1

COMPANY PROFILE Drought and floods. Food shortages and Foreword 1 power famine. Infectious diseases and lifestyle disorders. Migrants and refugees. From the Directors' Desk 5 Civil wars and territorial disputes. Resource unavailability. Protests and disruptions. Vision & Mission 11 Advancing deserts and the blooming of the Arctic. Extinction of species and emergence Profile - MSPL Limited 14 of new viruses. Mining Business Mankind is amidst a maze of challenges. 15 Rampant environmental and social illiteracy Wind Energy Business 17 is accelerating the damage. Awards and Accolades 19 A large majority is unable to read these danger signals and are uneducated about the linkages between their behaviour and the problems that confront us. This is sinking us deeper into the labyrinth. The need to educate and spread awareness on sustainable growth was never more urgent. At MSPL we are actively engaging with our stakeholders and civil society at large to sensitise them about sustainability and demonstrating through our actions how the practice of sustainability is helping us tide over tough times and creating a positive imprint on the environment and our communities.

We are happy to release our fourth consecutive sustainability report. The Report continues to cover the same units as in our 2007-2008 CSR report, namely Vyasankere Iron Ore Mines, Export Oriented Units (EOUs) and the Wind Energy Division. foreword

Dear Readers, During the year, we produced more than 2.7 MMT of iron ore; majority of which was exported to China with marginal quantities We are pleased to present our fourth Sustainability Report for the This year sold in the domestic market. Our devoted efforts in promoting financial year 2008-2009. This year's report has the visual theme we produced renewable energy continued with investments in clean and green of a “Maze”, reflecting the labyrinth of challenges we faced during more than wind energy through our separate wind division. As of today we the year. 2.7 MMT have an installed capacity of 127.8 MW of wind energy spread of iron ore We were among the handful early movers in country in terms of across high wind potential states of the country. Apart from wind, sustainability reporting in accordance with GRI guidelines. In fact we continue to evaluate and analyze our entry to other sources of we were one of the first Indian mining companies to report in renewable energy such as hydro, solar etc. accordance with GRI. This year's report is a continuing endeavour We have for the to communicate our efforts towards addressing sustainability second time issues to all our stakeholders. in a row reported in accordance We continue to cover our mines namely Vyasankere Iron Ore Mines (VIOM) including our Export Oriented processing Units We have today an installed with A+ (EOUs) and the Wind Energy Division of MSPL. This triple bottom capacity of Application line report is for the period from the 1st of April 2008 to the 31st of Level of the GRI March 2009. We have over the years consistently followed Global 127.8 MW Reporting Initiative's Sustainability Reporting Guidelines (GRI) of wind energy and have for the second time in a row reported in accordance with A+ Application Level of the GRI 2006 guidelines (GRI - G3). Through this report we have detailed our efforts towards addressing sustainability challenges on all fronts namely: To make sustainability the corner stone of our actions, we have rolled out a comprehensive Sustainability Policy of MSPL Limited Mining Business Renewable Energy this year which underpins our individual policies, standards and targets implemented within the company and one that encompasses triple bottom-line issues. Environment Significant Stakeholders Our mine has been certified for Being in the business of natural resource extraction, ISO environmental safeguards form the backbone of our vision Our financial performance considerably slowed down during the 14001:2004 towards protecting the environment near our operations and is report period as a result of the dire global economic scenario. Environmental crucial to our sustenance in the long run. Our mine has been Overall revenues were slashed in the second half of the year owing Management certified for ISO 14001:2004 Environmental Management to lowered ore prices, increased market competition and Systems Systems. diminished demand for ores from our prime export market of Our ambient air pollution levels are maintained well within limits. China. Coupled with these, there were also challenges in terms of We have effective waste management systems in place and our internal political pressures faced by our daily operations. We wastes from mines are systematically managed and disposed. had to take action on certain crucial issues such as cost cutting We have reduced our water usage over the years within our measures across our activities, but have ensured that employees' processing units and have adhered to water discharge job security is not jeopardized at any point in time. parameters as stipulated by the State Pollution Control Board We have come a long way since 1962. From being a core mining (SPCB). We have over the years been actively following company we have diversified our activities into related afforestation activities along with measures to curtail soil erosion businesses with a strategic decision to establish a Pellet plant and and run off from the mine area. Being a forerunner in foray into the Shipping business. We are now well poised to Our wastes environmental management programs among mining handle the entire supply chain from raw material production to from mines are companies, we have taken the lead in addressing environmental systematically end use, including logistics management. With our diversification issues in common forums such as Federation of Indian Mineral and future plans, we felt the need to have an organisational managed & Industries (FIMI) to promote sustainable principles among Indian restructuring to better manage our businesses. disposed Mining companies.

1 2 Our contribution to society dates back to a stage when there were recreational facilities for employees, assisting educational no mandates or pressures in adhering to a formal Corporate Social institutions, building bus shelters and greening activities. Also in Responsibility (CSR) structure. Our belief resonates with the vision our efforts to address health and sanitation, we aim to construct of our Founder Chairman who believed in inclusive growth and 1500 individual household toilets in the forthcoming years. ensuring the health of the communities along side MSPL's growth. We aim to I am not the His ethos - “I am not the owner of wealth, but a privileged trustee to construct Our full-fledged Occupational Health Center was renovated and owner of serve the community with it” continues to motivate us. Following 1500 further upgraded with new equipment. We have conducted wealth, the foot steps of the Founder Chairman, our Chairman & Managing annual occupational health surveillance for all our employees. We individual also have a company-wide medical insurance (Medi-claim) policy but a Director firmly believes that commitment from our own household privileged management, is essential to embed responsible business to cover all employees and their families. Smt. Vasantidevi practices into the decision making process. toilets Baldota Blood Bank, continued to offer its vital services to the trustee in the people of Hospet and its surrounding region of about 100km. to serve the The economic slow down has not deterred us in investing in social forthcoming years community causes. We firmly believe that the growth and health of our We strive to strengthen performance across the triple bottom line. with it communities will lead to our own growth and good health. We thank our stakeholders for their continued support and cooperation and urge you to be with us in our ever continuing The societal vision conceived by MSPL is in line with various journey of addressing sustainability on all fronts. national and international sustainability agendas such as the Indian Prime Minister's 10 Point Social Charter, United Nations Yours truly, Millennium Development Goals (UNMDG), International Council on Mining and Metal's (ICMM) Sustainable Development Principles and Sustainable Mining Initiative. Smt. Vasantidevi Baldota Blood Bank Shrenik Kumar N Baldota caters to Hospet & its surrounding We encourage you to reflect on the strengths and weaknesses of region of about this report and send us your valuable feedback and suggestions We formed 10 new 100kms to: [email protected] SHGs that were linked to bank for credit facilities

In the current year, we formed 10 new Self Help Groups (SHGs) that were linked to bank for credit facilities. As on 31st March, 2009 we have 45 women SHGs working in various villages for Women Empowerment. This has been a landmark activity that has underlined our efforts to address large number of issues in villages through women, who have the mettle and the strength for change. Also to provide livelihood opportunities we continued our efforts in conducting tailoring classes and providing women with sewing We have machines for them to pursue income generation activities. So far provided we have provided 160 sewing machines to women who underwent 160 training in tailoring. We have paid special attention on educating sewing the girl child and to reduce school drop out rates among female machines children. Our target for the forthcoming year is to re-enroll 100 to women who female students who had earlier dropped out of school. underwent We have ensured the development of Hospet town through training in tailoring enhanced infrastructural facilities like road ways, renovation of children's park, provision of advanced play equipment,

3 4 FROM THE DIRECTORS’ DESK

a maze of Our plans in this phase have been to seek stability and performance through acquisitions and moving challenges to related businesses for our growth and sustenance Our current year's report depicts the visual theme of a “Maze”. This reflects company to take stock to figure the the challenges we faced during the best way forward. Our plans in this addressing year in terms of economic turbulence phase have been to seek stability and sustainability and downturn. We see ourselves performance through acquisitions and navigating through this maze, guided moving to related businesses that The articulation of our Sustainability by the compass of strategic decisions, mixed bag where a good first half, was sustain growth. We are also looking at Policy is just a start towards a formal, actions and diversification, and view it followed by a lean patch in the second other countries for export. deliberate and coherent approach as an apt theme to communicate our towards engaging with our half especially with regards to our Our diversification via the Pellet plant commitment to meet challenges head stakeholders and working on mining and iron ore business. In light would assist us in continuing the line on and find new routes towards a sustainability issues. We have always of the current economic situation our of process from sourcing raw materials sustainable tomorrow. emphasised on triple bottom line challenges are aggravated. The to that of making steel. Our foray into performance across our operations. The twists, turns and dead ends that challenges that we face are both the shipping business, is aimed to The policy is an added driver for us to we faced during the year have internal and external. Internal being strategically venture into related focus on addressing sustainability at drastically impacted our mining the political scenario, policies and logistics business. MSPL through its every step and action. The next step business in terms of lowered barriers to our operations. External subsidiary has invested in procuring is to translate the policy into practice demands, lower prices, external being the shrinking of our export four new ships that would be delivered that is inherent in our system of competition and unfavourable market realisation from China and to us in the next two years. Governmental attitude. Despite these increased competition from Australia functioning. and Brazil, along with lowered prices of crucial challenges, we continued with We had the privilege of being part of ores. Indian iron ore prices in the 2nd determination to meet our targets and the recently setup Indian Mining half of the year have been the lowest fulfill commitments to our Initiative (IMI) which gave us the thus far. Our strategy has been to focus stakeholders. The current year was a platform to spearhead the drive to establish its sustainable mining principles, in line with those of the We see ourselves navigating through this maze, global International Council on Mining guided by the compass of strategic decisions, and Metals (ICMM), duly dovetailing actions and diversification them to suit national needs and This phase has provided us with relevance after deliberations with on pricing to beat competition. opportunities to cut costs and focus on other key Indian mining companies. We have been able to manage this with our activities. We have ventured into a These efforts will ultimately translate our high quality products and low port process audit that would assist us in into establishing an Indian Mining costs. The major challenge that we face optimising cost with increased Framework. is to determine the correct pricing efficiency of our processes. We have Being a forerunner in the mining levels at which we can continue to reached a stage, where we are adding sector in India, we have established sustain. more people for the pellet plant. This is internal systems and policies that a sign of our expanding family. In an In the past years we have enjoyed already address ICMM guiding attempt to address our diversification peaking growth rates in our mining principles in all our actions. As one of and expansion plans, a restructuring business. Now is the time for our the leaders in the industry, we want to process is currently underway. communicate our sustainable commitments and actions to our

5 6 The Baldota Group's CDM project of 125 MW where MSPL has a lion share of 78.90 MW, stakeholders. We believe that leading materials are dumped at designated by example will motivate other dumping areas. The dumps are was the largest wind power project in the world companies to follow suit. managed by proper terracing and to be registered as a CDM project afforestation. Our zero waste We have taken a number of steps over management plan for mining We are also keen on other renewable the years to be environmentally operations is intended to recover energy sources like solar and hydro. In friendly. Vyasankere Iron Ore Mines 100% of minerals through systematic the long term we harbour a vision to has their Environmental Management mining processing and stoking of foray into solar chip manufacturing, System and Occupational Health and minerals. Our efforts have been to which would make this energy source Safety Management System, ISO reduce pollution and environmental more affordable and prevalent. We are 14001:2004 and OSHAS 18001:1999 impacts in every way while complying aggressively exploring avenues to enter respectively in place. We have with norms and regulations. into the solar market and also in the developed structured processes to process of planning a mini hydro power ensure that all potential hazards are We have been actively conducting plant in Karnataka in the considered and preventive measures afforestation activities over the years forthcoming year. implemented to ensure safety of along with measures to curtail soil employees and the surrounding erosion and run off from the mine and received the first prize for community. To achieve our vision area. The mine is highly mechanized, 'Independent Power Producer' under towards zero waste from our mine, the with very little manual intervention. the Wind Programme (2002-2007). The sustainability of Baldota Group's 125 MW CDM project in Karnataka, where MSPL had a lion our communities share of 78.90 MW, was the largest We have a Research and Development (R&D) Much before the big talk on Corporate wind power project in the world to be Social Responsibility (CSR), we have department that constantly endeavours to conserve registered as a CDM project with the been active on this front and we and utilise low grade waste thus minimising waste United Nations Frame Work for believe in giving back to our society. Convention on Climate Change in CSR as a system is only a systematic, September 2006. This has reinforced consistent, apparent management We have installed a conveyor belt to our ambition towards investing in system to transport ore from excavation response to handle social issues that to points of loading. This has cut down we have mastered in our own ways. Our on our use of trucks for transportation initiaves have been aligned with thus reducing pollution. We have also national as well global mandates such taken initiatives to minimise the usage of road transport by shifting over to Rail mode, and would like to see its usage more along with Sea ways in the forth coming years.

