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You can view full text of the latest Director's Report for the company.

BSE: 526371ISIN: INE584A01023INDUSTRY: Mining/Minerals

BSE   ` 95.20   Open: 94.50   Today's Range 94.00
95.60
+1.30 (+ 1.37 %) Prev Close: 93.90 52 Week Range 86.45
132.90
Year End :2018-03 

Dear Members,

The Directors are pleased to present the 60th Annual Report on the performance of your Company, together with the Audit Report and Financial Statements for the year ended 31st March 2018 and the Report thereon by the Comptroller and Auditor General of India.

PERFORMANCE HIGHLIGHTS

During the year under review, the Company has recorded turnover of Rs.11,615 crores, achieved Profit Before Tax (PBT) of Rs. 6,180 crores and achieved Profit after Tax (PAT) of Rs.3,806 crores.

The major performance highlights are summarized as under:-

- The company achieved record production of 355.76 LT and sales of 360.75 LT - Highest ever achieved since inception of the Company.

- Turnover for the year under review was Rs.11,615 crores as against Rs. 8,830 crores in the previous financial year 2016-17 - an increase of 32%.

- Profit before tax (PBT) from continuing operations was Rs.6,180 crores compared to Rs. 4,294 crores in the previous financial year 2016-17 - an increase of 44%.

- Profit after tax (PAT) was Rs.3,806 crores compared to Rs. 2,589 crores in the previous financial year 2016-17 - an increase of 47%.

- Net worth of the Company stood at Rs.24,354 crores as on 31.03.2018 - 8.15% higher than Rs. 22,519 crores in the previous financial year 2016-17.

- The Company declared an Interim Dividend of Rs.4.30 per share for FY 2017-18.

- Capital expenditure of Rs.2,346 crore has been incurred during the year under review.

PHYSICAL PERFORMANCE

Production

Product

Achievement

Percentage of change

2016-17

2017-18

Iron Ore (lakh tonnes)

340.05

355.76

4.62%

Diamond (Carats)

35,636

39,394

10.55%

Sponge Iron (Tonnes)

5,474

Nil

-

Pellets (Tonnes)

Nil

58,070

-

SALES OF IRON ORE

Particulars

Physical (in lakh tonnes)

Value (Rs. in crore)

Achievement

% of change

Achievement

% of change

2016-17

2017-18

2016-17

2017-18

Domestic

328.92

334.78

1.78%

7,804.15

10,421.00

33.55%

Export through MMTC

27.29

25.97

(-) 4.84%

904.75

1,069.93

18.26%

Total Sales

356.21

360.75

1.27%

8,708.90

11,490.93

31.94%

Other Sales

Products

Achievement

2016-17

2017-18

a) Diamond

Sales (carats)

25,631

33,175

Value (Rs. in crore)

41.91

35.17

b) Sponge Iron

Sales (tonnes)

8,579

Nil

Value (Rs. in crore)

13.13

Nil

c) Wind Power

Sales (lakh units)

220

191

Value (Rs. in crore)

7.48

6.50

FINANCIAL PERFORMANCE

Operating Results

Parameter Achievement

Percentage of change

2016-17

2017-18

Profit Before Tax (PBT) (Rs. in crore)

4,294

6,180

43.90%

Profit After Tax (PAT) (Rs. in crore)

2,589

3,806

47.01%

Net Worth (Rs. in crore)

22,519

24,354

8.15%

Book value per share (Rs.)

71.17

76.97

8.15%

Earnings per Share (Rs.)

7.22

12.03

66.62%

There has been no change in the nature of business for the year under review.

Profit & Dividend

During the year under review, your Company has earned profit before tax from continuing operations of Rs.6,180 crores on a turnover of Rs.11,615 crores in comparison with previous year’s achievement of Rs. 4,294 crores and Rs. 8,830 crores respectively.

The Company has declared Interim Dividend for FY 2017-18 @ Rs. 4.30 per share in the month of March 2018 involving an outgo of Rs.1,360 crores. The share of Government with equity stake of 72.43% is Rs.985 crores.

Transfer To Reserves

The Company proposed to transfer Rs. 1000 Crore from net profit to General Reserve.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT - Nil

Deposits

The Company has not accepted any deposits covered under Chapter-V of the Companies Act, 2013 during the year under review.

INTERNAL CONTROL SYSTEMS

Necessary disclosure in respect of Internal Control Systems and their adequacy has been made in Annexure-C to the Independent Auditors’ Report dated 28.05.2018 which forms part of the Annual Report

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Necessary details in this regard have been disclosed in the financial statements.

Related Party Disclosure

Disclosures on related party transactions forms part of the Notes to the Balance Sheet both of Standalone and Consolidated.

STATUTORY AUDITOR’S REPORT

The Audit Report for both Standalone and Consolidated Financial Statements for the FY 2017-18 is unmodified and does not contain any qualification, reservation or adverse remark.

SECRETARIAL AUDIT REPORT

The Secretarial Audit Report for the FY 2017-18 as done by M/s Hanumanta Raju & Co., Company Secretary in whole time practice does not contain any qualification, reservation or adverse remark.

NEW PROJECTS & BUSINESS DIVERSIFICATIONS

In line with the vision plan of augmenting its Production & Evacuation capacity, technology upgradation, diversification & value-added products, NMDC has taken up many ambitious projects. Some of the projects have been completed and others are nearing completion. Action for new projects have been initiated. During the financial year 2017-18, the details of Projects undertaken by NMDC are summarized as under:-

A Completed Projects

1 Crushing Plant & Downhill Conveyor - Kumaraswamy Iron Ore Mine

2 1.2 MTPA Pellet Plant - Donimalai B Ongoing Projects

1 Doubling of KK line between Kirandul to Jagdalpur

2 Doubling of KK line between Jagdalpur to Ambagaon

3 Screening Plant III - Kirandul Complex

4 Additional Screening Line & up gradation of existing conveyors (at Kirandul & Bacheli)

C Projects in pipeline

1 Screening Plant II - Donimalai Complex

2 15 MTPA Slurry Pipeline - Bailadila to Nagarnar

Projects / Schemes for capacity expansion

To augment the production and to improve the quality of product mix from Bailadila Sector, the schemes like SP-III Kirandul, relocating Crushing Plant of Dep.14 & 11/C and Downhill conveyor, additional screening lines in Bacheli & Kirandul, Rapid Wagon Loading System (RWLS) etc are envisaged. Waste mining and increase in evacuation capacity being a major area of focus for enhancing the life of mines, the schemes like beneficiation plant at Bacheli & Kirandul and Slurry pipeline from Bacheli to Nagarnar has also been taken up. In the FY18, the Company has achieved success in terms of completion of Kumaraswamy Iron Ore Project, Pellet Plant in Donimalai Complex. Both these projects were commissioned & PG tests completed and are in operation now.

The upcoming scheme in Donimalai Complex includes a second Screening Plant of 10.0 MTPA capacity for handling the ROM from Donimalai & Kumarswamy mines in addition to the existing Screening Plant. For improving the rake loading capacity in the Donimalai sector an additional Stacking & Loading facility of 7.0 MTPA along with Railway Yard at Ranjitpura is being planned for which Railway consultant is already appointed and TEFR is under finalization. Statutory clearance for 10 MTPA Screening Plant-II is awaited.

Projects / Schemes to enhance evacuation capacity

To augment the evacuation capacity from Bailadila sector, many projects & schemes are taken up like doubling of KK line, Rowghat-Jagdalpur new rail line, Slurry Pipeline etc. Doubling of KK line between Kirandul & Jagdalpur (150.462 km) is executed by Railways as a deposit work and is in advance stage. During the financial year 2017-18, Section 1 between Jagdalpur to Silakjhori, a length of 45.5 km of railway line was completed and opened for traffic. The works in other two sections are also in advanced stages and is expected to be completed by 2018-19.

Further, Doubling of KK line between Jagdalpur & Ambagaon (25 km) is also taken up through Customer funding model agreement. During the financial year 2017-18, Rail line between Jagdalpur to Amagura, a length of 14.3 km of railway line was completed and opened for traffic.

