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Directors Report of NMDC Ltd.

Mar 31, 2015

Dear Members,

The Directors are pleased to present the 57th Annual Report on the performance of your Company, together with the Audit Report and Audited Accounts, for the year ended 31st March 2015 and the Report thereon by the Comptroller and Auditor General of India.

1.0 PERFORMANCE HIGHLIGHTS

During the year under review, the Company has recorded turnover of Rs.12,356 crores, achieved Profit Before Tax (PBT) of Rs.9,768 crores and achieved Profit After Tax (PAT) of Rs.6,422 crores.

The major performance highlights are summarized as under:

Achieved highest ever Iron ore production of 304.41 LT since inception and crossed the 300 LT barrier for the second year in succession.

Achieved highest ever Iron ore sales of 305.16 LT since inception and also crossed the 300 LT barrier for the second year in succession.

Turnover for the year under review was Rs.12,356 crores compared to Rs.12,058 crores in the previous financial year 2013-14 recording an increase of 2.5%.

Profit Before Tax (PBT) was Rs.9,768 crores compared to Rs.9,759 crores in the previous financial year 2013-14 recording an increase of 0.09%.

Profit After Tax (PAT) was Rs.6,422 crores compared to Rs.6,420 crores in the previous financial year 2013-14 recording an increase of 0.03%.

Net worth increased to Rs.32,326 crores as on 31.03.2015, 8% higher than Rs.29,983 crores in the previous financial year 2013-14 and is the best ever in the history of the Company.

The Company has declared a total Interim Dividends of Rs.7.25 per share during FY 2014-15.

Shri Narendra Singh Tomar, Union Minister of Steel and Mines interacting with senior officials during his maiden visit to NMDC, Head Office, Hyderabad. The Hon ble Minister was accompanied by Ms. Urvilla Khati, Jt. Secretary, Ministry of Steel, Shri Anupam Prakash, Director, Steel Ministry and Shri Nikunj Kumar Srivastava, PS to Steel Minister.

Capital expenditure of Rs.3,136 crores incurred during the year is the highest since inception in any given year.

Awarded the prestigious Platts Global Metal Award 2015 in Raw Material and Mining Category . NMDC is the first mining company of India to have been bestowed with this most prestigious global award.

Load trial commenced from Bailadila Iron Ore Deposit - 11/B which has a capacity of 7.0 MT of ROM per annum.

Incorporated two wholly owned subsidiary companies viz. Karnataka Vijaynagar Steel Ltd. and NMDC Steel Ltd.

NMDC Ltd. bagged the prestigious Platts Global Metals Awards 2015 in "Industry Leadership Award - Raw Materials & Mining" Category. Shri Narendra Kothari, CMD, NMDC received the coveted award at the function organized by Platts at Hotel Savoy London, UK. This award recognizes the performance of NMDC in consistently delivering strong returns to shareholders, while improving environmental efficiencies, implementing technological advances and displaying a commitment to sustainable, forward - thinking solutions, challenges of the political and business environments, etc.

2.0 PHYSICAL PERFORMANCE

2.1 Production

Product Achievement Percentage of change 2013-14 2014-15

Iron Ore (lakh tonnes) 300.25 304.41 1.4%

Diamond (Carats) 37,081.70 35,085.46 (-)5.4%

Sponge Iron (Tonnes) 29,734.36 28,993.96 (-)2.5%

3.0 SALES OF IRON ORE

Particulars Physical Value (in lakh tonnes) (Rs. in crore) Achievement % of Achievement % of 2013-14 2014-15 change 2013-14 2014-15 change

Domestic 282.03 280.49 (-)0.5% 10,268.06 10,828.16 5.5%

Export through MMTC 22.97 24.67 7.4% 1,631.46 1,369.53 (-)16%

Total Sales 305.00 305.16 0.05% 11,899.52 12,197.69 2.5%

3.1 Other Sales

Products Achievement 2013-14 2014-15

a) Diamond

Sales (carats) 43,487.63 38,788.58

Value (Rs. in crore) 49.85 50.06

b) Sponge Iron

Sales (tonnes) 30,572.34 25,191.38

Value (Rs. in crore) 56.01 48.09

c) Wind Power

Sales (lakh units) 31.05 176.16

Value (Rs. in crore) 1.05 5.96

4.0 FINANCIAL PERFORMANCE

4.1 Operating Results

Parameter Achievement Percentage of change 2013-14 2014-15

Profit Before Tax (PBT) (Rs. in crore) 9,759 9,768 0.09%

Profit After Tax (PAT) (Rs. in crore) 6,420 6,422 0.03%

Net Worth (Rs. in crore) 29,983 32,326 8%

Book value per share (Rs.) 75.62 81.54 8%

Earnings per Share (Rs.) 16.19 16.20 –

4.2 Profit & Dividend

During the year under review, your Company has earned profit before tax from continuing operations of Rs.9,769 crores on a turnover of Rs.12,356 crores in comparison with previous year's achievement of Rs.9,761 crores and Rs.12,058 crores respectively.

The Company has declared first Interim Dividend for FY 2014-15 @ Rs.3/- per share involving an outgo of Rs.1,189.41 crores. Second Interim Dividend for the financial year 2014-15 was declared @ Rs.4.25 per share involving an outgo of Rs.1,685.01 crores.

The Board of Directors at its meeting held on 28.05.2015 has recommended declaration of Final Dividend of Rs.1.30 per share subject to approval of the shareholders. The total dividend including final dividend if approved, aggregates Rs.8.55 per share.

The total dividend for the current year is Rs.3,390 crores. Share of Government of India at equity stake of 80% is Rs.2,712 crores.

4.3 TRANSFER TO RESERVES

The company proposes to transfer an amount of Rs.1,000 crores from net profit to General Reserve.

4.4 DEPOSITS

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

5.0 INTERNAL CONTROL SYSTEMS

The Company has in place adequate Internal Financial Control Systems commensurate with its size and operations.

6.0 (a) 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.

(b) RELATED PARTY DISCLOSURE

With respect to Rule 8(2) of the Companies (Accounts) Rules, 2014 there is no contract or arrangements with Related Parties referred to in Sub-Section(1) of Section 188 of the Companies Act, 2013.

7.0 STATUTORY AUDITOR'S REPORT AND SECRETARIAL AUDIT REPORT

The Auditor's Report and Secretarial Audit Report for the year under review does not contain any qualification, reservation or adverse remarks.

8.0 NEW PROJECTS & BUSINESS DIVERSIFICATIONS

8.1 Projects under construction

8.1.1 Bailadila Deposit - 11/B

With a strategic vision to augment production, the construction of Deposit 11B mine at an enhanced capacity of 7.0 Million Tons of ROM per annum has been taken up. The estimated capital expenditure towards this is Rs.607 crores. Out of this Rs.320 crores is for Plant and Rs.188 crores is for mining machineries. Naxal activities have seriously hindered the progress of the project work. Construction activities have completed and integrated load trials were undertaken on 29th March 2015.

8.1.2 Kumaraswamy Iron Ore Project

As an addition to present Donimalai Iron ore Mine and augmenting production capacity, the construction of Kumaraswamy Iron Ore Mine with a capacity of 7.0 MTPA is being taken up

with an estimated capital outlay of Rs.898.55 crores. MECON is appointed as the EPCM consultant. The entire project is being executed through six packages. Orders have been placed for all the packages and the works are in progress. Primary Crusher package trial runs are in progress. Civil & structural works are almost complete. Finishing works are in progress. Erection of fabricated structures for Down Hill conveyor package is in progress. Service centre, water supply, civil and structural works are in progress. The project is expected to be complete during the FY 2015-16.

8.1.3 1.2 MTPA Pellet Plant at Donimalai

One of the main objectives of this project is to prolong the life of the Tailing Dam at Donimalai by using slimes for making pellets. M N Dastur & Co. is appointed as the EPCM consultant. Execution of the Project is divided into Six Packages. The estimated capital expenditure is Rs.572 crores. Major civil works completed. Major Technological equipment erection completed. Trial runs are in progress. Project is scheduled to be completed in FY 2015-16.

8.1.4 3.0 MTPA Integrated Steel Plant in Chhattisgarh

As you are aware, your Company is setting up a 3.0 MTPA Integrated Steel Plant at Nagarnar near Jagdalpur in Bastar District of Chhattisgarh at an estimated cost of Rs.15,525 crores where the Company is in possession of about 2120 acres of land for the steel plant, township (Construction colony and Studio Apartments) and for other facilities.

Necessary statutory clearances including Environmental Clearance from Ministry of Environment & Forests (MOEF) and the Government of Chhattisgarh have been obtained. Rail Transport Clearance was received and the Final Detailed Project Report of Railway siding is also approved by East Coast Railway. Government of Chhattisgarh has sanctioned water and power for construction as well as for operation of the plant. Regarding power for operation of the steel plant, Chhattisgarh State Power Transmission Company Limited (CSPTCL) has awarded work order for the construction of 400 KV transmission line from Raipur to Jagdalpur (about 320 Kms.), 400/220 KV substation at Jagdalpur and 220 KV transmission line from 400/220 KV Substation to NISP Nagarnar and the work is progressing at site. The cost of construction of 400 KV transmission line from Raipur to Jagdalpur and substation at Jagdalpur will be equally shared by NMDC & CSPTCL. For the 220 KV power from Jagdalpur to Nagarnar the entire cost will be borne by NMDC.

Engineering Consultancy and Project Monitoring Services contracts have been awarded to M/s. MECON Ltd.

For expeditious execution and commissioning of the Steel Plant, the nine Major Technological packages in respect of various production units viz. Sinter Plant, Blast Furnace Complex, Raw Material Handling System, Coke Oven Plant,

By Product Plant, Steel Melting Shop, Thin Slab Caster & Hot Strip Mill, Lime & Dolo Plant and Oxygen Plant have been awarded on turnkey basis. Most of the auxiliary packages have also been awarded. Installation of the plant is moving at fast pace. Already more than 50% of major civil work has been completed and structural as well as equipment erection is at various stages of completion.

Tender enquiry is issued for Twenty two Auxiliary packages including Railway siding, Enabling works & Infra packages and same are at various stages of pre-award. Remaining Eighteen packages are at different stages of tender document finalization. Till date, NMDC has invested Rs.7,006 crores in the Steel Plant.

8.1.5 Ore Beneficiation and Slurry Pipeline Transportation system from Bailadila to Vizag

The Slurry Pipeline Transportation System is intended for transportation of Pellet Feed Concentrate from Bailadila to Vizag via Jagdalpur along National/State Highways with a provision of partial off-take at Nagarnar for making Pellets required for feeding to NMDC's proposed Steel Plant at Nagarnar. For part of this Project, investment proposal involving 2 MTPA Ore Processing Plant at Bacheli, 15 MTPA Slurry Pipeline system from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar has been approved by NMDC Board. Mecon is engaged as the EPCM Consultant for this part of Project and basic engineering is in progress.

Other pre project activities viz., Detailed Route Survey, Environmental clearance, Forest clearance, crossing permission from Railways & National Highway Authorities, MoU with Chhattisgarh State Government for sanction of utilities (Water and Electrical power) are also taken up and are in progress.

8.1.6 Panthal Magnesite Project

J&K Mineral Development Corporation Limited (J&KMDC), A subsidiary of NMDC Limited has decided to set up a 30,000 TPA Dead Burnt Magnesite plant at Panthal, Jammu.

M/s Dastur & Co. is the EPCM consultant for this project. The project is planned to be executed in four major packages. Soil investigation work is completed. Work order is placed for "Balance Civil Works" package and execution is in progress.

8.1.7 Screening Plant III at Kirandul Complex

To augment the production capacity of Kirandul Complex the construction of 12.0 MTPA screening plant with loading facilities is envisaged. This plant caters to both Dep. 11-B & Dep. 14 of Kirandul Complex.

The estimated capital expenditure is Rs.951 crores. TATA Consulting Engineers (TCE) is appointed as the EPCM consultant. The entire project has been planned to be executed in seven packages.

MoEF has accorded 1st stage clearance in Jan'2012. Environmental clearances received on 05.11.2013. 2nd stage forest clearance received on 10.04.2015.

8.1.8 Doubling of Railway Line between Kirandul and Jagdalpur

NMDC has signed a MoU with Ministry of Railways on 21.12.2012 and the said Project is helpful to augment evacuation capacity of Bailadila Sector by rail from the existing 28 MTPA to 40 MTPA of iron ore. The estimated cost is Rs.1,143.60 crores at 2013 price level and the expected date of commissioning is Jan' 2019. An amount of Rs.150 crores has been deposited with East Coast Railways and the expenditure incurred as on 31.03.2015 is Rs.132.00 crores. For execution purpose, Railways has divided the 150 km length of doubling work into three Sections namely, Jagdalpur to Silakjori 45.50 km, Kirandul to Gidam 52.23 km and Silakjori to Gidam 52.73 km. Work has already started and the progress in Jagdalpur to Silakhjori section is 34%, Kirandul to Gidam is 5.5%. In Gidam to Silakjori section, tender action is in process.

8.1.9 Steel Plant at Bellary

In pursuance of the MoU signed between the Government of Karnataka and your Company, action for setting up of a 3 MTPA Integrated Steel Plant at Bellary, in the State of Karnataka has been initiated by the Company. Acquisition of about 3000 acres of land for the proposed steel plant through Karnataka Industrial Areas Development Board (KIADB) was under progress subsequent to publication of statutory preliminary notifications in the gazette of Karnataka in this respect.

Govt. of Karnataka had issued final notification under Section 28(4) of KIAD Act 1966 declaring private land of about 2850 acres is acquired by State Govt. So far, the Company has deposited Rs.158.68 crores with KIADB, being the tentative cost of the land plus service charges payable to KIADB in terms of the agreement executed between your Company and KIADB.

As a next step, NMDC to deposit balance amount as per the rate finalized and approved by Govt. of Karnataka. Thereafter, KIADB to disburse the compensation to individual land owners and hand over the possession to NMDC.

Government of Karnataka also accorded approval towards allotment of water and power for operation of the proposed steel plant. M/s MECON has been engaged as consultant for preparation of Techno Economic Feasibility Report (TEFR).

8.1.10 Rail Link between Dalli-Rajhara-Rowghat-Jagdalpur Railway Line Project

Laying of Railway line from 0 to 17 km from Dalli-Rajhara to Dondi towards Rowghat has been completed. Work on the next phase i.e. from 18 to 42 km from Dondi to Kaveti is in progress. Construction of Rail line from DaIli-Rajhara to Rowghat 95 km is being co-ordinated by SAIL with Railways.

Work on the section from Rowghat to Jagdalpur, 140 km at an estimated cost of Rs.2,000 crores, which NMDC is partly funding, is yet to start. The project shall be used for both freight and passenger services. This section of the rail line work is proposed to be implemented by a Joint Venture Company (JVC) having equity participation of Govt. of Chhattisgarh, NMDC, SAIL and IRCON.

8.2 NMDC Global Strategic Alliances

8.2.1 Gold in Tanzania

In Tanzania, your Company has been granted 4 Mining Licenses for Gold over an area of 38.83 sq.kms. for a period of 10 years w.e.f. 12.03.2012. Your Company has been granted PL renewal of Masabi East area. Board has decided that Gold Mining Project at Bulyang'Ombe will be developed by NMDC. Necessary steps are being taken to start the mining activities in the Bulyang'Ombe ML areas and to put up a Pilot Plant for recovery of gold concentrate. The Pilot Plant will be commissioned in 2016-17. Renewal of Retention License at Siga Hill area is under process with Government of Tanzania.

8.2.2 Australia

Legacy Iron Ore, Perth, Australia

Legacy Iron Ore Ltd is an ASX listed entity based in Perth, Australia with a focus on iron ore, gold and base metals. NMDC had participated in the Legacy Iron's rights issue in August 2014 and subscribed to it's portion of equity with an investment of A$12.11 million. Post rights issue, NMDC's equity in Legacy Iron had increased from 48.82% to 78.56%.

Legacy is presently carrying out exploration in it's 21 exploration tenements in Western Australia in Iron Ore, Gold and base metals. 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. Legacy's major gold focus lies in the South Laverton region and base metals focus lies in the Koongie Park region of Western Australia.

8.2.3 Acquisition of significant stake in VPC's potash project in Russia

NMDC signed an MoU with Acron [on behalf of consortium led by NMDC and comprising fertilizer companies (NMDC-50%, RCF-15%, KRIBHCo-15%, NFL-10% and FACT-10%)] on 11th December 2014 during Indo-Russia bilateral. The due diligence has been completed and finalization of valuation is in process.

8.2.4 R&D for alternative iron making technology

NMDC is exploring the option to enter into an area of iron making R&D jointly with M/s ECT (Environment

Clean Technologies) Limited, an ASX listed company in Melbourne, Australia which has developed and patented MATMOR technology and Neyveli Lignite Corporation. This technology, aimed at upgradation of low grade iron ore and steel mill waste, will be developed jointly as an alternative to the traditional steel making process and will use lignite in place of metallurgical coal. At present advanced lab scale testing to establish the process engineering and feasibility of the process is underway.

8.2.5 International Coal Ventures Pvt. Ltd. (ICVL)

ICVL had recently acquired Rio Tinto Coal Mozambique (RTCM) by which ICVL has 65% ownership in Benga Coal Project and 100% interest in Zambeze, Tele East and other coal exploration projects. The SHA was signed on 28th July 2014 and transaction was completed on 7th October 2014. ICVL is presently engaged in post acquisition management and streamlining the coal operations at Benga mine.

8.2.6 Kopano NMDC Minerals (Pty) Limited

The JV with Kopano had reviewed several coal and manganese projects in South Africa. The Company had also taken up various strategic options for tie ups with other companies in the present market scenario.

8.3 Leases for minerals

8.3.1 Iron Ore

8.3.1.1 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.

8.3.1.2 The PLs being pursued in Chhattisgarh

Your Company has applied for 2 PL's in Dantewada District and is pursuing the PLs with Chhattisgarh Govt.

8.3.1.3 In Jharkhand

Sasangoda:

A JV Company (NMDC 60% & JSMDC 40%), Jharkhand National Mineral Development Corporation Limited (JNMDC) has been incorporated on 06.08.2012, with its registered office at Ranchi. DMG, Government of Jharkhand has granted PL for iron ore & Manganese in Sasangoda NE area in favor of JNMDC Limited for a period of 3 years. Detailed Geological mapping and topographical survey have been completed. Forest Clearance application for conducting drilling and other exploration works is submitted to MoEF. LOI has been issued for carrying out exploratory drilling in the PL area. Forest permission is awaited.

MoU with DMG, Jharkhand:

Your Company has signed MoU with Dept. of Mines & Geology (DMG), Jharkhand for exploration of Iron ore and other minerals in the State of Jharkhand. Under the MoU signed, your Company is executing exploration for iron ore in Silpunji - Kantoria area in West Singhbhum Dist. Geological mapping and topographical survey on 1:4000 scale has been completed.

Other PL Applications:

Your Company has applied for 3 PL's (March 2011) in West Singhbhum District.

8.3.1.4 In Karnataka

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

The Hon'ble High Court of Karnataka vide order dated 02.01.2014 has disposed of the case of Kumarswamy iron ore deposit providing relief to NMDC. Your Company has applied for 7 ML application (Aug 2007) in Chitradurga, Bellary, Tumkur and Bagalkote Districts.

In addition, your Company has also applied for another 6 PL applications (June 2010) in Tumkur, Bellary and Chitradurga Districts. Your Company has applied for 5 ML applications in Karnataka (3 against Govt. Notification & 2 in Donimalai Range (Dec 2010).

8.3.1.5 In Odisha

Your Company is pursuing for ML for Mankadnacha iron ore.

8.3.2 Gold

8.3.2.1 In Jharkahand

Your Company is pursuing for ML / PL for Pahardia - Rungikocha (West Singhbhum District) and Parasi- Kutachauli-Khotadih (Ranchi District).

8.3.3 Diamond

8.3.3.1 In Andhra Pradesh

Your Company is pursuing forest permission for exploration in 3 PLs falling in the Forest area (Renewal application submitted) in Kalyandurg area, Anantapur District. Forest permission & renewal is expected shortly.

Your Company has submitted two more PL applications for Diamond and Iron Ore in Anantapur district on 25.09.2012 and 23.10.2013 respectively.

8.3.3.2 In Madhya Pradesh

Your Company has carried out exploration work in granted 2 PLs (Baghain & Sarang). Exploration report submitted to State Government, based on the exploration work in Baghain PL area, 2 prospective areas were identified and applied for PL's. Your Company has also been granted the PL of Rampura Motwa (Renewal application submitted) for a period of two years. Your Company has applied for two more PLs in Panna District of Madhya Pradesh. Exploration works in granted PL is under progress.

Your Company is pursuing for 5 PLs in Panna district viz., Karmatia, Lakshmipur, Pali, Khirwa South & Khirwa West for early grant in favour of NMDC.

Your Company has applied for RP for Diamond in Chhatarpur, Panna & Damoh Districts and PL for Iron Ore in Sagar & Tikamgarh Districts.

Tikamgarh RP

Your Company was granted Reconnaissance Permit (RP) on 30.09.2009 in the Tikamgarh District. Exploration work has been completed under RP and the Exploration cum Relinquishment Report has been submitted. Your Company has applied for 5 PLs in Tikamgarh after completion of the RP works.

8.3.4 Platinum Group of elements

8.3.4.1 In Uttar Pradesh

Your Company is pursuing for PLs for Tsganan area, Dangli and Dangli RF in Lalitpur District.

8.3.5 Coal

The Honourable Supreme Court cancelled all the Coal Blocks allotted by Govt. of India vide its verdict dated 24.09.2014. Thus our two Coal blocks viz Shahpur East and Shahpur West were also de-allocated. Hence, all the activities taken up for developing these blocks were stopped.

Based on the new Coal Mines (Special Provisions) Act, 2015, the company is trying to get a few good coal blocks through auction and Government allocation route.

8.3.6 Bauxite

8.3.6.1 In Jharkahand

Your Company is pursuing for PL / ML for Mahaudih village, Kujam village, Utani, Akasi and Putrang villages, Kotih village, Kujam and Chirodih villages in Gumla District.

8.3.7 Dolomite: 8.3.7.1 In Chhattisgarh

Your Company is pursuing ML application for Sadartera Dolomite Deposit.

9.0 SUBSIDIARY / ASSOCIATE / JOINT VENTURE COMPANIES MONITORING FRAMEWORK

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

b) The subsidiaries of NMDC are managed by Board 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.

c) Incorporation of two wholly owned subsidiaries

During the year under review, two wholly owned subsidiary companies by the name Karnataka Vijaynagar Steel Ltd. and NMDC Steel Ltd. have been incorporated on 29.12.2014 and 02.01.2015 respectively.

10.0 ENVIRONMENT MANAGEMENT:

The Company is in the process of implementation of integrated management Systems (IMS) which includes ISO 9001:2008; ISO14001:2004; OSHAS 18001:2007 and SA 8000:2008 standards in respect of NMDC's four major production projects, i.e., Bailadila Kirandul Complex (Deposit-14/11C, 11B) Bailadila Bacheli complex (Deposit-5, 10&11a) and Donimalai and Kumaraswamy Projects.

The company has obtained Environmental Clearance on 05-11-2013 and 2nd stage Forest Clearance on 10.04.2015 from MoEF & CC for construction of Screening Plant - III for expansion of production capacity of Bailadila Dep-14/11c,11B projects at Kirandul complex South Bastar Dantewada District C.G; Obtained Stage-1 Forest Clearance on 12.11.2014 for diversion of 315.813 ha forest land and Environmental Clearance on 7.05.2015 from MoEF &CC for development of Bailadila Iron Ore Project, Deposit-13, (JV with CMDC Ltd) at Kirandul Complex South Bastar Dantewada District, C.G.; Obtained Terms of Reference for Bailadila Iron Ore Project Deposit-4 (JV with CMDC Ltd) at Bacheli South Bastar Dantewada District C.G for processing of Environmental Clearance application.; On 4.4.2015, successfully completed public consultation for construction of 2 MTPA Beneficiation Plant at Bacheli complex South Bastar Dantewada District C.G.; Obtained Stage 2 forest clearance on 10.04.2015 for Arki Limestone Project at District Solan H.P for Diversion of 84.36 Ha forest land falling within Mining lease of Arki Limestone Project, Shimla.

The Company is organizing environmental monitoring studies at all the production projects by engaging MOEF recognized laboratories. Studies indicate that PM10, PM2.5, SO2, NOx and CO levels at all the production projects are well within the prescribed limits as per MoEF / CPCB and State Pollution Control Board Standards.

10.1 Sustainable Development Performance

In compliance with GoI, Department of Public Enterprises, New Delhi guidelines on Sustainable Development (S.D) for central public sector enterprises (CPSE's) for the purpose of performance evaluation under MoU system, for the year 2014-15, the company has undertaken the SD activity of:

a) Installation of STP at Donimalai Project for sewage water treatment and recycling of water at a cost of Rs.8.42 crores.

b) Carbon Disclosure Project (CDP): In order to disclose Green House gas assessment on global platform, NMDC has taken up GHG assessment for the year 2014-15 and disclosing of GHG emissions of the projects under Carbon Disclosure and Climate Change program at NMDC four major Iron Ore Mining projects i.e., Bailadila Kirandul Complex, Bailadila Bacheli Complex and Donimalai and Kumaraswamy projects. The studies are under progress.

c) Performance evaluation of SD projects of NMDC Bailadila Dep-5, 10&11A, Bailadila Dep-14/11C, Donimalai for the period 2013-14 has been successfully completed.