Research and Development (R&D) renewable energy renewable energy and we seek to department constantly endeavours to We firmly believe in the fact that we substantially enhance our investments address issues of waste reduction and need to invest in renewable sources of in wind power. discover alternative uses of energy. Towards this our primary focus overburden mine wastes to conserve has been in wind energy. In our efforts Though there were no capacity and utilise low grade waste. to bring clean wind power to the additions in the current year, an In terms of overburden management country, we were recognised by the additional capacity of 15.2 MW in the plan, which is the main waste Ministry of New and Renewable Energy Hospet region is being planned in the generated in mining activity, all the (MNRE) forthcoming year.

7 8 as the United Nations Millennium Development Goals (UN MDG) to We firmly believe and have come to see that women address issues of eradicating poverty, act as enablers of change and are pillars for providing access to basic needs of sustaining their families and communities at all times water, sanitation, healthcare and education. To address the needs of villages and to focus on core areas of facilities to our city of Hospet. towards the upgradation of hospitals our social interventions we have thus These include roads, children's park, and also provided assistance to poor far adopted 10 villages, in close and recreational facilities for and needy individuals towards proximity to our mines and wind employees, assisting schools and healthcare costs. installations. greening activities. Providing access to healthcare and upgrading healthcare We remain firmly committed to creating Women empowerment has always had facilities is an another area of our opportunities for our communities, our special attention. We firmly believe tailoring classes and donating sewing attention. We have contributed improving their standard of living and and have come to see that women act machines to women. We have paid making them more self sustainable. as enablers of change and are pillars special attention on educating the girl for sustaining their families and child and to reduce their school drop communities at all times. To empower out rates. Our target for the Narendrakumar A. Baldota Rahul Kumar N. Baldota Shrenik Kumar N. Baldota Chairman & Managing Director Executive Director Executive Director Our initiaves have been aligned with national Baldota Group of Companies MSPL Limited MSPL Limited as well as global mandates such as the United Nations Millennium Development Goals

women our attempt was to form SHGs. forthcoming year is to re-enroll 100 With this we have aimed at providing female students. them with financial independence and decision making powers that has To provide basic access to sanitation automatically translated into uplifting facilities, especially to address the homes and communities. In line with needs of women, we have continued our previous year's efforts on this front, our efforts in individual household we formed 10 new SHGs this year that toilet construction in villages and our were linked to the bank after providing commitment is to construct 1500 seed funds for credit facilities. This toilets in the forthcoming years. takes the total SHGs formed to 45. To Our social contributions towards provide livelihood opportunities we development have been a conscious continued our efforts in conducting attempt to provide infrastructural

9 10 vision

'Guided by principles mission of sustainability 'To become the leading we will be a conglomerate supplier of iron ore driving the nation's and wind energy in growth by establishing the country by meeting standards of excellence the direct and implied in adding value to needs of domestic and nature's resources' global customers to their best satisfaction, through the employment of and services of committed and knowledgeable team members'

11 12 Concern The Vision and Mission stand on the pillars of MSPL’s A genuine and meaningful interest in company profile 5 CARDINALS the environment, by embracing green that characterise us as an technologies, organisation and the afforestation values of our employees. BALDOTA GROUP programs and air, water and soil management MSPL LIMITED MINING WIND ENERGY DHULE Creativity Care VYASANKERE IRON ORE MINES HARPANHALLI Innovatively For the community we EXPORT ORIENTED UNIT 1 SATARA harnessing the work in, by taking EXPORT ORIENTED UNIT 2 CHITRADURGA resources to find initiatives that make a SURAJABARI creative solutions real difference at the that augment grass root level in the business operations areas of education, healthcare and overall enhancement in the living standards of the community Commitment An unflinching promise of providing nothing Core Values short of the best in quality and quantity These are quality, through state-of-the-art customer relations, R&D and continuously safety, care for upgrading the skill environment, ethical quotient of managers business practices, MSPL Limited is a closely held unlisted flagship company of the Baldota Group. and workers forming the basis on We are based in Hospet, Karnataka, India and our principal business domains which the group are iron ore and wind energy. functions and supports the framework of its operations.

13 14 Leased area of 347.22 hectares

M Estimated Reserves of

O 17.98 million tonnes of +64% Fe I as on 31st March 2009 V mining business Mining Operations are highly ore excavation mechanised operational overview Extensive afforestation has been carried out over 1.7 million trees check dams & gully plugs Modern overburden management systems Elaborate network of check dams afforestation and gully plugs to control run off

Established air and noise overburden pollution management system management

Export Oriented Unit 1 Export Oriented Unit 2 1 2

Processes Iron Ore processes Iron Ore Excavated U

excavated from VIOM U from mines leased/operated Products are classified in by other companies of the O terms of size and Fe O Baldota Group E content E MSPL is one of India's leading private sector iron ore mining and exporting Raw ore from various mines are tested and blended prior companies and is actively involved in mining, processing, trading and to processing exporting of iron ore. China is the principal market for our products. MSPL operates the Vyasankere Iron Ore Mines (VIOM) and two Export Oriented Units Beneficiation is carried out for (EOUs) that process and dispatch products from VIOM and other mining upgrading Fe content companies.

truck transport truck transport from Strategic investments over the past decade in wind farms have given MSPL a & hopper other mines significant presence across some of the best wind regimes in India. We are one of the largest private sector investors in wind energy. Our wind farms at the districts of Davengere, Bellary, Chitradurga, Dhule, Satara and Kutch storage storage districts are located in the Indian states of Karnataka, Gujarat and Maharashtra.

crushing & screening crushing & screening

classification, classification beneficiation & thickening

tailings & other waste management waste management

major products:

S Our EOUs have rail sidings from lumps, fines & concentrate where products are transported 63.5% - 66% Fe grades C I

T The bulk of our products are exported to China via ocean freight S

I from ports of India rail transport G O

L ocean shipment

15 16 wind energy business operational overview

MSPL has been in the wind energy business for nearly a decade. The case for wind energy was clear: resource conservation, pollution abatement and the resultant climate change mitigation and these have made renewables a Evaluation of sites Priliminary detailed necessary component of any future energy scenario. Moreover, wind energy identified by the developer feasibility study at that time, was relatively more attractive in the Indian market as compared or by in-house experts Negotiations with with other renewable energy options. The wind energy business fit perfectly Assessment of technical investors, State Electricity in to MSPL and the Baldota Group's principles of environmental and economic feasibility Boards and other responsibility. government agents ) Assessment of The early start has given us access to some of the best sites in premium wind r environmental and social Acquisition of land and all regimes in India. Our hands on approach to this business domain and the o implication of proposed legal approvals and grants R t wealth of experience thus gained has given us a complete understanding of new project as required s E Identification of suitable the nuances of this business, the peculiarities of operating in the Indian e Provision for funds for P investor market and the implications of operations across different states and the v purchase O Development of site and pros and cons of working with different wind farm developers and operators. n L I Identification of competent support infrastructure Today, we are recognised among the most reputed wind energy investors in ( E

wind farm operator India and have achieved numerous awards for our contributions to this

V Provision of manpower and L industry.

Oversight of operations E facilities for on-site P through MSPL operational activities

D The emphasis we placed on our wind business and its professionals has S representatives on a Maintenance of wind farm helped us bring a wealth of experience to all dealings with site developers

M day-to-day basis assets, observation of and operators. Leveraging this in-house technical competence, we have Management of project safety measures carried out independent site assessment and feasibility studies. Based on finances and profitability Monitoring of electricity the results of these assessments, we will go ahead with plans to expand our Engagement with lenders, generation and electricity wind presence in India. developers and fed to the grid government authorities In the current year, there were no capacity additions by MSPL. However, projects that had already initiated such as the 15.20 MW capacity addition in Hospet, are well underway. We expect that this farm will be commissioned in the forthcoming year. Wind Grid Monitoring Turbines Connection Station Nevertheless, we are committed to our target of 400 MW of installed wind energy capacity by 2012 for the Baldota Group.

Our wind energy business is our most significant and important contribution to the climate change mitigation effort. In the coming years, we plan to complement wind energy with other alternative sources of energy such as ELECTRICITY BOARD solar and hydro power as well.

Provision of grid facilities Monitoring of electricity transmission to grid Payments to electricity generating party as per terms identified in Power Purchase Agreement

17 18 awards & accolades chanakya award for corporate governance We have received various accolades and recognitions for our contribution in the field of mining, corporate social responsibility and renewable energy business during FY 2008-09:

lifetime achievement award

“Chanakya Award for Corporate Governance” was presented to MSPL by the Public Relations Council of India (PRCI)

special recognition Our in-house Journal – “Minds and Mettle” received special recognition under the Corporate Collaterals category by the Public “Lifetime Achievement Award” by the Federation of Indian Export Relations Council of India (PRCI) Organisations (FIEO), New Delhi, was presented to our Chairman & Managing Director, Mr. Narendrakumar A. Baldota, by the President of India, Mrs. Pratibha D. Patil. The award is testament to his outstanding contributions to the field of business and for being top export award - CAPEXIL an inspiration for excellence

three star export house certificate “Three Star Export House” Certificate from the Ministry of Commerce. The status certificate was issued as per the Foreign Trade Policy 2004-09. The certificate, with a validity of five years, underscores MSPL's contribution to the Nation's exchequer

golden award-corporate collaterals

Our Corporate Sustainability Report 2006-07 received the “Golden Award” under the Corporate Collaterals category from the Public CAPEXIL's Top Export Award, Relations Council of India (PRCI) 2008-2009 and Special Export Award every year since 1999

19 20 MSPL LIMITED SUSTAINABILITY REPORT 08-09 2

REPORT PARAMETERS Embedding Sustainability 1

Governance and Accountability 11

Stakeholder Engagement 16 & Issue Identification

embedding The policy is also aligned with our 5 Cardinal Cs - Creativity, Commitment, Concern, sustainability Care and Core Values release of sustainability policy Our Sustainability Policy identifies all stakeholders that we consider as significantly The concept of sustainability is the keystone of our vision and business activities. In associated with our business activities and it clearly articulates our stance on issues our first report, we shared our views on Quality, Environment and Health & Safety that are relevant to our business and the communities within which we operate. and how we were putting these in to practice. Last year, we provided disclosure on The policy is also aligned with our 5 Cardinal Cs - Creativity, Commitment, Concern, the progressive deployment of the Human Rights policy at MSPL and the steps that Care and Core Values. had been undertaken towards implementation of and dissemination of the policy. The principles and ideas that are enshrined in each of these individual policies are The policy is designed to be both, purposeful and relevant. It is purposeful by simply facets of the wide concept that is sustainability. The development, unambiguously enunciating our point of view on the most relevant matters of declaration of the policies and the evolution of our business and our understanding business continuity - corporate governance; the core values that reinforce our of it, has prompted us to explicitly articulate our views, as an organisation, on operational attributes; sustainable development through environmental, social and sustainability. To this end, MSPL deliberated on and devised a Sustainability Policy economic performance controls; mitigation of climate change through renewable during the reporting period. energy; biodiversity protection; health, safety and human rights of direct and indirect employees and; our role in developing the communities that we operate in. The policy has been developed keeping in mind principal stakeholders, all material It is also designed to be broad enough to cater to the diverse sustainability contexts parameters, the sustainability and development context of MSPL and the regions in that are a derivative of MSPL's dynamic business profile. which it operates in addition to the aspirations of the company. The policy is the very essence of MSPL and what we endeavour to be.

MSPL sustainability policy We are committed to achieving We seek to conduct and grow 1 highest level of corporate 5 our business in a responsible governance standards, integral to At MSPL, we combine human and profitable manner, while At MSPL, we recognise the need to our activities and processes, by delivering value to all our ingenuity and natural resources for communicate our sustainability following our cardinal guiding stakeholders especially our the benefit of our current and future challenges and achievements to our principles of creativity, shareholders. stakeholders. This is our core stakeholders. We will strive for commitment, concern, care and contribution to a more sustainable credible reporting systems and core values. society. We believe that following For our direct and indirect encourage open dialogue with our sustainable development principles 6 employees we endeavor to stakeholders for enhanced makes good business sense and are We aim to operate at all times in a adhere to the highest norms of transparency. In implementing this therefore committed to achieving 2 way that embodies our values of health & safety and human sustainability policy we shall engage economic, environmental and social being reliable, responsive, rights across our operations. our stakeholders for sharing the straightforward and objectives associated with these responsibility of upkeep of our understanding. principles. sustainability commitments. We believe we have a positive Our Sustainability Policy framework We are committed to sustainable 7 role to play for our communities This policy will be reviewed at is underpinned by individual 3 development and aim to monitor contributing towards their appropriate intervals and updated as policies, standards and targets our environmental, social and various needs and concerns and when necessary to adequately implemented within MSPL economic performance and including local employment, reflect the current context of encompassing triple bottom line minimise the impact of all our health, sanitation, education, sustainable development within our issues. These are material to our operations. and livelihoods. sphere of influence. business, shareholders, lenders, employees, customers, suppliers We are committed to the continued We will aim to ensure that our communities, and regulatory 4 generation of renewable energy, to 8 contractors and suppliers also authorities and also extend to proactively engage in addressing observe regulatory and human March 20, 2009 respecting the needs of future climate change and preserving rights obligations. generations. Towards this extent, we biodiversity. MSPL Limited outline our approach relevant to MSPL's areas of operation.

