

5600

5400

5200

5000

4800

4600

` In

Cro

re`

In C

rore

` In

Cro

re

2012-13

5150

5864

5657 5699

5867

2013-14 2014-15 2016-172015-16

B. ProductionIron Ore Production was 63,65,831 MT in FY 2016-17 against 59,70,826 MT in FY 2015-16, which saw an increase of 6.62%.

1112

546

1007846

1084

797 838710

12581074

Production History

Graph 2.B.1. Production history

1400

1200

1000

800

600

400

200

0Revenue From Iron Ore Revenue From Chrome Ore

Qty

in M

T(m

illio

n un

its)

Fy 2019-20

Fy 2018-19

Fy 2017-18

0 2 4 6 8 10 12 14 16 18 20

31.74

18.3

18.3

1.5

0.5

1.56

1.558.41

Bauxite Chrome Ore Iron Ore

Graph 2.B.2. Roadmap of production of Bauxite, Chrome Ore and Iron Ore for the

Company till FY 2019-20

Roadmap of production of Bauxite, Chrome Ore and Iron Ore for the Company till FY 2019-20

The Chrome ore production was 12,06,226 MT in FY 2016-17 against 927,094 MT in FY 2015-16 evidencing an increase of 30.11%. The combined production quantity of Iron Ore & Chrome Ore increased by 9.77 % over the previous financial year (production quantity of Ore in FY 2016-17 was 75,72,057 MT & in FY 2015-16 was 68,97,920 MT). There was no production of Manganese, Lime stone & Gem stone during the year (previous financial year nil).

C. SalesSale of Iron ore & Chrome ore together have increased by 61.32 % over previous financial year (Sales quantity of Ore in FY 2016-17 was 80,11,578 MT & in FY 2015-16 was 49,66,135 MT). Sale of Iron Ore was 71,62,090 MT in FY 2016-17 which is an increase of 65.09%, over 43,38,368 MT achieved in FY 2015-16. The sale quantity of Chrome ore was 8,49,488 MT in FY 2016-17 which is an increase of 35.32%, over 6,27,767 MT achieved in FY 2015-16. There was no sale of Manganese, lime stone & Gem stone during the year (previous financial year Nil.)

There has been increase in sales value during the FY 2016-17 over previous financial year by 50.60 % (` 2,331.43 Crore in FY 2016-17 & ̀ 1,548.08 Crore in FY 2015-16). The sales of Chrome ore has increased by 51.21 % over previous financial year (` 1,073.63 Crores achieved in FY 2016-17 against ` 710.04 Crore in FY 2015-16). Sales turnover of Iron ore has increased by 50.09 % over previous financial year (` 1,257.80 Crores achieved in FY 2016-17 against ` 838.04 Crore in FY 2015-16) .

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1112

546

1007846

1084

797 838710

12581074

Comparison of revenue from iron Ore and Chrome Ore

1400

1200

1000

800

600

400

200

0

Revenue From Iron Ore Revenue From Chrome Ore

Graph 2.C.1. Comparison of revenue from Iron Ore and Chrome Ore

Graph 2.C.2. Sales Trend of Iron Ore and Chrome Ore

Graph 2.D.2. Breakup up of other income earned for FY 16-17

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8

7

6

5

4

3

2

1

0

2.73.2

3.9 4.14.1

0.5

3.2

0.7

3.5

0.6

4.3

0.6

7.2

8.1

0.9

Sales Trend of Iron Ore and Chrome Ore

2012-13 2013-14 2014-15 2015-16 2016-17

QTY IN MT ( IN MILLIONS )

D. Other IncomeOther Income of ` 374.14 Crore (previous year ` 481.22 Crore) mainly consists of the following:

a) Interest on fixed deposit of ` 180.80 Crore (previous year of ` 275.84 Crore).

b) Interest received from GRIDCO ` 79.74 Crore (previous year ` 101.34 Crore) & interest received from NINL ` 25.84 Crore (previous year ` 10.80 Crore).

c) Write back of excess liability ` 71.34 Crore (previous year `62.94 Crore).

` In

Cro

re

Graph 2.D.1. Comparison of total other income earned by the company

Comparison of total other income earned by the company

2012-13

541 581535 481

374

2013-14 2014-15 2015-16 2016-17

700

600

500

400

300

200

100

0

` In

Cro

re

82 (22%)

111 (30%)

181 (48%)

Breakup up of other income earned for FY 16-17 (` In Crore )

Interest on FD

Interest on Loans to Employees and others

Other Misc Income


10

2012-13

33%35%

30%

25%

20%

15%

10%

5%

0%

31%28%

31%

16%

2013-14 2014-15 2015-16 2016-17

Non - Core To Core Revenue Percentage

E. ConsolidationThis year the company has consolidated its Accounts with its subsidiary/ Joint Venture Companies i.e. M/s. Odisha Mineral Exploration Corporation Limited, M/s. Odisha Thermal Power Corporation Limited, M/s. Nuagaon Coal Company Limited, M/s. Mandakini B Coal Corporation Limited and M/s. Neelachal Ispat Nigam Limited as per Section 129(3) of the Companies Act, 2013 and prepared the Consolidated Financial Statement which was authorized by the Board of Directors as per Section 134 of the Companies Act, 2013.The accounts have been Audited, Certified and Reported by the Statutory Auditors as per Section 143 (2) of the Companies Act, 2013. The C&AG have also conducted the supplementary audit as per section 143(6)(b) of the Companies Act,2013 and submitted their report.

Total Revenue Breakup (` In crore) FY 16-17

Graph 2.F.1. Breakup of total revenue earned by the company in the FY 2016-17

Revenue from Iron Ore

Revenue from Chrome Ore

Other Income

374 (14%)

1258 (46%)

1074 (40%)

F. Other Statistical & Financial Highlights and Results are Attached to this Report as Annexure 1.

Breakup of total expenses incurred by the company in the FY 2016-17

Employee Benefit expenses

Selling and Distribution Expenses

Production and Processing Expenses

Others

263251

376

495

Graph 2.F.2. Breakup of total expenses incurred by the company in the FY 2016-17

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Liquidity Ratios9.008.007.006.005.004.003.002.001.000.00

TIM

ES

2012-13 2013-14 2014-15 2015-16 2016-174.34 6.20 2.91 4.30 8.074.09 5.91 2.72 3.80 7.07

Current Ratios

Current Ratios

Quick Ratios

Quick Ratios

Graph 2.F.3 Liquidity Ratios Graph 2.F.6. Value of inventory at year end

Graph 2.F.8. Money spent by the Company towards Society and Environment

Graph 2.F.4. EBITA margin of the Company

Graph 2.F.5. Return on Equity of the Company

EBITA margin of the Company

70

60

50

40

30

20

10

0

63 60 63

51 49

2012-13 2013-14 2014-15 2015-16 2016-17

Return on Equity of the Company (in %)

2012-13 2013-14 2014-15 2015-16 2016-17

1816141210

86420

1716

17

11

13

Value of Inventory ( at year end )

333279

421

591 569

2012-13 2013-14 2014-15 2015-16 2016-17

Graph 2.F.7. Total revenue earned by the Company

Total Revenue Earned by the Company

1400

1200

1000

800

600

400

200

02012-13 2013-14 2014-15 2015-16 2016-17

11121007

846

581

1084

797

535

838710

481

1258

1074

374

546541

Revenue from Iron Ore Revenue from Chrome Ore Other Income

Money spent by the Company towards Society and Environment

160140120100

80604020

02012-13

6 910

17 45 290.34

4

27

11

1360.6452

0

0

2013-14 2014-15 2015-16 2016-17CSR

CSR

Afforestation

Afforestation

Forest & EnvironmentExpenses

Forest & Environment Expenses

` In

Cro

re`

In C

rore

` In

Cro

re


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G. Payment of Dividend and other TaxesDuring the year the Company has paid ̀ 500 crores as Dividend to Government of Odisha for the FY 2016-17, for which Corporate Dividend Distribution Tax of ` 101.79 Crore was paid to Income Tax Authority.

Dividend Paid To Odisha Government

2016-17

2015-16

2014-15

2013-14

2012-13

500

500

500

500

400

0 100 200 300 400 500 600

Graph 2.G.1. Dividend paid to the Odisha Government

Graph 2.G.2. Major tax payments made to the government

Major tax payments made to the Government

68

213

794

85

102

349

474

115

102

335

358

81

85

436

521

95

85

239

661

85

1200

1000

800

600

400

200

02012-13 2013-14 2014-15 2015-16 2016-17

SALES TAX INCOME TAX ROYALTY DIVIDEND DISTRIBUTION TAX`

In C

rore

` In Crore

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3. Corporate Governance, Board’s Composition, Category of Directors and their Meetings

3.2 Board of DirectorsThe day to day management of the Company is vested with Managing Director and Chairman and is subject to the overall superintendence and control of the Board.

During the financial year 2016-17, Board meetings were held for 4 (Four) times i.e. on 28-Jun-2016, 28-Sep-2016, 07-Dec-2016 and 27-Mar- 2017.

The composition of the Board of Directors during the FY 2016-17 is given in table below. The Director’s attendance at the Board meetings and number of their Directorship in other companies during the financial year (2016- 2017) were as follows:

3.1 Corporate GovernanceThe philosophy of the company in relation to Corporate Governance is to ensure transparency, disclosures and reporting that conform fully to laws, regulations and guidelines etc. and to promote ethical conduct throughout the organisation. OMC believes in conforming to the highest standards of Corporate Governance. It recognises that each member of the Board owes his first duty for protecting and furthering the interest of the company.


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Sl. No.

Name of the Director Category of Directorships

Designation No. of Board Meetings

No. of Directorships in other BoardsDuring

tenureAttended

1. Sri Sanjeev Chopra, IAS(01-Apr-2016 to 31-Mar-2017)

Government Nominee

Chairman 4 4 5

2. Sri R.K.Sharma, IAS(01-Apr-2016 to 31-Mar-2017)

-do- Director/Pr. Secy. To Government Steel & Mines Dept.

4 1 4

3. Sri Vijay Arora, IAS(01-Apr-2016 to 31-Mar-2017)

-do- Director/ Pr. Secy. To Government PE Dept.

4 1 4

4. Sri A.K.K. Meena, IAS(26-Sep-2016 to 31-Mar-2017)

-do- Director/Spl. Secy. To Government Finance Dept.,GoO

3 2 3

5. Sri Deepak Mohanty, IFS(01-Apr-2016 to 31-Mar-2017)

-do- Director/Director of Mines, GoO

4 1 2

6. Sri R. Vineel Krishna(01-Apr-2016 to 31-Mar-2017)

-do- MD 4 4 7

7. Sri A.K.Mishra(01-Apr-2016 to 26-Sep-2016)

-do- Director 1 1 4

8. Sri C.R. Das(01-Apr-2016 to 31-Mar-2017)

Ind. Director Director 4 4 1

9. Sri D.K. Roy(01-Apr-2016 to 31-Mar-2017)

-do- Director 4 4 5

10. Sri G.S. Khuntia(01-Apr-2016 to 31-Mar-2017)

-do- Director 4 4 -

11. Dr. S. Acharya(01-Apr-2016 to 12-May-2016)

-do- Director - - 1

12. Late S.N. Padhi(01-Apr-2016 to 12-May-2016)

-do- Director - - 1

13. Sri C.R.Pradhan(12-May-2016 to 31-Mar-2017)

-do- Director 4 4 2

14. Sri S.P.Padhi(12-May-2016 to 31-Mar-2017)

-do- Director 4 4 -

15. Sri Satyajit Mohanty(01-Dec-2016 to 31-Mar-2017)

Whole Time Director

Director 2 2 -

16. Sri (Dr.) Santanu Kumar Rath(29-Mar-2017 to 31-Mar-2017)

Whole Time Director

Director - - -

3.2.1 Board of Directors

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3.3 Committees of the Boardi. Audit Committee of DirectorsAlthough the Audit Committee is not a statutory requirement for the Company, in the interest of good Corporate Governance, an Audit Committee has been constituted by the Board of Directors in their 337th meeting held on 27-Mar-2003. The Audit Committee responsibilities include:

y To oversee the Company’s financial reporting process

y Disclosure of financial information

y Review internal controls

y Review the process of compilation of Annual Accounts

y Laying down of proper accounting and financial policies

y Reviewing of statutory and C&AG Auditors

y Submitting proper compliance against the same

y Suggestions for improvement of the system

The Audit Committee comprises of 3 (three) Independent Directors and Director – Finance, OMC. Audit committee is chaired by one of the 3 Independent Directors. All the meetings of the Committee held during the year were presided by the Chairman.


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The current chairman of Audit committee, Sri D. K. Roy, belonged to Indian Revenue Services (IRS) and retired as Chief Commissioner, Income Tax. He was also the Chairman of Orissa Electricity Regulatory Commission.

The Audit Committee of the Board of Directors met 7 (seven) times during the financial year 2016-2017 viz. on 18-Apr-2016, 26-Sep-2016, 27-Oct-2016, 06-Dec-2016, 27-Feb-2017, 20-Mar-2017 & 21-Mar-2017.

Table 3.3.i. Audit Committee

Sl. No. Members of Audit CommitteeNo. of Meetings

D u r i n g tenure Attended

1 Sri D. K. Roy, (Chairman) 07 072 Sri C. R. Das 07 063 Late S. N. Padhi (01-Apr-2016 to 12-May-2016) 01 014 Sri S.P. Padhi (12-May-2016 to 31-May-2017) 06 065 Sri Satyajit Mohanty (01-Dec-2016 to 31-Mar-2017) 04 04

ii. Personnel Committee of DirectorsThe Personnel Committee of Directors discuss issues relating to Human Resource Development in the organization, design policies for recruitment and promotions, organizational structure, responsibility matrices etc. It also proposes its valuable recommendations for consideration of the Board.

The Personnel Committee of the Directors met twice viz. on 23-Jun-2016 & 30-Aug-2016 in the FY 2016-17. The particulars of the members including their attendance at the Personnel Committee meetings during the year were as follows:

Table 3.3.ii. Personnel Committee

Sl. No. Members of Personnel CommitteeNo. of Meetings

During tenure Attended1 Sri R. Vineel Krishna IAS, MD & Chairman of the

Committee 2 2

2 Sri C. R. Das 2 23 Sri D. K. Roy 2 24 Sri C.R. Pradhan 2 1

iii. Technical Committee of DirectorsThe Technical Committee of Directors deliberated different crucial technical issues relating to production, transport and safety matters of mines of OMC. It also analyses the technical reports submitted by different agencies who have been engaged by OMC to study technical aspects relating to smooth operation at mines keeping pace with rules and regulations framed by different statutory authorities. During the FY 2016-17, the Committee met 13 (thirteen) times viz. on 13-May-2016, 22-Jun-2016, 27-Jun-2016, 13-Jul-2016, 20-

Jul-2016, 28-Jul-2016, 17-Aug-2016, 08-Sep-2016, 06-Oct-2016, 07-Oct-2016, 05-Dec-2016, 18-Feb-2017 & 22-Mar-2017.

y Sri Satyajit Mohanty, Director(Finance) attended the meeting on 18-Feb-2017 & 22-Mar-2017 as Special Invitee.

y Late Sri S.N. Padhi, Ex-Director attended the meeting on 13-May-2016 as Special Invitee. Sri D.K. Roy & Sri S.P. Padhi, Independent Directors attended the meeting on 06-Oct-2016 and 07-Oct-2016 as Special Invitees.

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The particulars of the members including their attendance at the Technical Committee meetings during the year were as follows:

Table 3.3.iii. Technical Committee

Sl. No. Members of Technical CommitteeNo. of Meetings

During tenure Attended

1 Sri R. Vineel Krishna IAS, MD & Chairman of the Committee

13 12

2 Sri C. R. Das 13 12

3 Sri G. S. Khuntia 13 13

4 Sri C. R. Pradhan 12 12

iv. Sales Committee of DirectorsThe Sales Committee of Directors discuss and fix the sales price of minerals like Iron Ore, Chromite, Manganese Ore etc. raised by OMC keeping in view its cost of production and also the demand of the minerals in the domestic and global market and their prices in the said market. It also decides the methodology on sale of minerals by OMC from time to time and suggests means for improvement of sale/ auction of minerals.

During the FY 2016-17, the Committee met 12

(twelve) times on 11-Apr-2016, 21-Apr-2016, 10-

May-2016, 25-May-2016, 20-Jul-2016, 20-Sep-2016,

18-Nov-2016, 30-Dec-2016, 07-Jan-2017, 21-Jan-

2017, 20-Feb-2017 & 29-Mar-2017. The particulars

of the members including their attendance at the

Sales Committee meetings during the year were as follows:

Table 3.3.iv. Sales Committee

Sl. No. Members of Sales CommitteeNo. of Meetings


1 Sri R. Vineel Krishna, IAS, MD &Chairman of the Committee 12 12

2 Sri Deepak Mohanty, IFS, Director of Mines, Government of Odisha 12 1

3 Sri C. R. Das, Ind. Director 12 10

4 Sri D. K. Roy, Ind. Director 12 12

5 Sri G. S. Khuntia, Ind. Director 12 10

6 Sri S. Acharya (01-Apr-2016 to 12-May-2016) 3 3

7 Late S. N. Padhi (01-Apr-2016 to 12-May-2016) 3 3

8 Sri C. R. Pradhan, Ind.Director (12-May-2016 to 31- Mar-2017) 9 9

9 Sri S. P. Padhi, Ind. Director (12-May-2016 to 31-Mar-2017) 9 8


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v. CSR Committee of the BoardThe Ministry of Corporate Affairs, Government of India, vide notification dtd. 27-Feb-2014, has notified Section 135, Schedule VII of the Companies Act, 2013 (Provisions relating to CSR) and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The same is effective from 01-Apr-2014. The Company has realigned the CSR Policy and outlined the activities to be undertaken.

The composition of the CSR Committee and the No. of meetings during the FY 2016-17 is given in table below. As per the existing delegation two Independent Directors are being inducted in this Committee on a rotation basis every 6 months. The Committee met thrice viz. on 05-May-2016, 28-Jul-2016 and 21-Sep-2016. The particulars of the members including their attendance at the CSR Committee meetings during the year were as follows:

Table 3.3.v. CSR Committee

Sl. No. Members of CSR Committee

No. of Meetings


1 Sri R. Vineel Krishna, IAS, MD & Chairman of the Committee 3 3

2 Sri D.K. Roy (01-Apr-2016 to 21-Jun-2016) 1 1

3 Late S.N. Padhi (01-Apr-2016 to12-May-2016) 1 1

4 Sri C.R.Pradhan (22-Jun-2016 to 31-Mar-2017) 2 2

5 Sri S.P.Padhi (20-May-2016 to 31-Mar-2017) 2 2

4. Important Activities of Geology Section During the FY 2016-17

4.1 Exploration During the FY 2016-17, the following quantum of exploration work has been undertaken (as per exhibit in Table 4.1) in different leasehold areas of OMC for assessment of additional ore reserve, mine planning and delineation of barren areas.

4.2 Mineral ConcessionSupplementary lease deed extending the validity of ML area under MMDR Amendment Act, 2015 have been executed in respect of 5 nos. of MLs. Besides, 1 ML, i.e. Kodingamali ML for bauxite have

been executed. Authenticated DGPS lease maps in respect of 1 mining lease and 3 prospecting licenses have been finalised.

4.3 Odisha Mineral Exploration Corporation (OMECL) A 100% subsidiary of OMC has been incorporated on dated 25-Oct-2016 under Companies Act, 2013 (Formed vide Government of Odisha, Steel & Mines Department Resolution No. 7031 dated 17-Aug-2016) Government approval for sanction of 10 posts, selection of blocks for exploration with 5 years contingency plan is under progress.

Table 4.1. Exploration work

Sl. No. Item of work Annual TargetFY 2016-17

AchievementFY 2016-17

1. Geological mapping 593 hects. 633 hects2. Core drilling 4,847 mtrs 4,180 mtrs3. Sampling 720 nos. 1638 nos.


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5. Expansion / Diversification5.A. Iron5.A.1. Design, Engineering, Supply, Construction, Erection, Commissioning & Performance Guarantee Test of a New 1000 TPH Ore Handling Plant with 3200 TPH Mechanized Wagon Loading System including Related Railway Infrastructure for Iron Ore Mine at DaitariIn order to cater to the rising demand of iron ore by the state-based industries, OMC has decided to enhance its Iron Ore production from its mines at Daitari, Gandhamardan & Kurmitar. The proposed new Ore Handling Plant with mechanised Wagon Loading system at Daitari is of 2.5 MTPA at an estimated project cost of about ` 800 crore. For the same, OMC has already signed an agreement with M/s L&T, Chennai on dtd. 31-Oct-2013. Basing on the proposed design of L&T, OMC applied to the APCCF for obtaining the Forest Clearance of the required Forest land for construction of the plant on dtd. 15-Apr-2014. The Forest Clearance is yet to be obtained from the Ministry of Environment & Forest, Government of India. After obtaining FC, the construction work will start.

5.A.2. Installation of 9.12 Mtpa Project at Gandhamardan (Block-B) Iron Ore Mines Techno-Economic Feasibility report for setting up of a 9.12 MTPA project at Gandhamardan has already been prepared by MECON, Ranchi. The Project Approval Committee (PAC), Government of Odisha has already approved the project at an estimated cost of ̀ 1348.47 crore to be financed through debt equity in the ratio 2:1. The Ore Characterisation work has already been completed. The Survey & Soil Investigation work will start after obtaining FC of Gandhamardan-B ML area, after which action will be taken for preparation of tender document for selection of a Contractor.

5.A.3. Mechanised Production and Evacuation System at Kurmitar Iron Ore MinesThe project report for 6 MTPA project at Kurmitar is under preparation by M/s Engineers India Ltd. (EIL). After completion of the same, action will be taken for approval of the project by the PAC,GoO and preparation of tender document for selection of a Contractor.

5.B. Chrome5.B.1. Development of a Commercially Viable Flow-Sheet to Establish a Small Scale Beneficiation Plant to Recover Chromite Values from the Tailings of COB Plant In order to recover some Chromite values from the tailings, OMC did the preliminary laboratory investigation work at IMMT, Bhubaneswar (a CSIR unit). Basing on the test result of such study & the recommendation of IMMT, OMC has awarded the “Pilot plant study” to National Metallurgical Lab (NML), Jamshedpur. Work is currently in progress at NML, Jamshedpur.

5.B.2. Installation of New COB Plant

The construction work of new COB project at Kaliapani has been stopped and the contract made with the contractor MBE-CMT has been terminated. OMC is under the process of awarding the balance work to M/s KIOCL (a government of India enterprise). It is expected to complete the project in the Financial Year 2018-19.

5.B.3. Construction of Tailing Ponds for Both the COB Plants at South KaliapaniThe contractor for construction of tailing pond has been selected. However, the site construction work will start after obtaining modification to EC from the MoEF, GOI.

5.B.4. Under Ground MiningOMC is operating an underground Chromite ore mines at Bangur. After obtaining EC, permission for production has been obtained from Government of Odisha on 20-May-2016. Work started with effect from 01-Jul-2016 through Raising Contractor M/s. Maheswari Mining Pvt. Limited for a period of 10 years.

Expression of interest (EOI) was floated for selection of EPCM consultant for development of South Kaliapani Underground Mine. Four numbers of EPCM Consulting organizations have been shortlisted. The scope of work and tender terms and conditions is under finalization for selection of 1 EPCM consultant for the project.

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5.C. Bauxite5.C.1. Kodingamali Bauxite ProjectOMC has decided to diversify its business activities for Bauxite mining. OMC has engaged M/s EIL for preparation of DFR for Kodingamali Bauxite mines. Mining plan for Kodingamali Bauxite mines has already been approved by IBM. Selection of MDO has been completed. Production from the mines shall commence after obtaining necessary statutory clearances.

5.D. Coal 55.D.1. Baitarni-West Coal Mine:The MoC, GoI vide its Allotment Order no. 103/03/2016/NA dt. 29.-Sep-2016 has allotted Baitarni-west coal mine in favour of OMC . OMC has paid ` 78.21 crore (` 46.22 crore Upfront payment + ` 31.99 core Fixed Amount) and given Bank

Guarantee of ` 407.40 crore to MoC, GoI against this allotment.

OMC has entrusted CMPDI for Preparation of (i) Commencement Plan, (ii) Mine-Closure Plan (MCP), (iii) Pre-Feasibility Report (PFR), (iv) Detailed Project Report (DPR) and (v) EIA/EMP in respect of Baitarani-West coal mine with a composite consultancy fee of ` 4,15,33,700.00 vide Work Order dtd. 24-Oct-2016. CMPDI has already submitted the Commencement Plan, MCP & PFR to OMC. DPR & EIA/EMP is under preparation.

OMC is undertaking land acquisition for Baitarni-west coal mine under the CBA (A&D) Act, 1957. Gazette notifications for Section 3, Section 4(1) & Section 7(1) have already been issued by the MoC, GoI.


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6. Diversification with Subsidiary Companies, Joint Ventures and Associate Companies

Iron6.4. JV between OMC & HINDALCO:A Joint Venture Agreement was executed between OMC & Hindalco Industries Ltd. on dt. 25-Oct-2005 for development of Kodingamali Bauxite deposit in Koraput district. As per the JV Agreement, a JV Company was formed between OMC & Hindalco Industries Ltd. with 26:74 equity holding for development of the bauxite mines.

Due to poor progress of the project & as per the directive of the Government of Odisha, OMC terminated the JV Agreement between OMC & M/s Hindalco during October 2015.

Coal6.5 Utkal – D Coal BlockThe Ministry of Coal, Government of India vide letter no.47011/1(1) 01/CPAM/CA, dtd. 19-Dec-2003 had allotted the Utkal-D coal block in favour of OMC under Government dispensation Scheme. An agreement was executed between OMC & M/s. Sainik Mining & Allied Services Ltd on 29-Dec-2003 for development of the block & a JV Company namely M/s. Kalinga Coal Mining Pvt. Ltd (KCMPL) was formed during 2004. As per the approval of the GoO, OMC terminated the JV Agreement with SMASL on dt. 27-Sep-2012.

Due to delay in development of the coal block, MoC, GoI de-allocated Utkal-D coal block on dt. 30-Nov-2012.

6.6. Nuagaon - Telisahi Coal BlockThe Ministry of Coal, GoI had allotted Nuagaon-Telisahi coal block in favour of OMC & Andhra Pradesh Mineral Development Corporation (APMDC) vide letter no.13016/2006/CA/I, dtd. 2-Aug-2006 on 50:50 sharing basis under Government dispensation scheme. A JV Company namely Nuagaon Coal Company Ltd. (NCCL) was

6.1. JV Between OMC & RTMDAs per the directive of the Government, Odisha Mining Corporation Limited signed an Agreement with Rio Tinto Mineral Development (RTMD) on dt. 24-Feb-1995 & a JV Company was incorporated with shareholding of 51% by RTMD and 49% by OMC. Due to very low progress of the project, the Board of Directors of OMC decided to wind up the JVC & as per the advice of the GoO, OMC terminated the JV Agreement made between OMC & RTMD during July 2015.

Bauxite6.2. JV between OMC & Sterlite Industries (India) Limited (SIIL):A Joint Venture Agreement was signed between OMC and Vedanta Alumina Limited (A subsidiary of Sterlite Industries (India) Limited) on 05-Oct-2004 & 18-Feb-2009 for development of Lanjigarh bauxite Mining project. As per the JV Agreement, a JV Company was formed between OMC & SIIL with 26:74 equity holding for development of the bauxite mines.

As per the directive of the Government of Odisha, OMC terminated the JV Agreement between OMC & SIIL during September 2015.

6.3. JV between OMC & Utkal Alumina International Ltd (UAIL):OMC & INDAL executed an Agreement on dt. 8-Feb-1993 to develop Baphalimali bauxite deposit in Rayagada district for setting up of alumina refinery of one million tonne per annum capacity. As per the approval of the GoO, OMC has transferred the said lease to Utkal Alumina International Ltd. (new company formed by INDAL) on 10-Nov-2000. As per the Agreement, UAIL has issued debentures of ` 3.00 Crores each per annum to OMC since 2007.

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registered on 11-May-2011. Hon’ble Supreme Court of India has de-allocated 204 coal blocks including this coal block on dt. 24-Sep- 2014.

6.7 Mandakini- B Coal Block:The Ministry of Coal, GoI vide letter no. F.No. 13016/8/2007 – CA – I dtd. 25-Jul-2007 had allotted Mandakini–B coal block in favour of OMC Ltd, Assam Mineral Development Corporation, Meghalaya Mineral Development Corporation & Tamil Nadu Electricity Board on equal sharing basis for power generation. A JV Company namely Mandakini–B Coal Corporation Ltd. (MBCCL) was formed.

MoC, GoI has de-allocated Mandakini-B coal block on 05-Dec-2012 and invoked 50% bank guarantee due to delay in development of the said coal block.

Power6.8 Odisha Thermal Power Coprporation LimitedThe Odisha Mining Corporation Ltd. (OMC) and Odisha Hydro Power Corporation Ltd., (OHPC), the two Gold category State PSUs have promoted the Joint Venture Company i.e. Odisha Thermal Power Corporation Ltd., (OTPCL) each having 50% shareholding. OTPCL is setting up a coal based Super Critical Thermal Power Plant of 3 x 800 MW and 1 x 800 MW capacity in Kamakhyanagar, Tahsil of Dhenkanal District, Odisha with an estimated project outlay of ` 18,218 crores. So far OMC has invested ` 134.20 crore as equity. The total expenditure incurred till 31-Mar-2017 is around ` 230.75 crores OMC is committed to infuse more equity jointly with OHPC in the year 2017-18 depending upon the project requirement.

Rail6.9 Angul Sukinda Railway Limited (SPV Project)OMC has invested ` 63 crores constituting 10.5% of the share capital of ` 600 crores in this SPV

Project which is promoted jointly by RVNL, JSPL, IDCO, Container Corporation of India Ltd. and Government of Odisha to develop the BG rail link Budhapank-Sukinda Road which trasverses through Angul, Dhenkanal & Jajpur districts of Odisha for a route length of 104 KM. The project is under implementation.

The envisaged project cost is ` 1,202.70 crores, out of which ` 600 crores Equity has been received. Till 31 March 2017, around ̀ 306.67 crores (provisional) expenditure has been incurred. Till date OMC has contributed its full equity commitment of ̀ 63 crore which is 10.5% of the revised Equity Share Capital.

6.10 Haridaspur Paradip Railway Company Limited (SPV Project)Haridaspur-Paradip Railway Company Limited, a SPV, has been incorporated by RVNL for developing, financing, construction, operation and maintenance of a 82 km broad gauge single railway link between Haridaspur and Paradip stations in Odisha to establish a direct link between the Iron-ore rich areas of Odisha viz Barbil region to Paradip Port. The Rail Link traverses through three districts of Odisha, namely Kendrapada, Jajpur and Jagatsinghpur.

The revised Total Project Cost (“TPC”) is estimated at ` 2,230.92 crores, which includes the cost of land, civil works, buildings, plant & machinery, S&T engineering, electrical engineering, preliminary expenses and RVNL charges including IDC.

So far, OMC has contributed its full commitment of ` 74.70 crores which is 14.65% of the total Equity capital of ` 510 crores. The other shareholders in this SPV project are RVNL, IDCO, PPT, EMIL, RML, JSPL, SAIL, MSPL and Government of Odisha.


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7. Environmental Protection, Energy Conservation And Sustainable Development OMC is on its journey to build an effective and robust environmental management system with a strong vision and mission of Environmental Protection and Sustainable Development.

The mining operations at various leasehold areas of OMC - Gandhamardan, Daitari, South-Kaliapani, Sukurangi, Kurmitar and Bangur mines - are being continued in compliance with statutes. Continuous monitoring of environmental components like air, surface water, ground water, waste water, soil and noise is undertaken. Strict compliance of stipulated conditions in the consents & clearances granted from SPCB, Odisha & MoEF, Government of India, is also ensured by having a check on pollution control measures adopted at respective sites.

OMC has successfully commissioned the up-graded Effluent Treatment Plant (ETP) at South-Kaliapani chromite mines to avoid contamination of ground water by hexavalent chromium and installed Real-Time Effluent Quality Monitoring System with the facility of data transmission to SPCB server.

In order to monitor closely, the impact of air quality due to mining and transportation activities of the ores by road in Joda-Koira area, OMC has installed online continuous Ambient Air Quality Monitoring System near Bhadrasahi Chhak in Keonjhar district of Odisha for parameters such as PM10, PM2.5 alongwith the transmission of data to SPCB server.

As per the MoU executed between OMC and State Forest Department, Government of Odisha on 05-Jun-2015 plantation activities are being undertaken extensively under CSR initiative in the districts of Sundergarh, Keonjhar, Kalahandi and Jajpur.

8. Business Review/ State of the Company’s AffairsThe Company by extending a warm welcome to

all the stakeholders is honoured to step forward to

place once again a year full of positive achievements

before them. The Company is interested not only

to increase the earnings of the Company but also

to provide qualitative services to its customers and

society and continue its effort on achieving both

the objectives of protecting the interest of the

shareholders as well as its customers & society as a whole.

9. Changes in the Nature of the BusinessDuring the year under review, there were no changes in nature of business of the Company.

10. Material changes and Commitments affecting the Financial Position of the CompanyFrom the date of the Balance Sheet till the date of the Board’s Report, there have been no material changes and commitments that affect the financial position of the Company.

11. External Risk Factors to the CorporationThe Board of Directors is responsible for identifying,

evaluating and managing all significant risks faced

by the company. The risk management policy of

the company is being finalized.

12. Details of Significant and Material Orders Passed by the Regulators or Courts or Tribunals Impacting the Going Concern Status and Company’s Operations in FutureNo significant and material orders have been passed by the regulators or courts or tribunals during the year under review which will impact the going concern status of the Company.

13. Details in Respect of Adequacy of Internal Financial Controls with Reference to the Financial StatementsThe Company has an Internal Control System commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit (IA) function is defined in the Internal

25

Audit Charter. To maintain its objectivity and independence, the Internal Audit function reports to the Managing Director and the Audit Committee of the Board. The Audit Committee monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies of the Company. Based on the report of internal audit function & process, corrective actions are undertaken in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are periodically presented to the Audit Committee of the Board.

14. Certification of Internal Financial Controls over Financial StatementsM/s. Deloitte Haskins & Sells, Chartered Accountants have studied the Internal Financial Controls on Financial Reporting’s during the F.Y. 2016-17 and submitted its Report. As per Section-177 (5) of the Companies Act, 2013, the Audit Committee in its 2nd Meeting held on 27-Jun-2017 after due deliberation, examination and discussions with the Auditors, had recommended to the Board of Directors to certify on the adequacy of the Internal Financial Controls on Financial Statements. As per Rule-8(5)(viii) of the Companies (Accounts) Rules, 2014 the Board of Directors in its 421st Meeting held on 29-Jun-2017 have certified for the adequacy of the Internal Financial Controls over the Financial Statements. As per Sectioin-143 (3) (I) of the Companies Act, 2013, the Auditors have reported the adequacy of Internal Financial Controls over Financial Reporting’s subject to their observations.

15. Management Discussion and AnalysisManagement Discussion and Analysis comprising an overview of the financial results, operations/ performance and the future prospects of the

Company form part of this report.

16. Industries ScenarioM/s. The Odisha Mining Corporation Limited (OMC) is a Public Sector Undertaking Company, owned by the Government of Odisha, incorporated in the State of Odisha, vide Corporate Identity No. U13100OR1956SGC000313 on dated 16th day of May, 1956, by the Registrar of Companies, Odisha.

17. Statutory AuditorsM/s. SRB & Associates, Chartered Accountants, Bhubaneswar were appointed as Statutory Auditors for the Financial Year 2016-17 by the Office of the Comptroller and Auditor General of India vide Letter No.CA. V/COY/ORISSA, ORMINC (1)/1031 dt.17.08.2016 Under Section 139 (5) of the Companies Act, 2013.

18. C&AG AuditThe Comptroller and Auditor General of India (C&AG) have given their comments on the Financial Statements (Accounts) of the company for the Financial Year 2016-17 under Section 143 (6) (b) of the Companies Act, 2013.

19. Cost AuditorsThe Board of Directors have re-appointed M/s. Niran & Co., Cost Accountants, Bhubaneswar as the Cost Auditor of the company for FY 2016-17.

20. Explanations or Comments by the Board on Every Qualification, Reservation Made by the Auditors The comments of Management on the observations of Statutory Auditors and C&AG of India, on financial statements of OMC for the FY 2016-17 as per the provisions of section 134(3) of the companies Act, 2013 are enclosed as Annexures 2 and 3 respectively.

21. Secretarial Audit ReportOMC being a Private Limited Company, it is not required to obtain Secretarial Audit Report under Section 204(3) of the Companies Act, 2013.


26

22. Fixed Deposits

The Company has not accepted any deposits from the public in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

23. Share Capital

During the year, no allotment of shares has been made by the Corporation.

The Authorised Share Capital of the company is ` 1,00,00,00,000/- (Rupees One Hundred Crores Only) divided into 1,00,00,000 (One Crores) number of equity shares of ` 100/- (Rupees One Hundred Only) each. The issued, subscribed and paid-up capital is ` 31,45,48,000/- (Rupees Thirty One Crores Forty Five Lakhs Forty Eight Thousands Only) divided into 31,45,480 (Thirty One Lakhs Forty Five Thousand Four Hundred Eighty) numbers of equity shares of ` 100/- (Rupees One Hundred Only) each. Government of Odisha and its nominees hold the entire equity share capital of the Corporation.

24. Extract of the Annual Return

The Extract of Annual Return in Form MGT-9 pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014 is attached as Annexure 4 to this Report.

25. Corporate Social Responsibility (CSR)

OMC is committed to fulfil its obligation under Corporate Social Responsibility (CSR) and the OMC has formulated and adopted a CSR policy wherein up to 5% of average net profit of the company made in last three previous years is set aside for CSR activities. However, 2% has been earmarked to be spent under schedule-VII activities of Sec.135 under the companies’ act 2013.

During last five years OMC Limited has spent ` 105.14 Crores. to fulfil its obligations under Corporate Social Responsibility (CSR) on activities like environment protection and energy conservation, clean water and sanitation, skill development and training, education and promotion of talent, livelihood promotion and

infrastructure development, eradication of hunger and other community developments.

The Major CSR thrust initiate during the FY 2016 -17 are

y As part of its green initiatives, MoU has been signed with Forest & Environment department, Government of Odisha for plantation of 1 million saplings i.e. @ 1 tree per 10 metric tons of ore extracted. Further, ` 3.12 Cr has been given to the Forest Department, Government Of Odisha.

y Further, to nurture and promote talent amongst the backward classes and backward regions of the state OMC has undertaken an initiative called ‘ÓMC Super’. This programme provides support to under-privileged students for higher education in collaboration with Centre for Social Responsibility and leadership (CSRL), New Delhi in providing residential coaching to students after plus two for competing in Joint Entrance Examinations for IITs, NITs etc. ` 0.96 crores were spent for the purpose.

y OMC has also committed to provide financial support for construction of 25 model schools over a period of three years with a total expenditure of around ` 100 Crores.

y To promote alternative energy especially in the area where electricity is not adequate, OMC has tried to fill up the gap by providing solar lighting in mining villages. In this regard, 1354 household solar lights, street lights and lights to the schools were installed through district administration in Koraput.

y Similarly, a sum of ` 1.63 crores was spent for electrification and solar lighting in mining villages.

y OMC in collaboration with district administration is undertaking various rural and infrastructure development projects like roads, check dams, Anganwadi centres, school buildings, toilets, gravity based water supply systems etc. in Jajpur, Keonjhar, Sudargarh, Koraput and Rayagada and Kalahandi districts for the benefit of local people.

27

y `1.05 crores was spent on LED based information system for tourists in Puri.

y ̀ 1.10 Crores has also been spent for promotion of sports and related activities.

The Annual Report on CSR activities is attached as Annexure 5 to this Report.

504540353025201510

50

` In

Cro

re

2012-13 2013-14 2014-15 2015-16 2016-17

6

29

45

17

9

CSR expenditure of the Company

26. Donations

During the year OMC has disbursed ` 30.00 Crores to Chief Ministers Relief Fund (CMRF), ` 5.00 Lacs to M/s. Anjali for International Festival and ` 2.5 Lacs to Nandankanan Zoo, for adoption of 5 numbers of Tiger totalling to ` 30.07 Crores on this Noble head.

27. Peripheral Development Expenses

During the year, the Corporation disbursed an amount of ` 3.67 Crores towards Peripheral Development work which mainly constitute ` 3 Crores towards improvement of Dubna Sekradihi Road and ` 14.00 Lacs to organise a Mobile Health Unit in Kodingamali and ` 12.00 Lacs towards training of Youth around Kodingamali village.

28. The Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Out Go.

Details of energy conservation and research & development activities undertaken by the Company in accordance with the provisions of

Section 134(3) (m) of the Companies Act, 2013, is given in Annexure 6.

29. Particulars of Loans, Guarantees or Investments Under Section 186.

Out of total Inter Corporate Loan of ` 1500.00 crore extended to GRIDCO Ltd., the Corporation has an outstanding amount of ` 939.71 crore as on 31-Mar-2017 and ` 839.51 crore as on 31-Jul-2017 towards the principal sum. Further the Corporation has an outstanding towards principal of ̀ 170 crore as on 31.-Mar-2017 and ` 170.00 crore as on 31-Jul-2017 from Neelachal Ispat Nigam Limited (NINL) on account of Inter-Corporate Loan (ICL) extended to it. These loans were extended based on the approval of Government, the Board of Directors of both the Companies and receipt of letter of comfort / assurance from the State Government.

30. Nomination, Remuneration & Stakeholders Relationship Committee.

The Company is not required to constitute a Nomination and Remuneration Committee under Section 178(1) of the Companies Act, 2013 and Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014. Stakeholder Particulars of employees as required in terms of the provisions of Section 197 of the Companies Act, 2013, read with the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 which are not applicable to the Company.

31. Particulars or Contracts with Related Party Transactions

During the year there were no Contract or Arrangements with Related parties referred to in Section 188(1) of the Companies Act, 2013 except with NINL. Details of the transactions are provided in Form AOC – 2 which is submitted below.

FORM NO. AOC -2 (Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014.


28

Form for Disclosure of particulars of contracts/arrangements entered into by the company with related parties referred to in sub section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transaction under third proviso thereto.

Details of contracts or arrangements or transactions not at Arm’s length basis.

Sl. No. Particulars Details

1 Name of the related party & nature of relationship Neelachal Ispat Nigam Limited, Co-Promoter. 3 Directors of OMC are Directors in NINL.

2 Nature of contracts/arrangements/transaction Sale of Raw material and funding arrangement in Loan and Equity.

3 Duration of the contracts/arrangements/transaction

5 years agreement w.e.f 01/07/2015 for sale of Iron Ore

4 Salient terms of the contracts or arrangements or transaction including the value, if any

Agreement for sale of Iron Ore (CLO & Fines). Funding in Equity amount of Rs 127 crore and short term loan of Rs 170 crore.

5 Justification for entering into such contracts or arrangements or transactions’

To carter to the Iron ore requirement for production of Pig Iron & funding requirement for NINL.

6 Date of approval by the Board 28.-Sep-2016

7 Amount paid as advances, if any Short term loan amounting to Rs 170 crore

8 Date on which the ordinary resolution was passed in General meeting as required under first provision to section 188

30.12.2016

32. Declaration by an Independent Director.

In terms with section 149(7) of the Companies Act, 2013, the Independent Directors of the Company have submitted a declaration that they meet the criteria of Independence.

33. Details of Establishment of Vigil Mechanism for Directors and Employees.

As per provisions of Section 177(9) of the Companies Act, 2013 and rule 7 of the Companies (Meetings of

Board and its Powers) Rules, 2014, establishment of vigil mechanism for directors and employees is not compulsory for the Company.

34. Particulars of Employees

Furnishing of particulars of employees as required in terms of the provisions of Section 197 of the Companies Act, 2013, read with the rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable

29

to the Company since it is not a listed company.

35. Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, the Directors make the following statements in terms of section 134(3) (c) of the Companies Act, 2013.

1. That in the preparation of the Annual Accounts for the financial year ended 31st March 2017, the applicable Accounting Standards have been followed along with the proper explanation relating to material departures;

2. That the Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for the year under review;

3. That the Directors have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Companies Act, 1956/ Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the Directors have prepared the Accounts for the financial year ended 31st March,2017 on a going concern basis;

5. That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

6. That system to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

36. Human Resources Development and Staff Welfare

Introduction

To become an esteemed, world class corporation and a leader in Mining Industry on quality, productivity, profitability and customer satisfaction

parameters; a number of new initiatives have been undertaken, successfully turning OMC into a largest Gold Category State PSU in the country

The focus of OMC’s management on strategic alignment of People Management (HR) to the company’s business objectives has helped to deal with the emerging multifarious challenges confronting the mining sector. A number of HR initiatives have been launched which have contributed to building a conducive ambience in which the creativity and innovation of employees is gainfully unleashed.

Our corporation recognizes the contribution of its Human Resources (HR) in providing the competitive advantage. OMC has achieved its present level of excellence through investing in its human resource, whose skill and knowledge constitute the basis of every initiative be it technology or innovation. Developing skills and capabilities of employees to improve manpower utilization and labour productivity is the key thrust area of Human Resource Management in OMC.

OMC has taken giant strides to be a model employer by:

y Establishing and maintaining a dynamic organizational structure suited to meet present and future company needs.

y Attracting competent personnel with growth potential, and developing their maximum capabilities through the provision of opportunities for advancement and other incentives.

y Developing and sustaining a favourable employee attitude and obtaining maximum contribution from employees through stable employment, adequate wages commensurate with the Company’s capacity to pay and maintaining good and safe working conditions.

y Establishing a system for redressal of employees’ grievances in the shortest possible time and at the lowest possible steps.

y Providing training facilities, internal and


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MANPOWER STRENGTH AS ON 01-JUL-2017

15%

67%

2%

0%

0%

Deputation Executive Non-Executive

Contractual Non-Permanent Piece-rated Minor

Graph 37.1. Manpower strength as on 01-Jul-2017

external, and other opportunities for self-development in the current job and for advancement.