11.0 SAFETY

Mine Safety - Activities

NMDC has its training centers at 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. 25th Corporate Level Tripartite Safety Committee Meeting of Donimalai Iron Ore Mine / Kumaraswamy Iron Ore Mine was conducted for Bailadila Iron Ore Mines and Diamond Mining Project.

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 2013-14 is 0.52 and 0.21 for the year 2014-15.

12.0 ISO CERTIFICATION

ISO 9001:2008 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and R&D Center are accredited with ISO 9001:2008 Certification. Surveillance Audit II for Donimalai Iron Ore Mine was successfully conducted in the month of October 2014. Surveillance Audit II for BIOM, Bacheli Complex and BIOM, Kirandul Complex is scheduled. Surveillance Audit I for R&D Centre was successfully conducted in the month of November 2014.

OHSAS 18001:2007 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and Diamond Mining Project, Panna are accredited with OHSAS 18001:2007 Certification. Re-Certification Audit for DMP, Panna was successfully conducted in the month of January 2015. Surveillance Audit II was conducted at BIOM, Kirandul Complex; BIOM, Bacheli Complex in the month of March 2015 and Donimalai Iron Ore Mine in the month of April 2015.

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, with a planned programme.

Safety Management System:

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

13.0 IMPLEMENTATION OF INTEGRITY PACT:

With the objective of improving transparency in public procurement and contracts, we have entered into MoU with Transparency International India for implementation of Integrity Pact Programme during September 2007.

We are one of the first Mining Navaratna Company to have entered into the Integrity Pact Programme during the year 2007.

For covering the majority of the procurements initially (2007), the threshold values for entering into the Integrity Pact have been fixed as follows:

Civil Works - Rs.50.00 crores

Contracts - Rs.50.00 crores

Procurement - Rs.15.00 crores

To widen the coverage of Integrity Pacts, the threshold limits have been revised from 2009 onwards as follows:

Civil Works - Rs.20.00 crores

Contracts - Rs.20.00 crores

Procurement - Rs.10.00 crores

1st Batch of IEM

1. Shri M. Gopalakrishna, IAS (Retd.)

/ From 04.10.2007 to 30.09.2010

2. Dr. S. Ramnarayan, Prof. ISB, Hyderabad J

2nd Batch of IEM

1. Shri S. Anwar, IAS (Retd.), From 21.09.2010 to 30.09.2013

2. Dr. J.S. Juneja, Former Chairman, NSIC, From 01.10.2010 to 30.09.2013 3rd Batch of IEM

1. Shri Ajit Kumar Jain, IAS (Retd.), From 26.12.2013

2. Shri Ramesh Chandra Panda, IAS (Retd.), From 19.12.2013

The review meetings with IEMs are conducted regularly on a quarterly basis.

14.0 NMDC s R&D Centre at Hyderabad

NMDC has a R&D Centre at Hyderabad which has been recognized as a 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 flow ability with facilities for chemical analysis, electronic data processing and development of new products.

15.0 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 exploration to quantify mineral resources in the State and under section 4(1) of the MMDR Act, 1957 in line with GSI, MECL, AMD and State DMG. As per new MMDR Act, 2015, NMDC has been authorized by Central Government to carry out exploration works.

16.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

NMDC continued its efforts to successfully implement Official Language Policy of Govt. of India at its Headquarter, Projects and Units. In order to train officers and employees to do their official work in Hindi, 04 Hindi Workshops at Headquarters and 22 Hindi Workshops at Projects / Units were conducted during

the year. Training on Unicode Hindi Software was also imparted. Hindi Stenography training classes were conducted and 12 Stenographers passed Hindi Stenography training.

Organizing meeting of Rajbhasha Representatives nominated in various departments at Head Office for increasing usage of Rajbhasha was an innovative effort. An orientation programme for Hindi officers of Projects / Units was organized to give impetus and right direction in implementation of Official Language. During the year Rajbasha Technical Seminars were conducted.

To propagate use of Official Language, cash incentive schemes for noting and drafting in Hindi, working on computer in Hindi, dictation in Hindi were operated. Hindi Fortnight was organized during which various competitions were conducted and prizes were distributed.

Meetings of Official Language Implementation Committees of Headquarter and various projects/units were conducted in every quarter. To monitor implementation of Official Language Policy and suggest ways and means to improve upon that, inspections of various projects and units were done and desk trainings were also conducted during such inspections. Various Departments at Headquarter were also inspected.

Hindi / bilingual magazines viz Sarjana, Takaneeki Sopan, Takaneeki Khitij, Baila

Samachar, Bacheli Samachar, Doni Samachar, NISP Patrika and NMDC Samachar were published from Head Office and Projects.

17.0 Details required to be furnished in terms of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED).

NMDC is looking to improve its Vendor base under MSE category in procurement of goods. It always supports and encourages the participation of local and MSEs in various procurements. NMDC has given Expression of Interest for vendor empanelment of MSEs during 2014-15.

During the FY 2014-15, NMDC has participated in various National and State level Vendor development programmes / MSME Expo for Buyer - Seller meet at Hyderabad, Warangal, Raipur, Bangalore and Hubli. Besides, NMDC has also participated in the National Vendor Development Programme organized by Dalit Indian Chamber of Commerce & Industry (DICCI) at Hyderabad.

18.0 Manpower

18.1 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.

18.2 Scheduled Castes & Scheduled Tribes

22 candidates belonging to Scheduled Caste and 10 persons belonging to Scheduled Tribes were appointed in the year 2014 against 130 posts filled by direct recruitment.

18.3 Strength of SCs & STs as on 31st March 2015

1. Total number of employees = 5490

2. Scheduled Castes amongst them = 974

3. Scheduled Tribes amongst them = 1150

4. Total SCs and STs = 2124

5. Physically challenged employees = 46

18.4 Particulars of employees drawing remuneration of Rs.5 lakhs per month or Rs.60 lakhs per annum under Section 197 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Nil

18.5 Staff Welfare activities

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

18.6 Promotion of Sports

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

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

No case has been filed during the year 2014-15 under the provisions of the Sexual Harassment of Women

at Workplace (Prevention, Prohibition and Redressal) Act 2013.

19.0 HUMAN RESOURCES DEVELOPMENT

The activities under Human Resource Development witnessed a paradigm shift during FY 2014-15. Online Training Need Assessment started first time during FY 2014-15.

Apart from Learning and Development (L&D) Interventions in various Customized Interventions like Project Management, Entrepreneurship Development, Advanced Management Programs (AMP), Mentoring and Coaching etc., certain decisive HR Interventions has been done in the area of

Organization Climate Survey (OCS) and Employee Satisfaction Survey (ESS) . For the first time, Assessment Development Centre concept was introduced for the Succession Planning by covering 32 nos. Executives in the level of E-7 and above.

A total 780 nos. Executives attended In-Company Training Programs conducted by reputed Management Institutes like ASCI, ESCI, IPE, COD and a total 643 nos. Executives covered by External Training Programs on various topics conducted by various professional bodies all over India.

Under the Foreign Training Programs, a total 26 nos. of Executives benefitted from exposure to prestigious Professional bodies, Management Institutes and Colleges located abroad. Apart from the above, two women Executives participated in three months duration Course conducted by ASCI in collaboration with International Certificate Program in Business Management (ICP-WX) in Slovenia (Europe).

Quality Circles and Skill Development of Workers was given added flip. Like previous year, the Company has bagged Best organizational Award in QCs by Quality Circle Forum of India, Hyderabad. A total of 25 QCs participated out of which 19 got Gold, 5 Silver and 1 Bronze. NMDC Quality Circles (12 QCs) participated at National Convention in December 2014 at Pune and won Par Excellence (5 QCs), Excellence (2 QCs) and Distinguished (5 QCs). Awards at National level.

HRD Department has got Excellent rating under MoU Parameters during FY 2014-15 and Training Mandays per Employee is 4.5 against the Target of 3.2 Mandays achieved.

For overall performance in Training Excellence Indian Society for Training in Development (ISTD),

Hyderabad Chapter conferred NMDC Best Corporate HRD Award during the year.

20.0 VIGILANCE

NMDC's Vigilance Department had taken several initiatives during the year. Various programmes were conducted for awareness on vigilance matters for the employees of the Corporation. Emphasis was laid on adequate checks and balances in the form of well defined systems and procedures. The vigilance functionaries at the projects have conducted regular training classes for the employees on the vigilance matters. Executives of Vigilance Department were sent for training / workshops being organized in India.

During the year 119 surprise checks, 91 regular inspections and 22 CTE type inspections were conducted. Complaints received were taken up for investigation and necessary disciplinary action, wherever required, was recommended.

The following thrust area studies have been taken up for the year 2014-15 for improvements if any, which are as follows.

i) Ore despatches by rail & road including penalty and demurrage payments including chemical analysis of ore.

ii) Maintenance contracts of HEM Equipments (MARC & CAP).

iii) Availability of HEM equipments.

iv) CSR activities.

Vigilance Department in NMDC is certified

under ISO 9001:2008 conforming to the Quality Management System. It has been certified as per ISO standards since October 2006 by Integrated Quality Certification Private Limited, Bangalore. For re-certification of Quality Management System (QMS) of Vigilance Department, M/s TQ Services conducted an external audit on 19.10.2013 and ISO certificate was extended up to 09.02.2016. Surveillance Audit was conducted by M/s TQ Services on 09.12.2014.

In-house quarterly magazine of the Vigilance department "Sphoorthy" is being published periodically.

As part of implementation of "Leveraging of Technology for transparency" in all the transactions, 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 has been entered into 75 contracts with a value of Rs.20,131.65 crores. As such, more than 90% of the total value of the contracts are covered under Integrity Pact. In addition, implementation of e-procurement and e-auction have been taken up.

The Vigilance Awareness Week was observed from 27.10.2014 to 01.11.2014 with the theme "Combating Corruption - Technology as an enabler". An interactive session by Shri A.P. Choudhary, CMD-RINL (Retd.) on the said theme was arranged for the employees.

During the week, a workshop on "ERP - Technology as an enabler for transparency" by Shri T.C.A.S. Prasad, Advisor (ERP) was organized. On the concluding day, a talk by Dr. S. Subramanian (Retd. IPS), Founder-Patron, Vigilance Study Circle was arranged on the topic "Ensuring ethical climate in organizations".

A work shop on "e-Selling and e-Procurement" through M/s mjunction, Kolkata was organized in Hyderabad on 28.03.2015. The workshop was inaugurated by Shri Narendra Kothari, CMD, NMDC and was attended by 150 executives from within the organization as well as from other PSUs.

21.0 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 31.03.2015, 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, in the case of a listed company, 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.

22.0 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 2015-16. The Board of Directors at its 483rd meeting held on 10.04.2015 has noted the declaration as made by the Independent Directors.

23.0 NUMBER OF BOARD MEETINGS HELD

During the year under review 9 meetings of the Board was held. For further details, reference may kindly be made to Corporate Governance Section of the Annual Report.

24.0 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) and one Independent Director.

25.0 NMDC STRATEGIC MANAGEMENT PLAN (NMDC VISION 2025)

The Board of Directors at its 485th meeting has approved the Vision Plan of NMDC (SMP-2025). In terms of the Vision Plan, NMDC has an aggressive Growth Agenda for FY2025 incorporating the following:

Increase Iron Mining capacity to 75 MTPA by FY19 and 100 MTPA by FY22 from present level of 34 MTPA.

Strengthen exploration and forward-integrate to value added business (Pellet, Steel).

Strategically diversify into other commodities based on growth potential, relevance to NMDC.

Invest in other geographies selectively based on mining potential and business environment .

To accomplish the growth agenda, the company has to manage multiple Strategic Transformations:

Business Strategy: From single commodity, geography to multiple commodities and globally diversified .

Operations Strategy: From 34 MTPA Iron Miner to 100 MTPA with integration to value-added businesses.

Sustainability Strategy: From being in suppliers market to being compliant and profitable in buyers market.

Capital Projects Strategy: To manage significant capital investment in next 5 - 10 years.

Human Resources Strategy: From having mining skills to having skills in mining, metals, other businesses.

IT Strategy: From a basic level of IT maturity to be enabled by Leading Practices of Digital Innovations.

Imperative to find new markets & customers to sell 75 MTPA and 100 MTPA of Iron Ore by FY 2019 and FY 2022 respectively.

Even optimistic offtake scenario from existing customers would lead to significant surplus ore to be sold.

Global and Indian Iron Ore industry is projected to remain in over-supply situation.

India is likely to face increasing pressure of Iron-ore import from Big-3 miners (Vale, BHP Billiton and Rio Tinto).

Need to assess our product-mix, pricing strategy to retain existing customers; collaborate with key customers to be long-term and strategic partners in future.

Needs proactive support from Govt. of India for policies related to Allocation of Iron ore leases , Auction of Iron ore Mines and Export of Iron Ore.

26.0 DIRECTORS

The following Directors ceased to be Directors on the Board of the Company for the year under review:

w.e.f.

i) Shri S.K. Das, Director (Commercial) 31.08.2014

ii) Shri Subimal Bose, Director (Production) 31.10.2014

iii) Shri S.J. Sibal, Independent Director 27.12.2014

iv) Shri S. Thiagarajan, Director (Finance) 31.12.2014

v) Shri Vinod Kumar Thakral, Govt. Nominee Director 16.03.2015

The following Directors were appointed on the Board of the Company for the year under review:

w.e.f.

i) Dr. T.R.K. Rao, Director (Commercial) 17.11.2014

ii) Shri P.K. Satpathy, Director (Production) 13.12.2014

iii) Shri D.S. Ahluwalia, Director (Finance) 01.01.2015

iv) Smt. Bharathi S. Sihag 16.03.2015

Additional Secretary & Financial Advisor

Ministry of Steel and Govt Nominee Director

The Board places on record its deep appreciation for the valuable contribution made by Shri S.K. Das, Shri Subimal Bose, Shri S.J. Sibal, Shri S. Thiagarajan and Shri Vinod Kumar Thakral during their tenure on the Board of the Company.

27.0 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 2014-15:

Sl. No. Unit Statutory Auditors

1. Head Office, M/s. Venugopal & Chenoy R&D Center, Chartered Accountants SIU & Consolidation 4-1-889/16/2, Tilak Road Hyderabad - 500 001

2. Kirandul M/s. Brahmayya & Co. Bacheli Chartered Accountants NISP, Jagdalpur D.No.33-25-33B, Vizag Office Govindarajulu Naidu Street, Suryapet Vijayawada - 520002

3. Donimalai M/s.P K Subramaniam and Co. Chartered Accountants 11-5-23, Karthik Complex Above Vijaya Bank, Bresthwarpet Raichur - 584 001

4. Panna M/s Gopal Gupta & Co. Chartered Accountants, 7F-6 (Third Floor), Vinayak Central Plaza 172C/40, Mahatma Gandhi Marg Civil Lines, Allahabad - 211 001

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

28.0 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 Projects during the period 01.04.2014 to 31.03.2015 are as follows:

Month No. of Applications Received Information Provided Rejected

Apr-2014 (Including 10 Pending) 30 17 01

May-2014 15 18 01

Jun-2014 07 11 01

Jul-2014 18 07 04

Aug-2014 24 19 01

Sep-2014 15 18 01

Oct-2014 15 16 01

Nov-2014 16 13 Nil

Dec-2014 25 18 01

Jan-2015 16 19 02

Feb-2015 10 14 Nil

Mar-2015 20 18 Nil

Total 211 188 13

Pending as on 31.03.2015 - 10 Requests

29.0 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.

For the year under review, no orders were passed which is impacting the going concern status and company's operation in future.

30.0 AWARDS RECEIVED BY THE COMPANY

The details of awards received by the Company for the year under review are as follows:

1. On 19th Jan'15, NMDC received Golden Peacock Corporate Social Responsibility Award 2014 from Ms. Rajashree Birla, Chairperson, Aditya Birla Centre for Community Initiatives and Rural Development.

2. On 29th Jan'15, NMDC received Greentech Environment & CSR Awards 2015 from Sri Bhaskar Chatterjee, CEO of Indian Institute of Corporate Affairs, Ministry of Corporate Affairs, organized by Greentech Foundation, New Delhi.

3. On 21st Mar'2015, NMDC received National Safety Award (Mines) for the year 2011 for Bailadila Iron Ore Mine, Bacheli Complex for the longest accident free period from His Excellency President of India, Shri Pranab Mukherjee.

4. On 22nd Mar'2015, NMDC received "Udyog Ratna Award' from Sri KE Krishna Murthy, Hon'ble Dy. Chief Minister & Revenue Minister, Govt. of AP, organized by Delhi Telugu Academy.

5. On 24th Mar'2015, NMDC received "Most Efficient Navratna of the year" in the Non-Manufacturing category from Sri Suresh Prabhakar Prabhu, Hon'ble Minister for Railways, organized by Dalal Street Investment Journal.

6. On 13th May'2015 NMDC received "Top Indian Company Award 2015 under the sector Mining - Metals & Minerals category" organized by Dun & Bradstreet.

7. On 19th May'2015, NMDC received BT- Star PSU of the year Award (Best PSU in Maharatna and Navratna category) from Lt. Gen AK Singh, Lt. Governor of Andaman and Nicobar Islands, organized by Bureaucracy Today Magazine, New Delhi.

8. On 21st May'2015, NMDC received the prestigious " Platts Global Metal Awards 2015 under the category Industry Leadership Award - Raw Materials & Mining", organized by Platts at Hotel Savoy, London, UK.

9. On 29th May'2015 NMDC received Platinum HR Award -2015 for outstanding achievements in "Training Excellence in HR" organized by Greentech Foundation, New Delhi.

31.0 VIGIL MECHANISM

NMDC being a PSU, the guidelines of Central Vigilance Commission (CVC) are applicable which provides adequate safeguard against victimization of employees. No person has been denied access to the Audit Committee. 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 intranet of the Company for information of all the employees.

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

33.0 CORPORATE GOVERNANCE

Report on Corporate Governance is enclosed at Annexure-II

34.0 REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management discussions and Analysis as required in terms of Clause 49(F) of the Listing Agreement is enclosed at Annexure-III.

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

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

36.0 SECRETARIAL AUDIT REPORT

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

37.0 BUSINESS RESPONSIBILITY REPORT

In compliance with Clause 55 of the Listing Agreement, Business Responsibility Report (BRR) is enclosed at Annexure-VI.

38.0 GLOBAL COMPACT - COMMUNICATION ON PROGRESS

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

39.0 REPORT ON CSR ACTIVITIES IN TERMS OF COMPANIES (CORPORATE SOCIAL RESPONSIBILITY POLICY) RULES, 2014 IS ANNEXED AT ANNEXURE-VIII

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

41.0 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 and Jharkhand.

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.

(Narendra Kothari)

Chairman-cum-Managing Director

Place : Hyderabad

Date : 25.06.2015


Mar 31, 2014

Dear Members,

The Directors are pleased to present the 56th Annual Report on the performance of your Company, together with the Audit Report and Audited Accounts, for the year ended 31st March 2014 and the Report thereon by the Comptroller and Auditor General of India.

1.0 PERFORMANCE HIGHLIGHTS

During the year under review, the Company has recorded turnover of Rs.12,058 crores, achieved Profit Before Tax (PBT) of Rs.9,759 crores (including discontinued operations) and achieved Profit after Tax (PAT) of Rs.6,420 crores.

The major performance highlights are summarized as under:

The Company has registered highest iron ore production and sales since inception - Crossed the 300 lakh tonnes milestone in production and sales parameter for the first time in the FY 2013-14:

Achieved Iron Ore Production of 300.25 LT, highest since inception.

Achieved Iron Ore Sales of 305.00 LT, highest since inception.

Production of Diamonds also registered a remarkable growth of 18% at 37,082 carats over previous year.

Turnover for the year under review was Rs.12,058 crores compared to Rs. 10,704 crores in the previous financial year 2012-13 recording an increase of 13%.

Profit before tax (PBT) from continuing operations was Rs.9,761 crores compared to Rs.9,462 crores in the previous financial year 2012-13 recording an increase of 3%.

Profit after tax (PAT) was Rs.6,420 crores compared to Rs.6,342 crores in the previous financial year 2012-13 recording an increase of 1%.

Net worth increased to Rs.29,983 crores as on 31.03.2014, 9% higher than Rs.27,505 crores in the previous financial year 2012-13.

The Company has declared Dividend of Rs.8.50 per share for FY 2013-14 which is highest since its inception.

Supply of Iron Ore to domestic industries recorded 282.03 lakh tonnes as against the previous year supply of 246.72 lakh tonnes, recording an increase of 14%. Total exports of Iron Ore during the year was 22.97 lakh tonnes against 16.02 lakh tonnes in the previous financial year 2012-13 recording an increase of 43%.

Sponge Iron production during the year under review was 29,734 tonnes as against previous year 36,289 tonnes.

Diamond production for the year under review was 37,082 carats as against previous year 31,533 carats.

Capital expenditure of Rs.2,518 crore has been incurred which is once again the highest since inception.

Major packages for the 3.0 MTPA Steel Plant being set up at Nagarnar have been awarded and construction activity is going on in full swing.

2.0 PHYSICAL PERFORMANCE

2.1 Production

Product Achievement Percentage of change

2012-13 2013-14

Iron Ore (lakh tonnes) 271.84 300.25 10.45%

Diamond (Carats) 31,533.39 37,081.70 17.60%

Sponge Iron (Tonnes) 36,289.00 29,734.36 (-)18.06%

3.0 Sales of Iron Ore

Particulars Physical Value (in lakh tonnes) (Rs. in crore) Achievement % of Achievement % of

2012-13 2013-14 change 2012-13 2013-14 change

Domestic 246.72 282.03 14% 9,602.72 10,268.06 7%

Export through MMTC 16.02 22.97 43% 955.99 1,631.46 71%

Total Sales 262.74 305.00 16% 10,558.71 11,899.52 13%

3.1 Other Sales

Products Achievement

2012-13 2013-14

a)Diamond

Sales (carats) 17,862.57 43,487.63

Value (Rs. in crore) 28.51 49.85

b) Sponge Iron

Sales (tonnes) 37,599.54 30,572.34

Value (Rs. in crore) (Net of Excise) 73.50 56.01

c) Wind Power

Sales (lakh units) -- 31.05

Value (Rs. in crore) -- 1.05

d) Services - Value (Rs. in crore) 37.95 45.86

e) Other Operating Revenue (Net of Excise) 5.60 5.91

4.0 FINANCIAL PERFORMANCE

4.1 Operating Results

Parameter Achievement Percentage of change

2012-13 2013-14

Profit Before Tax from continuing operations (PBT) (Rs. in crore) 9,462 9,761 3%

Profit After Tax (PAT) (Rs. in crore) 6,342 6,420 1%

Net Worth (Rs. in crore) 27,505 29,983 9%

Book value per share (Rs.) 69.37 75.62 9%

Earnings per Share (Rs.) 16.00 16.19 1%

4.2 Profit & Dividend

During the year under review, your Company has earned profit before tax from continuing operations of Rs.9,761 crores on a turnover of Rs.12,058 crores in comparison with those of previous year''s achievement of Rs.9,462 crores and Rs.10,704 crores respectively.

The Company has declared first Interim Dividend for FY 2013-14 @ Rs.3/- per share involving an outgo of Rs.1,189.41 crores. Second Interim Dividend for the financial year 2013-14 was declared @ Rs.5.50 per share involving an outgo of Rs.2,180.60 crores.

Considering that Rs.8.50 per share has already been declared as interim dividend, no final dividend was recommended by the Board.

The total dividend for the current year is Rs.3,370 crores. Share of Government is Rs.2,696 crores.

5.0 DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

6.0 Hon''ble Supreme Court Verdict on mining in Karnataka

As stated in the Directors'' Report for the year 2011-12 & 2012-13, the case on mining issues in Karnataka went on before the Green Bench of the Hon''ble Supreme Court, and it pronounced the judgement on 18.04.2013 after taking into account the interim orders it had passed in the matter, the survey report of the Joint Committee, the Final Report and the Modified Report of the Central Empowered Committee, and the submissions made by all the Parties concerned. In short, the judgement has approved and accepted (a) the findings of the survey conducted by the Joint Team; (b) the categorization of the mines into ''A'', ''B'', and ''C''; (c) the CEC''s recommendations, including that of the role of the Monitoring Committee; and (d) the grant of fresh mining leases and consideration of pending applications to be dealt with in accordance with law and the judgement.

Accordingly, the Donimalai and Kumaraswamy mines situated in Karnataka have been placed in Category-A.

Further, the Monitoring Committee, appointed by the Hon''ble Supreme Court is continuing the sales of Donimalai and Kumaraswamy products through e-auction.

7.0 NEW PROJECTS & BUSINESS DIVERSIFICATIONS

7.1 Projects under construction

7.1.1 Bailadila deposit-11/B

As part of plan to enhance production, the construction of Deposit 11B mine at an expanded capacity of 7.0 Million Tons of ROM per annum has been taken up. The estimated capital expenditure towards this is Rs.607 Crores. Out of this Rs.320 Crores is for Plant and Rs.188 Crores is for mining machineries. Naxal activities have seriously hindered the progress of the project work. In Mar''2014 naxals have burnt the Downhill conveyor of 11 B over a length of 500 mts, which was scheduled to take trial run in May''2014. Trial runs of Secondary Crusher, EOT Crane in Secondary Crusher house, Scalping screen & some of the conveyor is completed. Substations are charged. Balance works are expected to be complete during FY 2014-15.