For increasing the rake loading capacity in Kirandul an uniflow system is being planned. This will reduce the rake loading time and turnaround time of rakes. The scheme for this project has been prepared and Railway consultant has been appointed, site survey completed and TEFR is under finalization.

NMDC has taken up an ambitious project of laying Slurry Pipeline from Bailadila to Jagdalpur and further up to Visakhapatnam. The Capacity of the line 15 MTPA and this will be associated with facilities like beneficiation Plant at Kirandul & Bacheli, Pellet Plant at Nagarnar and Vizag. The slurry Pipeline between Bachlei to Nagarnar is being executed by NMDC and from Nagarnar to Vizag is envisaged to be executed in SPV or BOO mode.

The statutory clearances for phase-I from Bacheli to Nagarnar in respect of Ore Processing plant (OPP), Bacheli and Pellet Plant, Nagarnar have been received. The activities for taking a corridor of land for Right of Use (ROU) for laying the Slurry pipe line is in progress.

Solar Power Projects

With the green energy initiative of Govt. of India focusing more on renewable energies, NMDC has taken up setting up of Solar Power projects (Rooftop) at its Office premises. This includes

- 30 KW rooftop solar power generation at Head Office.

- 1 MW rooftop solar power generation at production units of NMDC.

The rooftop solar power unit at Head office has been commissioned and is in operation since April 2017. Tenders for 1 MW solar power plant is under finalization.

Steel Plant Project at Nagarnar, Chhattisgarh

The progress of construction activities of steel plant in the year 2017-18 is noticeable in various fronts. At present, progress of civil work, structural and equipment erection are in advance stage and progressing in full swing.

The capex achievement w.r.t. steel plant during the financial year 2017-18 is Rs. 1809 Cr. and so far, expenditure incurred for construction of steel plant is about Rs.13,875 Cr. The value of work awarded during the financial year 2017-18 was Rs.280 Cr.

The steel plant project is getting ready for its commissioning of various units progressively, for which operational power supply system is already energized during first week March’ 2018. In order to facilitate the commissioning activities of steel plant, procurement action for initial requirement of various raw materials, spares, consumables, etc., are also under process. NMDC will put its all efforts to roll the first HR coil by March 2019 .

Promoting New Steel Plants through SPVs

NMDC is promoting Steel SPVs for setting up new steel plants in the state of Karnataka and Jharkhand. This initiative is under a collaborative approach of Ministry of Steel, GoI and respective State Government. The Steel SPVs shall acquire land, seek water and power allocation and iron ore linkage for setting up the Steel plant and then invite a strategic partner to develop and construct the Steel Plant.

The Steel SPV in Jharkhand has selected the site and has applied for allocation of land, water and power. In the state of Karnataka, NMDC has acquired 2800 acres of land through Karnataka Industrial Area Development Board (KIADB). NMDC has also sought for iron ore allocation in the state of Jharkhand and Karnataka for ore linkage to the steel SPVs. NMDC is planning to issue an EOI for a strategic partner for Karnataka steel SPV, after allocation of iron ore linkage. However, because of change in the MMDR Act with reference to allocation of mineral block through auction system, concerned State Govt. where SPVs are planned are reluctant to allocate mineral block directly to SPVs.

Implementation of Mine Transport Surveillance System:-

The implementation of Mine Transport Surveillance System (MTSS- KHADAN-CHOUKSI) at Donimalai Complex (Donimalai, Kumarswamy and Pellet Plant) has been completed.

The system has 7 integrated modules for different purposes:

1. Weighbridge automation system,

2. GPS-RFID based tracking,

3. Mine periphery surveillance,

4. Wireless networking,

5. CCTV surveillance,

6. Proximity warning device, and

7. Centralized monitoring & surveillance.

The MTSS is useful for improving mine safety & productivity.

OVERSEAS PROJECTS / NMDC GLOBAL

Legacy Iron Ore, Perth, Australia

Legacy Iron Ore Ltd is an ASX listed entity based in Perth, Australia, with a 78.56% equity stake in the Company. Legacy is carrying out exploration in its 19 exploration tenements in Western Australia in Iron Ore, Gold and base metals. Legacy also applied for allocation of tenements for tungsten in Western Australia. Legacy has 60% interest in Mt Bevan Iron Ore Project which has a JORC compliant Indicated and Inferred resource of 1.17 billion tonnes magnetite and discovered existence of Nickel in the northern side of Mount Bevan. Presently, Legacy is concentrating in exploration of Gold in Mount Celia where good occurrence of Gold is observed.

International Coal Ventures Pvt. Ltd. (ICVL), Mozambique

ICVL acquired a coking / thermal coal mine in Mozambique in 2014 and operation of the same was taken over by ICVL. ICVL undertook strategic review of Benga operations and re-started the mining operations with new contracts from Nov’2017. Benga Mine is presently operational and has achieved 100% of targeted ROM in May 2018.

Venture into Strategic Raw materials

Tungsten metal is of strategic importance due to its essential requirement in defence and aerospace sector and currently India meets its entire requirement through imports. NMDC has entered into MoUs with both MIDHANI and DMRL to explore tungsten investment opportunities in India and abroad. Presently NMDC is scouting for acquisition of tungsten assets in India and abroad as per requirement of Defence & Aerospace sector.

NMDC has also signed MOU with IREL for scouting of rare earth minerals in India and abroad.

Leases for minerals

Iron Ore

In Chhattisgarh

NMDC-CMDC Ltd., is a subsidiary of NMDC Ltd. with equity share holding of NMDC Ltd. and CMDC Ltd. in the ratio of 51:49. This subsidiary Company has been formed to develop, mine, process, raise and sell iron ore from Deposit No.13 & Deposit No.4 at Bailadila in South Bastar Dantewada, Chhattisgarh. The present Mining Lease Grant status of both the deposits are as follows:

Bailadila Iron Ore Deposit No.13

Mining lease was granted for Bailadila Iron Ore Dep-13 over an area of 413.745 Ha, in favour of NMDC Ltd. for 50 Years. Performance security has been deposited with the State Government in the form of a bank guarantee and Mine Development and Production Agreement was signed on 10.01.2017. The lease deed was executed and registered on 10.01.2017 over an area of 315.813 Ha. As per ML Grant Order No.F3-84/95/12 dated 07.01.2017 Mining lease has been transferred in favor of NMDC-CMDC Limited (NCL) on 04.12.2017. Intimation on transfer of Mining Lease in Form-N under Rule 50 of MCDR, 2017 has been submitted to the Regional Controller of Mines, IBM, Raipur on 29.12.2017. Intimation on transfer of records to transferee regarding Mining Lease under Rule 52 of MCDR, 2017 has been submitted to the Secretary, Mineral Resource Department, Govt. of Chhattisgarh on 29.12.2017. Transfer of EC and FC in favour of NMDC-CMDC Ltd. are in process. Modified mine plan has been prepared and will be submitted to IBM for approval. 3D Ore Body Modeling & resource estimation has been completed by using Surpac mine planning software and Geo-statistical tools of in WGS 84 datum. Action has been initiated for appointment of MDO. Tender has been floated and offers are under evaluation.

Bailadila Iron Ore Deposit No.4

M/s NMDC - CMDC Ltd. (NCL) has submitted the proposal to Secretary, MRD, Govt. of Chhattisgarh through DMG, Govt. of Chhattisgarh on 26.09.2017 for reservation of Bailadila Deposit No. 4 (646.597 ha) in favor of M/s. NCL under section 17A (2A) of MM (D&R) Amendment Act, 2015 for grant of ML. MRD, Govt. Chhattisgarh forwarded application to Ministry of Mines, GoI. The matter is being pursued with MoM, GoI

In respect of Bailadila-1 & 3

Your Company has filed Writ Petition before the Hon’ble High Court of Delhi against allotment of Deposit-1 in favor of Tata Steel & PL of Deposit-3 in favor of ESSAR Steels. The Writ Petitions are being heard before the Hon’ble High Court of New Delhi.