37. Human Resources

Manpower strength of the Company and the detailed break-up is given below:

Developing Employee Capabilities & CompetenciesIn order to harness the potential and develop the human resources, the corporation tries to integrate the individual aspirations and organizational goals through training and developmental activities in collaboration with reputed premiere institutes. The focus of the interactions are talent retaining, transfer of skill and knowledge, development of effective leadership and managerial competencies to align with business growth.

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Sl. No. Category Strength as on 31-March-2017A Deputation 08B Executive 382C Non-Executive 1773D Contractual 59E Non-Permanent 01F Piece-rated Minor 419

Total 2642

Harmonious Employee RelationsOur Company has a glorious tradition of conducive and fulfilling employee relations environment. The healthy practice of settling the issues through discussions with trade unions/workers’ representatives enabled workers’ participation at different levels and facilitated in establishing a peaceful IR climate. The Company has an established system of worker’s participation at different levels right from corporate level up to Shop-floor level. Some of these forums are functioning since its inception and are sufficiently empowered to address different issues related to wage, safety, and welfare of workers, arising from time to time thus helping in establishing a conducive work environment.

Bipartite forums like Works Committee, Welfare Committee, Canteen Managing Committee and Safety Committee on Safety, Health and Environment with representation from major central trade unions as well as representative Unions of Mines/Units meet on a periodic basis and jointly evolve recommendations/ action plans for ensuring a safe & harmonious work culture. This gets substantiated from the harmonious Industrial Relations enjoyed over the years by OMC Mines/Units, marked with diverse work culture at multi-locations.

Communication with employees at various levels concerning wide range of issues impacting the Company’s performance as well as those related to employees’ welfare is carried out in a structured manner. These interactive sessions help employees to align their working with the goals and objectives of the Company leading to higher production & productivity and enhanced employee engagement.

Preparing employees for tomorrow, for effectively taking up challenges and discharging new roles and responsibilities was given a major thrust. Overall, employees were trained on various contemporary technical and managerial modules.

The training statistics for the year is given below:

TRAINING

2014-15 2015-16 2016-17

8101341 1341

3318 33182929

4000

3000

2000

1000

0Man

day

s

Man days (Target) Man days (Achievement)

Table 37.2. Training statistics for the last three years

Year Man days (Target)

Man days (Achievement)

2014-15 810 1,3412015-16 1,341 3,3182016-17 3,318 2,929

Further, in order to strengthen the Industry-Academia Interface more vibrant Students’ of different Management/ Educational Institutions’ are provided an extensive exposure and hands on experience in a corporate environment during their Internship, Summer Project work. Vocational Training to the Technical students as sponsored by BOPT, Kolkata are also taken up in a phased manner.


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y Migration of TAX procedure from TAXINJ to TAXINN.

y E-Office Implementation Completed for HO.

y Remote Data Backup/Disaster recovery set up implementation.

y Redesign/Upgradation of OMC website.

Plan for the year FY 2017-18 y Implementation of redundant MPLS link to

Hyderabad data centre.

y Implementation of E-tendering process for procurement of goods and services.

y Delegation of power and modification of release strategy for procurement of goods and services.

y Implementation of truck parking management system.

y Redundant ILL link at Kaliapani mining weigh bridge.

y Implementation of CC TV monitoring system at Kaliapani and HO.

y Migration of CPF trust system from Legacy system to SAP treasury management System (SAP TRM).

y MIS report developed in SAP for daily sales, production and cash flow statement.

y Continuous Business Improvement study workshop will be carried out by SAP Solution architect team from each functional modules and the identified gapes will be implemented in SAP system.

y Biometric attendance system to be implemented at HO, regional offices and mines offices with user friendly reporting interface.

y IT security audit carried out successfully. Corrective actions to be taken to comply with security issues.

y GST enablement in ERP System.

y Integration of ERP to GSTN.

Grievance Redressal MechanismEffective internal grievances redressal machinery exists in OMC corporate and field units, separately for Executives and Non-Executives.

Majority of grievances are redressed informally in view of the participative nature of environment existing in the different units. The system is comprehensive, simple and flexible and has proved effective in promoting harmonious relationship between employees and management.

A General description of various defined benefit schemes are provided in Annexure 7.

38. System ManagementNew Computers with updated Windows 10 and 64 bit operating system have been procured. Routine system maintenance activities like HO LAN reconfiguration, Antivirus server configuration and process oriented incident management has been carried out keeping network security in mind. Recommended firewall deployment at gateway level has been implemented to enhance the security level.

The details of implementation of ERP in OMC in different departments have been provided in Annexure 8.

Recent Achievements of IT Section y Migration from MLLN to MPLS connectivity

completed successfully.

y Development of MIS reports in SAP system has been generated as per requirement placed by different sections of our organisation.

y Redundant internet connectivity commissioned for Baliparbat (Daitari) location.

y Surveillance Camera System implemented at Baliparbat, Daitari.

y Up-gradation of SAP System from SAP ECC 6.0 to SAP ECC 6.0 EHP 8 and migrated the data base from Oracle 10g to SAP HANA , hosted in private cloud i.e. HANA Enterprise Cloud (HEC).

y Implementation of SAP ESS in SAP Enterprise Portal (SAP EP) System.

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39. Security SystemOMC has established an integrated Security & Communication Management System. The Lease Protection Task Force have been monitoring the various leases of OMC in real time environment. The Company also proposes to create a compact and coherent industrial security system, to meet the futuristic challenges of Mines Security. Efforts are on to induct Odisha Industrial Security Force (OISF) personnel, in various Mines/Regional Offices of OMC Ltd by 2017-18. The aim would be to augment, the existing resources of Departmental Security Personnel with the OISF, so that an orchestrated and foolproof Security Plan is put in place which can effectively thwart any kind of pilferage of minerals.

40. LEGALThe Writ Petition (Civil) No.114 of 2014 was filed by one NGO namely Common Cause – vs – Union of India and Others in the Hon’ble Supreme Court of India seeking direction to Union of India and Government of Odisha pertaining to illegal mining

in the State of Odisha and to terminate all leases that are found to be involved in illegal mining in violation of provisions of Forest Conservation Act and Environmental Protection Act. Subsequently in this regard the report dtd. 16-Oct-2014 of Central Empowered Committee (‘CEC’) was filed before the Supreme Court wherein it was alleged that OMC has produced 260.219 lakh tons of iron ore and 0.280 lakh tons of manganese ore without/ in excess of Environmental clearance during the period from 2000-2001 to 2010-2011.

After hearing the matter, it was listed before the Supreme Court on 02-Aug-2017 and the judgment was delivered. The Court has taken the view that compensation should be payable for mining without/ in violation of Environmental Clearance or Forest Clearance at 100% of the price of the mineral, as rationalized by the CEC. It has, however, been clarified that in case there is overlapping violation of EC/ FC, only 100% and not 200% compensation will be payable. It has been further directed that the compensation should be paid latest by 31-Dec-2017 and unless the compensation is paid the


34

Mining License will not be allowed to restart the mining operations.

State Government has raised demand on the Company for Rs. 2178 Crore OMC is seeking the opinion of legal consultants to decide the future course of action.

Similarly, on receipt of demands in respect of five Chromite mines, OMC has filed Revision Applications before the Revisional Authority challenging the demand notices issued by the respective DDMs and Mining Officers. All the cases are pending and OMC is yet to receive the Orders from the Revisional Authority.

41. EconomyDuring the FY 2016-17, the Company has achieved Sales Turnover of ` 2,331.43 Crore, Other Income of ` 374.14 Crore, Total Income of ` 2,705.57 Crore Profit before Tax (PBT) of ̀ 1,320.51 Crore ,Profit after Tax (PAT) of ` 776.39 Crore, Other Comprehensive Income of ` (6.15) Crore and Total Comprehensive Income of ̀ 770.24 Crore. The Reserve Surplus/Other Equity as on 31-Mar-2017 stood as ` 5,867.13 Crore.

The Company has achieved the Sales of various Minerals of 17.63 Lakh Mt and sales Turnover of ` 368.71 crore by the end of Jun-2016 during the FY 2016-17.

The provisional actual achievement for the Financial Year 2017-18 up to Jun-2017 vis – a – vis the target for the corresponding period as per Budget estimate is as follows:

Table 37.1. Actual vs Budget

Item Production (MT) Sales (MT) Sales Turnover (` in crores)

Budget Actual Budget Actual Budget ActualIron Ore 23,00,000 21,24,816 23,00,000 18,48,474 415.39 423.86Chrome Ore 3,33,333 1,73,930 3,33,333 1,59,059 466.66 292.68Chr. Concentrate 22,400 Nil 15,166 10,782 21.00 17.55

After obtaining forest clearance over Baliparbat area during the FY 2014-15, stacking of ore at Baliparbat and effecting internal sales from Baliparbat is continuing. Production from OHP under BOT contract has been going on since 2014-15. Production of the raising agency M/s. Naaraayani Sons (P) Ltd. at Daitari has been kept in abeyance since April, 2016 due to restriction of Ghat Road transport by IBM. All efforts are made to increase the production from BOT. Due to above restriction of IBM, there is a production loss of around 3.30 Lakh MT as compared to original budgeted target during the Financial Year at Daitari mines. However, the mines has almost achieved the revised target for the Financial Year.

The working at Hill top quarry of Gandhamardan Block-B is not possible due to non-availability of forest clearance for transport of both OB & Ore over the transporting road passing through Block-A. Presently mining operation is continuing at Putulpani quarry of Gandhamardan Block-B ML. Due to non-approval of forest clearance for Gandhamardan-A ML there has been a total loss of around 19.85 Lakh MT during the F.Y. year as compared to the original budgeted target. However, the mines has achieved more than the revised target for the Financial Year.

Production of Chrome Ore from South Kaliapani has been affected due to space constraints for dumping of OB and stacking of Ore excavated from the Mines. However, after handing over of the part FDP area during the F.Y. all efforts are made to achieve the target. There is a production loss of around 1.00 Lakh MT as compared to the original budgeted target during the F.Y. However, the mines has achieved more than the revised target for the F.Y 2016-17.

35

Mining operation was suspended at Bangur underground mines w.e.f. 01-Oct-2011 due to want of statutory clearance. The agency continued with only essential work of de-watering of the mine. After obtaining required statutory clearance, the agency took around 3 months to mobilize its men & machineries and start actual Production of Chrome Ore w.e.f. Oct-2016. Further, the production was affected for around 40 days during November- December 2016 due to local problem.

With a view to have a more transparent and effective pricing, sale of chrome ore/chrome concentrate and iron ore to end-use plants as well as traders is presently made through national e-auction conducted through M/s MSTC Limited.

OMC supplies to end use industries of the State through Long-term Linkage contract as per guideline set by Government

OMC has signed LTL agreement with 42 nos. of iron ore buyers and with 10 nos. of chrome ore buyers for supply of annual quantity of 4.3 million tons of iron ore and 0.9 million tons of chrome ore/concentrate respectively.

In order to improve upon the sales turnover, the Corporation has taken several measures like relaxation of eligibility criteria, exemption/reduction of EMDs to be deposited by the buyers, reduction in the-auction period, extension of lifting period to facilitate lifting, relaxation in Penalty provisions, acceptance of Bank Guarantees and Letter of Credits etc.

During the last part of the year the prices of Chrome Ore increased considerably. Coupled with increased production and sales of chrome ore during the year resulted in increased profitability of the Company.

Prices of Iron Ore had drastically reduced. However due to higher production and sales quantity resulted in higher profitability in that segment.

The Corporation has undertaken steps for improvement in organizational set up. For exercising better control, administrative & financial powers have been delegated to Sectional Heads at HO and Regional Heads at ROs for expeditious decision making. Corporation has reorganized its management and operation to compete with professionally managed rivals. The recently


36

established Sections such as Corporate Planning and new business development, project monitoring unit, human resources development and corporate communication have been effectively operating for proper Planning & Management of the corporate affairs of OMC.

Effective inventory management through ERP has been undertaken by OMC for all stores and spare items. The obsolete stores & scarp items and discarded machineries and vehicles are being disposed off through e-auction conducted by M/s. MSTC Ltd. in phase wise manner for proper inventory management and 14th phase e-auction for disposal of scrap through MSTC has already been completed and action has already been initiated for next phase e-auction.

The Corporation has paid ` 500 Crore as Dividend to State Government for the F.Y. 2016-17 the approval of which in the AGM is awaited. In addition to the dividend ` 101.79 Crore was paid towards Corporate Dividend Distribution Tax.

Total Principal outstanding on Inter Corporate Loan to M/s. GRIDCO was ` 939.71 Crore as on 31-Mar-2017 and ` 839.51 as on 31-Jul-2017 out of the loan extended for ` 1,500.00 Crore during the periods 2012-13 to 2015-16.

The Principal outstanding on Inter Corporate Loan extended to M/s. NINL during the F.Y. 2015-16 is ` 170 Crore as on 31-Mar-2017.

With the above steps taken it is expected OMC would bounce back into its operations during the year 2017-18 vis-à-vis Productivity, sales profitability, etc.

42. Memorandum of UnderstandingIn line with the guide lines prescribed under the Corporate Governance Manual of Government of Odisha, the Company, for the 6th successive year, has entered into a Memorandum of Understanding with the Department of Steel & Mines, Government of Odisha for the Year 2016-17.

43. AcknowledgementI take this opportunity to thank all my colleagues on the Board for their valuable advice, guidance and support in managing the affairs of the Company. The Board places on record its appreciation towards valaubale contribution made by Dr. S. Acharya, Late S. N. Padhi & Sri A.K.Mishra during their tenure as Director of the Company.

On behalf of the Board and on my behalf, I extend my gratitude to the employees of the Company for their committed services to the Company for all round progress during the financial year 2016-17.

I would also like to express my gratitude to our Customers, Vendors, Auditors, Business Associates, Bankers and in particular to IBM, East Coast Railways, MMTC and Paradeep Port Trust Authorities and other Government of India and Odisha agencies for their continued co-operation /support and patronage.

I also thank our esteemed shareholders for their continued support in guiding and steering ahead the affairs of the Company.

For and On Behalf of the Board of Directors

SD/-

Shri Sanjeev Chopra, IAS CHAIRMAN The Odisha Mining Corporation Limited Place: Bhubaneswar Date: 9th October’ 2017

37

Annexure 1Following Tabular Statement Indicates the Achievements During 2016-2017 as Compared to Previous YearsIRON ORETable Annexure 1.1. Iron Ore

Year Production (in ‘000 MT)

Sales (in ‘000 MT)

Sales Value (` in crores)

2012-13 2,470 2,710 1,112.102013-14 2,439 3,191 1,007.432014-15 3,170 3,497 1,083.922015-16 5,971 4,338 838.042016-17 6,366 7,162 1,257.80

Chrome OreTable Annexure 1.2. Chrome Ore

Year Production(in ‘000 MT)

Sales(in ‘000 MT)

Sales Value(` in crores)

2012-13 680 476 546.04 2013-14 637 709 846.452014-15 732 615 797.342015-16 927 628 710.042016-17 1,206 849 1073.63

#Lime Stone, Gems Stone & Manganese Ore production and sales figures are Nil for the last five years.

ANNEXURE 1

38

Extract of Balance SheetTable Annexure 1.3. Extract of Balance Sheet

Particulars As at 31-Mar-2017 (` in crores)

As at 31-Mar-2016 (` in crores)

(I) ASSETSNon-Current Assets a) Property, Plant & Equipment 130.87 63.60 b) Capital work-in-Progress 56.30 93.21 c) Other Intangible Assets 348.50 - d) Intangible Assets under development 122.87 - e) Financial Assets (i) Investments 399.03 378.85 (ii) Loans 725.13 1,049.56 f) Deferred Tax Assets (Net) - 42.84 g) Other Non-Current Assets 330.16 315.62Total Non-Current Assets = Sub Total (1) 2,112.86 1,943.69 (2) Current Assets a) Inventories 568.79 590.77 b) Financial Assets (i) Trade Receivables 106.08 66.04 (ii) Cash & cash equivalents 100.01 21.76 (iii) Book balances other than (ii) above 1,053.89 2,830.81 (iv) Loans 393.25 337.09 (v) Others 1,536.30 201.06 c) Current Tax Assets (Net) 655.29 560.27 d) Other Current Assets 159.78 470.67Total Current Assets = Sub Total (2) 4,573.38 5,078.47Total (1) + (2) 6,686.24 7,022.15(I) EQUITY AND LIABILITIES(1) Shareholders’ Funds a) Share Capital 31.45 31.45 b) Other Equity 5,867.13 5,698.68Sub Total (1) 5,898.59 5,730.13(2) Non-Current Liabilitiesa) Provisions 120.10 111.26b) Deferred Tax Liabilities 101.11 -Sub Total (2) 221.21 111.26(3) Current Liabilitiesa) Borrowings - 737.00b) Trade Payables 245.83 284.58 c) Other Financial Liabilities 57.12 62.23 d) Other Current Liabilities 258.10 92.73 e) Provisions 5.40 4.22Sub Total (3) 566.44 1,180.76

Total (1)+(2)+(3) 6,686.24 7,022.15

39

Summary of Balance Sheet Table Annexure 1.3. Summary of Balance Sheet

PARTICULARS 2016-17 (` in crores)

2015-16 (` In crores)

WHAT WE OWNEDFIXED ASSETS (PPE & Intangible Assets)GROSS BLOCK (Including CWIP & Intangible Assets under Development) 743.82 156.81

Less: Depreciation 85.28 -*NET BLOCK (Including CWIP & Intangible Assets) 658.55 156.81Financial AssetsInvestment net of Diminution 399.03 378.85Non-Current Loans Net 725.13 1,049.56Deferred Tax Asset/ (Liabilities) – Net (101.11) 42.84Net off of Other Non-Current Assets & Liabilities 210.05 204.36Sub Total 1,891.65 1,832.43*(Written down value as on 31.03.2016 is taken as deemed carrying value as on 01-Apr-2016.)Add: Working Capital (Current Assets – Current Liabilities) 4,006.94 3,897.70TOTAL: (NET WORTH) 5,898.59 5,730.13REPRESENTED BY:Equity 31.45 31.45Reserve & Surplus 5,867.13 5,698.68TOTAL: 5,898.59 5,730.13

ANNEXURE 1

40

What We Earned and What We Spent Table Annexure 1.4.What we earned and what we spent


2015-16 (` In crore)

I. WHAT WE EARNED FROMRevenue from Operations 2,331.43 1,548.08Other Income 374.14 481.22TOTAL: 2,705.57 2,029.30II. WHAT WE SPENT/PROVIDED FOR A. CHANGE IN INVENTORIES: (i) Opening Stock 580.68 410.31 (ii) Closing Stock 562.74 580.68DIFFERENCE (i)-(ii) 17.94 (170.37)B. EMPLOYEE BENEFIT EXPENSES: 250.65 160.09C. FINANCE COSTS: 8.83 33.24D. DEPRECIATION / AMORTIZATION 76.44 9.23E. EXCISE DUTY 8.11 1.66F. OTHER EXPENDITURES I) Production & Processing Expenses i) Ore Raising 328.37 238.82 ii) Exploration & Prospecting Expenses 0.19 0.10 iii) Afforestation 0.34 27.40 iv) Forest Environ Exp. 4.44 11.38 v) Transportation 3.73 30.97 vi) Stamp Duty & Regn Charges for Supp.Lease Deed - 57.29 vii) Surface rent 3.38 3.39 viii) Energy Charges 2.47 3.76 ix) Consent Fees, Other Mining & Statutory Expenses 6.70 3.85 Sub-Total 349.62 376.96 II) Stores and Spares consumed (i) POL Consumed 5.53 4.52 (ii) Mech. Spares Consumed 1.47 1.07 (iii) Explosive 0.09 0.13 (iv) Prov Agst Slow Moving Store 0.51 - (v) Prov Agst Non Moving Store 3.70 1.25 (vi) Other Stores Consumed 1.99 1.15 Sub-Total 13.29 8.12 III) Administrative Expenses i) Repair & Maintenance 13.54 12.90 ii) Travelling Expenses 0.79 0.82 iii) Auditor’s Remuneration including Cost Audit 0.11 0.11 iv) Insurance, Rent, Dead Rent, Rates & Taxes 6.00 5.56 v) Watch & Ward 22.39 21.38 vi) Hire Charges 6.19 5.39

41


2015-16 (` In crore)

vii) Legal Expenses 1.14 1.12 viii) Rehabilitation Expenses - 0.20 ix) Donation 30.08 - x) Fees, Tariff, Electricity, etc. 5.87 3.62Sub-Total 86.11 51.11 IV) Selling & Distribution Expenses i) Royalty 348.88 335.48 ii) DMF 103.76 132.00 iii) NMET 6.92 8.80 iv) Transport, Rly Frt, & Wagon Loading 23.25 15.70 v) Sales Commission 2.41 1.47 vi) Analysis Charge, Advertisement, etc 9.73 4.13Sub-Total 494.95 497.58 V) Other Expenses i) Net Present Value - 13.73 ii) Penalty & Fines 5.21 1.25 iii) Prov for Diminution in Investment - 4.51 iv) Prior Period Expenses /(Income) - (1.47) v) Corporate Social Responsibility 29.19 44.51 vi) Peripheral Development Expenses 3.67 vii) Reconciliation effect of old balances 39.92 - viii) Misc Expenses 1.14 0.91Sub-Total 79.12 63.44TOTAL (I+II+III+IV+V) 1,023.09 997.21TOTAL: (A to F) 1,385.06 1,031.06NET MARGIN (I-II): 1,320.51 998.25Less: Provision for Income Tax & DTA (544.12) (360.16)PROFIT AFTER TAX/ PROFIT FOR THE PERIOD 776.39 638.09Less: Other Comprehensive Income (6.15) (8.20)Total Comprehensive Income 770.24 629.89Less: Transferred to General Reserve (89.25) (62.34)Available Profit for the period 680.99 567.54Add: Opening Balance of Profit b/f 3,462.19 3,496.44Available Profit as on year end 4,143.19 4,063.98Less: Dividend & Tax on Dividend (601.79) (601.79)Closing Retained Earnings as on year end 3,541.40 3,462.19Add: General Reserve 2,308.03 2,218.78Cumulative Profit as on year end 5,849.43 5,680.97Add: Capital Reserve 17.71 17.71Other Equity/Reserve & Surplus 5,867.13 5,698.68Add: Equity 31.45 31.45

Total Equity 5,898.59 5,730.13

ANNEXURE 2

42

Replies of the Management on the Comments of the Statutory Auditors on the Annual Accounts of the Odisha Mining Corporation Limited for the Financial Year FY 2016-17

Observation Replies of the ManagementIn pursuance to order of Honourable Supreme Court of India directing the Government of Odisha to sale 44.82 lakh MT of iron ore stocked in forest area, the Company has sold 4.69 lakh MT of iron ore valuing Rs. 4034.91 lakhs on behalf of the Govt of Odisha and accounted for it as its own sale without making any provision for the same under unrealized profit which has resulted in over statement of profit before tax and understatement of current liabilities of equal amount. The company has also sold 24.02 lakh MT of iron ore valuing Rs. 47547.36 lakhs out of this stock in earlier years without making any provision for unrealized profit thus inflating the general reserve of the company to an equal amount.

Due to non-availability of stacking space, the ore raised from Gandhamardan Block-B (for which OMC had all statutory clearances ) was stacked in Gandhamardan Block-A. However, the Statutory Authorities did not allow OMC to sale such ore from Gandhamardan Block-A. As a result, OMC has preferred an appeal to Hon’ble Supreme Court for allowing it to sale the ore.

Honorable Supreme Court, had directed while disposing I.A.No. 3402 in 378 in 2164 with I.A.no 3433 in writ petition (Civil) No (s). 202 of 1995, to take steps to sell all the dumped materials from the Gandhamardan Forest Area and deposit the sale proceeds in a Nationalized Bank and the amount can be realized to OMC only after obtaining order from the court. Accordingly 4.69 lakh MT (Previous Year 2.03 lakh MT) of Iron Ore were sold to various agencies and the sale value of Rs. 4034.91 lakh (Previous Year Rs. 2904.48 lakh) has been included in turnover (also shown under contingent liabilities and deposited Royalty, Sales Tax and other Statutory payments with the Concerned Authorities. After deduction of the above Statutory payments, which was deposited with the Concerned Authorities. the balance sale proceeds of Rs. 2690.78 lakh ( Previous Year Rs. 1929.17 lakh ) were deposited in Bank and treated in the account as receivable under Current Assets as matter is subjudice.

Annexure 2

43

Annexure 3Replies of Management on Comments of the Comptroller and Auditor General of India under section 143(6) (b) of the Companies Act, 2013 on the Financial Statement of The Odisha Mining Corporation Limited for the year 2016-17.Replies of the Management on the Comments of the C & A.G. on Standalone Financial Statements (SFS) of the Corporation for the Financial Year 2016-17.

Comments of the C & A.G. Replies of the Management.A.Comments on Profitability.1.Statement of Profit and Loss ExpensesChanges in inventories of finished goods,Stock in trade and W.I.P. - (Note-25) – Rs.17.94 crore.The above is understated by Rs.7.51 crore due to overvaluation of 73395MT of iron ore stock lying with the contractor (M/s Narayani & Sons) at Rs.1120.51/MT instead of valuing at actual rate as per contract i.e Rs. 97.75/MT).This has also resulted in overstatement of value of closing stock as well as profit for the year to the extent of Rs.7.51 crore each.

Cost incurred in bringing the inventories to their present location and condition is generally considered for valuation of inventories.

The suggestion of the audit is noted for compliance in the accounts for the year 2017-18.

The financial implication constitutes 0.20% of the turnover.

Expenses2. Other expenses (Note-28) – Rs.1023.09 crore.The above does not include Rs.5.32 crore being interest on Net Present Value (NPV) for belated payment of NPV. The company instead of charging the expenditure to Statement of Profit and Loss, capitalized the same under mining rights head which resulted in understatement of other expenses by Rs. 5.32 crore, overstatement of mining rights and corresponding overstatement of profit to same extent.

Amount paid for acquiring Mining rights is normally considered as an asset which is apportioned over its useful life. The future Economic Benefit embodied in an asset are consumed by an entity principally through its use and hence amortized value is charged to the Statement of Profit & Loss.

Interest component does not constitute a part of mining cost.

Necessary corrective measures shall be made in the accounts for the Financial Year 2017-18

It is further noted that the impact of inclusion of interest as mining right and its subsequent amortization is not material being 0.23% of the Turn Over.

ANNEXURE 3

44

B. Comment on Disclosure.OMC in its Consolidated Financial statements for the year ended 31 March 2017, has shown a contingent liability of Rs.9150.69 crore towards demand received from various DDMs and Mining Officers towards excess production.

In this regard, audit observed that Hon’ ble supreme Court vide Judgement dated 02 august 2017 has upheld penalty on all leaseholders who has carried out production of Ore beyond statutory limit for the period 2000-01 to 2009-10. The Apex Court has imposed a penalty of Rs. 17576.16 crore for iron ore and manganese ore based on recommendation of Central Empowered Committee (CEC) to be paid by all defaulters. The amount pertaining to OMC is to be ascertained by the state Government and OMC Ltd is required to pay Government of Odisha by 31 December 2017. This fact being significant should have been suitably disclosed in the accounts as it has material impact on stakeholders of annual accounts of the company.

Events after the reporting period are those events, favourable and un-favourable, that occur between the end of the reporting period and the date when the financial statements are approved by the Board of Directors in case of a company, and, by the corresponding approving authority in case of any other entity for issue (Paragraph-3, Ind AS-10).

Where an entity is required to submit its financial statements to its shareholders for approval after the financial statements have been approved by the Board for issue, in such cases, the financial statements are approved for issue on the date of approval by the Board, not the date when shareholders approve the financial statements (Paragraph-5, Ind AS-10).

The accounts of the corporation were approved by the Board of Directors on 29th June 2017 with proper disclosure of contingent liabilities for demands received from Dy. Director Mines and Mining Officers. However, the Hon’ble Supreme Court vide judgement in writ petition (civil) No 114 of 2014 dated 02 August 2017 have upheld payment of compensation by the lease holders as recommended by the Central empowered Committee (CEC) which is expected to be Rs.2178 crore for OMC on Iron ore and Manganese.

After pronouncement of the order by the Hon’ble Supreme Court on 02.08.2017 in case no 114 of 2014, the Revisional Authority i.e, the Mines Tribunal, New Delhi disposed off OMC’s 12 revision applications on 16.08.2017 pertaining to Iron Ore and Manganese mines with a directions that the State Government will take appropriate necessary action to comply with the directions given by the Hon’ble Apex Court.

The above event has occurred after the authentication of accounts by the Board of directors.

The corporation has also disclosed the fact that the financial statements are approved for issue by the Company’s Board of Directors on June 29, 2017 under general information of Notes to Accounts. It is further stated that demand notices from the appropriate authority indicating the amount payable in view of The Hon’ble Supreme Court Order were not received by the corporation as on the date of receipt of Preliminary Observation Memo from C& A.G.

Replies of the Management on the Comments of the C & A.G. on the Consolidated Financial Statements of the Corporation for the Financial Year 2016-17.

Comments of the C & A.G. Replies of the Management.1. This supplementary audit has been carried out independently without access to the working paper of the Statutory Auditors and is limited primarily to enquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplementary to statutory auditors report.

No comments.

45

Annexure 4

Form No. MGT 9Extract of Annual Return

As on the financial year ended on 31st March, 2017

[Pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the

Companies (Management and Administration) Rules, 2014]

I. Registration and other Details:

Table Annexure 4.I. Registration and other details

Sl. No. Particulars Details

1 CIN U13100OR1956SGC000313

2 Registration Date 16.05.1956

3 Name of the Company The Odisha Mining Corporation Limited

4 Category/Sub – Category of the Company State Government Company

5 Address of the Registered office and contact details OMC House, Bhubaneswar- 751001, Ph no. 0674-2377400

6 Whether listed company Yes/No No

7 Name, Address and Contact details of Registrar and Transfer Agent

N/A

[

II. Principal Business Activities of the Company:

All the business activities contributing 10% or more of the total turnover of the Company shall be stated:

Table Annexure 4.II. Registration and other details

Sl. No. Name and description of main product/ services

NIC code of the product/ service

% to total turnover of the Company

1 Iron Ore 1310 53.95

2 Chrome Ore & Concentrate 1320 46.05

ANNEXURE 4

46

Particulars of Holding, Subsidiary and Associate Companies:Table Annexure 4. Particulars of Holding, Subsidiary and Associate Companies

S l . No.

Name and address of company

CIN/GLN h o l d i n g / Subsidiary/Associate

% of share held

Applicable Section

1 Odisha Mineral Exploration Corporation Limited (OMECL)

U13209OR2016SGC025960 SUBSIDIARY 100% 2(87)

2 Mandakini-B Coal Corporation Ltd. (MBCCL)

U10200OR2009SGC010604 ASSOCIATE 25% 2(6)

3Kalinga Coal Mining Pvt. Ltd. (KCMPL)

U10101OR2004PTC007476 ASSOCIATE 26% 2(6)

4 South West Orissa Bauxite Mining Company (Pvt.) Ltd.


5 Rio Tinto Orissa Mining Pvt. Ltd.


6 Lanjigarh Project Area Development Fund (A company created u/s 25 on Companies Act 1956)

U85300OR2009NPL011190 ASSOCIATE 25% 2(6)

7 Nuagaon Coal Company Ltd.


8 Odisha Thermal Power Corporation Ltd


9 East Coast Bauxite Mining Company (Pvt.) Ltd


47

III. Shareholding Pattern (Equity Share Capital Breakup as Percentage of Total Equity):

I. Category-wise Share HoldingTable Annexure 4.III.(I) Category-wise share holding

Category ofShareholdersvv

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change

during the yearDemat Physical Total % of total

sharesDemat Physical Total % of

sharesPromotersIndian - - - - - - - - -Individual/ HUF - 90 90 0.01 - 90 90 0.01 -Central Government

- - - - - - - - -

State Government

- 31,45,390 31,45,390 99.99 - 31,45,390 31,45,390 99.99 -

Bodies Corp - - - - - - - - -

Banks/FI - - - - - - - - -Any Other - - - - - - - - -Total Shareholding of Promoter (A)

- 31,45,480 31,45,480 100 - 31,45,480 31,45,480 100 -

B. Public ShareholdingInstitutions - - - - - - - - -a) Mutual Funds - - - - - - - - -b) Banks / FI - - - - - - - - -c) Central Govt - - - - - - - - -d) State Govt(s) - - - - - - - - -e) Venture Capital Funds

- - - - - - - - -

f ) Insurance Companies

- - - - - - - - -

g) FIIs - - - - - - - - -h) Foreign Venture Capital Funds

- - - - - - - - -

i) Others (specify) - - - - - - - - -Sub-total B.1. - - - - - - - - -

2. Non-Institutions

- - - - - - - - -

a) Bodies Corp. - - - - - - - - -i) Indian - - - - - - - - -

ii) Overseas - - - - - - - - -

ANNEXURE 4

48

Category ofShareholdersvv

No. of Shares held at the beginning of the year

No. of Shares held at the end of the year

% Change

during the yearDemat Physical Total % of total

sharesDemat Physical Total % of

sharesb) Individuals - - - - - - - - -

i) Individual shareholdersholding nominal share capital upto Rs. 1 lakh

- - - - - - - - -

ii) Individualshareholdersholding nominalshare capital inexcess of Rs 1 lakh

- - - - - - - - -

c) Others (specify)

- - - - - - - - -

Non Resident Indians

- - - - - - - - -

Overseas Corporate Bodies

- - - - - - - - -

Foreign Nationals

- - - - - - - - -

Clearing Members

- - - - - - - - -

Trusts - - - - - - - - -Foreign Bodies- D R

- - - - - - - - -

Sub-total (B)(2):- - - - - - - - - -

Total PublicShareholding(B)=(B)(1)+ (B)(2)

- - - - - - - - -

C. Shares held by Custodian for GDRs & ADRs

- - - - - - - - -

Grand Total(A+B+C)

-31,45,480 31,45,480 100

-31,45,480 31,45,480

- -

49

Sl.

No.

Shar

ehol

der’s

Nam

e

Shar

ehol

ding

at t

he b

egin

ning

of t

he

year

Shar

ehol

ding

at t

he e

nd o

f the

yea

r

No.

of

Shar

es

% o

f tot

al

Shar

es

of th

e co

mpa

ny

% o

f Sha

res

Pled

ged

/ en

cum

bere

d to

to

tal s

hare

s

No.

of

Shar

es

% o

f tot

al

Shar

es o

f the

co

mpa

ny

% o

f Sha

res

Pled

ged

/ en

cum

bere

d to

tota

l sha

res

% c

hang

e in

sh

areh

oldi

ng

duri

ng th

e ye

ar

Hon

’ble

Gov

erno

r of O

dish

a31

,45,

390

99.9

931

,45,

390

99.9

9

Sri G

irish

S.N

. IA

S, E

x-M

D, O

MC

Ltd

300.

0009

5-

-

Sri R

. Vin

eel K

rishn

a, IA

S, M

D, O

MC

--

300.

0009

5

Sri R

. Bal

akris

hnan

, Ias

, Ex-

Addl

. Ch

ief S

ecy,

Fin

ance

Dep

artm

ent,

Odi

sha

150.

0004

7-

-

Sri T

uhin

Kan

ta P

ande

y, IA

S, P

r. Se

cy.

to G

over

nmen

tfin.

dept

.-

-15

0.00

047

Sri R

.k S

harm

a, IA

S, P

rinci

pal S

ecy.

To

Gov

ernm

ent S

teel

& M

ines

D

epar

tmen

t Odi

sha

150.

0004

715

0.00

047

Sri B

rund

aban

Beh

era

Addl

. Sec

y.

To G

over

nmen

t Ste

el &

Min

es

Dep

artm

ent O

dish

a15

0.00

047

150.

0004

7

Sri N

aren

dra

Kum

ar S

wai

n Fa

Cum

Jo

int S

ecy.

To G

over

nmen

t Ste

el &

M

ines

Dep

artm

ent O

dish

a15

0.00

047

-15

0.00

047

Tota

l31

,45,

480

100

31,4

5,48

010

0

(II) Shareholding of PromotersTable Annexure 4.III.(II) Shareholding of Promoters

ANNEXURE 4

50

(III) Change in Promoters’ Shareholding (please specify, if there is no change)a. SRI R. BALAKRISHNAN, IAS, EX-ADDL. CHIEF SECY, FINANCE DEPARTMENT, ODISHA

Table Annexure 4.III.(III).a. Sri R. Balakrishnan

S l . No. Particulars

Shareholding at the beginning of the year

Cumulative Shareholding during the year

No. of shares % of total shares of the company

No. of shares

% of total shares of the company

1 At the beginning of the year 15 0.00047

2

Date wise Increase/ Decrease in Promoters Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.

15 shares transferred to Sri Tuhin Kanta Pandey, IAS, PR. Secy. to Government Fin. Dept. on 17-Nov-2016

0.00047

3 At the end of the year - -

b. Sri Girish S.N. IAS, Ex-Md, OMC LtdTable Annexure 4.III.(III).b. Sri Ganesh S.N

S l . No. Particulars



No. of shares % of total shares of the company No. of shares

% of total shares of the

company

At the beginning of the year 30 0.00095

Date wise Increase/ Decrease in Promoters Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc.

30 shares transferred to Sri R. Vineel Krishna, IAS, MD, OMC on 16-Aug-2016

0.00095

At the end of the year - -

51

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRS):-

Table Annexure 4.III.(IV) Shareholding pattern of top ten shareholders

Sl. No. For Each of the Top 10Shareholders



No. of shares


No. of shares


1 At the beginning of the year

- - - -

2 Date wise Increase/ Decrease in Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer/ bonus/sweat equity etc.)

- - - -

3 At the End of the year(or on the date of separation, if separated during the year)

- - - -

(v) Shareholding of Directors and Key Managerial Personnel:a) Table Annexure 4.III.(V).a) Sri R.K. Sharma

S l . No

ParticularsShareholding at the

Beginning of the year


Sri R.K Sharma, IAS, Principal Secy. to Government Steel & Mines Department Odisha

No. of shares


company

No. of shares


1 At the beginning of the year 15 0.00047 - -

2

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment/ transfer/ bonus/ sweat equity etc)

- - - -

3 At the End of the year 15 0.00047 - -

ANNEXURE 4

52

b) Table Annexure 4.III.(V).b) Sri Vineel Krishna

S l . No

Particulars Shareholding at the Beginning of the year


Sri R. Vineel Krishna, IAS, MD, OMC No. of shares


company

No. of shares


1 At the beginning of the year - - -

2

Date wise Increase / Decrease in Shareholding during the year specifying the reasons for increase/ decrease (e.g. allotment / transfer / bonus/ sweat equity etc)

- -

3 At the End of the year 30 0.00095 -

IV. IndebtednessIndebtedness of the Company including interest outstanding/accrued but not due for payment.Table Annexure 4.IV. Indebteness

Secured Loans excluding deposits

UnsecuredLoans

Deposits TotalIndebtedness

Indebtedness at the beginning of the financial year

I. Principal AmountII. Interest due but not paidIII. Interest accrued but not

due

Total(i+ii+iii)

73,700 Lakh--

73,700 Lakh

Total (i+ii+iii) 73,700 Lakh 73,700 Lakh

Change in Indebtedness during the financial yearAdditionReduction

-73,700 Lakh

--

Net Change

Indebtedness at theend of the financial yeari) Principal Amountii) Interest due but not paid iii) Interest accrued but not due

---

---

Total(i+ii+iii) - -

53

v. Remuneration of Directors and Key Managerial PersonnelA. Remuneration to Managing Director, Whole Time Directors and/Other Managers:Table Annexure 4.V.A.1. Sri R. Vineel Krishna

S l . No.

Particulars of Remuneration Name of MD/ WTD/ Manager:R. Vineel Krishna (Managing

Director)

TotalAmount

---- --- --- ---- ---1. Gross salary

(a) Salary as per provisions containedinsection17(1) of the Income-tax Act, 1961

(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary undersection17(3)Income-

tax Act,1961

2. Stock Option ---- ---- ---- ----

3. Sweat Equity ---- ---- ---- ----

4. Commission- as % of profit- others, specify

5. Others, please specifyTotal(A) ---Ceiling as per the Act

Table Annexure 4.V.A.2. Satyajit Mohanty

S l . No.

Particulars of Remuneration Satyajit Mohanty (Whole Time Director) w.e.f 01/12/2016

TotalAmount

---- --- --- ---- ---

1. Gross salary(a) Salary as per provisions containedinsection17(1)

of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act,

1961(c) Profits in lieu of salary undersection17(3)Income-

tax Act,1961

7,03,916

2. Stock Option ---- ---- ---- ----

3. Sweat Equity ---- ---- ---- ----

4. Commission- as % of profit- others, specify

5. Others, please specify

Total(A) 7,03,916Ceiling as per the Act

ANNEXURE 4

54

B. Remuneration to other Directors:Table Annexure 4.V.B.1. C.R. Das

S l . No.

Particulars of Remuneration Name of Directors :C.R.Das (Independent Director)

TotalAmount

- - - -

1 Independent Directors• Fee for attending Board & Committee

meetings• Commission• Others, please specify

3,36,000

Total (1) 3,36,000

2 Other Non-Executive Directors· Fee for attending board committee meetings· Commission· Others, please specify

-

Total (2) -

Total (B)=(1+2) 3,36,000

Total Managerial Remuneration -

Overall Ceiling as per the Act -

Table Annexure 4.V.B.2. D.K. Roy

S l . No.

Particulars of Remuneration Name of Directors :D.K ROY (Independent Director)

TotalAmount

- - - -1 Independent Directors

• Fee for attending Board & Committee meetings

• Commission• Others, please specify

2,32,000

Total (1) 2,32,000

2 Other Non-Executive Directors• Fee for attending board committee


-

Total (2) -

Total (B)=(1+2) 2,32,000

Total ManagerialRemuneration

-


55

Table Annexure 4.V.B.3. S. Acharya

Sl. No. Particulars of Remuneration Name of Directors :S.ACHARYA (Independent Director)

TotalAmount

- - - -

1 Independent Directors• Fee for attending Board & Committee


24, 000

Total (1) 24,0002 Other Non-Executive Directors

• Fee for attending board committee meetings


-

Total (2) -

Total (B)=(1+2) 24,000Total Managerial Remuneration -

Overall Ceiling as per the Act -Table Annexure 4.V.B.4. Late S.N.Padhi

Sl. No. Particulars of Remuneration Name of Directors :Late S.N PADHI (Independent Director)

TotalAmount

- - - -

1 Independent Directors• Fee for attending Board

&Committee meetings• Commission• Others, please specify

48, 000

Total (1) 48,000

2 Other Non-Executive Directors• Fee for attending board

committee meetings• Commission• Others, please specify

-

Total (2) -

Total (B)=(1+2) 48,000Total Managerial Remuneration -


ANNEXURE 4

56

Table Annexure 4.V.B.5. G.S. Khuntia

Sl. No. Particulars of Remuneration Name of Directors :G.S KHUNTIA (Independent Director)

TotalAmount

- - - -

1 Independent Directors• Fee for attending Board &

Committee meetings• Commission• Others, please specify

2,16,000

Total (1) 2,16,000



-

Total (2) -

Total (B)=(1+2) 2,16,000



Table Annexure 4.V.B.6. C.R. Pradhan

Sl. No. Particulars of Remuneration Name of Directors :C.R.Pradhan (Independent Director)

TotalAmount

- - - -

1 Independent Directors• Fee for attending Board &

Committee meetings• Commission• Others, please specify

2,56,000

Total (1) 2,56,000



-

Total (2) -

Total (B)=(1+2) 2,56,000



57

Table Annexure 4.V.B.7. S.P.Padhi

S l . No.

Particulars of Remuneration Name of Directors :S.P.Padhi (Independent Director)

TotalAmount

- - - -1 Independent Directors

• Fee for attending Board & Committee meetings


1,84,000

Total (1) 1,84,000

2 Other Non-Executive Directors• Fee for attending board committee meetings• Commission• Others, please specify

-

Total (2) -

Total (B)=(1+2) 1,84,000



C. Remuneration to Key Managerial Personnel other than MD/ Manager/ WTD:

Table Annexure 4.V.C. Remuneration to KMP

S l . No.

Particulars of Remuneration Key Managerial Personnel

CEO Company Secretary CFO Total

1. Gross salary(a) Salary as per provisions contained in section17(1) of the Income-tax Act, 1961(b) Value of perquisites u/s 17(2) Income-tax Act, 1961(c) Profits in lieu of salary under section 17(3) Income- tax Act,1961

- 21,54,209 - 21,54,209

2. Stock Option

3. Sweat Equity

4. Commission- as % of profit- Others, specify

5. Others, please specify

Total 21,54,209 21,54,209

ANNEXURE 4

58

D. Penalties/ Punishment/ Compounding of Offences:Table Annexure 4.VI. Penalties/ Punishment/ Compunding of offences

Type Section of the Companies

Act

Brief Description Details of Penalty/ Punishment/

Compounding fees imposed

Authority [RD/ NCLT/

COURT]

Appeal Made, if

any (give details)

A. COMPANY NILPenaltyPunishmentCompoundingB. DIRECTORS NILPenaltyPunishmentCompoundingC. OTHER OFFICERS IN DEFAULT. NILPenaltyPunishmentCompounding

59

Annexure 5

Annual Report on CSR Activities[Pursuant to clause (o) of sub-section (3) of section 134 of the Companies Act 2013 and Rule 9 of the Companies (Corporate Social Responsibility) Rules, 2014]A brief outline of the Company’s CSR policy, including overview of projects or programs proposed to be undertaken.

Brief Outline of OMC CSR policyLarge population of India are deprived of basic amenities giving ample scope to create lasting impacts and abundance of areas to improve the society. As a responsive corporate entity the Company is taking up different Socio-Economic Development works through its well defined CSR Policy. Since its inception the Company has taken up various activities extending financial assistance for adoption of village, Art and Culture, Fair and exhibition, Donation, Drinking water, Educational, Games and Sports, Health, Infrastructure, Roads, Building, bore-well, tube well, ponds etc.

A detailed CSR Policy, approved by the Board, is available on the Company’s website i.e. www.omcltd.in.