7.1.2 Kumaraswamy Iron Ore Project

As an addition to present Donimalai Iron Ore Mine and augmenting production capacity towards achieving the target of 50 MTPA in NMDC and 12 MTPA in Karnataka, the construction of Kumaraswamy Iron Ore Mine with capacity of 7.0 MTPA was taken up with an estimated capital outlay of Rs. 898.55 Crs. MECON is appointed as EPCM consultant. The entire project is being executed through six packages. Orders are placed for Crushing Plant Package, Downhill conveyor Package, Electrics and Substation package and Service Centre facilities packages and the works are in progress. Civil works are completed for Primary & Secondary Crusher house, Dumper platform, Mine office Building. Erection & trial runs of Primary & Secondary Crusher is completed. Civil & Structural works of Downhill conveyor system are under progress. The project is expected to be complete during the FY 2014-15.

7.1.3 1.2 MTPA Pellet Plant at Donimalai

One of the main objectives of this project is to prolong the life of Tailing Dam at Donimalai by using the slimes for making pellets. M N Dastur & Co. is appointed as EPCM consultant. Execution of Project is divided into Six Packages. The estimated capital expenditure is Rs.572 Crores. All the packages are ordered. Major civil works completed. Major Technological equipment erection is completed and some of the equipment trial runs taken. Project is scheduled to be completed in FY 2014-15.

7.1.4 3.0 MTPA Integrated Steel Plant in Chhattisgarh

As you are aware, your Company is setting up a 3.0 MTPA Integrated Steel Plant at Nagarnar near Jagdalpur, District Bastar, Chhattisgarh at an estimated cost of Rs.15,525 Crores where the Company is in possession of about 2120 acres of land for the steel plant, township and for other facilities.

Necessary statutory clearances including Environmental Clearance from Ministry of Environment and Forests (MOEF) and the Government of Chhattisgarh have been obtained. Rail Transport Clearance was received and the Final Detailed Project Report of Railway siding is also approved by East Coast Railway.

Government of Chhattisgarh has sanctioned water and power for construction as well as for operation of the plant. For providing power for operation of the steel plant, Chhattisgarh State Power Transmission Company Limited (CSPTCL) has awarded work order for the construction of 400 KV transmission line from Raipur to Jagdalpur (about 320 Kms.), 400/220 KV substation at Jagdalpur and 220 KV transmission line from 400/220 KV Substation to NISP Nagarnar and the work is progressing at site. The cost of construction of 400 KV transmission line from Raipur to Jagdalpur and substation at Jagdalpur will be equally shared by NMDC & CSPTCL. For the 220 KV power from Jagdalpur to Nagarnar the entire cost will be borne by NMDC. Stage-I Forest clearances for 400 KV Transmission line and 400/220 KV substation have been obtained.

Engineering Consultancy and Project Monitoring Services contracts have been awarded to M/s MECON Ltd.

For expeditious execution and commissioning of the steel plant the nine Major Technological package in respect of various production units viz. Sinter Plant, Blast Furnace Complex, Raw Material Handling System, Coke Oven Plant, By Product Plant, Steel Melting Shop, Thin Slab Caster & Hot Strip Mill, Lime & Dolo Plant and Oxygen Plant have been awarded on turnkey basis. Civil & Structural and Equipment erection works for most of the aforesaid major technological packages are in progress. Most of the auxiliary packages have also been awarded and the works are in progress.

Tender enquiry is issued for two infra packages namely Storm water drainage & Central Plant store building. Remaining 14 packages are at different stages of tender document finalisation.

Till date, NMDC has already invested Rs.4,300 Crores in Steel Plant.

7.1.5 Ore Beneficiation and Slurry Pipeline Transportation system from Bailadila to Vizag

The Slurry Pipeline Transportation System is intended for transportation of Pellet Feed Concentrate from Bailadila to Vizag via Jagdalpur along National / State Highways with a provision of partial off-take at Nagarnar for making Pellets required for feeding to NMDC''s proposed Steel Plant at Nagarnar. For part of this Project, investment proposal involving 2 MTPA Ore Processing Plant at Bacheli, 15 MTPA Slurry Pipeline system from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar has been approved by NMDC Board.

Other pre project activities viz., Detailed Route Survey, Environmental clearance, Forest clearance, crossing permission from Railways & National Highway Authorities, MoU with Chhattisgarh State Government for sanction of utilities (Water and Electrical power) are also taken up and are in progress. Notification under the Act has been made for RoW and RoU.

7.1.6 BHJ (Banded Haematite Jasper) Beneficiation Plant at Donimalai

The intent of BHJ Beneficiation Plant at Donimalai is for processing low grade iron ore (of about 42%Fe) to produce Pellet Feed Concentrate (PFC of about 65% Fe). The PFC can either be used as a feed material in the upcoming Pellet Plant at Donimalai or can itself be sold as a product. Approved cost of this Project is Rs. 134.41 Crores. The implementation of this Project will be taken up after receipt of Forest Clearance for ''Change of land use pattern'' from MoEF.

7.1.7 Panthal Magnesite Project

J&K Mineral Development Corporation Ltd (J&KMDC), a subsidiary of NMDC has decided to set up a 30,000 TPA Dead Burnt Magnesite plant at Panthal, Jammu.

M/s. Dasturco is EPCM consultant for this project. The Project is planned to be executed in four major packages. Soil investigation work is completed. Work order is placed for "Balance Civil Works" package and order for main technological package is expected to be placed in August 2014.

7.1.8 Screening Plant III at Kirandul Complex

To augment the production capacity of Kirandul Complex the construction of 12.0 MTPA Screening Plant with loading facilities is envisaged. This plant caters both Dep. 11-B & Dep. 14 of Kirandul Complex. The estimated capital expenditure is Rs.951 Crores. TATA Consulting Engineers (TCE) is appointed as EPCM consultant. The entire project has been planned to be executed in seven packages.

MoEF has accorded 1st stage clearance in Jan''2012. Environmental clearances received on 05.11.2013.

7.1.9 Doubling of Railway Line between Kirandul and Jagdalpur

NMDC has entered into an MoU with Indian Railways on 21.12.2012 for the above work of 150 km length at an estimated cost of Rs.826.57 Crores at 2010-11 price level for which an amount of Rs.75 Crores has been deposited by NMDC during May 2013.

The works between Jagdalpur- Shilakjhori Section of 45.50 Kms has been already sanctioned by Railway Board and construction works of formation, minor and major bridges, staff quarter at Jagdalpur, collection of stone ballast, transportation of P-Way materials and linking works, S&T service buildings, goomties, rest rooms, traction substation, PWI office and modification of station buildings and foot over bridge between Jagdalpur-Silakjhori Section (45.50 km) is progressing.

For remaining portion between Silakjhori-Gidam (52.73 km) and Gidam-Kirandul (52.228 km), the detailed estimate has also been sanctioned by Railway Board for which approval of Major & Minor bridge drawings and preparation of tender schedules are under progress.

7.1.10 Steel Plant at Bellary

In pursuance of the MoU signed between the Government of Karnataka and your Company, action for setting up of 3 MTPA Integrated Steel Plant at Bellary, in the State of Karnataka has been initiated by the Company. Acquisition of about 3000 acres of land for the proposed steel plant through Karnataka Industrial Areas Development Board (KIADB) was under progress subsequent to publication of statutory preliminary notifications in the gazette of Karnataka in this respect.

As the next step, Govt. of Karnataka to issue final notification under 28(4) of KIAD Act 1966. The Company has deposited Rs.158.68 Crores with KIADB, being the tentative cost of the land plus service charges payable to KIADB in terms of the agreement executed between your Company and KIADB. Government of Karnataka also accorded approval towards allotment of water and power for operation of the proposed steel plant. M/s MECON has been engaged as consultant for preparation of Techno Economic Feasibility Report (TEFR).

7.2 Other initiatives

7.2.3 Rail Link between Dalli-Rajhara-Raoghat-Jagdalpur Railway Line Project

MOU was signed between Ministry of Railways, Govt. Of Chattisgarh, SAIL & NMDC in 1998 which was again revised in December''2007. The objective of the MOU is to provide a Broad Guage (BG) rail link from Dalli Rajhara to Rowghat and Bailadila Iron Ore Mines.

The project will be commissioned by the Indian Railways in two phases. The 1st phase will connect Dalli Rajhara with Rowghat (95 kms). In the 2nd Phase, the remaining portion between Rowghat-Kondagoan- Jagdalpur (140 Kms) will be commissioned. The total time period of construction will be 5 years for the 1st Phase. The commencement of the work on the 2nd Phase will be taken up simultaneously along with the 1st Phase. The effective date of commencement of the period of 5 years will be the date of execution of this MOU.

NMDC will contribute a proportionate amount of Rs. 70.70 Crores (2004-05 price level) and any escalations therein, towards the construction of Rowghat-Kondagoan-Jagdalpur (140 Kms) line. Because of MOU, Railways will assign traffic transportation assignment of SAIL & NMDC on this route for 37 years.

Work of laying of Railway line from 0 to 17 km from Dalli-Rajhara towards Raoghat is in progress.

Work of next phase i.e. from 18km to 42 km is yet to start on getting tree felling permission from Forest Department and after addressing issues related to jobs to land loosers.

7.2.4 NMDC Global

Strategic Alliances

Kopano-NMDC Minerals (Pty) Ltd.

Kopana NMDC Minerals (Pty) Limited - NMDC and Kopano logistics services (Proprietary) Ltd (BEE partner) had established a 50:50 joint venture company to undertake exploration and development of the mineral properties in the Republic of South Africa

NMDC being the technical partner in this initiative had reviewed several coal and manganese projects with Kopano at South Africa and conducted an external review by appointing consultants for one coal prospect. The Company is actively pursuing operating coal assets for acquisition.

The Board Meeting of the Kopano NMDC Minerals (Pty) Limited was held at NMDC, Hyderabad on 12th March''2014.

MOU with Mosi OA Tunya Development Company (MOTDC), Zimbabwe.

Your Company had signed an MoU for conducting due diligence and joint development of mineral resources with Mosi OA Tunya Development Company, Zimbabwe, the designated organization proposed by Ministry of Tourism, Government of Zimbabwe. The Company has shortlisted two gold and one diamond prospect for detailed due diligence and development through Joint Venture.

7.3 Foreign Venture

7.3.1 Gold in Tanzania

In Tanzania, your Company has been granted 4 Mining Licenses for Gold over an area of 38.83 sq. kms. for a period of 10 years w.e.f. 13.02.2012. Your Company has been granted Retention License at Siga Hill area and PL renewal of Masabi East area. NMDC Board has decided that Gold Mining Project at Bulyang''Ombe will be developed by NMDC. Necessary steps are being taken to start the mining activities in the Bulyang''Ombe ML areas and to put up a Pilot Plant for recovery of gold concentrate. The Pilot Plant will be commissioned in 2015-16.

7.3.2 Australia

Legacy Iron Ore, Perth, Australia

Legacy Iron Ore Ltd, an ASX listed entity based in Perth, Australia in which NMDC has 48.82% equity holds prospective iron ore tenements in both the Central Yilgarn and Pilbara areas of Western Australia. All project areas are located close to established infrastructure. Legacy''s major gold focus lies in the South Laverton region, where the Company holds some 560 square kilometers of prospective ground. Legacy has 60% interest in Mt Bevan Iron Ore Project from Hawthorn Resources Ltd in Western Australia.

7.4 Leases for minerals

7.4.1 Iron Ore

7.4.1.1 In respect of Bailadila-1 & 3

Your Company has filed Writ Petition before the Hon''ble High Court of Delhi against allotment of PL 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.

7.4.1.2 The PLs being pursued in Chhattisgarh

Your Company has applied 7 PL''s in Dantewada District and is pursuing the PLs with Chhattisgarh Govt.

7.4.1.3 In Jharkhand

Sasangada:

A JV Company (NMDC 60% & JSMDC 40%), Jharkhand National Mineral Development Corporation Limited (JNMDC) has been incorporated on 06.08.2012, with its registered office at Ranchi. DMG, Govt. of Jharkhand has granted PL for iron ore & Manganese in Sasangada NE area in favor of JNMDC Limited for a period of 3 years. DFO Chaibasa has granted permission for carrying out Topographical Survey and Geological Mapping for a period of six months (again extended for six months) i.e. upto 04.09.2014. Topographical Survey and Geological Mapping is in progress in the area.

MoU with DMG, Jharkhand:

Your Company has signed MoU with Dept. of Mines & Geology (DMG), Jharkhand for exploration of Iron ore and other minerals in the State of Jharkhand. Under the MoU signed, your Company is executing exploration for iron ore in Silpunji - Kantoria area in West Singhbhum Dist. Geological mapping and topographical survey on 1:4000 scale has been completed.

Other PL Applications:

Your Company has applied for 3 PL''s (March 2011) in West Singhbhum District.

7.4.1.4 In Karnataka

Your Company is pursuing for ML for Ramandurg and Kumarswamy Deposit (contiguous to ML No.1111). Ramandurg iron ore deposit is subjudice, pending in the Hon''ble Supreme Court of India. The Hon''ble High Court of Karnataka vide order dated 02.01.2014 has disposed of the case of Kumarswamy iron ore deposit providing relief to NMDC. Your Company has applied for 7 ML application (Aug 2007) in Chitradurga, Bellary, Tumkur and Bagalkote Districts.

In addition, your Company has also applied for another 6 PL applications (June 2010) in Tumkur, Bellary and Chitradurga Districts. Your Company has applied 7 ML applications in Karnataka (4 against Govt Notification & 3 in Donimalai Range (Dec 2010).

7.4.1.5 In Odisha

Your Company is pursuing for ML for Mankadnacha iron ore.

7.4.2 Gold

7.4.2.1 In Jharkahand

Your Company is pursuing for ML / PL for Pahardia - Rungikocha (West Singhbhum District) and Parasi-Kutachauli-Khotadih (Ranchi District).

7.4.3 Diamond

7.5.3.1 In Andhra Pradesh

Your Company is pursuing forest permission for exploration in 3 PLs falling in the Forest area (Renewal application submitted) in Kalyandurg area, Anantapur District. Forest permission & renewal is expected shortly.

Your Company has submitted one more PL application for Diamond in Anantapur district on 25.09.2012.

7.4.3.2 In Madhya Pradesh

Your Company has carried out exploration work in granted 2 PLs (Baghain & Sarang). Report is under preparation. Your Company has also been granted the PL of Rampura Motwa for a period of two years. Your Company has applied for one more PL in Panna District of MP. Exploration works in granted PL areas is under progress.

Your Company is pursuing for 3 PLs viz., Karmatia, Lakshmipur & Pali for early grant in favour of NMDC.

Your Company has applied for RP for Diamond in Chhatarpur & Panna Districts.

Tikamgarh RP

Your Company was granted Reconnaissance Permit (RP) on 30.09.2009 in the Tikamgarh District of M.P. Exploration work has been completed under RP and the Exploration cum Relinquishment Report has been submitted. Your Company has applied 5 PLs in Tikamgarh after completion of the RP works.

7.4.4 Platinum Group of Clements

7.4.4.1 In Uttar Pradesh

Your Company is pursuing for PLs for Tsganan area, Dangli and Dangli RF in Lalitpur District.

7.4.5 Coal

Shahpur East and Shahpur West Coal Blocks

The Company was allocated two coal blocks i.e. Shahpur East (Area 693 Ha) and Shahpur West (587.5 Ha) Coal Blocks in M.P. by Ministry of Coal, Govt. of India, on 25.07.2007 under Government Dispensation Route for Commercial Mining. Both blocks were regionally explored by GSI. Later NMDC conducted exploration through MECL, Nagpur and obtained Geological Reports for both the coal blocks. Mining Plans and Mine Closure Plans for Shahpur East and Shahpur West Coal Blocks have been approved by MoC.

Prior approval was granted by MOC for grant of ML of Shahpur West Coal Block. Matter is being pursued for getting prior approval for ML of Shahpur East Coal Block.

Environment Clearance Public Hearing successfully completed in Shahdol & Umaria districts and EAC, MOEF recommended project for Environment Clearance. Forest Clearance Proposals are under consideration with Forest Deptts.

Detailed Project Report (DPR) for both the blocks is under finalization by Consultant M/s SCCL.

7.4.6 Bauxite

7.4.6.1 In Jharkahand

Your Company is pursuing for PL / ML for Mahaudih village, Kujam village, Utani, Akasi and Putrang villages, Kotih village, Kujam and Chirodih villages in Gumla District.

7.4.7 Dolomite:

7.4.7.1 In Chhattisgarh

Your Company is pursuing ML application for Sadartera Dolomite Block in Bastar District.

8.0 SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANIES MONITORING FRAMEWORK

NMDC has five subsidiaries, one Joint Venture and stake in five Associate Companies. The names of these Companies and percentage of NMDC stake in these companies are as follows:

* Under closure.

Based on the legal opinion, during the year M/s. Legacy Iron Ore Limited, Perth has been classified as Associate Company against classifying on Subsidiary Company in the previous year.

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 / Joint Venture 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 the Board of Directors of Subsidiary Companies are reviewed by the Board of NMDC.

8.1 J&K Mineral Development Corporation Ltd (JKMDC) The Annual Report of the subsidiary Company is annexed.

8.2 NMDC-CMDC Ltd (NCL)

The Annual Report of the subsidiary Company is annexed.

8.3 NMDC Power Ltd. (NPL)

The Annual Report of the subsidiary Company is annexed.

8.4 Jharkhand National Mineral Development Corporation Limited The Annual Report of the subsidiary Company is annexed.

8.5 NMDC SARL, Madagascar

The Annual Report of the subsidiary Company is annexed. The wholly owned subsidiary Company is under closure.

9.0 ENVIRONMENT MANAGEMENT:

The Company has been accredited with ISO:14001 Environmental Management System certification in respect of NMDC''s four major production projects, i.e., Bailadila Deposit-14/11C, Deposit-5,10/11A, Donimalai and Diamond Mining Project, Panna. The Certification is valid up to November''2014. Regarding Environmental clearances, the company has obtained E.C on

5/11/2013 for construction of 12.0 MTPA Capacity Screening Plant-III and associated facilities at Kirandul from MoEF, GoI. The Company has successfully completed EIA/EMP process in r/o Shahpur U/G Coal Mining Projects at EAC, MoEF on 13/12/2013 and receipt of E.C is awaited. The Company has submitted applications for obtaining Environmental Clearances for (i) construction of 10 MTPA Screening Plant-II at Donimalai (ii) 4.0 MTPA Beneficiation plant at Bacheli along with slurry pipeline from Bacheli to Nagarnar and (iii) 2.0 MTPA Pellet plant at NISP, Nagarnar. The Company has also obtained approval for wildlife conservation plan for entire Dantewada forest division. The Company has also obtained Forest permission for undertaking P.L. works in Rampura, Motwa, Baghain and Sarang Diamond PLs in M.P. The company in process of completing the required formalities at C.G. State Forest Department for forwarding of the Forest clearance proposals to Government of C.G / MOEF for obtaining forest clearance for renewal of Mining Lease of Bailadila Deposit-14, 14 NMZ, Kirandul Complex and Deposit-5 and Deposit 10, Bacheli Complex. Your Company is organizing environmental monitoring studies at all the production projects by engaging the MOEF recognized laboratories. The studies indicate that PM10, PM2.5, SO2, NOx and CO levels at all the production projects are well within the prescribed limits as per MoEF / CPCB and State Pollution Control Board Standards.

9.1 Sustainable Development Performance

In compliance with GoI, Department of Public Enterprises, New Delhi guidelines on Sustainable Development (S.D) for Central Public Sector Enterprises (CPSE''s) for the purpose of performance evaluation under MoU system, the Company has chosen S.D. Projects / activities such as Carbon Management, Water Management and Training on S.D for employees for the year 2013-14. The status of each project is given below:

(i) Training programme on S.D.

The Company has engaged M/s. P.E. Sustainability Solutions Pvt Ltd., Bhilai for imparting the S.D training programme covering a total of 5 training sessions amounting to 22 days and 400 employees at all projects of the Company.

(ii) Energy Management

The Energy Conservation Options as recommended by the COPES are implemented at all projects of the Company for becoming more energy efficient.

(iii) Carbon Management

The Company has undertaken Carbon foot print studies at all Iron ore projects through M/s. First Climate India Pvt Ltd., Kolkata for the year 12-13 & 13-14. The Company has achieved 2.5 percent reduction in carbon footprint over the previous years. The expenditure incurred.

(iv) Water Management

Work awarded to M/s. Dee Tech Projects Pvt Ltd., Chennai for construction of STP based on SBR Technology at Bacheli at a total cost of Rs.6.61 Crores. The work is under progress. The treated water shall be recycled.

(v) Soil & Water Conservation

The Company has executed soil & water conservations works in and around Kirandul Complex through State Forest Department at a cost of Rs.2.20 Crores.

10.0 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. 25th Corporate Level Tripartite Safety Committee Meeting of Donimalai Iron Ore Mine and Bailadila Iron Ore Mines/Diamond Mining Project are to be conducted in the month of May 2014.

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 2012-13 is 0.33 and 0.52 for the year 2013-14.

11.0 ISO CERTIFICATION

ISO 9001:2008 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and R & D Center are accredited with ISO 9001:2008 Certification. I Surveillance Audit was conducted successfully at Donimalai Iron Ore Mine; BIOM, Bacheli Complex and BIOM, Kirandul Complex in the month of October/November 2013. Recertification Audit was conducted successfully at R&D Center in the month of October 2013.

OHSAS 18001:2007 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and Diamond Mining Project, Panna are accredited with OHSAS 18001:2007 Certification. I Surveillance Audit was conducted at BIOM, Kirandul Complex; BIOM, Bacheli Complex and Donimalai Iron Ore Mine in the month of November/December 2013. II Surveillance Audit of Diamond Mining Project, Panna was conducted in the month of September 2013.

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, with a planned programme.

Safety Management System:

Safety Management System has been implemented in all our mines.

12.0 IMPLEMENTATION OF INTEGRITY PACT:

1. With a view to maintain transparency in all dealings with contractors and vendors and keeping with international practices, NMDC & Transparency International India (TII) developed an Integrity Pact Programme.

2. All the tenders for the contracts and civil works above threshold value of Rs.20.00 Crores and procurements above threshold value of Rs.10.00 Crores are the subject matters of Integrity Pact.

3. Shri A.K.Jain, IAS (Retd) and Shri Ramesh Chandra Panda, IAS (Retd) have been appointed as Independent External Monitors (IEMs) for overseeing the Integrity Pact programme.

4. Till March 2014 a total of 75 tenders with an indented value of Rs.20131.65 crore were covered under the Integrity Pact.

13.0 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.

14.0 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.

15.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

During the year under review, NMDC Limited made all efforts for the implementation of the official language policy and for the use of Official language in all its Projects, Units and Head Office.

Hindi Workshops were conducted for employees to make them efficient to use official Language in their day-to-day official work. During Hindi Workshops all employees were imparted Micro Soft Indic Computer Training on Phonetic Hindi Keyboard.

To bring awareness among the employees and their family members of NMDC various competitions like Hindi Noting, Drafting and Technical Terms, Hindi Anuvad, Unicode hindi typing on computer, Quiz, Hindi Sshabdahgyan Competition and creativity competition for house wives, (The procedure of item was Written in Hindi) etc were also conducted and prizes were awarded to winners during Rajbhasha Pakhwara.

To encourage the employees to implement official Language Hindi in the technical field 56 Rajbhasha Technical seminars were organized till now and Technical Seminar patrika "Takneeki Sopan, Takneeki kshitiz" and Rajbhasha Souvenirs" Sarjana, Kaanan Kusum" were also published.

NMDC was also awarded Rajbhasha Shield as 1st prize for the year 2012-2013 by the Town Official Language Implementation Committee (undertakings) Hyderabad- Secunderabad, for excellent implementation of the Official Language Policy.

16. Details required to be furnished in terms of Micro, Small and Medium Enterprises Development Act, 2006 (MSMED).

NMDC supports and encourages the participation of local and small vendors in procurement of goods and services. NMDC is taking steps to improve the capacity and capability of local and small vendors. A special drive for registering Micro and Small Enterprises was initiated in FY 2012-13. During FY 2013-14, we have participated in National level vendor development programme, State level vendor development programme and other programmes conducted by Ministry of MSME, Hyderabad in the nearby areas. We have also attended vendor development programme conducted by Ministry of MSME at Visakhapatnam, Raipur and Mysore wherein prospective MSEs were explained of our requirement and invited applications for vendor empanelment from the interested MSEs.

17. Offer and allotment of equity shares to Eligible Employees of NMDC by Government of India as per CCEA approval.

Department of Disinvestment, Government of India has offered upto 1,98,23,580 equity shares of face value of Re.1/- each to the eligible employees of NMDC at a discounted price of Rs.141.10 per equity share. In response to the said offer, 280 shares was transferred from President of India to the eligible employee who participated in the offer.

18.0 Manpower

18.1 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. During the year a tripartite settlement revising the wages of workmen was signed.

18.2 Scheduled Castes & Scheduled Tribes

24 candidates belonging to Scheduled Caste and 23 persons belonging to Scheduled Tribes were appointed in the year 2013 against 153 posts filled by direct recruitment.