In Jharkhand

Sasangada:

A JV Company (NMDC 60% & JSMDC 40%), Jharkhand National Mineral Development Corporation Limited (JNMDC) has been incorporated, with its registered office at Ranchi. DMG, Government of Jharkhand had granted PL for iron ore & Manganese in Sasangada NE area in favor of JNMDC Limited for a period of 3 years. M/s JNMDC applied for renewal of PL for a period of two years. Detailed Geological mapping and topographical survey have been completed. Lol has been issued for carrying out exploratory drilling in PL area. Forest Clearance application for conducting drilling and other exploration works was submitted.

FAC of MoEF & CC recommended for Forest Clearance. Drilling will be commenced after grant of renewal of PL.

Other PL/ML Applications:

Your Company is pursuing for reservation for Ghatkuri Iron ore area in West Singhbhum District. JNMDC (a JV company of NMDC & JSMDC) submitted a proposal to the Secretary, Department of Industries Mines & Geology, Govt. of Jharkhand, for reservation of Ghatkuri Iron ore deposit, West Singhbum District, Jharkhand, under Section 17A(2A) of MM(D&R) Amendment Act 2015 for grant of Prospecting and Mining operation to provide iron ore linkage to upcoming Jharkhand Kolhan Steel Limited. The matter is being pursued with Govt. of Jharkhand for reserving Ghatkuri iron Ore deposit in favor of JNMDC.

In Karnataka

Your Company is pursuing for ML for Ramandurg and Kumarswamy Deposit (contiguous to ML No.1111). Ramandurg iron ore deposit is subjudice and pending in the Hon’ble Supreme Court of India.

In addition, your company has applied for 3 Prospective blocks contiguous to Donimalai ML under reservation route.

In Odisha

Your Company is pursuing for reservation for Mankadnacha , Malangtoli, Khandadhar, Rakma iron ore deposits and Panduliposi Iron Ore & Manganese Deposit.

In Madhya Pradesh

Iron Ore Prospective Blocks:

Tripartite MoU among GoMP (MRD, through DGM), MPSMCL & NMDC was signed for geological and geophysical exploration in various Districts of M.P.

Govt. of Madhya Pradesh issued Gazette Notifications of Sidhi-Singrauli, Dhuarra and Sagar Iron Ore prospective blocks, which are applied under MoU for exploration and subsequent reservation.

Sidhi-Singrauli Block - Remote Sensing Studies has been completed in collaboration with NRSC. Five Iron ore potential areas have been identified in Sidhi and Singrauli Districts namely Lohkhanti, Chitrangi North, Chitrangi South, Katri Kadi and Mauhariya Blocks. Geological mapping has been completed in Lokhanti Block and Katrikadi blocks. Ground Geophysical (Magnetic & VLF-EM) data has been acquired and interpreted for Lohkhanti area. The exploration work is under progress.

Dhaurra block - The team of NMDC Geologists visited the block and geological traverses were taken and Ground Geophysical Survey (Magnetic survey) has been completed. Anomaly map has been prepared depicting the iron ore formation. Geological mapping at 1:10000 scale has been completed and 100 chip/soil samples have been collected in grid pattern and along the iron ore formation.

In Andhra Pradesh

Your Company has applied for Ramgiri prospective block for Iron Ore in Anantapur district. NMDC has requested State Govt. to reserve this block in favour of NMDC under 17A (2A) of MM (D&R) Amendment Act, 2015.

Diamond

In Andhra Pradesh

Your Company is pursuing for grant of 3 PLs falling in the Forest area (Renewal application submitted) in Kalyandurg area, Anantapur District. FAC recommended for forest permission for drilling. NMDC requested Director, DMG for grant of renewal of PL’s in favor of NMDC. Once the Govt. of Andhra Pradesh grant the renewal of PL’s in favor of NMDC, exploration will be commenced in 3 PL areas.

In Madhya Pradesh Tikamgarh PL’s:

Based on RP works, 5 PL applications namely Acharra, Dargany Kalan, Jalandarpur, Sunrai Khas & Birorakhet were submitted to Mining Officer, Tikamgarh. All 5PLs (Dargany Kalan, Jalandharpur, Birorakhet Sunrai Khas and Acharra) for Diamond in Tikamgarh District in Madhya Pradesh, were forwarded by MP Govt. to MoM, GoI, New Delhi. The MoM, New Delhi requested Secretary, MRD, GOMP, Controller General of IBM and DG,GSI for their comments for grant of PL’s in favour of NMDC. MRD, Secretary sent comments for grant of the above PL’s in favor of NMDC. Matter is being pursed with MoM, New Delhi for prior grant. Your company will start detailed exploration in these areas after grant of PL’s.

Large area Diamond Prospective Blocks:

Your company has applied for three large area Prospective Blocks namely Damoh Block, Chhattarpur Panna Block-1 and Chhattarpur Panna Block-2 for diamond exploration. Tripartite MoU among GoMP (MRD, through DGM) MPSMCL & NMDC was signed for geological and geophysical exploration for various Districts of M.P. Govt. of Madhya Pradesh issued Gazette Notifications for above large prospective blocks, which are applied under MoU for exploration and subsequent reservation.

Remote Sensing Studies has been completed in collaboration with NRSC. Collected 815 Number of stream sediment samples from Chhattarpur Panna Block-1, & 2 and Damoh Block till April. 2018. Collection of Stream Sediment Samples is in progress. 206 Number of Stream Sediment samples have been transferred to Kalyandurg, A.P. for processing. Processing for heavy minerals separation is in progress. 24 nos of samples have been processed for Sorting of heavy indicator minerals using microscope.

In 16 prospective areas of Chhattarpur Panna Block-1 & 2 and Damoh blocks grids have been laid for undertaking VLF-EM & Ground Magnetic survey.

Ground Control Point fixed in Chhattarpur Panna Block-1 & 2 and Damoh blocks for Ground Geophysical Survey. Ground Geophysical Survey (Magnetic and VLF-EM Survey) is under progress.

Panna Prospective Blocks:

Tripartite MoU among GoMP (MRD, through DGM) MPSMCL & NMDC was signed for geological and geophysical exploration for various Districts of M.P.

Govt. of Madhya Pradesh issued Gazette Notifications for Karmatiya, Lakshmipur, Pali, Khirwa South and Khirwa West prospective blocks, which are applied under MoU for exploration and subsequent reservation. Exploration will be commenced in 5 Prospective Blocks.

Additional 12 Diamond Prospective Blocks:

Your company has applied for 12 additional Diamond Prospective Blocks in Panna, Damoh, Sagar and Chhatarpur districts for exploration under Section 4(1) of MMDR 1957. GoMP granted permission for carrying out exploration works. Forest permission has been obtained for Reconnaissance Survey. Ground Geophysical survey (Magnetic and VLF-EM) is under progress.

Prospective block for various minerals:

Your company has applied for prospecting of various minerals (Diamond, Gold, PGE, Nickel, etc.) in Jabalpur Katni Block (563 Sq. Km.). Tripartite MoU among GoMP (MRD, through DGM) MPSMCL & NMDC was signed for geological and geophysical exploration for various Districts of M.P. Govt. of Madhya Pradesh issued Gazette Notifications for prospective block, which is applied under MoU for exploration and subsequent reservation Preliminary exploration started.

In Chhattisgarh

Baloda - Belmundi Diamond Block - Your company has submitted the proposal to the Secretary, MRD, Govt. of Chhattisgarh vide letter dated 12.12.2017 for Baloda -Belmundi Diamond Block over an area of 156.80 sq km in Saraipali Tehsil, Mahasamund Dist. for reservation under section 17(A) (2A) of MM (D&R) Amendment Act, 2015 for Diamond for Prospecting and Exploitation. The matter is being pursued with Govt. of Chhattisgarh

Gold: In Rajasthan

Bhukia Gold Block - Your company has submitted the proposal to the Director of Mines & Geology, Govt. of Rajasthan vide letter dated 08.11.2017 for Bhukia Gold Block for over an area of 24 sq km in Banswara Dist. for reservation under section 17(A) (2A) of MM (D&R) Amendment Act, 2015 for Gold for Prospecting and Exploitation. The matter is being pursued with Govt. of Rajasthan.