ObjectiveAny CSR Policy must take into account the nature of the industry and its short-term, medium term and long-term impact on the environment, on the socio-economic life of the people in the peripheral areas and on the society. In this context, the CSR Policy for a mining industry will essentially be different from other industries as mines have finite, often short life. The CSR Policy of the mining industry should endeavour to take care of the socio-economic well-being of the local people and environmental protection even after closure of the mines. After winding up of mining activities, the local community has to fall back upon other means of livelihood based upon the infrastructure and other capital assets created and skill sets acquired during the period of mining.

ScopeOMC follows the Schedule VII of Companies Act 2013 including activities for the benefit of the people around the mining impacted areas, institutions and State of Odisha.

CSR Activities

With due regard to the above stated objectives are outlined below. OMC intends to undertake following CSR activities-

I. Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water.

II. Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

III. Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically back ward groups.

IV. Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water.

V. Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts.

VI. Measures for the benefit of armed forces veterans, war widows and their dependents.

VII. Training to promote rural spots, nationally recognised sports, Paralympic sports and Olympic sports.

VIII. Contribution to the Prime Minister’s National

ANNEXURE 5

60

Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women.

IX. Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government.

X. Rural development projects.

XI. To assist the State Government of Odisha in tackling natural/man-made disasters including donation to CMRF.

XII. To provide assistance to educational and academic institutions, research organisations and professional bodies for knowledge sharing events relevant to mining industry vis-à-vis OMC activities.

XIII. To provide assistance to charitable, philanthropic and similar organizations of Odisha.

XIV. To support activities in the field of literature, journals & media, games and sports, fair and exhibitions, etc

CSR at OMC is driven by demands from local stakeholders from its mines locationAllocation of FundAllocation of funds for CSR activities shall be made as per following principles.

y Basing on the need as well as fund utilization/ absorption capacity, a maximum of up to

5% (five) of the average net profit of the Corporation made in the three previous years can be utilized for above stated CSR activities, out of which a minimum of 2% (two) shall be spent on activities listed at above paragraph Sl. No. (i) to (x). However, the annual outlay will be decided by the Board of Directors of OMC from year to year.

y Many CSR activities may spill over the financial year of initial allotment and may therefore need funding for more than a year. Steps should be taken to ensure that before a commitment is made for any new CSR project, the total fund requirement for the first and following years is carefully assessed. Further, in a subsequent year, priority should be accorded to completion of any ongoing project before making any commitment of funds for new projects.

y It shall be the endeavour of the management to spend about 50% of CSR fund in the mining affected areas

1. The composition of the CSR Committee.The CSR Committee of the company comprises of:

y Managing Director (Chairman of the Committee)

y Two Independent Director who are inducted on rotation basis for a tenure of 6 months.

The members of the Committee for the F.Y. 2016-17 are as under:

Table Annexure 5.1. CSR committeeSl. No. Particulars Period1 Sri R. Vineel Krishna, IAS, MD OMC Ltd, Chairman of the Committee. 31-Mar-2016 to Continuing2 Sri D.K Roy, Independent Director of OMC Board - Member of the

Committee. 22-Feb-16 to 21-Jun-16

3 Late S.N Padhi Independent Director of OMC Board - Member of the Committee.

22-Jan-2016 to 12-May-2016

4 C. R Pradhan Independent Director of OMC Board - Member of the Committee. 22-Jun-2016 to 31-Mar-2017

5 Sri S.P Padhi, Independent Director of OMC Board - Member of the Committee.

20-May-2016 to 31-Mar-2017

61

2. Average net profit of the company for last three financial yearsAverage net profit (PBT) of last three financial years is ` 1,311.77 crore.

3. Prescribed CSR Expenditure (two percent of the amount as in item 2 above)The two percent of the Average net profit of last three financial years is ` 26.24 crore.

4. Details of CSR amount spent during the financial year is enclosed as Annexure to this report.

y Total CSR amount estimated for the financial year;

The minimum amount @ 2% of the net profit of the last three financial year is ` 26.24 crore against

CERTIFICATEThis is to certify that the implementation and monitoring of CSR Policy, is in compliance with CSR objectives and Policy of the Company.

which the Company has spent ` 29.19 crore which is 2.23% of average net profit (PBT) of last three financial years.

y Amount unspent ,if any; The unspent CSR amount is NIL.

5. In case the Company has failed to spend the two percent of the average net profit of the last three financial years or any part thereof, the company shall provide the reasons for not spending the amount in its Board report.

N/A

6. A responsibility statement of the CSR committee that the implementation and monitoring of CSR policy, is in compliance with CSR objectives and policy of the Company.

Sd/-

CVO (CSR) I/c

Sd/-

Managing Director (Chairman of the Committee)

ANNEXURE 5

62

Table Annexure 5.2. CSR Activities

The Odisha Mining Corporation Limited.Sl. No.

CSR Project activities identified for the finan-cial year 2016-17

Sector in which the project is covered

Projects or Programs (1) local area or others (2) specify the State and Dis-trict where projects or programs were under-taken.

Amount outlay

(Budget) proj-

ect or Program

wise

Amount spent on the proj-

ects or programs sub Head (1) Direct expendi-

ture on projects

or pro-grams (2)

over-heads

Cumulative expendi-

ture up to the report-ing period

(01.04.2016 to

31.03.2017)

Amount spent

Direct-ly or

through Imple-ment-

ing agency

1 Eradicating hunger, poverty and malnutrition, Promoting preventive health care and sanitation and making available safe drinking water.

All mining Districts and other districts of Odisha

Keonjhar, Khurada, Cuttack Jajpur and Sundergargh

2.74 2.67 2.67 Govt/ Non

Govt

Annexure to Annual Report on CSR Activities(` in crores)

63

2 Promoting education including special education and employment enhancing vocation skill especially among children, women, elderly and the differently abled and livelihoods enhancement projects


Keonjhar, Khurda, Jajpur and Sundergargh

6.65 3.90 3.90 Govt/ Non Govt

3 Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centre’s and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.


Keonjhar, Puri,khorda ,Jajpur and Sundergargh

0.03 0.03 0.03 Govt/ Non Govt

4 Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water;


Keonjhar, dhenkanal , ,Jajpur and Sundergargh

3.17 3.17 3.17 Govt/ Non Govt

5 Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts:


Keonjhar, Puri, khorda, Jajpur and Sundergargh

0.07 0.07 0.07 Govt/ Non Govt

ANNEXURE 5

64

6 Measures for the benefit of armed forces veterans, war widows and their dependents;

- - - - - -

7 Training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports;


Keonjhar, Puri,khorda ,Jajpur and Sundergargh

0.74 0.74 0.74 Govt/ Non Govt

8 Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Caste, the Scheduled Tribes, other backward classes, minorities and women;

- - - - - -

9 Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;

- - - - - -

10 Rural development projects.


Keonjhar, Jajpur , Koraput, Kalahandi, Rayagarda and Sundergargh

32.62 18.13 18.13 Govt/ Non Govt

11 Other activities All mining Districts and other districts of Odisha

Keonjhar, Jajpur and Sundergargh

0.47 0.47 0.47 Govt/ Non Govt

Total 46.48 29.19 29.19 Govt/ Non Govt

65

Annexure to the Directors’ ReportInformation in accordance with the provision of section 134(3)(m) of the Companies Act 2013 forming part of Directors ‘report for the year ended 31st March 2017.

Conservation of Energy(a) Energy Conservation measures taken :-

y Earlier OMC had installed Automatic Power Factor Correction (APFC) panel at Daitari, COB Plant, Gandhamardan, Khandbandh (Barbil Region), Bangur as well as at Head Office. During last year OMC has installed APFC panel at COBP and another APFC installation work at Daitari is under progress to improve power factor.

y We are replacing LED light fittings in all our mines in phased manner including high mast lights & mobile tower lights installed/ to be installed.

y We are using LED Bulb, Tube Light and Ceiling Fans under UJALA Scheme of Ministry of Power, Government of India.

y 5 Star rated Air Conditioners; Refrigerators, T-5 Tube, Star rated transformers etc. have been procured and are in use at different mines/camps for energy conservation.

Annexure 6 y OMC has already signed NET-metering

agreement with CESU for setting up of roof top solar plant at H.O.

As per IBM norm we are in process of installation of solar power plants in different Mines of OMC.

(b) Additional investments and proposals, if any being implemented for reduction of consumption of energy :-It has been approved by the Management for implementation of solar roof top project on our Head Office building in view of Conservation of energy and accordingly Ms.GEDCOL has been informed for its implementation.

(c) Impact of the measures at (a) and (b) above for reduction of energy consumption and consequent impact on the cost of production of goods :- By following the above measures, conservation of energy can be made.

(d) Total energy consumption and energy consumption per unit of production as per Form A of the Annexure in respect of industries specified in the Schedule thereto : -Not Applicable

Foreign Exchange TransactionsTable Annexure 6.1. Foreign Exchange transactions

Particulars FY 2016-17 (` in crores)

FY 2015-16 (` in crores)

Income in Foreign Currency Nil NilExpenditure incurred in Foreign Currency Nil Nil

Research & Development (R & D) In its R&D activities, Project Section has already initiated action for recovery of Chromite values from the tailing of the Chrome Ore Beneficiation Plant at South Kaliapani. Presently Pilot Plant study is under progress at the laboratory of National Metallurgical Laboratory (NML), Jamshedpur.

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General description of various defined benefit schemes are as under:

(i) Housing OMC provides accommodation for the employees and the members of their families in mines and at Regional Offices and corporate/Head Office on nominal rent. Where accommodation is not provided, the employees are paid house rent allowances at 20% of basic pay & Grade pay for HO, 10% for Regional Offices and 5% for the field.

OMC also provides house building advances for its employees to build their own houses at such locations as suitable to them.

(ii) HealthOMC gives full and free medical care to its employees and the eligible members of their families. A 16-beded hospital at Daitari & 4-beded hospital at Kaliapani are functioning. In most of the Mines and at HO, Hospitals/Dispensaries are functioning with required medical and paramedical staffs along with x-Ray, pathological Test equipment’s. The medical treatment cost is reimbursable as per Medical Attendant Rules-1976 (Amended) of OMC.

Annual Health check-up for Executives /Non-Executives above 40 years is also introduced in order to monitor the health standards of Executives /Non-Executives working in different fields.

(iii) Post-Retirement Medical BenefitThe benefit is available to retired employees and their spouses who have opted for the benefit.

y If both the spouses are alive ` 6,000 per annum and

y If one of the spouses is alive ` 3,000 per annum. The amount shall be credited to the joint Bank account of all retired employees during beginning of each year. However, the concerned employee shall submit living certificate in each year to OMC & in case of Death of either of the

Annexure 7

retired employee or his/her spouse, the amount will be limited to ` 3,000 per annum.

(iv)Safety y Being basically a mining organization, OMC

attaches greater importance for safety of the employees. In its mining projects, OMC has its own Training Centers equipped with the infrastructure as required under the Mines Vocational Training Rules. These centers cater to the needs of basic training, refresher training, and training for skilled trades and also for those injured on duty.

y Sufficient number of workmen inspectors are nominated/appointed for mining operations, mechanical installations and electrical installations in terms of the statutory requirement

y Occupational Health Centers have been provided in the mines.

y Doctors have been given specialized training in occupational health.

y Periodical medical examinations of employees are done in accordance with the prescribed schedule.

y Safety appliances such as safety shoes, helmets, rain suits, goggles, etc, are provided to employees periodically.

y Every month safety committee meetings are conducted and accident analysis is discussed and remedial measures implemented.

(v) Education y OMC encourages its employees to better their

educational and professional qualification by giving suitable incentives, study leave, etc.

y OMC takes care of the school education of the employees’ children in its mines and gives incentives and scholarships for their higher education. As its mines are located in remote areas, OMC has arranged for quality schooling facilities at some of the mines itself.

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y The schooling facilities available at the mines are extended to the children of the surrounding villages as well.

Cash award of amount ` 4,000/- is being given to each best student among the children of OMC employees who secures highest marks in the annual H.S.C. Examination and CBSE every year on the OMC Day fallng on 16th May every year.

Scholarship Scheme:In order to encourage the children of the employees, OMC has introduced a scholarship scheme. Scholarships are being sanctioned to the meritorious students for higher studies after Matriculation. The rates of Scholarships are indicated below.

Table Annexure 7.(v). Description of scholarship

Description of Scholarship Amount per month

At Intermediate level 11th & 12th Std. ` 300/-PM` 400/-PM

Students securing above 90% marks in 10th class Exam, ` 500/- PMAt Graduate level for ordinary courses i.e. B.A., B. Com., B.Sc., LLB & other courses where Bachelor’s degree is awarded ` 500/- PM

At Diploma level in professional courses in Engineering/Pharmacology ` 500/- PMAt Post-graduate level i.e. M.A., M. Com., M. Sc., LLM etc. ` 600/- PMAt Graduate/PG in Medicine/Pharmacology/ Dentistry/ Engineering/Architecture/Management Studies/Agriculture /Veterinary Science.

` 900/- PM

Special Scholarship for exceptionally brilliant/talented students for technical/professional studies, where admission is through National level competitions.

` 1,500/- &` 2000/- PM

(vi) Liveries y Liveries are being provided to all employees

including executives. Two pairs of dresses are also being provided to the PR Miners and DRMP works.

y Liveries washing allowance is also being paid to the eligible Class-III & Class-IV employees and PR Mines @ ` 150/- per month and ` 130/- per month respectively.

(vii) Recreation & Cultural Programme y In order to conduct various cultural programme,

Community centers in Head Office and each Mines/Camps are being maintained.

y OMC is sanctioning a substantial amount for different recreation and cultural activities of its employees. Regular film shows, opera shows and drama are being conducted by the employees. Besides, recreation clubs with TV

and Dish Antenna facilities are being provided in each Mine.

(viii) Presentation to Retired EmployeesThe employees at the time of their retirement are being presented with presentation worth ` 20,000/- (Rupees Twenty Thousand).

(ix) Ex-gratia for Funeral RitesIn case of death of an employee in service, a sum of ` 25,000 is being sanctioned towards ex-gratia for funeral rites.

(x) Provident FundThe company pays fixed contribution to Provident Fund at predetermined rates, to a separate trust, which invests the funds in permitted securities. On contributions, the trust is required to pay a minimum rate of interest, to the members, as specified by Government of India. Where the trust

ANNEXURE 7

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is unable to pay interest at the declared rate for the reasons that the return on investment is less or for any other reason, then the deficiency is made good by the Company.

(xi) Pension Fund The Company pays fixed contribution to the Regional Provident Commissioner towards pension. The company’s liability is limited only to the extent of fixed contribution.

(xii) GratuityGratuity payable to employees as per The Payment of Gratuity Act and Gratuity Fund Trust Rules of OMC. The gratuity scheme is funded by the company with LIC of India and is managed by a separate trust.

(xiii) Settling-in-benefitOn superannuation/ retirement/termination, the employees who have opted for the benefit and/or family shall be entitled to get travelling allowance

as fixed by the company (as per TA rule) from the last headquarters to the home town or any other place of settlement.

(xiv) Long Service Reward The employee who completes 15 years of service in OMC are entitled for a long service reward and honored with presentation of a wrist watch.

(xv) Leave Encashment The accumulated earned leave is payable on separation, subject to maximum permissible limit as prescribed in the leave rules of the company. The fund valued through actuary has been parked with LIC of India.

(xvi) Group Insurance SchemeOMC has adopted the Group Insurance Scheme of LIC for all the employees with a uniform assurance benefit of ` 6.02 lakh in case of premature death while in service.

(xvii) Conveyance AllowanceTable Annexure 7.(xvii). Conveyance Allowance

Types of Conveyance Price of quantity of Fuel per month

Car Cost of 45 Litres of Petrol

Motor Cycle/Scooter Cost of 25 Litres of Petrol

Moped Cost of 15 Litres of Petrol

Cycle ` 500 per month

(xviii) Hardship Allowances Normal Mines

Table Annexure 7.(xviii). Normal Mines

Scale of pay (in `) Rate

5200-20,200/-+GP-1800/- & above ` 250/-

5200-20,200/-+GP-1900/- & above ` 300/-

9300-34,800_GP-4200/- & above ` 350/-

9300-34,800_GP-4600/- & above ` 400/-

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Difficult MinesTable Annexure 7.(xviii). Difficult Mines

Scale of pay (in `) Rate

5200-20,200/-+GP-1800/- & above ` 325/-5200-20,200/-+GP-1900/- & above ` 400/-

9300-34,800_GP-4200/- & above ` 475/-9300-34,800_GP-4600/- & above ` 550/-

Most Difficult MinesTable Annexure 7.(xviii). Most difficult Mines

Scale of pay (in `) Rate5200-20,200/-+GP-1800/- & above ` 875/-5200-20,200/-+GP-1900/- & above ` 950/-9300-34,800_GP-4200/- & above ` 1025/-9300-34,800_GP-4600/- & above ` 1100/-

(xix) Reimbursement of mobile expenses Mobile expenses are reimbursed to all Sectional Heads at HO/Regional Managers/ @ ` 300/- and to Managers/Employees in essential services @ ` 200/- per month.

(xx) CanteenCanteens are functioning on no profit-no loss basis in all Mines, Regional Offices including HO. OMC has provided building, utensils, staff etc. to the canteens free of cost.

(xxi) Rehabilitation SchemeThe Rehabilitation scheme of Government has been adopted to provide employment to the legal heirs of the regular deceased employees.

(xxii) Bonus SchemeBonus is paid as per Payment of Bonus Act, 1965. However, since last twenty years 20% bonus is being paid to the employees.

(xxiii) Productivity Linked Incentive SchemeThe employees who are not eligible for bonus are being paid incentive which is equivalent to one month’s gross salary subject to a maximum of ` 16,800. This is linked to corporate productivity and efficiency Index.

(xxiv) Ex-GratiaEx-Gratia is being paid to the employees & departmental workers since 2004-05 during Puja occasion at the rate of ` 1000/- per 100 crore net profit subject to maximum of ` 15000/-.

(xxv) Awards & AchievementOMC has been recognizing the Best Mines and the Best Prospecting Divisions by awarding Cash Prizes and Memento including the Best Employee Awards amongst the employees of OMC on the OMC Foundation Day every year. Basing on the decision taken by OMC management, one person of prominence in the field of Social Activities, contributions in the field of Technical/Educational/Sports & Games etc. are being felicitated on the OMC Foundation Day.

(xxvi) VRSA Voluntary Retirement Scheme has been introduced for regular employees of the Corporation since 1993. As per the provision under the scheme, the beneficiary gets one and half month’s salary for each completed year of service or salary for the remaining period of service whichever is less as ex-gratia.

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(xxvii) Holiday Home FacilityHoliday Home Facility for both executives and non-executives are provided at Puri. For executives one AC family room has been reserved at the hotel Hans Coco Palm and two rooms at Gundicha Bhakta Niwas Puri for non-executives.

(xxviii) Group Health Insurance PolicyA customized Group Health Insurance Policy has been finalised by P.E. Dept., Government of Odisha with United India Insurance Company Limited for all state PSUs extending coverage from the age of 3 months to 80 years for ̀ 5 lakhs covering all existing diseases from day one with yearly premium of ` 7080/- for maximum six members of the family.

(xxix) AdvancesOMC is extending different types of advances with nominal rates of interest as indicated below:

Table Annexure 7.(xxix). Advances

Types of Advance Amount Rate of Interest (%) p.a.

House Building Advances

Up to ` 7.5 lakhs Addl. up to ` 1.6 lakhs

Up to ` 50,000/- (7.5%)

Upto ` 1.5 Lakh (9.0%) Upto ` 5 Lakhs (11%) Upto 7.5 lakhs (12%)

Car Advance

15 months of Basic pay or 4 lakhs or the anticipated cost of the car whichever is less.

(b) For 2nd &R subsequent occasion ` 3,00,000/- or 12 months basic pay or

anticipated cost of the vehicle whichever is less.

12.5%

Motor Cycle /Scooter ` 50,000/- 10%

Moped ` 25,000/- 10%

Marriage 6 months salary or 1 lakh whichever is less. 8%

Medical Advance As per Estimate Interest free

Festival ` 15,000/-(up to GP ` 4200/-) Interest free

TV Advance ` 15,000/- 8%

Special Advance One month salary Interest free

Misc. Advance One & half months basic Interest free

Computer Advance ` 30,000/- 10%

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ERP in OMCAs a result of implementation of ERP – a modern business tool in OMC, the processes in different departments like Material Procurement, Inventory Management, Sales & Distribution, Production Planning, Financial Management and Personal Administration has been streamlined to a great extent. The Software tool as SAP ECC 6.0 platform implemented in OMC has facilitated the handling of the expanding tonnage volume, financial turn over and has ensured effective monitoring, control and decision making. Having integration of the aforesaid departments through the above software tool and extended with Wide Area Networking, Local Area Networking (LAN) and adequate hardware facilities, OMC has been able to handle its expanding business transactions with better monitoring and control of different activities.

I. Production Planning (PP-SOP) Implementation of Production Planning module has facilitated creation of production plan for finished material in the system, material-wise and mines-wise separately so as to meet sales requirement. The annual plan is broken down to monthly plan and entered into the system. Daily production of ore is captured in the system in unanalyzed material code. After analysis, the stock is posted in finished material code. Daily transport, dispatch and consumption of ore are also captured in the system. Updated stock overview facilities, sale of materials, MIS reports containing annual production plan, revised plan up to the month, plan for the month, achievement for the month and cumulative achievement up to the month are generated from the system which are submitted to statutory authorities and the Government. These reports facilitate monitoring of production activities and taking timely decision for achievement of production target.

II. Materials Management (MM)MM functionality implemented throughout the organization has facilitated maintaining the inventory on real time basis and has facilitated a

systematic and transparent procurement process. Procurement of spares, Material Management Department, Civil departments etc. are undertaken through the SAP system starting from raising of purchase requisition to request for quotation & finding appropriate source of supply, creation of purchase order including material receipt, invoice verification and release of payment. Annual physical inventory is taken up through the system on the basis of annual store verification done by a committee. Vendors for supply of different spares, materials and vendors for providing services for each kind of job are enlisted and vendor master is maintained centrally once in every three years and as and when necessary basing on due verification of the credentials as per eligible norms defined by OMC. Materials like fuel, lubricants, common spares, equipments, hardware, explosives etc. and services like raising and excavation of over burden and ore, transportation, hiring of vehicles, geological exploration etc. are done centrally at HO through contract which eliminates frequent manual approval process on an annual basis. Depending upon the financial power delegated to the Mines and Regional Office level, procurement of materials and services are also done at their level & SAP ensures limiting the financial delegation. The release strategy adopted has facilitated speedier disposal of different POs and Contracts.

Integration of different functions in SAP system has facilitated the monitoring of the status of supply of materials and settlement of bills of the vendors. Scrap material is also maintained for auction sale. Action has been taken to customise the Scrap sale cycle in the SAP system. Valuation of stock has been facilitated maintaining moving average price of the materials automatically. Integration of MM with Finance facilitate passing of information automatically to finance and reduces error. The annual budget incorporated against each head of account is adhered to in case of purchase order creation and payment. This ensures due adherence to budgeting and cost analysis gets simplified. Monitoring of every transaction is made

Annexure 8

ANNEXURE 8

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through SAP which helps in faster transmission of information and enables taking necessary steps in real time. As a result, better control is ensured.

III. Sales & Distribution (SD)The Sales and Distribution function implemented has facilitated creation of contract at HO, sales order, financial document and billing at the RO level and issue of DO at the Mines level on line in the system and has facilitated capturing the status of lifting of the material by the customers on real time basis. Appropriate guidelines, monitoring and control have facilitated effective control over sale of the material produced by OMC right from allotment to lifting and billing. Customer master is maintained in the system which facilitates sale of material to all customers, mines-wise and maintaining the customer balance. Scrap sales has been taken up. Customer Balances & Contracts are intimated to the customers online. Generation of Reports & MIS have helped in quicker decision making.

IV. Finance & Controlling (FICO)Finance and Controlling system implementation has ensured on line posting and updating of GL account and sub-ledger accounts. It ensures online check of budget availability and on line updating of controlling data. Due to integration of functions of different departments, automatic flow of documents from other modules is ensured. Further Due to online updating of GL accounts, Trial Balance, Balance Sheet and Statement of Profit & Loss can be generated at periodic intervals.

V. Asset Management (AM)Implementation of Asset Management has facilitated maintaining of Asset Register and

appropriate charging of depreciation as per Company Act & Income Tax Act. Business area wise asset accounting is being done currently.

It is now possible to maintain up-to-date Asset Register in the system. The process of capitalization of Asset and the maintenance of sub-category of assets is capitalized, WIP has become efficient. Various reports as per the need of various statutory requirements are generated with greater agility and correctness.

VI. HR FunctionalityImplementation of SAP India Pay Roll system has facilitated processing of pay roll of all categories of employees of OMC including the DRMP and PR miners and posting of all such payments in finance. Similarly implementation of HR and ESS function has facilitated the viewing by employees, of their personal information, salary slip, loan balance, leave balance and IT Form-16. Annual Self-Appraisal in respect of all executives and CCRs of non-executive employees are submitted and reporting/reviewing done through online system. All type of leave quota, automatic calculation of accrued leave, submission and approval of leave application are all done on line. All types of loans and advances applications are received on line and approval accorded and payment advice realized making the process easier and faster.

OMC has upgraded its software from SAP R/3 4.7 version to SAP ERP 2005 (ECC 6.0) with a view to receive the enterprise support of SAP and to adopt additional features depending upon the necessity.

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Office of The Principal Accountant General (Economic and Revenue Sector Auditor) Odisha, Bhubaneswar

ToThe Managing Director, Odisha Mining Corporation Limited, Bhubaneswar.Sub : Comments of the comptroller & Auditor General of India Under Section 143(6), Companies Act, 2013 on the accounts of Odisha Mining Corporation Limited(SFS) for the year 2016-17.

Sir,

I enclose Comments of the Comptroller and Auditor General of India under section (b) of the Companies Act, 2013 on the accounts of the Odisha Mining Corporation Limited for 2016-17.

Three copies of the Annual Reports placed before the Annual General Meeting, Company may please be furnished to this office indicating the date of the meeting.

No:- E.S-I(T)/ Accts/OMC/16-17Date:- 07 September 17

Yours faithfully,Sd/-

(YASHODHARA RAY CHAUDHURI)

PRINCIPAL ACCOUNTANT GENERAL

Sachivalaya Marg, Bhubaneswar -751001. Tel:- 0674-2391583. Fax:- 0674 -2390880Email:- [email protected]

AUDIT REPORT

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Comments of the Comptroller and Auditor General of India Under Section 143(6) (b) of the Companies Act, 2013 on standalone Financial Statement (SFS) of The Odisha Mining Corporation Limited for the year ended 31 March 2017. The preparation of financial statements of The Odisha Mining Corporation Limited for the year ended 31 March 2017 in accordance with financial reporting framework prescribed under the Companies Act , 2013 is the responsibility of the management of the Company. The Statutory Auditor appointed by the Comptroller and Auditor General of India Under Section 139 (5) of the Act, is responsible for expressing opinion of the financial statements under Section 143 of the Act, based on independent audit in accordance 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 04 July 2017.

I on behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 143 (6) (a) of the Act of the financial Statements of the Odisha Mining Corporation Limited for the year ended 31 March 2017. This supplementary audit has been carried out independently without access to the working paper of the Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and company personnel and a selective examination of some of the accounting records. Based on my supplementary audit. I would like to highlight the following significant matter under section 143(6) (b) of the Act. Which have come to my attention and which in my view are necessary for enabling a better understanding of the financial statements and the related Audit Report.

A. Comments on Profitability.Statement of Profit and Loss Expenses Changes in inventories of finished goods, Stock in trade and W.I.P:- (Note-25)- ` 17.94 crore. 1. The above is understated by ` 7.51 crore due

to over valuation of 73395 MT of iron ore stock lying with the contractor (M/s Narayani & Sons) at ` 1120.51/MT instead of valuing at actual rate as per contract i.e ` 97.75/MT. This has also resulted in over statement of vale of closing

stock as well as profit for the year to the extent of ` 7.51 crore each.

Expenses Other expense (Note-28)- ` 1023.09 crore.

2. The above does not include ` 5.32 crore being interest on Net Present Value (NPV) for belated payment of NPV. The company instead of charging the expenditure to Statement of Profit and Loss, capitalized the same under mining rights head which resulted in understatement of other expenses by ̀ 5.32 crore, overstatement of mining rights and corresponding overstatement of profit of the same extent.

B. Comment on Disclosure :3. OMC in its Consolidated Financial Statements

for the year ended 31 March 2017, has shown a contingent liability of ` 9150.69 crore towards demand received from various DDMs and Mining Officers towards excess production. In this regard, audit observed that Hon’ble Supreme Court vide judgment dated 02 august 2017 has upheld penalty on all leaseholders who has carried out production of Ore beyond statutory limit for the period 2000-01 to 2009-10. The Apex Court has imposed a penalty of ` 17576.16 crore for iron ore and manganese ore based on recommendation of Central Empowered Committee (CEC) to be paid by all defaulters. The amount pertaining to OMC is to be ascertained by the state Government and OMC Ltd is required to pay Government of Odisha by 31 December 2017. This fact being significant should have been suitably disclosed in the accounts as it has material impact on stake holders of annual accounts of the company.

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

Sd/-

(YASHODHARA RAY CHAUDHURI) PRINCIPAL ACCOUNTANT GENERAL

Place: Bhubaneswar Date: 07.09.2017

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Independent Auditor’s Report To the members of The Odisha Mining Corporation Limited

Report on the Standalone Ind AS Financial StatementsWe have audited the accompanying standalone Ind AS financial statements of The Odisha Mining Corporation Limited (“The Company”) which comprise the balance sheet as at 31 March 2017 , the statement of profit and loss (Including other comprehensive income) , the statement of cash flows and the statement of changes in equity for the year ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as “standalone Ind AS financial statements”).

Management’s Responsibility for the Standalone Financial Statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued there under .

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, the were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair

view and are free material misstatement, whether due to fraud or error .

Auditors’ ResponsibilityOur responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of risks of material misstatement of the standalone Ind AS Financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS financial statement that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

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Basis for Qualified Opinion1. In pursuance to order of Honourable Supreme

Court of India directing the Government of Odisha to sell 44.82 lakh MT of iron ore stocked in forest area, the Company has sold 4.69 lakh MT of iron ore valuing Rs. 4034.91 lakhs on behalf of the Govt of Orissa and accounted for it as its own sale without making any provision for the same under unrealized profit which has resulted in overstatement of profit before tax understatement of current liabilities of equal amount.

The company has also sold 24.02 lakh MT of iron valuing Rs. 47547.36 lakhs out of this stock in earlier years without making any provision for unrealized profit thus inflating the general reserves of the company to an equal amount.

OpinionIn our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the ‘basis of qualified opinion’ paragraph the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at 31 March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements1. With respect to the other matters to be

included in the Auditor’s Report in terms of the directions of the Comptroller and Auditor-General of India (CAG) under section 143 (5) of the Act, and on the basis of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanation given to us, we give in the Annexure ‘A’ and Annexure ‘B’ statement on the matters specified in the Directions and additional Directions of CAG respectively .

2. 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 Act, we give in the Annexure-C, a statement on the matters specified in the paragraph 3 and 4 of the order.

3. As required by Section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to best of 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 the Company so far as it appears from our examination of those books;

c. The balance sheet, the statement of profit and loss, the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with books of account;

d. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;

e. On the basis of the written representations received from the directors as on 31 March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure D”; and

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 in our

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opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and protection fund by the Company; and

iv. The Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in specified Bank Notes during the period from 8 November, 20116 to 30 December, 2016 Based on audit procedures and relying on the management representation we report that the disclosure are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.

For SRB & Associates chartered AccountantsFirm’s Registration Number: 310009E

Sd/-R S Sahoo Partner Membership Number : 053960


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Annexure – A to the Auditor’s ReportNo Direction Reply

1 Whether the company has clear title/ lease deeds for freehold and leasehold respectively? If not please state the area of free hold and leasehold and for which title/lease deeds are not available?

The Company has a clear title/ lease deeds for freehold and leasehold land respectively.

2 Please report whether there are any cases of waiver/write-off of debts/interest etc, if yes, the reason there for and the amount involved.

On reconciliation of old accounts the Company has written back liabilities worth Rs. 7014.23 lacs and written off an amount of Rs. 399.22 lacs.

3 Whether proper records are maintained for inventories lying with third parties & assets received as gift from Govt. or other authorities.

Proper records are maintained for inventories lying with the third parties. During the financial year under audit, no assets received as gift from Govt. or other authorities.


Sd/-R S Sahoo Partner Membership Number: 053960


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Annexure – B to the Auditor’s ReportNo Direction Reply1 Whether the Company’s pricing policy absorbs all fixed

and variable cost of production as well as the allocation of overheads?

Yes

2 Whether the Company has utilized the Government assistance for technology up gradation/mordenisation of its manufacturing process and timely submitted the utilization certificates.

Not applicable

3 Where the Company has fixed norms for normal losses and a system for evaluation of abnormal losses for the remedial action is in existence.

Not applicable

4 What is the system of valuation of by – products and finished products? List pout cases of deviation from its declared policy.

Refer Note 2, policies on ‘inventories’ and Note 10 to the financial statements. No such deviations noticed.

5 Whether the effect of deteriorated stores and spares of closed mills been properly accounted for in the books.

Not applicable

6 Whether the Company has effective system of physical verification, valuation of stock. Treatment of non-moving items and accounting the effect of shortage / excess noticed during the physical verification.

Refer Note 2, Policies on ‘inventories’ and Note 10 to the financial statements No such deviations noticed.

7 State the extent of utilization of plant and machinery during the year vis-a-vis installed capacity.

Most of the plant and machineries utilized for mining is provided by excavation contractors. In case of beneficiation plants the utilization of the same depends upon mining and environmental clearance

8 Report on the cases of discounts / commission in regard to debtors and creditors where the company has deviated from its laid down policy.

No such deviations notices

9 Whether the company has taken adequate measure to reduce the adverse effect on environment as per established norms and taken up adequate measures for the relief and rehabilitation of displaced people.

Yes

10 Whether the company has obtained the requisite statutory compliances that was required under mining and environmental rules and regulations?

Mining: Requisite approval in respect of MP/SOM documents has been obtained from IBM. Environment: Requisite clearances have been obtained from MOEF & CC Gol and SPCO, Odisha prior to the commencement of production.

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80

11 Whether overburden removal from mines and backfilling of mines are commensurate with the mining activity?

Mining activities are conducted as per approvals as per approvals of MP/SOM obtained from IBM..

12 Whether the company has disbanded and discontinued mines, if so, the payment of corresponding dead rent there against may be verified.

Dead Rent as applicable are being paid from time to time in respect of leases where mining is discontinued.

13 Whether the company’s financial statements had properly accounted for the effect of Rehabilitation Activity and Mine Closure plan?

Yes


Sd/-R S Sahoo Partner Membership Number : 053960


81

Annexure – C to the Auditor’s ReportThe Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31 March 2017, we report that:

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii. (a) In our opinion and according to the information & explanations given to us, the procedures of physical verification of inventories of iron ore and chromite followed by the management is adequate.

(b) The Company has maintained proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification.

iii. The Company has granted loans to two bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 (‘the Act’).

(a) In our opinion, the rate of interest and other terms and conditions on which the loans had been granted to the bodies corporate listed in the register maintained under Section 189 of

the Act were not, prima facie, prejudicial to the interest of the Company.

(b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the principal and interest as stipulated.

(c) There are no overdue amounts in respect of the loan granted to a body corporate listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

v. The Company has not accepted any deposits from the public.

vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the services rendered by the Company.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income-tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of employees’ state insurance and duty of excise.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, value added tax, duty of customs, service tax, cess and other material statutory dues were in arrears as at 31 March 2017 for a period of more

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82

than six months from the date they became payable.

(b) According to the information and explanations given to us, the following dues of

sales tax, service tax & duty of excise have not been deposited by the Company on account of disputes.

Name of the Statute

Name of the forum where dispute is pending

Total amount demanded (Rs. In

Lakh)

Period

CENTRAL EXCISE AND CUSTOMS

Orissa High Court 102.06 1996-97 to 2003-04Orissa High Court 174.11 2005-06 to 2009-10CESTAT, Kolkata 23,476.40 March, 2011 to September, 2014CESTAT,Kolkata 24,543.48 March, 2011 to September, 2014

Service Tax CESTAT,Kolkata 11.46 2004-05 to September, 2008CESTAT,Kolkata 9.23 October, 2008 to September.

2009CESTAT, Kolkata 4.55 October, 2009 to March, 2010Commissioner (Appeals). CECST

2.03 2004-05 to 2010-11

Orissa Sales Tax Orissa Sales Tax Tribunal 29.96 2002-03Central Sales Tax

Orissa Sales Tax Tribunal 50.89 1996-97Orissa Sales Tax Tribunal 251.24 2005-06 to 2006-07Orissa Sales Tax Tribunal 40.90 01.07.2006 to 31.03.2008Orissa Sales Tax Tribunal 14.61 2008-09Addl. Commissioner of Commercial Tax

29.25 01.01.2012 to 31.03.2014

Dy. Commissioner of Commercial Tax

25.97 01.04.2008 to 31.12.2011

Orissa Sales Tax Tribunal 5.05 2007-08Entry Tax Orissa Sales Tax Tribunal 114.70 2005-06 to 2007-08

Orissa Sales Tax Tribunal 73.07 01.04.2008 to 31.01.2012Addl. Commissioner of Commercial Tax

97.77 01.02.2012 to 31.03.2014

Dy. Commissioner of Commercial Tax

13.48 2004-05

VAT Orissa Sales Tax Tribunal 2.48 01.04.2008 to 31.01.2012State Dispute Redressal Committee

170.61 01.01.2012 to 31.03.2014

Orissa Sales Tax Tribunal 1.37 01.01.2012 to 31.03.2014Income Tax CIT(A) & ITAT 76,423.31 2004-05 to 2013-14 (F.Ys.)

viii. The Company does not have any loans or borrowings from any financial institution, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.

83

ix. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) and team loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

x. According to the information and explanation given to us, no material fraud by the Company or on the company by its officers or employees has been noticed or reported during the course of our audit.

xi. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on our examination of the

records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements as required by the applicable accounting standards .

xiv. According to the information and explanation give to us and based on our examination of the records of the Company, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For SRB & Associates Chartered Accountants Firm’s Registration Number: 310009E

Sd/-R S Sahoo Partner membership Number: 053960


AUDIT REPORT

84

Annexure – D to the Auditors’ ReportReport on the Internal Financial Controls under clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ( “the Act”)

We have audited the internal financial controls over financial reporting of the Odisha Mining Corporation Limited (“the Company”) as of 31 March 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial controlsThe Company ‘s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’) These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial 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 and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial ReportingA company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company ; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

85

with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial ReportingBecause of the inherent limitations of internal financial controls over financial reporting , including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial

reporting to future periods are subject to the risk that the internal financial controls over financial reporting may became inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

OpinionIn our opinion , the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial reporting issued by the Instituted of Chartered Accountants of India.

For SRB & Associates Chartered Accountants Firm’s Registration Number: 310009E

Sd/-

R S Sahoo Partner membership Number: 053960


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86

S l . No

Particulars Note No.

Figures as at the end of

the current reporting

period March 31,

2017


the previous reporting

period March 31,

2016

Figures as at date of

transition to Ind AS April

1, 2015

1

2

ASSETS Non-current assets (a) Property, Plant and Equipment (b) Capital work-in-progress (c) Other Intangible assets (d) Intangible assets under evelopment (e) Financial Assets (i) Investments (ii) Loans (f ) Deferred tax assets (Net) (g) Other non-current assets Total non-current assets Current assets (a) Inventories (b) Financial Assets (i) Trade receivables (ii) Cash and cash equivalents (iii) Bank balances other than (ii) above (iv) Loans (v) Others(c) Current Tax Assets (Net) (d) Other current assets Total Current Assets

555 (i)5 (ii)

6789

10

1112127131415

13,087.35 5,630.22

34,850.41 12,286.71

39,902.59 72,512.62

- 33,015.79

6,360.19 9,321.27

- -

37,885.18 1,04,956.21

4,283.58 31,562.26

6,396.55 6,134.10

- -

38,335.90 70,605.33

3,793.84 29,187.31

2,11,285.69

56,878.90

10,608.04 10,000.98

1,05,389.44 39,324.50

1,53,630.10 65,528.66 15,977.79

1,94,368.69

59,077.12

6,604.21 2,175.97

2,83,080.81 33,708.62 20,105.59 56,026.92 47,067.48

1,54,453.03

42,078.07

3,643.15 6,498.30

4,00,713.15 16,206.58 27,581.35

1,00,030.65 53,897.23

4,57,338.41 5,07,846.72 6,50,648.48 TOTAL ASSETS 6,68,624.10 7,02,215.41 8,05,101.51

Balance Sheet as at March 31, 2017, 2016 and April 1, 2015

(Rupees in Lakhs)

87

1

2

EQUITY AND LIABILITIES Equity (a) Equity Share capital (b) Other Equity Total equity LIABILITIES Non-current liabilities (a) Provisions (b) Deferred tax liabilities (Net) Total non-current liabilities Current liabilities (a) Financial Liabilities (i) Borrowings (ii) Trade payables (iii) Other financial liabilities(b) Other current liabilities (c) Provisions Total Current Liabilities

1617

188

1920212218

3,145.48 5,86,713.28

3,145.48 5,69,867.78

3,145.48 5,67,057.78

5,89,858.76

12,010.39 10,110.64 22,121.03

- 24,582.86

5,711.50 25,809.96

539.99 56,644.31

5,73,013.26

11,125.79 -

11,125.79

73,700.00 28,458.08

6,223.39 9,273.16

421.73 1,18,076.36

5,70,203.26

11,231.57 -

11,231.57

1,50,200.00 14,876.26

8,933.53 49,551.34

105.55 2,23,666.68

TOTAL EQUITY AND LIABILITIES 6,68,624.10 7,02,215.41 8,05,101.51

Notes forming part of the financial statement 1-33

In terms of our report attached. For and on behalf of the Board For SRB & Associates Chartered Accountants FRN-310009E

SD/- SD/- SD/- SD/-Partner Company Secretary Director Finance Managing Director ChairmanSD/-R. S. Sahoo Mem No : 053960

Place : Bhubaneswar Place : BhubaneswarDate : 04.07.2017 Date : 03.07.2017

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88

Statement of Profit and Loss for the periods ended March 31, 2017 and 2016

S l . No


Figures for the current

reporting period

March 31, 2017

Figures for the previous

reporting period March

31, 2016

I Revenue from Operations 23 2,33,142.96 1,54,808.04 II Other Income 24 37,413.71 48,122.37 III Total Income (I + II) 2,70,556.67 2,02,930.41

IV Expenses(a) Changes in inventories of finished goods, Stock-in -Trade and work-in-progress

25 1,794.08 (17,037.32)

(b) Employee benefits expense 26 25,064.91 16,009.09 (c) Finance costs 27 882.60 3,324.37 (d) Depreciation and amortization expense 5 7,643.67 922.58 (e) Excise duty 811.22 165.77 (f ) Other expenses 28 1,02,309.41 99,721.15 Total expenses (IV) 1,38,505.89 1,03,105.64

V Profit/(loss) before exceptional items and tax (III - IV) 1,32,050.78 99,824.77 VI Exceptional Items - - VII Profit/(loss) before tax (V - VI) 1,32,050.78 99,824.77 VIII Tax expense:

(i) Current tax 42,692.10 33,071.76 (ii) Deferred tax 14,719.59 (55.79)(iii) Taxes of earlier years (3,000.00) 3,000.00

54,411.69 36,015.97 IX Profit/ (Loss) for the period from continuing operations

(VII-VIII) 77,639.09 63,808.80

X Profit / (loss) from discontinued operations - -

XI Tax expense of discontinued operations - -

XII Profit / (loss) from discontinued operations (after tax) (X - XI)

- -

(Rupees in Lakhs)

89

XIII Profit / (loss) for the period (IX + XII) 77,639.09 63,808.80 XIV Other Comprehensive Income (614.78) (819.98)

A (i) Items that will not be reclassified to profit or loss (a) Remeasurement of defined employee benefit plans (940.14) (1,253.95) (ii) Income tax relating to items that will not be reclassified to profit or loss

(325.36) (433.97)

B (i) Items that will be reclassified to profit or loss - - (ii) Income tax relating to items that will be reclassified to profit or loss

- -

XV Total Comprehensive Income for the period (XIII+XIV)(Comprising Profit/ (Loss) and Other Comprehensive Income for the period)

77,024.31 62,988.82

XVI Earnings per equity share (for continuing operation): (1) Basic (Rs) 2,448.73 2,002.52 (2) Diluted (Rs) 2,448.73 2,002.52

XVII Earnings per equity share (for discontinued operation): (1) Basic (Rs) - - (2) Diluted (Rs) - -

XVIII Earnings per equity share (for discontinued and continuing operations): (1) Basic (Rs) 2,448.73 2,002.52 (2) Diluted (Rs) 2,448.73 2,002.52


In terms of our report attached. For and on behalf of the Board For SRB & Associates Chartered Accountants FRN-310009E SD/- SD/- SD/- SD/-Partner Company Secretary Director Finance Managing Director ChairmanSD/-R. S. Sahoo Mem No : 053960


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90

Statement of Cash Flow for the periods ended March 31, 2017 and 2016

(Rupees in Lakhs)

Particulars For the period ended March 31,

2017

For the period ended March 31,

2016”

(A) Cash flows from operating activities:

Profit before taxes 1,32,050.78 99,824.77

Adjustments for:

Finance costs recognised in profit or loss 882.60 3,324.37

Investment income recognised in profit or loss (29,215.77) (39,713.40)

Gain on disposal of property, plant and equipment (16.38) (13.77)

Depreciation and amortisation of non-current assets 7,643.67 922.58

Provision for write down of inventories (439.08) (149.58)

Provision for Impairment of Investments - 450.72

Operating profit before working capital changes

Movements in working capital:

Increase in trade and other receivables (3,075.59) (3,293.37)

(Increase)/decrease in inventories 2,637.30 (16,849.47)

(Increase)/decrease in other assets 29,636.15 4,454.81

(Decrease)/ Increase in trade and other payables (3,442.10) 13,055.03

Increase/(decrease) in provisions 388.08 (609.58)

(Decrease)/increase in Mine Closure Liability - -

(Decrease)/increase in other liabilities 16,536.80 (40,278.18)

Cash generated from operations 1,53,586.46 21,124.93

Taxes Paid (49,519.20) 7,498.01

Net Cash Flow from/(used in) Operating Activities 1,04,067.26 28,622.94

(B) Cash flows from investing activities:

Payments for property, plant and equipment (57,819.10) (4,074.72)

Sale of property, plant and equipment 18.61 15.11

Payments to acquire financial assets (2,017.41) -

Interest received 35,663.01 47,521.47

91

Repyament by Employees & Others 107.71 33.24

Repyament by Employees & Others 26,720.00 -

Payment for Loans to others - (51,886.16)

Payment for Investmen in FD 36,791.37 1,17,632.34

Net Cash Flow from/(used in) Investing Activities 39,464.20 1,09,241.28

(C) Cash flows from financing activities:

Repayment of borrowings (73,700.00) (76,500.00)

Dividends paid on redeemable cumulative preference shares

Dividends paid to owners of the Company (60,178.82) (60,178.82)

Interest paid (1,827.63) (5,507.72)

Net Cash Flow from/(used in) Financing Activities (1,35,706.45) (1,42,186.54)

Net Increase/(decrease) in cash or cash equivalents 7,825.01 (4,322.32)

Cash and cash equivalents at the beginning of the year 2,175.97 6,498.30

Cash and cash equivalents at the end of the year 10,000.98 2,175.98

Notes forming part of the financial statement Note No. 1-33



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92

Statement of Changes in Equity for the periods ended March 31, 2017 and 2016

A. Equity Share Capital

B. Other Equity

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

Balance as at April 1, 2015 Changes in equity share capital during the year

Balance as at March 31, 2016

3,145.48 - 3,145.48

Balance as at April 1, 2016 Changes in equity share capital during the year


3,145.48 - 3,145.48

Reserves and SurplusCapital reserve General Reserve Retained earnings

Balance as at April 1, 2015 1,770.69 2,15,643.20 3,49,643.89 Profit for the year 63,808.80 Other Comphrehensive Income (819.98)Total Comprehensive Income 62,988.82 Dividend (including tax on dividend) (60,178.82)Transfer of profits of the year to General Reserve 6,234.47 (6,234.47)Balance as at March 31, 2016 1,770.69 2,21,877.67 3,46,219.42 Profit for the year 77,639.09 Other Comphrehensive Income (614.78)Total Comprehensive Income 77,024.31 Dividends (60,178.82)Transfer of profits of the year to General Reserve 8,925.17 (8,925.17)Balance as at March 31, 2017 1,770.69 2,30,802.84 3,54,139.74 Notes forming part of the financial statement Note No. 1-33



93

Standalone Ind AS Accounting Policies1. Notes to AccountsGeneral Information

The Odisha Mining Corporation Limited (“OMC” / “the Company”) was incorporated with the objective of harnessing the mineral wealth of the State of Odisha through exploration, extraction as well as value addition. The major minerals mined by OMC are chrome, iron and manganese ore which cater to the requirement of mineral based industries such as steel, sponge iron, pig iron, Ferro-manganese, Ferro-chrome, etc. OMC has been growing steadily over these years and today it stands as the largest State PSU in the mining sector of the country. OMC has been classified as a “Gold” Category State PSU”, having an Authorized Capital of Rs. 100crore where Hon’ble Governor of Odisha holds 99.997% of share capital. The headquarters of OMC is located at Bhubaneshwar.The Company is now taking steps to start bauxite mining.