1 2 Drive policy FIMI and sustainability into practice in the mining industry International Council on Mining and Metals (ICMM) International Council on Mining and Metals (ICMM) Sustainable Development Framework Principle 02: Sustainable Development Framework Principle 1: Integrate sustainable development Implement and maintain ethical considerations within the corporate business practices & sound systems decision making process of corporate governance

Since our inception, we have made The Federation of Indian Minerals efforts to emphasise triple bottom line Industry (FIMI) is a forum where performance across our operations. members can deliberate and work Through our previous sustainability together on matters of significance to reports, the reader would be aware the industry. A number of heads of the and informed that MSPL is a major mineral companies of India are forerunner to the concepts of members of the highest decision sustainability and has consistently making committee at FIMI. worked to ensure the implementation of sustainable business practices. MSPL has been an active member of FIMI as we have always believed that the Indian minerals industry would significantly benefit from partnership MSPL is a forerunner to the concepts of sustainability and co-operation that it has historically and has consistently worked to ensure the lacked. Moreover, through collective implementation of sustainable business practices actions, much can be achieved in terms of shared best practices, stronger The FIMI recognises industry lobby in government decisions The declaration of the Sustainability Performance against these indicators and many others. the need for integration Policy represents the beginning of a will be disclosed in a transparent of sustainable practices more formal, deliberate and coherent manner utilising a balanced score card Our Executive Director, as necessary across the approach towards engaging with the approach in subsequent reports. Mr. Rahul Kumar N. Baldota, is the Indian mining industry. stakeholders and working on present President of the Federation. sustainability issues that are most The declaration of this policy is also His tenure as the Chairman has seen To this end, over the material to us. significant in terms of the influence, it the issue of sustainability gain greater past year, we have taken will have on our stakeholders. The next importance at FIMI. concrete action towards It is the first step in setting ourselves action for us is to share the detailed clear targets and goals, articulating policy with our stakeholders so that In the reporting period, members of developing a our commitments and delineating they are encouraged to partner and FIMI, with the help of specially Sustainability Framework areas for continual improvement. assist us in achieving our targets and appointed industry and subject and a set of associated Following the release of the set goals through a process of mutual experts, tabled a proposal to FIMI to Guidelines for the Sustainability Policy, we will define cooperation and constant learning. shape and implement a sustainability the most material parameters that are MSPL's Sustainability Policy holds framework and a set of key process Indian mining industry associated with tenets of great importance and promise on guidelines for the Indian mining sustainability identified in the policy account of the proliferation of its industry. Modelled on the ICMM and set up mechanisms to periodically essence, recognition of its vitality and Sustainable Development Framework measure performance (in case these the development of methods to Principles, the FIMI framework included Rahul Kumar N. Baldota do not already exist). Targets or improve sustainability performance. principles associated with business Executive Director - MSPL Limited benchmarks across business units will ethics, corporate governance, President - FIMI be set for continual improvement. incorporation of sustainable

3 4 sustainability of our wind farms

development principles at the highest process guidelines for the Indian level of decision-making, human mining industry are agreed upon soon rights, risk management strategies, and will be embraced by the entire health & safety, biodiversity & land industry. This step is the first among management, community the other significant steps taken development and transparent towards the elimination of the stigma engagement. The guidelines pertained associated with the mining industry. to the process through which the framework may be deployed across MSPL would be glad to play a leading mining operations in India. By virtue of role in demonstrating how the our experience of integrating framework principles and guidelines sustainable and responsible practices can be put into practice and progress in our business, MSPL has played a on performance shared with constructive role in developing the stakeholders. In fact, this report framework and the guideline by references the ICMM Sustainable providing inputs on how to tailor make Development Framework Principles in the policy to suit the needs and an effort to demonstrate the initiatives that a company may take circumstances of the fragmented Operation and Maintenance (O&M) of responsibility in terms of attending to and practices that it may adopt, in Indian mining industry. wind farms is usually an activity routine checks, maintenance, repairs, order to meet both, the letter and the carried out by site developers. Private calibration of meters, data logging and For far too long the Indian mining spirit of the FIMI sustainable developers are essentially suppliers of data reporting on a daily basis. In industry as a whole, has been tainted development framework. wind turbines who take an O&M terms of actual working and with a single brush and associated Through such industry efforts, contract to maintain machines of generation, daily data generation is with poor environmental and social MSPL believes that it can play a role project proponents over the project life automated, compiled at the Central credentials due to the malpractices of in advocating and facilitating a time. We have sourced our wind mills Monitoring System of the wind farm by some small mining entities. It is change in the outlook of the industry from reputed global/national suppliers O&M contractors and is sent to us on a expected that the Sustainable and its stakeholders towards such as Suzlon Energy Limited, Vestas daily basis. Development Framework and its key sustainability performance. Wind Technology and RRB Energy We have also recruited around 13 Limited. These companies have been dedicated staff who are stationed at in the wind energy business for some of our larger wind farm sites. decades and are also our O&M They function at the levels of manager contactors for respective machines at liaison, site engineer, office different wind farms. representative, senior manager, senior As companies of global repute, our engineer and technicians. MSPL staff O&M contractors adhere to at the wind sites takes care of our international best practices / policies. wind installations and works in close They are ISO-9000 and ISO-14000 coordination with the contractors to certified and follow strict norms, ensure the proper functioning and documentation processes and generation of electricity. continuously upgrade their products, We remain firmly committed towards services and practices. generating renewable energy through Their trained and qualified wind power and adopting professionals take complete sustainability at every level. MSPL has been an active member of FIMI as we have always believed that the Indian minerals Daily generation data is automated, compiled at the industry would significantly benefit from partnership Central Monitoring System of the wind farm by and co-operation that it has historically lacked. O&M contactors and is sent to us on a daily basis

5 6 IFC mandates its funding beneficiaries to targeting global adhere to the rigorous world-class environmental benchmarks: embracing and social standards the IFC standards set of MSPL as well as the operation of its sister company. Satisfied with The wind farm projects that we invest in are capital intensive in nature and have our performance, the IFC has high up-front costs. It is therefore prudent to secure funding for these projects from disbursed the first tranche of funds We were aware of the reliable and reputable lenders. The International Finance Corporation (IFC) is an for this multi-million dollar project. stringent environmental ideal case in point. As a member of the World Bank Group, IFC is committed to fostering sustainable economic development in developing countries through the The following table identifies MSPL's and social standard judicious finance of private sector investments. In fact, what differentiates IFC from characteristics that respond and help that the IFC required other lenders is its emphasis on sustainability. meet the IFC's Performance from clients to whom it Standards on Environmental and lent. However, we Due to this commitment to sustainability, the IFC mandates its funding beneficiaries Social performance. Also listed are to adhere to the rigorous world-class environmental and social standards. For many the opportunities for improvement considered the imposition companies, the stringent requirements of meeting performance standards on that were identified through the of these requirements Environmental Health & Safety set by the IFC act as a deterrent. Whilst considering reviews conducted by the IFC and on our Company as not potential lenders for one of our large wind farms in Gujarat, MSPL identified the IFC external advisors. We are actively just an opportunity to as a suitable lender. working towards bridging these gaps. benchmark ourselves We have hired external advisors to help identify and implement programs to meet One of the suggestions that the IFC against globally the IFC standards. IFC itself has carried out exhaustive physical assessments on a has put forth is the conduct of regarded environmental environmental and social impact and social standards, assessment at our wind farms. Wind farms in India legally do not require but also to seek out environmental or social impact new ways of improving assessments. However, we recognise our triple bottom line that such an assessment would not performance only help in meeting the IFC's conditions, but will prove to be a learning opportunity for us and other wind investors in India to better Srikar S. Bhattbhatt understand the environmental and Vice President - Corporate Affairs social implications of wind farm & Company Secretary development in India. MSPL Limited

IFC has also carried out exhaustive physical assessments on a sample set of MSPL as well as its sister company's operations.

7 8 IFC Performance IFC Performance Standard on Standard on Major MSPL characteristics: Major MSPL characteristics: Social and Social and systems, activities, processes and standards systems, activities, processes and standards Environmental Environmental Sustainability Sustainability

An Environmental Impact Assessment (EIA) covering MSPL's Health and Safety Impacts of our operations on communities mining operations has been carried out by external agencies. is limited through the establishment of effective pollution This includes risks and impacts of inter alia, ambient air quality, control and avoidance systems as described in Performance water quality, water use, noise control, ground vibration control, PS4 Community Standard 3. solid quality, biodiversity and socio-economic aspects. PS1 Health, Safety Explosives and hazardous materials are stored and Social and MSPL's mine - VIOM - has established certified Environmental and Security maintained separately within the mine lease area. Environmental and Operations Health and Safety Standards: ISO 14001 and Safety and emergency preparedness systems have been put in Assessment OHSAS 18001 that are periodically audited by reputed external place and are periodically reviewed. and certification agencies. Management A mine closure plan has been developed and submitted to the Systems Indian Bureau of Mines (IBM). P S5 MSPL's operations have not involved the disturbance or The Corporate Social Responsibility Team headed by an Assistant Land Acquisition resettlement of any communities. Land acquisitions have General Manager (AGM) consults with local community members and Involuntary generally been made in forest areas through permission from and attends to their grievances. Resettlement the Department of Forests and other Government agencies.

Our open cast mining operations have involved the removal of A comprehensive Human Resources (HR) Manual that is sparse forest cover in mining areas. applicable to all our employees, comprehensively covers PS6 Biodiversity Extensive afforestation activities are carried out in areas within aspects related to recruitment, issuance of identification Conservation the lease. cards, personal protective equipment, reporting on work and Sustainable Compensatory reforestation is carried out by the Forest departure, leave, over-time conditions, attendance, Natural Department, funding for which is provided by MSPL on a absenteeism, medical examinations, accidents, Resource mutually agreed basis. superannuation, grievance procedure, discharge/dismissal, Management PS2 gifts, gratification, tips, misconduct, procedures of dealing Incident introduction of invasive species during afforestation is Labour and with misconduct, code of conduct, sexual harassment, avoided. Species provided by the Forest Department are used Working punishment, redressal of employee grievances against in afforestation. Engagements unfair treatment, notices, service certificates, date of Our wind operations involve limited loss of forest cover. Our payment of wages, deduction of fines and the display of the wind project developers also undertake afforestation activities. HR Manual. MSPL employees may also make use of the Open Door Policy at the organisation and directly speak with the Chairman and Managing Director (CMD) regarding any serious PS7 The sites where we operate have not had settlements of grievances they might have. Indigenous indigenous people. People

PS8 None of the sites at which we operate in are declared as MSPL's operations are in full compliance with the Pollution Cultural being of cultural heritage. Control norms set by the State Pollution Control Board (PCB). Heritage MSPL has established and manages environmental impacts through its ISO 14001 Standard certified Environmental PS3 Improvement Opportunities: Pollution Management System (EMS). Prevention and Key elements of pollution prevention, abatement and MSPL is considering to go beyond legal requirements and conducting exhaustive Abatement monitoring include: environmental and social impact assessments at our major wind farm locations. Air emission controls and monitoring systems Effective We are also evaluating the need for conducting a more detailed community overburden management processes Network of check dams assessment study to further understand potential impacts and risks, if any, to and gully plugs Waste segregation at operations and communities that are within the regions in which we operate. disposal through PCB approved parties. MSPL has deployed a Human Rights Policy.

9 10 Committee of Directors

Mr. Narendrakumar A Baldota (Chairman) Deliberation on and resolution of material issues of the Company. Mr. Rahul Kumar N Baldota Directors of strategic investments within the investments guidelines established by the Board. governance and Mr. Shrenik Kumar N. Baldota accountability Audit Committee board structure, committees and responsibility Mr. A.R. Barwe (Chairman) Authority goes hand in hand with responsibility and accountability. At MSPL, we Review of internal checks and have had a long tradition of enmeshing authority with accountability. To this effect, Mr. Shrenik Kumar N. Baldota balances as well as internal the Board assumes a paramount role in the organisation. Its key functions are to audits. Determination of audit findings. Oversight of financial provide strategic direction and insight to MSPL. Mr. R.H. Sawkar records and disclosure.