Tungsten: In Maharashtra

Khobna Tungsten Block - Your Company has submitted the proposal for reservation of Khobna Tungsten Block, Nagpur District, Maharashtra under section 17(A) (2A) of MM (D&R) Amendment Act, 2015 for Tungsten for Prospecting and Exploitation. The matter is being pursued with Govt. of Maharashtra.

Coal

Coal Blocks allocation under Section-5 of the Coal Mines (Special Provision) Act, 2015:

As per the Section-5 of the Coal Mines (Special Provision) Act, 2015, Your Company is trying to get Coking & Non Coking Coal Blocks for captive and commercial mining through auction or allocation.

Exploration under Sub-section (1) of Section (4) of MM (D&R) Act, 1957 in MoM, GoI allotted Blocks.

Your company has been allocated 5 blocks (2 iron ore blocks in Jharkhand & Maharashtra and 3 Gold blocks 2 in Karnataka & 1 in M.P.) by Ministry of Mines, GoI for G4 level exploration. Exploration work is under progress.

The above expansion plan of NMDC contemplates the high prospects of the growth of the Indian Steel Industry in the coming years with several factors indicating the same, such as, the thrust of the government on infrastructure development, growing urbanization, extensive plans of rail network expansion, improving power generation, etc. Low per capita steel consumption in the country at 63 kg/t vis-a-vis the world average of 208 kg/t also indicate the huge growth potential the Indian steel industry has.

In the financial year 2017-18, the Company has achieved success in terms of starting of construction activity of the fifth screening line in Screening Plant II and Rapid Wagon Loading System I in Kirandul Complex to increase the production and mechanised loading capacity. The clearances for the construction of the fifth screening line in Deposit 5 Screening Plant in Bacheli Complex has been obtained and the work is going to be started soon.

To augment the evacuation capacity from Bailadila sector, many projects & schemes are taken up like doubling of KK line, Rowghat-Jagdalpur line, Slurry Pipeline etc. Doubling of KK line between Kirandul and Jagdhalpur, 150.46 Kms is being executed by Railways in three sections. In 2017-18, the entire Section I Jagdhalpur to Silakjhori 45.5 km of the railway line was completed and was opened for traffic. The works in the other two sections Kirandul - Gidam and Gidam - Silakjhori are also in advanced stages and is expected to be completed in 2019. The completion of this project will augment the evacuation capacity of Bailadila sector through Railway line from 28 MTPA to 40 MTPA. NMDC has taken up an ambitious project of laying Slurry Pipeline from Bailadila to Jagdalpur and further up to Visakhapatnam. The capacity of the slurry pipeline is 15 MTPA and this will be associated with facilities like beneficiation Plant at Kirandul & Bacheli, Pellet Plant at Nagarnar and Vizag. The Slurry Pipeline between Bacheli to Nagarnar is being executed by NMDC and from Nagarnar to Vizag is envisaged to be executed in SPV mode. The works for Bailadila to Jagdalpur segment (140 Km) has been taken up and site levelling work for 2 MTPA pellet plant at Nagarnar has been completed and for 2 MTPA beneficiation plant at Bacheli is in progress.

Besides the expansion plan, the SMP also envisaged introduction of systemic interventions in six strategic transformation areas - Business, Operations, Sustainability, Capital Projects, Human Resource and IT. by Several initiatives in this respect are under implementation such as, License-to-Operate computer-based model (in which all the statutory approvals will be brought under one umbrella); installation of Mines Transport Surveillance System (MTSS)- Weighbridge automation/ Virtual Fencing/ Geo Fencing/ GPS/ Proximity Warning Device for dumpers/ CCTV Surveillance/ Wireless Networking at Donimalai Iron Ore Mine; driving cost reduction and other business-improvement initiatives, publishing of 1st sustainability report for 2016-17 etc.

SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES MONITORING FRAMEWORK

a) NMDC has 7 subsidiaries and stake in 5 Associate and 5 JV Companies. The names of these Companies and percentage of NMDC stake in these companies are as follows:

* Under closure.

b) The subsidiaries of NMDC are Board managed with the primary interest to manage such Companies in the best interest of the shareholders. The framework for Subsidiary / Associate / JV Companies are as under:-

i) All investments in these Companies are approved by the Board of Directors.

ii) The Company nominates its representatives on the Board of these Companies.

iii) The minutes of the meeting of these Companies are placed before the Board.

Notes:

1) Subsidiary / Associate / Joint Venture Companies have been categorized in line with disclosures as made in the financial statements.

2) A step down Subsidiary Company of NMDC-SAIL Ltd. by the name Chhattisgarh Mining Ventures Ltd. was incorporated on 08/11/2016.

ENVIRONMENT MANAGEMENT:

The Company has obtained Environmental Clearance for capacity expansion of Bailadila Iron Ore Mine, Deposit-10 from existing 4.2 to 6.0 MTPA on 07/07/2017. The company has also obtained all statutory clearances such as Environmental Clearance (27/04/2017), Final Forest Clearance (27/09/2017), Consent For Establishment (17/10/2017) for setting up of 4 MTPA Iron Ore Beneficiation Plant at Bacheli. The company also obtained stage-1 Forest clearance for diversion of 83.831 Ha Forest land for proposed slurry pipeline for transportation of iron ore concentrate from Bailadila to Nagarnar covering a distance of 139 Km. The company also obtained stage-1 Forest clearances under F.C. Act, 1980 for construction of road over 2.733 Ha Forest land from Loading Plant at Bacheli to main road and approach road for Kumaraswamy iron ore mine over 5.71 Ha from MOEFCC on 12/02/2018 and 27/09/2017 respectively. The valid operating consents are available for all projects under Air and Water Acts. The company has submitted applications in respect of 5 mining leases of Bailadila complex for obtaining forest clearances for renewal of Mining leases beyond 31/03/2020 for further period of 20 years.

Donimalai, Bailadila Deposit-5, 10, 14 and 11C obtained FIVE Star rating from IBM, Ministry of Mines. ICFRE, Dehradun has been engaged for preparation of EMP and R&R plans for 3 mining leases of Kirandul complex. The Company has participated in Chhattisgarh Hariyar plantation programme during the year 2017-18 and contributed Rs.25 Cr to Hariyar Kosh for undertaking block plantation in the State of Chhattisgarh. The Company is undertaking all environmental pollution control works such as de-silting of check dams / check bunds, tailing dams, construction of buttress walls at toe of waste dumps and geo-coir matting on waste rock dumps for stabilization of dumps. The Company is organizing monitoring studies covering all environmental parameters by recognized laboratories. The studies indicated that all environmental parameters are found to be well within the limits.

Sustainable Development Performance

The construction of STP with SBR technology is under progress at Kirandul (3 MLD) and Donimalai (3 MLD). Carbon foot print studies were conducted for FY 201718 and Green House Gas emissions disclosed in Carbon disclosure project.

First Sustainability Report of NMDC has been prepared as per Global Reporting Initiative (GRI) G4 framework, ushering in a new resolve in the organization to take Sustainable Development to greater heights by leveraging the decades of relentless efforts undertaken. the report is available on https://www.nmdc.co.in/ Docs/NMDC-Sustainability/NMDC-Sustainability-Report-2017.pdf. The Sustainability Report in the Diamond Jubilee Year is dedicated to the tireless efforts of our predecessors in the journey of triple bottom line excellence in the past and a reinforcement of our commitment to achieving greater heights in future to come.

SAFETY

Mine Safety - Activities

NMDC has its training centers in all its projects. They are equipped with infrastructure as required under Mines Vocational Training Rules. These centers cater to the needs of basic training, refresher training and training for skilled workers and also for those injured on duty.

In each mining project of NMDC sufficient number of workmen inspectors are nominated / appointed for mining operations, mechanical and electrical installations as per statutory requirements.

Mine Level Tripartite Safety Committee Meetings have been conducted in each of the operating mines. This meeting is conducted once in a year at project level with senior officials, Union Representatives and DGMS Officials in which Safety Performance and its appraisal are made and the recommendations are implemented. Corporate Level Tripartite Safety Committee Meetings are being held regularly once in a year at Head Office.

28th Corporate Level Tripartite Safety Committee Meeting of Bailadila Iron Ore Mines / Diamond Mining Project and Donimalai Iron Ore Mine / Kumarswamy Iron Ore Mine was conducted on 23.10.2017.