The functional and presentation currency of the Companyis Indian Rupee (“INR”) which is the currency of the primary economic environment in which the Company operates.

The financial statements are approved for issue by the Company’s Board of Directors on June 29, 2017

Statement of Compliance

In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1 April, 2016, with a transition date of 1 April 2015

These financial statements for the year ended 31 March 2017 are the Company’s first financial statements prepared in accordance with Ind AS. Prior to adoption of Ind AS, the Company had been preparing its financial statements in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and other generally accepted accounting principles in India (‘together referred to as “Indian GAAP”) for all periods up to and including the year ended 31 March 2016. During the first-time adoption, the following optional exemptions are availed by the Company apart from the mandatory exemption:

y Deemed cost for property, plant and equipment and intangible assets - The Company has elected to continue with the carrying value of all of its property, plant and equipment’srecognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

y Leases -The Company has elected to apply paragraphs 6-9 of the Appendix C of Ind AS 17 “Determining whether an Arrangement contains a Lease” to determine whether an arrangement contains a lease prospectively and not for the arrangement existing as on transition date.

y Investments in joint ventures and associates - The Company has elected to continue with the carrying value of all of its investment in joint venture recognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

y Fair value measurement of financial assets or financial liabilities at initial recognition – The Company has elected to apply the requirements paragraph B5.1.2A (b) of Ind AS 109 prospectively to transactions entered into on or after the transition date.

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94

2. Significant Accounting PoliciesBasis of preparation

The financial statements of the Company have been prepared in accordance withInd AS and relevant provisions of the Companies Act, 2013.

The Company has adopted all the applicable Ind AS and such adoption was carried out in accordance with Ind AS 101 – First Time Adoption of Indian Accounting Standards. The Company has transited from Indian GAAP which is its previous GAAP, as defined in Ind AS 101 with necessary disclosures relating to reconciliation of Shareholders’ equity and the comprehensive net income as per Previous GAAP to Ind AS.

The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured at fair values by Ind AS. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

All assets and liabilities have been classified as current or non-current as per Company’s operating cycle and other criteria set out in Schedule-III of the Companies Act 2013. Based on the nature of business, the Company has ascertained its operating cycle as 12 months for the purpose of Current or noncurrent classification of assets and liabilities.

Adoption of New and Revised Standards

Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

95

Use of estimates These financial statements have been prepared based on estimates and assumptions in conformity with the recognition and measurement principles of Ind AS.

The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected.

Key sources of estimation uncertainty at the reporting date, which may cause a material adjustment to the carrying amounts of assets and liabilities for future years are provided in Note-3

Significant judgments and estimates relating to the carrying amounts of assets and liabilities, while evaluating/assessing useful lives of property, plant and equipment, impairment of property, plant and equipment, impairment of investments, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.

Investments in subsidiaries, associates and joint ventures

SUBSIDIARY - A subsidiary is an entity that is controlled by another entity.

Control is achieved when the Company:

y Has power over the investee;

y Is exposed, or has rights, to variable returns from its involvement with the investee; and

y Has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

ASSOCIATE - An associate is an entity over which the Company has significant influence.Whereassignificant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.

INTERESTS IN JOINT VENTURES - A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

Investment in subsidiaries,associates and joint ventures are measured at cost in accordance with Ind AS 27 – Separate Financial Statements.

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Property, Plant and Equipment

Property, plant and equipment held for use in the production or/ and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any subsequent accumulated depreciation and impairment loss, if any.

Initial MeasurementThe initial cost comprises of purchase price, non-refundable purchase taxes, other directly expenditure attributable to acquisition, borrowing cost, if any, incurred for bringing the assets to its location and condition necessary for it to be capable of operating in the manner intended by the management, and the initial estimates of the present value of any asset restoration obligation or obligatory decommissioning and dismantling costs.

Expenditure incurred on development of freehold land is capitalized as part of the cost of the land

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of overheads, directly attributable borrowing costs, if any.

Spare parts having unit value of more than Rs.5 lakh that meets the criteria for recognition as Property, plant and equipment are recognized as Property, plant and equipment.

1.1 Subsequent expenditureExpenditure on major maintenance or repairs including cost of replacing the parts of assets and overhaul costs where it is probable that future economic benefits associated with the item will be available to the Company, are capitalized and the carrying amount of the item so replaced is derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred

Physical verification of Fixed Assets are undertaken by the management at a reasonable interval and in a phased manner so as to complete 100% verification in a cycle of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are found

Capital work-in-progress Assets in the course of construction for production and/or supply of goods or services or administrative purposes, or for purposes not yet determined, are included under capital work in progress and are carried at cost, less any recognized impairment loss. Such capital work in progress, is transferred to the appropriate category of property, plant and equipment when completed or starts operating as per management’s intended use whichever is earlier.

Expenses for assessment of new potential projects incurred till and for the purpose of making investment decision are charged to revenue. Expenditure incurred for projects after investment decisions are accounted for under capital work in progress and capitalized subsequently.

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In respect of construction of labour tenements in mines, differencebetween the expenses incurred and subsidy from Government / other agencies is charged / credited to revenue account during the year. The supervision charges incurred Fthereon not being material is included in Other Expenses

DepreciationDepreciation on assets are providedfor from the dates, the assets are available for their intended use and are spread over their estimated useful economic lives or, in the case of leased assets (including leasehold improvements), over the lease period if shorter . The lease period is considered by excluding any lease renewals options, unless the renewals are reasonably certain. Depreciation on assets are provided on a written down value basis over the useful life of the asset in the manner prescribed under Schedule II of the Companies Act, 2013. The estimated useful lives and residual values are reviewed at each year end, and changes in estimates if any, are accounted for on a prospective basis.

Each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of that item is depreciated separately if its useful life differs from the main asset.

Property, plant and equipment which are subject to componentization, comprises of main assets, componentized assets and remainders, if any. The Company has chosen a benchmark of ` 1 crore or above for the purposes of componentization and accordingly through a technical evaluation, have assessed and assigned the useful life of such assets. The useful life of remainders, if any carry the life of main assets.The estimated useful lives of the main assets considered for depreciation are described hereunder:

Buildings- 30 to 60 yearsRoads,Bridges,Culverts & Helipads- 10 to 30 yearsPlant & Machinery- 8 to 15 yearsRailway Sidings- 15 yearsVehicles- 8 to 10 yearsFurniture, Fixtures and Office Equipment’s- 3 to 10 years

Disposal of assetsAn item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in statement of profit and loss.

Deemed cost on transition to Ind AS

For transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

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Investment property

Investment properties held to earn rentals or for capital appreciation or both are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any gain or loss on disposal of investment property is determined as the difference between net disposal proceeds and the carrying amount of the property and is recognized in the statement of profit and loss. Transfer to, or from, investment property arerecognized at the carrying amount of the property.

Intangible Assets (Other than goodwill)

Intangible assets acquired separately

Intangible assets acquired are reported at cost less accumulated amortization and accumulated impairment losses. Intangible assets having finite useful lives are amortized over their estimated useful lives, whereas intangibles assets having indefinite useful lives is not amortized. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Internallygenerated intangible assets – research and development expenditure

Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internallygenerated intangible asset arising from development (or from the development phase of an internal project) isrecognized if, and only if all the conditions stipulated in Ind AS 38 – Intangible Assets is met

The amount initially recognized for internallygenerated intangible assets is the sum of the expenditure incurred from the date when the intangible asset is recognized. Where no internallygenerated intangible asset can be recognized, development expenditure is recognized in the statement of profit and loss in the period in which it is incurred.

Subsequent to initial recognition, internallygenerated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately.

Mining Rights

The amount incurred to acquire mining rights which includes NPV, stamp duty, registration fees, afforestation and land alienation charges etc. are capitalized as “Mining rights” in the year in which they are incurred.

Capitalized mining rights are amortizedover the period of mining lease and are subject to impairment review.

The amount paid on renewal of Mining Leases which is leviable on the date of execution of renewal deed are apportioned equally on the balance of the lease period from the date of execution

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Software

Operating software acquired separately (RDBMS,ERP/SAP etc.) are capitalized asintangible asset (Software) where they are clearly linked to long term economic benefits for the Company. They are measured initially at purchase cost and then amortized on a straight-line basis over their estimated useful lives.

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognized in the statement of profit and loss when the asset is derecognized.

Impairment of tangible and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount (i.e. higher of fair value less cost to sell and the value-in-use) of the asset is reviewed in order to determine the extent of impairment loss (if any).Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount and the difference between the carrying amount and recoverable amount is recognized as impairment loss in the statement of profit or loss.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment annuallyand whenever there is an indication that the asset may be impaired.

Non-current assets held for sale and discontinuedoperations

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is only met when the sale is highly probable and the asset, or disposal group, is available for immediate sale in its present condition and is marketed for sale at a price that is reasonable inrelation to its current fair value. The Company must also be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

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Foreign currency transactions and translation

The financial statements of the Company are presented in Indian rupees (“INR”), which is the functional currency of the Company and the presentation currency for the financial statements.

In preparing the financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items are measured at historical cost.

Exchange differences arising on monetary items are recognized in the statement of profit and loss in the period in which they arise

Provisions and contingencies

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event,which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated.

Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Provisions are measured on a discounted basis when it is considered appropriate. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money in that jurisdiction and the risks specific to the liability.

Constructive obligation is an obligation that derives from an entity’s actions where:

a. by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and

b. As a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities

Onerous contracts

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

Restructurings

A restructuring provision is recognized when there is a detailed formal plan for the restructuring which has raised a valid expectation in those affected. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring.

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Restoration, rehabilitation and decommissioning

An obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production of a mine and other manufacturing facilities. The Company has recognized the obligated restoration, rehabilitation and decommissioning liability as mandated in the land document on which the Plant property and equipment is erected.

Such costs, discounted to net present value, are provided for and a corresponding amount is capitalized at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged to the statement of profit or loss over the life of the operation through the depreciation of the asset and the unwinding of the discount on the provision. The cost estimates are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors such as updated cost estimates, changes to lives of operations, new disturbance and revisions to discount rates. The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The unwinding of the discount is shown as finance and other cost in the statement of profit or loss.

Environmental liabilities

Environment liabilities are recognized when the Company becomes obliged, legally or constructively to rectify environmental damage or to perform remediation work.Litigation

Provision is recognized once it has been established that the Company has a present obligation based on consideration of the information which becomes available up to the date on which the Company’s financial statements are finalized.

Contingent Liabilities

Contingent liabilities arising from past events, the existence of which would be confirmed only on occurrence or non-occurrence of one or more future uncertain events, not wholly within the control of the Company or contingent liabilities where there is a present obligations but it is not probable that economic benefits would be required to settle the obligations are disclosed in the financial statements unless the possibility of any outflow in settlement is remote.

Contingent Assets

Contingent assets are not recognized in the financial statement, but are disclosed where an inflow of economic benefits is probable.

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Leases The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the Company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.

Leases are classified as finance leases whenever the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Company as lessee

Operating lease:Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Finance lease:Finance leases are capitalized at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income over the period of the lease.

The Company as lessor

Operating lease – Rental income from operating leases is recognized in the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight line basis over the lease term.

Finance lease – When assets are leased out under a finance lease, the present value of the minimum lease payments is recognized as a receivable. The difference between the gross receivable and the present value of the receivable is recognized

as unearned finance income. Lease income is recognized over the term of the lease using the net investment method before

tax, which reflects a constant periodic rate of return.

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Inventories Inventories i.e. ore stock, stores and spares (including loose tools & implements), work in progress and finished goods are valued at lower of cost and net realizable value.

Cost of inventories comprises all costs of production/purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the price at which the inventories can be realized in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling and distribution.

The basis of determining the cost is as follows:

Ore Stock- Periodic weighted average cost

Stores & Spares- Moving weighted average cost

Stock in transit- At cost

Work in progress and finished goods- Material cost plus appropriate share of direct cost, overheads and levies other than those subsequently recoverable by the Company from the taxing authorities

(A) The quantity of sub-grade and incidental waste of Iron Ore mines is booked to production on effecting Sales and is not considered for calculation of cost of production for closing stock valuation purpose.

(B) The quantity of sub-grade Chrome Ore out of the South Kaliapani Mines old dumps booked to Production on the basis of transferred quantity for beneficiation to COBP / Sales and is not considered for calculation of cost of production for closing stock valuation purpose.

Non-stock items such as medicine, printing & stationery, crèche and canteen stores are charged to consumption account in the system at the time of purchase. Basing on physical verification report, value of such stock (on purchase cost) at the year end is fed into the system through adjustment entry while finalizing the Annual Accounts. The consumption account of such stores is reduced to the extent of physical stock value created in the system.ROM (Run of Mines):ROM (Run of Mines) is the immediate excavated material from the mother earth which is predominantly ore with certain amount of impurities and which requires further processing to bring to the form of saleable ore. Hence, ROM is not accounted for under ore production.

Any stores items not issued for three years are considered as slow moving stores items and 50% of value of such items are provided in the accounts with effect from Financial Year 2016-17

Any stores items not issued for five years are considered as non-moving stores items and 100% of value of such items are provided in the accounts with effect from Financial Year 2016-17

In absence of detailed calculation of ore reserve, its grade, associated rocks and materials etc. as required under Rule 43 of Mineral Conservation and Development Rules, 1998, no provision is being made for backlog / excess of quantity of waste material. Expenditure on cutting and removing of overburden is accounted for as and when incurred

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Trade receivable

Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary course of business. If collection is expect to be collected within a period of 12 months or less from the reporting date (or in the normal operating cycle of the business if longer), they are classified as current assets otherwise as non-current assets.

Trade receivables are measured at their transaction price unless it contains a significant financing component in accordance with Ind AS 18 (or when the entity applies the practical expedient) or pricing adjustments embedded in the contract.

Trade receivables which arise from contracts where the sale price is provisional and revenue model have the character of a commodity derivative are measured at fair value. The fair value is measured at forward rate and recognized as an adjustment to revenue.

Loss allowance for expected life time credit loss is recognized on initial recognition.

Financial Instruments

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities ( other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liabilities.

Financial AssetsCash or Cash Equivalent

The Company considers all short term Bank deposits, which are readily convertible in to known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage

For the purposes of the Cash Flow Statement, cash and cash equivalents is as defined above, net of outstanding bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.

The balance lying in the Stale Cheques Account” is transferred to “Other Receipts Accounts” after the expiry of the period of limitations i.e. three years from the date of expiry of the validity period of the cheque with the approval of RO Head/ Finance Head at Ros and HO respectively. This policy has been effective from 1st April, 2015.

Financial assets at amortized cost Financial assets are subsequently measured at amortized costs if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at fair value through other comprehensive income(FVTOCI)Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and contractual term of the financial assets give rise on specified days to cash flows that are solely payment of principals and the interest on principal amount outstanding.

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Financial assets at Fair value through Profit or loss (FVTPL)Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive item on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in the statement of profit or loss.

Financial liabilities and equity instruments issued by the Company

Financial LiabilitiesTrade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method.

Other financial liabilities are measured at amortized cost using the effective interest method.

Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Compound instrumentsThe component parts of compound instruments (convertible instruments) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently re-measured.

Financial guarantee contract liabilitiesFinancial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

• theamountoftheobligationunderthecontract,asdeterminedinaccordancewithIAS 37 Provisions, Contingent Liabilities and Contingent Assets; and

• the amount initially recognized less, where appropriate, cumulativeamortizationrecognized in accordance with the revenue recognition policies.

Derecognition of financial assetsThe Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity

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Impairment of financial assets At each reporting date, the Company assess whether the credit risk on a financial instrument has increased significantly since initial recognition.

If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. If, the credit risk on that financial instrument has increased significantly since initial recognition, the Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses.

The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is recognized as an impairment gain or loss in the statement of profit and loss.

Derecognition of financial liabilityThe Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire.

Offsetting financial instrumentsFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business.

Derivatives Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

Accounting for government grants

Government grants are recognized when there is reasonable assurance that we will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in the statement of profit and loss on a systematic basis over the periods in which the Companyrecognizes as expenses the related costs for which the grants are intended to compensate. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized in the balance sheet by setting up the grant as deferred income.

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Other government grants (grants related to income) are recognized as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of providing immediate financial support with no future related costs are recognized in the statement of profit and loss in the period in which they become receivable.

Grants related to income are presented under other income in the statement of profit and loss except for grants received in the form of rebate or exemption which are deducted in reporting the related expense.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Employee Benefits

Short-term employee benefitsA liability is recognized for benefits accruing to employees in respect of wages and salaries, short term compensatedabsences etc. in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid.

Post-employment benefitsi. Defined contribution plans A defined contribution plan is a plan under which the Company pays fixed contributions

to a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all the employees the benefits relating to employee service in the current and prior periods. Payment to defined contribution plans are recognised as an expense when the employees have rendered service entitling them for such contributions.

ii. Defined benefit plans For defined benefit retirement schemes the cost of providing benefits is determined

using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Re-measurement gains and losses of the net defined benefit liability/ (asset) are recognized immediately in other comprehensive income. The service cost, net interest on the net defined benefit liability/ (asset) is treated as a net expense within employment costs.

Past service cost is recognized as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are recognized, whichever is earlier.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined-benefit obligation as reduced by the fair value plan assets.

long-term employee benefitsLiabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit retirement plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of profit and loss in the period in which they arise. These obligations are valued annually by independent actuaries.

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Income Taxes

Tax expense for the year comprises current and deferred tax.

Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period

Deferred tax Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences. In contrast, deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to cover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there

are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognized as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognized in other comprehensive income or directly in equity

Revenue recognition and Other income

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue

can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes or duties collected on behalf of the government

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Income Taxes Sales of GoodsThe Company derives revenue principally from sale of mineral ores. Revenue from the sale of goods is recognized when thesignificant risks and rewards of ownership have been transferred to the buyer. No revenue is recognized if there are significant uncertainties regarding recovery of the amount due, associated costs or the possible return of goods.

Dividend incomeDividend income from investments is recognized when the shareholder’s rights to receive payment have been established.

Interest incomeInterest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Income from Incentives from Government AgenciesGovernment Grants, if any, received during the year against any project or Scheme implemented during that year is credited to the project or Scheme cost. If such Grant is received at a later year after completion of the project, the same is treated as other income in the year in which it is received. Revenue related grants are treated as other income in the year in which they are received

Exceptional items

Exceptional items are items of income and expenses arises from ordinary activities but of such size, nature or incidence whose disclosure is felt necessary for better explanation of the performance of the Company.

3. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Company’s accounting policies, which are described in Note-2, the management of the Company is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised.

Critical judgments in applying accounting policies:

The following are the critical judgements, apart from those involving estimations (see point ii below), that the management have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements

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Income Taxes

i. Financial assets at amortized costThe management has reviewed the Company’s financial assets at amortized cost in the light of its business model and have confirmed the Company’s positive intention and ability to hold these financial assets to collect contractual cash flows. The carrying amount of these financial assets is Rs 352,118.19 lakhs (March 31, 2016: Rs 416,922.79). Details of these assets are set out in note 31

ii. Key sources of estimation uncertainty:The following are the key assumptions concerning the future, and other key sources of estimation of uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year

a. Impairment of investments The Company reviews its carrying value of investments carried at amortized cost

annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.

b. Provisions Provisions (excluding retirement benefits and compensated absences) are not

discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.

c. Contingent liabilities Contingent liabilities arising from past events the existence of which would be

confirmed only on occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Company or contingent liabilities where there is a present obligations but it is not probable that economic benefits would be required to settle the obligations are disclosed in the financial statements unless the possibility of any outflow in settlement is remote

d. Fair value measurements and valuation processes: For financial reporting purposes, fair value measurements are categorized into Level

1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identicalassets or liabilities that the Company can access at the measurement date;

• Level2inputsareinputs,otherthanquotedpricesincludedwithinLevel1,thatare observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are inputs that are not based on observable market data(unobservable inputs).

Restatement of material error / omissions

Incomes / expenditure relating to prior period of non-material nature i.e., below Rs. 1 lakh is not considered for restatement.

111

Reconciliation between previous GAAP and Ind AS

4 (i) Equity reconciliation

4 (ii) Total comprehensive income reconciliation

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars Note As at March 31, 2016 As at April 1, 2015Equity under previous GAAP 5,70,965.90 5,68,800.11 Gratuity and Capital reserve-Transition error (b) 4,360.72 3,716.51 Creation of Mine Clsoure Liaility (c) (2,321.20) (2,321.20)Provision for Impairment - Reclassified (d) 7.84 7.84 Equity under Ind AS 5,73,013.26 5,70,203.26

Particulars Note For the period ended March 31, 2016Net income under Previous GAAPTax adjustmentsGratuityProfit for the year under Ind ASOther comprehensive incomeTotal comprehensive income under Ind AS

(a)(b)

62,344.62 439.50

(229.26) 62,554.86

(433.96) 62,988.82

4 (iii) Reconciliation of statement of cash flow There are no material adjustments to the statement of cash flows as reported under Previous GAAP.

Notes to reconciliations between Previous GAAP and Ind AS (a) Tax adjustments Tax adjustments include deferred tax impact on account of differences between Previous GAAP and Ind AS. These adjustments have resulted in an increase in equity under Ind AS by Rs. 3,009.20/- lakhs and Rs.2,292.36/- lakhs as at March 31, 2016 and April 1, 2015 respectively and increase in net profit by Rs.716.84 lakhs for the year ended March 31, 2016 .

(b) Gratuity and Capital reserveGratuity: Liability in respect of gratuity is provided as per actuarial valuation made by LIC which is managing the fund of Gratuity Trust and the same is being paid by OMC to Gratuity Fund Trust. As per the report, OMC has paid excess amount to LIC as a contribution as compared

to gratuity liability. Therefore, OMC has more plan assets in comparison to gratuity obligation. Net excess amount paid to Gratuity Trust (Plan Assets) by OMC is charged to statement of profit and loss. Capital reserve: OMC had received some amount of free shares of “The Mandakini-B Coal Corporation Limited” during Financial Year 2012-13. So, Capital Reserves was credited to the extent of Rs.7.84 lakhs by debiting the Investment account with respect to free shares received

(c) Mine Closure LiailityThe Company has created mine closure liability for its operative mines

(d) Reclassification of provision for Impairment OMC had received some amount of free shares of “The Mandakini-B Coal Corporation Limited” during Financial Year 2012-13. So, Capital Reserves was credited to the extent of Rs.7.84 lakhs by debiting the Investment account with respect to free shares received. These investments were impaired during Financial Year 2014-15

AUDIT REPORT

112

As at March 31, 2017


As at April 1, 2015

Carrying amounts of : Freehold Land Buildings Plant and Equipment Furniture and Fixtures Vehicles Railway Siding Roads,Bridges,Culverts & Helipads Total (A) Capital work-in-progress Total (B)

214.64 3,901.36 2,079.00

454.59 74.04

100.46 6,263.27

211.51 4,030.00 1,584.31

366.20 82.61

5.66 79.89

211.51 4,108.81 1,555.29

440.49 74.45

6.00 -

13,087.35 5,630.22

6,360.19 9,321.27

6,396.55 6,134.10

5,630.22 9,321.27 6,134.10

Mining Rights Total (‘C)

34,850.41 34,850.41

--

--

Intangible assets under development Total (D)

12,286.71 12,286.71

--

--

Grand Total (A+B+C+D) 65,854.69 15,681.46 12,530.65

Notes forming part of the financial statement

(Rupees in Lakhs)

(Rupees in Lakhs)

5 - Property, Plant and Equipment and capital work-in Progress.

5(i) Other Intangible assets

5(ii) Intangible assets under development

Particulars Free-hold Land

Furni-ture &

Fixtures

Roads, Bridges, Culverts

& Heli-pads

Vehicles Rail-way

Siding

Mining Rights

Build-ings

Plant and

Equip-ment

Total

Cost or deemed costBalance as at April 1, 2015

211.51 440.49 - 74.45 6.00 4,108.81 1,555.29 6,396.55

Additions - 59.21 83.26 33.24 - - 148.90 562.95 887.56 Disposals - 1.34 - - - - - - 1.34 Balance as at March 31, 2016

211.51 498.36 83.26 107.69 6.00 - 4,257.71 2,118.24 7,282.77

Additions 3.13 231.85 6,672.29 12.78 114.12 41,151.70 81.41 956.18 49,223.47 Disposals - 9.48 - 9.13 - - - 22.07 40.68 Balance as at March 31, 2017

214.64 720.73 6,755.55 111.34 120.12 41,151.70 4,339.12 3,052.35 56,465.56

113

Free-hold Land

Furni-ture &

Fixtures


& Heli-pads

Vehi-cles

Rail-way

Siding

Mining Rights

Buildings Plant and

Equip-ment

Total

Accumulated Depreciation and impairment

Balance as at April 1, 2015

- - - - - - - - -

Elimination on disposals of assets

- - - - - - - - -

Depreciation & Amortisation expense

- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


- 7.76 - 9.11 - - - 21.58 38.45


- 141.74 488.91 21.34 19.32 6,301.30 210.05 461.00 7,643.67


- 266.15 492.28 37.30 19.66 6,301.30 437.76 973.36 8,527.80

AUDIT REPORT

114

Free-hold Land

Furni-ture &

Fixtures

Roads, Bridges,

Culverts & Helipads

Vehicles Railway Siding

Mining Rights

Buildings Plant and Equipment

Total

Carrying amount

Balance as at April 1, 2015

211.51 440.49 - 74.45 6.00 - 4,108.81 1,555.29 6,396.55

Additions - 59.21 83.26 33.24 - - 148.90 562.95 887.56

Disposals - 1.34 - - - - - - 1.34

Deprecia-tion & Am-ortisation expense

- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


211.51 366.20 79.89 82.61 5.66 - 4,030.00 1,584.31 6,360.19

Additions 3.13 231.85 6,672.29 12.78 114.12 41,151.70 81.41 956.18 49,223.47

Disposals - 1.72 - 0.02 - - - 0.49 2.23

Deprecia-tion & Am-ortisation expense

- 141.74 488.91 21.34 19.32 6,301.30 210.05 461.00 7,643.67


214.64 454.59 6,263.27 74.04 100.46 34,850.41 3,901.36 2,079.00 47,937.77

(iii) Depreciation is provided in the accounts on written down value method based on usefull life basis and in the manner prescribed in Schedule II of the Companies Act, 2013.

(iv) Depreciation is provided on building and structures as per usefull life provided in Schedule -II of Company’s Act 2013 even if these are constructed on land taken on mining lease / rental basis.

(v) Even though Road which are constructed by OMC on Government Possessed Land are Capitalised and depreciation is taken as per usefull life prescribed in schedule II of Company’s Act 2013

(vi) Mining assets represent expenditure incurred in relation to acquisition of mine, mine development expenditure post establishment of commercial feasibility reclassified as mining rights.

115

Notes forming part of the financial statement 6 - Investments

Particular % of share hold-

ings


As at March 31, 2016 As at April 1, 2015

No. of shares

Amounts No. of shares


Amounts

UNQUOTED INVESTMENTS CARRIED AT COSTEquity investment in wholly owned subsidiary(1) Odisha Mineral Exploration Corporation Ltd (174,051 fully paid up shares has been acquired during the year)

100.00 1,74,051 17.41 - - - -

Equity investment in Joint Ventures(1) RIO Tinto Orissa Mining Pvt. Ltd (Fully Paid up)

49.00 2,28,000 228.00 2,28,000 228.00 2,28,000 228.00

(2) Orissa Thermal Power Corporation Ltd (Fully Paid up)

50.00 13,42,047 13,420.47 11,42,047 11,420.47 11,42,047 11,420.47

(3) Nuagaon Coal Company Limited (Fully Paid up)

50.00 1,00,000 100.00 1,00,000 100.00 1,00,000 100.00

(4) Kalinga Coal Mining Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 17,16,000 - 17,16,000 - 17,16,000 -

(5) Neelachal Ispat Nigam Ltd (Fully Paid up)

12.32 7,15,98,530 12,694.71 7,15,98,530 12,694.71 7,15,98,530

12,694.71

(6) Keonjhar Infrastructure Development Co Ltd (Fully paid up)

11.11 7,200 0.72 7,200 0.72 7,200 0.72

(7) Angul Sukinda Railway Limited (Fully paid up)

10.50 6,30,00,000 6,300.00 6,30,00,000 6,300.00 6,30,00,000 6,300.00

(Rupees in Lakhs)

AUDIT REPORT

116

(8) Haridaspur Paradip Railway Company Limited (Fully Paid up)

15.48 7,47,00,000 7,470.00 7,47,00,000 7,470.00 7,47,00,000 7,470.00

Less: Impairment of investments

(328.72) (328.72) (328.00)

Total 39,885.18 37,885.18 37,885.90

Equity investment in Associates(1) Lanjigarh Schedule Area Development Fund (Face value of Rs 10 each at free of cost)

25.00 12,500 - 12,500 - 12,500 -

(2) South West Orissa Bauxite Mining Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 13,000 - 13,000 - 13,000 -

(3) East Coast Bauxite Mining Co. Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 2,600 - 2,600 - 2,600 -

(4) Mandakini B Coal Corporation Ltd (Fully paid up)

25.00 2,07,843 200.00 2,07,843 200.00 2,07,843 200.00


(200.00) (200.00) (200.00)

Total - - - TOTAL AGGREGATE UNQUOTED INVESTMENTS (A)

39,902.59 37,885.18 37,885.90

OTHER INVESTMENTS (B)Investments in joint ventures (Preference shares, face value of 10 each, fully paid up)(1) Keonjhar Infrastructure Development Co Ltd

13.30 45,00,000 450.00 45,00,000 450.00 45,00,000 450.00


(450.00) (450.00)

TOTAL OTHER INVESTMENTS (B)

- - 450.00

TOTAL INVESTMENTS (A) + (B)

39,902.59 37,885.18 38,335.90

117

(i)The carrying amount and market value of unquoted Equity investments is as follows:

Particular As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 (a) Unquoted Carrying amount Subsidiary Joint Ventures Associates Total carrying amount

17.41 39,885.18

-

- 37,885.18

-

- 37,885.90

-

39,902.59 37,885.18 37,885.90

The cost of unquoted investments approximate the fair value because there is a wide range possible fair value measurements and the cost represents estimate of fair value within that range.

(ii) OMC executed an agreement with Rio Tinto Mineral Dev.(RTMV) on 24.02.1995 as per the directive of Government for developing an inegrated rail,port and mines project having production capacity of at least 15MT of iron ore p.a from Gandhamardan and Malangtoli Leases by forming a joint venture company. The JV RTOM was incorporated in July,1997 with holding of 51% by RTMD and 49% by OMC. The project after completion of feasibility studies Ph-I and Ph-II has not progressed due to non finalization of the project development agreement. Case filed by OMC & RTMD on winding up of the JV Co.are continuing at respective legal forums. So impairment was made for Rs. 228.00 lakh against this investmement in JV Company during FY 2010-11.

(iii) The Ministry of Coal, Government of India vide letter No. f No.13016/8/207-CA-1 dtd 25.07.2007 alloted Mandakini-B Coal Block in favour of the OMC Ltd, Assam Minereral Development Corpn, Meghalaya Mining Corpn, and Tamilnadu Electricity Board on equal sharing basis of 25% each for Power Generation. Accordingly, the new Comapany Viz M/S MBCCL was incorporated. Further Ministry of Coal, GoI has de-allocated Madakini-D Coal Block on 05.12.2012. The Board of Directors of MBCCL in its meeting held on 08.02.2013 decided for dissolution of the company and the Board of Directors of the OMC limited in its 398th meeting held on 26.03.2013 approved dissolution of MBCCL, accordingly provision has

been created for Rs 207.84 lakh in the Accounts of 2012-13 towards impairment of investment in the said company. Now the said company is declared us dormant as per the provisions of section 455(2) of the Companies Act, 2013 by MCA, GOI on dated 23.06.2017.

(iv) OMC & APMDC invested Rs.100 lakh each being 50% partner in joint venture company namely M/S Nuagaon Coal Company Ltd & shown as share deposit amount. The JV Comapany alloted 3000 equity share of Rs.100.00 each amounting to Rs.3 lakh.However the share are yet to be received.As per order of Hon’able Suprem Court of India, 204 coal blocks were de-allocated including M/S Nuagaon Coal Company Limited. Accordingly, impairment was created for Rs. 100 lakh against this investment in the JV Company during the F.Y 2014-15.Now the said company is declared us dormant as per the provisions of section 455(2) of the Companies Act, 2013 by MCA, GOI on dated 23.06.2017.

(v) During Financial Year 2015-16, consequent upon approval of Board of Directors, an amount of Rs.450.72 lakh (Rs.450.00 Lakh of preference shares + Rs.0.72 lakh of equity shares) invested in M/S Keonjhar Infrastructure Development Co Ltd have been provided for as the same were found to be permanently diminuted due to the company’s net worth as well as the derived market value of share was continuously showing (-ve) trend.

(vi) 7,200 Nos of shares held by the OMCL in Keonjhar Infrastructure Development Co Ltd. has been pledged with State Bank of India for availment of loan by M/s KIDCOL.

(Rupees in Lakhs)

AUDIT REPORT

118


7 - Loans- Non Current

7 - Loans- Current

(Rupees in Lakhs)

Particulars As at March 31, 2017


As at April 1, 2015

a) Security Deposits - Secured, considered good - - - - Unsecured, considered good 166.06 149.35 138.92 - Doubtful - - - Less : Allowance for bad and doubtful advances - - - b) Loans to related parties - Secured, considered good - Unsecured, considered good 8,027.78 13,694.44 - - Doubtful Less : Allowance for bad and doubtful advances c) Loans to employees - Secured, considered good - Unsecured, considered good 407.62 481.26 526.41 - Doubtful - - - Less : Allowance for bad and doubtful advances - - - d) Loans to GRIDCO - Secured, considered good - - - - Unsecured, considered good 63,911.16 90,631.16 69,940.00 - Doubtful Less : Allowance for bad and doubtful advances - - - Total 72,512.62 1,04,956.21 70,605.33



As at April 1, 2015

a) Security Deposits - Secured, considered good - - - - Unsecured, considered good - Doubtful - - - Less : Allowance for bad and doubtful advances - - - b) Loans to related parties - Secured, considered good - Unsecured, considered good 8,972.22 3,305.56 - - Doubtful Less : Allowance for bad and doubtful advances

119

c) Loans to employees - Secured, considered good - Unsecured, considered good 292.28 343.06 341.58 - Doubtful - - - Less : Allowance for bad and doubtful advances - - - d) Loans to GRIDCO - Secured, considered good - - - - Unsecured, considered good 30,060.00 30,060.00 15,865.00 - Doubtful Less : Allowance for bad and doubtful advances - - - Total 39,324.50 33,708.62 16,206.58

(i) Loans to related parties include: Loans given to Joint venture i.e. Neelachal Ispat Nigam Ltd (NINL) of Rs. 17,000 Lakhs (31.03.2016: Rs. 17,000 Lakhs ) (01.04.2015: Rs. Nil) (ii) Loans include Intercorporate deposits to GRIDCO of Rs. 93,971 Lakhs (31.03.2016: Rs. 120,691 Lakhs) (01.04.2015: Rs. 85,805 Lakhs)

(iii) The above loans and inter-corporate deposits have been given for business purpose.

(iv) There are no loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or no amounts due by firms or private companies respectively in which any director is a partner or a director or a member .

(V) GRIDCO is a State PSU dealing with trading of power. GRIDCO availed the above inter corporate loan from OMC for their working capital management executing necessary agreement including escrow agreement among GRIDCO, OMC and Union Bank of India. The period of loan is 6 years including 1 year(1st year) as moratorium period. The rate of interest is floating which is 1.5% over the FD rates offered by SBI on bulk deposits (For 1 crore and above) for a period of 1 to 2 years.

(vi) NINL, a manufacturer of steel, has availed the above intercorporate deposit from OMC for 3 years excluding 1 year (1st year) as moratorium period. The rate of interest is 12.25% Fixed .

AUDIT REPORT

120

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015Deferred Tax Assets 6,202.55 4,283.58 3,793.84 Less : Deferred Tax Liabilities 16,313.19 - - Net Deferred Tax (Liability)/ Assets (10,110.64) 4,283.58 3,793.84

Notes forming part of the financial statement8 - Deferred tax balances

(i)Significant component of deferred tax assets and liabilities for the year ended March 31, 2017 is as follows:

Significant component of deferred tax assets and liabilities for the year ended March 31, 2016 is as follows:

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

Opening balance as at April 1, 2016

Deferred tax expense/(income)

recognised in profit and loss

Deferred tax expense/ (income)

recognised in OCI)


recognised in other equity)

Closing balance as at

March 31, 2017

Deferred tax assetsRetirement benefit assets 3,314.59 21.71 325.36 - 3,661.66

Provisions 172.69 1,487.61 - - 1,660.30 Total 3,487.28 1,509.32 325.36 - 5,321.96 Deferred tax liabilitiesProperty, plant and equipment and Intangible assets

(796.31) 16,228.94 - - 15,432.63

Total (796.31) 16,228.94 - - 15,432.63 Net Deferred tax assets/(liabilities)

4,283.59 (14,719.62) 325.36 - (10,110.66)

Opening balance as

at April 1,

2015




recognised in OCI)




March 31, 2016

Deferred tax assetsRetirement benefit assets 3,085.15 (204.53) 433.97 - 3,314.59 Provisions 120.92 51.77 - - 172.69 Total 3,206.07 (152.76) 433.97 - 3,487.28 Deferred tax liabilitiesProperty, plant and equipment and Intangible assets

(587.80) (208.52) - - (796.31)

OthersTotal (587.80) (208.52) - - (796.31)Net Deferred tax assets/(liabilities)

3,793.84 55.76 433.97 - 4,283.59

121

Notes forming part of the financial statement 9 - Other non-current assets

Operating Lease Payments

(i) The Company has taken land under operating leases. The following is the summary of future minimum lease rental payments under operating leases entered into by the Company:

(Rupees in Lakhs)

(Rupees in Lakhs)



As at April 1, 2015

Prepayments (Leasehold Land) 414.89 419.91 424.55 Restricted Balances with Bank 32,441.81 29,939.62 27,330.77 Deposit with LIC (Gratuity) 159.09 1,202.73 1,431.99 TOTAL 33,015.79 31,562.26 29,187.31

Minimum Lease Payments As at March 31,

2017 As at March 31,

2016 As at April 1,

2015 Not later than 1 year 4.82 4.63 4.61 Later than one year but not later than five years

19.28 18.51 18.44

Later than five years 390.79 396.77 401.50 Total minimum lease commitments 414.89 419.91 424.55

(a) During the year ended March 31, 2017, total operating lease rental recognised in the statement of profit and loss was Rs. 4.63 Lakhs, (2015-16: Rs. 4.61 Lakhs)

(b) Significant leasing arrangements include lease of land for periods ranging between 70 to 99 years with renewal option.

(ii) Balances with banks which are restricted from being exchanged or used to settle a liability for more than 12 months from the balance sheet date are classified under Non-current assets.

(iii) Actuarial valuation of Gratuity as on 31.03.2017 was done by M/s. LIC of India which is managing the fund of the OMC Gratuity trust fund.

AUDIT REPORT

122


10 - Inventories

(i)

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015(a) Finished goods

Iron Ore 41,791.83 47,923.14 35,050.82 Chrome Ore 14,336.27 10,004.52 5,839.52 Manganese Ore 146.15 140.67 140.67

(b) Stores & Spares 1432.81 1,388.97 1296.46(c) Others

Non inventorised stores 16.36 25.26 6.46 Less: Provision on stores and spares

(844.52) (405.44) (255.86)

Total Inventories 56,878.90 59,077.12 42,078.07

Included above, goods-in-transit:

As at March 31, 2017 As at March 31, 2016 As at April 1, 2015

(i) Finished goods - - - (ii) Stores & spares - - - Total goods-in-transit - -

(ii) The cost of inventories recognised as an expense includes Rs 439.08 lakhs (2015-2016: Rs 149.58 lakhs) in respect of write-downs of inventory to net realisable value, and has been reduced by Rs. Nil (2015-2016: Rs. Nil) in respect of the reversal of such write-downs. Previous write-downs have been reversed as a result of increased sales prices in certain markets.

123

Notes forming part of the financial statement 11 - Trade receivables (Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)



As at April 1, 2015

Trade receivables (a) Unsecured, considered good 10,608.04 6,604.21 3,643.15 (b) Doubtful - 93.55 93.55 Less: Allowance for credit losses - (93.55) (93.55)TOTAL 10,608.04 6,604.21 3,643.15

(i) Trade receivables are dues in respect of goods sold or services rendered in the normal course of business.

(ii) Where no due date is specifically agreed upon, the normal credit period allowed by the Company is taken into consideration for computing the due date which may vary depending upon the nature of goods or services sold and the type of customers, etc.

(iii) Trade receivables are further analysed as :

As at March 31, 2017 Gross credit risk amount

Allowance for credit losses

Net credit risk amount

Amounts not yet due 9,849.63 - 9,849.63 One month overdue 517.59 - 517.59 One month overdue - - - Three months overdue 25.19 - 25.19 Between three to six months overdue - - - Greater than six months overdue 215.63 - 215.63 TOTAL 10,608.04 - 10,608.04




Amounts not yet due 6,297.74 - 6,297.74 One month overdue - - - One month overdue - - - Three months overdue - - - Between three to six months overdue - - - Greater than six months overdue 400.02 93.55 306.47 TOTAL 6,697.76 93.55 6,604.21

AUDIT REPORT

124

(iv) Movement in allowance for credit losses in respect of trade receivables:

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the period 93.55 93.55 Additions during the period - - Utilised during the period 93.55 - Balance at the end of the period - 93.55

In determining the allowances for doubtful trade receivables the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the

(Rupees in Lakhs)

(Rupees in Lakhs)

As at April 1, 2015 Gross credit risk amount



Amounts not yet due 3,445.95 - 3,445.95 One month overdue 7.34 - 7.34 Two month overdue 0.80 - 0.80 Three months overdue 8.65 - 8.65 Between three to six months overdue 42.62 - 42.62 Greater than six months overdue 231.34 93.55 137.79 TOTAL 3,736.70 93.55 3,643.15

ageing of the receivables that are due and rates used in the provision matrix.

(v) There are no loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or no amounts due by firms or private companies respectively in which any director is a partner or a director or a member .

125


12 - Cash and Cash Equivalents



As at April 1, 2015

(a) Balances with banks(1) Unrestricted Balance with banks (i) In Current Account 9,998.31 2,169.53 6494.70 (ii) In Deposit Account(b) Cash in hand 2.66 6.43 3.60 (c) Others 0.01 0.01 - Cash and cash equivalents as per balance sheet

10,000.98 2,175.97 6,498.30

(a) Earmarked Balances with banks (i) In Current Account - - - (ii) In Deposit Account 1,05,389.44 2,83,080.81 4,00,713.15 Total 1,05,389.44 2,83,080.81 4,00,713.15 Total Cash and Bank Balances 1,15,390.42 2,85,256.78 4,07,211.45

(Rupees in Lakhs)

Notes(i) Earmarked cash and bank balances primarily represent balances held for sales proceeds of seized chrome ore, LC provided to East Coast Railway and against short term borrowings.