18.3 Strength of SCs & STs as on 31st March 2014

1. Total number of employees = 5,664

2. Scheduled Castes amongst them = 995

3. Scheduled Tribes amongst them = 1,219

4. Total SCs and STs = 2,214

5. Physically challenged employees = 40

18.4 Particulars of employees drawing Rs.5 lakhs per month or Rs.60 lakhs per annum under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Amendment Rules, 2011.

NIL

18.5 Staff Welfare activities

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

18.6 Promotion of Sports

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

19.0 HUMAN RESOURCES DEVELOPMENT

Training Coverage to all employees was 70% against the target of 30%. Training Index of average employees in Training Mandays as percentage of Working Mandays was 3.93 against a target of 3.0.

Employee Development Services are delivered through In-Company, External and Foreign training modes.

In-Company Programmes: 278 Executives participated in 08 programmes.

External Training Programmes: 126 programmes were attended by 386 NMDC participants. This includes Executives, JO''s and Workmen.

Foreign Programmes: 09 Foreign training visits involved 31 participants.

Formal Risk Management Programmes: 09 persons at Senior Management were trained on "ISO 31000-Enterprise Risk Management" to have a practical knowledge in understanding various steps, benefits in Risk Management Culture in the Organization.

Executive Trainees: 62 Executive Trainees [47-ET''s & 15-AM(Fin)] received the training during 2013-14.

HRD Interventions:

1. A three day HR Conclave "Aaroh" has been organized by external expert at Kovalam during 24-26 Feb, 2014 for all the Trade Union Leaders for better appreciation of their roles and also for Senior Management & Top Management to jointly work out a plan for Organizational Development to make NMDC a Healthy Vibrant Organization.

2. Sustainable Development Programme as per MoU parameter held at each location of our Projects / Units. We have covered 450 persons in this programme.

Quality Circles: Creating Sustainable Quality Circles is one of the focus areas of the Company. Total 27 Quality Circles presented their case studies in CCQC-2013 held in the month of Sep-2013 at Hyderabad and Bangalore. Our teams in the CCQC-2013 were adjudged 22 as ''Gold'' and 5 as ''Silver'' out of 109 Quality Circles. 10 Quality Circles participated in NCQC in which 06 as Par Excellence and 04 QC''s as Excellence achieved.

NMDC received the Best Organization Award for consistently supporting QC activities.

20.0 VIGILANCE

NMDC Vigilance Department had taken several initiatives during the year. Various programmes were conducted for awareness on vigilance matters for the employees of the Corporation. Emphasis was laid on adequate checks and balances in the form of well defined systems and procedures. The vigilance functionaries at the projects have conducted regular training classes for the employees on the vigilance matters. Executives of Vigilance Department were sent for training / workshops being organized in India as well as abroad (Kathmandu) by various organizations like Delhi Productivity Council, New Delhi on the "Role and Functions of Vigilance and Disciplinary Proceedings" during Dec, 2013.

As per the Action Plan, surprise and regular checks were conducted besides study of files. Irregularities and omissions under the provisions of the rules are identified and improvements in the systems are suggested. Based on the observations of Vigilance, recoveries were made from the contractors bills for not conforming to the contractual terms. During the year, 72 surprise checks, 72 regular inspections and 24 CTE type inspections were conducted.

Complaints received were taken up for investigation and necessary disciplinary action wherever required was recommended.

A Training Programme for the new incumbents has been conducted at the CBI Academy Ghaziabad so that they acquaint themselves with the processes & procedures to help them in discharging their duties as Vigilance Officers.

As part of implementation of "Leveraging of Technology for transparency" in all the transactions, 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. E-procurement cell in the Engineering Department has been set-up recently in November 2013.

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 has been entered into 75 contracts with a value of Rs.20131.65 crores. As such, more than 90% of the total value of the contracts are covered under Integrity Pact. In addition, implementation of e-procurement and e-auction have been taken up.

Vigilance Department in NMDC is certified under ISO 9001:2008 conforming to the Quality Management System. It has been certified as per ISO standards since October, 2006 by Integrated Quality Certification Private Limited, Bangalore. For re-certification of Quality Management System (QMS) of Vigilance Department, M/s. TQ Services conducted an external audit was conducted on 19.10.2013 and ISO certificate was extended upto 09.02.2016.

In-house quarterly magazine of the Vigilance department "Sphoorthy" from the year 2013 - 14 has been published being released in the Vigilance Awareness Week 2013.

The Vigilance Awareness Week was observed from 28.10.2013 to 02.11.2013 with the theme "Promoting Good Governance - Positive Contribution of Vigilance". A talk on "Good Governance" by Justice N. Santosh Hegde, Former Lok Ayukta, Karnataka was organized. During the week, a workshop on "Good Governance" for officers of NMDC from all across the units of NMDC was conducted by Shri M.N. Rao, Director, Centre for Good Governance, Hyderabad. On the concluding day, a lecture by Dr. Y.R.K. Reddy, Advisor and Professional Speaker in Corporate Governance Policy was organized.

A training program was also organized in March, 2014 by the Vigilance Department through M/s TQ Services of Tata Projects Ltd. on "Welding and Painting Inspection" at NISP, Nagarnar for the benefit of our officers in the field of supervising fabrication, quality, conducting inspections at the vendor sites, site inspections etc.

21.0 DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial year ended 31st March 2014, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under report;

iii) 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, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis.

22.0 DIRECTORS

The following Directors ceased to be Directors on the Board of the Company for the year under review:

i) Shri R.N. Aga, Independent Director 02.12.2013

ii) Mrs. Parminder Hira Mathur, Independent Director 02.12.2013

iii) Shri D. Rath, Independent Director 02.12.2013

iv) Shri C.S. Verma, Chairman-cum-Managing Director 21.04.2014

Shri Narendra Kothari assumed charge as Chairman-cum-Managing Director of the Company in terms of Order No.4(3)/2013-RM-I (Vol-II) dated 17.04.2013 of Ministry of Steel, Government of India w.e.f. 21.04.2014.

The Board places on record its deep appreciation for the valuable contribution made by Shri R.N. Aga, Mrs. Parminder Hira Mathur, Shri D. Rath and C.S. Verma during their tenure on the Board of the Company.

Shri S.K. Das, Director (Commercial) shall be superannuating on 31.08.2014. Accordingly, Shri S.K. Das is not seeking re-appointment in the ensuing Annual General Meeting of the Company. Hence, the re- appointment of Shri S.K. Das is not included in the notice convening the 56th AGM.

23.0 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 2013-14:

Sl.No. Unit Statutory Auditors

1. Head Office, M/s. Venugopal & Chenoy R&D Center, Chartered Accountants SIU & Consolidation 4-1-889/16/2, Tilak Road HYDERABAD 500 001

2. Kirandul M/s. Brahmayya & Co, Bacheli Chartered Accountants Raipur "Suhasini", 10-50-24 NISP, Jagdalpur Siripuram Jn. Central Work Shop VISAKHAPATNAM-530 003

Vizag Office

3. Donimalai M/s.P K Subramaniam and Co, Chartered Accountants 11-5-23, Karthik Complex Above Vijaya Bank, Bresthwarpet RAICHUR-584 001

4 Panna M/s Gopal Gupta & Co, Chartered Accountants, TF-6 (Third Floor), Vinayak Central Plaza, 179C/40, Mahatma Gandhi Marg, Civil Lines, ALLAHABAD - 211001

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. Cost Audit: Pursuant to Section 233B of the Companies Act, 1956, your Company carried out an audit of cost records relating to iron ore product, diamond and sponge iron product. The Company appointed M/s. Prasad & Bharathula Associates, Cost and Management Consultants as cost auditor with due approval of the Central Government to audit the cost accounts of the Company for the Financial Year ending 31st March, 2014. The cost audit report for the Financial Year 2012-13 was filed with Ministry and Corporate Affairs on 26.09.2013. The due date for filing the cost audit report for the Financial Year 2013-14 is September 27, 2014 and the report is yet to be filed.

24.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)

It is a matter of pride that several CSR initiatives have been in place right from the inception of the Company and they have become an integral part of the business model of NMDC.

An amount of Rs.126.85 Cr. amounting to 2% of PAT of previous year i.e. 2012-13 has been allocated for CSR activities of 2013-14. Apart from this an amount of Rs.44.20 Cr. of unspent CSR fund of 2012-13 has been carried forward to 2013-14. Thus, the total annual CSR Budget for 2013-14 is Rs.171.05 Cr. Against this budget, an amount of Rs.152.85 Cr. has been spent on various CSR activities during the year 2013-14.

A Quick Retrospective of Major Initiatives in Vogue is as follows:

1. Education

Balika Siksha Yojana

NMDC has introduced a focused initiative called "Balika Siksha Yojana" for the benefit of the tribal girl students of Bastar region. Under this Yojana, the girl students are being sponsored for various academic and professional courses in Engineering, Medicine, BDS, Management, Nursing, Diplomas etc. The entire expenditure is borne by NMDC.

In the first year, (i.e.2011-2012) 25 tribal girls from Bastar region have been admitted to Nursing courses in M/s Apollo Hospitals, Hyderabad. During the academic years 2012-13 & 2013-14 second batch & third batch of 40 girls each have been sponsored in GNM & B.Sc. nursing courses at Apollo Hospitals, Hyderabad.

Siksha Sahayog Yojana

NMDC Siksha Sahayog Yojana, a unique scheme granting scholarships to the poor Tribal and SC students of 5 (Five) districts of Bastar region, Chhattisgarh and Karnataka has been extended to about 11,000 students to continue academic pursuit beyond 8th class upto Graduation in Engineering/Medicine. Under this scheme, scholarship is granted from class IX onwards till they pursue their graduation and the amount is paid through their individual accounts in Pos/Banks.

A survey has brought out that this has been widely accepted and has started positively impacting the students and also their families. The eligibility criteria during 2012-13 were relaxed to 40% pass marks in the qualifying examination to cover the maximum number of students which has resulted in distribution of 18000 scholarships. During the year 2013-14, 16472 scholarships were distributed.

Education Improvement program

NMDC has taken up a 3 year education improvement program in 84 Govt. Primary schools in Dantewada block of South Bastar district aimed at reducing drop-out rate, improve education standards etc. through special initiatives. A total of 4200 students, mostly tribals, are benefitting from this program. Out of the identified 1077 out of school children, 328 have been mainstreamed to formal schooling.

Polytechnic College at Dantewada

An amount of 31.94 crore has been sanctioned for constructing a Polytechnic College at Dantewada. NMDC has requested Chhattisgarh Govt. to exempt tribal students of Bastar from central counseling in admissions to Polytechnic College. Considering NMDC''s request Govt. of Chhattisgarh has granted administrative approval by delinking the tribal students of Bastar region from central counseling. Plans are being drawn to start new trades from the ensuing academic year of 2014-15.

2. Infrastructure Development

- Construction of SC/ST Girls Hostels at Ongole & Guntur with a contribution of Rs.31.50 lakh each in Partnership with Govt. of A.P. has been completed.

- Strengthening PHCs in Bellary in partnership with Govt. of Karnataka by upgrading them/equipping them with various necessary/desirable medical equipment at a cost of Rs.169.00 lakh. Additional fund of Rs.34.41 lakh required has been released.

- NMDC has partnered with State Govt. of Chhattisgarh for construction of Gaurav Path - 4 way lane at Dantewada at a cost of Rs.1300.00 lakh.

- Electrification related works in 67 villages of Bastar District at a cost of Rs.252.48 lakh.

- Construction of 30 Community Centres in 30 villages of Bastar District at a cost of Rs.30.00 lakh each at a total cost of Rs.900.00 lakh.

- Farmer''s development scheme at Dantewada was taken up in partnership with CG Govt. @ total expenditure of Rs.1500.00 lakh. The scheme includes providing fencing to farmers land, digging of borewells & installation of hand pumps. An amount of Rs.1200.00 lakh has been released till date.

3. Healthcare

NMDC runs three hospitals at Project sites, in collaboration with M/s Apollo and M/s Yashoda Hospitals offering free medical treatment not only to staff but to the local communities as well addressing the needs of an average 90000 out-patients &

9000 in-patients from local tribals every year.

NMDC operates ''Hospital on Wheels'' (HoW) service in Bailadila benefitting about 40000 tribal villagers in 45 villages by providing free medi-care facilities at their doorsteps.

4. Drinking water Facility

NMDC has partnered with State Govt of Karnataka for providing Drinking Water Facility in 7 villages of Bangalore Rural District, Karnataka at a cost of Rs.78.34 lakh.

5. Integrated Development of Villages

NMDC has identified 58 tribal villages around its Bailadila Projects in South Bastar (Dantewada) district and in the first phase, developmental activities in the areas of education, agriculture, healthcare and awareness, income generation through acquisition of income-earning skills, formation of SHGs, lift irrigation and modern tools & techniques of cultivation have been undertaken in 8 villages. Requisite tools and equipment are also provided to the beneficiaries. This has been extended to additional 10 villages around Kirandul Project, thereby bringing the total number of villages for integrated development to 18. Plans are on the anvil to include another 8-10 villages under the programme in the current financial year.

6. Skill Development

- Skill development training program in bamboo, bell metal & tumba art is being organized in Bastar District, CG to provide training to 460 unemployed tribal youth. An amount of Rs.31.60 lakh has been spent till date.

- Another skill development training program in installation of hand pumps & repairs of hand pumps for the development of 1260 youth of Bastar has been organized. An amount of Rs.59.92 lakh has been spent on training.

- NMDC has launched livelihood-linked skill development program leading to employment in various trades viz., welding, electrician, fitter, sales & marketing, data entry operator in partnership with IL&FS at Balrampur, Uttar Pradesh. Under this program, 1000 unemployed youth will be trained. The program guarantees placement to at least 75% of the successful trainees.

25.0 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. During the year 2013-14, the Company received 201 applications out of which 13 were only rejected while providing the details for 188 applications.

26.0 R&D ACTIVITIES

Particulars required under the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are at Annexure-I.

27.0 (a) CONSOLIDATED FINANCIAL STATEMENTS

In terms of Listing Agreement with Stock Exchanges, the duly audited Consolidated Financial Statements forms part of Annual Report.

(b) STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Statement pursuant to section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is at Annexure-II.

28.0 CORPORATE GOVERNANCE

The Board of Directors at their 427th meeting have approved the Policy on Corporate Governance. A separate report on Corporate Governance is enclosed at Annexure-III.

29.0 REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management discussions and Analysis as required in terms of Clause 49(F) of the Listing Agreement is enclosed at Annexure-IV.

30.0 GLOBAL COMPACT - COMMUNICATION ON PROGRESS

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

31.0 BUSINESS RESPONSIBILITY REPORT

In compliance with Clause 55 of the Listing Agreement, Business Responsibility Report (BRR) is enclosed at Annexure-VI.

32.0 AWARDS RECEIVED BY THE COMPANY

The details of awards received by the Company for the year under review are as follows:

1. On 28th May''2013, NMDC received ''Dun & Bradstreet Corporate Awards 2012'' as Best Mining Company Under the sector Mining. Received top Indian Company under Mining Sector from Dun & Bradstreet Corporate Awards 2012. This award was presented by Sri Jayant Kumar Banthia, Chief Secretary, Govt. of Maharashtra.

2. On 29th Jun''2013, NMDC received ''CMSB Public Sector Enterprise / Government undertaking Excellence in CSR Award 2013'' from Council for Media and Satellite Broadcasting, New Delhi.

3. On 24th Jul''2013 CMD, NMDC received PSU Award in "Human Resource Utilization'' from Sri Praful Patel, Hon''ble Minister for Heavy Industries and Public Enterprises, Govt. of India, organized by Governance Now, News Magazine.

4. On 13th Sep''2013, NMDC received "Best Organization supporting Quality Circle Movement" Award from Sri Sarvey Satyanarayana, Hon''ble Minister of State for Road Transport and Highways, Govt. of India, organized by Quality Circle Forum of India, Hyderabad Chapter.

5. On 2nd Apr''2014 CMD, NMDC received ''Most Efficient Navratna Award'' from Sri TKA Nair, Advisor to the Hon''ble Prime Minister of India organized by Dalal Street Investment Journal, New Delhi.

33.0 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 and Jharkhand.

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.

(Narendra Kothari)

Chairman-cum-Managing Director

Place : Hyderabad Date : 30.05.2014


Mar 31, 2013

Dear Members,

The Directors are pleased to present the 55th Annual Report on the performance of your Company, together with the Audit Report and Audited Accounts, for the year ended 31 March 2013 and the Report thereon by the Comptroller and Auditor General of India.

1.0 PERFORMANCE HIGHLIGHTS

During the year under review, the Company has recorded turnover of Rs.10,704 crores, achieved Profit Before Tax (PBT) of Rs.9,465 crores and achieved Profit after Tax (PAT) of Rs.6,342 crores.

The major performance highlights are summarized as under:

- Turnover for the year under review was Rs.10,704 crores compared to Rs.11,262 crores in the previous financial year 2011-12 recording a decrease of 5%.

- Profit before tax from continuing operations was Rs.9,462 crores compared to Rs.10,760 crores in the previous financial year 2011-12 recording a decrease of 12%.

- Profit after tax was Rs.6,342 crores compared to Rs.7,265 crores in the previous financial year 2011-12 recording a decrease of 13%.

- Net worth increased to Rs.27,505 crores as on 31.03.2013, 13% higher than Rs.24,396 crores in the previous financial year 2011-12.

- 1st Interim Dividend @ 200% on the paid up equity share capital of the Company aggregating Rs.793 crores was paid by the Company. 2nd Interim Dividend @ 100% on the paid up equity share capital of the Company aggregating Rs.396 crores was also paid by the Company. The total interim dividends paid by the Company aggregates Rs.1,189 crores.

- Supply of Iron Ore to domestic industries recorded 246.72 lakh tonnes as against the previous year supply of 269.16 lakhs tonnes, recording a decrease of 8%. Total exports of Iron Ore during the year was 16.02 lakh tonnes against 3.85 lakh tonnes in the previous financial year 2011-12 recording an increase of 316%.

- Sponge Iron production during the year under review was 36,289 tonnes as against previous year 37,260 tonnes.

- Diamond production for the year under review was 31,533 carats as against previous year 18,043.44 carats.

- A Joint Venture Company named Jharkhand National Mineral Development Corporation Limited (JNMDC) in Joint Venture with Jharkhand State Mineral Development Corporation Ltd. (JSMDC) was incorporated 06.08.2012 for exploration and exploitation of Iron Ore Deposits from Sasangoda Iron Ore lease, Jharkhand. The shareholding ratio between NMDC and JSMDC is 60% and 40% respectively and accordingly, JSMDC is a subsidiary of NMDC.

- Department of Disinvestment, Government of India completed further disinvestment of 10% of the shareholding of President of India through OFS route. The realization netted by Government of India on account of the said divestment is Rs.5,973.27 crores during the month of December 2012.

- The Equity Shares of NMDC has been included into CNX NIFTY Index of National Stock Exchange w.e.f. 01.04.2013.

- To further strengthen evacuation infrastructure, the following major initiatives have been taken:

(a) Uniflow Railway Line commissioned in May 2012 which further augments evacuation capacity by 3 million tonnes;

(b) In-principle approval has been accorded for construction of a slurry pipeline from Bacheli to Nagarnar at an estimated cost of Rs. 2123.81 crores;

(c) MoU signed with RINL for development of a Slurry Pipeline from Nagarnar to Visakhapatnam and a Pellet Plant in Visakhapatnam under Joint Venture route;

(d) Signed a MoU with Ministry of Railways on 21.12.2012 for doubling of KK line between Kirandul & Jagdalpur of around 150 kms at an estimated cost of Rs.827 crores.

2.0 PHYSICAL PERFORMANCE

2.1 Production

Product Achievement Percentage change

2011-12 2012-13

Iron Ore (lakh tonnes) 272.60 271.84 -0.28%

Diamond (Carats) 18,043.44 31,533.39 75%

Sponge Iron (Tonnes) 37,260.00 36,289.00 -3%

Notes:

In respect to DMP, Panna:

1. Plant operation stopped from 01.07.2010 due to expiry of supplementary lease on 30.06.2010. Stage-I approval was cleared on 04.01.2011. The operations resumed w.e.f. 17.06.2011.

2. Obtained temporary permission for operation till 22.11.2011 and further extension was accorded upto 20.06.2012.

3. Received the final clearance on 14.06.2012 from MoEF for a period of 5 years upto 30.06.2015. The Mine and Plant are in operation.

3.0 SALES OF IRON ORE

Particulars Physical Value

(in lakh tonnes) (Rs. in crore) Achievement % of Achievement % of 2011-12 2012-13 change 2011-12 2012-13 change

Domestic 269.16 246.72 -8% 10,894.63 9,602.72 -12%

Export through MMTC 3.85 16.02 316% 272.93 955.99 250%

Total Sales 273.01 262.74 -4% 11,167.56 10,558.71 -5%

3.1 Other Sales

Products Achievement

2011-12 2012-13

a) Diamond

Sales (carats) 8,085.00 17,862.57

Value (Rs. in crore) 9.84 28.51

b) Sponge Iron

Sales (tonnes) 33,731.79 37,599.54

Value (Rs. in crore) 65.93 73.50

4.0 FINANCIAL PERFORMANCE

4.1 Operating Results

Parameter Achievement Percentage of change 2011-12 2012-13

Profit Before Tax from continuing operations (PBT) (Rs. in crore) 10,760 9,462 -12%

Profit After Tax (PAT) (Rs. in crore) 7,265 6,342 -13%

Net Worth (Rs. in crore) 24,396 27,505 13%

Book value per share (Rs.) 61.53 69.37 13%

Earnings per Share (Rs.) 18.33 16.00 -13%

4.2 Profit & Dividend

During the year under review, your Company has earned profit before tax from continuing operations of Rs.9,462 crores on a turnover of Rs.10,704 crores in comparison with those of previous year''s achievement of Rs.10,760 crores and Rs.11,262 crores respectively.

The Company has paid 1st interim dividend @ 200% on the equity shares of Re.1/- each aggregating Rs.793 crores and 2nd Interim Dividend also @ 100% on the paid up equity share capital of the Company aggregating Rs.396 crores. The Board has recommended subject to shareholder''s approval, payment of final dividend @ 400% on the paid up equity share capital of the Company aggregating Rs.1,586 crores. The total dividend payout for the year under review aggregates Rs.2,775 crores. The share of Government of India stands at Rs.2,300 crores.

5.0 DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

6.0 HON''BLE SUPREME COURT VERDICT ON MINING IN KARNATAKA

As stated in the Directors'' Report for the year 2011-12, the case on mining issues in Karnataka went on before the Green Bench of the Hon''ble Supreme Court, and it pronounced the judgement on 18.04.2013 after taking into account the interim orders it had passed in the matter, the survey report of the Joint Committee, the Final Report and the Modified Report of the Central Empowered Committee, and the submissions made by all the Parties concerned. In short, the judgement has approved and accepted (a) the findings of the survey conducted by the Joint Team; (b) the categorization of the mines into ''A'', ''B'', and ''C''; (c) the CEC''s recommendations, including that of the role of the Monitoring Committee; and (d) the grant of fresh mining leases and consideration of pending applications be dealt with in accordance with law and the judgement.

The impact on NMDC in relation to its Donimalai and Kumaraswamy mines situated in Karnataka are given below in brief:

i) NMDC''s mines at Donimalai and Kumaraswamy have been placed in Category-A. However, the Hon''ble Supreme Court took the view that NMDC has to pay the compensation as per Category-B even after NMDC''s detailed submissions, including those based on historical factors;

ii) Monitoring Committee, appointed by the Hon''ble Supreme Court, will continue the sales of Donimalai and Kumaraswamy products through e-auction.

7.0 DISINVESTMENT OF SHARES BY GOVERNMENT OF INDIA

During the year under review, 39,64,71,600 equity shares of the face value of Rs.1/- each aggregating 10% of the total paid up equity share capital of the Company was disinvested by Department of Disinvestment (DoD), Govt. of India in the month of December 2012. The disinvestment was done under Offer for Sale (OFS) route through Stock Exchange mechanism as per SEBI rules/regulations. In this regard, the entire deal was executed through Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) with NSE being the designated Stock Exchange. The floor price was fixed by Government of India at Rs.147 per share. The average sale price in NSE as per their contract note is Rs.150.8014 per share and in BSE as per their contract note is Rs.150.84 per share. As informed by Department of Disinvestment, Government of India, the net realization accrued to Government of India on account of 10% disinvestment of NMDC''s shares stands at Rs.59,73,27,22,792.80 i.e. Rs.5,973.27 crores. Post disinvestment of shares, the shareholding of Government of India stands at 3,17,19,46,580 equity shares constituting 80% of the total paid up equity share capital of the Company.

8.0 INCLUSION OF EQUITY SHARES OF NMDC INTO CNX NIFTY INDEX W.E.F. 01.04.2013

The Equity Shares of NMDC has been included into CNX NIFTY Index of National Stock Exchange w.e.f 01.04.2013. To commemorate the inclusion of NMDC shares into CNX NIFTY Index, an opening Bell Ceremony was held on 01.04.2013 at National Stock Exchange, Mumbai. CNX Nifty comprises of 50 large and liquid scrips representing 22 sectors. It represents 67% of free float market capitalization, 50% of total traded turnover of total number of companies traded at NSE.