Safety Committees have been constituted in every operating mine and pit safety meetings are held every month discussing the safety matters and corrective actions related to work atmosphere.

Man days lost per 1000 man days worked for the year 2017-18 is 0.43 and 0.20 for the year 2016-17. Integrated Management System (IMS) Comprising of Quality Management System (QMS) - ISO 9001:2008; Environmental Management System (EMS) - ISO 14001:2004; Occupational Health & Safety Management System (OHSMS) - OHSAS 18001:2007 & Social Accountability - SA 8000:2014 Certification Standards.

All the NMDC Production Projects viz. BIOM, KC; BIOM, BC; DIOM; DMP, Panna including R&D Centre are accredited with Integrated Management System (IMS)

Upgradation of ISO 9001:2008 (QMS) and ISO 14001:2004 (EMS) to ISO 9001:2015 and ISO 14001:2015 are in progress.

OHS Activities:

Occupational Health Services have been provided with adequate manpower and infrastructure and are functioning in full-fledged manner at all the projects, headed by Qualified Doctors trained in OHS at Central Labour Institute, Mumbai.

Periodical Medical Examination under statute is carried out regularly in all the projects.

Safety Management System:

Safety Management system has been implemented in all our mines. Risk Assessment studies are being conducted regularly.

IMPLEMENTATION OF INTEGRITY PACT:

As per the guidelines, NMDC has entered into an agreement with Transparency International in

implementation of Integrity Pact. Tenders of value Rs.10 crores and above for procurements & Rs.20 crores and above for contracts are covered under Integrity Pact. Due care is taken to see the guidelines in the Integrity Pact are followed strictly.

Transparency in procurements handled

In order to enhance transparency in procurements & for increasing competitiveness, the company took following initiatives :-

- e-Procurement:

- All procurements of value above Rs.2 lakh are tendered through e-mode at HO & Projects. Reverse e-auctions are conducted for high value spares & consumables, wherever possible,.

- Broad basing of vendors achieved for high value items viz. Milled Ferro Silicon, Crusher Spares, Under Carriage parts of Excavators, TCRR bits which resulted in substantial cost savings.

- GeM Portal: Procurement through GeM portal as per the guidelines of GOI initiated at all units.

- CPP Portal: All procurement tenders (including Single tender & Proprietary) are placed in the CPP portal inviting offers from other interested parties to expand vendor participation and obtain competitive rates.

NMDC’S R&D CENTRE AT HYDERABAD

NMDC has an R&D Centre at Hyderabad which has been bestowed with “Centre of Excellence” by UNIDO. The centre has capabilities for undertaking studies on mineralogy, batch ore dressing, mineral beneficiation pilot plant, agglomeration, pyro and hydro metallurgy, bulk solids flowability with facilities for chemical analysis, electronic data processing and development of new products and is endowed with state of art laboratory equipment to analyse optimum use of minerals. The lab equipment are WD-XRF, ICP-AES, GFAAS, SEM, CS, TGA, ring shear tester, dry & wet abrasion tester, automatic mineral analyzer, sink-float analysis, petrological / stereo microscope, density tester, batch & pilot plant facilities for mineral processing, agglomeration etc. For further details reference may be made to Annexure-II attached to the Directors’ Report.

GLOBAL EXPLORATION CENTRE, RAIPUR

NMDC’s Global Exploration Centre at Raipur is continuously doing exploration in the mines of NMDC and adding new reserves every year. NMDC has offered to State Governments to undertake free exploration to quantify mineral resources in the State.

IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

NMDC continued to effectively implement Official Language Policy of Government of India in its Headquarters, Projects and Units.

A new course devised by Govt. of India “Hindi Parangat” was started at Hindi Training Centre of Head Office to make Officers and employees work in Hindi efficiently. Two batches of employees have already completed the course and third batch is under training. Hindi Workshops were conducted in every quarter at Head Office and all the Projects/Units. Training in “Hindi Unicode” was imparted to work in Hindi on computers. Regular classes were held in HO premises with the help of Hindi Teaching Scheme of Govt. of India to impart Hindi Stenography training to all the English Stenographers.

Incentive Schemes for writing noting, letters, Registers in Hindi and giving dictation in Hindi were implemented throughout the year. Hindi Fortnight was celebrated. Various Hindi competitions were conducted and prizes distributed to the participants. To promote use of Hindi, “Monthly Hindi Competitions” were also conducted. Meetings of Official Language Implementation Committees were held in every quarter at Head Office and all the Projects. To monitor use of Rajbhasha and suggest measures to augment the same, inspections and Desk trainings programs were conducted at various projects and units. Rajbhasha contact programs were held every month at various departments of HO by Officers of Rajbhasha Department and desk training in Hindi was imparted during such programs.

NMDC also continued its efforts for propagation of Rajbhasha at town level. A Joint Hindi workshop for small undertakings of Twin cities was conducted at Head Office under the agis of Town Official Language Committee (Undertakings), Hyderabad-Secunderabad. Also, an “Inter-PSU elocution Hindi Competition” was organized for employees of all the undertakings.

All India Seminar of Rajbhasha Officers of all the undertakings of Ministry of Steel, other PSUs situated in Hyderabad and of various projects and offices of NMDC was held at Head Office. House journal dedicated to Official language “Khanij Bharati” was published. Various Hindi/Bilingual magazines, news magazines were also published from Head Office and Projects viz, Sarjana, Baila Samachar, Bacheli Samachar, Doni Samachar, She News etc. “NMDC Rajbhasha Shield” was awarded to Projects and Offices for excellent implementation of Rajbhasha.

NMDC was awarded “Rajbhasha Samman” by Ministry Of Steel, Govt. of India for excellent implementation of Rajbhasha for the Year 2016-17. NMDC was also conferred with First Prize-”Rajbhasha Shield” by Town Official Language Implementation Committee (U), Hyderabad-Secunderabad in mid-sized category for outstanding implementation of Rajbhasha during 2016-17. NMDC’s Hindi Magazine “Khanij Bharati” was awarded “Best Magazine Award” among all the PSUs of Hyderabad-Secunderabad. “Khanij Bharati” was also awarded “Special Jury Award” by Public Relations Society of India, Hyderabad Chapter.

DETAILS REQUIRED TO BE FURNISHED IN TERMS OF MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 (MSMED).

During the year 2017-18, NMDC has achieved the prescribed norms of percentage procurements of MSEs and MSE SC/ST i.e. 20 & 4% respectively.

The following are the details:

Sl.No.

Description

Year 2017-18 (1st Apr.’17 to 31st Mar.’18)

I

Total Annual procurement (in value) (excluding NISP)

Rs. 35935.34 Lakhs

I(A)

Total Annual procurement after deducting Exclusions

Rs. 10368.15 Lakhs

II

Total Value of Goods & Services procured from MSEs (including MSEs owned by SC/ST Entrepreneurs)

Rs. 3406.53 Lakhs

III

Total Value of Goods & Services procured from only MSEs owned by SC/ ST Entrepreneurs

Rs. 477.87 Lakhs

IV

% of Procurement from MSEs(including MSEs owned by SC/ST Entrepreneurs) out of total procurement at Sl No.I(A)

32.86%

V

% of Procurement from MSEs owned by SC/ST Entrepreneurs out of Total MSE procurement at Sl No.II

4.61%

VI

Total number of Vendor Development Programmes for MSEs

19

MANPOWER

Employee-Employer relations

The overall industrial relations situation was peaceful and cordial during the year. There was no strike/lockout against the Company’s policies affecting production and productivity.

Scheduled Castes & Scheduled Tribes

2 candidates belonging to Scheduled Caste and 1 candidate belonging to Scheduled Tribes were appointed in the year 2017 against 17 posts filled by direct recruitment.

Strength of SCs & STs as on 31stMarch 2018

1.

Total number of employees =

5382

2.

Scheduled Castes amongst them =

917

3.

Scheduled Tribes amongst them =

1163

4.

Total SCs and STs =

2080

5.

Physically challenged employees =

99

Particulars of employees drawing remuneration of Rs.8.5 lakhs per month or Rs.1.02 crores per annum under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended.