Details of Fixed Deposits pledged against Bank Guarantee is as follows

Name of Bank Face Value of FDUCO Bank, Govternment of Odisha Secretariate Br. 86,00,000 Sub Total 86,00,000 HDFC Bank Ltd 65,00,00,000

52,00,00,000 78,00,00,000 85,00,00,000 65,00,00,000 85,00,00,000 45,00,00,000

Sub Total 4,75,00,00,000 Andhra Bank, Main Branch 6,91,90,990.00

6,91,90,988.00 Sub Total 13,83,81,978.00 Axis Bank 25,00,000.00 Sub Total 25,00,000 SBI 1,49,00,000 Sub Total 1,49,00,000 Syndicate Bank 54,62,350

38,41,100 Sub Total 93,03,450 Total 4,92,36,85,428

AUDIT REPORT

126

(Rupees in Lakhs)

(ii) In accordance with the MCA notification G.S.R. 308(E) dated March 30, 2017 details of Specified Bank Notes (SBN) and Other Denomination Notes (DDN) held and transacted during the period from November 8, 2016 to December 30, 2016, is given below:

Particulars SBNs Other denomination notes Total

Closing cash in hand as on 08.11.2016 7,96,500 3,57,057 11,53,557

(+) Unpermitted receipts - - -

(+) Permitted receipts 1,82,075 1,82,075

(-) Unpermitted payments - - -

(-) Permitted payments - - -

(-) Amounts deposited in Banks (7,96,500) (7,96,500)

Closing cash in hand as on 30.12.2016 5,39,132 5,39,132

(iii) The cash and bank balances as above are primarily denominated and held in Indian rupees

127


13 - Others (Rupees in Lakhs)



As at April 1, 2015

Advances to staff 827.07 1,180.21 1,175.59 Interest accrued on loans and depsoits 11,837.23 18,284.48 26,092.55 Sundry Dues Realisable 65.80 640.90 313.21 Deposits with bank 1,40,900.00 - - TOTAL 1,53,630.10 20,105.59 27,581.35

AUDIT REPORT

128


14 - Current tax assets and liabilities (Rupees in Lakhs)



As at April 1, 2015

Current tax assets Tax refund receivables/Advance Tax 65,528.66 56,026.92 1,00,030.65 Total 65,528.66 56,026.92 1,00,030.65

129


15 - Other current assets (Rupees in Lakhs)



As at April 1, 2015

Prepaid Expenses 670.84 23,615.73 395.68 Advances to suppliers & others 14,743.73 22,779.24 10,264.28 Less: Allowance for credit losses Prepayments (Leasehold Land) 4.82 4.63 4.61 Balance with Govternment Authority 558.40 667.88 43,232.66 TOTAL 15,977.79 47,067.48 53,897.23

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Notes forming part of the financial statement 16 - Equity Share Capital



As at April 1, 2015

Equity Share Capital 3,145.48 3,145.48 3,145.48 TOTAL 3,145.48 3,145.48 3,145.48 Authorised Share Capital1,00,00,000 nos. of equity shares of Rs.100/- each (Previous year 1,00,00,000 nos. of equity shares of Rs.100/- each)

10,000.00 10,000.00 10,000.00

Issued , Subscribed & Paid up capital comprises :31,45,480 nos. of equity shares of Rs.100/- each

3,145.48 3,145.48 3,145.48

Total 3,145.48 3,145.48 3,145.48

(Rupees in Lakhs)

Notes

(i) The movement in subscribed and paid up share capital is set out below:

Shares in the company held by each shareholder holding more than 5% shares

As at March 31, 2017 As at March 31, 2016No. of shares Rs. Lakhs No. of shares Rs. Lakhs

Ordinary shares of Rs.100 eachAt beginning of the year 31,45,480 3145.48 31,45,480 3145.48Shares allotted during the year - - - -

31,45,480.00 3,145.48 31,45,480.00 3,145.48

As at March 31, 2017 As at March 31, 2016Name of Shareholder

No. of Shares Held (Face value of Rs. 100

each)

% of Total Shares

No. of Shares Held ( Face value of Rs.

100 each)

% of Total Shares

Hon’ble Governer of Odisha

31,45,390 99.9971 31,45,390 99.9971

(ii) The Corporation has only one class of shares referred to as equity shares having a par value of Rs 100/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive any

of the remaining assets of the corporation, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

131


17. Other equity

(i) General Reserve

(ii) Retained Earnings

(iii) Capital Reserve

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015General Reserve 2,30,802.84 2,21,877.67 2,15,643.20 Retained earnings 3,54,139.74 3,46,219.42 3,49,643.89 Capital reserve 1,770.69 1,770.69 1,770.69 Total 5,86,713.28 5,69,867.78 5,67,057.78

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the year/period 2,21,877.67 2,15,643.20 Movements 8,925.17 6,234.47 Balance at the end of the year/period 2,30,802.84 2,21,877.67

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the period 3,46,219.42 3,49,643.89 Profit attributable to owners of the Company 77,639.09 63,808.80 Other comprehensive income arising from remeasurement of defined benefit obligation net of income tax

(614.78) (819.98)

Payment of dividends on equity shares 50,000.00 50,000.00 Tax On Dividend 10,178.82 10,178.82 Transfer to General Reserve 8,925.17 6,234.47 Balance at the end of the period 3,54,139.74 3,46,219.42

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the year/period 1,770.69 1,770.69 Movement during the year/period - - Balance at the end of the year/period 1,770.69 1,770.69

(iv) The nature of reserves are follows: (a) General Reserve :- Under the erstwhile

companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of companies Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. However the Company has

followed its earlier practice of transferring the profit to general reserve.

(b) Capital Reserve :- Capital reserves represents the excess of labilities over assets of the erstwhile “Charge Chrome Division” of the company, transferred to Government of Odisha as per the notification. In absence of any claim against the said amount, the said liability was no longer required and was transferred to capital reserve.

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18. Provisions Non-current

Non-current

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Employee Benefits - Leave Encashments 6,864.01 6,834.59 6,488.20 - Payable on retirement 855.18 - - Others - Mine Closure 4,291.20 4,291.20 4,291.20 - Felling of Trees - - 452.17 Total 12,010.39 11,125.79 11,231.57

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Employee Benefits - Leave Encashments 539.99 421.73 105.55 Total 539.99 421.73 105.55

(i) Provision for employee benefits include long term benefits such as for leave, early retirement and long service awards

(ii) The actuarial valuation for leave encashment as on 31.03.2017 was done by M/S LIC of India for 2548 OMC Employees by taking average Age as 50 years and average Monthly Salary of Rs. 31,189.00.In the actuarial valuation following assumptions were taken: Mortality Rate: LIC (2006 to 08) ultimate, withdrawal rate 1% to 3% depending on age, discount rate 8% p.a., salary escalation 10% and normal retirement age 60 years.

(iii) Other provisions primarily represent mine closure and rehabilitation obligations. These amounts become payable upon closure of the mines and are expected to be incurred over a period of 1 to 13 years.

(iv) Mine Closure :- As per Mineral Conservation & Deveopment (Amendment) Rule, 2003 vide Notification Dt. 10th April, 2003 of Ministry of Mines, New Delhi, every mine shall have Mine Closure Plan- (1) Under Rule 23B of MCDR (Amendment) 2003, the owner shall in case of

fresh grant/renewal of mining lease submit a progressive Mine Closure Plan as a component of mining plan and in case of existing minig lease submit a progressive Mine Plan for approval within a period of 180 days from the commencement of aforesaid rule. (2) Final Mine Closure Plan means a plan prepared as per IBM guidelines. Under rule 23C of MCDR (Amendment) 2003, this shall be submitted for approval one year prior to the purpose of decommissioning, reclamation in the mine or part thereof after cessation of mining and mineral proposed closure of the plan. (3) As against securities of carrying out above work u/r 23f pf MCDR(Amendment) 2003, lessee has to furnish financial assurance to the competent authority (IBM) so as to indemnify the authorities against the reclamation and rehabilitation cost. All the mines (24 operational mines ) which have mining lease of 7900 Hects approx. and under rule 23F(1) MCD Rules (Amended) 2003. OMC mines are considered as “A “ grade mines and a provision of 19.70 crore has ben provided for in books of accounts over a period of 10 years wef Financial Year 2003-04.

133

(v) Felling of trees:- Approval under forest conservation Act under Sec-II is regarding use of Forest land for non-forestry activity wherein felling of trees is a vital component. Approval of MOEF, GoI under Section-2 of Forest Conservation Act over a perticular patch of forest land is a pre requisite before initiating proposal for tree felling by user agency. The working cost of felling by OFDC & cost towards Royalty for the proposed tree felling by DFO is demanded on user agency. The tree felling as per Approved Mining Plan is granted by DFO concerned in a phase wise manner as per the

condition stupulated by MOEF, GoI. Once the tree standing over the approved forest area is clear felled and the timbers lifted by OFDC, the process get completed and the area is handed over by DFO to user agency to commence operation. It is not a regular phenomenium. Once the activity is over for a particular patch of forest land mining & ancillary operation continues till the mineral is exhaused. As these liabilities are very old and either paid or not payable, the same is written back in the Financial Year 2015-16 consequent upon approval of BODs.

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19. Borrowings (Rupees in Lakhs)



As at April 1, 2015

Secured - at amortised cost (a) Loans Repayable on Demand From Banks - 73,700.00 1,50,200.00 Total - 73,700.00 1,50,200.00

(i) Short term loans from banks are availed against pledge of fixed deposits.

135

(i) The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as under:


20. Trade Payables

Notes

(Rupees in Lakhs)

(Rupees in Lakhs)



As at April 1, 2015

Creditors for supplies and services 24,528.43 28,437.20 14,395.11 Creditors for accrued wages and salaries 54.43 20.88 481.15 Total 24,582.86 28,458.08 14,876.26

Description As at March 31, 2017


As at April 1, 2015

i. The principal amount remaining unpaid to supplier as at the end of the year

0.14 - -

ii. The interest due thereon remaining unpaid to supplier as at the end of the year

- - -

iii. The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act

- - -

iv. The amount of interest accrued during the year and remaining unpaid at the end of the year

- - -

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21. Other Financial Liabilities

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015a) Interest accrued on borrowings - 945.03 3,128.38 b) Others:Security & Earnest Money Deposits 5,462.65 5,029.73 5,562.87 Capital Creditors 248.85 248.63 242.28

5,711.50 6,223.39 8,933.53

(Rupees in Lakhs)

137


22. Other Current Liabilities

(Rupees in Lakhs)



As at April 1, 2015

a) Advances from Governments & Others 3,190.23 2,737.53 1,661.75 b) Indirect Tax Payables 2,401.33 92.08 447.59 c) Advance From Customers 20,022.46 6,333.10 8,862.50 d) Other Statutory Dues Payable 195.94 110.45 38,579.50

25,809.96 9,273.16 49,551.34

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138


23. Revenue from Operations

(Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16 (a) Sale of Ore -Iron Ore 1,25,780.20 83,804.12 -Chrome Ore & Concentrate 1,07,362.76 71,003.92

2,33,142.96 1,54,808.04

(i) Sale of chrome ore & concentrate includes excise duty of RS. 522.79 Lakhs (2015-16 RS. 165.77 Lakhs) levied on sale of chrome concentrate from COBP plant.

139


24. Other Income

(Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16

a)

b)

Interest Income Interest income from Bank Deposits at amortised Cost

18,079.71 27,583.79

Interest income from other financial assets carried at amortised cost

11,136.06 12,129.61

29,215.77 39,713.40 Other non-operating income (net of expenses directly attributable to such income)Rental Income 50.46 62.24 Reconciliation effect of old balances 7,134.07 6,293.60 Other Miscellaneous Income 1,013.41 2,053.13

8,197.94 8,408.97 Total 37,413.71 48,122.37

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25. Changes in Inventory

(Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16 Change in Ore Stock :-Opening StockIron Ore 47,923.14 35,050.82 Chrome Ore & Concentrate 10,004.52 5,839.52 Manganese Ore 140.67 140.67 Total (A) 58,068.33 41,031.01 Closing StockIron Ore 41,791.83 47,923.14 Chrome Ore & Concentrate 14,336.27 10,004.52 Manganese Ore 146.15 140.67 Total (B) 56,274.25 58,068.33 Differences (A-B) 1,794.08 (17,037.32)

141


26. Employee Benefit Expense (Rupees in Lakhs)

(Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16 Salaries and Wages 18,731.06 11,113.53 Contribution to provident and other funds 2,771.30 2,625.64 Staff Welfare expenses 3,562.55 2,269.92 Total 25,064.91 16,009.09

(i) The Company has recognised in the statement of profit and loss, an amount of Rs 7.04 lakhs (2015-16: Rs 12.89 lakhs ) as expenses with respect to key managerial personnel. The details of such expenses are as below:

Particulars For the period 31-Mar-17 For the period 31-Mar-16 (a) Short term employee benefits 7.04 12.89(b) Post employment benefits(c) Other long term employee benefitsTotal 7.04 12.89

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142


27. Finance Costs (Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16 (a) Interest costs : Interest on bank overdrafts and loans

(other than those from related parties) 842.84 3,295.44

Other Interest expense 39.76 6.66 Total interest expenses for financial liabilites not classified as FVTPL

882.60 3,302.10

Less: Amounts included in the cost of qualifying assets

- -

882.60 3,302.10 (b) Exchange differences losses - 22.27 Total 882.60 3,324.37

143


28. Other Expenses (Rupees in Lakhs)

Particulars For the period 31-Mar-17

For the period 31-Mar-16

A. Production and Processing ExpensesOre Raising 32,836.72 23,882.19 Transportation 372.53 3,096.74 Manchinery Hire Charges 137.69 90.48 Energy Charges 246.66 375.90 Repair & Maintenance to Machinery 58.45 24.68 Prospecting Expenses 13.35 10.56 Exploration Expenses 6.19 - Dereservation Plan 7.02 20.34 Afforestation 34.17 2,739.73 Stamp Duty & Registration Charges for Supplimentary Lease Deed - 5,728.58 Forest Environtment Expenses 444.30 1,138.80 Mining Plan Fees 263.31 59.16 Consent Fees 75.82 86.34 Mine Environment 81.44 65.76 Safety Week Expense 18.29 16.40 Maintenance of Lease-Hold Area 28.11 21.69 Surface Rent 337.71 339.12

34,961.76 37,696.47 B. Stores and spares consumedExplosives 9.16 13.83 Drilling Accessories Consumed 10.65 9.43 Safety equipment consumed 23.86 11.52 Provision against non-moving stores and spares 370.30 124.55 Provision against slow-moving stores and spares 51.27 Mining Tools Consumed 1.27 2.59 Belt consumed 2.80 0.34 Machinery Spare Consumed 146.71 106.79 Machine Insurance 0.01 Other Store Consumed 85.40 49.47 POL Consumed 553.10 452.12 Laboratory Consumed 0.80 1.04 TyreTube Battery consumed 22.72 11.82 Motor Vehicle Spares Consumed 0.30 0.34 Electrical Store Consumed 50.80 28.19 Total 1,329.15 812.03

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144

C. Administrative Expenses(i)Travelling expenses - Domestic 74.78 78.40 - Directors-Domestic 4.61 3.67 (ii) Auditor’s Remuneration - For Statutory Audit 5.75 5.75 - For Tax Audit 1.44 1.44 - For Certification on CFS & Reporting on ICOFR 2.30 2.30 - For Cost Audit 1.44 1.44 Fees & Tariff 53.05 45.47 Repair & Maintenance to Building 940.73 849.13 Repair & Maintenance to Others 371.36 408.59 Annual Maintenance Contract 42.40 32.03 Rent 44.21 44.38 Rates & Taxes 23.00 33.20 Insurance 0.34 0.14 Motor Vehicle Insurance 10.46 8.97 Dead Rent 514.99 460.32 Motor Vehicle Tax 6.68 9.23 Printing & Stationary 72.76 66.76 Telephone & Postage 33.66 30.40 Periodicals & Magazines 3.17 2.95 Hire Charges 619.18 539.48 Rehabilitation Expenses - 19.92 ERP/SAP Expenses 171.56 140.38 Guest House Expenses 23.59 22.39 Survey Expense 1.97 0.64 Watch & Ward 2,238.98 2,138.32 Consultancy Charges 178.31 4.57 Legal Expenses 114.10 111.90 Donation 3,007.50 - Electricity Charges of Offices 48.53 48.53

8,610.85 5,110.70 D. Selling & DistributionRoyalty 34,888.37 33,547.94 User Fees 129.26 86.32 District Mineral Foundation 10,376.34 13,199.62 National Mineral Exploration Trust 691.76 879.97 OST /VAT/CST on Demand - 10.85 Analysis Charges 175.97 177.61 Selling expenses 240.64 147.42 Advertisement & Publicity 667.64 138.41 Transportation,Railway Freight, Wagon Loading,Plot Rent, etc. 2,325.30 1,570.05

49,495.28 49,758.19

145

E. Other ExpensesProvision for Diminuation in Investment - 450.72 Dimuniuation of Current Assets 17.51 25.04 Loss on Sale/Discard/Surveyed of Assets (16.38) (13.77)Net Present Value * - 1,372.80 Penalty & Fines 520.96 124.87 Other Miscellaneous Expenses 479.49 80.01 Prior Period Adjustment - -146.91 Reconciliation effect of old balances 3,992.22 CSR 2,918.57 4,451.00

7,912.37 6,343.76 Total (A+B+C+D+E) 1,02,309.41 99,721.15

(i) *As per Order of Hon’ble Supreme Court of India, the guidelines Government of India, Ministry of Environment and Forest, New Delhi and Circulars of Government of Odisha, Forest and Environment Department, NPV of forest land (in case of diversion proposals which are granted in principle approval after

(30.10.2002) is to be realised from the user agency while diverting the forest land for non forest purposes under the Forest Conservation Act 1980 (Ammended) in the range of Rs. 7.30 lakhs per Hect. to Rs. 10.43 Lakh per Hect., depending upon the quantity, quality and density of the forest land in question.

AUDIT REPORT

146


29. Contingent Liabilities and Contingent Assets (Rupees in Lakhs)

Contingent Liability 2016-17Rs. In Lakh

2015-16Rs. In Lakh

A. Legal

i Shri D.P. Sahoo (land loser) has filed a case against OMCL, Barbil claiming Rs.7, 05,685/- towards balance cost of the land sold to OMCL. It is pending before the Hon’ble Court of Civil Judge (SD), Champua.

7.06 7.06

ii Case was filed by Sri S.K.Panda versus OMCL claiming Rs.2, 82,244/- towards supply of furniture and renovation work of Guest House Building of the erstwhile OMC Alloys Limited (OMCL). Our counter has been filed and the matter has so far not been disposed off.

2.82 2.82

iii Sales of Chrome Ore & Concentrate through e-auction is before disposal of writ petition ( C ) no.17088/2012 by Hon’ble High Court. As per the order of the Honorable High Court, the billing is done at the highest bidding rate against the individual bidding rate for different customers through e-auction policy. (Rs.1885.00 lakh towards differential cost of material and Rs.95.37 lakh towards VAT/CST & ET totaling to Rs.1980.37 lakh) OMC is appealing the auction rate and the matter is under sub-Judice.

1980.37 1,980.37

iv The IFC Case no.1/06 was filed before the Member Secretary, Industry Facilitation Council, Mumbai by M/s.Indiana Engg. Works (Bombay) Pvt Ltd. In the prayer, the petitioner has sought before the Conciliator for the award for a sum of Rs.5,37,01,293/- in respect of his claim payment to the work order issued to him for design, supply, installation and commissioning of one number of 75 TPH Crusher and Screen plant in our BPJ Mines. We had filled a Writ Application before the Hon’ble High Court of Orissa challenging the jurisdiction of the proceeding at Thane, Maharastra under Micro Small Medium Enterprises Development Act, 2006. But while the Writ Application was pending before the Hon’blle Court, the Council has passed an Order directing us to pay principal amount of Rs.45,60,886/- and interest as per the Act to the respondent within one month from the date of receipt of the Order.further, we have filled a petition before the Hon’ble High Court for amendment of the petition as well as a misc. case seeking stay operation of such Order dtd. 23.02.2015 passed by the Micro and Small Enterprises Facilitation Council,Konkan Region,Thane,Mumbai.The Hon’ble Court vide Order dtd.12.05.2015 stayed the operation of the order dtd.23.02.2015 which is still in force.

537.01 537.01

147

v M/s.FGM had claimed an amount of Rs.4,37,74,202.00 and further interest @ 15% till the date of payment for the work of raising, calibration and transportation of CLO/Fines at Daitari Iron Ore Project before the Arbitrator, Sri. A.K Parichha. On 07.12.2015, the learned Arbitrator had awarded a sum of Rs. 59,28,580/- in favour of the claimant and had directed the respondent to pay the same to the claimant within a period of ninety days from the date of the award. In the meantime, we have filed an Arbitration Petition No. 12 of 2016 before the Hon’ble District Judge, Khurda at Bhubaneswar for setting aside and stay of the award dtd. 07.12.2015 passed by the learned Arbitrator and the matter is pending.

59.29 59.29

vi During 1994-95 MMTC collected Advance of US$ 547470.00 from M/s Sinexim Co. for export of Chrome Ore of OMC & passed on the advance after deduction of 1% commission to OMC. The buyer failed to lift the materials. The arbitration case between MMTC and M/s Sinexim Co. has been finalized during 2002-03 and MMTC had to refund the advance along with 12% interest to M/s Sinexim Co. In turn MMTC has filed an arbitration case – Arb(P) 162/05 against OMC in Delhi High Court to realize the amount. The contingent Liabilty is $4,37,976 amounting to Rs.290.52 lakh in INR. The case has since been settled.

0.00 290.52

vii M/s. A.K Enterprises claimed an amount of Rs. 68,19,696.67 against the pending dues along with interest for the period of with-holding of the payment in respect of the job for commissioning 135KW MAMC winder at Bangur Mines of OMC Ltd. We have received the Award dtd. 20.05.2017 passed by the learned Arbitrator, Sri Pitamber Patra, wherein he has granted some relief to the claimant out of the amount claimed and the same is under review.

68.20 68.20

viii M/s. D.K Nayak had claimed an amount of Rs. 9,40,56,780/- and interest @ 18% from the due date i.e. 07.07.2011. He has also claimed Compensation @ 18% per annum on the contract value of Rs. 3,13,52,260/- for 3 years i.e. Rs. 9,40,56,780/-. On 18.07.2016, the learned Arbitrator, Sri. P.C Mishra, retired District Judge allowed the claims of the contractor in part, holding that the claimant/contractor is entitled to be paid an amount of Rs. 95,27,629/- (Rupees Ninety Five Lakhs Twenty Seven Thousand Six Hundred Twenty Nine) only towards R/A Bills, EMD, Breach of Contract, sum under additional/supplementary claim and interest calculated thereon. We have filed a petition before the learned District Judge, Khurda for stay operation of the award dtd. 18.07.2016 passed by the learned Arbitrator, Sri. P.C Mishra, retired District Judge and the matter is pending.

940.57 940.57

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148

IX M/s S.S Mining & Infra (P) Ltd.has claimed an amount of Rs.2456.94 lakhs due to the loss sustained by the claimant on account of cancellation of 5 remaining years of contract for excavation/raising of iron ore etc. and shifting of the products to Jagar Stock Yard of Gandhamardan Iron Ore mines (Block-A).The matter is pending before the sole Arbitrator, Sri A.K Parichha.

2456.94 2,456.94

X M/s. Balaji Metals and Minerals Pvt. Ltd. has claimed an amount of Rs. 18,01,79,366/- along with the ante-lite, pendent-lite and post-lite interest on the awarded amount and with the cost of the arbitration arising out of Tender Notice No. 78/OMC/P&T dtd. 03.01.2007 for composite raising of iron ore at Khandabandh Iron ore mines. The matter is pending before the High Court of Orissa Arbitration Centre, Cuttack.

1801.79 -

XI Sri. Surya Narayan Kar, Secretary, Gandhamardan Mines Loading Agency has claimed an amount of Rs. 7,45,07,460/- along with interest and has prayed before the learned Arbitrator Sri. P.C Mishra, retired District Judge to extend the period of work of the claimant firm for another one year as per the terms and conditions of the Agreement dtd. 20.11.2013 entered between the claimant and OMC Ltd. for loading of iron ore to the buyer’s carriers and associated works by means of Pay Loader at Gandhamardan Iron ore mines. The matter is pending.

745.07 -

Sub Total 8599.12 6,342.78

B. Central Excise & Service Tax

i Show cause notice received for Barbil Region is for Rs.18.00 lakh . Demands raised by Central Excise and Customs Department alleging manufacturer of iron ore concentrate at Barbil for Rs.18.00 Lakh was rejected by Customs Excise & service Tax Appellate Tribunal, Eastern Bench, Kolkata. The Department has appealed in Supreme Court against the order of Tribunal.

18.00 18.00

ii 21 Nos. Show Cause Notices (SCN) received from Central Excise Authority for payment of Central Excise Duty for manufacturing of Iron Ore Concentrate at Daitari. Replies have been filed with the Department against each Show Cause Notice upto 30.09.2014 and the cumulative demand is Rs.45,101.15 lakh. Out of these 21 Nos. SCN, 14 Nos. of SCN for the period from 23.07.1996 to 28.02.2011 have been disposed off with a favorable order quashing the demand amounting to Rs.33362.94 lakh and 7 Nos. of SCN for the period from 01.03.2011 to 30.09.2014 has been confirmed by the Commissioner of Central Excise, Customs and Service Tax and demanded Rs.11738.21 lakh along with penalty of Rs.11738.21 lakh. The Corporation has filed the appeal before the CESTAT by depositing Rs.880.37 lakh on 22.09.2015. Further, 4 Nos. of SCN for the period from 01.10.2014 to 30.09.2016 has been received for Rs.11,059.86 Lakh.

33655.91 27,693.82

149

iii a) Asst. Commissioner of Central Excise, Customs & Service Tax , Balasore had demanded Excise Duty of Rs.102.06 lakh along with interest on shortage of 25,015 MT of Chrome Concentrate during 1996-97 to 2003-04 on account of loss during transport/handling/storage of Ore while transporting from COB Plant to Paradeep. The representation made by the Corporation to Central Board of Excise & Customs for waival of Excise Duty on such loss had been turned down. The Corporation has deposited Rs.40 lakh with Central Excise Authority, as per the Stay Order of Hon’ble High Court Orissa. The Corporation has filed an appeal before the Hon’ble Orissa High Court vide case no WPC No 3098/2008 for relief of the Duty which is still pending for disposal.

62.06 62.06

The Central Excise Authority have demanded further an amount of Rs.174.11 lakh for the period 2005-06 to 2009-10 for a quantity of 13303.305MT against which the Corporation has deposited Rs.56 lakh on 21.04.2014, as per the Stay Order of Hon’ble High Court Orissa. The Corporation has filed an appeal before the Hon’ble Orissa High Court vide case no WPC No 14385/2013 for relief of the Duty which is still pending for disposal.

118.11 118.11

iv The Central Excise Customs and Service Tax Authority have issued Demand cum Show Cause Notices for Rs. 26.59 Lakh towards Service Tax and Interest on alleged storage & handling charges of materials for the period 2004-05 to 2010-11. Against which the Corporation has filed appeals before CESTAT on 21.06.2016 and deposited Rs.0.68 lakh.

25.91 26.59

1. Period of Demand - April 2004 to September, 2008, SCN/Order No.- 10295-A, dated 03.08.2009, Service Tax & Penalty Rs.11.46 lakh, Present Status- Appeal set aside by the Commissioner (Appeal ) Central Excise , Customs and Service Tax, Bhubaneswar. The department has filed the appeal before CESTAT.

2. Period of Demand- October, 2008 to Septmber,2009 , SCN/Order No.16/2011-12 , Date -31.03.2012 , Service Tax Rs.4.59 lakh, Penalty Rs.4.59 lakh, Penalty Rs.0.05 lakh, Present Status- The demand has been confirmed by the Commissioner (Appeal), Central Excise & Service Tax, Bhubaneswar. The Corporation has filed the appeal before CESTAT by depositing Rs.0.46 Lakh on 21.06.2016

3. Period of Demand,- October,2009 to March,2010 , SCN/Order No.20/2011-12 Date-31.3.2012, Service Tax Rs.2.25 lakh, Penalty Rs.2.25 lakh, Penalty Rs.0.05 lakh, Present Status- The demand has been confirmed by the Commissioner (Appeal), Central Excise & Service Tax, Bhubaneswar. The Corporation has filed the appeal before CESTAT by depositing Rs.0.22 Lakh on 21.06.2016

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150

4. Period of Demand-2010-11 SCN/Order No1359, DATE-10.4.2012 Service Tax & Penalty Rs.2.03 lakh, Present Status- SCN has been dropped by Asst. Commissioner vide order dated 28.08.2014 against which the Department has gone for an appeal before Commissioner of Appeal which is pending.

Total: Service Tax & Penalty Rs.25.91 lakh

v 4 Nos. Demand Cum Show Cause Notice received from Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar, for manufacturing of Iron Ore Concentrate at Gandhamardan Region for the period from 01.03.2011 to 30.09.2014 and confirmed the demand of Rs.12271.74 lakh and penalty of Rs.12271.74 lakh towards Central Excise Duty total amounting to Rs.24543.48 lakh. The Corporation has filed the appeal before the CESTAT by depositing Rs.920.38 lakh on 16.05.2016. Further, 3 Nos. of SCN have been received for payment of Rs.2980.47 lakh for the period from 1.10.2014 to 31.03.2016.

26603.57 26,462.19

Sub Total 60483.56 54380.77

C. Commercial Tax

i “An Appeal is pending before Orissa Sales Tax Tribunal for the F.Y. 2002-03 (Sales to NINL) under OST, Act. The disallowance of exemption has resulted in a demand of Rs.29.96 Lakh out of which an amount of Rs.20.00 lakh has been deposited(Rs.15.00 lakh against the stay order of ACST (Appeal) dated 04.09.2006 and Rs.5.00 Lakh against stay order of Commissioner of Sales Tax, Odisha order dated 12.11.2008.) “

9.96 9.96

ii An Appeal is pending before Orissa Sales Tax Tribunal for the F.Y. 1996-97 (Export sale through MMTC & Interstate sales) under CST, Act for a demand of Rs.50.89 lakh. The Corporation has deposited Rs.25.00 Lakh ( Rs.17.00 Lakh on 29.03.2000 and Rs.8.00 Lakh on 16.10.2000) against the demand as directed by the Sales Tax Authority.

25.89 25.89

iii Demand has been raised by DCCT, Bhubaneswar for Rs.12,58,789.00, Rs.46,57,227.00 and Rs.1,92,07,939.00 by reopening the assessment against the utilisation of way bills for the period 2005-06, April,2006 to June,2006 and July,2006 to March,2007, respectively. Appeal has been confirmed by Addl. Commissioner, Commercial Tax, Odisha, South Zone for 2005-06 and April,2006 to June,2006 vide order dated 26.03.2015 and the matter relating to July 2006 to March,2007 is still pending. The Corporation has filed appeal by depositing, 20% of demanded tax amounting to Rs.12,80,529.00 on 29.09.2015 and Rs.20.00 Lakh on 19.03.2016 against the stay order dated 11.03.2016 and against the demand of Rs.12,58,789.00 refund of Rs. 5.00 Lakh of 2005-06 has been adjusted by the Sales Authority.

213.43 213.43

151

iv Assessment of ET for the period 01.04.2005 to 31.03.2008 is under dispute with a tax demand of Rs.38,23,743.00 and penalty Rs.76,46,480.00 totaling to Rs.1.14,71,229.00. Appeal has been filed before Orissa Sales Tax Tribunal on dtd.02.05.2013. The Corporation has deposited Rs.25.00 Lakh as per direction of Commissioner ,Commercial Tax ,Odisha, against the stay order.

89.70 89.70

v Against the demand of CST for Rs.40.90 lakh (Rs.25.20 lakh + Rs.15.70 lakh for the period 01.07.2006 to 31.03.2008, an amount of Rs.6.32 lakh relating to Q.E. 30.06.2006, has been adjusted vide order memo No.1952/CT dated 16.09.2010 by the Sales Tax Authority. Further, the Corporation has deposited Rs.10.56 lakh on 28.05.2010. The Corporation has filed an appeal before Orissa Sales Tax Tribunal against the order of 1st Appellate Authority passed on 02.05.2013.

24.02 24.02

vi Assessment of VAT for the period 01.04.2008 to 31.01.2012 has been completed and an amount of Rs.82,532.00 is under disopute.An appeal has been filed before Adl.Commissioner,Commercial Tax on 04.12.2013. The Demand was for Rs.2,47,596.00 (Tax Rs.82,532.00 and interest Rs.1,65,064.00) and the Corporastion has deposited Rs.16,506.00 on 03.12.2013.

2.31 2.31

vii Assessment of Entry Tax for the period 1.4.2008 to 31.1.2012 has been completed and an amount of Rs..24,29,344.00 is under dispute (Total Demand is Rs.91,69,807.00 including interest and penalty). An appeal has been filed before the Addl. Commissioner Commercial Tax, Odisha, South Zone on 4.12.2013 which has been disposed-off by reducing the demand to Rs.73,07,084.00 (Tax Rs.18,08,677.00 and interest & Penalty. Rs.54,98,407.00) order dated 26.03.2015 against which the Corporation has deposited Rs.2976100.00. .The Corporation filed an Appeal before Sales Tax Tribunal,Odisha which is yet to be disposed off.

43.31 49.78

viii Assessment of CST for the period 01.04.2008 to 31.12.2011 has been completed and an amaount of Rs.8,65,820.00 is under dispute. An appeal has been filed before Addl.Commissioner, Commercial Tax on 04.12.2013 , which has been set aside vide order dated 20.08.2015 against the demand of Rs.25,97,458.00 (Tax Rs.8,65,820.00 & Penalty Rs.17,31,638.00) and the Corporation has depositd Rs.4,32,000.00 (Rs.1,73,164.00 + Rs.2,58,836.00 ) on 12.06.2013 and 29.03.2014 as per the order of the Commissioner of Commercial Tax, Odisha.Re-assessment by the Sales Tax Dept. yet to be started

21.65 21.65

ix The dispute against the Entry Tax amount deposited by M/s.OSIL for the year 2004-05 has been set aside by the 1st appealate authority. The Dy. Commisssioner of Commercial Tax has to check the genuineness of Rs.5.29 lakh & Rs.8.19 lakh and to reassess according to the direction given in the appeal order.

13.48 13.48

AUDIT REPORT

152

x Demand has been raised by DCCT, Bhubaneswar for Rs.14,61,258.00 on utilisation of waybills for the period 01.04.2008 to 31.03.2009. The Corporation has deposited Rs.97,417.00 on 23.10.2013 and Rs.3,89,669.00 on 29.03.2017. The Addl. Commissioner, Commercial Tax, Odisha confirmed the demand. The Corporation has filed an appeal before the Sales Tax Tribunal.

9.74 13.64

xi “Demand has been raised by DCCT, Bhubaneswar for Rs.5,05,141.00O on utilisation of waybills for the period 01.04.2007 to 31.03.2008. An appeal has been filed before the Sales Tax Tribunal, Odisha and the Corporation has deposited Rs.33,680.00 on 12.06.2013 and Rs. 66,320.00 on 29.03.2014 against the stay order.

4.05 4.05

xii Assessment of VAT for the period 01.01.2012 to 31.03.2014 has been completed with a demand of Rs.1,36,890.00 (Tax Rs.45,630.00 and interest Rs.91,260.00), which is under dispute. An appeal has been filed before the Addl. Commissioner of Commercial Tax. Against the demand, the Corporation has deposited Rs.9,126.00 on 07.01.2016 ,Rs.9,000.00 on 20.06.2016 and Rs.16,874.00 on 28.03.2017..

1.02 1.19

xiii Assessment of Entry Tax for the period 1.1.2012 to 31.3.2014 has been completed with nil tax demand. However, there is a dispute towards interest and penalty is Rs.97,76,949.00. An appeal has been filed before Addl. Commissioner Commercial Tax, Odisha, South Zone ,which has been disposed off by the ACCT by reducing the demand to Rs.69,49,629.00. Against the demand which the Corporation has deposited Rs.8,80,535.00 on 07.01.2016.

60.69 88.96

xiv Assessment of CST for the period 01.01.2012 to 31.03.2014 has been completed and an amount of Rs.9,74,935.00 is under dispute. An appeal has been filed before the Addl.Commissioner, of Commercial Tax . and the demand has been reduced to Rs.11,92,024.00(Tax Rs.8,03,973.00 & Penalty Rs.3,88,051.00). The Cororation has depositd Rs.1,94,987.00 on 07.01.2016, Rs.1,95,000.00 on 20.06.2016 and Rs.4,32,202.00 on 18.11.2016.

3.70 25.35

xv Penalty of Rs.1,70,61,242.00 has been imposed by the sales tax authority for the period from 01.01.2012 to 31.03.2014 on delay payment of VAT on Works Contract. An appeal has been filed before the Commissioner of Comercial Tax , Odisa, and before the Sate Dispute Redressal Committe also.to waive out the penality since the VAT amount was duly paid long back.

170.61 170.61

Sub Total 693.56 754.02

153

D. Income Tax

1 Income Tax assessment has been completed till Asst.Year 2014-15. As against the demand of Rs.5,59,369.30 lakh the corporation has provided for and amount of Rs 5,15,232.86 lakh for the Assessment Years 2005-06 to 2016-17. Accordingly the balance amount of Rs.44136.44 lakh have been shown as contingent liability.

44,136.44 74,690.40

Sub Total 44136.44 74,690.40

E. Mining, Geology, Forest & Environment

i Royalty demanded by Director of Mining & Geology, Government of Odisha.

6.33 6.33

ii Demanded by Dy. Director of Mines, J.K. Road towards cost price of Chrome Concentrate found in excess of book balance vide letter No.4960 dtd.4.05.2011

663.48 663.48

iii A quantity of 80603.325 M.T. of Chrome ore of Kaliapani, which was seized by Director of Mines, has been disposed off. As per the order of Hon’ble Court of JMFC, J.K.Road, vide Misc. case No. 71 of 2009, the amount realized from sales of the ore has been kept in separate account along with interest earned on this amount.

8445.90 7,912.77

iv Demand of Deputy Director of Mines (April 2012) , Jajpur Road relating to the period from 2008-09 and 2009-10 towards Royalty of Rs.72 lakh and interest on Royalty Rs.115 lakh on the quantity of loss due to beneficiation of Ore in respect of Daitary Iron Ore Mines. In reply the Managments stand is that “The loss of royalty for the period FY 2008-09,2009-10 & 2010-11 has been communicated by the DDM,JK Road to the Mines Manager,Daitari vide letter No.1115 dated 19.4.2012 based on the audit report of the auditors of Steel & Mines Department Govt. of Odisha. As per the rule, interst on royalty can be charged if this demanded royalty is not paid within 30 days of the notice served. Whereas the interest of Rs.1.15 crore has been claimed on the royalty of Rs.0.72 crore before the communication of royalty demand i.e. vide their letter No.1043 dtd.12.4.2012. This contradicts the provision.The Steel & Mines guideline on calculation of royalty vide their letter No.5905 dated 7.9.2010 was applicable from August,2009.But this royalty due has been calculated in the same manner w.e.f. April,2008 in this demand letter.For this reason,the assessment has been disputed and no provision on royalty liability has been created. On seettlement of the issue, the amount payable, if any, will be accounted for in the year of settlement”. However, as directed by AG during the supplimentary Audit for the F.Y. 2013-14 this was shown as Contingent Liability.

187.00 187.00

AUDIT REPORT

154

v a) The Mining Officer, Keonjhar Circle for Rs.208.08 crore towards unlawful extraction/removal of 24.65 lakh MT of iron ore during 2007-08 and 2008-09 from Gandhamardan Block A iron mines. To counter this OMC approached Hon’ble Supreme Court for disposing of the disputed ore from Gandhamardan Mines & the sale of ore has been carried out as per the directive of the Court with the sale value being deposited with the State Government in due compliance to the Supreme Court directive. However, as directd by AG during the supplimentary Audit for the F.Y. 2013-14 this was shown as Contingent Liability.

20808.00 20,808.00

VI Due to non-availability of stacking space, the ore raised from Gandhamardan Block-B (for which OMC had all statutory clearances) was stacked in Gandhamardan Block-A (whose forest clearance is under process). However, the Statutory Authorities did not allow OMC to sell such ore from Gandhamardan Block-A. As a result, OMC has preferred an appeal to Hon’ble Supreme Court for allowing it to sell the ore. Honorable Supreme Court, had directed while disposing I.A. No.3402 in I.A.No.2378 in 2164 with I.A. no.3433 in Writ Petition (Civil) No (s). 202 of 1995, to take steps to sell all the dumped materials from the Gandhamardan Forest Area and deposit the sale proceeds in a Nationalized Bank and the amount can be released to OMC, only after obtaining Order from the Court.

a -do- (FY 2012-13) 402436.040 MT 6108.79 6,108.79

b -do- (FY 2013-14) 733609.410 MT 15846.65 15,846.65

c -do- (FY 2014-15) 1062554.670 MT 22687.44 22,687.44

d -do- (FY 2015-16)203110.620 MT 2904.48 2,904.48

-do- (FY 2016-17) 469280.630 MT 4034.91 -

vii The sale proceeds realized on sale of 415205.720 MT of total seized iron ore at Baliparbat Stockyard of Daitari Iron Ore Mines against which Court Case is pending.

a --do-- (FY2014-15) 137172.560 MT 5829.19 5,829.19

b --do-- (FY2015-16) 269400.510 MT 4386.18 4,386.18

c --do-- (FY2016-17) 8632.650 MT 114.67 -

viii Demand of DDM, Joda Circle, Keonjhar towrads balance amount of Royalty on auction proceeding for disposal of Seized Mineral at Barbil Region for 84497.2 MT.

28.75 -

Sub Total 92051.77 87340.31

F. Demand received from various DDMs and Mining Officers towards excess production

Gandhamardhan - A : Vide demand Letter no.MO/2029/12.09.2012, Reminder letter no.MO/348/21.02.2014, Stayed vide RA no.22/(94)/2014-RC-I dt.10.10.2014.

52100.43 52,100.43

155

Gandhamardhan - B : Vide demand Letter no.MO/2027/12.09.2012, Reminder letter no.MO/346/21.02.2014, Stayed vide RA no.22/(90)/2014-RC-I dt.10.10.2014.

111514.79 1,11,514.79

Koira-Kasira : Vide demand Letter no.DDM/5336/14.11.12, Reminder letter no.DDM/352/03.02.2014, Stayed vide RA no.22/(87)/2014-RC-I dt.10.10.2014.

2813.16 2,813.16

Koira-Bhanjapali : Vide demand Letter no.DDM/5109/20.10.2012, Reminder letter no.DDM/344/03.02.2014, Stayed vide RA no.22/(88)/2014-RC-I dt.10.10.2014.

1822.52 1,822.52

Kurmitar : Vide demand Letter no.DDM/5027/18.10.2012, Reminder letter no.DDM/354/03.02.2014, Stayed vide RA no.22/(100)/2014-RC-I dt.10.10.2014.

171808.91 1,71,808.91

Khandabandha : Vide demand Letter no.DDM/42501/09.11.2011 for Rs.51437.87 Lakh & Revised Demand Letter DDM/898/15.02.2014, Stayed vide RA no.22/(93)/2014-RC-I dt.10.10.2014.

16460.21 16,460.21

Seremda Bhadrasahi : Vide demand Letter no.DDM/6629/30.10.2012 for Rs.19452.15 Lakh & Revised Demand Letter DDM/949/15.02.2014, Stayed vide RA no.22/(96)/2014-RC-I dt.10.10.2014..

26168.95 26,168.95

Dubna : Vide demand Letter no.DDM/42661/9.11.2011 for Rs.16937.72 Lakh & Revised Demand Letter DDM/856/15.02.2014, Stayed vide RA no.22/(92)/2014-RC-I dt.10.10.2014..

7265.64 7,265.64

Sakradihi : Vide demand Letter no.DDM/42665/09.11.2011 for Rs.46181.53 & Revised Demand Letter DDM/853/15.02.2014, Stayed vide RA no.22/(97)/2014-RC-I dt.10.10.2014..

7951.67 7,951.67

Banspani : Vide demand Letter no.DDM/42625/09.11.2011 for Rs.6912.69 Lakh & Revised Demand Letter DDM/883/15.02.2014, Stayed vide RA no.22/(89)/2014-RC-I dt.10.10.2014.

1826.61 1,826.61

BPJ : Vide demand Letter no.DDM/42509/09.11.2011 for Rs.79946.03 Lakh & Revised Demand Letter DDM/889/15.02.2014, Stayed vide RA no.22/(91)/2014-RC-I dt.10.10.2014..

36915.01 36,915.01

Bangur : Vide demand Letter no.MO/354/21.02.2014, Stayed vide RA no.22/(95)/2014-RC-I dt.10.10.2014.

1514.49 1,514.49

Daitari : Vide demand Letter no.DDM/2462/08.07.2013, Delay in filling RA accepted vide RA no.22/(117)/2014-RC-I

120350.98 1,20,350.98

Roida - C : Vide demand Letter no.DDM/802/15.02.2014, under Sub Judice.

25,324.34 25,324.34

South Kaliapani : Vide demand Letter no.DDM/3800/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

325674.83 3,25,674.83

Kaliapani: Vide demand Letter no.DDM/3803/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

2842.06 2,842.06

AUDIT REPORT

156

Sukrangi : Vide demand Letter no.DDM/3802/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

2638.51 2,638.51

Kathpal : Vide demand Letter no.DDM/2018/31.10.2013, Reminder letter no.35/Mines/09.01.2015, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

76.07 76.07

Sub Total 915069.18 915069.18

G.I. Demand against NPV provided in FY 2012-13, written back in Financial Year 2015-16 as per MOEF & CC, GoI Circular No.1-51/2015-FC dt.01.04.2015 and based on opinion of Sri R. K. Mehta, Advocate, Supreme Court of India. But as DFO was not vacated the Demand Notice the same were shown under Contingent Liablity here.