Inclusion of NMDC shares in CNX Nifty Index of NSE is a historic occasion which will lead to greater visibility and bring out the true potential of the Company, both to domestic and international investors.

After SESA GOA, it is the next iron ore mining Company and the first CPSE under the administrative control of Ministry of Steel, Government of India to be included in CNX NIFTY Index.

9.0 NEW PROJECTS & BUSINESS DIVERSIFICATIONS

9.1 Projects under construction

9.1.1 Bailadila Deposit-11/B

As part of plan to enhance production, the construction of Deposit-11B mine at an expanded capacity of 7.0 Million Tonnes of ROM per annum has been taken up. The estimated capital expenditure towards this is Rs.607 Crores, out of which Rs. 320 Crores is for Plant and Rs. 188 Crores is for mining machineries. Naxal activities have seriously hindered the progress of the project work. More than 90% work is completed. Trial runs of Secondary Crusher, EOT Crane in Secondary crusher house, Scalping screen & some of the downhill conveyors completed. Balance work will be completed during FY 2013-14.

9.1.2 Uniflow System at Bacheli

East Coast Railways was assigned the work of execution of the "construction of Uniflow Dispatch Line at Bacheli on K-K Line of East Coast Railways. The work is completed and the system is in operation.

9.1.3 Ore Beneficiation and Slurry Pipeline Transportation system from Bailadila to Vizag

The Slurry Pipeline Transportation System is intended for transportation of Pellet Feed Concentrate from Bailadila to Vizag via Jagdalpur along National/State Highways with a provision of partial off-take at Nagarnar for making Pellets required for feeding to NMDC''s Steel Plant at Nagarnar. For part of this Project, investment proposal involving 2 MTPA Ore Processing Plant at Bacheli, Slurry Pipeline from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar has been approved by NMDC Board. Gazette Notification for ''Right of Use'' for a corridor of land to lay the Slurry Pipeline has been issued by Govt. of India in August 2012. Mecon has been appointed as Consultant for Detailed Route Survey of Slurry Pipeline Project. Work is in progress.

9.1.4 BHJ Beneficiation Plant at Donimalai

For treating low grade iron ore Banded Hematite Jasper (BHJ), a Beneficiation Plant is being set-up at Donimalai Iron Ore Mine for processing 3.6 lakh tonnes per annum of BHJ iron ore to produce 1.18 lakh tonnes per annum of BF Grade Pellet Feed Concentrate at an estimated cost of Rs.134.42 crores. As part of plant construction, the work of setting up of Beneficiation Plant is awarded to Hindustan Dorr Oliver Limited (HDOL). However, further work has not progressed due to non-receipt of clearance from Forest Department.

9.1.5 Kumaraswamy Iron Ore Project

To augment the production capacity towards achieving the target of 40 MTPA by 2014-15, the construction of Kumaraswamy Iron Ore Mine with capacity of 7.0 MTPA was taken up with an estimated capital outlay of Rs.898.55 Crs. MECON is appointed as EPCM consultant. The entire project has been planned to be executed in six packages. Work orders are placed for Crushing Plant Package, Downhill conveyor Package, Electrics and Substation package and Service Centre facilities packages. Orders for other minor packages like Approach road & Telecommunication system packages will be placed shortly. Construction works are in progress. The project is expected to be completed during the FY 2013-14.

9.1.6 Low Silica Limestone Project, Arki (HP)

Arki Limestone Deposit was identified as a potential source to supply SMS grade low silica limestone to steel plants of SAIL.

Under MOU between your Company and SAIL, M/s Tata Consulting Engineers Limited (TCE), Kolkata has been appointed as a Consultant for preparation of Feasibility Report of the project. TCE has submitted the final draft Feasibility Report and the same is under examination. Simultaneously, the Company obtained:

(i) 1st stage Forest clearance from MoEF for diversion of 84.36 ha forest land with certain terms and conditions.

(ii) Approval of the Mining Plan from IBM with Progressive Mine Closure Plan of Arki Limestone deposit on 27-04-2012.

9.1.7 Panthal Magnesite Project

NMDC has formed a joint venture Company with J&K Minerals Limited in the year 1989 to explore and exploit Panthal magnesite mine and to produce dead burnt magnesite. The Joint Venture is named as J&K Mineral Development Corporation Ltd (J&KMDC) and is a subsidiary of NMDC. After an initial phase of uncertainty regarding future of the Panthal Magnesite Plant due to inadequate demand in the market, J&KMDC Board in its 93rd meeting held on 27.08.2009 decided to revive the project. NMDC Board in its 417th meeting held on 07.01.2010 endorsed to revive the project by setting up a 30,000 TPA Dead Burnt Magnesite plant.

Mining Lease renewed for 10 years w.e.f from 11.01.2009 and registered on 21.05.2010. Mining lease was transferred to J&KMDC on 10th Jan''2011. It has been registered on 07.04.2011 at Hon''ble court of Katra in favour of J&KMDC.

Public hearing for Environmental Clearance (EC) was held successfully. MoEF has issued E.C on 03.05.2011 subject to obtaining NOC from NBWL. NBWL vide its letter dated 14.11.2011 & corrigendum dated 31.01.2012 has issued NOC to J&K state Forest department. J&K has issued NOC dated 13.03.2012. Two nos. of PIL''s which were filed against Panthal Magnesite Project in Hon''ble high court of J&K in March''2012, was dismissed by Hon''ble high court of J&K.

M/s Dasturco is EPCM consultant for this project. The Project is planned to be executed in four major packages. Soil investigation work Completed. Work order is placed for "Balance civil works" package and the works were resumed after dismissal of PIL and are in progress.

9.1.8 Screening Plant III at Kirandul Complex

To augment the production capacity of Kirandul complex the construction of 12.0 MTPA screening plant with loading facilities is envisaged. This plant caters both Dep. 11-B & Dep. 14 of Kirandul complex. The estimated capital expenditure is Rs.951 crores. TATA Consulting Engineers (TCE) is appointed as EPCM consultant. The entire project has been planned to be executed in seven packages. Tender activities are in progress.

MoEF has accorded 1st stage clearance in Jan''2012. Final Clearances from MoEF are awaited.

9.1.9 1.2 MTPA Pellet Plant at Donimalai

One of the main objectives of this project is to prolong the life of Tailing Dam at Donimalai by using the slimes for making pellets. M N Dastur & Co. appointed as EPCM consultant. Execution of Project divided into Six Packages. The estimated capital expenditure is Rs.572 crores. Orders placed for Major Packages. Major civil works completed. Technological equipment received at site. Structural & erection works are in progress. Project is scheduled to be completed in FY 2013-14.

9.1.10 Doubling of Railway Line

NMDC has signed a MoU with Ministry of Railways in the august presence of Hon''ble Minister of Steel & Hon''ble Minister for Railways on 21.12.2012 for Doubling of KK line between Kirandul & Jagdalpur at an estimated expenditure of Rs.826 crores for enhancement in the infrastructure facilities for evacuation of the iron ore produced at the Kirandul and Bacheli complexes to various customer destinations with a timeline of 5 years and 8 months. East Coast Railways have taken up the work.

9.1.11 3.0 MTPA Integrated Steel Plant in Chhattisgarh

As you aware, your Company is setting up a 3.0 MTPA Steel Plant at Nagarnar near Jagdalpur, District Bastar, Chhattisgarh at an estimated cost of Rs. 15525 crores where the Company is in possession of about 2120 acres of land for the steel plant, township and for other facilities.

Necessary statutory clearances including Environmental Clearance from Ministry of Environment and Forests (M0EF) and the Government of Chhattisgarh have already been obtained. Rail Transport Clearance was received. Final Detailed Project Report (DPR) along with cost estimates submitted to East Coast Railway for their approval which is under process.

Government of Chhattisgarh has sanctioned water and power for construction as well as for operation of the plant. For providing power for operation of the steel plant, Chhattisgarh State Power Transmission Company Limited (CSPTCL) has awarded work order for the construction of 400 KV transmission line from Raipur to Jagdalpur (about 320 Kms.) and 400 / 220 KV substation at Jagdalpur. The cost of construction of 400 KV transmission line from Raipur to Jagdalpur and substation at Jagdalpur will be equally shared by NMDC & CSPTCL. For the 200 KV power line from Jagdalpur to Nagarnar the entire cost will be borne by NMDC.

Engineering Consultancy and Project Monitoring Services contracts have been awarded to M/s MECON Ltd. Enabling works packages like soil investigation, temporary power and plant entrance road have been completed.

Other enabling works like site levelling, Plant Road network, Construction water, Construction power and construction of plant boundary wall were awarded and works are in progress at site.

For expeditious execution and commissioning of the steel plant the nine Major Technological packages in respect of various production units viz. Sinter Plant, Blast Furnace Complex, Raw Material Handling System, Coke Oven Plant, By Product Plant, Steel Melting Shop, Thin Slab Caster & Hot Strip Mill, Lime & Dolo Plant and Oxygen Plant have been awarded on turnkey basis. Civil & structural works for the aforesaid major technological packages are in progress.

While one of the major auxiliary package i.e. Power & Blowing Station has been awarded, other auxiliary packages like Permanent water, Power and Blowing Station, Turbo Blowers and Main Receiving Sub-station are in different stages of order placement.

For providing residential accommodation to the employees of NMDC and consultants, construction of studio apartments near the plant site have been taken up of with 110 units in the first phase are ready for occupation. Works for construction of permanent township, construction colony are also under progress.

9.1.12 Steel Plant at Bellary

In pursuance of the MoU signed between the Government of Karnataka and your Company, action for setting up of a 3 MTPA Integrated Steel Plant at Bellary, in the State of Karnataka has been initiated by the Company. Acquisition of about 3000 acres of land for the proposed steel plant through Karnataka Industrial Areas Development Board (KIADB) was under progress subsequent to publication of statutory preliminary notifications in the gazette of Karnataka in this respect. However, on consideration of Writ Petitions, the Hon''ble High Court of Karnataka (Circuit Bench, Dharawad) passed an interim order staying issue of final notification. The matter is at present pending for hearing before the Hon''ble High Court. The Company has deposited Rs.158.67 crore with KIADB, being the tentative cost of the land plus service charges payable to KIADB in terms of the agreement executed between your Company and KIADB. Government of Karnataka also accorded approval towards allotment of water and power for operation of the proposed steel plant. M/s MECON has been engaged as consultant for preparation of Techno Economic Feasibility Report (TEFR).

9.2 Other initiatives

9.2.1 Bailadila Iron Ore Deposit-13

NMDC formed a Subsidiary Company NMDC-CMDC Ltd. with 49% partnership of CMDC Limited to develop Deposit-13 as standalone project of 10 MTPA.

Mining plan for the area has been approved by Indian Bureau of Mines (IBM) on 12.09.2008 for obtaining forest clearance which is being pursued.

9.2.2 Bailadila Deposit-4

It is envisaged to develop Deposit 4 with CMDC Ltd. as partner for supplying raw material to the steel plant at Nagarnar. Govt of Chhattisgarh recommended the ML application of NMDC to Ministry of Mines, GOI for prior approval for grant of ML in favour of NMDC. Ministry of Mines on 30.11.2011 has given the prior approval for grant of ML in favour of NMDC over an area of 646.60 Ha. Mine Plan is under approval.

9.2.3 Rail Link between Dalli-Rajhara - Raoghat, Jagdalpur Railway Line Project

The leveling for erection of railway track between Dalli Rajhara to Bhanupratappur, which is around 35 kilometers from Bhanupratappur to village Kewanti around 10 kilometers and from Kewanti to Antagarh, which is around 15 kilometers, is in progress. Tree felling and other works could not be taken up due to Naxal activities.

Further progress is still at halt due to stoppage of tree felling and railway line leveling & alignment work by agitating villagers near village Kewanti, Bhanupratappur. Now it can only be resumed after deployment of sufficient paramilitary forces in disturbed area.

9.2.4 International Coal ventures (P) Limited (ICVL)

The Company International Coal Ventures (P) Limited (ICVL) has been incorporated between SAIL, NMDC, NTPC, Coal India and RINL. The objective of the Company is to primarily acquire coking and thermal coal assets abroad.

9.2.5 NMDC Global Strategic Alliances Kopano-NMDC Minerals (Pty) Ltd.

The JV with Kopano (Johannesburg, South Africa) has become functional and the first board meeting was held. Proposals related to coal assets are being reviewed by the JV.

ITMK3 Based Nugget Plant

Your Company had made significant progress in the ITMK3 initiative by testing the raw material i.e. domestic coal and NMDC iron ore. Feasibility study is kept in abeyance due to process stabilization issues.

9.3 Foreign Venture

9.3.1 Gold in Tanzania

In Tanzania, your Company has been granted 4 Mining Lease for Gold over an area of 38.83 sq. kms. for a period of 10 years w.e.f. 13.02.2012. Your Company has been granted Retention Licence at Siga Hill area and PL renewal of Masabi East area. NMDC Board has decided that Gold Mining Project at in Bulyang''Ombe will be developed by NMDC. Necessary steps | are being taken to start the mining in the Bulyang''Ombe ML areas.

9.3.2 Australia Legacy Iron Ore, Perth, Australia

Legacy Iron Ore Ltd, an ASX listed entity based in Perth, Australia in which NMDC has 49.61% equity holds prospective iron ore tenements in both the Central Yilgarn and Pilbara areas of Western Australia. All project areas are located close to established infrastructure. Legacy''s major gold focus lies in the South Laverton region, where the Company holds some 560 square kilometres of prospective ground.

Legacy has acquired 60% interest in Mt Bevan Iron Ore Project from Hawthorn Resources Ltd in Western Australia and also acquired three coal tenements in Queensland.

9.3.3 Coking Coal

Your Company had reviewed various acquisition opportunities in coking coal in Mozambique, USA, Russia, Australia and Canada.

9.4 Leases for Minerals

9.4.1 Iron Ore

9.4.1.1 In respect of Bailadila-1 & 3 The PLs are as under:

9.4.1.2 The PLs being pursued in Chhattisgarh

Your Company has applied 3 PL''s in Dantewada District (2006-2008) and is pursuing the PLs with Chhattisgarh Govt.

9.4.1.3 In Jharkhand Sasangada:

The Company applied for PL in the west Singhbhum district. State Govt. recommended to Central Govt. for prior approval for grant of PL in favour of JV Co. (NMDC & JSMDC). MoM, GoI has conveyed its prior approval for grant of PL in favor of JV of NMDC Ltd & JSMDC for a period of 3 years. Grant order from State Govt. is awaited.

DMG Govt of Jharkhand asked NMDC to provide the Consent letter of Forest Department, Latest ownership certificate of NMDC-JSMDC, JV Company & Latest Income Tax Payment certificate to facilitate for grant of PL to NMDC-JSMDC JV Company. A JV Company, Jharkhand National Mineral Development Corporation Limited (JNMDC) has been incorporated on 06.08.2012, with its registered office at Ranchi. All the information have been provided to the DMG and the matter is pursued with the DMG, Govt of Jharkhand for grant of PL in favour of JNMDC.

MoU with DMG, Jharkhand:

The Company has signed MOU with Dept. of Mines & Geology (DMG), Jharkhand for exploration of Iron ore and other minerals in the State of Jharkhand. Under the MoU signed, the Company is executing exploration for iron ore in Silpunji - Kantoria area in West Singhbhum Dist. Geological mapping and topographical survey on 1:4000 scale has been completed.

Ghatkuri (Notified Forest):

The Company is pursuing PL & ML application for Ghatkuri Iron Ore Deposit for exploitation in JV with State Government. Your Company has filed Impleadment Petition requesting the Apex Court to direct maintaining status-quo of the State Government Notification of 27.10.2006 which reserves exploitation of Ghatkuri deposit by PSU''s. Hon''ble Supreme Court of India vide order dated 26.07.2012 has dismissed all the appeals filed by the private parties. The Company is pursuing the matter of grant of ML with the state Govt.

The Company has applied for 3 PL''s (March 2011) in West Singhbhum District.

9.4.1.4 In Karnataka

The Company is pursuing for ML for Ramandurg and Kumaraswamy deposit (contiguous to ML No.1111). Both the MLs are subjudice, pending in the Hon''ble Supreme Court of India and in Hon''ble High Court of Karnataka respectively. The Company has applied for I 7 ML application (Aug 2007) in Chitradurga, n Bellary, Tumkur and Bagalkote Districts. I

In addition, the Company has also applied for another 6 PL applications (June 2010) in Tumkur, Bellary and Chitradurga Districts. The Company has applied 7 ML applications in Karnataka (4 against Govt Notification & 3 in Donimalai Range (Dec 2010).

9.4.1.5 In Odisha

The Company is pursuing for ML for Mankadnacha iron ore.

9.4.1.6 In Rajasthan

The Company is pursuing for PL applied near Malikhera village in Bhilwara District for iron ore.

9.4.2 Gold

9.4.2.1 In Jharkahand

The Company is pursuing for ML / PL for Pahardia - Rungikocha (West Singhbhum District) and Parasi-Kutachauli-Khotadih (Ranchi District).

9.4.3 Diamond

9.4.3.1 In Andhra Pradesh

The Company is pursuing forest permission for exploration in 3 PLs falling in the Forest area (Renewal application submitted) in Kalyandurg area, Anantapur District.

The Company has submitted one more PL application for Diamond in Anantapur district on 25.09.2012.

9.4.3.2 In Madhya Pradesh

The Company has carried out exploration work in granted 2 PLs (Baghain & Sarang). Renewals have been granted for these two PLs for two years. 2nd renewal for 1 year has also been applied. The Company has been granted the PL of Rampura Motwa for a period of two years. The Company has applied for one more PL in Panna District of MP. Exploration works in granted PL areas is under progress.

The Company is pursuing for 3 PLs viz., Karmatia, Lakshmipur & Pali for early grant in favour of NMDC.

Tikamgarh RP

The Company has been granted Reconnaissance Permit (RP) on 30.09.2009 in the Tikamgarh District of M.P. Exploration work has been completed under RP and the Exploration cum Relinquishment Report has been submitted. The Company has applied 5 PLs in Tikamgarh after completion of the RP works.

9.4.4 Platinum Group of Elements

9.4.4.1 In Uttar Pradesh

The Company is pursuing for PLs for Tsganan area, Dangli and Dangli RF in Lalitpur district.

9.4.5 Coal Shahpur East and Shahpur West Coal Blocks

The Company was allocated two coal blocks i.e. Shahpur East (Area 693 Ha) and Shahpur West (587.5 Ha) Coal Blocks in M.P. by Ministry of Coal, Govt. of India, on 25.07.2007 under Government Dispensation Route for Commercial Mining. Both blocks were regionally explored by GSI. Later NMDC conducted exploration through MECL, Nagpur and obtained Geological Reports for both the coal blocks. Mining Plans and Mine Closure Plans for Shahpur

East and Shahpur West Coal Blocks have been approved by MoC.

Prior approval was granted by MOC for grant of ML of Shahpur West Coal Block. Matter is being pursued for getting prior approval for ML of Shahpur East Coal Block.

Land survey for acquisition of land for infrastructure and boundary demarcation in Shahpur East and Shahpur West Coal Blocks have been completed and Application for land acquisition for both the coal blocks have been submitted to Collectors, Shahdol & Umaria Districts.

Detailed Project Report (DPR) for both the coal blocks is being prepared by the Consultant M/s SCCL and is under finalization.

Applications for 12 coal blocks submitted to MOC against notification for competitive bidding for Power and Commercial Mining.

9.4.6 Bauxite

9.4.6.1 In Jharkahand

The Company is pursuing for PL / ML for Mahaudih village, Kujam village, Utani, Akasi and Putrang villages, Kotih village, Kujam and Chirodih villages in Gumla District.

9.4.7 Dolomite:

9.4.7.1 In Chhattisgarh

The Company is pursuing ML application for Sadartera Dolomite Block in Bastar District.

10.0 SUBSIDIARY / JOINT VENTURE / ASSOCIATE COMPANIES MONITORING FRAMEWORK

NMDC has six subsidiaries, stake in five Associate Companies and one JV Company. The names of these Companies and percentage of NMDC stake in these Companies are as follows:

* Under closure

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 / Joint Venture 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 the Board of Directors of Subsidiary Companies are reviewed by the Board of NMDC.

10.1 J&K Mineral Development Corporation Ltd (JKMDC)

The Annual Report of the subsidiary Company is annexed.

10.2 NMDC-CMDC Ltd (NCL)

The Annual Report of the subsidiary Company is annexed.

10.3 NMDC Power Ltd. (NPL)

The Annual Report of the subsidiary Company is annexed.

10.4 Jharkhand National Mineral Development Corporation Limited (JNMDC)

The Annual Report of the subsidiary Company is annexed.

10.5 NMDC SARL, Madagascar

The Annual Report of the subsidiary Company is annexed. The wholly owned subsidiary Company is under closure.

10.6 Legacy Iron Ore Co. Ltd., Australia

It is a listed Company in Australia. The Annual Report of the subsidiary Company is annexed.

11.0 ENVIRONMENT MANAGEMENT:

The Company has been accredited with ISO 14001 Environment System certification in respect of NMDC''s four major production projects, i.e., Bailadila Deposit-14/11C, Deposit-5, Donimalai and Diamond Mining Project Panna. The Certification is valid up to November''2014. The Company has obtained Terms of Reference from MoEF, GoI for preparation of EAI / EMP report for combined peak production capacity of 1.3 MTPA in Shahpur East and Shahpur West underground coal mining projects for obtaining Environmental Clearance. The Company has obtained Final Forest Clearance from MoEF on 14.6.2012 for diversion of 74.018 ha of forest land for renewal of supplementary ML Diamond Mining Project Panna. The Company is in the process of compliance of First Stage Forest clearance conditions for obtaining final forest clearance for diversion of 84.36 Ha of forest land for Arki Lime stone Project and 65.936 ha Forest Land for construction of screening plant at Kirandul complex. The Company has initiated advance action and submitted Forest Clearance application forms to State Forest Department, Raipur for obtaining forest clearance for renewal of Mining Lease of Bailadila Deposit-14, 14 NMZ, Kirandul Complex and Deposit-5 and Deposit 10, Bacheli Complex.

The Company is organizing environmental monitoring studies at all the production projects by engaging the MOEF recognized laboratories. The studies indicate that PM10, PM2.5, SO2, NOx and CO levels at all the production projects are well within the prescribed limits as per MoEF / CPCB and State Pollution Control Board Standards.

11.1 Sustainable Development Performance

In compliance with GoI, Department of Public Enterprises, New Delhi guidelines on Sustainable Development (S.D) for Central Public Sector Enterprises (CPSE''s) for the purpose of performance evaluation under MoU system, your Company has chosen five S.D. Projects / activities such as Bio-Diversity survey & Conservation Plan, Energy Management, Carbon Management, Water Management and Training on S.D for employees for the year 2012-13. The Company has reviewed the above S.D. Projects by Board level S.D. Committee and details are given bellow:

(i) Bio-Diversity Survey and conservation plan:

The Company has engaged M/s. IIBRD, Kolkata for undertaking Biodiversity studies and conservation plan at Bailadila Iron Ore Mining Complex, C.G, Donimalai - Kumaraswamy Iron Ore Mining Complex, Karnataka and Diamond Mining Project, Panna, M.P. The study recorded around 208 species belonging to 10 Faunal Groups and 213 floral species within which 77 are tree species, 53 are shrubs and 76 are herbs in the Core and Buffer Areas of Bailadila iron ore complex and the area is suitable for the sustenance of wild animals in their preferred habitat. Canopy cover in most places of the forest area is within 40-70% which is known to be dense forest as per the FSI classification. Under bio-diversity conservation plan, the Company has proposed to undertake development of habitat conservation through plantation, soil conservation, grass land development and development of water bodies in buffer zone areas.

(ii) Energy Management

The Company has completed Energy Audit studies at NMDC projects through M/s. Centre of Plant Engineering Services (COPES), Secunderabad. The Energy Conservation Options as suggested by the COPES shall be implemented for becoming more energy efficient.

(iii) Carbon Management

The Company has undertaken Carbon foot print studies at all projects through M/s. First Climate India Pvt. Ltd., Kolkata. The firm estimated the carbon footprint for F.Y 2011-12 in accordance with ISO: 14064 and GHG protocol following tier-2 approach and Scope I, 2 and 3 emissions. The Company has purchased voluntarily 2500 no.s of Renewable Energy Certificates (non-solar).

(iv) Water Management

The Company is in the process of appointment of an agency on EPP basis for construction of STP using SBR technology at Bacheli complex for recycling of treated water in the process and other purposes.

(v) Training programme on S.D

The Company has arranged training programme on S.D aspects covering Bio-diversity, water management, energy management, carbon management, etc covering about 438 employees at all projects.

12.0 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. 24th Corporate Level Tripartite Safety Committee Meeting of Donimalai Iron Ore Mine was conducted on 04.04.2013 and Bailadila Iron Ore Mines/Diamond Mining Project on 05.04.2013.

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 2012-13 is 0.32 and 0.46 for the year 2011-12.

13.0 ISO CERTIFICATION ISO 9001:2008 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and R & D Center are accredited with ISO 9001:2008 Certification. Re-Certification Audit was conducted successfully at Donimalai Iron Ore Mine; BIOM, Bacheli Complex and BIOM, Kirandul Complex in the month of October / November 2012. II Surveillance Audit was conducted successfully at R&D Center in the month of September 2012.