MSPL's Board is led by the Chairman & Managing Director. Mr. M. Ravindra The Board composition is unchanged since the previous reporting period and comprises seasoned industry veterans and dynamic business leaders. It includes three independent Non-Executive Directors. Remuneration Committee Mr. Narendrakumar A. Baldota Chairman & Managing Director

Mr. Rahul Kumar N. Baldota Executive Director Mr. R.H. Sawkar (Chairman) Review of Executive Director Mr. Shrenik Kumar N. Baldota Executive Director Mr. M. Ravindra Performance and determination of their salaries. Independent Non-Executive Director Mr. A.R. Barwe

Mr. A.R. Barwe Chairman-Audit Committee Security Transfer Mr. R.H. Sawkar Chairman-Remuneration Committee and investors grievance Committee Mr. M. Ravindra Chairman-Security Transfer & Investors Grievance Committee Mr. M Ravindra (Chairman) Handling of Investors Mr. Rahul Kumar N. Baldota grievances. Oversight of securities transfer. Mr. Shrenik Kumar N. Baldota

11 12 International Council on Mining and Metals (ICMM) MSPL continues to accord the Sustainable Development Framework Principle 1: significant importance to ethical and transparent Implement and maintain ethical Corporate Governance. business practices and sound systems on the Board's roles and industry association of corporate governance responsibilities and continue to accord significant importance to ethical and memberships transparent Corporate Governance. As We continue to have a presence on Notwithstanding the economic reported in the previous year, we have some of the major business downturn, our community development incorporated good standards of associations that are relevant to our program and environmental Corporate Governance and are guided business and industries. The stewardship efforts continue to be by our 5 Cardinal Cs as well as our Federation of Indian Mineral Industry accorded due importance and vision and mission statements. The (FIMI) and the Indian Wind Power consideration by the Board. Issues Code of Conduct, to which all members Association (IWPA) are the premier related to social development and of the Board and Senior Management industry associations pertaining to the environmental responsibility are within need to comply with, clearly articulates mining and wind energy industries in the ambit of MSPL's Sustainability the values that must be necessarily India. We are represented at the Governance system that is headed by incorporated in their professional highest levels at both these industry the Chairman & Managing Director. activities and the decisions that For the past few years, the high associations. At the heart of our system for the they make. demand and supply situation in the Governance of Sustainability is the Mr. Rahul Kumar N. Baldota our iron and steel industry resulted in Corporate Sustainability Committee Executive Director is the President of windfall benefits for the iron ore that consists of a cross section of FIMI and Mr. Shrenik Kumar N. Baldota mining business. During this period, dedicated experts and members of the our Executive Director is the MSPL's Board provided directions and various departments of the Company. Vice-Chairman of the IWPA. Through insight to our executive functionaries these memberships, we play a to maximise shareholder value and [Please visit our website www.mspllimited.com and refer to Society constructive role in strengthening the ride the economic boom, whilst Management Approach Section in respective industries through lobbying maintaining absolute regulatory Sustainability Report 2007-08 for a detailed and through the exchange and discipline and standards of social discussion on the operations and functions of introduction of global best practices in accountability. the Sustainability Committee.] terms of operational, economic, social Even though MSPL is not a listed and environmental performance. Issues related to social development and company and is not bound by the The FIMI is currently in advanced requirements of clause 49 of Listing stages of formalising an India specific environmental responsibility are within the ambit of Agreement, it has voluntarily Sustainability Framework and Key MSPL's Sustainability Governance system embraced corporate governance Process Guidelines for the mining requirements as mandated under industries. Listing Agreement. MSPL's corporate During the year the global slump has In the recent past there have been governance framework has been [Please refer “FIMI and Sustainability in the Mining Industry” in the Embedding significantly affected the minerals instances where the senior most developed in accordance with clause industry. In this radically altered governing bodies of some of the Sustainability section of this report for a 49 of the Listing Agreement and this detailed discussion on this] scenario the focus of the Board and its corporate houses have failed the shows our sincere commitment to supporting committees has shifted to litmus test of accountability. This leads follow good corporate governance minimising the impact on MSPL by to a complete lack of confidence practices. The internal Audit directing the organisation's efforts among stakeholders. Committee ensures that all applicable towards greater optimisation, laws and provisions are complied with. maximisation of business relations Authority continues to be linked with and trust developed in customers an equal or greater proportion of toward securing best possible accountability and responsibility at Through these memberships, we play a constructive contracts and prices. MSPL. We have applied greater focus role in strengthening the respective industries through the exchange of global best practices

13 14 In addition to the membership of associations, we have also become a stakeholder engagement member of the Business and and issue identification Community Foundation (BCF), India in the reporting year. For over a decade, the BCF has been working towards industry associations memberships: bringing Corporate Responsibility to the centre stage within its activities and has been operating at the Mining Engineers interface between communities, 1 Association of India (MEAI) NGOs, state actors and businesses. Its focus areas are health, education, empowerment, livelihoods, marketing Federation of Indian linkages and information. 2 Mineral Industry (FIMI) Apart from providing guidance & expertise, the BCF will provide us with Indian Wind Power a forum to learn from practices and 3 Association (IWPA) activities of other business enterprises in the social sphere as well as to contribute our experiences Federation of Indian Chambers of Commerce 4 & Industry (FICCI)

Federation of Karnataka Chambers of Commerce 5 & Industry (FKCCI) MSPL believes in transparency, of stakeholders and their respective disclosure, ethical business practices issues. and equitable treatment to all the Chemicals & Allied Lenders constitute an important Products Export Promotion stakeholders. 6 Council (CAPEXIL) stakeholder group that we have In our previous sustainability report, interacted with but not formally we discussed the initial progress we identified as a stakeholder in previous Council for Fair Business among members and associated had made since 2006-07 in terms of reports. The International Finance 7 Practices agencies. MSPL's primary focus areas: identifying and categorising Corporation is a major stakeholder in education, health & sanitation and stakeholders we engage with. More this category. women empowerment fit well with recently we initiated a holistic [Please refer “Targetting Global Benchmarks: Karnataka State Council BCF's areas of expertise and activism. assessment of our stakeholder Embracing the IFC Standards” in the 8 Membership We believe that this partnership with activities and are formally identifying Embedding Sustainability section of this the BCF will help us further strengthen the issues most material to MSPL. report for a more elaborate discussion on our our community programs and share engagement with IFC.] This year marks a step ahead in our Mines Safety Association our message to other business efforts. Through reviews and Government has been categorised Karnataka enterprises on the rationale for 9 discussions with employees of the under Regulatory Authorities so as to engaging in social development. The organisation who are in regular include the various government bodies furtherance of effective community contact with various stakeholders, we and agencies that we interact with and Business & Community development and empowerment is not have refined and broadened the scope influence our business. Foundation (BCF) just a motivation, but also the goal of our partnership with the BCF. This year marks a step ahead in our efforts MSPL's primary focus areas: education, health & towards stakeholder identification and sanitation and women empowerment fit well with categorisation of issues that are of most relevance to BCF's areas of expertise and activism. both the stakeholder and MSPL.

15 16 The issues identified are a combination of matters of importance identified and Formal stakeholder feedback exercises are carried out for different stakeholders disclosed in the previous reports as well as new issues that have arisen out of further periodically. In the forthcoming year, we plan to conduct a formal employee interaction with stakeholders. satisfaction exercise in order to understand the current interests, needs, demands and aspirations of our employees.

Employees Suppliers The outcome of these thought provoking exercises has resulted in a mix of issues Customers that vary from issues that have resulted from a current or prevalent scenario to those that are inherently related to our business, regardless of external changes. Attracting & Timely delivery of Product quality and Moreover, the four broad chapters: Crisis or Opportunity? Shaping MSPL, Embedding retention of talent goods and services timely delivery Sustainability, People Development and Environmental Stewardship are the broad Dynamic work Re-assessment of Customer grievance aspects that include and detail sustainability issues, material to MSPL. environment that vendor contracts to handling fosters career assess Renegotiation of Progress on areas that were identified development opportunities for for immediate action in our previous report: cost reduction contracts Improved educational and Supplier Diversification of Provision of drinking water recreational sustainability customer base and facilities in Hospet performance identification of quality customers in Promotion of health and sanitation India Provision for improved medical facilities by providing mobile medical vans and increasing Local Regulatory the availability of doctors in each village Community Authorities Lenders Construction of a new hospital Generation of Efforts towards Implementation of employment streamlined and world-class Induction and training for teachers to have opportunities pragmatic mining sustainability competency in computers to increase policies standards across computer literacy Provision of health operations and sanitation Provision of need- Construction of bus shelters facilities based support to Credit worthiness government bodies Women's Assistance in development of roads empowerment Compliance with dynamic regulatory Improvement in entertainment facilities for Access to education; norms employees upgrading of educational facilities Improvement of educational facilities in In Progress Hospet including building of a new school

Close cooperation with Government Material issues were identified through a series of discussions with personnel departments across various levels of the organisation, with a focus on senior most management. The issues identified emerged from the confluence of stakeholder related issues as Interaction with customers to assess customer well as matters that are central to MSPL's business and thus, sustainability context. satisfaction We consider regular interaction the most effective method of engagement and we enagage with a majority of the stakeholders identified, on a continuous basis. For example, MSPL's Corporate Social Responsibility employees are in regular contact with community members in the areas in which we operate. Similarly, we interact with customers on an ongoing basis, with the levels and frequency of engagement varying with the need and importance of the interaction.

17 18

3

ECONOMIC BOTTOMLINE Introduction 1

Management Approach 2

Economic crisis or Opportunity? 2 Shaping MSPL

Pushing the Frontiers of Business 13 Pellet Plant 13 Shipping Business 14 Restructuring 15 Operations Optimisation 16 management approach economic crisis or opportunity? shaping MSPL risk & impact

the unfolding crisis and its effects on the Our business strategy and core mining industry decisions focus on responsibly increasing profit margins and thus The financial services turmoil and the maximising our ability to generate and bursting of the credit bubble last year, redistribute wealth among those has had a ripple effect leading to major responsible for its creation. The bulk of repercussions across the globe. The our workforce is recruited locally; past year has seen the world economy these employees have their roots in being suddenly thrust in to a state of introduction the local region and are also aware of turmoil. grass-roots issues and local conditions. This plays a very important The world is going through testing part in smooth and successful times. The global economic crisis has operations. We are developing an thrown a unique set of challenges and alternative energy strategy and opportunities at us. We took a hit as aggressively pursuing renewable the turnover of the Company dropped 2008-09 has been energy options as a source of regular by 30.8% to INR 17,395.3 Million as a mixed year for MSPL. and secure income as well as a means compared to INR 25,166.5 Million last of contributing to the global effort year. This was the direct consequence The first six months towards mitigating climate change. of fall in both volume by 17.89% and alone were robust. lower realisation by 17.14% in terms of Overall it has been more FOB year on year. The trigger for this negative than positive product responsibility Among a number of alarmist forecasts was the downturn in the commodity and predictions coming in from various sector during the later half of the year. We ensure that our products and services are in compliance with all quarters, the widely respected The changing economic scenario and applicable legal requirements of the International Monetary Fund (IMF), has the circumstances that we are in, play a Rahul Kumar N. Baldota markets we are present in. In the revised its forecast down significantly role in shaping our actions and the Executive Director minerals business, a product's and now expects the world economy to manner in which we operate. However, MSPL Limited environmental performance is primarily grow on average by only 0.5% in 2009. at MSPL, we have also developed and linked to natural resource conservation. It has further estimated that growth in are deploying our own long-term plans To this end, we have an established emerging economies will slow to an that we are committed to with suitable R&D program that also leverages on average of 3.3% in the same year. The modifications. We are moving in to new external factors that represent the external expertise, which is aimed at scale of the crisis, in terms of its depth businesses and bringing about change through which MSPL is to maximising resource productivity. and breadth, and the nature of its systemic changes within the sustain itself. It also showcases the impact on inter alia, development and organisation. progress on the changes that are being In the reporting period, there were no employment has made it an introduced through various programs significant incidents of non-compliance extraordinary event. Uncertainties This chapter presents two major at MSPL, in order to achieve our goals with regulations and voluntary codes regarding the trend, rate and timing of sections: the implications of the global and long term plans. concerning the product & service the recovery abound. The forecast for economic crisis and other prevailing information and labeling. the mining industry in the backdrop of