Boula 1,947.11 1,947.11

Nishikhal 208.18 208.18

Dumuria China Clay 139.69 139.69

Roida D 776.39 776.39

G.II. Though based on the Demand of DFO provision was created in respect of Daitari & Rantha for 100% in FY 2012-13, but the Company had surrendered 50% area. As per direction of Supreme Court of India OMC had submitted an undertaking that if Supreme Court will direct OMC to pay the balance 50% then only OMC needs to pay the balance payment. As per obsrvation of P&AG during Suplementary Audit in Financial Year 2014-15 .The provision created for 50% was written back in Financial Year 2015-16 and shown under cotingent liabilty.

-

Daitari 2,112.75 2,112.75

Rantha 657.30 657.30

Sub Total 5,841.42 5,841.42

H. Demand against Stamp Duty under Section 3A of Indian Stamp (Odisha Amendement) Act, 2013 received from Distrct Collector which was stayed by Hon’ble High Court,Odisha,but it was not vacated shown under contingent Liability.

Sukrangi chromite mines: Demand Notice No.2500 dt.08.07.2013 55301.40 55,301.40

Gandhamardan Block-B: Demand Notice No.1022 dt.08.07.2013 65173.98 65,173.98

South kaliapani : Demand Notice No.2506 dt.08.07.2013 63519.32 63,519.32

Barbil Region: (Seremeda, Bhadrasahi & Barpada Kasia) Iron and Manganese mines Demand Notice No.1020 dt.08.07.2013

10833.36 10,833.36

Khandadhar: Demand Notice No.492 & 494 dt.08.07.2013 77333.25 77,333.25

Sub Total 2,72,161.31 2,72,161.31

157

I. Demand received against Wildlife Management Plan (Regional & Site Specific) payable only prior to Grant of Stage I Forest Clearance

S.G.B. K. Mines Demand Letter no.62/Mining dt.06.01.2015 by DFO, Keonjhar

434.95 434.95


215.63 215.63

Sub Total 650.58 650.58

J. Others

i Extra claim by State PWD towards construction of Building. 0.36 0.36

ii Interest demanded by Tahasildar, Barbil. 0.35 0.35

Sub Total 0.71 0.71

Total 13,99,687.65 14,17,231.47

AUDIT REPORT

158

Notes forming part of the financial statement 30. Financial Instruments (i) Capital Management :- The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan, coupled with long term and short term strategic investing plan. The funding requirements are met through equity, convertible and non- convertible debt securities, and other short term and long term borrowings. The Company’s policy is aimed at combination of short term and long term borrowings. The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company.

(ii) Disclosure on Financial Instruments This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments.

(a) Financial assets and liabilities The following table presents the carrying amount and fair value of each category of financial assets & liabilities as at March 31, 2017


Amortised cost

Derivative instruments

other than in hedging

relationship

Equity instruments classified as

fair value through other

comprehensive income

Classified as fair value

through statement of profit &

loss

Total Carrying

Value

Total Fair Value

Financial assets

Financial assetsInvestments - - - - - - Loans 1,11,837.12 - - - 1,11,837.12 1,11,837.12 Trade receivables

10,608.04 - - - 10,608.04 10,608.04

Other financial assets

1,53,630.10 - - - 1,53,630.10 1,53,630.10

Cash and bank balances

1,15,390.42 - - - 1,15,390.42 1,15,390.42

Total financial assets

3,91,465.68 - - - 3,91,465.68 3,91,465.68

Financial liabilitiesBorrowings - - - - - - Trade payables

24,582.86 - - - 24,582.86 24,582.86

Other financial liabilities

5,711.50 - - - 5,711.50 5,711.50

Total financial liabilities

30,294.36 - - - 30,294.36 30,294.36

(Rupees in Lakhs)

159

(Rupees in Lakhs)


Amortised cost



relationship

Equity instruments classified as

fair value through other

comprehensive income



loss

Total Carrying

Value

Total Fair Value

Financial assets

Financial assetsInvestmentsTrade receivables

6,604.21 - - - 6,604.21 6,604.21

Loans 1,38,664.83 - - - 1,38,664.83 1,38,664.83 Other financial assets

20,105.59 - - - 20,105.59 20,105.59


2,85,256.78 - - - 2,85,256.78 2,85,256.78


4,50,631.41 - - - 4,50,631.41 4,50,631.41

Financial liabilitiesBorrowings 73,700.00 - - - 73,700.00 73,700.00 Trade payables

28,458.08 - - - 28,458.08 28,458.08


6,223.39 - - - 6,223.39 6,223.39


1,08,381.47 - - - 1,08,381.47 1,08,381.47

AUDIT REPORT

160

(Rupees in Lakhs)

As at April 1, 2015

Amortised cost

Derivative instru-ments


relation-ship

Equity instru-ments clas-

sified as fair value through

other com-prehensive

income

Classified as fair val-

ue through statement of profit &

loss

Total Carry-ing Value

Total Fair Val-ue Financial

assets

Financial assetsInvestments - - 450.00 - 450.00 450.00 Trade receivables

3,643.15 - - - 3,643.15 3,643.15

Loans 86,811.91 - - - 86,811.91 86,811.91 Other financial assets

27,581.35 - - - 27,581.35 27,581.35


4,07,211.45 - - - 4,07,211.45 4,07,211.45


5,25,247.86 - 450.00 - 5,25,697.86 5,25,697.86

Financial liabilitiesBorrowings 1,50,200.00 - - - 1,50,200.00 1,50,200.00 Trade payables

14,876.26 - - - 14,876.26 14,876.26


8,933.53 - - - 8,933.53 8,933.53


1,74,009.79 - - - 1,74,009.79 1,74,009.79

(b) Financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company’s over-the-counter (OTC) derivative contracts.

161

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The main items in this category are investment in unquoted equity shares, measured at fair value.

(iii) The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

(c) Financial risk management

In the course of its business, the Company is exposed primarily to interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which covers the risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management framework aims to:

(i) Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

(ii) Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(Rupees in Lakhs) As at March 31, 2017

Carrying amount

Contractual cash flows

Less than 1 year

Between 1 - 5 years

More than 5 years

Non- derivative financial liabilitiesBorrowings including interest thereon

- - - - -

Trade payables 24,582.86 24,582.86 24,582.86 - - Other financial liabilities 5,711.50 5,711.50 5,711.50 - -

Total nonderivative financial liabilities

30,294.36 30,294.36 30,294.36 - -

(i) Market Risk : - Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(ii) Credit Risk :- Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

(iii) Liquidity Risk: Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

(d) The following table shows a maturity analysis of the anticipated cash flows including interest payable for the Company’s nonderivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value.

AUDIT REPORT

162

As at March 31, 2016Carrying amount


Less than 1 year

Between 1 - 5 years

More than 5 years


74,645.03 74,645.03 74,645.03 - -

Trade payables 28,458.08 28,458.08 28,458.08 - - Other financial liabilities 5,278.36 5,278.36 5,278.36 - - Total nonderivative financial liabilities

1,08,381.47 1,08,381.47 1,08,381.47 - -

(Rupees in Lakhs)

(Rupees in Lakhs)

As at April 1, 2015Carrying amount


Less than 1 year

Between 1 - 5 years

More than 5 years


1,53,328.38 1,53,328.38 1,53,328.38 - -


1,74,009.79 1,74,009.79 1,74,009.79 - -

163

(Rupees in Lakhs)

(Rupees in Lakhs)

Change in defined benefit obligations: Year ended March 31,2017

Year ended March 31,2016

(a) Obligation as at the beginning of the year 11,991.27 9,860.94 (b) Current service cost 504.71 446.30 (c) Interest cost 959.30 788.88 (d) Remeasurement (gains)/losses 940.14 1,253.95 (e) Benefits paid (1,400.67) (358.80)Obligation as at the end of the year 12,994.75 11,991.27

Change in plan assets: Year ended March 31,2017


(a) Fair value of plan assets as at beginning of the year

13,194.00 11,292.93

(b) Interest income 1,079.75 1,108.18 (c) Remeasurement gains/(losses) - - (d) Employers’ Contributions 280.76 1,151.69 (e) Benefits paid (1,400.67) (358.80)Fair value of plan assets as at end of the year 13,153.84 13,194.00

1. Defined Contribution Plana. Provident fundIn accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company

2. Defined benefit plansa. Retiring gratuityThe Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible

31. Employee Benefitsemployees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Gratuity Act 1972. Vesting occurs upon completion of five years of service. The Company makes annual contributions to Life Insurance Corporation of India. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

(i) The following table sets out the amounts recognized in the financial statements for retiring gratuity plans in respect of the Company.

AUDIT REPORT

164

Amount recognised in the balance sheet consists of:



(a) Fair value of plan assets as at end of the year

13,153.84 13,194.00

(b) Present value of obligation as at the end of the year

12,994.75 11,991.27

(c) Amount recognised in the balance sheet (i) Retirement benefit Asset - Non current 159.09 1,202.73

Costs recognised in the statement of profit and loss consist of:



(a) Service cost (i) Current service cost 504.71 446.30 (b) Net interest expense 959.30 788.88 Costs recognised in the statement of other comprehensive income consist of:(c) Actuarial gains and losses arising from changes in financial assumption

940.14 1,253.95

Costs recognised in the statement of other comprehensive incomeTotal costs recognised in the statement of profit & loss

2,404.15 2,489.13

(ii) The assumptions used in accounting for retiring gratuity are set out below:As at March 31,2017 As at March 31,2016 As at April 01,2015

(a) Discount rate 8% 8% 8%(b) Rate of escalation in salary 10% 10% 10%(iii) The weighted average duration of the defined benefit obligation as at March 31, 2017 is 60 years (March 31, 2016: 60 Years) (April 1, 2015: 60Years)

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

165


32. Related party transactions OMC is controlled by the government of Odisha. Government of Odisha holds 100% ownership interest in OMC including and as on March 31, 2017. The Company’s related parties principally consist of its subsidiaries, joint ventures, associates,

(Rupees in Lakhs) Transactions Subsid-

iariesAssociates and Joint ventures

Key Man-agement

Person-nel

Relatives of Key

Manage-ment

Personnel

Trust Govern-ment of Odisha

Sale of goodsFY 2016-17 16,493.16 FY 2015-16 16,110.00 Dividend paidFY 2016-17 50,000.00 FY 2015-16 50,000.00 Contributions madeFY 2016-17 2,373.60 FY 2015-16 3,150.42 Interest on loan givenFY 2016-17 2,284.19 FY 2015-16 1,080.35 Finance providedFY 2016-17 - FY 2015-16 17,000.00 Purchase of investmentsFY 2016-17 17.41 2,000.00 - - - FY 2015-16 - - - - - Provision for impairment of InvestmentsFY 2016-17 - FY 2015-16 450.00 RemunerationFY 2016-17 7.04FY 2015-16 12.89Outstanding receivablesFY 2016-17 22,817.77 FY 2015-16 23,438.05 FY 2014-15 2,518.68 Outstanding payblesFY 2016-17 183.62 FY 2015-16 175.42 FY 2014-15

Central Provident Fund and Gratuity Trust and Government of Odisha. The Company routinely enters into transactions with these related parties in the ordinary course of business at market rates and terms

AUDIT REPORT

166

33. Segmental Reporting: 2016-17

1) The company has considered Iron, Chrome and Manganese Ore as primary segment.Chrome ore includes chrome concentrate.

2) Domestic Sales And Export Sales are the two geographical segments.Since,all production and other facilities are located in India, segment assets except

export debtors are shown under domestic segment

3)Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities.Revenue,expenses, assets and liabilities

which relate to the enterprise as a whole and are not allocable on a reasonable basis, have been included under “Unallocated” segment.

Segmentwise Information

IRON CHROME MANGANESE UNALLOCATED CONSOLIDATED TOTAL

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

BUSINESS SEGMENTSA. RevenueSales (including Srap sales)

125798 83818 106840 70838 0 0 0 0 232639 154656

B. ResultSegment result 53981 26299 68506 48298 -2987 -3318 -16436 -9043 103063 62235Interest Expenses

843 3295

Interest Income 29216 39713Income Taxes 54412 36309Net Profit 77024 62345C. Other InformationSegment Asset 117958 109354 30459 26595 1164 1206 554679 562073 704259 699228Segment Liabilities

-28181 -28406 -15882 -11100 -1014 1239 -69326 -13817 -114402 -54562

Capital Expenditure

34835 76 10418 661 45 12 12521 62 57819 811

Depreciation 900 407 331 396 18 17 97 103 1347 923Non Cash Exp(Other than Dep.)

(Rupees in Lakhs)

167

GEOGRAPHIC SEGMENTS

DOMESTIC EXPORT CONSOLIDATED TOTAL

Current Year Previous Year Current Year Previous Year Current Year Previous YearA. Revenue

External Sales 232639 154656 0 232639 154656

B. Other InformationSegment Assets 704259 699228 0 0 704259 699228Capital Expenditure 57819 811 0 0 57819 811

ANNEXURE 8

168

Office of The Principal Accountant General (Economic and Revenue Sector Auditor) Odisha, Bhubaneswar

ToThe Managing Director, Odisha Mining Corporation Limited, Bhubaneswar.Sub : Comments of the comptroller & Auditor General of India Under Section 143(6), Companies Act, 2013 on the accounts of Odisha Mining Corporation Limited(SFS) for the year 2016-17.

Sir,

I enclose Comments of the Comptroller and Auditor General of India under section (b) of the Companies Act, 2013 on the accounts of the Odisha Mining Corporation Limited for 2016-17.

Three copies of the Annual Reports placed before the Annual General Meeting, Company may please be furnished to this office indicating the date of the meeting.

No:- E.S-I(T)/ Accts/OMC/16-17Date:- 07 September 17

Yours faithfully,Sd/-

(YASHODHARA RAY CHAUDHURI)

PRINCIPAL ACCOUNTANT GENERAL

Sachivalaya Marg, Bhubaneswar -751001. Tel:- 0674-2391583. Fax:- 0674 -2390880Email:- [email protected]

169

Comments of the Comptroller and Auditor General of India under section 143(6) (b) of read with section 129(4) of the Companies Act, 2013 on the Consolidated Financial Statement of The Odisha Mining Corporation Limited for the year ended 31 March 2017The preparation of Consolidated Financial Statements of The Odisha Mining Corporation Limited for the year ended 31 March 2017 in accordance with financial reporting framework prescribed under the Companies Act, 2013 is the responsibility of the Management of the Company. The Statutory Auditors appointed by the Comptroller and Auditor General of India under section 139 (5) read with 129 (4) of the Companies Act. are responsible for expressing opinion on the financial statements under Section 143 read with 129 (4) of Act. based on independent audit in accordance 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: 17 July 2017.

1. On behalf of the Comptroller and Auditor General of India have conducted a supplementary audit under Section 143 (6) (a) read with 129 (4) of the Act of the Consolidated Financial Statements of The Odisha Mining Corporation Limited for the year ended 31 March 2017. We conducted a supplementary audit of the financial statements of Odisha Thermal Power Corporation Limited and Odisha Mineral Exploration Corporation Limited for the year ended on that date but did not conduct supplementary audit of the financial statements of Lanjigarh Project Area Development Foundation. Nuagon Coal Company Limited and Mandakini B-Coal Corporation Limited. This supplementary audit has been carried out independently without access to the working papers of Statutory Auditors and is limited primarily to inquiries of the Statutory Auditors and Company personnel and selective examination of some of the accounting records. On the basis of my audit nothing significant has come to my knowledge which would give rise to any comment upon or supplementary to statutory auditors’ reports.

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

Sd/-(YASHODHARA RAY CHAUDHURI) PRINCIPAL ACCOUNTANT GENERALPlace: Bhubaneswar Date: 07.09.2017

ANNEXURE 8

170

Independent Auditors’ Report

To the Members of The Odisha Mining Corporation LimitedReport on the Consolidated Ind AS Financial Statements We have audited the accompanying consolidated Ind AS financial statements of The Odisha Mining Corporation Limited (“the Holding Company”) and its subsidiaries (collectively referred to as “the Company” or “the Group”), which comprise the consolidated balance sheet as at 31 March 2017, the consolidated statement of profit and loss (including other comprehensive income), the consolidated statement of cash flows and the consolidated statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (hereinafter referred to as “the consolidated Ind AS financial statements”).

Management’s Responsibility for the Consolidated Ind AS Financial Statements The Holding Company’s Board of Directors is responsible for the preparation of these consolidated Ind AS financial statements in terms of the requirements of the Companies Act, 2013 (hereinafter referred to as “the Act”) that give a true and fair view of the consolidated financial position, consolidated financial performance including other comprehensive income, consolidated cash flows and consolidated changes in equity of the Group in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder. The respective Board of Directors of the companies included in the Group are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance

of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the consolidated Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the consolidated Ind AS financial statements by the Directors of the Holding Company, as aforesaid.

Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the consolidated Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Holding

171

Company’s Board of Directors, as well as evaluating the overall presentation of the consolidated Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the consolidated Ind AS financial statements.

Emphasis of MatterWe draw attention to Note 6 (vi) of the consolidated financial statements, which states non conlosidation of eight joint venture and associates due to absence of audited financial statements. The effect of which on the consolidated financial statements cannot be ascertained on account of non availability of the financial statements. Our opinion is not modified in respect of this matter.

Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid consolidated Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the consolidated financial position of the Group, as at 31 March 2017 and its consolidated financial performance including other comprehensive income, its consolidated cash flows and the consolidated changes in equity for the year then ended.

Other MattersWe did not audit the financial statements / financial information of one subsidiary, and four jointly controlled entities, whose financial statements / financial information reflect total assets of Rs. (12824.22)Lakhs as at 31st March, 2017, total revenues of Rs. (2218.95) Lakhs and net cash outflows / (inflows) amounting to Rs. NiL lakhs for the year ended on that date, as considered in the consolidated financial statements. These financial statements/ financial information have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the consolidated financial statements, in so far as it relates to the amounts and disclosures

included in respect of these subsidiaries, and our report in terms of sub-sections (3) and (11) of Section 143 of the Act, insofar as it relates to the aforesaid subsidiaries, is based solely on the reports of the other auditors.

Our opinion on the consolidated financial statements, and our report on Other Legal and Regulatory Requirements below, is not Modified in respect of the above matters with respect to our reliance on work done and the reports of the other auditors and the financial statement/ financial information certified by the management.

Report on Other Legal and Regulatory Requirements 1. As required by Section 143(3) of the Act, we report, that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit of the aforesaid consolidated Ind AS financial statements.

(b) In our opinion, proper books of account as required by law relating to preparation of the aforesaid consolidated Ind AS financial statements have been kept so far as it appears from our examination of those books.

(c) The consolidated balance sheet, the consolidated statement of profit and loss, the consolidated statement of cash flows and consolidated statement of changes in equity dealt with by this Report are in agreement with the relevant books of account maintained for the purpose of preparation of the consolidated Ind AS financial statements.

(d) In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder.

(e) On the basis of the written representations received from the directors of the Holding Company as on 31 March 2017 taken on record by the Board of Directors of the

ANNEXURE 8

172

Holding Company and the reports of the statutory auditors of its subsidiary companies incorporated in India, none of the Directors of the Group companies incorporated in India is disqualified as on 31 March 2017 from being appointed as a Director of that company in terms of Section 164(2) of the Act.

(f ) With respect to the adequacy of the internal financial controls over financial reporting of the Group and the operating effectiveness of such controls, refer to our separate report in “Annexure A”; and

(g) with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the consolidated Ind AS financial statements disclose the impact of pending litigations on the consolidated financial position of the Group;

ii. provision has been made in the consolidated Ind AS financial statements, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivatives contracts;

iii. there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Holding Company and its subsidiary companies incorporated in India; and

iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016. Based on audit procedures and relying on the management representation we report that the disclosure are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.

For SRB & AssociatesChartered AccountantsFirm’s Registration Number: 310009E

Sd/-R S SahooPartner Membership Number: 053960

Bhubaneswar, 04/07/ 2017

173

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) In conjunction with our audit of the consolidated Ind AS financial statements of the Company as of and for the year ended 31 March 2017, we have audited the internal financial controls over financial reporting of The Odisha Mining Corporation Limited (“the Holding Company”) and its subsidiary companies which are companies incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls The Respective Board of Directors of the Holding Company and its subsidiary companies, which are companies incorporated in India, are responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors’ Responsibility Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) issued by ICAI and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable

to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that

Annexure - A to the Auditors’ Report

ANNEXURE 8

174

transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial

reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion In our opinion, the Holding Company and its subsidiary companies, which are companies incorporated in India, have, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For SRB & AssociatesChartered AccountantsFirm’s Registration Number: 310009E Sd/-R S SahooPartner Membership Number: 053960Bhubaneswar04/07/ 2017

175

Consolidated Balance Sheet as at March 31, 2017, 2016 and April 1, 2015

S l . No



current reporting

period March 31,

2017


the previous reporting

period March 31,

2016

Figures as at date of

transition to Ind AS April 1,

2015

ASSETS1 Non-current assets

(a) Property, Plant and Equipment 5 13,087.35 6,360.19 6,396.55 (b) Capital work-in-progress 5 5,630.22 9,321.27 6,134.10 (c) Other Intangible assets 5 (i) 34,850.41 - - (d) Intangible assets under development 5 (ii) 12,286.71 - - (e) Financial Assets (i) Investments 6 27,062.03 27,279.34 31,852.05 (ii) Loans 7 72,512.62 1,04,956.21 70,605.33 (f ) Deferred tax assets (Net) 8 - 4,283.59 3,793.85 (g) Other non-current assets 9 33,032.13 31,562.26 29,187.31

Total non-current assets 1,98,461.47 1,83,762.86 1,47,969.19 2 Current assets

(a) Inventories 10 56,878.90 59,077.12 42,078.07 (b) Financial Assets (i) Trade receivables 11 10,608.04 6,604.21 3,643.15 (ii) Cash and cash equivalents 12 10,000.98 2,175.97 6,498.30 (iii) Bank balances other than (ii) above 12 1,05,389.44 2,83,080.81 4,00,713.15 (iv) Loans 7 39,324.50 33,708.62 16,206.58 (v) Others 13 1,53,630.10 20,105.59 27,581.35 (c) Current Tax Assets (Net) 14 65,528.66 56,026.92 1,00,030.65 (d) Other current assets 15 15,977.79 47,067.48 53,897.23 Total Current Assets 4,57,338.41 5,07,846.72 6,50,648.48 TOTAL ASSETS 6,55,799.88 6,91,609.58 7, 98,617.67

(Rupees in Lakhs)

AUDIT REPORT

176

EQUITY AND LIABILITIES

Equity (a) Equity Share capital 16 3,145.48 3,145.48 3,145.48 (b) Other Equity 17 5,73,888.49 5,59,261.95 5,60,573.94 Total equity 5,77,033.97 5,62,407.43 5,63,719.42 LIABILITIES

1 Non-current liabilities(a) Provisions 18 12,010.39 11,125.79 11,231.57 (b) Deferred tax liabilities (Net) 8 10,110.63 - - Total non-current liabilities 22,121.02 11,125.79 11,231.57

2 Current liabilities(a) Financial Liabilities(i) Borrowings 19 - 73,700.00 1,50,200.00 (ii) Trade payables 20 24,582.86 28,458.08 14,876.26 (iii) Other financial liabilities 21 5,711.50 6,223.39 8,933.53 (b) Other current liabilities 22 25,810.54 9,273.16 49,551.34 (c) Provisions 18 539.99 421.73 105.55 Total Current Liabilities 56,644.89 1,18,076.36 2,23,666.68 TOTAL EQUITY AND LIABILITIES 6,55,799.88 6,91,609.58 7 ,98,617.67


In terms of our report attached. For and on behalf of the Board For SRB & Associates Chartered Accountants FRN-310009E SD/- SD/- SD/- SD/-Partner Company Secretary Director Finance Managing Director Chairman SD/-R. S. Sahoo Mem No : 053960


177

Consolidated Statement of Profit and Loss for the periods ended March 31, 2017 and 2016

(Rupees in Lakhs)

S l . No


Figures for the current


31, 2017

Figures for the previous


31, 2016 I Revenue from Operations 23 2,33,142.96 1,54,808.04 II Other Income 24 37,413.71 48,122.37 III Total Income (I + II) 2,70,556.67 2,02,930.41 IV Expenses

(a) Changes in inventories of finished goods, Stock-in -Trade and work-in-progress”

25 1,794.08 (17,037.32)

(b) Employee benefits expense 26 25,064.91 16,009.09 (c) Finance costs 27 882.60 3,324.37 (d) Depreciation and amortization expense 5 7,643.67 922.58 (e) Excise duty 811.22 165.77 (f ) Other expenses 28 1,02,311.05 99,721.15 Total expenses (IV) 1,38,507.53 1,03,105.64

V Profit/(loss) before exceptional items and tax (III - IV) 1,32,049.14 99,824.77 VI Exceptional Items - - VII Profit/(loss) before tax (V - VI) 1,32,049.14 99,824.77 VIII Share of profit/(loss) of Associates - - IX Share of profit/(loss) of Joint Ventures (2,217.31) (4,121.99)X Tax expense:

(i) Current tax 42,692.10 33,071.76 (ii) Deferred tax 14,719.59 (55.79)(iii) Taxes of earlier years (3,000.00) 3,000.00

54,411.69 36,015.97 XI “Profit/ (Loss) for the period from

continuing operations (VII+VIII+IX-X)” 75,420.14 59,686.80

XII Profit / (loss) from discontinued operations - - XIII Tax expense of discontinued operations - - XIV Profit / (loss) from discontinued operations (after

tax) (XIII - XII) - -

XV Profit / (loss) for the period (XI + XIV) 75,420.14 59,686.80

AUDIT REPORT

178

XVI Other Comprehensive Income (614.78) (819.98)A (i) Items that will not be reclassified to profit or loss(a) Remeasurement of defined employee benefit plans

(940.14) (1,253.95)

(ii) Income tax relating to items that will not be reclassified to profit or loss

(325.36) (433.97)

B (i) Items that will be reclassified to profit or loss - - (ii) Income tax relating to items that will be reclassified to profit or loss

- -

XVII Total Comprehensive Income for the period (XV+XVI)(Comprising Profit/ (Loss) and Other Comprehensive Income for the period)

74,805.37 58,866.82

XVIII Earnings per equity share (for continuing operation): (1) Basic (Rs) 2,378.19 1,871.47 (2) Diluted (Rs) 2,378.19 1,871.47

XIX Earnings per equity share (for discontinued operation): (1) Basic (Rs) - - (2) Diluted (Rs) - -

XX Earnings per equity share (for discontinued and continuing operations): (1) Basic (Rs) 2,378.19 1,871.47 (2) Diluted (Rs) 2,378.19 1,871.47




179

Consolidated Statement of Cash Flow for the periods ended March 31, 2017 and 2016

Particulars For the period ended

March 31, 2017

For the period ended March 31, 2016

(A) Cash flows from operating activities:Profit before taxes 1,32,049.14 99,824.77 Adjustments for: Finance costs recognised in profit or loss 882.60 3,324.37 Investment income recognised in profit or loss (29,215.77) (39,713.40)Gain on disposal of property, plant and equipment (16.38) (13.77)Depreciation and amortisation of non-current assets 7,643.67 922.58 Provision for write down of inventories (439.08) (149.58)Share of Profit of Associates and Joint Ventures (2,217.31) (4,121.99)Provision for Impairment of Investments - 450.72 Operating profit before working capital changes

Movements in working capital:Increase in trade and other receivables (3,075.59) (3,293.37)(Increase)/decrease in inventories 2,637.30 (16,849.47)(Increase)/decrease in other assets 29,619.81 4,454.81 (Decrease)/ Increase in trade and other payables (3,442.10) 13,055.02 Increase/(decrease) in provisions 388.08 (609.58)(Decrease)/increase in Mine Closure Liability - - (Decrease)/increase in other liabilities 16,537.38 (40,278.18)

Cash generated from operations 1,51,351.75 17,002.93 Taxes Paid (49,519.21) 7,498.01 Net Cash Flow from/(used in) Operating Activities 1,01,832.55 24,500.94

(B) Cash flows from investing activities:Payments for property, plant and equipment (57,819.10) (4,074.72)Sale of property, plant and equipment 18.61 15.11 Payments to acquire financial assets 217.31 4,121.99 Interest received 35,663.01 47,521.47 Repyament by Employees & Others 107.71 33.24 Repyament by Employees & Others 26,720.00 - Payment for Loans to others - (51,886.16)Payment for Investmen in FD 36,791.37 1,17,632.34 Net Cash Flow from/(used in) Investing Activities 41,698.91 1,13,363.27

(Rupees in Lakhs)

AUDIT REPORT

180

(C) Cash flows from financing activities:Repayment of borrowings (73,700.00) (76,500.00)Dividends paid on redeemable cumulative preference sharesDividends paid to owners of the Company (60,178.82) (60,178.82)Interest paid (1,827.63) (5,507.72)

Net Cash Flow from/(used in) Financing Activities (1,35,706.45) (1,42,186.54)

Net Increase/(decrease) in cash or cash equivalents 7,825.01 (4,322.33)

Cash and cash equivalents at the beginning of the year

2,175.97 6,498.30

Cash and cash equivalents at the end of the year 10,000.98 2,175.97

Notes forming part of the financial statement Note No. 1-33



181

Consolidated Statement of Changes in Equity for the periods ended March 31, 2017 and 2016

A. Equity Share Capital

B. Other Equity

Balance as at April 1, 2015 Changes in equity share capital

during the yearBalance as at March 31, 2016

3,145.48 - 3,145.48

Balance as at April 1, 2016 Changes in equity share capital

during the yearBalance as at March 31, 2017

3,145.48 - 3,145.48

Reserves and SurplusCapital reserve General Reserve Retained earnings

Balance as at April 1, 2015 1,770.69 2,15,643.20 3,43,160.05

Profit for the year 59,686.80 Other Comphrehensive Income (819.98)Total Comprehensive Income 58,866.82 Dividend (including tax on dividend) (60,178.82)Transfer of profits of the year to General Reserve 6,234.47 (6,234.47)Balance as at March 31, 2016 1,770.69 2,21,877.67 3,35,613.58 Profit for the year 75,420.14 Other Comphrehensive Income (614.78)Total Comprehensive Income 74,805.37 Dividends (60,178.82)Transfer of profits of the year to General Reserve 8,925.17 (8,925.17)Balance as at March 31, 2017 1,770.69 2,30,802.84 3,41,314.96 Notes forming part of the financial statement Note No. 1-33



Rupees In Lakhs

Rupees In Lakhs

(Rupees in Lakhs)

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1. Notes to AccountsGeneral Information

The Odisha Mining Corporation Limited (“OMC” / “the Company”) was incorporated with the objective of harnessing the mineral wealth of the State of Odisha through exploration, extraction as well as value addition. The major minerals mined by OMC are chrome, iron and manganese ore which cater to the requirement of mineral based industries such as steel, sponge iron, pig iron, Ferro-manganese, Ferro-chrome, etc. OMC has been growing steadily over these years and today it stands as the largest State PSU in the mining sector of the country. OMC has been classified as a “Gold” Category State PSU”, having an Authorized Capital of Rs. 100crore where Hon’ble Governor of Odisha holds 99.997% of share capital. The headquarters of OMC is located at Bhubaneshwar.The Company is now taking steps to start bauxite mining.

OMC together with its subsidiaries, joint ventures and associates is herein after referred to as the “Group”.

The functional and presentation currency of the Groupis Indian Rupee (“INR”) which is the currency of the primary economic environment in which the Group operates.

The Group’s consolidated financial statements are approved for issue by the Company’s Board of Directors on June 29, 2017

Statement of Compliance

In accordance with the notification issued by the Ministry of Corporate Affairs, the Group has adopted Indian Accounting Standards (referred to as “Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1 April, 2016, with a transition date of 1 April 2015These consolidated financial statements for the year ended 31 March 2017 are the Group’s first financial statements prepared in accordance with Ind AS. Prior to adoption of Ind AS, the Group had been preparing its financial statements in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 and other generally accepted accounting principles in India (‘together referred to as “Indian GAAP”) for all periods up to and including the year ended 31 March 2016. During the first-time adoption, the following optional exemptions are availed by the Group apart from the mandatory exemption:

y Deemed cost for property, plant and equipment and intangible assets - The Group has elected to continue with the carrying value of all of its property, plant and equipment’srecognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

y Leases -The Group has elected to apply paragraphs 6-9 of the Appendix C of Ind AS 17 “Determining whether an Arrangement contains a Lease” to determine whether an arrangement contains a lease prospectively and not for the arrangement existing as on transition date.

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y Investments in joint ventures and associates - The Group has elected to continue with the carrying value of all of its investment in joint venture recognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

y Fair value measurement of financial assets or financial liabilities at initial recognition – The Group has elected to apply the requirements paragraph B5.1.2A (b) of Ind AS 109 prospectively to transactions entered into on or after the transition date

2. Significant Accounting PoliciesBasis of preparation

The consolidated financial statements of the Group have been prepared in accordance withInd AS and relevant provisions of the Companies Act, 2013.

The Group has adopted all the applicable Ind AS and such adoption was carried out in accordance with Ind AS 101 – First Time Adoption of Indian Accounting Standards. The Group has transited from Indian GAAP which is its previous GAAP, as defined in Ind AS 101 with necessary disclosures relating to reconciliation of Shareholders’ equity and the comprehensive net income as per Previous GAAP to Ind AS.

The consolidated financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be measured at fair values by Ind AS. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

All assets and liabilities have been classified as current or non-current as per Group’s operating cycle and other criteria set out in Schedule-III of the Companies Act 2013. Based on the nature of business, the Group has ascertained its operating cycle as 12 months for the purpose of Current or noncurrent classification of assets and liabilities.

Adoption of New and Revised Standards

Standards issued but not yet effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ‘Statement of cash flows’ and Ind AS 102, ‘Share-based payment.’ These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ‘Statement of cash flows’ and IFRS 2, ‘Share-based payment,’ respectively. The amendments are applicable to the Group from April 1, 2017. Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

The Group is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

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Use of estimates These consolidated financial statements have been prepared based on estimates and assumptions in conformity with the recognition and measurement principles of Ind AS.

The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods affected.

Key sources of estimation uncertainty at the reporting date, which may cause a material adjustment to the carrying amounts of assets and liabilities for future years are provided in Note-3

Significant judgments and estimates relating to the carrying amounts of assets and liabilities, while evaluating/assessing useful lives of property, plant and equipment, impairment of property, plant and equipment, impairment of investments, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.

Basis of consolidation

OMC consolidates entities which it owns or controls. The consolidated financial statements comprise the financial statements of the Company, its subsidiary. Control exists when the parent has power over the entity, is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns by using its power over the entity. Power is demonstrated through existing rights that give the ability to direct relevant activities, those which significantly affect the entity’s returns. Subsidiaries are consolidated from the date control commences until the date control ceases.

The financial statements of the Group companies are consolidated on a line-by-line basis and intra- group balances and transactions including unrealized gain/loss from such transactions are eliminated upon consolidation. These financial statements are prepared by applying uniform accounting policies in use at the Group.

Joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. The investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the acquisition date.

Associates are entities over which the Group has significant influence but not control. Investments in associates are accounted for using the equity method of accounting. The investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the acquisition date.

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Property, Plant and EquipmentBasis of consolidation

Property, plant and equipment held for use in the production or/ and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any subsequent accumulated depreciation and impairment loss, if any.

Initial MeasurementThe initial cost comprises of purchase price, non-refundable purchase taxes, other directly expenditure attributable to acquisition, borrowing cost, if any, incurred for bringing the assets to its location and condition necessary for it to be capable of operating in the manner intended by the management, and the initial estimates of the present value of any asset restoration obligation or obligatory decommissioning and dismantling costs.

Expenditure incurred on development of freehold land is capitalized as part of the cost of the land

In case of self-constructed assets, cost includes the costs of all materials used in construction, direct labour, allocation of overheads, directly attributable borrowing costs, if any.

Spare parts having unit value of more than Rs.5 lakh that meets the criteria for recognition as Property, plant and equipment are recognized as Property, plant and equipment.

1.1 Subsequent expenditureExpenditure on major maintenance or repairs including cost of replacing the parts of assets and overhaul costs where it is probable that future economic benefits associated with the item will be available to the Group, are capitalized and the carrying amount of the item so replaced is derecognized. Similarly, overhaul costs associated with major maintenance are capitalized and depreciated over their useful lives where it is probable that future economic benefits will be available and any remaining carrying amounts of the cost of previous overhauls are derecognized. All other costs are expensed as incurred

Physical verification of Fixed Assets are undertaken by the management at a reasonable interval and in a phased manner so as to complete 100% verification in a cycle of three years. The discrepancies noticed, if any, are accounted for in the year in which such differences are foundCapital work-in-progress Assets in the course of construction for production and/or supply of goods or services or administrative purposes, or for purposes not yet determined, are included under capital work in progress and are carried at cost, less any recognized impairment loss. Such capital work in progress, is transferred to the appropriate category of property, plant and equipment when completed or starts operating as per management’s intended use whichever is earlier.

Expenses for assessment of new potential projects incurred till and for the purpose of making investment decision are charged to revenue. Expenditure incurred for projects after investment decisions are accounted for under capital work in progress and capitalized subsequently.

In respect of construction of labour tenements in mines, differencebetween the expenses incurred and subsidy from Government / other agencies is charged / credited to revenue account during the year. The supervision charges incurred thereon not being material is included in Other Expenses

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DepreciationDepreciation on assets are providedfor from the dates, the assets are available for their intended use and are spread over their estimated useful economic lives or, in the case of leased assets (including leasehold improvements), over the lease period if shorter . The lease period is considered by excluding any lease renewals options, unless the renewals are reasonably certain. Depreciation on assets are provided on a written down value basis over the useful life of the asset in the manner prescribed under Schedule II of the Companies Act, 2013. The estimated useful lives and residual values are reviewed at each year end, and changes in estimates if any, are accounted for on a prospective basis.

Each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of that item is depreciated separately if its useful life differs from the main asset.

Property, plant and equipment which are subject to componentization, comprises of main assets, componentized assets and remainders, if any. The Group has chosen a benchmark of `1 crore or above for the purposes of componentization and accordingly through a technical evaluation, have assessed and assigned the useful life of such assets. The useful life of remainders, if any carry the life of main assets.

The estimated useful lives of the main assets considered for depreciation are described hereunder:

Buildings- 30 to 60 yearsRoads,Bridges,Culverts & Helipads- 10 to 30 yearsPlant & Machinery- 8 to 15 yearsRailway Sidings- 15 yearsVehicles- 8 to 10 yearsFurniture, Fixtures and Office Equipment’s- 3 to 10 yearDisposal of assetsAn item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in statement of profit and loss.

Deemed cost on transition to Ind ASFor transition to Ind AS, the Group has elected to continue with the carrying value of all its property, plant and equipment recognized as of 1 April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

Investment property

Investment properties held to earn rentals or for capital appreciation or both are stated in the balance sheet at cost, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Any gain or loss on disposal of investment property is determined as the difference between net disposal proceeds and the carrying amount of the property and is recognized in the statement of profit and loss. Transfer to, or from, investment property arerecognized at the carrying amount of the property.

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Intangible Assets (Other than goodwill)

Intangible assets acquired separately Intangible assets acquired are reported at cost less accumulated amortization and accumulated impairment losses. Intangible assets having finite useful lives are amortized over their estimated useful lives, whereas intangibles assets having indefinite useful lives is not amortized. The estimated useful life and amortization method are reviewed at the end of each annual reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Internally generated intangible assets – research and development expenditure Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internally generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if all the conditions stipulated in Ind AS 38 – Tangible Assets is met

The amount initially recognized for internally generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset is recognized. Where no internallygenerated intangible asset can be recognized, development expenditure is recognized in the statement of profit and loss in the period in which it is incurred.

Subsequent to initial recognition, internallygenerated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets acquired separately.

Mining RightsThe amount incurred to acquire mining rights which includes NPV, stamp duty, registration fees, afforestation and land alienation charges etc. are capitalized as “Mining rights” in the year in which they are incurred.

Capitalized mining rights are amortizedover the period of mining lease and are subject to impairment review.

The amount paid on renewal of Mining Leases which is leviable on the date of execution of renewal deed are apportioned equally on the balance of the lease period from the date of execution

SoftwareOperating software acquired separately (RDBMS,ERP/SAP etc.) are capitalized as intangible asset (Software) where they are clearly linked to long term economic benefits for the Group. They are measured initially at purchase cost and then amortized on a straight-line basis over their estimated useful lives.

Derecognition of intangible assetsAn intangible asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognized in the statement of profit and loss when the asset is derecognized.

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Investment property

Impairment of tangible and intangible assetsAt the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that the carrying amount of those assets may not be recoverable through continuing use. If any such indication exists, the recoverable amount (i.e. higher of fair value less cost to sell and the value-in-use) of the asset is reviewed in order to determine the extent of impairment loss (if any).Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount and the difference between the carrying amount and recoverable amount is recognized as impairment loss in the statement of profit or loss.

Intangible assets with an indefinite useful life and intangible assets not yet available for use are tested for impairment annuallyand whenever there is an indication that the asset may be impaired.

Non-current assets held for sale and discontinuedoperations

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is only met when the sale is highly probable and the asset, or disposal group, is available for immediate sale in its present condition and is marketed for sale at a price that is reasonable inrelation to its current fair value. The Group must also be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

Foreign currency transactions and translation

The financial statements of the Group are presented in Indian rupees (“INR”), which is the functional currency of the Group and the presentation currency for the financial statements.

In preparing the financial statements, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at the end of the reporting period. Non-monetary items are measured at historical cost.

Exchange differences arising on monetary items are recognized in the statement of profit and loss in the period in which they arise

Provisions and contingencies

Provisions are recognized when theGroup has a present obligation (legal or constructive) as a result of a past event,which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated.

Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Provisions are measured on a discounted basis when it is considered appropriate. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money in that jurisdiction and the risks specific to the liability.

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Constructive obligation is an obligation that derives from an entity’s actions where:

a. by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and

b. As a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities

Onerous contractsA provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

RestructuringsA restructuring provision is recognized when there is a detailed formal plan for the restructuring which has raised a valid expectation in those affected. The measurement of a restructuring provision includes only the direct expenditures arising from the restructuring.

Restoration, rehabilitation and decommissioningAn obligation to incur restoration, rehabilitation and environmental costs arises when environmental disturbance is caused by the development or ongoing production of a mine and other manufacturing facilities. The Group has recognized the obligated restoration, rehabilitation and decommissioning liability as mandated in the land document on which the Plant property and equipment is erected.

Such costs, discounted to net present value, are provided for and a corresponding amount is capitalized at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged to the statement of profit or loss over the life of the operation through the depreciation of the asset and the unwinding of the discount on the provision. The cost estimates are reviewed periodically and are adjusted to reflect known developments which may have an impact on the cost estimates or life of operations. The cost of the related asset is adjusted for changes in the provision due to factors such as updated cost estimates, changes to lives of operations, new disturbance and revisions to discount rates. The adjusted cost of the asset is depreciated prospectively over the lives of the assets to which they relate. The unwinding of the discount is shown as finance and other cost in the statement of profit or loss.

Environmental liabilitiesEnvironment liabilities are recognized when the Groupbecomes obliged, legally or constructively to rectify environmental damage or to perform remediation work.

Litigation Provision is recognized once it has been established that the Group has a present obligation based on consideration of the information which becomes available up to the date on which the Group’s financial statements are finalized.

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Contingent LiabilitiesContingent liabilities arising from past events, the existence of which would be confirmed only on occurrence or non-occurrence of one or more future uncertain events, not wholly within the control of the Group or contingent liabilities where there is a present obligations but it is not probable that economic benefits would be required to settle the obligations are disclosed in the financial statements unless the possibility of any outflow in settlement is remote.

Contingent Assets Contingent assets are not recognized in the financial statement, but are disclosed where an inflow of economic benefits is probable.

Leases The Group determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the Group in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.

Leases are classified as finance leases whenever the terms of the lease transfers substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lesseeOperating lease: Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

Finance lease: Finance leases are capitalized at the commencement of lease, at the lower of the fair value of the property or the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income over the period of the lease.

The Group as lessorOperating lease: Rental income from operating leases is recognized in the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight line basis over the lease term.

Finance lease: When assets are leased out under a finance lease, the present value of the minimum lease payments is recognized as a receivable. The difference between the gross receivable and the present value of the receivable is recognized as unearned finance income. Lease income is recognized over the term of the lease using the net investment method before tax, which reflects a constant periodic rate of return.

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Inventories Inventories i.e. ore stock, stores and spares (including loose tools & implements), work in progress and finished goods are valued at lower of cost and net realizable value.

Cost of inventories comprises all costs of production/purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the price at which the inventories can be realized in the normal course of business after allowing for the cost of conversion from their existing state to a finished condition and for the cost of marketing, selling and distribution.

The basis of determining the cost is as follows:Ore Stock- Periodic weighted average costStores & Spares- Moving weighted average costStock in transit- At cost

Work in progress and finished goods- Material cost plus appropriate share of direct cost, overheads and levies other than those subsequently recoverable by the Group from the taxing authorities

(A) The quantity of sub-grade and incidental waste of Iron Ore mines is booked to production on effecting Sales and is not considered for calculation of cost of production for closing stock valuation purpose.

(B) The quantity of sub-grade Chrome Ore out of the South Kaliapani Mines old dumps booked to Production on the basis of transferred quantity for beneficiation to COBP / Sales and is not considered for calculation of cost of production for closing stock valuation purpose.

Non-stock items such as medicine, printing & stationery, crèche and canteen stores are charged to consumption account in the system at the time of purchase. Basing on physical verification report, value of such stock (on purchase cost) at the year end is fed into the system through adjustment entry while finalizing the Annual Accounts. The consumption account of such stores is reduced to the extent of physical stock value created in the system.

ROM (Run of Mines):

ROM (Run of Mines) is the immediate excavated material from the mother earth which is predominantly ore with certain amount of impurities and which requires further processing to bring to the form of saleable ore. Hence, ROM is not accounted for under ore production.