OHSAS 18001:2007 Certification:

NMDC Projects - BIOM, Kirandul Complex; BIOM, Bacheli Complex; Donimalai Iron Ore Mine and Diamond Mining Project, Panna are accredited with OHSAS 18001:2007 Certification. Re-Certification Audit was conducted at BIOM, Kirandul Complex; BIOM, Bacheli Complex and Donimalai Iron Ore Mine in the month of December 2012. I Surveillance Audit of Diamond Mining Project, Panna was conducted in the month of August 2012.

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, with a planned programme.

14.0 IMPLEMENTATION OF INTEGRITY PACT

1. With a view to maintain transparency in all dealings with contractors and vendors and keeping with international practices, NMDC & Transparency International India (TII) developed an Integrity Pact Programme.

2. All the tenders for the contracts and civil works above threshold value of Rs. 20.00 crore and procurements above threshold value of Rs.10.00 crore are the subject matters of Integrity Pact.

3. After the implementation of said programme, Head of Safety Dept. was appointed as Nodal Officer and a Review Committee comprising of Functional Directors of NMDC was constituted. This Committee was also vested with the powers to modify the Integrity Pact procedure and systems.

4. Shri S. Anwar, IAS (Retd) and Dr. J.S. Juneja, Former Chairman, NSIC have been appointed as independent external monitors (IEMs) for overseeing the Integrity Pact programme.

5. Till March 2013 a total of 67 cases of tenders with an indented value of Rs. 19,347.08 Crore were covered under the Integrity Pact.

15.0 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.

16.0 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.

17.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

During the year under review, NMDC Limited made all efforts for the implementation of the Official Language Policy and for the use of Official Language in all its Projects, Units and Head Office.

Hindi Workshops were conducted for employees to make them efficient to use Official Language in their day-to-day official work. During Hindi Workshops all employees were imparted Micro Soft Indic Computer | training on Phonetic Hindi Keyboard.

To bring awareness among the employees and their family members as well as employees of Central Govt. / Central Govt. Undertakings/ State Govts Offices situated in the vicinity of NMDC Office various competitions like Hindi Essay, Hindi Noting, Drafting and Technical Terms, Hindi Anuvad, Laughter Competition, Unicode hindi typing on Computer, Quiz, Hindi Shabdahgyan, Cooking Competition (procedure of recipe in Hindi) etc were also conducted and prizes were awarded to winners during Rajbhasha Pakhwara.

Monthly Hindi Cash Incentive Schemes were implemented to propagate the usage of Hindi and large number of employees were benefitted under this scheme.

To encourage the employees to implement Official Language Hindi in the technical fields 53 Rajbhasha Technical Seminars were organized till now and Technical Seminar Patrika "Takneeki Sopan, Takneeki Kshitiz" and Rajbhasha Souvenirs "Sarjana , Kaanan Kusum" were also published.

During the year monthly bulletins "Baila Samachar, Bacheli Samachar" in Hindi and Doni Samachar in trilingual were also published.

NMDC Limited was awarded "Ispat Rajbhasha Protsahan Shield" by the Honorable Minister of Steel, Ministry of Steel, New Delhi for the undertakings situated in ''C'' Region, for the excellent implementation of the Official Language Policy and Progressive Use of Hindi in the year 2010-11.

NMDC was also awarded Rajbhasha Shield as 2nd Prize for the year 2011-12 by the Town Official Language Implementation Committee (Undertakings) Hyderabad-Secunderabad, for excellent implementation of the Official Language Policy.

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

Necessary details required to be mentioned in the Annual Report in compliance with provisions of MSMED Act are as follows:

(Rs. In lakhs)

Sl. No. Particulars Year 2012-13

a. Total Annual Procurement (includes H.O., Kirandul, Bacheli, Donimalai, Panna & SIU). 30845.03

b. Total Value of Goods & Services procured from MSEs (including MSEs owned by SC / ST Entrepreneurs). 1711.33

c. Total Value of Goods & Services procured from only MSEs owned by SC / ST Entrepreneurs. Not Available

d. %age of Procurement from MSEs (including MSEs owned by SC/ ST Entrepreneurs) out of total Procurement. 5.55%

e. %age of Procurement from only MSEs owned by SC / ST Entrepreneurs) out of total Procurement. Not Available

f. Total No. of Vendor Development Programme for MSEs 03

g. No. of MSE Vendors Registered against MSE Vendor Development Program. 07

19.0 MANPOWER

19.1 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. However, on two occasions unions went for strike against Government''s policy of disinvestment of Company''s shareholding.

19.2 Scheduled Castes & Scheduled Tribes

25 persons belonging to Scheduled Caste and 32 persons belonging to Scheduled Tribes were appointed in the year 2012 against 205 posts filled by direct recruitment.

19.3 Strength of SCs & STs as on 31st March 2013

1. Total number of employees = 5777

2. Scheduled Castes amongst them = 1021

3. Scheduled Tribes amongst them = 1273

4. Total SCs and STs = 2294

5. Physically challenged employees = 40

19.4 Particulars of employees drawing Rs.5 lakhs per month or Rs.60 lakhs per annum under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Amendment Rules, 2011.

NIL

19.5 Staff Welfare activities

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

19.6 Promotion of Sports

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

20.0 HUMAN RESOURCES DEVELOPMENT

One in-house programme on ''Reservation for SC/ST/OBC was organized. Advanced Management, Mentorship Development & Leadership programme have been organized for Senior Executives. In various International Conferences like Mining Indaba in South Africa and PDAC in Canada, some Sr. Executives had participated.

20 Quality Circle Projects have been completed during the year. HRD Department has also organized a National Seminar on New CSR & Sustainability Guidelines of DPE successfully. The efforts of HRD Department resulted in training man days of 3.23 per employee per year as against the MoU target of 3.0 per employee per year. A number of knowledge-based Seminars, Conferences, Workshops etc. were also sponsored in which NMDC Executives had participated actively.

21.0 VIGILANCE

Vigilance Department in the Company has been focusing on "Preventive and Proactive Vigilance". Periodic Review Meetings with Vigilance officers were held on quarterly basis wherein various discussions were held about vigilance activities carried out during the year and also to draw-up future Action Plans in conformity with the directives of the Central Vigilance Commission. Further, Vigilance Department coordinated with other departments in the organization in improving the existing procedures and systems to achieve the overall objectives of the Company. The Vigilance Department also carried out various studies in the fields of Contracts, Procurement, Recruitment and Commercial activities etc and suggested system improvements to the management for implementation.

Vigilance Department in NMDC is certified under ISO 9001:2008 conforming to the Quality Management System. It has been certified as per ISO standards since October, 2006 by Integrated Quality Certification Private Limited, Bangalore. For re-certification of Quality Management System (QMS) of Vigilance Department, M/s. TQ Services conducted an external audit on 20.10.2012 and awarded the certificate of compliance to Quality Management System on 10.02.2013.

Vigilance Department has been overseeing the implementation of Integrity Pact in the Company. Till date, the Integrity Pact has been entered into 65 contracts with a value of Rs. 18438.62 crores.

The Vigilance Awareness Week was observed from 29.10.2012 to 02.11.2012 on the inaugural day, Pledge was administered by Director (Technical) to all the employees of Corporate office of NMDC, which was followed by a talk by Shri. V V Lakshmi Narayana, Jt. Director, CBI, Hyderabad. Talks were arranged by eminent personalities on "Transparency in Public Procurement". On the concluding day, a talk by Shri Pratyush Sinha, Former Central Vigilance Commissioner, Central Vigilance Commission was organized. Prizes were distributed by the Chief Guest to all the winners of the competitions held during the Vigilance Awareness Week.

As a part of the week, a Workshop on e-procurement was conducted by General Manager (Materials) for the benefit of officials of NMDC and vendors. All the vendors who attended were guided and assisted for obtaining digital signature to participate in prospective e-tender. They were also trained in the e-procurement portal of CI India, the service provider for NMDC. A talk on e-procurement and e-tendering for Transparency in Public Procurement" by Shri. Jitendra Kohli, Founder and Managing Director of Electronic Tender was also organised. Various queries raised by the NMDC officials related to e-procurement and e-tendering were clarified.

The Vigilance Department intranet portal developed inhouse was inaugurated by Shri. R. Sri Kumar, Vigilance Commissioner, Central Vigilance Commission on 18.12.2012. The portal features information on the CVC Circulars, Rules of the organization, FAQ''s on vigilance, knowledge bank on vigilance related issues and provision for online submission of APRs.

NMDC Vigilance Department in coordination with Vigilance Study Circle, organised a 5-day Training Programme from December 18th to 22nd, 2012 on "Vigilance for Organisational Excellence" for Vigilance Executives of various PSUs including NMDC, Banks and other Insurance Companies at NMDC Learning Centre.

22.0 DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial year ended 31st March 2013, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under report;

iii) 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, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis.

23.0 DIRECTORS

During the year under review, the following were appointed as Directors of the Company pursuant to orders of Ministry of Steel, Government of India:

i) Shri C.S. Verma, CMD w.e.f. 25.05.2012

ii) Shri E.K. Bharat Bhushan, Special Secretary & Financial Advisor, MoS 26.07.2012

iii) Shri J.P. Shukla, Joint Secretary, MoS 30.07.2012

iv) Shri Syedain Abbasi, Joint Secretary, MoS 18.10.2012

v) Dr. Noor Mohammad, Independent Director 26.11.2012

vi) Shri Vinai Kumar Agarwal, Independent Director 26.11.2012

vii) Shri Mahesh Shah, Independent Director 26.11.2012

viii) Shri Vinod Kumar Thakral, Additional Secretary & Financial Advisor, Mos 07.06.2013

The following Directors ceased to be Directors on the Board of the Company for the year under review:

i) Shri N.K. Nanda, CMD upto 24.05.2012

ii) Shri Y.K. Sharma, Independent Director 18.06.2012

iii) Shri Abdul Kalam, Independent Director 18.06.2012

iv) Shri K.S. Raju, Independent Director 18.06.2012

v) Shri U.P. Singh, Joint Secretary, MoS 16.07.2012

vi) Shri S. Machendranathan, Additional Secretary & Financial Advisor, MoS 16.07.2012

vii) Shri J.P. Shukla, Joint Secretary, MoS 18.10.2012

viii) Shri E.K. Bharat Bhushan, Special Secretary & Financial Advisor, MoS 28.04.2013

The Board places on record its deep appreciation for the valuable contribution made by Shri Y.K. Sharma, Shri Abdul Kalam, Shri K.S. Raju, Shri U.P. Singh, Shri S. Machendranathan, Shri J.P. Shukla and Shri E.K. Bharat Bhushan during their tenure on the Board of the Company.

24.0 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 2012-13:

Sl. No Unit Statutoty Auditors

1. Head Office M/s. VENUGOPAL & CHENOY R & D Center, SIU & Consolidation Chartered Accountants, 4-1-889/16/2,Tilak Road, HYDERABAD 500 001 Andhra Pradesh

2. Kirandul M/s. BRAHMAYYA & CO, Bacheli Chartered Accountants NISP, Jagdalpur "Suhasini", 10-50-24, Sripuram Junction, Central Work Shop Visakhapatnam -530 003 Vizag Office Andhra Pradesh

3. Donimalai M/s. P K SUBRAMANIAM AND CO, Chartered Accountants 11-5-23,Karthik complex, Above Vijaya Bank, Bresthwarpet, RAICHUR-584 001 Karnataka.

4. Panna M/s. GOPAL GUPTA & CO, Chartered Accountants 588, Mutthiganj, Ist Floor, Allahabad, Allahabad - 211 003.

b. Cost Audit

Pursuant to Section 233B of the Companies Act, 1956, your Company carried out an audit of cost records relating to Iron Ore Product and Sponge Iron Prouduct. The Company appointed Shri P V Prasad, Cost Accountant of H.No.2-4-911, Road No.6, Samatapuri Colony, Post Saroor Nager, Hyderabad - 500 035 as Cost Auditor, with due approval of the Central Government, to audit the cost accounts of the Company for the financial year ending on 31st March, 2013.

The cost audit report for the financial year 2011-12 was filed with the Ministry of Corporate Affairs on December 26, 2012 much earlier than the due date of February 28, 2013. The due date for filing the cost audit report for the financial year 2012-13 is September 27, 2013 and the report is yet to be filed.

25.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)

NMDC is one of the very few organizations which have overtly realized the linkage of a business organization with the well-being of the society. It is a matter of pride that several CSR initiatives have been in place right from the inception of the Company and they have become an integral part of the business model of NMDC.

During the year 2012-13 an amount of Rs.72.38 crore has been invested in CSR activities, which works to about 1.14% of its net profit after tax (PAT) of the previous financial year.

In the CSR area, the Company has focused on the following major works in the identified thrust areas:

1. Education

- Recognizing that Education is an integral and critical aspect of human development and a powerful instrument for emancipation, NMDC''s focus has been on improving the literacy rate & quality of education in the tribal belt of Bastar in Chhattisgarh.

- NMDC has been contributing to empower Tribal, Scheduled Caste and Poor children by setting up free residential schools of high quality for them.

- Scholarships to 18000 tribal and poor students in 412 schools in Bastar Region at an annual expenditure of Rs 5 Crore.

- Construction of schools and hostels for students including girl students.

- Mid-day meal to 8000 rural students.

- Setting up ITI''s & Polytechnic for technical education, focussing on backward region.

- Supporting the establishment of a medical college & reservation of seats in management institute (IPE) for tribal & poor children.

Specific Education-related initiatives during 2012-13 1.1 NMDC Shiksha Sahayog Yojana

- This is a Scholarship Scheme of NMDC designed to reduce the dropout rate of students belonging to SC/ST communities. It involves direct transfer of scholarship amount to the Bank/PO Account of the student.

- Students belonging to Bastar Region are covered under this scheme.

1.2 Balika Siksha Yojana

- This is a focused initiative through which tribal girls are sponsored to professional courses. During 2011-12, 25 tribal girls and during 2012-13 40 tribal girls are pursuing GNM & B.Sc. (Nursing) courses under the scheme in Apollo Hospitals, Hyderabad.

1.3 Education improvement programme in South Bastar, Dantewada District

- An education improvement programme covering South Bastar schools and 4,200 beneficiaries is in progress in the South Bastar (Dantewada) District through Naandi Foundation.

- NMDC is also running a Polytechnic College at Dantewada since 2010 in Electrical and Mechanical streams with an intake of 120 students. A new building at an estimated expenditure of Rs.3,194.80 lakhs is under construction.

2. Infrastructure Development

- Infrastructure Development viz., Roads Bridges and Buildings is the most effective indicator of development process, particularly relevant in the Indian context where infrastructure alleviates poverty, providing access to opportunities.

- NMDC prioritizes its interventions to bridge the critical gap of poor connectivity by laying several kilometers of metalled & tarred roads and by building bridges and culverts to improve connectivity.

2.1 Infrastructure Development related initiatives during 2012-13

- Construction of SC/ST Girls Hostels at Ongole & Guntur @ Rs.31.50 lakh each in Partnership with Govt. of A.P. is in progress.

- Upgradation of Hostels for SC/ST/BCs in Bellary @ Rs.190.00 lakh in partnership with Govt. of Karnataka is completed.

- Strengthening PHCs in Bellary in partnership with Govt. of Karnataka by upgrading them/equipping them with various necessary/desirable medical equipment @ Rs.169.00 lakh is under implementation.

- Partnering with MGM Eye Institute, Raipur for expanding their infrastructure & other facilities & provide free treatment/mega eye camps for patients sponsored by NMDC.

- NMDC has partnered with the Govt. of Chhattisgarh for construction of Gaurav Path - 4 way lane at Dantewada @ Rs.1300.00 lakh.

- Electrification related works in 67 villages of Bastar District @ Rs.252.48 lakh.

- Construction of 30 Community Centres in 30 villages of Bastar District @ of Rs.30.00 lakh each at a total cost of Rs.900.00 lakh.

- Construction of ''Shanti Dham'' a home for destitute, mentally challenged and aged people @ Rs.505.00 lakh in Bellary District in partnership with Govt. of Karnataka.

3. Healthcare

3.1 Healthcare related initiatives during the year 2012-13

- The three hospitals at Project sites offer free medical treatment not only to NMDC employees and their families but to the local communities as well, addressing the needs of an average of 80000 out-patients & 8000 in-patients from local tribals every year.

- NMDC operates ''Hospital on Wheels'' (HoW) service in Bailadilla benefitting about 20000 tribal villagers in 45 villages by providing free medi-care facilities at their doorsteps.

4. Drinking water Facility

4.1 Drinking Water Facility related initiatives during the year 2012-13

- NMDC has partnered with State Govt of Karnataka for providing Drinking Water facility in 7 villages of Bangalore Rural District, Karnataka @ Rs.78.34 lakh.

5. Integrated Village Development

5.1 Integrated Village Development related initiatives during the year 2012-13

- The work of Integrated Village Development has been taken up in 18 villages through reputed NGOs. The work involves focus on Literacy, Health & Hygiene, Agriculture, Livelihood Development, Infrastructure Development, etc.

6. Skill Development

6.1 Skill Development related initiatives during the year 2012-13

- 40 youth from Bastar Region were trained in Air Conditioning, Refrigeration, Automobile Repairs & Services at Raipur and successfully placed.

- 14 Tribal youth of Bastar Region were trained in Retail, BPO, and Hospitality Sectors and successfully placed.

26.0 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 during the period 01.04.2012 to 31.03.2013 are as follows:

Month No. of Applications Information Rejected Received Provided

Apr-2012 (Including 14 Pending) 37 24 03

May-2012 31 21 06

Jun-2012 16 20 Nil

Jul-2012 14 14 03

Aug-2012 16 14 02

Sept-2012 18 13 02

Oct-2012 18 12 01

Nov-2012 19 22 01

Dec-2012 14 17 01

Jan-2013 12 10 02

Feb-2013 15 10 02

Mar-2013 17 16 01

Total 227 193 24

Pending as on 01.04.2013 - 10 Requests

27.0 R&D ACTIVITIES

Particulars required under the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are at Annexure-I.

28.0 STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Statement pursuant to section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is at Annexure-II.

29.0 CORPORATE GOVERNANCE

The Board of Directors at their 427th meeting have approved the Policy on Corporate Governance. A separate section on Corporate Governance is enclosed at Annexure-III.

30.0 REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management discussions and Analysis as required in terms of Clause 49(F) of the Listing Agreement is enclosed at Annexure-IV.

31.0 GLOBAL COMPACT - COMMUNICATION ON PROGRESS

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

32.0 BUSINESS RESPONSIBILITY REPORT

SEBI vide its Circular No. CIR/CFD/DIL/8/2012 dated 13.08.2012 has inter alia stipulated that considering the larger interest of public disclosure regarding steps taken by listed entities from an Environmental, Social and Governance ("ESG") perspective, it has been decided to mandate inclusion of Business Responsibility Reports ("BR reports") as part of the Annual Reports for listed entities. Accordingly, a new Clause 55 has been included in the Listing Agreement of the Stock Exchanges which inter alia stipulates that listed entities shall submit, as part of their Annual Reports, Business Responsibility Reports, describing the initiatives taken by them from an environmental, social and governance perspective, in the format as suggested. The requirement to include Business Responsibility Reports as part of the Annual Reports shall be mandatory for top 100 listed entities based on market capitalization at BSE and NSE as on March 31, 2012. The provisions of this circular shall be applicable with effect from financial year ending on or after December 31, 2012. The equity shares of NMDC are listed both in BSE / NSE and also form part of top 100 listed entities based on market capitalization criteria. Accordingly, as NMDC is fulfilling the criteria as stipulated, it is required to comply with clause 55 of the Listing Agreement. As such, Business Responsibility Report is annexed at Annexure-VI.

33.0 AWARDS RECEIVED BY THE COMPANY

The details of awards received by the Company for the year under review are as under:

i) On 25th May''2012 NMDC received Bureaucracy Today Star PSU Excellence Award 2012 under CSR category organized by Bureaucracy Today.

ii) On 28th May''2012 NMDC received

i) Overall PSU Excellence, ii) Best Navratna Company iii) Best Mining PSU awards from Dr. Verappa Moily, Hon''ble Minister for Corporate Affairs, Govt. of India organized by Dun & Bradstreet.

iii) On 05th Jun''2012 CMD, NMDC received Rajbhasha Protsahan Shield for the year 2010-11 for implementation of Offficial Language policy in the Undertakings/ Offices under MoS for the excellent work done in Hindi. This award was presented by Sri Beni Prasad Verma, Hon''ble Minister for Steel, Govt. of India.

iv) On 01st Jun''2012, NMDC received 1st Rank in Mining Sector out of "Top 500 companies 2011" Organized by Dun & Bradstreet. This award was presented by Sri Kapil Sibal, Hon''ble Minister for Communication & IT Govt. of India.

v) On 12th Jul''2012 Director(Finance), NMDC is conferred with "Achievers and Leaders Award (Finance)" from Institute of Public Enterprises (IPE) and Banking Financial Services & Insurance (BFSI), Hyderabad.

vi) On 13th Jul''2012 Director(Technical), NMDC received Abheraj Baldota Memorial Award ''Mining Engineer of the year'' for the year 2010-11 from Mining Engineers Association of India.

vii) On 23rd Jul''2012 Director(Finance), NMDC received "Icon of the Accounting Profession'' Award from Institute of Public Enterprises (IPE), Hyderabad.

viii) On 06th Sep''2012 Director(Per.) has been conferred with HR Leadership Award at the Asia Pacific HRM Congress 2012 at Bengaluru. He was also honoured with a citation on inclusion of his name as one of the "Most Powerful HR Professional of India".

ix) On 20th Dec''2012 CMD, NMDC received PSE Excellence Award as Company of the year in the Navratna category for the year 2012 from Sri OP Rawat, Secretary, Department of Public Enterprises organized by Department of Public Enterprises & Indian Chamber of Commerce.

x) On 28th Jan''2013, NMDC received India Pride Award in the category "Metals, Minerals & Trade including Mining" for the year 2012-13 from Dr. M Veerappa Moily, Hon''ble Union Minister for Petroleum & Natural Gas, Govt. of India organized by Dainik Bhaskar Group.

xi) On 14th Feb''2013, NMDC received Quality Excellence Award for Best CSR practices from Star of the Industry Group, Mumbai.

xii) On 16th Feb''2013, Director(Per) received "Most talented HR Leader in PSUs" Award during the World CSR Congress.

xiii) On 1 7th Feb''201 3, Di rector(Per) received "Global HR Excellence Award" during The World CSR Congress.

xiv) On 18th Feb''201 3, NMDC received Fifty ''Most caring Companies of India" Award during the CSR Congress at Mumbai.

xv) On 23rd Mar''2013, NMDC received

''Best PSU Award 2013'' under ''Most efficient Navratna in Non-Manufacturing'' category from Sri Ajit Singh, Hon''ble Minister for Civil Aviation, Govt. of India organized by Dalal Street Investment Journal, New Delhi.

34.0 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 and Jharkhand.

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.

(C.S. VERMA)

Chairman-cum-Managing Director

Place : Hyderabad

Date : 03.07.2013


Mar 31, 2012

The Directors are pleased to present the 54th Annual Report on the performance of your Company, together with the Audit Report and Audited Accounts, for the year ended 31 March 2012 and the Report thereon by the Comptroller and Auditor General of India.

1.0 PERFORMANCE HIGHLIGHTS

The year under review has been a milestone year in which the Company has established yet again, new landmarks in its performance in various parameters. The Company has recorded turnover of Rs.11,261.89 crores mark and achieved Profit after Tax (PAT) of Rs.7,256.39 crores, which was the highest ever in its history.

The major performance highlights are summarized as under:

- Turnover for the year under review was Rs.11262 crores compared to Rs.11369 crores in the previous financial year 2010-11 recording a decrease of 0.94%.

- Profit before tax from continuing operations was Rs.10,760 crores compared to Rs.9726 crores in the previous financial year 2010-11 recording an increase of 11%.

- Profit after tax was Rs.7,265 crores compared to Rs.6499 crores in the previous financial year 2010-11 recording an increase of 12%.

- Net worth increased to Rs.24,396 crores as on 31.03.2012, 27% higher than Rs.19200 crores in the previous financial year 2010-11.

- 1st Interim Dividend @ 100% on the paid up equity share capital of the Company aggregating Rs.396.47 crores was paid by the Company. 2nd Interim Dividend @ 100% on the paid up equity share capital of the Company aggregating Rs.396.47 crores was also paid by the Company. The total interim dividends paid by the Company aggregates Rs.792.94 crores.

- As an MoU signing PSE with the Government of India, your Company's performance during the year qualifies for "Excellent" rating.

- Supply of Iron Ore to domestic industries recorded 269.16 lakh tonnes as against the previous year supply of 237.52 lakhs tonnes, recording an increase of 13.32%. Total exports of Iron Ore during the year was 3.85 lakh tonnes against 25.63 lakh tonnes in the previous financial year 2010-11 recording a decrease of 84.98%.

- Sponge Iron production during the year under review was 37,260 tonnes as against previous year 38,962 tonnes.

- Diamond production for the year under review was 18043.44 carats as against previous year 10,866 carats.

- The Company has completed acquisition of 50% stake in Legacy Iron Ore Ltd., a listed Australian Company engaged in exploration of iron ore and other minerals in Australia. Acquisition of 50% stake in Legacy marks the Company's first foray in international arena and shall serve as the platform for other international acquisitions.