NIL

Staff Welfare activities

Adequate facilities for education, health, accommodation and recreation were in place. Various Bipartite fora have been functioning satisfactorily.

Promotion of Sports

Inter Project tournaments, both indoor and outdoor, for employees and games & sports for the wards of employees were held in different Projects during the year apart from promoting sports events under CSR.

Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013

One complaint was received during the financial year 2017-18. Departmental Enquiry is underway.

HUMAN RESOURCES DEVELOPMENT

NMDC Limited has consistently fostered a culture that rewards continuous learning, collaboration and talent for the organization to be future-ready and to meet the challenges posed by ever- changing market realities.

Not only do we attract the best, but in order to continue to grow and thrive in the competitive marketplace, we have developed a strong culture of learning — where executives and workmen are supported and encouraged to constantly hone and build their skills and competencies.

By combining formal learning with vigorous on-the-job development, coaching and feedback, Executives and Workmen have improved their performance and advanced their careers in significant ways. This culture of learning keeps us relevant, agile and ahead of the competition.

Corporate HRD is a critical part of creating this culture of learning. The curriculum offered, accessed through the classroom, was custom designed to develop the skills to succeed. It is a vital strategic resource for NMDC’s future and its human capital.

Capability Building Programmes:

NMDC’s HRD Team has crafted initiatives that include core programmes straddling various dimensions of Leadership, Capability Enhancement and Skill(s) Development along with customized programmes that address diverse capability-building needs at various levels of the organization. These programmes cover not just functional competencies but behavioral inputs as well, to ensure comprehensive development of our human resources. Training is delivered both internally and via external bodies to meet the specific requirements of roles or to target professional development. Such training ensures that employees are aware of their personal and Company obligations related to their workplace, safety and environment standards, as well as industry and international standards. Corporate HRD has Organized 22 Nos of Customised In House Training Programmes covering 584

Executives during 2017-18, 177 Nos of External Training Programmes covering 505 executives on various subjects, 20 Nos of Executives were sent abroad for Foreign Training Programmes / AMP.

Leadership Development:

- . To develop leaders at various levels of Management Cadre, 98 executives of different level have undergone one week long training such as Advanced Leadership Programme and Advanced Management Programme in the centers of excellence like IIM, Raipur, ISB Hyderabad and ASCI Hyderabad which is more than 5% of executives.

- . To conduct a progressive intervention for creating a sustainable leadership pipeline at Mid-Level Managerial cadre through “High Potential Executive Programme (HI-PO) for AGMs/DGMs. Identified 40 Hi-potential executives out of 258 in the level of AGM & DGM which is a part of Bhavishya Nirman initiative and trained them in different phases to groom them as future leaders. They took up specific projects within their area as a part of this training, which was then presented to top management. The identified executives completed this Programme with Action Learning Projects, 10 days Class Room Programme under the guidance of senior executives as coaches.

-. With an objective to align the efforts of senior management Representatives and the Senior Union Representatives in NMDC Limited towards meeting our company’s goals in collaborative approach and equipping them effectively to face the future challenges together, we have started initiative of HR Conclave (AAROH) in NMDC Limited in 2014 . As a sequel, Corporate HRD organized a strategic Orientation Workshop (HR - Conclave) for Management and Trade Union Representatives on 4th & 5th April 2017 at Kodaikanal.

-. A Learning Intervention of one week duration on “Leadership”, “Change Management” and “Strategic Thinking” were organized from 3rd to 7th July 2018 at ISB Hyderabad covering 24 Nos. of NMDC Top Management Executives

Knowledge Management Framework:

Knowledge Management Culture at NMDC shall be viewed as a major contributor to build intellectual capital in NMDC encompassing free flow of knowledge across all locations it operates in. The basis for Knowledge Management (KM) initiative and process design is to consciously identify what knowledge is critical to NMDC, what knowledge already exists, what still needs to be known, where to get this knowledge from and how efficiently and effectively this knowledge is put to use to meet NMDC goals and challenges. The initiatives reinforce conscious learning and improvement philosophy through collaborative approach to knowledge sharing. To develop & implementation of Knowledge Management Framework across the Organization a cross Functional Committee has been constituted to develop a frame work on Knowledge Management to be implemented in our organization which is identified as one of the risks in the Area of Human Resources. The committee members have finalized a Draft Report on Knowledge Management frame work with concrete Short term and long term plan.

Employee Engagement Initiatives for Young Executives:

To develop a sense of camaraderie amongst the Young Executives at NMDC who are from across the Projects/Units/Regional Offices, ‘You Thrive’ - A unique Engagement Initiative for Young Executives has been planned at NMDC. A Policy prepared on ‘You Thrive’, for young executives below 35 years age has been communicated to all projects. ‘You Thrive’ has been launched formally in all Projects. Major Projects have started action on this in constituting committee with young executives as members. Inter-Project competitions on Quiz & Case studies are planned in May-June, 2018 at Hyderabad after completion of the same in Projects by end of April 2018.

SANDHAAN - Open Forum: Corporate HRD is continuing “Sandhaan - An Open Forum” programme which is an essential element for developing Two Way Communication within the Organization. Corporate HRD has conducted one workshop on “Sandhaan - A Open Forum” in DIOM, Donimalai.

Strengthening of Quality Circles: To strengthen the Quality Circles Movement, Corporate HRD has given more thrust on Quality Circles activities by adding 5% more QCs this year. 48 Numbers of Quality Circles were formulated, out of which 46 Nos of QCs participated in CCQC. 39 Nos of Quality circles won Gold Awards and 7 numbers of QCs won Silver Awards.20 Nos QCs participated in NCQC.

REWARDS & RECOGNITION FOR HRD INITIATIVES (2017-18)

- NMDC was conferred Best Supporting Organization Award in Quality Movement during 31st Annual Chapter Convention held during 11-12 Sep 2017 in Hyderabad.

- NMDC limited was conferred with Platinum Award from Green Tech Foundation New Delhi for “Training Excellence -2017” for Customizing and Excelling in its Innovative interventions in 7th Annual Green Tech HR Conference in Oct 2017.

- NMDC Was Conferred with Best HR Practices Award & Merit Certificate by NIPM, Kolkatta for BEST HR practices being implemented in NMDC Limited.

- ISTD, New Delhi conferred Certificate of Merit to NMDC limited, Hyderabad for Innovative Training Practices 2016-17 adopted and Implemented in NMDC for achieving business Excellence on 17th June 2017 at SCOPE complex, New Delhi

VIGILANCE

NMDC Vigilance Department guides and facilitates impartial, fair and transparent decision making and gives priority to preventive vigilance, with proactive measures. Department had taken several initiatives during the year. Emphasis was laid on adequate checks and balances in the form of well-defined systems and procedures. Various programmes were conducted for awareness on vigilance matters for the employees of the Corporation. The vigilance functionaries at the projects have conducted regular training classes for the employees on the vigilance matters. Executives of Vigilance Department were nominated for training / workshops being organized in India.

Vigilance Department in NMDC is certified under ISO 9001:2008 conforming to the Quality Management System. Surveillance Audit of Vigilance Department has been conducted by M/s. Integrated Quality Certification Pvt. Limited on 30.01.2018 and recommended for Certification which is valid up to 14.09.2018.

During the year (Apr, 2017 - March, 2018) 94 surprise checks, 104 regular inspections and 5 CTE type inspections were conducted.

During the period, 51 grievances were addressed in the CPGRAMS Portal. Complaints received were taken up for investigation and necessary disciplinary action wherever required was recommended.

Apart from these, the thrust area studies were conducted on following activities:-

1. Study of Job Rotation - Sensitive Posts.

2. Study of Procurement of Medicines

3. Study of Power Consumption in all units

As part of implementation of “Leveraging of Technology for transparency” in all the transactions, the initiatives/system improvements studies/suggestions/ recommendations made during the period are as below:-

1. On line Vigilance clearance system is has been implemented since July 2017 for executives below Board level.

2. On line submission of certificate regarding award of contracts on nomination basis has been implemented since Feb 2018.