1 2 Effect on MSPL and the Indian mining industry

IMF has revised its forecast down significantly In 2008, the global steel production quantum of iron ore imports of around and now expects the world economy to grow on entered into a new phase due to the 444 Million Tonnes in 2008. global economic downturn in the average by only 0.5% in 2009 second half of the year. Output cut by Although Indian iron ore exports to major steel producing countries China rose slightly in the middle of the caused global steel production to fall year on account of the reopening of a the ongoing crisis is grim. The Fraser crisis impacts on the mining business number of steel mills that were closed Institute's Survey of Mining has been the loss of thousands of for the first time in last ten years in Companies: 2008-09 reported that the livelihoods across major mining majority of mining executives believed regions, the world over. that 30% of exploration companies During the year the global steel production was would go out of business. 1.329 Billion Tonnes as compared to 1.351 Billion The present day fundamentals are not Tonnes in the previous year, a reduction of 1.6% strong – the mining industry ultimately caters to the needs of primarily, the during the 2008 Beijing Olympics, automobile and consumer goods export numbers are significantly lower industry - both of which have been than those of last year. Due to sluggish badly hit. The largest segment of the growth in China and a drop in its steel mining and metal industry - the iron consumption Indian iron ore exports to and steel segment that accounts for that country consequently suffered. over 60% of the industry's market value, has been strongly impacted. More significantly, iron ore prices The iron and steel industry is also have crashed dramatically from peak MSPL's principal customer. The Employees are integral prices in the previous year - this has challenge for our industry is thus, to had a significant impact on the sustain through the change that's to our Company. 2008. During the year the global steel margins of export oriented Indian swept the world economy; the Our people have been production was 1.329 Billion Tonnes mining companies. Current prices companies that are able to dig deep with us through good as compared to 1.351 Billion Tonnes in hover around USD 50 per tonne as and unearth latent value will emerge and bad days. the previous year, a reduction of 1.6%. compared with an estimated average from it stronger. At the same time the crude steel and peak selling price of USD 100 and We intend to retain production of China, the largest steel USD 200 per tonne respectively, in the So far, the typical industry response our people producer in the world, increased by 12 previous year. has been to adopt levels of production Million Tonnes to a total of 501 Million (to bring production in line with Tonnes from 489 Million Tonnes demand) as well as to trim costs representing a growth of 2.6%. through cutting back on capital Narendrakumar A. Baldota However, the pace of growth fell by expansions and reducing employee Chairman & Managing Director almost 14.5% as compared to growth costs through salary cuts and MSPL Limited & Baldota Group in the previous year. During 2008 the Stocks are not moving downsising. Among the most prices of steel products fell to the level from the ports. At the significant fall outs of the economic of first half 2006 in the major markets. This has had huge impacts on our year end, stocks have industry and Company. piled up in various ports

The largest segment of the mining and In terms of global iron ore output, it metal industry - the iron and steel segment that grew by 700 Million Tonnes from 2001 to 2008 with total global iron accounts for over 60% of the industry's market value, ore output in 2008 reaching 1.90 Rahul Kumar N. Baldota has been strongly impacted Billion Tonnes. China continued to be Executive Director MSPL Limited the largest steel producer and it retained its top position with largest

3 4 Current prices hover around USD 50 per tonne as Mining Statistics compared with an estimated average and peak selling 2008-2009 (MT) price of USD 100 and USD 200 per tonne respectively, Production 2,735,554.00 in the previous year On other counts, the economic Purchases 1,084,433.00 uncertainty has also impacted foreign exchange rates and increased volatility The crisis has given buyers of iron ore January. However, pricing pressures Turnover 3,595,295.00 – this has thrown up its own set of an opportunity for some hard emerged in February and continued till challenges for an export-oriented bargaining. In the recent round of March 2009. If the downturn does not Distribution of sales company such as ours. negotiations for price contracts, the show any signs of ameliorating, the 2008-2009 largest buyers, primarily steel makers prices of iron ore may slide further and Export (MT) Motivated and disruptive, political from Japan and China, bargained hard along with other iron ore exporters, interference in the operational aspects for price cuts of up to 40%. There have MSPL will be significantly impacted. Export (China) 3,583,614.00 of mining in the region in which we been instances where Indian iron ore operate has also added to the risks and There are also certain factors that will exporters have been faced with obstacles that we currently face. The improve the situation. The Chinese Distribution of sales payment defaults. Fortunately, our political scenario is a barrier to the Government announced a USD 586 2008-2009 unwavering product quality as well as honest and sustainable business Billion stimulus package that was Domestic (MT) the long and credible relationship that (Karnataka) model consciously developed at MSPL. has been established and nurtured aimed at infrastructure development in China – a move that seems to have In general, the profitability and between our customers and MSPL has Janki Corp 4,062.21 ensured that we do not have to suffer already begun to benefit the steel Limited operational aspects of wind energy from payment defaults. industry. Information about the last businesses have been unaffected by quarter of FY 09 indicates an increase Kirloskar 4,000.99 the economic crisis. This is largely Ferrous Limited The three big iron ore exporters from of about 18.8% year-on-year, albeit at because the wind energy business Brazil and Australia – Vale, Rio Tinto 35% lower prices in iron ore imports. which has no input resource costs, but Hare Krishna 2,628.92 and BHP Billiton – have been forced to Based on this information and other Metallics only fixed maintenance costs, is not a enter the spot market, which had thus indicators, there are pointers of a subject of global economic forces. far been restricted solely to Indian potential upturn in the steel industry Shirdi Sai Steels 988.65 However in terms of the global Carbon Pvt. Limited suppliers. Spot iron ore prices reached by the end of 2009 or the middle of market, this has been affected by the record lows in November 2008 but 2010. Moreover, steel prices seemed Total 3,595,295.00 economic slump and thus the revenues revived marginally in December and to have bottomed out. from wind CDM projects have been Per Ton affected by the lowered global CER Iron Ore realisation prices. MSPL Financial Performance Turnover Moreover, India is an energy starved 2008-2009 (INR million) (Quantity MT) 3,595,295.00 country in which, as per the World Bank, over 40% of the country's Turnover population does not have access to Revenues 18,430.37 16,470,414,613.00 (Amount INR) electricity. Thus, there is a huge gap Operating cost 15,477.97 between the demand and supply of Average per tonne power in the country. For MSPL, capital Employee wage and benefit 331.31 4,581.10 realisation expansion – linked with the availability Payment to providers of capital 261.86 of funding – is the major area that has been impacted and slowed on account Payment to Government 1,012.94 of the economic crisis.

Earning per share 24.63 MSPL did not receive any significant financial assistance from the Net worth per share 167.20 government in the reporting period. Shareholder fund 12,842.17

5 6 response & opportunity

The unfolding scenario has forced us A major disadvantage The crisis has also made us rethink our The economic turmoil to analyse all aspects of our business strategy to export. The Chinese market and search for measures that can be that Indian exporters to will remain the predominant has prompted us to taken to reduce costs and yet China have in destination for our products, we will scrutinise our cost maximise returns. Production has comparison to those also identify premium customers in the structure and assess been impacted due to many factors, from Australia and Brazil Indian market that are interested in it for potential cost the most significant of which include is the difference in purchase of our products where sales the reducing demand, lowering prices, realisation is higher. reductions. Through and political interference in regional logistics costs. Indian the renegotiation of mining operations. exporters have little to contracts with equipment Attributes of a For MSPL, the largest cost component no control over costs and service providers, short-medium term is associated with logistics of our particularly related to savings have been made. logistics/marketing minerals business. Other costs rail freight from mines components include extraction and strategy to cope with to the ports. emergent economic processing operations for our mining Our logistics costs make business and operational overheads scenario: it difficult to compete on Manoj Kumar Agrawal for our wind farms. Due to this we are Vice President - Material faced with a paradoxical challenge – pricing in a market where MSPL Limited logistics cost – the component that is prices have tumbled Lobby through industry most significant to our cost structure – 1 associations with railways for is largely out of our control. Rail reducing high freight rates freight, port storage and handling targeted at iron ore products costs are controlled by the Government Rahul Kumar N. Baldota Maximum use of low-lead and the respective authorities. Rail Executive Director distance ports and reduction freight rates have not reduced and MSPL Limited 2 continue to remain extremely high. in supply chain losses to The challenge is in Through industry associations, we reduce costs getting our products have taken the lead and presented the from the mines to the Increase in domestic sales, case to the Government to consider customer at the rationalisation of rail freight rates. 3 wherever higher sales However, this is a slow process. In the realisations are possible least cost – this requires interim, our response has been to close association further optimise transport over land Development of a market for of the marketing and value added iron ore products and maximise the use of the nearest 4 logistics teams. available ports, viz Chennai and Goa, for market diversification and that offer the shortest turnaround increase sales realisation These two aspects of times and minimal storage costs. The business sales of high rail prices have also forced us to contractors), we have focussed on iron ore at MSPL are resort back to road transport of further streamlining processes. We In the larger scheme of things, we seamlessly integrated minerals for the time being. have also been able to renegotiate contracts with our vendors/suppliers believe that the downturn actually and increases For our mineral extraction and for lower cost supplies and represents an opportunity for us. our flexibility. processing operations as well as for maintenance. Energy conservation Although the crisis is deep and the our wind farms (operated by third party also continues to be a focus area. timing of its end is uncertain, business fundamentals have not undergone any change whatsoever. We are certain that there remains a tremendous long K. K. Kumar term scope for infrastructural Vice President Production has been impacted due to reduced Marketing and Logistics development across the developing MSPL Limited demand, lower pricing, and political interference in world. This will require steel and other regional mining operations raw materials.

7 8 International Council on Mining and Metals (ICMM) Sustainable Development Framework Principle 02: during the economic heydays will be available at very modest valuations. Integrate sustainable development We believe that companies that seize considerations within the corporate clearly identified opportunities to sustain their development in the decision-making process downturn will emerge strongest from the global crisis.

In terms of our energy business, over the years, steady investments in wind energy have been made by MSPL. We have clearly understood and accepted renewable and alternative energy as When the Indian markets the true future of energy. In fact, in the current scenario, our wind business opened up in 1991-92, has stood us in good stead due to the companies like MSPL consistent revenues generated from it. took time to understand We continue to target an installed wind the risks and energy capacity of 400MW by 2012 at opportunities that had the Group level. been thrust on us. Moreover, the Government's Our added maturity positive stance has attracted further investments in the renewable and experience with energy sector. global markets and The revenue from wind power division of the Group competitors places us as a whole was maintained and in fact was higher in much better stead by 8.5% at INR to seize the opportunities that show up in these Wind energy tariffs Our wind installations so far have been and this has further enthused us to volatile times across Indian states across Indian States based on wind constantly step up our wind have been increasing. potential, State Government policies and investments. The dedicated wind It is encouraging that availability of land. In searching and division of our group has given us the Shrenik Kumar N. Baldota deciding on potential wind sites, we leverage to concentrate on wind at par the Government is observe that Government policies and with our mining businesses. The Executive Director taking steps to promote MSPL Limited tariffs are favourable in the states of revenue from wind power division of renewable energy Gujarat and Rajasthan but the Plant Load the group as a whole was maintained Factor (PLF) is low in these states. In the and in fact was higher by 8.5% at states of Karnataka and Maharashtra we INR. 924.8 Million as against A period of crisis can provide an find that the major challenges are in INR. 852.2 Million in the previous year opportunity to bring about not just K. V. S. Subramanyam terms of land clearances by the Govt. mainly because of sale of certain change, but a transformation, more GM - Power authorities. Thus we face constant Certified Emission Reduction (CER) for rapidly and at lower costs than in a MSPL Limited challenges between securing good wind INR 47.8 Million. The wind division is period of prosperity. Potential sites, conducive policies and procedures constantly engaged in constructive acquisitions that were considered along with our desire to expand our wind discussions with manufacturers, installations. service providers as well as policy makers. Our experience in large wind Our Group's 125 MW wind power project A period of crisis can provide an opportunity to bring investments and constant follow up was one of the largest wind power with this sector have placed a about not just change, but a transformation, more project to get registered with UNFCCC as responsibility on us to participate and rapidly and at lower costs than in a period of prosperity a CDM project way back in September exchange our experience with other 2006. The sale of tradable carbon credits corporates and interested wind have established a supplementary developers as well as providing inputs revenue stream for our wind division to policy makers at the national level.