Any stores items not issued for three years are considered as slow moving stores items and 50% of value of such items are provided in the accounts with effect from Financial Year 2016-17

Any stores items not issued for five years are considered as non-moving stores items and 100% of value of such items are provided in the accounts with effect from Financial Year 2016-17In absence of detailed calculation of ore reserve, its grade, associated rocks and materials etc. as required under Rule 43 of Mineral Conservation and Development Rules, 1998, no provision is being made for backlog / excess of quantity of waste material. Expenditure on cutting and removing of overburden is accounted for as and when incurred

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Trade receivable

Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary course of business. If collection is expect to be collected within a period of 12 months or less from the reporting date (or in the normal operating cycle of the business if longer), they are classified as current assets otherwise as non-current assets.

Trade receivables are measured at their transaction price unless it contains a significant financing component in accordance with Ind AS 18 (or when the entity applies the practical expedient) or pricing adjustments embedded in the contract.

Trade receivables which arise from contracts where the sale price is provisional and revenue model have the character of a commodity derivative are measured at fair value. The fair value is measured at forward rate and recognized as an adjustment to revenue.

Loss allowance for expected life time credit loss is recognized on initial recognition.

Financial Instruments

Financial assets and liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument. Financial assets and liabilities are initially measured at fair value. Transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liabilities ( other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liabilities.

Financial Assets

Cash or Cash EquivalentThe Group considers all short term Bank deposits, which are readily convertible in to known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consists of balances with banks which are unrestricted for withdrawal and usage

For the purposes of the Cash Flow Statement, cash and cash equivalents is as defined above, net of outstanding bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.

The balance lying in the Stale Cheques Account” is transferred to “Other Receipts Accounts” after the expiry of the period of limitations i.e. three years from the date of expiry of the validity period of the cheque with the approval of RO Head/ Finance Head at Ros and HO respectively. This policy has been effective from 1st April, 2015.

Financial assets at amortized cost Financial assets are subsequently measured at amortized costs if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at fair value through other comprehensive income(FVTOCI)Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and contractual term of the financial assets give rise on specified days to cash flows that are solely payment of principals and the interest on principal amount outstanding.

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Financial assets at Fair value through Profit or loss (FVTPL)Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive item on initial recognition. The transaction cost directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in the statement of profit or loss.

Financial liabilities and equity instruments issued by the Group

Financial LiabilitiesTrade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost, using the effective interest rate method.

Other financial liabilities are measured at amortized cost using the effective interest method.

Equity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

Compound instrumentsThe component parts of compound instruments (convertible instruments) issued by the Group are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or at the instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently re-measured.

Financial guarantee contract liabilitiesFinancial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of:

y the amount of the obligation under the contract, as determined in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets; and

y the amount initially recognized less, where appropriate, cumulative amortizationrecognized in accordance with the revenue recognition policies.

Derecognition of financial assetsThe Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity

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Impairment of financial assets At each reporting date, the Group assess whether the credit risk on a financial instrument has increased significantly since initial recognition.

If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. If, the credit risk on that financial instrument has increased significantly since initial recognition, the Group measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses.

The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date is recognized as an impairment gain or loss in the statement of profit and loss.

Derecognition of financial liabilityThe Groupderecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire.

Offsetting financial instrumentsFinancial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business.

Derivatives Derivatives are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedging relationship and the nature of the hedged item.

Borrowing cost

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. The Group considers a period of twelve months or more as a substantial period of time.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in the statement of profit and loss in the period in which they are incurred.

Accounting for government grants

Government grants are recognized when there is reasonable assurance that we will comply with the conditions attaching to them and that the grants will be received.

Government grants are recognized in the statement of profit and loss on a systematic basis over the periods in which the Grouprecognizes as expenses the related costs for which the grants are intended to compensate. Government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized in the balance sheet by setting up the grant as deferred income.

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Other government grants (grants related to income) are recognized as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of providing immediate financial support with no future related costs are recognized in the statement of profit and loss in the period in which they become receivable.

Grants related to income are presented under other income in the statement of profit and loss except for grants received in the form of rebate or exemption which are deducted in reporting the related expense.

The benefit of a government loan at a below-market rate of interest is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

Employee Benefits

Short-term employee benefitsA liability is recognized for benefits accruing to employees in respect of wages and salaries, short term compensatedabsences etc. in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid.

Post-employment benefitsi. Defined contribution plansA defined contribution plan is a plan under which the Group pays fixed contributions to a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all the employees the benefits relating to employee service in the current and prior periods. Payment to defined contribution plans are recognised as an expense when the employees have rendered service entitling them for such contributions.

ii. Defined benefit plansFor defined benefit retirement schemes the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each balance sheet date. Re-measurement gains and losses of the net defined benefit liability/ (asset) are recognized immediately in other comprehensive income. The service cost, net interest on the net defined benefit liability/ (asset) is treated as a net expense within employment costs.

Past service cost is recognized as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are recognized, whichever is earlier.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined-benefit obligation as reduced by the fair value plan assets.long-term employee benefitsLiabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit retirement plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to the statement of profit and loss in the period in which they arise. These obligations are valued annually by independent actuaries.

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Income Taxes Tax expense for the year comprises current and deferred tax.

Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period

Deferred tax Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences. In contrast, deferred tax assets are only recognized to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realized based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to cover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.

Current and deferred tax are recognized as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognized in other comprehensive income or directly in equity

Revenue recognition and Other income

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue

can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts, taking into account contractually defined terms and excluding taxes or duties collected on behalf of the government

Sales of GoodsThe Group derives revenue principally from sale of mineral ores. Revenue from the sale of goods is recognized when thesignificant risks and rewards of ownership have been transferred to the buyer. No revenue is recognized if there are significant uncertainties regarding recovery of the amount due, associated costs or the possible return of goods.

197

Dividend incomeDividend income from investments is recognized when the shareholder’s rights to receive payment have been established.

Interest incomeInterest income from a financial asset is recognized when it is probable that the economic benefits will flow to the Group and the amount of income can be measured reliably. Interest income is accrued on a time proportion basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

Income from Incentives from Government AgenciesGovernment Grants, if any, received during the year against any project or Scheme implemented during that year is credited to the project or Scheme cost. If such Grant is received at a later year after completion of the project, the same is treated as other income in the year in which it is received. Revenue related grants are treated as other income in the year in which they are received

Exceptional items

Exceptional items are items of income and expenses arises from ordinary activities but of such size, nature or incidence whose disclosure is felt necessary for better explanation of the performance of the Group.

3. Critical accounting judgments and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in Note-2, the management of the Group is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised.

Critical judgments in applying accounting policies:The following are the critical judgements, apart from those involving estimations (see point ii below), that the management have made in the process of applying the Group’s accounting policies and that have the most significant effect on the amounts recognized in the financial statements

i. Financial assets at amortized costThe management has reviewed the Group’s financial assets at amortized cost in the light of its business model and have confirmed the Group’s positive intention and ability to hold these financial assets to collect contractual cash flows. The carrying amount of these financial assets is Rs 352,118.19 lakhs (March 31, 2016: Rs 416,922.79). Details of these assets are set out in note 31

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ii. Key sources of estimation uncertainty:The following are the key assumptions concerning the future, and other key sources of estimation of uncertainty at the end of the reporting period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial yeara. Impairment of investmentsThe Group reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for. b. ProvisionsProvisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date adjusted to reflect the current best estimates.c. Contingent liabilitiesContingent liabilities arising from past events the existence of which would be confirmed only on occurrence or non-occurrence of one or more future uncertain events not wholly within the control of the Group or contingent liabilities where there is a present obligations but it is not probable that economic benefits would be required to settle the obligations are disclosed in the financial statements unless the possibility of any outflow in settlement is remoted. Fair value measurements and valuation processes:For financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

y Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date;

y Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

y Level 3 inputs are inputs that are not based on observable market data (unobservable inputs).

Restatement of material error / omissions

Incomes / expenditure relating to prior period of non-material nature i.e., below Rs. 1 lakh is not considered for restatement.

In terms of our report attached. For and on behalf of the Board For SRB & Associates Chartered Accountants FRN-310009E SD/- SD/- SD/- SD/-Partner Company Secretary Director Finance Managing Director ChairmanSD/-R. S. Sahoo Mem No : 053960 Place : Bhubaneswar Place : BhubaneswarDate : 04.07.2017 Date : 03.07.2017

199

Reconciliation between previous GAAP and Ind AS 4 (i) Equity reconciliation

(Rupees in Lakhs) Particulars Note As at March 31, 2016 As at April 1, 2015Equity under previous GAAP 5,70,965.90 5,68,800.11

Gratuity and Capital reserve-Transition error (b) 4,360.71 3,716.51 Creation of Mine Clsoure Liaility (c) (2,321.20) (2,321.20)Provision for Impairment - Reclassified (d) 7.84 7.84 Consolidation Entry (e) (10,605.82) (6,483.84)

Equity under Ind AS 5,62,407.43 5,63,719.42 5,62,407.43 5,63,719.42

4 (ii) Total comprehensive income reconciliation

(Rupees in Lakhs)Particulars Note For the period ended March 31, 2016Net income under Previous GAAP 62,344.62 Tax adjustments (a) 439.50 Gratuity (b) (229.26)Consolidation Entry (e) (4,122.00)Profit for the year under Ind AS 58,432.85 Other comprehensive income (433.97)

Total comprehensive income under Ind AS 58,866.82

4 (iii) Reconciliation of statement of cash flow There are no material adjustments to the statement of cash flows as reported under Previous GAAP Notes to reconciliations between Previous GAAP and Ind AS

(a) Tax adjustments Tax adjustments include deferred tax impact on account of differences between Previous GAAP and Ind AS. These adjustments have resulted in an increase in equity under Ind AS by Rs. 3,009.20/- lakhs and Rs.2,292.36/- lakhs as at March 31, 2016 and April 1, 2015 respectively and increase in net profit by Rs.716.84 lakhs for the year ended March 31, 2016 .

(b) Gratuity and Capital reserveGratuity: Liability in respect of gratuity is provided as per actuarial valuation made by LIC which is managing the fund of Gratuity Trust and the same is being paid by OMC to Gratuity Fund Trust. As per the report, OMC has paid excess amount to LIC as a contribution as compared

to gratuity liability. Therefore, OMC has more plan assets in comparison to gratuity obligation. Net excess amount paid to Gratuity Trust (Plan Assets) by OMC is charged to statement of profit and loss. Capital reserve: OMC had received some amount of free shares of “The Mandakini-B Coal Corporation Limited” during Financial Year 2012-13. So, Capital Reserves was credited to the extent of Rs.7.84 lakhs by debiting the Investment account with respect to free shares received

(c) Mine Clsoure LiailityThe Company has created mine closure liability for its operative mines

(d) Reclassification of provision for Impairment OMC had received some amount of free shares of “The Mandakini-B Coal Corporation Limited” during Financial Year 2012-13. So, Capital Reserves was credited to the extent of Rs.7.84 lakhs by debiting the Investment account with respect to free shares received. These investments were impaired during Financial Year 2014-15

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Notes forming part of the financial statement 5 - Property, Plant and Equipment and capital work-in Progress.

(Rupees in Lakhs)



As at April 1, 2015

Carrying amounts of :Freehold Land 214.64 211.51 211.51 Buildings 3,901.36 4,030.00 4,108.81 Plant and Equipment 2,079.00 1,584.31 1,555.29 Furniture and Fixtures 454.59 366.20 440.49 Vehicles 74.04 82.61 74.45 Railway Siding 100.46 5.66 6.00 Roads,Bridges,Culverts & Helipads 6,263.27 79.89 - Total (A) 13,087.35 6,360.19 6,396.55

Capital work-in-progress 5,630.22 9,321.27 6,134.10 Total (B) 5,630.22 9,321.27 6,134.10

5(i) Other Intangible assets Mining Rights 34,850.41 - - Total (‘C) 34,850.41 - -

5(ii) Intangible assets under development Intangible assets under development 12,286.71 - - Total (D) 12,286.71 - -

Grand Total (A+B+C+D) 65,854.69 15,681.46 12,530.65

201

Particulars Freehold Land

Furniture & Fixtures

Roads, Bridges,

Culverts & Helipads


Mining Rights

Buildings

Plant and Equipment

Total

Cost or deemed costBalance as at April 1, 2015

211.51 440.49 - 74.45 6.00 4,108.81 1,555.29 6,396.55

Additions - 59.21 83.26 33.24 - - 148.90 562.95 887.56 Disposals - 1.34 - - - - - - 1.34 Balance as at March 31, 2016

211.51 498.36 83.26 107.69 6.00 - 4,257.71 2,118.24 7,282.77

Additions 3.13 231.85 6,672.29 12.78 114.12 41,151.70 81.41 956.19 49,223.48 Disposals - 9.48 - 9.13 - - - 22.07 40.68 Balance as at March 31, 2017

214.64 720.74 6,755.55 111.34 120.12 41,151.70 4,339.12 3,052.35 58,465.57

Free-hold Land

Furniture & Fixtures


& Helipads


Mining Rights

Buildings Plant and Equipment

Total

Accumulated Depreciation and impairmentBalance as at April 1, 2015

- - - - - - - - -


- - - - - - - - -


- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


- 7.76 - 9.11 - - - 21.58 38.45


- 141.74 488.91 21.34 19.32 6,301.30 210.05 461.00 7,643.67


- 266.15 492.28 37.30 19.66 6,301.30 437.76 973.36 8,527.81

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202

Free-hold Land

Furniture &

Fixtures

Roads, Bridges,

Culverts & Helipads


Mining Rights

Buildings Plant and

Equip-ment

Total

C a r r y i n g amountBalance as at April 1, 2015

211.51 440.49 - 74.45 6.00 - 4,108.81 1,555.29 6,396.55

Additions - 59.21 83.26 33.24 - - 148.90 562.95 887.56 Disposals - 1.34 - - - - - - 1.34 Depreciation & Amortisation expense

- 132.16 3.37 25.07 0.34 - 227.71 533.93 922.58


211.51 366.20 79.89 82.61 5.66 - 4,030.00 1,584.31 6,360.19

Additions 3.13 231.85 6,672.29 12.78 114.12 41,151.70 81.41 956.19 49,223.48 Disposals - 1.72 - 0.02 - - - 0.49 2.23 Depreciation & Amortisation expense

- 141.74 488.91 21.34 19.32 6,301.30 210.05 461.00 7,643.67


214.64 454.59 6,263.27 74.04 100.46 34,850.41 3,901.36 2,079.00 47,937.76

(iii) Depreciation is provided in the accounts on written down value method based on usefull life basis and in the manner prescribed in Schedule II of the Companies Act, 2013.

(iv) Depreciation is provided on building and structures as per usefull life provided in Schedule -II of Company’s Act 2013 even if these are constructed on land taken on mining lease / rental basis.

(v) Even though Road which are constructed by OMC on Government Possessed Land are Capitalised and depreciation is taken as per usefull life prescribed in schedule II of Company’s Act 2013

(vi) Mining assets represent expenditure incurred in relation to acquisition of mine, mine development expenditure post establishment of commercial feasibility reclassified as mining rights.

203

Notes forming part of the financial statement 6 - Investments

(Rupees in Lakhs)

Particular % of share hold-ings

As at March 31, 2017 As at March 31, 2016 As at April 1, 2015

No. of shares


Amounts No. of shares Amounts

UNQUOTED INVEST-MENTS CARRIED AT COSTEquity investment in Joint Ventures(1) RIO Tinto Orissa Mining Pvt. Ltd (Fully Paid up)

49.00 2,28,000 228.00 2,28,000 228.00 2,28,000 228.00

(2) Orissa Thermal Power Corporation Ltd (Fully Paid up)

50.00 13,42,047 13,072.09 11,42,047 11,050.84 11,42,047 11,054.63

(3) Nuagaon Coal Company Limited (Fully Paid up)

50.00 1,00,000 112.09 1,00,000 109.79 1,00,000 110.78

(4) Kalinga Coal Mining Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 17,16,000 - 17,16,000 - 17,16,000 -

(5) Neelachal Ispat Nigam Ltd (Fully Paid up)

12.32 7,15,98,530 - 7,15,98,530 2,240.87 7,15,98,530 6,358.08

(6) Keonjhar Infra-structure Develop-ment Co Ltd (Fully paid up)

11.11 7,200 0.72 7,200 0.72 7,200 0.72

(7) Angul Sukinda Railway Limited (Fully paid up)

10.50 6,30,00,000 6,300.00 6,30,00,000

6,300.00 6,30,00,000 6,300.00

(8) Haridaspur Paradip Railway Com-pany Limited (Fully Paid up)

15.48 7,47,00,000 7,470.00 7,47,00,000

7,470.00 7,47,00,000 7,470.00


(328.72) (328.72) (328.00)

Total 26,854.19 27,071.50 31,194.21

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204

Equity investment in Associates(1) Lanjigarh Sched-ule Area Develop-ment Fund (Face value of Rs 10 each at free of cost)

25.00 12,500 - 12,500 - 12,500 -

(2) South West Orissa Bauxite Mining Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 13,000 - 13,000 - 13,000 -

(3) East Coast Bauxite Mining Co. Pvt. Ltd (Face value of Rs 10 each at free of cost)

26.00 2,600 - 2,600 - 2,600 -

(4) Mandakini B Coal Corporation Ltd (Fully paid up)

25.00 2,07,843 207.84 2,07,843 207.84 2,07,843 207.84


- - -

Total 207.84 207.84 207.84 TOTAL AGGREGATE UNQUOTED INVEST-MENTS (A)

27,062.03 27,279.34 31,402.05

OTHER INVESTMENTS (B)Investments in joint ventures (Preference shares, face value of 10 each, fully paid up)(1) Keonjhar Infra-structure Develop-ment Co Ltd

13.30 45,00,000 450.00 45,00,000 450.00 45,00,000 450.00


(450.00) (450.00)

TOTAL OTHER IN-VESTMENTS (B)

- - 450.00

TOTAL INVESTMENTS (A) + (B)

27,062.03 27,279.34 31,852.05

205

(i) OMC executed an agreement with Rio Tinto Mineral Dev.(RTMV) on 24.02.1995 as per the directive of Govt. for developing an inegrated rail,port and mines project having production capacity of at least 15MT of iron ore p.a from Gandhamardan and Malangtoli Leases by forming a joint venture company. The JV RTOM was incorporated in July,1997 with holding of 51% by RTMD and 49% by OMC. The project after completion of feasibility studies Ph-I and Ph-II has not progressed due to non finalization of the project development agreement. Case filed by OMC & RTMD on winding up of the JV Co.are continuing at respective legal forums. So impairment was made for Rs. 228.00 lakh against this investmement in JV Company during FY 2010-11.

(ii) The Ministry of Coal, Government of India vide letter No. f No.13016/8/207-CA-1 dtd 25.07.2007 alloted Mandakini-B Coal Block in favour of the OMC Ltd, Assam Minereral Development Corpn, Meghalaya Mining Corpn, and Tamilnadu Electricity Board on equal sharing basis of 25% each for Power Generation. Accordingly, the new Comapany Viz M/S MBCCL was incorporated. Further Ministry of Coal, GoI has de-allocated Madakini-D Coal Block on 05.12.2012. The Board of Directors of MBCCL in its meeting held on 08.02.2013 decided for dissolution of the company and the Board of Directors of the OMC limited in its 398th meeting held on 26.03.2013 approved dissolution of MBCCL, accordingly provision has been created for Rs 207.84 lakh in the Accounts of 2012-13 towards impairment of investment in the said company. Now the said company is declared us dormant as per the provisions of section 455(2) of the Companies Act, 2013 by MCA, GOI on dated 23.06.2017.

(iii) OMC & APMDC invested Rs.100 lakh each being 50% partner in joint venture company namely M/S Nuagaon Coal Company Ltd & shown

as share deposit amount. The JV Comapany alloted 3000 equity share of Rs.100.00 each amounting to Rs.3 lakh.However the share are yet to be received.As per order of Hon’able Suprem Court of India, 204 coal blocks were de-allocated including M/S Nuagaon Coal Company Limited. Accordingly, impairment was created for Rs. 100 lakh against this investment in the JV Company during the F.Y 2014-15.Now the said company is declared us dormant as per the provisions of section 455(2) of the Companies Act, 2013 by MCA, GOI on dated 23.06.2017.

(iv) During Financial Year 2015-16, consequent upon approval of Board of Directors, an amount of Rs.450.72 lakh (Rs.450.00 Lakh of preference shares + Rs.0.72 lakh of equity shares) invested in M/S Keonjhar Infrastructure Development Co Ltd have been provided for as the same were found to be permanently diminuted due to the company’s net worth as well as the derived market value of share was continuously showing (-ve) trend.

(v) 7,200 Nos of shares held by the OMCL in Keonjhar Infrastructure Development Co Ltd. has been pledged with State Bank of India for availment of loan by M/s KIDCOL.

(vi) In the absence of audited accounts or management financials, consolidation of following joint ventures and associates have not been made

(1) RIO Tinto Orissa Mining Pvt. Ltd

(2) Kalinga Coal Mining Pvt. Ltd

(3) Keonjhar Infrastructure Development Co Ltd

(4) Angul Sukinda Railway Limited

(5) Haridaspur Paradip Railway Company Limited

(6) Lanjigarh Schedule Area Development Fund

(7) South West Orissa Bauxite Mining Pvt. Ltd

(8) East Coast Bauxite Mining Co. Pvt. Ltd

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206


7 - Loans- Non Current (Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 a) Security Deposits - Secured, considered good - - - - Unsecured, considered good 166.06 149.35 138.92 - Doubtful - - - Less : Allowance for bad and doubtful advances

- - -

b) Loans to related parties - Secured, considered good - Unsecured, considered good 8,027.78 13,694.44 - - Doubtful Less : Allowance for bad and doubtful advances c) Loans to employees - Secured, considered good - Unsecured, considered good 407.62 481.26 526.41 - Doubtful - - - Less : Allowance for bad and doubtful advances

- - -

d) Loans to GRIDCO - Secured, considered good - - - - Unsecured, considered good 63,911.16 90,631.16 69,940.00 - Doubtful Less : Allowance for bad and doubtful advances

- - -

Total 72,512.62 1,04,956.21 70,605.33

207

(Rupees in Lakhs) 7 - Loans- Current Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 a) Security Deposits - Secured, considered good - - - - Unsecured, considered good - Doubtful - - - Less : Allowance for bad and doubtful advances

- - -

b) Loans to related parties - Secured, considered good - Unsecured, considered good 8,972.22 3,305.56 - - Doubtful - - Less : Allowance for bad and doubtful advances

-

c) Loans to employees - Secured, considered good - Unsecured, considered good 292.28 343.06 341.58 - Doubtful - - - Less : Allowance for bad and doubtful advances

- - -

d) Loans to GRIDCO - Secured, considered good - - - - Unsecured, considered good 30,060.00 30,060.00 15,865.00 - Doubtful Less : Allowance for bad and doubtful advances

- - -

Total 39,324.50 33,708.62 16,206.58

(i) Loans to related parties include: Loans given to Joint venture i.e. Neelachal Ispat Nigam Ltd (NINL) of Rs. 17,000 Lakhs (31.03.2016: Rs. 17,000 Lakhs ) (01.04.2015: Rs. Nil) (ii) Loans include Intercorporate deposits to GRIDCO of Rs. 93,971 Lakhs (31.03.2016: Rs. 120,691 Lakhs) (01.04.2015: Rs. 85,805 Lakhs)

(iii) The above loans and inter-corporate deposits have been given for business purpose.

(iv) There are no loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or no amounts due by firms or private companies respectively in which any director is a partner or a director or a member .

Loans - Non Current

(v) GRIDCO is a State PSU dealing with trading of power. GRIDCO availed the above inter corporate loan from OMC for their working capital management executing necessary agreement including escrow agreement among GRIDCO, OMC and Union Bank of India. The period of loan is 6 years including 1 year(1st year) as moratorium period. The rate of interest is floating which is 1.5% over the FD rates offered by SBI on bulk deposits (For 1 crore and above) for a period of 1 to 2 years.

(vi) NINL, a manufacturer of steel, has availed the above intercorporate deposit from OMC for 3 years excluding 1 year (1st year) as moratorium period. The rate of interest is 12.25% Fixed .

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208


8 - Deferred tax balances (Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015Deferred Tax Assets 6,202.55 4,283.59 3,793.85 Less : Deferred Tax Liabilities 16,313.18 - - Net Deferred Tax (Liability)/ Assets

(10,110.63) 4,283.59 3,793.85

(i) Significant component of deferred tax assets and liabilities for the year ended March 31, 2017 is as follows:

Notes

Opening balance

as at April 1,

2016



Deferred tax

expense/ (income)

recognised in OCI)




March 31, 2017

Deferred tax assetsRetirement benefit assets

3,314.59 21.71 325.36 - 3,661.66

Provisions 172.69 1,487.61 - - 1,660.30 Total 3,487.28 1,509.32 325.36 - 5,321.96 Deferred tax liabilitiesProperty, plant and equipment and Intangible assets

(796.32) 16,228.94 - - 15,432.62

Total (796.32) 16,228.94 - - 15,432.62 Net Deferred tax assets/(liabilities)

4,283.59 (14,719.62) 325.36 - (10,110.66)

209

(Rupees in Lakhs)

Significant component of deferred tax assets and liabilities for the year ended March 31, 2016 is as follows:

Opening balance as

at April 1,

2015




recognised in OCI)




March 31, 2016

Deferred tax assetsRetirement benefit assets

3,085.15 (204.53) 433.97 - 3,314.59

Provisions 120.92 51.77 - - 172.68 Total 3,206.07 (152.76) 433.97 - 3,487.27 Deferred tax liabilitiesProperty, plant and equipment and Intangible assets

(587.80) (208.52) - - (796.32)

OthersTotal (587.80) (208.52) - - (796.32)Net Deferred tax assets/(liabilities)

3,793.84 55.76 433.97 - 4,283.59

AUDIT REPORT

210


9 - Other non-current assets

Operating Lease Payments

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Prepayments (Leasehold Land) 414.89 419.91 424.55 Restricted Balances with Bank 32,441.81 29,939.62 27,330.77 Deposit with LIC (Gratuity) 159.09 1,202.73 1,431.99 Preliminary Expenses 16.34 - - TOTAL 33,032.13 31,562.26 29,187.31

(i) The Company has taken land under operating leases. The following is the summary of future minimum lease rental payments under operating leases entered into by the Company:

Minimum Lease Payments As at March 31, 2017 As at March 31,

2016 As at April 1,

2015 Not later than 1 year 4.82 4.63 4.61 Later than one year but not later than five years

19.28 18.51 18.44

Later than five years 390.79 396.77 401.50 Total minimum lease commitments

414.89 419.91 424.55

(a) During the year ended March 31, 2017, total operating lease rental recognised in the statement of profit and loss was Rs. 4.63 Lakhs, (2015-16: Rs. 4.61 Lakhs)

(b) Significant leasing arrangements include lease of land for periods ranging between 70 to 99 years with renewal option.

(ii) Balances with banks which are restricted from being exchanged or used to settle a liability for more than 12 months from the balance sheet date are classified under Non-current assets.

(iii) Actuarial valuation of Gratuity as on 31.03.2017 was done by M/s. LIC of India which is managing the fund of the OMC Gratuity trust fund.

211


10. - Inventories (Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016

As at April 1, 2015

(a) Finished goodsIron Ore 41,791.83 47,923.14 35,050.82 Chrome Ore 14,336.27 10,004.52 5,839.52 Manganese Ore 146.15 140.67 140.67

(b) Stores & Spares 1432.81 1,388.97 1296.46(c) Others

Non inventorised stores 16.36 25.26 6.46 Less: Provision on stores and spares (844.52) (405.44) (255.86)

Total Inventories 56,878.90 59,077.12 42,078.07

Included above, goods-in-transit: As at March 31, 2017


As at April 1, 2015

(i) Finished goods - - - (ii) Stores & spares - - - Total goods-in-transit - -

The cost of inventories recognised as an expense includes Rs.439.08 lakhs (2015-2016: Rs.149.58 lakhs) in respect of write-downs of inventory to net realisable value, and has been reduced by Rs. Nil (2015-2016: Rs. Nil) in respect of the reversal of such write-downs. Previous write-downs have been reversed as a result of increased sales prices in certain markets.

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11 - Trade receivables (Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)


As at April 1, 2015

Trade receivables (a) Unsecured, considered good 10,608.04 6,604.21 3,643.15 (b) Doubtful - 93.55 93.55 Less: Allowance for credit losses - (93.55) (93.55)TOTAL 10,608.04 6,604.21 3,643.15

Notes(i) Trade receivables are dues in respect of goods sold or services rendered in the normal course of

business. (ii) Where no due date is specifically agreed upon, the normal credit period allowed by the Company is

taken into consideration for computing the due date which may vary depending upon the nature of goods or services sold and the type of customers, etc.

(iii) Trade receivables are further analysed as :




Amounts not yet due 9,849.63 - 9,849.63 One month overdue 517.59 - 517.59 One month overdue - - - Three months overdue 25.19 - 25.19 Between three to six months overdue - - - Greater than six months overdue 215.63 - 215.63 TOTAL 10,608.04 - 10,608.04




Amounts not yet due 6,297.74 - 6,297.74 One month overdue - - - One month overdue - - - Three months overdue - - - Between three to six months overdue

- - -

Greater than six months overdue

400.02 93.55 306.47

TOTAL 6,697.76 93.55 6,604.21

213

(Rupees in Lakhs)

(Rupees in Lakhs)

As at April 1, 2015 Gross credit risk amount



Amounts not yet due 3,445.95 - 3,445.95 One month overdue 7.34 - 7.34 Two month overdue 0.80 - 0.80 Three months overdue 8.65 - 8.65 Between three to six months overdue

42.62 - 42.62

Greater than six months overdue

231.34 93.55 137.79

TOTAL 3,736.70 93.55 3,643.15

(iv) Movement in allowance for credit losses in respect of trade receivables:

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the period 93.55 93.55 Additions during the period - - Utilised during the period 93.55 - Balance at the end of the period - 93.55

In determining the allowances for doubtful trade receivables the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix.

(v) There are no loans due by directors or other officers of the company or any of them either severally or jointly with any other persons or no amounts due by firms or private companies respectively in which any director is a partner or a director or a member .

AUDIT REPORT

214

(Rupees in Lakhs)

Notes forming part of the financial statement12 - Cash and Cash Equivalents



As at April 1, 2015

(a) Balances with banks (1) Unrestricted Balance with banks (i) In Current Account 9,998.31 2,169.53 6494.70 (ii) In Deposit Account(b) Cash in hand 2.66 6.43 3.60 (c) Others 0.01 0.01 - Cash and cash equivalents as per balance sheet

10,000.98 2,175.97 6,498.30

(a) Earmarked Balances with banks (i)In Current Account - - - (ii) In Deposit Account 1,05,389.44 2,83,080.81 4,00,713.15 Total 1,05,389.44 2,83,080.81 4,00,713.15 Total Cash and Bank Balances 1,15,390.42 2,85,256.78 4,07,211.45

Notes

(i) Earmarked cash and bank balances primarily represent balances held for sales proceeds of seized chrome ore, LC provided to East Coast Railway and against short term borrowings. Details of Fixed Deposits pledged against Bank Guarantee is as follows

Name of Bank Face Value of FDUCO Bank, Govternment of Odisha Secretariate Br. 86,00,000

Sub Total 86,00,000 HDFC Bank Ltd 65,00,00,000

52,00,00,000 78,00,00,000 85,00,00,000 65,00,00,000 85,00,00,000 45,00,00,000

Sub Total 4,75,00,00,000 Andhra Bank, Main Branch 6,91,90,990.00

6,91,90,988.00 Sub Total 13,83,81,978.00 Axis Bank 25,00,000.00 Sub Total 25,00,000 SBI 1,49,00,000 Sub Total 1,49,00,000 Syndicate Bank 54,62,350

38,41,100 Sub Total 93,03,450 Total 4,92,36,85,428

215

(ii) In accordance with the MCA notification G.S.R. 308(E) dated March 30, 2017 details of Specified Bank Notes (SBN) and Other Denomination Notes (DDN) held and transacted during the period from November 8, 2016 to December 30, 2016, is given below:

Particulars SBNs Other denomination notes TotalClosing cash in hand as on 08.11.2016 7,96,500 3,57,057 11,53,557 (+) Unpermitted receipts - - - (+) Permitted receipts 1,82,075 1,82,075 (-) Unpermitted payments - - - (-) Permitted payments - - - (-) Amounts deposited in Banks (7,96,500) (7,96,500)Closing cash in hand as on 30.12.2016 5,39,132 5,39,132

(iii) The cash and bank balances as above are primarily denominated and held in Indian rupees

AUDIT REPORT

216

Notes forming part of the financial statement13 - Others

(Rupees in Lakhs)



As at April 1, 2015

Advances to staff 827.07 1,180.21 1,175.59 Interest accrued on loans and depsoits 11,837.23 18,284.48 26,092.55 Sundry Dues Realisable 65.80 640.90 313.21 Deposits with bank 1,40,900.00 - - TOTAL 1,53,630.10 20,105.59 27,581.35

217

(Rupees in Lakhs)


14 - Current tax assets and liabilities

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Current tax assets Tax refund receivables/Advance Tax

65,528.66 56,026.92 1,00,030.65

Total 65,528.66 56,026.92 1,00,030.65

AUDIT REPORT

218

(Rupees in Lakhs)


15 - Other current assets



As at April 1, 2015

Prepaid Expenses 670.84 23,615.73 395.68 Advances to suppliers & others 14,743.73 22,779.24 10,264.28 Less: Allowance for credit losses Prepayments (Leasehold Land) 4.82 4.63 4.61 Balance with Govternment Authority

558.40 667.88 43,232.66

TOTAL 15,977.79 47,067.48 53,897.23

219

(Rupees in Lakhs)


16 - Equity Share Capital



As at April 1, 2015

Equity Share Capital 3,145.48 3,145.48 3,145.48 TOTAL 3,145.48 3,145.48 3,145.48 Authorised Share Capital1,00,00,000 nos. of equity shares of Rs.100/- each (Previous year 1,00,00,000 nos. of equity shares of Rs.100/- each)

10,000.00 10,000.00 10,000.00

Issued ,Subscribed & Paid up capital comprises :31,45,480 nos. of equity shares of Rs.100/- each

3,145.48 3,145.48 3,145.48

Total 3,145.48 3,145.48 3,145.48

Notes(i) The movement in subscribed and paid up share capital is set out below:

As at March 31, 2017 As at March 31, 2016No. of shares Rs. Lakhs No. of shares Rs. Lakhs

Ordinary shares of Rs.100 eachAt beginning of the year 31,45,480 3145.48 31,45,480 3145.48Shares allotted during the year - - - -

31,45,480.00 3,145.48 31,45,480.00 3,145.48

Shares in the company held by each shareholder holding more than 5% shares

As at March 31, 2017 As at March 31, 2016Name of Shareholder No. of Shares Held ( Face

value of Rs. 100 each)% of Total

SharesNo. of Shares Held ( Face value of Rs.

100 each)

% of Total Shares

Hon’ble Governer of Odisha

31,45,390 99.9971 31,45,390 99.9971

(ii) The Corporation has only one class of shares referred to as equity shares having a par value of Rs 100/-. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Corporation, the holders of equity shares will be entitled to receive any of the remaining assets of

the corporation, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

AUDIT REPORT

220

Notes forming part of the financial statement17. Other equity

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

(Rupees in Lakhs)

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015General Reserve 2,30,802.84 2,21,877.67 2,15,643.20 Retained earnings 3,41,314.96 3,35,613.58 3,43,160.05 Capital reserve 1,770.69 1,770.69 1,770.69 Total 5,73,888.49 5,59,261.95 5,60,573.94

(i) General Reserve

(ii) Retained Earnings

(iii) Capital Reserve

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the year/period 2,21,877.67 2,15,643.20 Movements 8,925.17 6,234.47 Balance at the end of the year/period 2,30,802.84 2,21,877.67



Balance at the beginning of the period 3,35,613.58 3,43,160.05 Profit attributable to owners of the Company 75,420.14 59,686.80 Other comprehensive income arising from remeasurement of defined benefit obligation net of income tax

(614.78) (819.98)

Payment of dividends on equity shares 50,000.00 50,000.00 Tax On Dividend 10,178.82 10,178.82 Transfer to General Reserve 8,925.17 6,234.47 Balance at the end of the period 3,41,314.96 3,35,613.58

Particulars As at March 31, 2017 As at March 31, 2016Balance at the beginning of the year/period 1,770.69 1,770.69 Movement during the year/period - - Balance at the end of the year/period 1,770.69 1,770.69

(iv) The nature of reserves are follows: (a) General Reserve :- Under the erstwhile companies Act 1956, a general reserve was created through an annual transfer of net profit at a specified percentage in accordance with applicable regulations. Consequent to the introduction of companies Act 2013, the requirement to mandatory transfer a specified percentage of net profit to general reserve has been withdrawn. However the Company has followed its earlier practice of transferring the profit to general reserve.

(b) Capital Reserve :- Capital reserves represents the excess of labilities over assets of the erstwhile Charge Chrome Division” of the company, transferred to Government of Odisha as per the notification. In absence of any claim against the said amount, the said liability was no longer required and was transferred to capital reserve.

221

Non-current

Non-current

(Rupees in Lakhs)

(Rupees in Lakhs)

18. Provisions

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Employee Benefits - Leave Encashments 6,864.01 6,834.59 6,488.20 - Payable on retirement 855.18 - - Others - Mine Closure 4,291.20 4,291.20 4,291.20 - Felling of Trees - - 452.17 Total 12,010.39 11,125.79 11,231.57

Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Employee Benefits - Leave Encashments 539.99 421.73 105.55 Total 539.99 421.73 105.55

(i) Provision for employee benefits include long term benefits such as for leave, early retirement and long service awards

(ii) The actuarial valuation for leave encashment as on 31.03.2017 was done by M/S LIC of India for 2548 OMC Employees by taking average Age as 50 years and average Monthly Salary of Rs. 31,189.00.In the actuarial valuation following assumptions were taken: Mortality Rate: LIC (2006 to 08) ultimate, withdrawal rate 1% to 3% depending on age, discount rate 8% p.a., salary escalation 10% and normal retirement age 60 years.

(iii) Other provisions primarily represent mine closure and rehabilitation obligations. These amounts become payable upon closure of the mines and are expected to be incurred over a period of 1 to 13 years.

(iv) Mine Closure :- As per Mineral Conservation & Deveopment (Amendment) Rule, 2003 vide Notification Dt. 10th April, 2003 of Ministry of Mines, New Delhi, every mine shall have Mine Closure Plan- (1) Under Rule 23B of MCDR (Amendment)

2003, the owner shall in case of fresh grant/renewal of mining lease submit a progressive Mine Closure Plan as a component of mining plan and in case of existing minig lease submit a progressive Mine Plan for approval within a period of 180 days from the commencement of aforesaid rule. (2) Final Mine Closure Plan means a plan prepared as per IBM guidelines. Under rule 23C of MCDR (Amendment) 2003, this shall be submitted for approval one year prior to the purpose of decommissioning, reclamation in the mine or part thereof after cessation of mining and mineral proposed closure of the plan. (3) As against securities of carrying out above work u/r 23f pf MCDR(Amendment) 2003, lessee has to furnish financial assurance to the competent authority (IBM) so as to indemnify the authorities against the reclamation and rehabilitation cost. All the mines (24 operational mines ) which have mining lease of 7900 Hects approx. and under rule 23F(1) MCD Rules (Amended) 2003. OMC mines are considered as “A“ grade mines and a provision of 19.70 crore has ben provided for in books of accounts over a period of 10 years wef Financial Year 2003-04.

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222

(v) Felling of trees:- Approval under forest conservation Act under Sec-II is regarding use of Forest land for non-forestry activity wherein felling of trees is a vital component. Approval of MOEF, GoI under Section-2 of Forest Conservation Act over a perticular patch of forest land is a pre requisite before initiating proposal for tree felling by user agency. The working cost of felling by OFDC & cost towards Royalty for the proposed tree felling by DFO is demanded on user agency. The tree felling as per Approved Mining Plan is granted by DFO concerned in a phase wise manner as per

the condition stupulated by MOEF, GoI. Once the tree standing over the approved forest area is clear felled and the timbers lifted by OFDC, the process get completed and the area is handed over by DFO to user agency to commence operation. It is not a regular phenomenium. Once the activity is over for a particular patch of forest land mining & ancillary operation continues till the mineral is exhaused. As these liabilities are very old and either paid or not payable, the same is written back in the Financial Year 2015-16 consequent upon approval of BODs.

223


19. Borrowings (Rupees in Lakhs)


As at April 1, 2015

Secured - at amortised cost (a) Loans Repayable on Demand From Banks - 73,700.00 1,50,200.00 Total - 73,700.00 1,50,200.00

(i) Short term loans from banks are availed against pledge of fixed deposits.

AUDIT REPORT

224

(Rupees in Lakhs)

(Rupees in Lakhs)


20. Trade PayablesParticulars As at March 31,

2017As at March 31,

2016As at April 1,

2015Creditors for supplies and services 24,528.43 28,437.20 14,395.11 Creditors for accrued wages and salaries 54.43 20.88 481.15 Total 24,582.86 28,458.08 14,876.26

Notes (i) The amount due to Micro and Small Enterprises as defined in the “The Micro, Small and Medium Enterprises Development Act, 2006” has been determined to the extent such parties have been identified on the basis of information available with the Company. The disclosures relating to Micro and Small Enterprises are as under:

Description As at March 31, 2017


As at April 1, 2015

i. The principal amount remaining unpaid to supplier as at the end of the year

0.14 - -

ii. The interest due thereon remaining unpaid to supplier as at the end of the year

- - -

iii. The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act

- - -

iv. The amount of interest accrued during the year and remaining unpaid at the end of the year

- - -

225

(Rupees in Lakhs)


21. Other Financial Liabilities

Particulars In Lakhs



As at April 1, 2015

a) Interest accrued on borrowings - 945.03 3,128.38 b) Others:Security & Earnest Money Deposits 5,462.65 5,029.73 5,562.87 Capital Creditors 248.85 248.63 242.28

5,711.50 6,223.39 8,933.53

AUDIT REPORT

226

(Rupees in Lakhs)

Notes forming part of the financial statement 22. Other Current Liabilities



As at April 1, 2015

a) Advances from Governments & Others

3,190.23 2,737.53 1,661.75

b) Indirect Tax Payables 2,401.33 92.08 447.59 c) Advance From Customers 20,022.46 6,333.10 8,862.50 d) Other Statutory Dues Payable 195.94 110.45 38,579.50 e) Others 0.58

25,810.54 9,273.16 49,551.34

227

(Rupees in Lakhs)

Notes forming part of the financial statement 23. Revenue from Operations



(a) Sale of Ore -Iron Ore 1,25,780.20 83,804.12 -Chrome Ore & Concentrate 1,07,362.76 71,003.92

2,33,142.96 1,54,808.04

(i) Sale of chrome ore & concentrate includes excise duty of RS. 522.79 Lakhs (2015-16 RS. 165.77 Lakhs) levied on sale of chrome concentrate from COBP plant.

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228

Notes forming part of the financial statement 24. Other Income (Rupees in Lakhs)



a) Interest Income Interest income from Bank Deposits at amortised Cost

18,079.71 27,583.79

Interest income from other financial assets carried at amortised cost

11,136.06 12,129.61

29,215.77 39,713.40 b) Other non-operating income (net of expenses

directly attributable to such income)Rental Income 50.46 62.24 Reconciliation effect of old balances 7,134.07 6,293.60 Other Miscellaneous Income 1,013.41 2,053.13

8,197.94 8,408.97 TOTAL 37,413.71 48,122.37

229

Particulars For the period 31-Mar-17 For the period 31-Mar-16 Change in Ore Stock :-Opening StockIron Ore 47,923.14 35,050.82 Chrome Ore & Concentrate 10,004.52 5,839.52 Manganese Ore 140.67 140.67 Total (A) 58,068.33 41,031.01 Closing StockIron Ore 41,791.83 47,923.14 Chrome Ore & Concentrate 14,336.27 10,004.52 Manganese Ore 146.15 140.67 Total (B) 56,274.25 58,068.33 Differences (A-B) 1,794.08 (17,037.32)

(Rupees in Lakhs)

Notes forming part of the financial statement25. Changes in Inventory

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230


26. Employee Benefit Expense (Rupees in Lakhs) Particulars For the period 31-Mar-17 For the period 31-Mar-16 Salaries and Wages 18,731.06 11,113.53 Contribution to provident and other funds 2,771.30 2,625.64 Staff Welfare expenses 3,562.55 2,269.92 Total 25,064.91 16,009.09

(Rupees in Lakhs)

Notes

(i) The Company has recognised in the statement of profit and loss, an amount of Rs.7.04 Lakhs (2015-16: Rs.12.89 Lakhs ) as expenses with respect to key managerial personnel. The details of such expenses are as below:



(a) Short term employee benefits 7.04 12.89(b) Post employment benefits(c) Other long term employee benefits

Total 7.04 12.89

231

(Rupees in Lakhs)


27. Finance Costs

Particulars For the period 31-Mar-17 For the period 31-Mar-16 (a) Interest costs : Interest on bank overdrafts and loans (other than those from related parties)

842.84 3,295.44

Other Interest expense 39.76 6.66 Total interest expenses for financial liabilites not classified as FVTPL

882.60 3,302.10

Less: Amount included in the cost of qualified assets

- -

882.60 3,302.10 (b) Exchange differences losses - 22.27 Total 882.60 3,324.37

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232


28. Other Expenses (Rupees in Lakhs)

Particulars For the period 31-Mar-17 For the period 31-Mar-16

A. Production and Processing ExpensesOre Raising 32,836.72 23,882.19 Transportation 372.53 3,096.74 Manchinery Hire Charges 137.69 90.48 Energy Charges 246.66 375.90 Repair & Maintenance to Machinery 58.45 24.68 Prospecting Expenses 13.35 10.56 Exploration Expenses 6.19 - Dereservation Plan 7.02 20.34 Afforestation 34.17 2,739.73 Stamp Duty & Registration Charges for Supplimentary Lease Deed

- 5,728.58

Forest Environtment Expenses 444.30 1,138.80 Mining Plan Fees 263.31 59.16 Consent Fees 75.82 86.34 Mine Environment 81.44 65.76 Safety Week Expense 18.29 16.40 Maintenance of Lease-Hold Area 28.11 21.69 Surface Rent 337.71 339.12

34,961.76 37,696.47 B. Stores and spares consumedExplosives 9.16 13.83 Drilling Accessories Consumed 10.65 9.43 Safety equipment consumed 23.86 11.52 Provision against non-moving stores and spares 370.30 124.55 Provision against slow-moving stores and spares 51.27 Mining Tools Consumed 1.27 2.59 Belt consumed 2.80 0.34 Machinery Spare Consumed 146.71 106.79 Machine Insurance 0.01 Other Store Consumed 85.40 49.47 POL Consumed 553.10 452.12 Laboratory Consumed 0.80 1.04 TyreTube Battery consumed 22.72 11.82 Motor Vehicle Spares Consumed 0.30 0.34 Electrical Store Consumed 50.80 28.19 Total 1,329.15 812.03

233

C. Administrative Expenses(i)Travelling expenses - Domestic 74.78 78.40 - Directors-Domestic 4.61 3.67 (ii) Auditor’s Remuneration - For Statutory Audit 5.75 5.75 - For Tax Audit 1.44 1.44 - For Certification on CFS & Reporting on ICOFR 2.30 2.30 - For Cost Audit 1.44 1.44 Fees & Tariff 53.05 45.47 Repair & Maintenance to Building 940.73 849.13 Repair & Maintenance to Others 371.36 408.59 Annual Maintenance Contract 42.40 32.03 Rent 44.21 44.38 Rates & Taxes 23.00 33.20 Insurance 0.34 0.14 Motor Vehicle Insurance 10.46 8.97 Dead Rent 514.99 460.32 Motor Vehicle Tax 6.68 9.23 Printing & Stationary 72.76 66.76 Telephone & Postage 33.66 30.40 Periodicals & Magazines 3.17 2.95 Hire Charges 619.18 539.48 Rehabilitation Expenses - 19.92 ERP/SAP Expenses 171.56 140.38 Guest House Expenses 23.59 22.39 Survey Expense 1.97 0.64 Watch & Ward 2,238.98 2,138.32 Consultancy Charges 178.31 4.57 Legal Expenses 114.48 111.90 Donation 3,007.50 - Electricity Charges of Offices 48.53 48.53

8,611.23 5,110.70 D. Selling & DistributionRoyalty 34,888.37 33,547.94 User Fees 129.26 86.32 District Mineral Foundation 10,376.34 13,199.62 National Mineral Exploration Trust 691.76 879.97 OST /VAT/CST on Demand - 10.85

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234

Analysis Charges 175.97 177.61 Selling expenses 240.64 147.42 Advertisement & Publicity 667.64 138.41 Transportation,Railway Freight, Wagon Loading,Plot Rent, etc.