3. Electronic complaint handling is deployed and a completely automated IT enabled module on investigation and subsequent action is being initiated.

4. Based on study and consequent suggestions from Vigilance Department, Surveillance system to monitor production and despatches of Iron ore produced is automated in Kumaraswamy and Donimalai Projects.

5. Based on study of estate matters by Vigilance department, steps for strengthening estate matters were initiated. Process of engaging domain experts is also going on.

6. Based on study of Handling/sale of Diamond by Vigilance, SOPs was forwarded and sub committee also approved it.

7. Based on suggestions from Vigilance Department, provisions for making tendering process more transparent and accountable were made in Contracts Manual.

8. Based on study regarding deployment of hired vehicle at Kirandul by Project Vigilance, as a part of system improvement a circular was issued

by the project to implement the suggestions of deploying of hired vehicle by following tendering system.

9. Integrity Index Development Project: Integrity Index Development Project initiated by CVC was taken up whole heartedly by the Organization. Integrity Index has been envisaged as a tool to facilitate internal assessment and improve performance. Considering it an ongoing activity a Senior Management Official has been nominated as IID Coordinator. Active all round participation in time bound manner by sharing necessary inputs and suggestions from time to time, as required by the consultant was done.

Information about limited tender enquiries above Rs. 30 lakhs, details of contracts concluded above Rs. 10 lakhs, works awarded on nomination basis, single tender basis above Rs. 1 lakh, information regarding bill payments to the contractors etc., are provided on the company’s website. Efforts to encourage e-procurement, e-tender, e-auction are being made continuously.

NMDC has adopted implementation of Integrity Pact since November, 2007. The threshold limit of Rs. 20 crores in case of civil works and contracts and Rs. 10 crores in case of procurement is being followed. Till date, the Integrity Pact is entered into 145 contracts with a value of Rs. 21,115.15 crores. As such, more than 90% of the total value of the contracts is covered under Integrity Pact. In addition, procurements through e-procurement and sales through are in place.

The Vigilance Awareness Week 2017 was celebrated from 30.10.2017 to 04.11.2017. On the inaugural day administration of pledge to all the employees at Head Office and Units of NMDC at - Kirandul, Bacheli, Donimalai, Panna, NISP, Nagarnar, Sponge Iron Unit and Regional Offices was done. The theme for this year was “My Vision-Corruption Free India”.

To create awareness among the employees and Vendors/Contractors, facility to take Integrity Pledge online was created by sending SMS and voice messages. NMDC group mobile caller tone was changed during the Vigilance Awareness Week with message to spread vigilance awareness. A Season’s Greeting Card was made with useful information related to Vigilance, Integrity pledge etc. and sent to all the employees. Doordarshan Yadagiri telecast live interview with CVO on 01.11.2017 in connection with Vigilance Awareness Week. Also brief on the importance of the Vigilance Awareness Week and Week-long activities at NMDC aired through All India Radio, Hyderabad.

Quarterly Meeting of CVOs of Steel CPSEs under the administrative control of Ministry of Steel was held on 8.9.2017 at NMDC, Hyderabad.

A Quarterly meeting of Vigilance Officers in NMDC was conducted on 19th & 20th, September 2017.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013 with respect to Directors Responsibility Statement it is hereby confirmed that:-

(a) in the preparation of the annual accounts for the financial year ended 31.03.2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the Directors had 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 and loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the Directors had prepared the annual accounts on a going concern basis; and

(e) the Directors, had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

DECLARATION ON MEETING THE CRITERIA OF INDEPENDENCE AS PER THE COMPANIES ACT, 2013

The Independent Directors have given a declaration on meeting the criteria of independence as stipulated in Section 149(6) of the Companies Act, 2013 in the FY 2018-19. The Board of Directors at its 512th meeting held on 28.05.2018 has noted the declaration as made by the Independent Directors.

COMPANY’S POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

All Directors are appointed by Govt. of India including fixation of remuneration.

NUMBER OF BOARD MEETINGS HELD

During the year under review 8 meetings of the Board were held. For further details, reference may kindly be made to Corporate Governance Section of the Annual Report.

IMPLEMENTATION OF RISK MANAGEMENT POLICY

The Board at its 442nd meeting held on 19.01.2012 has approved the Risk Assessment and Risk Mitigation Policy / Enterprise Risk Management (ERM) of the Company. Accordingly, the Company has constituted a Board level Risk Management Committee comprising of all Functional Directors (excluding CMD). The Company as a part of its current Risk Management Policy has identified top 15 Risks That Matters (RTMs) and documented Mitigation Plan / Strategy for the same. During the year under review, four meetings of the Board level Risk Management Committee were held.

DETAILS OF DIRECTORS OR KMP APPOINTED OR RESIGNED DURING THE YEAR.

The following Directors ceased to be Directors on the Board of the Company:-

upto

Shri R. Sridharan,

!) CMD

05.09.2017

ii) Shri Syedain Abbasi, Govt. Nominee Director

10.10.2017

The following Directors were appointed on the Board of the Company:-

w.e.f.

i)

Shri N. Baijendra Kumar, IAS, CMD

06.09.2017

ii)

Shri Sunil Barthwal, Govt. Nominee Director

11.10.2017

iii)

Shri Bahram Navroj Vakil

06.09.2017

iv)

Shri Ashok Kumar Angurana

16.11.2017

The Board places on record its deep appreciation for the valuable contribution made by Shri R. Sridharan and Shri Syedain Abbasi during their tenure on the Board of the Company.

AUDIT

a. Statutory Auditors

On the advice of the Comptroller and Auditor General of India, New Delhi, your Company appointed the following firms of Chartered Accountants as Statutory Auditors of the Company for the year 2017-18:

S.No.

Unit

Statutory Auditors

Head Office, R&D Centre, SIU &

M/s. Tej Raj & Pal, Chartered Accountants

1

Plot No. 1278/2256/4294

Consolidation

Govinda Prasad, Bomikhal

Bhubaneswar - 751 010, Odisha

Kirandul Bacheli NISP, Jagdalpur Vizag Office

M/s. O P Totla & Co., Chartered Accountants

2

C-16, First Floor, Shyam Market, Near LIC Building, Pandri, Raipur-492 004(C.G)

M/s. Vijay Panchappa & Co.

Chartered Accountants

3

Donimalai

Maruti Complex, II Floor Line Bazar Dharwad, Dharwad-580 001, Karnataka.

M/s. Amit OM & Co.,

Chartered Accountants

4

Panna

2nd Floor, Dr. Bajaj Complex 17/12, Tashkhand Marg-SP Next to PVR Campus, Civil Line Allahabad-211001(UP)

b. Cost Auditors

M/s Prasad Bharathula & Associates

Cost and Management Consultants House No.2-4-911, Road No.6, Samatapuri Colony, Post. Saroornagar, HYDERABAD - 500 035

c. Secretarial Auditors

M/s D. Hanumanta Raju & Co. Company Secretaries B-13, F1, P.S. Nagar Vijaynagar Colony Hyderabad - 500 057

IMPLEMENTATION OF RIGHT TO INFORMATION ACT, 2005

All the provisions of the RTI Act 2005 are being complied with by the Company. In order to ensure timely disposal of RTI applications, PIOs have been appointed in each of NMDC’s Units. A close monitoring of the RTI applications received is done to ensure that the replies are sent in time.

The details of RTI applications received in Head Office and all the Units of the Company during the period 01.04.2017 to 31.03.2018 are as follows:

Month

No of Applications received

Information Provided

Rejected

April 2017

26

21

02

May 2017

20

21

00

June 2017

22

26

00

July 2017

24

23

00

August 2017

14

07

00

September 2017

08

17

00

October 2017

16

10

01

November 2017

18

17

01

December 2017

26

13

01

January 2018

15

30

03

February 2018

17

11

00

March 2018

20

18

00

TOTAL

226

214

08

Carried forward from 2016-17 as on 01.04.2017 - 14 Requests, 04 Applications have been transferred to other CPIOs.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE - NIL

AWARDS RECEIVED BY THE COMPANY

The details of awards received by the Company are as follows:-

1. NMDC has been conferred ‘SKOCH BSE Order-of-Merit Award’ for Corporate Excellence in CSR for its flagship CSR initiative ‘Siksha Sahayog Yojana’ in a function held at BSE, Mumbai on 20/6/2017.