9 10 wind statistics MSPL Wind Energy Unit 2004-05 2005-06 2006-07 2007-08 2008-09

Opening capacity MW 20.9 81.85 111.6 111.6 127.8

Addition in capacity MW 60.95 29.75 0 16.2 0

Closing capacity MW 81.85 111.6 111.6 127.8 127.8

Units generated per MW KWHr 815,064 1,589,400 2,309,005 1,962,285 1,996,274

Lakh 667.13 1,773.77 2,507.8 Total units generated KWHr 2,576.85 2,551.23

Capex during the year INR 2,440 1,500 Nil 1,000 million

We believe that solar energy is a necessary wind installation till date component of any 21st century energy portfolio. We are evaluating the business benefits of foraying into thin film solar cell manufacturing State District Location Capacity (MW)

Maharashtra Satara Satara 1 We are seriously considering the technology holds tremendous Dhule Dhule 20 diversification in our alternative energy promise for the solar power industry. business. We believe that solar energy We have begun exploratory is a necessary component of any 21st discussions with technology providers Karnataka Chitradurga Joimatti 11.25 century energy portfolio. At this point, for partnering in manufacture of solar Chitradurga GR Halli 27.10 we are evaluating the business cells. Davangere Jaikaligudda 21.25 benefits of foraying in to thin film solar Bellary Soggy 25 cell manufacturing. The existing solar Apart from investing in solar energy power market is dominated by segment in the short term, we will also Davangere Harihar 6 conventional silicon photovoltaics. consider other renewable energy investments in the longer run. As a However, this technology has not been Gujarat Kutch Surajbari 16.2 able to garner much of the market due start, we are in the process of setting to high up-front costs, space up of two run of the river hydro power Total 127.8 constraints and other scaling plants in Karnataka in the forthcoming problems. The fundamental difference years. between thin film technology and We hope that through these ventures, conventional photovoltaics is the particularly in the field of alternative amount of material needed. At this energy, we will play a role in changing Through diversification, we will play a role in changing point, manufacturing costs, efficiency the energy scenario in India in terms the energy scenario in India in terms of enabling and reliability of this technology are of enabling greater access to energy the major barriers to overcome. and striving for a diverse energy mix greater access to energy and striving for a Nevertheless, we are convinced that and increasing self-sufficiency. diverse energy mix and increasing self-sufficiency

11 12 overtly selective, mining firms that are pushing able to provide value added products shipping business have a clear competitive advantage. the frontiers of Customers are inclined to demand At MSPL, our mining business has been products with higher iron centred on the export of iron ore. We We followed a rigorous business concentration and superior physical have hitherto been dependent on selection process properties. contracting ships from external parties for selection of our for the movement of material. With the pellet plant Iron ore pellets are hardened balls of benefit of having had many years of shipyard for construction iron ore that have enhanced physical experience of handling overseas of our ships. In addition Our in-depth understanding of the properties and are an ideal feedstock shipments of iron ore, logistics has to seeking the best iron ore mining business had for blast furnaces and have the added evolved as an area of core competence. quality ships at convinced us that we have the ability advantage of being easy to store and With prior experience and a view to to differentiate our products and transport. Thus, the setting up of the synergising Group's diversification in competitive prices, maintain a greater control over the pellet plant is a step in ensuring trading and manufacturing, the we also made sure that product value chain which offers us a greater and more consistent input company decided to pursue shipping the shipyard was distinct competitive advantage, product quality for our customers. business. accredited by reputed particularly in tough times. Over the Along with the beneficiation last few years, we have carried out the capabilities that we already posses, Keeping this in mind, we considered it certifying agencies synergistic to set up our own shipping fleet and wield greater control over the logistical aspects of our business. The We have the ability to differentiate our products and Baldota Group is also moving towards Suresh Kumar maintain a greater control over the product value chain the areas of steel manufacturing, which GM - Shipping which offers us a distinct competitive advantage, will involve significant use of ocean MSPL Limited freight for import of fuel. Also there is particularly in tough times a large amount of raw material movement in and out of India. Each of ground work for the forward integration the pellet manufacturing systems will these factors viz our experience in Diamond Pte Ltd (MDPL) as a wholly of our iron ore mining business. The help guard against future price shocks owned step down subsidiary in plan to set up a 1.2 MTPA pellet plant through clear product differentiation Singapore on 29th July 2008. Orders at Koppal, Karnataka is under way. and improved quality control. have been placed for four Post- Through this pellet plant, we will Panamax size dry bulk carriers benefit from the moderate pellet Land procurement for the plant has (92,500 DWT) at reputed shipyards in production capacity in India and thus been completed and clearances from China. The delivery of the first ship is establish a presence in the the State Pollution Control Board expected towards the end of 2010 and downstream iron and steel sector in (SPCB) have been obtained. We target the others in a staggered manner over the Indian market. to commence production of pellets by a period till 2011. Singapore was 31st December, 2009. Once the pellet chosen for setting up these companies Although the iron ore from our mine is plant is fully operational, we expect to due to the credibility that is attached of a very high quality, there exist create direct employment opportunities to the country and the ease with which variations across the mine strata. to over a thousand people. logistics, upcoming steel business's stock market listing is possible. The Thus, there is a need for ore commissioning of the first ship will processing capabilities to ensure that These are the first in a number of major need for ocean freight and the steps that MSPL and the Baldota Group tremendous exim movement of cargos mark a definitive step taken towards customers are provided with a de-bottling the logistical hurdles consistent quality of iron ore products. is taking to change or recast MSPL and from India has convinced us of the its Group entities to ensure enhanced business logic, synergism and the currently faced by us due to our Particularly in difficult times, when dependence on third parties. This is a pricing is tough and customers are and long term value creation. prudence of having a presence in the shipping business. thoroughly considered plan and forms part of our strategy to develop In the reporting period, MSPL competencies and facilities that The 1.2 MTPA pellet plant coming at Koppal, Karnataka incorporated MSPL Maritime Pte Ltd strategically fit the MSPL's is a step ahead in ensuring greater and more (MMPL) as a 100% subsidiary in transforming and expanding business consistent input product quality for our customers Singapore on 7th May 2008 and MSPL profile.

13 14 restructuring

Since its inception, MSPL has been a that are commensurate with business family run business. The promoters development plans being Through this process, have handled the day-to-day activities implemented. Each year, the plan and we have identified: of running the company. As the ground requirements are assessed and business grew, additions to our human actions taken in order to meet the and physical infrastructure were made needs of the evolving business. Non-value adding activities on a need basis. 1 and potential for greater An important aspect of this process is streamlining of processes With the forward integration plans of that the promoters will move away from MSPL, we soon realised that the hands on business operation and will Opportunities for organisational structure needed to be assume a solely strategic role in 2 improvement in inventory strengthened to meet the demands of business thrust areas and orientation. management business growth. The integrated steel Our business has Towards these, we are bringing in plant as Aaress Iron & Steel Plant grown at a fast pace. highly experienced and qualified Potential for improved (AISL) a company under Baldota The organisational professionals to take up business 3 controls around asset Flagship and MSPL Pellet Plant will management and operational roles to management require the additional manpower structure to support such handle the existing and emerging comparable to the employee strength growth was urgently dimensions of our business. Areas for increased IT of MSPL. Further, the skills and needed. It was prudent 4 utilisation experience of the personnel needed for us to assign for managing and operating the new operations businesses will also be of a different responsibilities to nature to the skills of our existing professional experts optimisation employees. so that we can It is the belief of the MSPL administration; information technology Clearly, we needed a robust and well concentrate on strategy management that in order to develop and; legal and secretarial compliance. developed support structure to formation for and operate new aspects of our We have already initiated to take steps facilitate the evolution of MSPL that business, it is necessary to review and business development. on each of these fronts and are setting will have an increasing presence, optimise existing business systems up better controls for improved process directly or through its subsidiaries, in and processes. In any market efficiency and functional alignment of downstream minerals, logistics, and condition, process optimisation and various business aspects. It is diverse energy businesses. lean operations result in improved important to note that under the current Shrenik Kumar N. Baldota business performance and best Executive Director economic circumstances, the conduct prepare us for business changes and MSPL Limited of this exercise has stood us in good transformation. stead to implement efficiency Mindful of this, MSPL, in the reporting improvements that will make us more period, engaged world renowned resilient to the adverse external We are committed to We engaged reputed consultants to consultants to carry out a economic factors. help us better understand and chart the organisational comprehensive process review that our present and evolving human In hindsight and in light of the restructuring process. included a two phase process audit of resource and infrastructural abilities economic turmoil that has spread so its mining and wind energy MSPL is committed to and needs. We embarked on a journey quickly the world over, the decision to businesses. employing best in to create and execute a step-wise plan undertake an exercise as significant as class business practices to reorganise and augment our human High resolution tests for process this was remarkably prescient; it has and personnel resources to meet the needs of our efficiency and effectiveness; financial clearly given us a competitive dynamic business. Through this reporting and; legal compliance were advantage. process, areas of immediate concern carried out. All significant processes of This process has been one part of the and improvement have been MSPL were covered through this larger plan to enhance and reshape identified. A time based plan has been exercise, including mining and Rahul Kumar N. Baldota MSPL and its subsidiary businesses in devised that charts the measures – in processing; marketing and logistics; Executive Director the coming years. The exercise carried terms of augmenting of infrastructural wind energy; finance and accounts; MSPL Limited out will help gear us for the change in abilities, human resource procurement and inventory MSPL that is being driven from within. requirements and support functions - management; human resources;

15 16 MSPL LIMITED SUSTAINABILITY REPORT 08-09 4

ENVIRONMENTAL BOTTOMLINE Management Approach 2

Environmental Stewardship 2 Waste Management 5 Air Emissions and its Management 7 Water Usage, Waste Water 9 and its Management Noise Levels and its Management 12 Biodiversity Conservation 13 Energy & Emissions 16 Innovation- Progress in 18 Research & Development (R&D) management approach

The ethos of managing and reducing legal compliance to environmental the environmental impacts of our regulation is non-negotiable at MSPL; operations is embedded in our our track record shows that our business psyche. We have integrated standards commonly exceed comprehensive management systems mandated requirements. into our operations to monitor environmental impacts. We periodically conduct assessments of our systems and performance measures to ensure environmental performance. Based on these assessment reports we plan intervention strategies to reduce water and energy consumption and manage overburdens and waste. Furthermore,

environmental stewardship International Council on Mining and Metals (ICMM) Sustainable Development Framework Principle 06: Seek continual improvement of our environmental performance

United Nations Millennium Development - Goal 7 Ensure environmental sustainability

Environmental Management has been responsible and keen to safeguard the the core of our sustainability initiatives environment for the sustenance of our and an integral part of our mine and future generations. Our management strategy and plan. Being environmental policy, is a constant in a business that is directly dependant reminder of our commitment and on natural resources, we are pledge to preserve the environment.

1 2 We continuously strive to address and mitigate negative impacts, in line with global initiatives like Kyoto Protocol We have mechanised our mine and have adopted and climate change. We are phasing state-of-the-art technology that has reduced manual Awareness out of Ozone Depleting substance as intervention in our mining activities of environmental mandated by the Montreal Protocol. responsibility We have implemented the ISO 14001 commenced along with Environmental Management System at our VIOM operations. This demands our operriskations. & impact rigorous documentation and Since inception of our implementation procedures to be in activities we have place, triggering a chain of process worked alongside for improvements. mine site rehabilitation Major operations and have continued leading to significant and improved our impacts from any efforts over time as mining operation the technology, include: community expectations and legislation Land use for mining and have advanced. infrastructure development We have mechanised our mine and was to the tune of 3,86,651.2 Mt, Displacement of persons have adopted state-of-the-art while 3,617 Nos. of relay and other technology which reduces manual detonators were used. top soil removal Srikar S. Bhattbhatt intervention during mining activities. Through our systematic planning and Vice President - Corporate Affairs drilling and blasting The down hill conveyor system has & Company Secretary reduced the need for ore extraction methods, impacts from our mine operations on air, water, land and MSPL Limited overburden dumping transportation from the mine area to the loading station through road, thus biodiversity have been kept to a minimum. Apart from our in-house mineral beneficiation reducing air pollution as well as diesel efforts to encourage planning, We have been involved in large-scale usage in trucks. Moreover our water usage dependence on road transportation preservation and regeneration of the mining operations for generations; environment and ecology of mines, we inevitably our operations have has further been reduced by switching toxic / contaminated waste present an environment award each environmental impacts. We proactively over to the rail mode. water discharge year to mines that are adjudged as the address aspects of our operations at The raw materials used during the best in their efforts to integrate every stage and act to mitigate and mineral transportation excavation, extraction and ore environmental concerns in their mining minimise such impacts. Our transportation processes are plans. We have systematic plans to environmental management system is electricity, diesel, fuel oil, grease, and meet the closure requirements of all focused on continually reviewing, explosives. operations when required, in line with preventing, mitigating and [For the quantum of energy used kindly refer national and international ameliorating adverse environmental section Energy and Emissions.] requirements such as ICMM, etc. impacts. We comply with all stipulated laws and believe that every little In terms of other materials, the total action we take today would help us amount of fuel oil and grease used in now and in the future. the current year at VIOM was around 56.13 KL and 3326 Kg respectively. The quantum of explosives used included 35,975 Kg of slurry Conscious of the impacts, we proactively address explosives, around 1,29,300 Kg of aspects of our operations at every stage and act to other explosives like Ammonium Nitrate and 4,13,763 Kg of Liquid mitigate and minimize impacts Oxygen explosive. Fuse material used

3 4 waste management

The major sources of waste from mining different tree species. Also seeds are Pollution Control Board. The other activities are that of overburden or strewn across dumps with higher wastes form our operations include mine waste that is continually potential to foster germination. These cotton waste that are also collected generated during mining. Our mining steps conserve soil erosion and and disposed appropriately. operations are carried out in a mine prevent run off and siltation of valleys area of 347.22 Ha, under reserve forest and nearby water bodies. We have also We provide safe storage and disposal land that have been leased out to us by constructed bunds to arrest boulders of residual wastes and process the government. The lease procured from rolling down. Active dumps are residues. We strictly adhere to the includes an additional 3.56 Ha for also terraced immediately and Hazardous Wastes (Management and approach roads to the mines, totaling plantations undertaken for quick Handling) Amendment Rules, 1989 of the leased area to over 350.78 Ha. stabilisation. MoEF, India for the use, handling & management and transport of all of our of waste oil generated from VIOM was hazardous wastes. We keep a strict around 1.25 KL. vigil on the implementation of correct Our dumping of waste material in non ore bearing and safe procedures. This has resulted areas is carried out as per approved mining plan. All wastes are handled as per in zero spillages of oil or chemicals in regulations and disposed to recyclers our mine. Old dump yards are terraced into different platforms authorised by Karnataka State and are planted with tree species