2,325.30 1,570.05

49,495.28 49,758.19 E. Other ExpensesProvision for Diminuation in Investment - 450.72 Dimuniuation C/A 17.51 25.04 Loss on Sale/Discard/Surveyed of Assets (16.38) (13.77)Net Present Value * - 1,372.80 Penalty & Fines 520.96 124.87 Other Miscellaneous Expenses 480.75 80.01 Prior Period Adjustment - -146.91 Reconciliation effect of old balances 3,992.22 CSR 2,918.57 4,451.00

7,913.63 6,343.76 Total (A+B+C+D+E) 1,02,311.05 99,721.15

(i) *As per Order of Hon’ble Supreme Court of India, the guidelines Government of India, Ministry of Environment and Forest, New Delhi and Circulars of Government of Odisha, Forest and Environment Department, NPV of forest land (in case of diversion proposals which are granted in principle approval after (30.10.2002) is to be realised from the user

agency while diverting the forest land for non forest purposes under the Forest Conservation Act 1980 (Ammended) in the range of Rs. 7.30 lakhs per Hect. to Rs. 10.43 Lakh per Hect., depending upon the quantity, quality and density of the forest land in question.

235

(Rupees in Lakhs)


29. Contingent Liabilities

Contingent Liability 2016-17Rs. In Lakh

2015-16Rs. In Lakh

A. Legal

i Shri D.P. Sahoo (land loser) has filed a case against OMCL, Barbil claiming Rs.7, 05,685/- towards balance cost of the land sold to OMCL. It is pending before the Hon’ble Court of Civil Judge (SD), Champua.

7.06 7.06

ii Case was filed by Sri S.K.Panda versus OMCL claiming Rs.2, 82,244/- towards supply of furniture and renovation work of Guest House Building of the erstwhile OMC Alloys Limited (OMCL). Our counter has been filed and the matter has so far not been disposed off.

2.82 2.82

iii Sales of Chrome Ore & Concentrate through e-auction is before disposal of writ petition ( C ) no.17088/2012 by Hon’ble High Court. As per the order of the Honorable High Court, the billing is done at the highest bidding rate against the individual bidding rate for different customers through e-auction policy. (Rs.1885.00 lakh towards differential cost of material and Rs.95.37 lakh towards VAT/CST & ET totaling to Rs.1980.37 lakh) OMC is appealing the auction rate and the matter is under sub-Judice.

1980.37 1,980.37

iv The IFC Case no.1/06 was filed before the Member Secretary, Industry Facilitation Council, Mumbai by M/s.Indiana Engg. Works (Bombay) Pvt Ltd. In the prayer, the petitioner has sought before the Conciliator for the award for a sum of Rs.5,37,01,293/- in respect of his claim payment to the work order issued to him for design, supply, installation and commissioning of one number of 75 TPH Crusher and Screen plant in our BPJ Mines. We had filled a Writ Application before the Hon’ble High Court of Orissa challenging the jurisdiction of the proceeding at Thane, Maharastra under Micro Small Medium Enterprises Development Act, 2006. But while the Writ Application was pending before the Hon’blle Court, the Council has passed an Order directing us to pay principal amount of Rs.45,60,886/- and interest as per the Act to the respondent within one month from the date of receipt of the Order.further, we have filled a petition before the Hon’ble High Court for amendment of the petition as well as a misc. case seeking stay operation of such Order dtd. 23.02.2015 passed by the Micro and Small Enterprises Facilitation Council,Konkan Region,Thane,Mumbai.The Hon’ble Court vide Order dtd.12.05.2015 stayed the operation of the order dtd.23.02.2015 which is still in force.

537.01 537.01

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236

v M/s.FGM had claimed an amount of Rs.4,37,74,202.00 and further interest @ 15% till the date of payment for the work of raising, calibration and transportation of CLO/Fines at Daitari Iron Ore Project before the Arbitrator, Sri. A.K Parichha. On 07.12.2015, the learned Arbitrator had awarded a sum of Rs. 59,28,580/- in favour of the claimant and had directed the respondent to pay the same to the claimant within a period of ninety days from the date of the award. In the meantime, we have filed an Arbitration Petition No. 12 of 2016 before the Hon’ble District Judge, Khurda at Bhubaneswar for setting aside and stay of the award dtd. 07.12.2015 passed by the learned Arbitrator and the matter is pending.

59.29 59.29

vi During 1994-95 MMTC collected Advance of US$ 547470.00 from M/s Sinexim Co. for export of Chrome Ore of OMC & passed on the advance after deduction of 1% commission to OMC. The buyer failed to lift the materials. The arbitration case between MMTC and M/s Sinexim Co. has been finalized during 2002-03 and MMTC had to refund the advance along with 12% interest to M/s Sinexim Co. In turn MMTC has filed an arbitration case – Arb(P) 162/05 against OMC in Delhi High Court to realize the amount. The contingent Liabilty is $4,37,976 amounting to Rs.290.52 lakh in INR. The case has since been settled.

0.00 290.52

vii M/s. A.K Enterprises claimed an amount of Rs. 68,19,696.67 against the pending dues along with interest for the period of with-holding of the payment in respect of the job for commissioning 135KW MAMC winder at Bangur Mines of OMC Ltd. We have received the Award dtd. 20.05.2017 passed by the learned Arbitrator, Sri Pitamber Patra, wherein he has granted some relief to the claimant out of the amount claimed and the same is under review.

68.20 68.20

viii M/s. D.K Nayak had claimed an amount of Rs. 9,40,56,780/- and interest @ 18% from the due date i.e. 07.07.2011. He has also claimed Compensation @ 18% per annum on the contract value of Rs. 3,13,52,260/- for 3 years i.e. Rs. 9,40,56,780/-. On 18.07.2016, the learned Arbitrator, Sri. P.C Mishra, retired District Judge allowed the claims of the contractor in part, holding that the claimant/contractor is entitled to be paid an amount of Rs. 95,27,629/- (Rupees Ninety Five Lakhs Twenty Seven Thousand Six Hundred Twenty Nine) only towards R/A Bills, EMD, Breach of Contract, sum under additional/supplementary claim and interest calculated thereon. We have filed a petition before the learned District Judge, Khurda for stay operation of the award dtd. 18.07.2016 passed by the learned Arbitrator, Sri. P.C Mishra, retired District Judge and the matter is pending.

940.57 940.57

237

IX M/s S.S Mining & Infra (P) Ltd.has claimed an amount of Rs.2456.94 lakhs due to the loss sustained by the claimant on account of cancellation of 5 remaining years of contract for excavation/raising of iron ore etc. and shifting of the products to Jagar Stock Yard of Gandhamardan Iron Ore mines (Block-A).The matter is pending before the sole Arbitrator, Sri A.K Parichha.

2456.94 2,456.94

X M/s. Balaji Metals and Minerals Pvt. Ltd. has claimed an amount of Rs. 18,01,79,366/- along with the ante-lite, pendent-lite and post-lite interest on the awarded amount and with the cost of the arbitration arising out of Tender Notice No. 78/OMC/P&T dtd. 03.01.2007 for composite raising of iron ore at Khandabandh Iron ore mines. The matter is pending before the High Court of Orissa Arbitration Centre, Cuttack.

1801.79 -

XI Sri. Surya Narayan Kar, Secretary, Gandhamardan Mines Loading Agency has claimed an amount of Rs. 7,45,07,460/- along with interest and has prayed before the learned Arbitrator Sri. P.C Mishra, retired District Judge to extend the period of work of the claimant firm for another one year as per the terms and conditions of the Agreement dtd. 20.11.2013 entered between the claimant and OMC Ltd. for loading of iron ore to the buyer’s carriers and associated works by means of Pay Loader at Gandhamardan Iron ore mines. The matter is pending.

745.07 -

Sub Total 8599.12 6,342.78 B. Central Excise & Service Taxi Show cause notice received for Barbil Region is for Rs.18.00 lakh .

Demands raised by Central Excise and Customs Department alleging manufacturer of iron ore concentrate at Barbil for Rs.18.00 Lakh was rejected by Customs Excise & service Tax Appellate Tribunal, Eastern Bench, Kolkata. The Department has appealed in Supreme Court against the order of Tribunal.

18.00 18.00

ii 21 Nos. Show Cause Notices (SCN) received from Central Excise Authority for payment of Central Excise Duty for manufacturing of Iron Ore Concentrate at Daitari. Replies have been filed with the Department against each Show Cause Notice upto 30.09.2014 and the cumulative demand is Rs.45,101.15 lakh. Out of these 21 Nos. SCN, 14 Nos. of SCN for the period from 23.07.1996 to 28.02.2011 have been disposed off with a favorable order quashing the demand amounting to Rs.33362.94 lakh and 7 Nos. of SCN for the period from 01.03.2011 to 30.09.2014 has been confirmed by the Commissioner of Central Excise, Customs and Service Tax and demanded Rs.11738.21 lakh along with penalty of Rs.11738.21 lakh. The Corporation has filed the appeal before the CESTAT by depositing Rs.880.37 lakh on 22.09.2015. Further, 4 Nos. of SCN for the period from 01.10.2014 to 30.09.2016 has been received for Rs.11,059.86 Lakh.

33655.91 27,693.82

AUDIT REPORT

238

iii a) Asst. Commissioner of Central Excise, Customs & Service Tax , Balasore had demanded Excise Duty of Rs.102.06 lakh along with interest on shortage of 25,015 MT of Chrome Concentrate during 1996-97 to 2003-04 on account of loss during transport/handling/storage of Ore while transporting from COB Plant to Paradeep. The representation made by the Corporation to Central Board of Excise & Customs for waival of Excise Duty on such loss had been turned down. The Corporation has deposited Rs.40 lakh with Central Excise Authority, as per the Stay Order of Hon’ble High Court Orissa. The Corporation has filed an appeal before the Hon’ble Orissa High Court vide case no WPC No 3098/2008 for relief of the Duty which is still pending for disposal.

62.06 62.06

The Central Excise Authority have demanded further an amount of Rs.174.11 lakh for the period 2005-06 to 2009-10 for a quantity of 13303.305MT against which the Corporation has deposited Rs.56 lakh on 21.04.2014, as per the Stay Order of Hon’ble High Court Orissa. The Corporation has filed an appeal before the Hon’ble Orissa High Court vide case no WPC No 14385/2013 for relief of the Duty which is still pending for disposal.

118.11 118.11

iv The Central Excise Customs and Service Tax Authority have issued Demand cum Show Cause Notices for Rs. 26.59 Lakh towards Service Tax and Interest on alleged storage & handling charges of materials for the period 2004-05 to 2010-11. Against which the Corporation has filed appeals before CESTAT on 21.06.2016 and deposited Rs.0.68 lakh.

25.91 26.59

1. Period of Demand - April 2004 to September, 2008, SCN/Order No.- 10295-A, dated 03.08.2009, Service Tax & Penalty Rs.11.46 lakh, Present Status- Appeal set aside by the Commissioner (Appeal ) Central Excise , Customs and Service Tax, Bhubaneswar. The department has filed the appeal before CESTAT.2. Period of Demand- October, 2008 to Septmber,2009 , SCN/Order No.16/2011-12 , Date -31.03.2012 , Service Tax Rs.4.59 lakh, Penalty Rs.4.59 lakh, Penalty Rs.0.05 lakh, Present Status- The demand has been confirmed by the Commissioner (Appeal), Central Excise & Service Tax, Bhubaneswar. The Corporation has filed the appeal before CESTAT by depositing Rs.0.46 Lakh on 21.06.20163. Period of Demand,- October,2009 to March,2010 , SCN/Order No.20/2011-12 Date-31.3.2012, Service Tax Rs.2.25 lakh, Penalty Rs.2.25 lakh, Penalty Rs.0.05 lakh, Present Status- The demand has been confirmed by the Commissioner (Appeal), Central Excise & Service Tax, Bhubaneswar. The Corporation has filed the appeal before CESTAT by depositing Rs.0.22 Lakh on 21.06.2016

239

4. Period of Demand-2010-11 SCN/Order No1359, DATE-10.4.2012 Service Tax & Penalty Rs.2.03 lakh, Present Status- SCN has been dropped by Asst. Commissioner vide order dated 28.08.2014 against which the Department has gone for an appeal before Commissioner of Appeal which is pending.Total: Service Tax & Penalty Rs.25.91 lakh

v 4 Nos. Demand Cum Show Cause Notice received from Commissioner of Central Excise, Customs & Service Tax, Bhubaneswar, for manufacturing of Iron Ore Concentrate at Gandhamardan Region for the period from 01.03.2011 to 30.09.2014 and confirmed the demand of Rs.12271.74 lakh and penalty of Rs.12271.74 lakh towards Central Excise Duty total amounting to Rs.24543.48 lakh. The Corporation has filed the appeal before the CESTAT by depositing Rs.920.38 lakh on 16.05.2016. Further, 3 Nos. of SCN have been received for payment of Rs.2980.47 lakh for the period from 1.10.2014 to 31.03.2016.

26603.57 26,462.19

Sub Total 60483.56 54380.77C. Commercial Tax i An Appeal is pending before Orissa Sales Tax Tribunal for the F.Y. 2002-

03 (Sales to NINL) under OST, Act. The disallowance of exemption has resulted in a demand of Rs.29.96 Lakh out of which an amount of Rs.20.00 lakh has been deposited(Rs.15.00 lakh against the stay order of ACST (Appeal) dated 04.09.2006 and Rs.5.00 Lakh against stay order of Commissioner of Sales Tax, Odisha order dated 12.11.2008.)

9.96 9.96

ii An Appeal is pending before Orissa Sales Tax Tribunal for the F.Y. 1996-97 (Export sale through MMTC & Interstate sales) under CST, Act for a demand of Rs.50.89 lakh. The Corporation has deposited Rs.25.00 Lakh ( Rs.17.00 Lakh on 29.03.2000 and Rs.8.00 Lakh on 16.10.2000) against the demand as directed by the Sales Tax Authority.

25.89 25.89

iii Demand has been raised by DCCT, Bhubaneswar for Rs.12,58,789.00, Rs.46,57,227.00 and Rs.1,92,07,939.00 by reopening the assessment against the utilisation of way bills for the period 2005-06, April,2006 to June,2006 and July,2006 to March,2007, respectively. Appeal has been confirmed by Addl. Commissioner, Commercial Tax, Odisha, South Zone for 2005-06 and April,2006 to June,2006 vide order dated 26.03.2015 and the matter relating to July 2006 to March,2007 is still pending. The Corporation has filed appeal by depositing, 20% of demanded tax amounting to Rs.12,80,529.00 on 29.09.2015 and Rs.20.00 Lakh on 19.03.2016 against the stay order dated 11.03.2016 and against the demand of Rs.12,58,789.00 refund of Rs. 5.00 Lakh of 2005-06 has been adjusted by the Sales Authority.

213.43 213.43

iv Assessment of ET for the period 01.04.2005 to 31.03.2008 is under dispute with a tax demand of Rs.38,23,743.00 and penalty Rs.76,46,480.00 totaling to Rs.1.14,71,229.00. Appeal has been filed before Orissa Sales Tax Tribunal on dtd.02.05.2013. The Corporation has deposited Rs.25.00 Lakh as per direction of Commissioner ,Commercial Tax ,Odisha, against the stay order.

89.70 89.70

AUDIT REPORT

240

v Against the demand of CST for Rs.40.90 lakh (Rs.25.20 lakh + Rs.15.70 lakh for the period 01.07.2006 to 31.03.2008, an amount of Rs.6.32 lakh relating to Q.E. 30.06.2006, has been adjusted vide order memo No.1952/CT dated 16.09.2010 by the Sales Tax Authority. Further, the Corporation has deposited Rs.10.56 lakh on 28.05.2010. The Corporation has filed an appeal before Orissa Sales Tax Tribunal against the order of 1st Appellate Authority passed on 02.05.2013.

24.02 24.02

vi Assessment of VAT for the period 01.04.2008 to 31.01.2012 has been completed and an amount of Rs.82,532.00 is under disopute.An appeal has been filed before Adl.Commissioner,Commercial Tax on 04.12.2013. The Demand was for Rs.2,47,596.00 (Tax Rs.82,532.00 and interest Rs.1,65,064.00) and the Corporastion has deposited Rs.16,506.00 on 03.12.2013.

2.31 2.31

vii Assessment of Entry Tax for the period 1.4.2008 to 31.1.2012 has been completed and an amount of Rs..24,29,344.00 is under dispute (Total Demand is Rs.91,69,807.00 including interest and penalty). An appeal has been filed before the Addl. Commissioner Commercial Tax, Odisha, South Zone on 4.12.2013 which has been disposed-off by reducing the demand to Rs.73,07,084.00 (Tax Rs.18,08,677.00 and interest & Penalty. Rs.54,98,407.00) order dated 26.03.2015 against which the Corporation has deposited Rs.2976100.00. .The Corporation filed an Appeal before Sales Tax Tribunal,Odisha which is yet to be disposed off.

43.31 49.78

viii Assessment of CST for the period 01.04.2008 to 31.12.2011 has been completed and an amaount of Rs.8,65,820.00 is under dispute. An appeal has been filed before Addl.Commissioner, Commercial Tax on 04.12.2013 , which has been set aside vide order dated 20.08.2015 against the demand of Rs.25,97,458.00 (Tax Rs.8,65,820.00 & Penalty Rs.17,31,638.00) and the Corporation has depositd Rs.4,32,000.00 (Rs.1,73,164.00 + Rs.2,58,836.00 ) on 12.06.2013 and 29.03.2014 as per the order of the Commissioner of Commercial Tax, Odisha.Re-assessment by the Sales Tax Dept. yet to be started

21.65 21.65

ix The dispute against the Entry Tax amount deposited by M/s.OSIL for the year 2004-05 has been set aside by the 1st appealate authority. The Dy. Commisssioner of Commercial Tax has to check the genuineness of Rs.5.29 lakh & Rs.8.19 lakh and to reassess according to the direction given in the appeal order.

13.48 13.48

x Demand has been raised by DCCT, Bhubaneswar for Rs.14,61,258.00 on utilisation of waybills for the period 01.04.2008 to 31.03.2009. The Corporation has deposited Rs.97,417.00 on 23.10.2013 and Rs.3,89,669.00 on 29.03.2017. The Addl. Commissioner, Commercial Tax, Odisha confirmed the demand. The Corporation has filed an appeal before the Sales Tax Tribunal.

9.74 13.64

241

xi “Demand has been raised by DCCT, Bhubaneswar for Rs.5,05,141.00O on utilisation of waybills for the period 01.04.2007 to 31.03.2008. An appeal has been filed before the Sales Tax Tribunal, Odisha and the Corporation has deposited Rs.33,680.00 on 12.06.2013 and Rs. 66,320.00 on 29.03.2014 against the stay order.

4.05 4.05

xii Assessment of VAT for the period 01.01.2012 to 31.03.2014 has been completed with a demand of Rs.1,36,890.00 (Tax Rs.45,630.00 and interest Rs.91,260.00), which is under dispute. An appeal has been filed before the Addl. Commissioner of Commercial Tax. Against the demand, the Corporation has deposited Rs.9,126.00 on 07.01.2016 ,Rs.9,000.00 on 20.06.2016 and Rs.16,874.00 on 28.03.2017..

1.02 1.19

xiii Assessment of Entry Tax for the period 1.1.2012 to 31.3.2014 has been completed with nil tax demand. However, there is a dispute towards interest and penalty is Rs.97,76,949.00. An appeal has been filed before Addl. Commissioner Commercial Tax, Odisha, South Zone ,which has been disposed off by the ACCT by reducing the demand to Rs.69,49,629.00. Against the demand which the Corporation has deposited Rs.8,80,535.00 on 07.01.2016.

60.69 88.96

xiv Assessment of CST for the period 01.01.2012 to 31.03.2014 has been completed and an amount of Rs.9,74,935.00 is under dispute. An appeal has been filed before the Addl.Commissioner, of Commercial Tax . and the demand has been reduced to Rs.11,92,024.00(Tax Rs.8,03,973.00 & Penalty Rs.3,88,051.00). The Cororation has depositd Rs.1,94,987.00 on 07.01.2016, Rs.1,95,000.00 on 20.06.2016 and Rs.4,32,202.00 on 18.11.2016.

3.70 25.35

xv Penalty of Rs.1,70,61,242.00 has been imposed by the sales tax authority for the period from 01.01.2012 to 31.03.2014 on delay payment of VAT on Works Contract. An appeal has been filed before the Commissioner of Comercial Tax , Odisa, and before the Sate Dispute Redressal Committe also.to waive out the penality since the VAT amount was duly paid long back.

170.61 170.61

Sub Total 693.56 754.02D. Income Tax1 Income Tax assessment has been completed till Asst.Year 2014-15.

As against the demand of Rs.5,59,369.30 lakh the corporation has provided for and amount of Rs 5,15,232.86 lakh for the Assessment Years 2005-06 to 2016-17. Accordingly the balance amount of Rs.44136.44 lakh have been shown as contingent liability.

44,136.44 74,690.40

Sub Total 44136.44 74,690.40 E. Mining, Geology, Forest & Environmenti Royalty demanded by Director of Mining & Geology, Government of

Odisha.6.33 6.33

ii Demanded by Dy. Director of Mines, J.K. Road towards cost price of Chrome Concentrate found in excess of book balance vide letter No.4960 dtd.4.05.2011

663.48 663.48

AUDIT REPORT

242

iii A quantity of 80603.325 M.T. of Chrome ore of Kaliapani, which was seized by Director of Mines, has been disposed off. As per the order of Hon’ble Court of JMFC, J.K.Road, vide Misc. case No. 71 of 2009, the amount realized from sales of the ore has been kept in separate account along with interest earned on this amount.

8445.90 7,912.77

iv Demand of Deputy Director of Mines (April 2012) , Jajpur Road relating to the period from 2008-09 and 2009-10 towards Royalty of Rs.72 lakh and interest on Royalty Rs.115 lakh on the quantity of loss due to beneficiation of Ore in respect of Daitary Iron Ore Mines. In reply the Managments stand is that “The loss of royalty for the period FY 2008-09,2009-10 & 2010-11 has been communicated by the DDM,JK Road to the Mines Manager,Daitari vide letter No.1115 dated 19.4.2012 based on the audit report of the auditors of Steel & Mines Department Govt. of Odisha. As per the rule, interst on royalty can be charged if this demanded royalty is not paid within 30 days of the notice served. Whereas the interest of Rs.1.15 crore has been claimed on the royalty of Rs.0.72 crore before the communication of royalty demand i.e. vide their letter No.1043 dtd.12.4.2012. This contradicts the provision.The Steel & Mines guideline on calculation of royalty vide their letter No.5905 dated 7.9.2010 was applicable from August,2009.But this royalty due has been calculated in the same manner w.e.f. April,2008 in this demand letter.For this reason,the assessment has been disputed and no provision on royalty liability has been created. On seettlement of the issue, the amount payable, if any, will be accounted for in the year of settlement”. However, as directed by AG during the supplimentary Audit for the F.Y. 2013-14 this was shown as Contingent Liability.

187.00 187.00

v a) The Mining Officer, Keonjhar Circle for Rs.208.08 crore towards unlawful extraction/removal of 24.65 lakh MT of iron ore during 2007-08 and 2008-09 from Gandhamardan Block A iron mines. To counter this OMC approached Hon’ble Supreme Court for disposing of the disputed ore from Gandhamardan Mines & the sale of ore has been carried out as per the directive of the Court with the sale value being deposited with the State Government in due compliance to the Supreme Court directive. However, as directd by AG during the supplimentary Audit for the F.Y. 2013-14 this was shown as Contingent Liability.

20808.00 20,808.00

243

VI Due to non-availability of stacking space, the ore raised from Gandhamardan Block-B (for which OMC had all statutory clearances) was stacked in Gandhamardan Block-A (whose forest clearance is under process). However, the Statutory Authorities did not allow OMC to sell such ore from Gandhamardan Block-A. As a result, OMC has preferred an appeal to Hon’ble Supreme Court for allowing it to sell the ore. Honorable Supreme Court, had directed while disposing I.A. No.3402 in I.A.No.2378 in 2164 with I.A. no.3433 in Writ Petition (Civil) No (s). 202 of 1995, to take steps to sell all the dumped materials from the Gandhamardan Forest Area and deposit the sale proceeds in a Nationalized Bank and the amount can be released to OMC, only after obtaining Order from the Court.

a -do- (FY 2012-13) 402436.040 MT 6108.79 6,108.79 b -do- (FY 2013-14) 733609.410 MT 15846.65 15,846.65 c -do- (FY 2014-15) 1062554.670 MT 22687.44 22,687.44 d -do- (FY 2015-16)203110.620 MT 2904.48 2,904.48

-do- (FY 2016-17) 469280.630 MT 4034.91 - vii The sale proceeds realized on sale of 415205.720 MT of total seized

iron ore at Baliparbat Stockyard of Daitari Iron Ore Mines against which Court Case is pending.

a --do-- (FY2014-15) 137172.560 MT 5829.19 5,829.19 b --do-- (FY2015-16) 269400.510 MT 4386.18 4,386.18 c --do-- (FY2016-17) 8632.650 MT 114.67 - viii Demand of DDM, Joda Circle, Keonjhar towrads balance amount of

Royalty on auction proceeding for disposal of Seized Mineral at Barbil Region for 84497.2 MT.

28.75 -

Sub Total 92051.77 87340.31F. Demand received from various DDMs and Mining Officers towards

excess productionGandhamardhan - A : Vide demand Letter no.MO/2029/12.09.2012, Reminder letter no.MO/348/21.02.2014, Stayed vide RA no.22/(94)/2014-RC-I dt.10.10.2014.

52100.43 52,100.43

Gandhamardhan - B : Vide demand Letter no.MO/2027/12.09.2012, Reminder letter no.MO/346/21.02.2014, Stayed vide RA no.22/(90)/2014-RC-I dt.10.10.2014.

111514.79 1,11,514.79

Koira-Kasira : Vide demand Letter no.DDM/5336/14.11.12, Reminder letter no.DDM/352/03.02.2014, Stayed vide RA no.22/(87)/2014-RC-I dt.10.10.2014.

2813.16 2,813.16

Koira-Bhanjapali : Vide demand Letter no.DDM/5109/20.10.2012, Reminder letter no.DDM/344/03.02.2014, Stayed vide RA no.22/(88)/2014-RC-I dt.10.10.2014.

1822.52 1,822.52

Kurmitar : Vide demand Letter no.DDM/5027/18.10.2012, Reminder letter no.DDM/354/03.02.2014, Stayed vide RA no.22/(100)/2014-RC-I dt.10.10.2014.

171808.91 1,71,808.91

AUDIT REPORT

244

Khandabandha : Vide demand Letter no.DDM/42501/09.11.2011 for Rs.51437.87 Lakh & Revised Demand Letter DDM/898/15.02.2014, Stayed vide RA no.22/(93)/2014-RC-I dt.10.10.2014.

16460.21 16,460.21

Seremda Bhadrasahi : Vide demand Letter no.DDM/6629/30.10.2012 for Rs.19452.15 Lakh & Revised Demand Letter DDM/949/15.02.2014, Stayed vide RA no.22/(96)/2014-RC-I dt.10.10.2014..

26168.95 26,168.95

Dubna : Vide demand Letter no.DDM/42661/9.11.2011 for Rs.16937.72 Lakh & Revised Demand Letter DDM/856/15.02.2014, Stayed vide RA no.22/(92)/2014-RC-I dt.10.10.2014..

7265.64 7,265.64

Sakradihi : Vide demand Letter no.DDM/42665/09.11.2011 for Rs.46181.53 & Revised Demand Letter DDM/853/15.02.2014, Stayed vide RA no.22/(97)/2014-RC-I dt.10.10.2014..

7951.67 7,951.67

Banspani : Vide demand Letter no.DDM/42625/09.11.2011 for Rs.6912.69 Lakh & Revised Demand Letter DDM/883/15.02.2014, Stayed vide RA no.22/(89)/2014-RC-I dt.10.10.2014.

1826.61 1,826.61

BPJ : Vide demand Letter no.DDM/42509/09.11.2011 for Rs.79946.03 Lakh & Revised Demand Letter DDM/889/15.02.2014, Stayed vide RA no.22/(91)/2014-RC-I dt.10.10.2014..

36915.01 36,915.01

Bangur : Vide demand Letter no.MO/354/21.02.2014, Stayed vide RA no.22/(95)/2014-RC-I dt.10.10.2014.

1514.49 1,514.49

Daitari : Vide demand Letter no.DDM/2462/08.07.2013, Delay in filling RA accepted vide RA no.22/(117)/2014-RC-I

120350.98 1,20,350.98

Roida - C : Vide demand Letter no.DDM/802/15.02.2014, under Sub Judice.

25,324.34 25,324.34

South Kaliapani : Vide demand Letter no.DDM/3800/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

325674.83 3,25,674.83

Kaliapani: Vide demand Letter no.DDM/3803/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

2842.06 2,842.06

Sukrangi : Vide demand Letter no.DDM/3802/15.12.2012, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

2638.51 2,638.51

Kathpal : Vide demand Letter no.DDM/2018/31.10.2013, Reminder letter no.35/Mines/09.01.2015, payable as per decission against the Revision Application filed before the Mines Tribunal, Ministry of Mines, GoI.

76.07 76.07

Sub Total 915069.18 915069.18

245

G.I. Demand against NPV provided in FY 2012-13, written back in Financial Year 2015-16 as per MOEF & CC, GoI Circular No.1-51/2015-FC dt.01.04.2015 and based on opinion of Sri R. K. Mehta, Advocate, Supreme Court of India. But as DFO was not vacated the Demand Notice the same were shown under Contingent Liablity here.Boula 1,947.11 1,947.11 Nishikhal 208.18 208.18 Dumuria China Clay 139.69 139.69 Roida D 776.39 776.39

G.II. Though based on the Demand of DFO provision was created in respect of Daitari & Rantha for 100% in FY 2012-13, but the Company had surrendered 50% area. As per direction of Supreme Court of India OMC had submitted an undertaking that if Supreme Court will direct OMC to pay the balance 50% then only OMC needs to pay the balance payment. As per obsrvation of P&AG during Suplementary Audit in Financial Year 2014-15 .The provision created for 50% was written back in Financial Year 2015-16 and shown under cotingent liabilty.

-

Daitari 2,112.75 2,112.75 Rantha 657.30 657.30 Sub Total 5,841.42 5,841.42

H. Demand against Stamp Duty under Section 3A of Indian Stamp (Odisha Amendement) Act, 2013 received from Distrct Collector which was stayed by Hon’ble High Court,Odisha,but it was not vacated shown under contingent Liability.Sukrangi chromite mines: Demand Notice No.2500 dt.08.07.2013 55301.40 55,301.40 Gandhamardan Block-B: Demand Notice No.1022 dt.08.07.2013 65173.98 65,173.98 South kaliapani : Demand Notice No.2506 dt.08.07.2013 63519.32 63,519.32 Barbil Region: (Seremeda, Bhadrasahi & Barpada Kasia) Iron and Manganese mines Demand Notice No.1020 dt.08.07.2013

10833.36 10,833.36

Khandadhar: Demand Notice No.492 & 494 dt.08.07.2013 77333.25 77,333.25 Sub Total 2,72,161.31 2,72,161.31

I

Demand received against Wildlife Management Plan (Regional & Site Specific) payable only prior to Grant of Stage I Forest ClearanceS.G.B. K. Mines Demand Letter no.62/Mining dt.06.01.2015 by DFO, Keonjhar

434.95 434.95


215.63 215.63

Sub Total 650.58 650.58 J. Othersi Extra claim by State PWD towards construction of Building. 0.36 0.36 ii Interest demanded by Tahasildar, Barbil. 0.35 0.35

Sub Total 0.71 0.71 Total 13,99,687.65 14,17,231.47

AUDIT REPORT

246


30. Financial Instruments

(i) Capital Management :- The Company’s capital management is intended to create value for shareholders by facilitating the meeting of long term and short term goals of the Company. The Company determines the amount of capital required on the basis of annual business plan, coupled with long term and short term strategic investing plan. The funding requirements are met through equity, convertible and non- convertible debt securities, and other short term and long term borrowings. The Company’s policy is aimed at combination of short term and long term borrowings.

The Company monitors the capital structure on the basis of net debt to equity ratio and maturity profile of the overall debt portfolio of the Company. (ii) Disclosure on Financial Instruments This section gives an overview of the significance of financial instruments for the Company and provides additional information on balance sheet items that contain financial instruments. (a) Financial assets and liabilities

The following table presents the carrying amount and fair value of each category of financial assets & liabilities as at March 31, 2017


Amortised cost



relation-ship




income



loss

Total Car-rying Value

Total Fair Value

Financial assets

Financial assetsInvestments - - - - - - Loans 1,11,837.12 - - - 1,11,837.12 1,11,837.12 Trade receivables 10,608.04 - - - 10,608.04 10,608.04 Other financial assets

1,53,630.10 - - - 1,53,630.10 1,53,630.10


1,15,390.42 - - - 1,15,390.42 1,15,390.42


3,91,465.68 - - - 3,91,465.68 3,91,465.68

Financial liabilitiesBorrowings - - - - - - Trade payables 24,582.86 - - - 24,582.86 24,582.86 Other financial liabilities

5,711.50 - - - 5,711.50 5,711.50


30,294.36 - - - 30,294.36 30,294.36

(Rupees in Lakhs)

247


Amortised cost



relation-ship




income

Classi-fied as

fair value through

statement of profit &

loss


Total Fair Value

Financial assets

Financial assetsInvestmentsTrade receivables 6,604.21 - - - 6,604.21 6,604.21 Loans 1,38,664.83 - - - 1,38,664.83

1,38,664.83 Other financial assets

20,105.59 - - - 20,105.59 20,105.59


2,85,256.78 - - - 2,85,256.78 2,85,256.78


4,50,631.41 - - - 4,50,631.41 4,50,631.41

Financial liabilitiesBorrowings 73,700.00 - - - 73,700.00 73,700.00 Trade payables 28,458.08 - - - 28,458.08 28,458.08 Other financial liabilities

6,223.39 - - - 6,223.39 6,223.39


1,08,381.47 - - - 1,08,381.47 1,08,381.47

(Rupees in Lakhs)

AUDIT REPORT

248

As at April 1, 2015

Amortised cost



relationship




income

Classi-fied as

fair value through

statement of profit &

loss


Total Fair Value

Financial assets

Financial assetsInvestments - - 450.00 - 450.00 450.00 Trade receivables

3,643.15 - - - 3,643.15 3,643.15

Loans 86,811.91 - - - 86,811.91 86,811.91 Other financial assets

27,581.35 - - - 27,581.35 27,581.35


4,07,211.45 - - - 4,07,211.45 4,07,211.45


5,25,247.86 - 450.00 - 5,25,697.86 5,25,697.86

Financial liabilitiesBorrowings 1,50,200.00 - - - 1,50,200.00 1,50,200.00 Trade payables 14,876.26 - - - 14,876.26 14,876.26 Other financial liabilities

8,933.53 - - - 8,933.53 8,933.53


1,74,009.79 - - - 1,74,009.79 1,74,009.79

(Rupees in Lakhs)

249

(b) Financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3, as described below:

Quoted prices in an active market (Level 1): This level of hierarchy includes financial assets that are measured by reference to quoted prices (unadjusted) in active markets for identical assets or liabilities. This category consists of investment in quoted equity shares, quoted corporate debt instruments and mutual fund investments.

Valuation techniques with observable inputs (Level 2): This level of hierarchy includes financial assets and liabilities, measured using inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This level of hierarchy includes Company’s over-the-counter (OTC) derivative contracts.

Valuation techniques with significant unobservable inputs (Level 3): This level of hierarchy includes financial assets and liabilities measured using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. The main items in this category are investment in unquoted equity shares, measured at fair value.

(iii) The short-term financial assets and liabilities are stated at amortized cost which is approximately equal to their fair value.

(c) Financial risk management In the course of its business, the Company is exposed primarily to interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial instruments.

The Company has a risk management policy which covers the risks associated with the financial assets and liabilities such as interest rate risks and credit risks. The risk management framework aims to:

(i) Create a stable business planning environment by reducing the impact of currency and interest rate fluctuations on the Company’s business plan.

(ii) Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.

(i) Market Risk : - Market risk is the risk of any loss in future earnings, in realizable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.

(ii) Credit Risk :- Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk of deterioration of creditworthiness as well as concentration risks.

(iii) Liquidity Risk: Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements.

(d) The following table shows a maturity analysis of the anticipated cash flows including interest payable for the Company’s nonderivative financial liabilities on an undiscounted basis, which therefore differ from both carrying value and fair value.

AUDIT REPORT

250



Less than 1 year

Between 1 - 5 years

More than 5 years


- - - - -


30,294.36 30,294.36 30,294.36 - -



Less than 1 year

Between 1 - 5

years

More than 5 years


74,645.03 74,645.03 74,645.03 - -


1,08,381.47 1,08,381.47 1,08,381.47 - -

(Rupees in Lakhs)

(Rupees in Lakhs)

As at April 1, 2015Carrying amount


Less than 1 year

Between 1 - 5

years

More than 5

yearsNon- derivative financial liabilitiesBorrowings including interest thereon

1,53,328.38 1,53,328.38 1,53,328.38 - -


1,74,009.79 1,74,009.79 1,74,009.79 - -

(Rupees in Lakhs)

251

(Rupees in Lakhs)

Change in defined benefit obligations: Year ended March 31,2017


(a) Obligation as at the beginning of the year

11,991.27 9,860.94

(b) Current service cost 504.71 446.30 (c) Interest cost 959.30 788.88 (d) Remeasurement (gains)/losses 940.14 1,253.95 (e) Benefits paid (1,400.67) (358.80)Obligation as at the end of the year 12,994.75 11,991.27 Change in plan assets: Year ended March

31,2017Year ended March

31,2016(a) Fair value of plan assets as at beginning of the year

13,194.00 11,292.93

(b) Interest income 1,079.75 1,108.18 (c) Remeasurement gains/(losses) - - (d) Employers’ Contributions 280.76 1,151.69 (e) Benefits paid (1,400.67) (358.80)Fair value of plan assets as at end of the year

13,153.84 13,194.00

Notes forming part of the financial statement31. Employee Benefits

1. Defined Contribution Plana. Provident fund

In accordance with Indian law, eligible employees of the Company are entitled to receive benefits in respect of provident fund, a defined contribution plan, in which both employees and the Company make monthly contributions at a specified percentage of the covered employees’ salary. The contributions, as specified under the law, are made to the provident fund set up as an irrevocable trust by the Company

2. Defined benefit plansa. Retiring gratuity

The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible

employees. The plan provides for a lump-sum payment to vested employees at retirement, death while in employment or on termination of employment as per the Gratuity Act 1972. Vesting occurs upon completion of five years of service. The Company makes annual contributions to Life Insurance Corporation of India. The Company accounts for the liability for gratuity benefits payable in the future based on an actuarial valuation.

(i) The following table sets out the amounts recognized in the financial statements for retiring gratuity plans in respect of the Company.

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252

(ii) The assumptions used in accounting for retiring gratuity are set out below:As at March 31,2017 As at March 31,2016 As at April 01,2015

(a) Discount rate 8% 8% 8%(b) Rate of escalation in salary 10% 10% 10%(iii) The weighted average duration of the defined benefit obligation as at March 31, 2017 is 60 years (March 31, 2016: 60 Years) (April 1, 2015: 60Years)

Amount recognised in the balance sheet consists of:



(a) Fair value of plan assets as at end of the year

13,153.84 13,194.00

(b) Present value of obligation as at the end of the year

12,994.75 11,991.27

(c) Amount recognised in the balance sheet (i) Retirement benefit Asset - Non current 159.09 1,202.73 Costs recognised in the statement of profit and loss consist of:



(a) Service cost (i) Current service cost 504.71 446.30 (b) Net interest expense 959.30 788.88 Costs recognised in the statement of other comprehensive income consist of:(c) Actuarial gains and losses arising from changes in financial assumption

940.14 1,253.95

Costs recognised in the statement of other comprehensive incomeTotal costs recognised in the statement of profit & loss

2,404.15 2,489.13

253


32. Related party transactions OMC is controlled by the government of Odisha. Government of Odisha holds 100% ownership interest in OMC including and as on March 31, 2017. The Company’s related parties principally consist of its subsidiaries, joint ventures, associates,

Central Provident Fund and Gratuity Trust and Government of Odisha. The Company routinely enters into transactions with these related parties in the ordinary course of business at market rates and terms

(Rupees in Lakhs)

Transactions Associates and Joint ventures

Key Management

Personnel

Relatives of Key

Management Personnel

Trust Government of Odisha

Sale of goodsFY 2016-17 16,493.16 FY 2015-16 16,110.00 Dividend paidFY 2016-17 50,000.00 FY 2015-16 50,000.00 Contributions madeFY 2016-17 2,373.60 FY 2015-16 3,150.42 Interest on loan given

FY 2016-17 2,284.19 FY 2015-16 1,080.35 Finance providedFY 2016-17FY 2015-16Purchase of investmentsFY 2016-17 2,000.00 - - - FY 2015-16 - - - - Provision for impairment of InvestmentsFY 2016-17 - FY 2015-16 450.00 RemunerationFY 2016-17 7.04FY 2015-16 12.89Outstanding receivablesFY 2016-17 22,817.77 FY 2015-16 23,438.05 FY 2014-15 2,518.68 Outstanding payblesFY 2016-17 183.62 FY 2015-16 175.42 FY 2014-15

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254

Notes forming part of the financial statement33. Segmental Reporting: 2016-17

1) The company has considered Iron, Chrome and Manganese Ore as primary segment.Chrome ore includes chrome concentrate.

2) Domestic Sales And Export Sales are the two geographical segments.Since,all production and other facilities are located in India, segment assets except

export debtors are shown under domestic segment

3)Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities.Revenue,expenses, assets and liabilities

which relate to the enterprise as a whole and are not allocable on a reasonable basis, have been included under “Unallocated” segment.

Segmentwise Information

IRON CHROME MANGANESE UNALLOCATED CONSOLIDATED TOTAL

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

Current Year

Previous Year

BUSINESS SEGMENTS

A. RevenueSales (including Srap sales)

125798 83818 106840 70838 0 0 0 0 232639 154656

B. ResultSegment result 53981 26299 68506 48298 -2987 -3318 -16436 -9043 103063 62235Interest Expenses

843 3295

Interest Income 29216 39713Income Taxes 54412 36309Net Profit 77024 62345C. Other InformationSegment Asset 117958 109354 30459 26595 1164 1206 554679 562073 704259 699228Segment Liabilities

-28181 -28406 -15882 -11100 -1014 1239 -69326 -13817 -114402 -54562

Capital Expenditure

34835 76 10418 661 45 12 12521 62 57819 811

Depreciation 900 407 331 396 18 17 97 103 1347 923Non Cash Exp(Other than Dep.)

(Rupees in Lakhs)

255

GEOGRAPHIC SEGMENTS

DOMESTIC EXPORT CONSOLIDATED TOTAL

Current Year Previous Year Current Year Previous Year Current Year Previous YearA. Revenue

External Sales 232639 154656 0 232639 154656

B. Other InformationSegment Assets 704259 699228 0 0 704259 699228Capital Expenditure 57819 811 0 0 57819 811


2

THE ODISHA MINING CORPORATION LTD. (A GOLD CATEGORY STATE PSU)

CIN: U13100OR1956SGC000313(A Government of Odisha Undertaking)

Head Office: Post Box No.34, Bhubaneswar-751 001, India. Tel: 0674-2377400 & 2377401

FAX NO. 0674- 2396889(CMD), 2391629(C.MAN), 2396882(PRDN), 2392662(MAT), 2390972(S&M), 2390431(GEO)

www.omcltd.in

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