2. On 19th Jul’2017, NMDC received ‘Certificate of Distinction’ under CSR Programmes from Mr. Jaco Cilliers, Country Director, UN Development Program, organized by Economic Times & KPMG India, New Delhi.

3. On 25th Jul’2017 NMDC received “Dun & Bradstreet PSU Award 2017 under the sector Mining - Metals & Minerals category” organized by Dun & Bradstreet.

4. On 05th Aug’2017, NMDC received Public relations Society of India (PRSI), Hyderabad chapter Award for its House Journal titled “Khanij Bharathi, Corporate Diary 2017 & Website www.nmdc.co.in from Sri B Ram Mohan, Mayor, Hyderabad.

5. On 11th Sep’2017, NMDC received Rajbhasha Samman from Hon’ble Union Minister of Steel Sri Chaudhary Birender Singh in New Delhi during the meeting of Hindi Advisory Committee of Ministry of Steel.

6. On 14th Sep’2017 NMDC received ‘SKOCH - Order-of-Merit 2017 Award’ in Cyber Security Category organized by SKOCH at New Delhi.

7. On 05th Oct’2017, NMDC received “Platinum Award - 2017” from Greentech Foundation for Training Excellence in HR organized by Greentech Foundation, New Delhi.

8. On 12th Dec’2017, NMDC received “CII - ITC Sustainability Award 2017 Commendation” for significant achievement under CSR category organized by Confederation of Indian Industry at New Delhi.

9. On 14th Dec’2017, NMDC received Golden Peacock Corporate Ethics Award 2017 from Sri Jawed Ashraf, IFS, High Commissioner of India to Singapore, organized by Institute of Directors, New Delhi.

10. NMDC Limited conferred with prestigious ET Now CSR Leadership Award-2018 in the categories of Women empowerment and Community Development at a function organized at Mumbai on 18th Feb’18.

11. On 20th Mar’2018, NMDC’s 5 Iron ore mines received 5 star rating from Sri Narendra Singh Tomar, Hon’ble Union Minister of Mines, organized by Ministry of Mines, Govt. of India.

12. On 27th Mar’2018, NMDC received ‘Governance Now PSU Award’ for Employee Productivity from Sri Mansukh Laxman Mandaviya, Hon’ble Minister for State for Road Transport & Highways, Shpping, Chemical & Fertilisers, Govt. of India, organized by Governance Now Magazine, New Delhi.

VIGIL MECHANISM

NMDC being a PSU, the guidelines of Central Vigilance Commission (CVC) are applicable which provides adequate safeguard against victimization of the employees. The Board of Directors at its 451st meeting held on 20.09.2012 approved the internal Whistle Blower Policy of NMDC. In terms of the said Policy, CVO NMDC has been designated as the Nodal Officer for implementation of Internal Whistle Blower Policy. The internal Whistle Blower Policy has also been uploaded on the website and intranet of the Company for information of all the employees. In terms of Whistle Blower Policy, the Screening Committee will comprise of CMD and Chairman of Audit Committee. No complaint has been received by the Company under Whistle Blower Mechanism for the year under review. In order to spread awareness about Whistle Blower Policy, awareness programmes were conducted during the Vigilance Awareness Week 2017 at Projects.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN WHICH ARE REPORTABLE TO CENTRAL GOVT. - NIL.

STRATEGIC DISINVESTMENT OF NMDC IRON & STEEL PLANT (NISP) AT NAGARNAR.

The Core Group of Secretaries on Disinvestment (CGD) in its meeting held on 28.02.2018 considered and concurred with the proposal of Ministry of Steel as regards deferment of the proposal of Strategic Disinvestment till the plant becomes operational. IMG noted the recommendations of CGD.

MOU SIGNED BETWEEN NMDC AND CHIPS, RAIPUR

The company has signed an MoU with CHiPS, Raipur on 24.05.2018.

The purpose of this MOU is to establish consent of NMDC & CHiPS Raipur to work together in:-

(a) The area of IT and electronics driven automation

(b) Development, standardization of technology and scaling for organization-wide deployment

(c) Business process modeling, engineering and / or re-engineering thereof, covering areas of work relevant to mining industry and to NMDC in specific as deemed necessary.

This will benefit NMDC on the following:-

Mining Value Chain (pit to port / pit to dispatch)

1. Back Office Automation - Standard ERP

2. Application Program Interface to connect data in near real time.

OFFER FOR SALE (OFS) IN F.Y. 2017-18

Pursuant to the Offer for Sale (OFS), the President of India (acting through and represented by the Ministry of Steel, Government of India), the Promoter of NMDC Limited sold equity shares aggregating 7,95,54,641 on 9th January 2018 and 10th January 2018 representing 2.51% of the paid-up equity share capital of the Company. The Floor Price for the Offer was Rs. 153.50 per equity share. The total sale proceeds received by the Government of India was Rs. 1224.53 Crore. Post completion of the said OFS, the equity stake of the Promoter in NMDC Limited stands reduced from 74.94% to 72.43%.

FORMAL ANNUAL EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS.

All the Directors on the Board of NMDC are appointed by Govt. of India. As desired by Ministry of Steel, Govt. of India, assessment / evaluation of performance of 6 Non-official Directors (Independent) was submitted to Ministry of Steel, Govt. of India.

REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management discussions and Analysis as required in terms of Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is at Annexure-I.

REPORT ON CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO UNDER THE COMPANIES (ACCOUNTS) RULES, 2014 IS AT -ANNEXURE -II.

CORPORATE GOVERNANCE

Report on Corporate Governance is at Annexure-III

EXTRACT OF ANNUAL RETURN UNDER SECTION 92(3) OF THE COMPANIES ACT, 2013.

The extract of Annual Return as provided under SubSection (3) of Section 92 read with Rule 12(1) of the Companies (Management & Administration) Rules, 2014 is at Annexure-IV.

BUSINESS RESPONSIBILITY REPORT

In compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility Report (BRR) is at Annexure-V.

SECRETARIAL AUDIT REPORT

Secretarial Audit Report in Form No.MR-3 pursuant to Section 204(1) of the Companies Act, 2013 is at Annexure-VI.

GLOBAL COMPACT - COMMUNICATION ON PROGRESS

Report on compliance with principles of Global Compact is at Annexure-VII.

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES / ASSOCIATE COMPANIES / JOINT VENTURES (FORM AOC-1) IS ENCLOSED AT ANNEXURE-VIII.

REPORT ON CSR ACTIVITIES

Report in terms of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is at Annexure-IX.

RECOMMENDATIONS MADE BY THE COMMITTEE ON PAPERS LAID ON THE TABLE (RAJYA SABHA) IN ITS 150th REPORT - DETAILS TO BE PROVIDED IN THE ANNUAL REPORT.

Details to be provided in the Annual Report in terms of recommendations made by the Committee on Papers laid on the Table (Rajya Sabha) in its 150th Report is enclosed at Annexure-X.

ACKNOWLEDGEMENT

Your Directors gratefully acknowledge the support, cooperation and guidance received from the Ministry of Steel, Ministry of Mines and Ministry of Forests & Environment and other Departments of Government of India and the State Governments of Andhra Pradesh, Chhattisgarh, Karnataka, Madhya Pradesh, Jharkhand and Telangana.

Your Directors acknowledge the support extended by the valued and esteemed international and domestic customers, Shareholders stakeholders, MMTC, Chennai Port Trust, Visakhapatnam Port Trust, Railways and other Departments of the Central and State Governments. We believe that our long-term success is dependant on our domestic customer relationship and responsiveness. We will do everything possible to provide our customers better, timely and value added services.

The success of your Company is due to the commitment and dedicated efforts of the managers and employees at all levels. Your Directors place on record their appreciation and also acknowledge the support and co-operation of All India NMDC Workers’ Federation and their members for the smooth functioning of the Company’s operations.

Place : Hyderabad

Date : 08.08.2018 N. BAIJENDRA KUMAR

Chairman-cum-Managing Director