Over the years, the top soil removed waste oil from reef section has been brought down to reclaim the float ore mined (VIOM) area. This has transformed a stretch of barren area to lush green land. litres Other wastes include scrap like metal, 1400 rubber and tyres. These are generated 1200 from activities including the use of 1000 equipment and machinery. These are 800 segregated and kept at specified 600 locations until they are responsibly 400 This necessitates our constant efforts disposed to government certified 200 to manage mine waste and also agents. 0 rehabilitate areas of forest land that Liquid wastes in the mine area include 2006-07 2007-08 2008-09 can be productively used, before waste/spent oil that is generated from handing over to the forest department. industrial operations using We engage excavators to remove waste mineral/synthetic oil as lubricant in material and dumpers to transport the hydraulic systems and other waste to designated dumps. Our applications. This is the only category dumping of waste material in non-ore The waste oil from the mine site is collected in of hazardous waste (as per KSPCB bearing areas is carried out as per norms), that we generate. The waste leak proof containers and stored in designated approved mining plans. oil from the mine site is collected in storage area. The quantum of waste oil generated Old dump yards are terraced into leak proof containers and stored at a from VIOM was around 1.25 KL different platforms and planted with designated storage area. The quantum

5 6 air emissions and its management The annual average of SPM and RSPM were 3 3 Mining activity involves removing the found to be 278.60 µg/m and 65.86 µg/m and top layer of soil to access ore and thus 3 that of SO2 and NOx monitored was 31.87 µg/m disturbs the soil leading to air 3 pollution. and 36.52 µg/m respectively

undertaken on a rotational basis authorisation to operate. The annual across monitoring locations in mines average concentration for SPM and The sources of 3 and EOUs. Monitoring is carried out RSPM was 278.60 µg/m and 65.86 air pollution in a drilusling,ing Central blastin Pollutiong, ore C sontrolcreening, Board segregation,3 transportation and storage. mine area are from µg/m respectively. The annual average (CPCB) approved methodology and of SO emissions monitored was 31.87 following activities: 2 equipment. The collected samples are 3 generally observed to be in high µg/m while NOx emissions stood at analysed at our laboratory. Monthly 3 concentrations in mine areas. SO2 and 36.52 µg/m . averages are tabulated and records drilling NOx emissions emanate from the combustion of fuel, predominantly maintained. These records are also Our initiatives in the mine area have submitted to the CPCB/MoEF on a been to curtail pollution levels blasting from transportation activities in mining areas. These are also monitored along yearly basis to procure the especially that of particulates. We employ a wet drilling process and ore screening with particulates in the mine area and have been found to be below sprinkle water for dust suppression on segregation, stipulated levels. The usage of Diesel a regular basis. Water tankers regularly Generator (DG) sets for back-up power sprinkle water on all haul roads. For transportation and in the mine area is also a source of air common roads used by other mines, pollution; however all our DG sets have we have, mutual agreements to ensure storage chimneys with stipulated heights so that water sprinkling is carried out on a that pollutants can disperse high into sustained basis on every non paved transportation corridor. Spraying of water is also carried out near Hopper, We have 9 ambient air quality monitoring locations where the above pollutants are monitored on an 8 hourly basis, twice a week covering all ambient air quality four seasons in a year in mines and EOUs

(VIOM, EOU 1 & EOU 2) 2007 - 2008 2008 - 2009 Re-suspension of dust from unpaved the atmosphere. These generator sets CPCB Annual Avg. Std µg/m mine haul roads due to transportation also have enclosures to absorb noise. 3 360 activities (of heavy earth moving 350 Apart from complying with mandated 285.82 278.60 equipment such as hydraulic 300 excavators, dumpers, loaders etc) is legislation of the Air (Prevention and 250 the predominant source of Respirable Control of Pollution) Act 1981 by the Suspended Particulate Matter (RSPM) Central Pollution Control Board, we 200 and Suspended Particulate Matter monitor air pollutants (for criteria 150 pollutants) namely RSPM, SPM, SO 120 (SPM) pollution. 2 100 and NO . We have 9 ambient air 65.86 57.35 x 50 Respirable Particulates less than 10 quality monitoring locations where the microns in size, causes adverse 0 above pollutants are monitored on an SPM RSPM impacts on the respiratory system. 8 hourly basis, twice a week covering Particulates (RSPM and SPM) are all four seasons in a year. This is

7 8 water Water is consumption The objective of beneficiation is to improve predominantly the iron ore grade from 58% to 64% iron with used for the (VIOM) minimum of loses following purposes: m3 14220 15000 loading points and dump yards for dust sprinkling for dust 12740 water usage, 12500 suppression. Water is also sprayed suppression on haul roads before and after blasting. waste water and 10000 its management reef workings and dump yard 7500 Since all our mining equipment are as 5000 per latest Euro II norms, emissions watering our plantations from them are well within stipulated 2500 levels. Six wagon drills have been horticultural activities and 0 2007-08 2008-09 replaced by Top Hammer Hydraulic for in-house consumption (Tamroch Pentera 1100) drills which drill 7-8 times faster at lower cost per meter consuming lesser fuel and thereby reducing air pollution. This system also employs an in-built wet drilling system & dust extraction system which reduces air pollution levels drastically. Being close to the Tungabhadra River, We also transport ores by covering there is no dearth of water in the trucks with tarpaulins to avoid Hospet region. However our need for spillages and fugitive dust emissions. water is comparatively low as we employ a dry mining process. Only our Export Oriented Unit (EOU-II) uses water for beneficiation process. Ores from our other mines including VIOM that require beneficiation are processed at this plant. The objective of beneficiation is to enhance the iron ore grade from 58% to 64% iron with The total amount of water used in the negligible. Around 60,000 Tonnes of minimum loses. The ratio of ore to current year for the EOU-II alone is tailings are collected from the settling 3 water used is 1:1 in our beneficiation nearly 54417.16 m . Water usage at tank annually and stored for future plant. For maintaining this ratio, only the EOU-II (beneficiation plant) is use, as the tailings have around 50% 20% of fresh water is added along with calculated through usage, that is of iron content. 80% of water that has been through calculations of ore processed re-circulated in the system. to water required (1:1 ratio). Efforts to The water consumption at VIOM in the 3 have systems which monitor actual current year was 12740 m as opposed Fresh water requirement for 3 consumption of water at the EOU-II 14220 m in the last year. The total beneficiation is sourced from five bore plant are being planned. The resultant water consumed this year was wells that are situated in and around 3 tailings from the beneficiation process 67157.16 m (inclusive of VIOM and our EOU-II plant. Water consumed at are settled in a settling pond, thus EOUs). In the previous report water our mine is procured from outside. waste water from this process is consumption of EOU-II was excluded.

Around 60,000 Tonnes of tailings are collected from The bunds are constructed with sufficient height and the settling tank annually and is stored for future use, length to prevent storm water from flowing down the as the tailings have around 50% of iron content hills from the mining areas 9

10 Also in our efforts to address soil off to check dams so that silt deposits erosion and water pollution, we have are collected and removed during constructed gully plugs and check summers. Collected sediments are bunds across the streams flowing segregated and useful products are through the mine lease area, to contain recycled and used for strengthening run off. So far we have 54 gully plugs bunds to level the low-lying areas. and 25 check bunds. During rainy season water from check bunds is collected both from upstream The philosophy followed by the and downstream and analysed for company is to see that the entire run physical and chemical parameters. off is contained within the lease area and only clear water is discharged. The bunds are constructed with sufficient noise levels and height and length to prevent storm water from flowing down the hills from its management the mining areas. Moreover, retaining walls are constructed around mine dumps. The height and width of these retaining walls is increased as the Export Oriented Unit - II with dump progresses. We have also carried out desilting & increasing the height of Wet Beneficiation process for Ore Fines the existing earthen bunds /gully plugs in the mine lease area. Such rain water harvesting measures increase ground EOU-II, located near Ingaligi The slurry again is fed to the water level and also help plants to village of Hospet taluka has two classifier where we get two end retain the moisture. The water plants - a dry and a wet plant. The products - 1. Classifier Sand and accumulated in these Noise levels in our mine area are wet plant, which utilises water for 2. Classifier Overflow. earthen bunds / gully plugs are being caused by blasting, drilling and the beneficiation process has a The overflow is further fed to utilised for suppressing the dust & movement of trucks. Noise levels are capacity of 250 Tonnes per hour. Hydro-cyclones to recover watering the plants in the mine regularly monitored at 8 identified noise Here the raw material (-10mm valuable product and the tailing premises . These measures have also generating locations. The levels fines) of about 58 to 60% Fe grade is disposed from thickener reduced the purchase of water from monitored were observed to be within fines is received from different allowing the material to settle in external sources. the stipulated KSPCB standards. mines and line blended and ponds. beneficiated to get products as We have provided garland drains to To protect workers from auditory per customers’ satisfaction. The products are then routed to collect surface run off from the impacts due to high and continuous respective stocks through belt over-burden dumps and other dumps noise levels, key personnel who work The material is fed to the plant conveyors to be shited to the during monsoon and to divert the run continuously in noisy environments are hopper with the help of machines railway yard when required. mandated to use Personal Protective and trucks, it is subjected to Equipment (PPE) such as mufflers. Water for this plant is supplied screening with spraying water Noise levels from DG sets are also from bore wells, while recycled where two products are minimised with the help of silencers water is routed from the ponds to produced - Aggregate and 2-1mm and mufflers. For reduction of noise the system. Fraction Slurry. levels especially during blasting we employ slurry explosives and core delay devices that minimise noise pollution and also reduce ground vibration. Vibration is inevitable during the blasting process, yet we carry out blasting in a way that it minimises disturbance to surrounding areas. We have adopted, controlled and safe blasting practices which not only reduce ground vibration but also give good fragmentation.

11 12 International Council on Mining and Metals (ICMM) An average survival rate of 85% is ensured of our Sustainable Development Framework Principle 07: planted samplings, through our rigorous efforts of Contribute to conservation of watering and safeguarding methods. biodiversity and integrated activities towards afforestation, habitat approaches to land use planning development, soil management, moisture conservation and fauna protection. Our plans are to plant 20,000 saplings per annum. MSPL has biodiversity conservation pledged to continue its work in sustaining the environment not only VIOM is located in Ramanamalai hill through afforestation and related range of Gunda Forest near Vyasankere activities but also through continued village. Since our mine is located in a development of scientific pollution forest area, we realise the need to control practices and involvement in all conserve the local ecosystem and environment related issues. perpetuate the exhaustive flora and In an effort to create awareness fauna of the region. towards environment and biodiversity An authentication study on the list of conservation among children, we have species found in the region was organised tree plantation drives and have distributed tree saplings to 650 conducted in 2005 by conducting a ecology and the biodiversity of the school children of Hospet, Kariganur, Participative Research Assessment region and the tree saplings are Ingaligi, Hanumanahalli and Danapur (PRA) exercise. This exercise recorded sourced from the local forest villages. responses on the flora and fauna that department. were sighted in and around our mining area by the localites. Our rigorous watering efforts and safeguarding methods have ensured We have year wise planned activities Over the years, we have undertaken an average survival rate of 85% of our towards afforestation, habitat development, consistent afforestation activities. planted samplings. Some of the These activities began in 1976 and species of trees that we have planted management of soil, moisture conservation and since then we have being planting over include Gulmohar, Neem, Honge, also for fauna protection measures. 1.7 million trees, across an area of Agaves and Seemthangadi. In line with 240 Ha both within and outside the principles like ICMM, we contribute to lease area. Our plantations are conservation of biodiversity and carefully matched to plant native integrated approaches to land use species of trees to safeguard the planning. These have resulted in preserving the ecosystem of the region.