- A wholly owned subsidiary Company by the name of NMDC Power Ltd. has been incorporated on 12.12.2011 for the purpose of setting up of a Power Plant for supply of power to 3 MTPA Integrated Steel Plant being constructed at Nagarnar.

2.0 PHYSICAL PERFORMANCE

2.1 Production

Product Achievement Percentage change 2010-11 2011-12

Iron Ore (lakh tonnes) 251.55 272.60 8%

Diamond (Carats) 10865.93 18043.44 66%

Sponge Iron (Tonnes) 38962.00 37260.00 (-) 4%

Notes:

a) The Hon'ble Supreme Court of India has granted permission for operation of Diamond Mining Project upto 13.12.2020. However, on 01.07.2010, supplementary lease has expired. Accordingly, application has been submitted for Forest Clearance. Stage-I approval was cleared on 04.01.2011 and final / stage-II approval is awaited.

b) Silica sand mining operations are suspended since November, 2007 due to commercial reasons and the Lalapur Silica sand mines are kept under care and maintenance.

2.2 Sales of Iron Ore

Particulars Physical Value (in lakh tonnes) (Rs. in crore) Achievement % of Achievement % of 2010-11 2011-12 change 2010-11 2011-12 change

Domestic 237.52 269.16 13.32 9753.85 10894.63 12.00

Export through MMTC 25.63 3.85 (-)84.98 1531.48 272.93 (-)82.00

Total Sales 263.15 273.01 3.75 11285.33 11167.56 (-)1.00

2.3 Other Sales

Products Achievement 2010-11 2011-12

a) Diamond

Sales (carats) 18421.22 8085.00

Value (Rs. in crore) 12.88 9.84

b) Wind Power

Sales (lakh KWh) 137.11 -

Value (Rs. in crore) 4.48 -

c) Sponge Iron

Sales (tonnes) 39775.00 33731.79

Value (Rs. in crore) 63.12 67.29

3.0 FINANCIAL PERFORMANCE

3.1 Operating Results

Parameter Achievement Percentage change 2010-11 2011-12

Profit Before Tax from continuing operations (PBT) (Rs. in crore) 9727 10760 11%

Profit After Tax (PAT) (Rs. in crore) 6499 7265 12%

Net Worth (Rs. in crore) 19200 24396 27%

Book value per share (Rs.) 48.43 61.53 27%

Earnings per Share (Rs.) 16.39 18.33 12%

3.2 Profit & Dividend

During the year under review, your Company has earned profit before tax from continuing operations of Rs.10,760 crores on a turnover of Rs.11,262 crores in comparison with those of previous year's achievement of Rs. 9726 crores and Rs.11369 crores.

The Company has paid 1st interim dividend @ 100% on the equity shares of Re.1/- each aggregating Rs.396.47 crores and 2nd Interim Dividend also @ 100% on the paid up equity share capital of the Company aggregating Rs.792.94 crores. The Board has recommended subject to shareholder's approval, payment of final dividend @ 250% on the paid up equity share capital of the Company aggregating Rs.991.18 crores. The total dividend payout for the year under review aggregates Rs.1784.12 crores. The share of Government of India stands at Rs.1605.71 crores.

4.0 DEPOSITS

The Company has not accepted any fixed deposits during the year under review.

5.0 Hon'ble Supreme Court Verdict on mining in Karnataka

The Hon'ble Supreme Court suspended mining operations and transportation of iron ore in the area admeasuring 10868 ha in Bellary district vide its order in SLP(C) No.7366-7367/2010 dated 29.07.2011. NMDC complied with the said order and stopped all the mining activities including transportation of iron ore in both the mines i.e. Donimalai and Kumaraswamy.

Subsequently, Hon'ble Supreme Court of India vide the hearing held on 05.08.2011 made the following order:

(i) A macro level Environment Impact Assessment (EIA) study is to be undertaken by Indian Council of Forestry Research and Education (ICFRE) in collaboration with Wild Life Institute of India, FSI and such other domain experts as may be decided by ICFRE in consultation with Ministry of Environment and Forests (MOEF) in respect of Bellary District. This report shall be submitted within 3 months.

(ii) In order to balance the environmental concerns with economic development and keeping in mind mandate of Article 21 of the Constitution including inter generational equity, the Court under extraordinary circumstances allowed NMDC alone to operate its mine at Donimalai (mining lease area 608 ha) and KIOM (mining lease area 647.5 ha) to the extent of providing 1 million ton per month commencing on 6th August 2011 till further orders.

(iii) It has also been clarified that no part of these production shall be exported outside India till further orders. NMDC will sell the production to the states in consultation with Ministry of Steel, Govt. of India.

The Supreme Court order has made it possible to restart Kumaraswamy mines also where mining was stopped for quite some time due to Karnataka High Court order. As directed by Supreme Court, iron ore from Donimalai is sold through e-auction only conducted by Central Monitoring Committee.

5.1 Subsequently, in the hearing of the Forest Bench held on 13.04.2012 the Hon'ble Supreme Court inter alia directed as under:

i) The boundaries of the mining lease in respect of NMDC mines at Karnataka shall be as per the findings of the Joint team and as modified by Central Empowered Committee (CEC);

ii) In the larger public interest the mining operations in the two leases of NMDC has been permitted to be continued. However, NMDC will be liable to deposit penalty / compensation as payable for the mining leases falling in category 'B';

iii) The sale of iron ore should continue to be through E-Auction and the same is to be conducted by the Monitoring Committee as constituted by the Supreme Court;

iv) The system of sale through the Monitoring Committee may be reviewed after two years. The present members of the Monitoring Committee should continue for a period of next 2 years.

v) A ceiling of 25 million metric tonnes (MMT) has been fixed from all mining leases in Bellary District. A ceiling of 5 MMT for production of iron ore from all the mining leases in Chitradurga and Tumkur Districts has been prescribed;

vi) Preparation, Implementation and Monitoring of the Reclamation and Rehabilitation Policy will be under the supervision of Central Empowered Committee.

6.0 NEW PROJECTS & BUSINESS DIVERSIFICATIONS

6.1 Projects under construction

6.1.1 Bailadila deposit-11/B

As part of plan to enhance production, the construction of Deposit 11B mine at an expanded capacity of 7.0 Million tonnes of ROM per annum has been taken up. The estimated capital expenditure towards this is Rs.607 Crores out of which Rs.320 Crores is for Plant and Rs.188 Crores is for mining machineries. Naxal activities have seriously hindered the progress of the project work. More than 80% work is completed. The balance work will be completed and the project will be commissioned during 2012-13.

6.1.2 Uniflow System at Bacheli

East Coast Railways has been assigned the work of execution of the "construction of Uniflow Despatch Line at Bacheli on K.K Line of East Coast Railways of Waltair Division for Civil, OHE and S&T Works" as a "Deposit Work" for which an amount of Rs.30.92 crore has been deposited with East Coast Railways towards the estimated cost of the work based on the detailed estimate for Civil, S&T and OHE submitted by East Coast Railways.

The work has been completed on 31.03.2012 and trial run/commissioning of the line is awaiting clearance from Commissioner of Railway Safety.

6.1.3 Slurry Beneficiation and Transportation system from Bailadila to Vizag

The Slurry Pipeline Transportation system is intended for transportation of Pellet Feed Concentrate from Bailadila to Vizag via Jagdalpur along State/National Highways with a provision of partial off-take at Nagarnar for making Pellets required for feeding to NMDC's proposed Steel Plant at Nagarnar. Techno Economic Feasibility Report (TEFR) is prepared by Mecon. IFCI carried out the Due Diligence of the TEFR and submitted the report during January, 2012. As a part of this Project, investment proposal involving 2 MTPA Ore Processing Plant at Bacheli, Slurry Pipeline from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar is under active consideration of NMDC's Board.

6.1.4 BHJ Beneficiation Plant at Donimalai

For treating low grade iron ore, Banded Hematite Jasper (BHJ), a Beneficiation Plant is being set-up at Donimalai Iron Ore Mine for processing 3.6 lakh tonnes per annum of BHJ iron ore to produce 1.18 lakh tonnes per annum of BF Grade Pellet Feed Concentrate at an estimated cost of Rs.134.42 crores. As part of plant construction, the work of setting up of Beneficiation Plant is awarded to Hindustan Dorr Oliver Limited (HDOL) and the scheduled date of commissioning of the Plant is 14.08.2013. Consultancy assignment for construction of Tailing Dam of capacity of 6.2 million tonnes is awarded on WAPCOS. Work of award of power supply and water supply packages are in various stages.

6.1.5 Kumaraswamy Iron Ore Project

To compensate the depleting reserve of Donimalai Iron Ore Mine and augmenting production capacity towards achieving the target of 50 MTPA, the construction of Kumaraswamy Iron Ore Mine with capacity of 7.0 MTPA was taken up with an estimated capital outlay of Rs.898.55 Crs. MECON is appointed as EPCM consultant. The entire project has been planned to be executed in six packages. Work orders are placed for Crushing Plant Package, Downhill conveyor Package, Electrics and Substation package and Service Centre facilities packages. Orders for other minor packages like Approach road & Telecommunication system packages are planned to be placed by May'2012. Construction work is in progress. The project is scheduled to be complete by June 2013.

6.1.6 Windmill in Karnataka

Wind Mill in Karnataka has been stopped since 15th October, 2010, due to non-availability of forest clearance for part of the evacuation line, laid by Suzlon, who has set up the wind farm. While the application for forest clearance is pending with MoEF, Suzlon is also planning to lay another evacuation line through alternate route to restart the wind mill at the earliest.

6.1.7 Low Silica Limestone Project, Arki (HP)

Mining Lease of the Arki Lime Stone Deposit is valid upto 7th August 2011. Mining lease renewal application was submitted on 23.04.2009 and the same is under consideration of Addl. Chief Secretary (Industries), Shimla. MOEF, New Delhi has accorded Environmental Clearance on 22.12.2010 subject to transportation of material by road for 1st five years and then by conveyor. An application has already been filed at State Govt. of H.P. on 3rd March 2011 for reconsideration as earlier State Govt. of H.P. has not agreed for transportation of limestone by road.

1st Stage Forest Clearance of Arki lease has already been received from MoEF on 15.12.2011 and action has been taken to obtain demand note from DFO, Kunihar towards compensatory afforestation, NPV etc.

For land acquisition, on 23.02.2011, Revenue Dept, of Govt, of H.P. has issued the notification for exemption in the 1851=03 Bigha Private Land under Clause (h) of section-5 of the Himachal Pradesh Ceiling on Land holding Act, 1972. Matter is being pursued for issuing the notification under section-4 of Land Acquisition Act.

Under the MoU between NMDC and SAIL, M/s Tata Consulting Engineers Limited (TCE), Kolkata was appointed as a consultant and has submitted the Final draft of feasibility Report of Arki Limestone Deposit and the same is being submitted to the respective Board of NMDC and SAIL. The Mining Plan with Progressive Mine Closure Plan earlier submitted to IBM Regional office at Dehradun and further to the office of the Controller of Mines (North) IBM, Ajmer has been scrutinized and the approval of the mining plan has been received.

6.1.8 Panthal Magnesite Project

NMDC has formed a Joint Venture Company with J&K Minerals Limited in the year 1989 to explore and exploit Panthal magnesite mine and to produce dead burnt magnesite. The Joint Venture is named as J&K Mineral Development Corporation Ltd and is a subsidiary of NMDC. After an initial phase of uncertainty regarding future of the Panthal Magnesite Plant due to inadequate demand in the market, J&KMDC Board in its 93rd meeting held on 27.08.2009 decided to revive the project. NMDC Board in its 417th meeting held on 07.01.2010 endorsed to revive the project by setting up a 30,000 TPA Dead Burnt Magnesite plant.

Mining Lease renewed for 10 years w.e.f from 11.01.2009 and registered on 21.05.2010. Mining lease was transferred to J&KMDC on 10th Jan'2011. It has been registered on 07.04.2011 at Hon'ble court of Katra in favor of J&KMDC.

Public hearing for Environmental Clearance (EC) was held successfully. MoEF has issued E.C on 03.05.2011 subject to obtaining NOC from NBWL. NBWL vide its letter dated 14.11.2011 & corrigendum dated 31.01.2012 has issued NOC to J& K state Forest department. J&K has issued NOC dated 13.03.2012.

M/s Dasturco is appointed as EPCM consultant. The Project is planned to be executed in four major packages. Soil investigation work Completed. Work order is placed for "Balance civil works" package. Tender enquiry floated for main technological package and discussions are underway to clear commercial issues.

Meanwhile, a PIL has been filed against Panthal Magnesite Project in Hon'ble high court of J&K in March'2012, which has issued an interim order for maintaining "status quo" of the project. NMDC / J&KMDC have initiated legal proceedings and has appointed senior advocate of J&K for filing the case.

6.1.9 Screening Plant III at Kirandul Complex

To augment the production capacity of Kirandul complex the construction of 12.0 MTPA screening plant with loading facilities is envisaged. This plant caters both Dep. 11-B & Dep. 14 of Kirandul complex. The estimated capital expenditure is Rs.951 Crores. TATA Consulting Engineers (TCE) is appointed as EPCM consultant. The entire project has been planned to be executed in seven packages. Tender activities are in progress.

MoEF has accorded 1st stage clearance in Jan'2012. Second stage clearance is awaited. Project is scheduled to be completed in 27 months after obtaining statutory clearances.

6.1.10 1.2 MTPA Pellet Plant at Donimalai

One of the main objectives of this project is to prolong the life of Tailing Dam at Donimalai by using the slimes for making pellets. M N Dastur & Co. appointed as EPCM consultant. Execution of Project is divided into Six Packages. The estimated capital expenditure is Rs.572 Crores. Orders placed for Site leveling, Misc. Building, MRSS and Pelletization Package and Beneficiation packages. Works are in progress. Project is scheduled to be complete by April 2013.

6.1.11 3.0 MTPA Integrated Steel Plant in Chhattisgarh

As you are aware, your Company is setting up a 3.0 MTPA Steel Plant at Nagarnar near Jagdalpur, Chhattisgarh at an estimated cost of Rs.15,525 Crore where the Company is in possession of about 1801 acres of land. Formal allotment of additional 102.64 acres of Government Land is under process in the Government of Chhattisgarh. Besides, diversion of about 63.52 acres of forest land for utilization for setting up of the Steel Plant is also under process in the government. As such in total your Company will be in possession of about 1968 acres of land at Nagarnar for the Plant and Township.

All necessary statutory clearances have been obtained. Rail Transport Clearance was received on 17.02.2009.

Railway consultants were appointed on 29.12.2009 and detailed site survey for the rail line connectivity was completed on 16.05.2010 by the Consultants. East Coast Railway, Bhubaneswar cleared the feasibility report on 04.08.2010 for preparation of DPR. Accordingly, the DPR was submitted to East Coast Railway on 20.12.2010 for their approval which is under process. Further to the discussions with East Coast Railway officials in 25th November 2011, Engineering Scale Plan has been submitted to East Coast Railway, Waltair on 28.02.2012 which will form a part of the DPR.

State Govt, of Chhattisgarh has sanctioned water and power for construction as well as for operation of the plant. Chhattisgarh State Power Transmission Company Limited will construct power line from Jagdalpur to Nagarnar on deposit basis for which necessary charges have already been paid.

Engineering Consultancy and Project Monitoring Services contracts have been awarded to M/s MECON Ltd. Enabling works packages like site levelling, Plant Entrance Road, Construction water, Construction power and construction of plant boundary wall were awarded and works are in progress at site.

For providing power for operation of the steel plant, Chhattisgarh State Power Transmission Company Limited (CSPTCL) has awarded work order for the construction of 400 KV transmission line from Raipur to Jagdalpur and 400/220 KV substation at Jagdalpur. The cost of construction of 400 KV transmission line from Raipur to Jagdalpur will be equally shared by NMDC & CSPTCL. PFC Consultancy Limited (A Public Sector Company) has been engaged as consultant for setting up a Coal based power plant of 250 MW capacity on Joint Venture basis to supply power to steel plant and remaining other units of NMDC. The JV partner will be selected through competitive bidding. A Special Purpose Vehicle (SPV) called "NMDC Power Limited "has been formed for the purpose.

Out of the 9 Major Technological packages, viz. Sinter Plant, Blast Furnace Complex, Raw Material Handling System, Coke Oven Plant, By Product Plant packages have been awarded. All orders have been issued. Civil construction works for major technological packages have been commenced at site. Auxiliary packages like Permanent water, Power and Blowing Station, Turbo Blowers and Main Receiving Sub -station are in final stages of order placement.

6.1.12 Steel Plant at Bellary, Karnataka

In line with the MoU signed between the Government of Karnataka and your Company, action for setting up of a 3 MTPA Integrated Steel Plant at Bellary, in the state of Karnataka has been initiated by the Company. Acquisition of about 3000 acres of land for the proposed steel plant through Karnataka Industrial Area Development Board (KIADB) is under process subsequent to publication of statutory notifications in the gazette of Karnataka in this respect. Your Company has deposited Rs.158.67 Crore with KIADB, being the tentative cost of the land plus service charges payable to KIADB in terms of the agreement executed between your Company and KIADB. Government of Karnataka accorded approval towards allotment of water and power for operation of the proposed steel plant. M/S MECON have been engaged as consultant for preparation of Techno Economic Feasibility Report (TEFR).

6.2 Other initiatives

6.2.1 Bailadila Iron Ore Deposit-13

NMDC formed a Subsidiary Company NMDC-CMDC Ltd. with 49% partnership of CMDC Limited. The JVC was incorporated under the Companies Act, 1956 on 19th June 2008 to develop Deposit-13 as standalone project of 10 MTPA.

Mining plan for the area has been approved by Indian Bureau of Mines (IBM) on 12.09.2008 for obtaining forest clearance which is being pursued. Forest clearance proposal has been returned by MoEF as the area is having high bio-diversity values. IIRBT, Kolkata has been engaged for undertaking Bio-diversity study for approaching to MoEF for restoration.

6.2.2 Bailadila Deposit-4

It is envisaged to develop Deposit 4 with CMDC Ltd. as partner for supplying raw material to the steel plant at Nagarnar. Govt of Chhattisgarh on 30.09.2010 has recommended the ML application of NMDC to Ministry of Mines, GOI for prior approval for grant of ML in favour of NMDC. Ministry of Mines vide letter dated 30.11.2011 has given the prior approval for grant of ML in favour of NMDC over an area of 646.60 Ha.

Secretary, MRD Govt of Chhattisgarh vide letter dated 13.01.2012 has issued the letter of intent allocating the "precise area" of 646.60 ha to NMDC and asked NMDC to submit the Mine Plan approved by IBM within 6 month of the date of issue. Mining plan preparation is under progress.

6.2.3 Rail Link between Dalli-Rajhara - Raoghat, Jagdalpur Railway Line Project

The levelling for erection of railway track between Dalli-Rajhara to Bhanupratappur which is around 35 kilometers, from Bhanupratappur to village Kewanti around 10 kilometers and from Kewanti to Anthagarh which is around 15 kilometers, is in progress. Further, tree felling and other works could not be taken up due to naxal activities.

6.2.4 International Coal ventures (P) Limited (ICVL)

The Joint Venture Company International Coal Ventures (P) Limited (ICVL) has been incorporated between SAIL, NMDC, NTPC, Coal India and RINL.

The objective of the joint venture is to primarily acquire coking and thermal coal assets abroad. Recently it has identified coal projects in Australia, New Zealand and Mongolia. These proposals will be taken forward jointly.

6.2.5 Memorandum of Understanding with Andhra Pradesh Mineral Development Corporation (APMDC), Govt. of A.P. and NMDC Limited for Mineral Exploration in the State of A.P.

NMDC has signed an MOU with Andhra Pradesh Mineral Development Corporation (APMDC) on 50:50 basis for joint exploration work for:

a) Iron ore in Chittur, Kadapa, Kurnool and Karimnagar districts.

b) Gold in Chittur, Ananthapur and Kurnool districts.

6.2.6 NMDC Global Strategic Alliances

Implementation Protocol with Severstal

Your Company has signed an implementation protocol with OAO Severstal for jointly setting-up an integrated steel plant with an initial capacity of 3 MTPA (expandable to 5 MTPA) in Bellary-Hospet area of Karnataka. The proposed partnership will complement the strengths of both the partners with NMDC organising the supply of iron ore and Severstal taking responsibility for supplies of coking coal. The techno-economic feasibility study has been completed by MECON and NMDC has since made significant progress on critical issues such as land acquisition, water allocation etc.

JV with Kopano Ke Matla Investment Company (Pty)

A JV Company, Kopano-NMDC Minerals Pty Ltd. has been incorporated in Johannesburg, South Africa to acquire and develop mineral prospects of steel making and energy raw materials such as Iron Ore, coal and manganese ore.

ITMK3 Based Nugget Plant

The ITMK3 initiative proposes the production of high quality iron nuggets by utilizing iron ore fines and non- coking coal. Your Company has made significant progress on the project by completing the empirical lab testing of the process based on a combination of input raw materials from NMDC's mines and tailing ponds as well as non-coking coal from India. The partners have agreed on setting up the plant at the spare land available with NMDC at Paloncha and executed a protocol agreement to expedite the initiative.

Met/Foundry Coke from Indian Thermal Coal (CARBONITE PROJECT)

Carbonite Acquisition LLC (CAL) have patented Carbonite, the upgraded coal product using variety of coal like bituminous, sub-bituminous etc., while emitting less C02 during the process. CAL expressed interest to be associated with NMDC for developing the technology for producing foundry and blast furnace coke. The development of new technology is basically aimed to upgrade thermal coal to suit to steel production. During July 2011, Dr. Wolfe and his associates continued to produce India Carbonite with simultaneous evaluation of the India coal samples, testing a variety of coal blends and analyzing the Carbonite output. The Carbonite research team is analyzing and utilizing each of the three India coal samples. They are also examining different formulations for briquetting.

Renewable Energy Bio-Mass Plant

NMDC has identified Renewable Energy as an area of interest as a responsible corporate and in line with this objective has explored entry into the Bio Mass based power plant sector. They have suggested that Donimalai site is favorable for installation of a biomass based power plant of minimum capacity of 5 MW, but, the exact capacity may be even 8-10 MW which can be ascertained after a Biomass Assessment Survey and the preparation of Feasibility cum DPR.

6.3 Foreign venture

6.3.1 Gold in Tanzania

In Tanzania, your Company is pursuing the gold exploration works in Bulyang'Ombe and Siga Hill area. NMDC has been granted Retention Licence at Bulyang'Ombe and Siga Hill areas. National Environmental Management Committee (NEMC) has granted Env. Clearance for the Bulyang'Ombe area. The Ministry of Energy & Minerals, Govt of Tanzania has granted 4 ML's in Bulyang'Ombe for a period of 10 years w.e.f. 13.02.2012. NMDC Board has decided that Gold Mining Project at in Bulyang'Ombe will be developed by NMDC.

6.3.2 Iron Ore

NMDC Global in line with its strategic objective of augmenting its resource base of iron ore has progressed in the acquisition of early stage iron ore mineral assets in Australia and Brazil. It now proposes to develop these tenements by leveraging its core competencies in mine exploration and development.

6.3.3 Australia

Acquisition of 50% Equity in Legacy iron Ore, Perth, Australia

NMDC Global has taken the first step towards the realization of its vision of making NMDC a Global Company by acquisition of 50% equity in Legacy Iron ore Limited, an ASX listed entity based in Perth, Australia. Legacy Iron Ore is a vibrant Perth-based Australian Exploration Company, established to search for iron ore and gold deposits. After the entry of NMDC in as a majority shareholder in Legacy, it also proposes to diversify into coal.

Legacy holds highly prospective iron ore tenements in both the Central Yilgarn and Pilbara areas of Western Australia. All project areas are located close to established infrastructure. Legacy's major gold focus lies in the South Laverton region, where the Company holds some 560 square kilometres of prospective ground.

Legacy has recently announced JORC inferred category resource of 1.59 billion tonnes @30.2% Fe at its Flagship project Mt. Bevan where it will earn 60% interest as per the Farm In and Joint Venture agreement with Hawthorn Resources Ltd. This significant JORC resource increase provides evidence establishing Mt Bevan as a premier magnetite ore body with good potential for attractive project financials.

NMDC has since nominated three Directors on the Board of Legacy and Shri N.K.Nanda, Director (Technical) and the then CMD I/c, NMDC has been appointed as Chairman of Legacy.

6.3.4 Brazil Inked an MoU for Exclusivity for Amplus Iron Ore project in Amapa, Brazil

Your Company has signed an MoU with Amplus Mineracao LTDA, a Company having iron ore concessions in the State of Amapa in Brazil located 200 kms from the Port of Santana as per which it has been granted an exclusivity period during which it will complete due-diligence and enter into a binding term sheet for acquisition of significant equity into the project. Amplus Mineracao Ltda proposes to develop the property for production of lump ore and sinter feed products.

6.3.5 Coking Coal Mozambique

Your Company has taken forward its discussions for acquisition of equity with equivalent offtake in Sol Mineracao Mozambique, a prospective coking and thermal coal assets company. Sol Mineracao Mozambique owns the coking/thermal coal tenement 400L located in the Mutarara district of Tete Province spread over 37sq km with an exploration target of 500 million tons. The exploration activity is complete in the precise area and is due for the grant of Mining license.

Russia

Your Company continues to pursue acquisition of coking coal mineral assets in Russia and is presently in discussions for acquisition of strategic stake with a coking coal company located in Kuzbass basin in Kemerovo region, one of the largest coal mining areas in the world. The target asset has total recoverable reserves of about 50 million tons including 10 million tons reserves in open cast mines with an upside potential of an additional 100 million tons.

USA

Your Company has been scouting for various acquisition opportunities in coking coal in West Virginia, Virginia, Pennsylvania, Alabama and Kentucky. The assets being targeted are producing or near production coking coal mines. The Company continues to hold negotiations with the management/ promoters of the targeted assets.

6.3.6 Phosphate and Potash

Your Company has identified a large phosphate deposit at Australia for participation. NMDC entered into an MOU and has appointed a transaction advisor to conduct independent diligence on the Company and its assets. Based on the recommendation of the Transaction Advisor, the project was not pursued in view of the risks not being commensurate with the returns.

Further upcoming rock phosphate projects in Africa have been under consideration, which have the capacity to meet the quality requirements of Indian fertilizer industry.

6.4 Leases for minerals

6.4.1 Iron Ore

6.4.1.1 In respect of Bailadila-1 & 3

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

6.4.1.2 The PLs being pursued in Chhattisgarh

Your Company has applied for 12 PL's in Dantewada District (2006-2008). In addition to that, your Company has also applied for 3 PLs in Kanker District in Sept - 09. Your Company is pursuing all the applied PLs with Chhattisgarh Govt.

6.4.1.3 In Jharkhand Sasangada:

Your Company applied for PL / ML in the west Singhbhum district. State Govt. recommended to Central Govt. for prior approval for grant of PL in favour of JV Co. (NMDC & JSMDC). MoM, GoI has conveyed its prior approval for grant of PL in favor of JV of NMDC Ltd & JSMDC for a period of 3 years. Grant order from State Govt. is awaited. The formation of JV Company is in process.

Your Company has signed MOU with Dept. of Mines & Geology (DMG), Jharkhand for exploration of Iron ore and other minerals in the State of Jharkhand. Under the MoU signed, your Company is executing exploration for iron ore in Silpunji - Kantoria area in West Singhbhum Dist. geological mapping and topographical survey on 1:4000 scale has been completed. The Exploration work is under progress.

Ghatkuri (Notified Forest):

Your Company is pursuing ML application for Ghatkuri Iron Ore Deposit for exploitation in JV with State Government. Your Company has filed Impleadment Petition requesting the Apex Court to direct maintaining status-quo of the State Government Notification of 27.10.2006 which reserves exploitation of Ghatkuri deposit by PSU's. The case is being heard in the Hon'ble Supreme Court of India.

Your Company has applied for 3 PL's (1 in June 2010 & 2 in March 2011) in West Singhbhum District.

6.4.1.4 In Karnataka

Your Company is pursuing for ML for Ramandurg and Kumaraswamy deposit (contiguous to ML No.1111). Both the MLs are subjudice, pending in the Hon'ble Supreme Court of India and in Hon'ble High Court of Karnataka respectively. Your company has applied for 7 ML application (Aug 2007) in Chitradurga, Bellary, Tumkur and Bagalkote Districts.

In addition, your Company has also applied for another 6 PL applications (June 2010) in Tumkur, Bellary and Chitradurga Districts. Your company has applied 7 ML applications in Karnataka (4 against Govt Notification & 3 in Donimalai Range (Dec 2010).

6.4.1.5 In Orissa

Your Company is pursuing for ML for Mankadnacha iron ore.

6.4.2 Gold

6.4.2.1 In Jharkahand

Your Company is pursuing for ML / PL for Pahardia - Rungikocha (West Singhbhum District) and Parasi-Kutachauli-Khotadih (Ranchi District).

6.4.3 Diamond

6.4.3.1 In Andhra Pradesh

Your Company is pursuing forest permission for exploration in 3 PLs falling in the Forest area (Renewal application submitted) in Kalyandurg area, Anantapur District. Forest permission & renewal is expected shortly.

6.4.3.2 In Madhya Pradesh

Your Company has carried out exploration work in granted 2 PLs (Baghain & Sarang). Renewals have been applied for these two PLs. MoM, GoI has granted prior approval for grant of PL of Rampura Motwa. Your Company is also pursuing for other 2 PLs viz., Karmatia and Lakshmipur for early grant in favour of NMDC.

Tikamgarh RP

Your Company has been granted Reconnaissance Permit (RP) on 30.09.2009 in the Tikamgarh District of M.P. Exploration work is in progress & some areas have been identified for further exploration based on positive results.

6.4.4 Platinum Group of elements

6.4.4.1 In Uttar Pradesh

Your Company is pursuing for PLs for Tsganan area, Dangli and Dangli RF in Lalitpur district.

6.4.5 Coal

Shahpur East (Area. 693 ha) and Shahpur West (Area 587.5 ha) Coal blocks allotted by MoC, New Delhi under Government Dispensation route for commercial mining. Both coal blocks were regionally explored by GSI. Later NMDC conducted detailed exploration through MECL, Nagpur and obtained Geological Report of both the Coal blocks. Based on Geological Report, Mining Plans along with Mine Closure Plan was prepared through consultant and submitted to Ministry of Coal, Government of India, New Delhi for approval on 07/06/2010.

Presentation for approval of Mine Plan of Shahpur East Coal Block and Shahpur West Coal Block were made by NMDC on 15.11.2010 and 29.04.2011 respectively before Ministry of Coal.

Mine Plan of Shahpur West Coal Block after incorporating the queries as suggested by Standing Committee of MoC, New Delhi and the same was approved on 07.02.2012 by MoC, GOI. Approval letter on Shahpur East Coal Block is yet to be received.

Land acquisition applications for the both blocks are likely to be submitted to concerned District Collector, Shahdol and Umaria District by May, 2012.

In addition to that Mining Lease application of above both Coal blocks have been forwarded from MRD, Bhopal to Ministry of Coal for prior approval. Mining Lease applications are pending with MoC, New Delhi. Ministry of Coal, New Delhi requested to MRD, Bhopal to submit duly filled Form-K for Shahpur East and Shahpur West Coal block for prior approval of Mining Lease. NMDC forwarded the same to the office of MRD, Bhopal for onward submission.

Detailed Project Report of both the coal blocks is under preparation so that NMDC could go ahead with the development of the coal blocks engaging a suitable Mine Developer cum Operator.

The Status of Applied Coal Block under Government Dispensation route for captive use / Commercial Mining are as under:

No of Name of the Coal Coal Blocks Applied Reserve Grade Remarks Blocks

4 Rauthpara (Jharkhand) 16.11.2009 190 VIV/ UNGD Applied under government dispensation route

Parbatpur North (Jharkhand) 230 VIV/UNGD for captive use

Pachwara South (Jharkhand) 279 E-F

Tokisud South (Jharkhand) 160 E-F

1 Banai (Chhattisgarh) 06.05.2010 510 E-F Applied under governmen dispensation route for commercial mining

1 Kudanal- Lobori (Orissa) 29.10.2010 364 E-F Applied under government reapplied dispensation route for on commercial mining. MoS 19.12.11 forwarded the Application to MoC on 29.12.2011

1 Jhirki- Jhirki West 30.06.2011 301 WIV Applied under government (Jharkhand) reapplied dispensation route for on captive use. Pending 19.12.11 with MoS.

1 Bhalumara (Chhattisgarh) 26.04.2011 650 E-F Applied under government reapplied dispensation route for on commercial mining. MoS 19.12.11 forwarded the application to MoC on 29.12.2011

1 Bandha (M.P.) 06.03.2012 405 F-G Applied under government dispensation route for commercial mining. MoS forwarded the application to MoC on 12.03.2012

Your Company is in the process of signing a Memorandum of Agreement with Goa Industrial Development Corporation (GIDC) for development of Gare Palma Sector - III Coal Blocks in Chhattisgarh allotted to GIDC.

6.4.6 Bauxite

6.4.6.1 In Jharkahand

Your Company is pursuing for PL / ML for Mahaudih village, Kujam village, Utani, Akasi and Putrang villages, Kotih village, Kujam and Chirodih villages in Gumla District.

6.4.7 Dolomite:

6.4.7.1 In Chhattisgarh

Your Company is pursuing ML application for Sadartera Dolomite Block in Bastar District.

7.0 SUBSIDIARY / JOINT VENTURE COMPANIES MONITORING FRAMEWORK

NMDC has five subsidiaries and stake in four Associate Companies. The names of these Companies and percentage of NMDC stake in these companies are as follows:

* Under closure.

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 / Joint Venture 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 the Board of Directors of Subsidiary Companies are reviewed by the Board of NMDC.

In terms of Listing Agreement/DPE Guidelines, the existing Indian Subsidiary Companies of NMDC are non-material, non-listed Companies.

7.1 J&K Mineral Development Corporation Ltd (JKMDC)

The annual report of the subsidiary Company is annexed.

7.2 NMDC-CMDC Ltd (NCL)

The annual report of the subsidiary Company is annexed.

7.3 NMDC SARL, Madagascar

The annual report of the subsidiary Company is annexed. The wholly owned subsidiary Company is under closure.

7.4 NMDC Power Ltd. (NPL)

In terms of provisions of Section 210 of the Companies Act, 1956, NPL has applied to Registrar of Companies, Hyderabad seeking approval for 1st financial year to commence from the date of incorporation i.e. 12.12.2011 till 31.03.2013. Approval from Registrar of Companies, Hyderabad is awaited. Accordingly, the Annual Report of NPL shall be annexed w.e.f. financial year 2012-13.

8.0 ENVIRONMENT MANAGEMENT:

Your Company has been accredited with ISO: 14001: EMS in respect of Bailadila Deposit-14/11C, Deposit-5, 10/11A, Donimalai and Panna Projects. Your Company has received Environmental Clearance for capacity expansion of Bailadila Deposit-10 from 3.3 to 4.2 MTPA and Deposit-11A from 1.7 to 2.8 MTPA from MoEF, GoI. Your company also received stage-1 approval for diversion of 65.936ha revenue forest land for construction of SP-III at Kirandul and 84.36 ha forest land at Arki Limestone Project from MoEF, GoI. Government of Karnataka, FEE Department has also accorded final forest clearance for renewal of Donimalai iron ore mine over 608ha of forest land. Your Company has also obtained temporary working permission from MoEF, GoI to continue the plant operations till 22.06.2012 at Panna Diamond Mining Project.

Your Company is organizing environmental monitoring studies at all production projects by engaging CPCB / MoEF approved laboratories and the results shows that all the environmental parameters are meeting the applicable standards prescribed by CPCB / MoEF

9.0 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. 23rd Corporate Level Tripartite Safety Committee Meeting of Donimalai Iron Ore Mine was conducted on 09.03.2012 and of Bailadila Iron Ore Mines/Diamond Mining Project was conducted on 12.04.2012.

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 2011-12 is 0.46 and 5.87 for the year 2010-11.

10.0 ISO CERTIFICATION ISO 9001:2008 Certification:

NMDC Projects - BIOM, Kirandul Complex, BIOM, Bacheli Complex; Donimalai Iron Ore Mine and R & D Center are accredited with ISO 9001:2008 Certification. II Surveillance Audit was conducted successfully at BIOM, Bacheli Complex and BIOM, Kirandul Complex in the month of October 2011. I Surveillance Audit was conducted successfully at Donimalai Iron Ore Mine and at R&D Center in the month of October 2011.

OHSAS 18001:2007 Certification:

NMDC Projects - BIOM, Kirandul Complex, BIOM, Bacheli Complex and Donimalai Iron Ore Mine are accredited with OHSAS 18001:2007 Certification in the month of December 2009. II Surveillance Audit was conducted at BIOM, Kirandul Complex & BIOM, Bacheli Complex in the month of August 2011; Donimalai Iron Ore Mine in the month of November 2011 and Certification Audit of Diamond Mining Project, Panna was conducted on 23.11.2011 and was recommended for Certification.

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, with a planned programme. All the results are computerized and individual files are being maintained.

11.0 IMPLEMENTATION OF INTEGRITY PACT:

i) With a view to maintain transparency in all dealings with contractors and vendors and keeping with international practices, NMDC & Transparency International India (TII) developed an Integrity Pact Programme.

ii) All the tenders for the contracts and civil works above threshold value of Rs.20.00 crore and procurements above threshold value of Rs.10.00 crore are the subject matters of Integrity Pact.

iii) After the implementation of said programme, Head of Safety Dept. was appointed as Nodal Officer and a Review Committee comprising of Functional Directors of NMDC was constituted. This Committee was also vested with the powers to modify the Integrity Pact procedure and systems.

iv) Shri S. Anwar, IAS (Retd) and Dr. J.S.Juneja, Former Chairman, NSIC have been appointed as independent external monitors (IEMs) for overseeing the Integrity Pact programme.

v) Till date a total of 63 cases of tenders with an indented value of Rs.17905.81 Crore were covered under the Integrity Pact.

12.0 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.

13.0 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.

14.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

During the year under review, NMDC Limited made all efforts for the implementation of the Official Language Policy and for the use of Official Language in all its Projects, Units and Head Office.

Hindi Workshops were conducted for employees to make them efficient to use Official Language in their day-to-day official work. During Hindi Workshops all employees were imparted Micro Soft Indic Computer training on Phonetic Hindi Keyboard. A training programme on MS Indic and Intelligent Keyboard was also organized for the Rajbhasha officers and their subordinates of all Projects and Officers/Incharges of the Units related to Rajbhasha work on the occasion of Rajbhasha Sammelan.

To bring awareness among the employees and their family members as well as employees of Central Govt. / Central Govt. Undertakings/ State Govts Offices situated in the vicinity of NMDC Office, various Competitions were also conducted and prizes were awarded to winners during Rajbhasha Saptah / Pakhwara/Maah.

Monthly Hindi Cash Incentive Schemes were implemented to propagate the usage of Hindi and large number of employees were benefitted under this scheme.

To encourage the employees to implement Official Language Hindi in the technical fields Rajbhasha Technical Seminars were organized and Technical Seminar Patrika and Rajbhasha Souvenirs were also published.

During the year House Journals viz. "SHE Samachar", "NMDC Patrika" in bilingual quarterly and Monthly bulletins "Baila Samachar", "Bacheli Samachar" and "Hira Samachar" in Hindi and "Doni Samachar" in trilingual were also published.

NMDC Limited was awarded "Ispat Rajbhasha Protsahan Shield" by the Honorable Minister of Steel, Ministry of Steel, New Delhi for the undertakings situated in 'C' Region, for the excellent implementation of the Official Language Policy and Progressive Use of Hindi in the year 2010-11.

NMDC was also awarded Rajbhasha Shield as 1st Prize for the year 2010-11 by the Town Official Language Implementation Committee (Undertakings) Hyderabad-Secunderabad, for excellent implementation of the Official Language Policy.

15.0 Manpower

15.1 Employee-Employer relations

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

15.2 Scheduled Castes & Scheduled Tribes

15 persons belonging to Scheduled Castes and 13 persons belonging to Scheduled Tribes were appointed in the year 2012 against 139 posts filled in by direct recruitment.

15.3 Strength of SCs & STs as on 31st March 2012

1. Total number of employees = 5924

2. Scheduled Castes amongst them = 1070

3. Scheduled Tribes amongst them = 1288

4. Total SCs and STs = 2358

5. Physically challenged employees = 39

15.4 Particulars of employees drawing Rs.5 lakhs per month or Rs.60 lakhs per annum under Section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Amendment Rules, 2011.

NIL

15.5 Staff Welfare activities

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

15.6 Promotion of Sports

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

16.0 HUMAN RESOURCES DEVELOPMENT

Employee's Development Services are delivered through In-Company, External and Foreign Training modes. The HRD Index of all the employees as percentage of total training man days / total working man days was 1.35 against the target of 1.11. The average training man days per employee was 3.8.

16.1 External Training Programmes & In-Company Training Programmes

Employees across the Company were nominated to External (290) and In-Company (103) Training Programmes at different locations on various subjects.

16.2 Foreign Training Programmes

9 Foreign Programmes were attended by 17 NMDC employees.

16.3 Executive Trainees

56 Executive Trainees joined the Company.

17.0 VIGILANCE

Smt. Usha Chandrasekhar, IPoS has taken charge as CVO, NMDC on 19.09.2011 after the completion of tenure of Shri. N V Raja Shekar, IFS as CVO, NMDC on 31.04.2012.

Vigilance Department in the Company has been focusing on "Preventive and Proactive Vigilance". Periodic Review Meetings with Vigilance officers were held from time to time wherein various discussions were held about vigilance activities carried out during the year and also to draw-up future Action Plans in conformity with the directives of the Central Vigilance Commission. Further, Vigilance Department coordinated with the other departments in the organization in improving upon the existing procedures and systems to achieve the overall objectives of the Company.

The Vigilance Department is certified for compliance to ISO Certification 9001:2008 standards. Surveillance Audit was conducted on 17.10.2011 by M/s. Integrated Quality Certification (P) Ltd. This has ensured continual improvement in Quality Management Systems.

Vigilance Department has been overseeing the implementation of Integrity Pact in the Company. Till date, 65 contracts valuing Rs.17967.67 Crores have been covered under this Pact.

Vigilance Awareness Week 2011 was observed from 31st October to 5th November 2011. During the Week, various programmes were conducted including talks by eminent personalities on "Participative Vigilance"; Essay Competition; Elocution and Quiz Programmes. On the Concluding Day, a talk by Shri. N Vittal, Former Central Vigilance Commissioner, CVC was organized. Prizes along with the Certificates signed by Shri. N Vittal and Shri. Rana Som, CMD NMDC Limited were distributed to the winners in the competitions held during the Week. Vigilance Awareness Week was also observed at all the Units of NMDC including Regional Offices.

As an initiative towards proactive vigilance, a Questionnaire on the effectiveness and awareness of vigilance among the employees was circulated to all the officers of the Units and Head Office for their feedback.

As another step towards proactive vigilance, NMDC Management has approved strengthening of vigilance functionary in the organization by four Senior Executives and five Junior Executives.

18.0 DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement under section 217(2AA) of the Companies Act, 1956, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

i) In the preparation of the annual accounts for the financial year ended 31st March 2012, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 of the Company for the year under report;

iii) 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, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) The Directors have prepared the annual accounts on a going concern basis.

19.0 DIRECTORS

During the year under review, the following were appointed as Directors of the Company pursuant to orders of Ministry of Steel, Government of India:

Name of the Director W.e.f

i) Shri C.S. Verma, CMD w.e.f. 25.05.2012

ii) Shri N.K. Nanda, CMD w.e.f. 01.01.2012 (Additional Charge) upto 24.05.2012

iii) Shri S. Bose, Director (Production) 17.06.2011

iv) Shri S.K. Das, Director (Commercial) 11.08.2011

v) Shri Rabindra Singh, Dierctor (Personnel) 01.10.2011

vi) Shri S.J. Sibal, Independent Director 28.12.2011

In tems of Ministry of Steel's, Govt. of India letter No.4(13)/2010-RM-I (Vol-II) dated 25.05.2012, inter alia, it has been decided with the approval of Hon'ble Minister of Steel to assign additional charge of the post of Chairman-cum-Managing Director, NMDC Limited to Shri C.S. Verma, Chairman, SAIL for a period of three months with immediate effect or until further order, whichever is earlier, in addition to his regular assignment, subject to approval of the Competent Authority.

The Board vide circular resolution has also approved the appointment of Shri C.S. Verma as Additional Director and CMD, NMDC w.e.f. 25.05.2012.

The following Directors ceased to be Directors on the Board of the Company for the year under review:

Name of the Director W.e.f

i) Shri Rana Som, CMD 31.12.2011

ii) Shri V.K. Sharma, Director (Commercial) 30.07.2011

iii) Shri G.B. Joshi, Director (Personnel) 30.09.2011

The Board places on record its deep appreciation for the valuable contribution made by Shri Rana Som, Shri V.K. Sharma and Shri G.B. Joshi during their tenure on the Board of the Company.

20.0 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 2011-12:

Sl No Name & address of Auditors Units Covered

i) M/s VENUGOPAL & CHENOY Head Office and R&D Centre; Chartered Accountants Consolidation, 4-1-889/16/2, Tilak Road Sponge Iron Unit, Paloncha HYDERABAD 500 001, Andhra Pradesh Phone No. 040-24752853 / 24753454 Fax No. 040-24756885

ii) M/s Brahmayya & Co., Bailadila Dep-14/11C, Chartered Accountants Bailadila Dep-5,10 & 11A, "Suhasini",10-50-24, Sripuram Junction, Central Workshop, Visakhapatnam -530 003. Andhra Pradesh NISP, RO, Vishakapatnam Phone No.0891-2755821 / 2754071 Fax No.0891-2755848

iii) M/s P K Subramaniam & Co., Donimalai Iron Ore Mine, Chartered Accountants Chennai Office 11-5-23, Karthik complex, Above Vijaya Bank, Bresthwarpet, RAICHUR - 584 001 Karnataka.

iv) M/s Hari Gupta & Co, Diamond Mining Project Purvasha Panna. 5A/7A, Dr. Panna Lal Road, Allahabad - 211 002

b. Cost Auditors

During the year, the Company has come under the ambit of Cost Audit of Sponge Iron Activity and Windmill Power Generation.

The details of Cost Auditors appointed to conduct Cost Audit of the cost records maintained by the Company for 2011-12 are as under:

Name and address of Cost Auditors Units Covered

Shri P.V. Prasad Sponge Iron Project

H.No. 2-4-911, Road No.6 Windmill Power Generation

Samatapuri Colony, Post Saroor Nagar

Hyderabad - 500 035

21.0 R&D ACTIVITIES

Particulars required under the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are at Annexure-I.

22.0 STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956

Statement pursuant to section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is at Annexure-II.

23.0 CORPORATE GOVERNANCE

The Board of Directors at their 427th meeting have approved the Policy on Corporate Governance. A separate section on Corporate Governance is enclosed at Annexure-III.

24.0 REPORT ON MANAGEMENT DISCUSSIONS AND ANALYSIS

A Report on Management discussions and Analysis as required in terms of Clause 49(F) of the Listing Agreement is enclosed at Annexure-IV.

25.0 GLOBAL COMPACT - COMMUNICATION ON PROGRESS

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

26.0 CORPORATE SOCIAL RESPONSIBILITY (CSR)

NMDC has a legacy of not only meeting but surpassing the commitments & expectations of its stake holders. All through its existence, NMDC has endeavoured to positively uplift the lives of the communities around its areas of operations.

The sentiment that Social Responsibility is an integral part of the wealth creation process and when managed properly, can enhance the competitiveness of business, maximize the value of wealth creation to society and thereby contribute to Nation building is ingrained in the core philosophy of NMDC.

'Leadership with Care & Concern' is the guiding principle and core motivator of NMDC to make a difference.

Investing an amount of Rs.63.32 crore during the year 2011-12, which calculates to about 0.87% of its net profit after tax (PAT) of the previous financial year in the CSR, the Company has taken up the following major works in the identified thrust areas:

26.1 Education

NMDC's focus is increasingly on improving the literacy rate & quality of education in the tribal belt of Bastar in Chhattisgarh. NMDC has been contributing to empower Tribal, Scheduled Caste and Poor children to make it their instrument to fight against poverty, disease & injustice by setting up free residential schools of high quality for tribal children, scholarships to 11000 tribal and poor students in 330 schools in Bastar Region at an annual expenditure of Rs.5 Crore, construction of schools and hostels for students including girl children, mid-day meal to 8000 rural children, setting up ITI's & Polytechnic for technical education, supporting the establishment of medical college & reservation of seats in management institute(IPE) for tribal & poor children.

26.2 Balika Siksha Yojana

NMDC has introduced a focused initiative called "Balika Siksha Yojana" for the benefit of the tribal girl students of Bastar region. Under this Yojana, the girl students will be sponsored for various academic and professional courses in Engineering, Medicine, BDS, Management, Nursing, Diplomas etc. The entire expenditure will be met by NMDC.

In the first year, 25 tribal girls from Bastar region have been admitted to Nursing courses in M/s Apollo Hospitals, Hyderabad.

26.3 Residential Public School for Tribal students at Kanker

NMDC is establishing a residential public school at Kanker for the tribal students of Bastar region. The school will be operational from the academic year 2012-13 with an initial intake of 400 students and will ultimately cater to 2000 tribal students. For the construction and management of the residential school, NMDC has signed an MOU with Kalinga Institute of Social Sciences, Bhubaneswar.

An amount of Rs.38.22 crore has been sanctioned for constructing the school building and other facilities.

26.4 Construction of Gurukul Astha at Dantewada

NMDC has agreed to revise financial assistance from Rs.12.91 crore to Rs.21.03 crore for the construction of a Gurukul Astha at Dantewada by the State Govt, for the benefit of ST, SC.OBC and Orphan students.

26.5 Polytechnic College at Dantewada

The Chhattisgarh Govt, has allotted about 8 acres of land for the Polytechnic College. An amount of Rs. 31.94 crore has been sanctioned for constructing the Polytechnic and other facilities in the campus.

Considering NMDC's request for special dispensation in the admissions of tribals of Bastar to Polytechnic College, Dantewada, Govt, of Chhattisgarh has granted administrative approval by delinking the tribal students of Bastar region from central counseling.

26.6 Education Improvement Program

Implemented 'Education Improvement Program in 84 Govt. Primary Schools with objectives of enhancing the quality of education of the children studying in the identified schools, bringing childr

 
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