Concerned with the health of our neighbouring communities, we have also planted and distributed some fruit yielding and flower bearing species to attract birds and provide shelter and food for the fauna in the area. As a part of our mine management plan we have year wise

13 14 our contribution to energy & emissions SWaN and to nature conservation Also as a part of our afforestation Energy is an important environmental SWaN has undertaken various program, we have gradually planted indicator. Our prime energy conservation awareness and action trees and also encouraged plantations consumption is in our mining programs in and around Hospet. along every house and is also operations and office, where we use planning kitchen gardens in school electricity sourced form the southern compounds. regional grid. Other energy sources are campaign for that of diesel for our machinery and for ritual hunting We have distributed around 60 Kg our diesel generator sets. seeds for kitchen gardens through our SWaN representatives submitted a SHGs and 5,500 fruit plants of five The total electricity consumption from memorandum to the Honorable varieties to 1,100 families in the the grid in the current year stood at Deputy Commissioner of Bellary to adopted villages. We also provide 2,906,419 kWh. This includes issue a notice against Ritual Hunting fire wood to workers who live in the electricity consumption at the mines, during Ugadi festival. They also nearby mining camps for their EOUs and the corporate office. The total requested the government officials to domestic use, to minimise diesel consumption inclusive of our We have also financially supported patrol the entire forest areas of Hospet unwarranted cutting of trees. machinery and Diesel Generator sets at the Society for Wildlife and Nature taluka during the Ugadi festival. the mine and EOUs alone in the current (SWaN). The society has formed year was 3,037.44 KL. nature clubs and conducts various Pamphlets and posters were Thus the direct Greenhouse Gas (GHG) conservation awareness and action distributed among the villagers to emissions by the use of diesel fuel programs among youth on flora and create awareness about the amounts to 2,066.18 Tonnes of CO fauna, especially endangered animal conservation of wild animals and 2 equivalent and indirect emissions from species and species of native birds, eliminate the brutal practice of Ritual the use/purchase of electricity amounts thus inculcating the importance of Hunting. to 2,470.45 Tonnes of CO . The total preserving the environment, among 2 from these amounts to 4,536.63 the young minds. securing shelter for Tonnes of CO2 compared to 3,734

The region is home to a range of migratory birds Tonnes of CO2 in the previous year. wild animals and it is imperative for us to conserve and safeguard the The villagers have a practice of sowing fauna of the region. Inspired by the crop seeds near the bank of T.B. Dam huge success last year, we continued which hinders the nests of migratory birds. SWaN has appointed caretakers to propagate the campaign against We launched an infotainment program to keep a watch on the lagoons and Renewable energy ritual hunting during the annual along with All India Radio (AIR) - also spread awareness. Awareness and energy efficiency festival of Ugadi. Hospet to create environmental program included protecting nests of awareness among school children a go hand in hand about 10 species of birds at the few years back. This program being and we consider these backwaters of T.B. Dam. very popular as ‘MSPL's Hasire Usiru’, “our twin pillars” of we continue to assist this program that the policies regarding protecting crocodiles propagates environmental awareness sustainabrisk le& ener impactgy among children across the taluka. usage and dependence SWaN has identified potential as well as addressing breeding grounds for fresh water crocodiles and planning to stop illegal climate change sand mining from the river to protect eggs of crocodiles and turtles. Srikar S. Bhattbhatt Vice President - Corporate Affairs Through its consistent efforts and with the help & Company Secretary of the Deputy Commissioner, SWaN has banned MSPL Limited ritual hunting of wild animals by localites.

15 16 electricity energy office, we appointed an independent consumption consultant who conducted an energy conservation (VIOM, EOU 1, EOU2 & Corporate Office) audit study and have submitted a efforts report to us with recommendations to KWh 2906419 reduce energy usage and thus reduce 3000000 costs further. We are in a stage of considering these recommendations. 2500000 Based on the analysis, we would be 2000000 taking up further conservation 1664705 measures. 1500000 1000000 solar 500000 reef panel and 0 its usage 2007-08 2008-09

To meet our energy demands apart In an effort to conserve energy as well from our dependence on grid innovation - progress The total R&D expenditure as a as costs, we have taken a number of electricity and diesel generators, we percentage of total turnover of MSPL had strategically decided to install in research & measures across our operations. With development (R&D) has been 0.005%. The R&D regards to our corporate office, over completely renewable and pollution department has identified low grade the years we have taken steps to cut free energy from solar cells. We mineral and associated rocks like, energy consumption and measures installed five solar light sets of 55 In the present competitive business Banded Hematite Quartzite, Banded such as switching off lights during non watts. This initiative continues to world changes are constant both in Magnetite Quartzite, Banded Iron ore office hours viz lunch breaks, reducing provide power in our mining production and quality to meet formation, Shale, Phylite and Gabbro. the air conditioning load etc. operations. The panel with exposure human needs acceptability. Some Beneficiation tests are carried to to around 12 hours to solar energy advanced mineral beneficiation upgrade these ore to add to resource. Also to take decisive action towards produces around 3.3 kWh of power techniques are essential to energy reduction in our corporate per day. congregate the requirements of In the endeavour of zero waste mining industries and support environment. the key challenges is to productively MSPL believes in sustainable process high volumes of low grade development which is interpreted as mineral aggregate, achieve savings in diesel consumption “working in harmony with nature”. waste disposal cost, resource generation, resource conservation, (VIOM, EOU 1 & EOU2) reduction of environmental stress likely in waste disposal. KL Specific areas in To study the beneficiation technique of 5000 4838 which R&D was 4500 carried out by low grade iron ore, MSPL team visited 4000 the company: Tilden Mines of USA and Brazil during 3500 April 2008. A representative sample of 3037.44 3000 BHQ is collected from Vyasankere Iron 2500 To conserve / utilise low Ore Mines and has been sent to MCC 2000 China for continuous Bench Scale Test. 1500 grade ores 1000 The tests carried out would help us in 500 Towards the company goal of using ore waste effectively with the 0 zero waste mining least amount to be wasted. In addition 2007-08 2008-09 to the zero waste management, R&D Processing & upgradation of also gives inputs on process Banded Hematite Quartzite improvements, increasing the (BHQ) efficiency and performance of the equipment used in production.

17 18

5

SOCIAL BOTTOMLINE Management Approach 2

People Development 2

Community Development 11

Village Adoption 14

Women's Welfare & Empowerment 15

Educational Impetus 19

Support for Healthcare 23 management people approach development community nurturing employees We believe in following the highest standards of corporate citizenship and have aligned our community plans with the United Nations' Millennium Development Goals and the Prime Minister's Social Charter. Our approach is to have a positive impact on the society in the form of incremental growth in the local economy, thus entwined with our business imperatives. Towards this, need assessment exercises are carried out to evaluate community development imperatives. Contributions to the The bulk of MSPL's workforce is society too form a key component of involved in mining operations and at our planned expenditures. the corporate office. Our wind farms are fully operated and maintained by companies of repute to whom we have employees outsourced the operation and Employee safety, satisfaction and maintenance (O&M). Hence the welfare are at the heart of our business. number of our employees in the wind We practise non-discrimination and business is small. provide equal opportunities both in recruitment and employee performance assessment processes and associated remunerations, thus managing risks of attrition. We engage with our Our fair business employees regularly and have mechanisms to assess career practices have also satisfaction and plan career helped establish enhancement. MSPL as an employer of choicriske for & the impact people human rights in the region. Members We believe in the fundamental of the community principle of preserving human dignity where we operate, and respect of an individual's rights and freedom. Our Code of Conduct and consider MSPL a the Human Rights Policy that is being dream company progressively deployed provide to work with. detailed guidelines for safeguarding human rights. If any, incidents of violation of human rights will be investigated in detail and appropriate Nabaghana Pany punitive measure will be taken. All Vice President - HR employees reserve the right to directly MSPL Limited convey their grievances to the Chairman and Managing Director.

1 2 MSPL's iron ore mine is located in the mineral rich Hospet region of Bellary employee strength district. Due to the presence of several mines in the region, there has Grade Units 2006-07 2007-08 2008-09 traditionally been an intense competition for workers. We employ a Director Nos. 3 3 3 large number of people from the local communities. In a competitive Manager Nos. 25(8) 29(1) 36(7) environment, where workers are sought out by various mining Officer Nos. 117(14) 124(15) 133(11) companies - the respect, stability and potential for development that we offer Staff Nos. 242(21) 270(35) 307(16) those who work with us, has made us a Our people are confident ideal employer in the region. Worker Nos. 792(69) 1284(141) 1220(18) about their jobs; we have The downturn in the global mining made every effort to Total Nos. 1179 1710 1699 industry has created unemployment among a number of mine workers, create a healthy work environment that Numbers indicated in brackets pertain to probationary employees of MSPL having joined within 6 months particularly daily wage workers and risk & impact prior to March 31 2009, and the total is not inclusive of these. The above figures are for MSPL Limited illegal miners. At MSPL, we have made provides our employees a (inclusive of VIOM, EOU-I, EOU-II and Corporate Office) a conscious effort to ensure that we sense of security. In fact, retain all those who work with us. No we are scouting for best employee has been relieved of his or International Council on Mining and Metals her duties. In fact, our commitment to available talent and Sustainable Development Framework Principle 03: recruit full time employees, as talent management opposed to contract workers, has remains a major activity Uphold fundamental human rights given our people a sense of security. for the Human Resources and respect cultures, customs and This sense of comfort goes a long way towards ensuring that our people are Department at values in dealings with employees focused on discharging their duties MSPL Limited. and that MSPL will take care of them and others who are affected by our even under the most severe activities circumstances. We have made efforts Nabaghana Pany to retain a small number of contract Vice President - HR workers who have been with us for a MSPL Limited long time. United Nations Millennium Development - Goal 3 Promote gender equality and empower women total employee strength

At MSPL, we understand that it is in mining operations are not typically 1710 1699 our best interests to employ the best attractive to women and secondly people for a given function regardless women have been historically kept Our employee strength remained stable with a small decrease of 11 personnel of their age, gender, religion, race or away from employment opportunities, at the year end, compared to previous any other discriminatory parameter. thereby impacting their professional year end. Employee strength increased We make employment and promotion development in India. Giving the girl across Manager, Officer and Staff decisions solely on the basis of merit child access to education is the first categories but decreased in the worker and performance appraisals are step towards providing women the category. In addition to the employees carried out for all post-probation basic skills to be eligible for 1179 on our rolls, 16 experts have been employees. employment. contracted as consultants. We also have [For a comprehensive understanding of our 77 contract workers at our mines However, as reported in the previous efforts in women's empowerment, please refer operations. year, majority of our employees are to “Women's Empowerment” in the People male due to two principal factors – Development section on page 15]

2006-07 2007-08 2008-09

3 4 When compared to last year, the number of male employees decreased by 0.37%, ensure that we emerge best equipped We used a balanced development while female employees increased by the same percentage. In terms of age, majority at the end of the crisis, we have approach in which, apart from the of our employees are under the age group of 50 years. There is a healthy distribution embarked on an extensive training regular technical, operational and of workforce between the sub-30 and 30-50 age groups. drive across the workforce. People certifications related training that was have received training in technical provided to our employees, we skills development, operational engaged an external expert for workforce diversity & equal opportunity refresher courses and soft skills & providing personality development and leadership skills, which included category 2008-09 lifestyle management. There have been conscious and concerted efforts goal setting, change management, Grade <30 30-50 >50 Total towards imparting training to developing human relations, stress M F M F M F M F employees at mine locations, management, time management and particularly in sub-managerial development of effective habits. Director 0 0 2 0 1 0 3 0 categories.

Manager 0 0 21 0 15 0 36 0

Officer 26 5 77 4 20 1 123 10

Staff 100 16 181 4 6 0 287 20 male female 1400 Worker 592 1 598 6 23 0 1213 7 genderwise break-up 1213 1200 of employees Total 718 22 879 14 65 1 1662 37 1000 800 The above figures are for MSPL Limited (inclusive of VIOM, EOU-I, EOU-II and Corporate Office) 600

400 287 200 123 Employee Turnover 3 0 36 0 10 20 7 0 Directors Managers Officers Staff Workers level-wise break-up Although the number of employees of employees leaving the firm was 9.76% lower than employee categories Directors 3 the previous year, the rate of turnover at MSPL continued to remain high. The Managers 36 bulk of employees leaving the Officers 133 company were from the Worker and employee turnover Staff 307 Staff grade, but the percentage 2007 - 2008 Workers 1220 turnover was most significant among 2008 - 2009 33.90 the Officer and Manager grades. The 35 significant increase in turnover rate as 30 compared to the previous year is a matter of serious concern since these 25 22.22 gender-wise break-up employees are highly skilled and of employees r 20 17.29 17.40 experienced personnel. In the other e v 13.80 13.03

o 15

employee categories, the turnover rate n

Females 37 r u

has either improved from the previous t 10 Males 1662 0.00 0.00 7.79 7.87 year or remained unchanged. % 5 Moreover, the sub-50 age group continues to witness the highest 0 absolute levels of turnover. Directors Managers Officers Staff Workers We are convinced that the long term fundamentals of our business are employee categories robust. As part of our strategy to The above figures are for MSPL Limited (inclusive of VIOM, EOU 1 , EOU 2 and Corportae Office

5 6 In an effort to relieve employee stress formal training camps also promoted and inculcate discipline of healthy cordial employee relations increased living, we organised a yoga camp (refer interaction with employees at all page 28). A workshop was also levels. conducted by the Art of Living Foundation wherein participants were Employee training was a major activity The soft-skills training exposed to the tools and techniques in the reporting period. Over 16,000 hours of training was imparted to provided to our mine that enabled them to de-stress and workers over the years energise. These programs apart from employees across the firm. Extensive have been very beneficial. It will help Safety has been built training and workers in their into the culture across development training hours personal lives and our operations. People training hours/employee family development have been trained and 9000 45 as well as with job re-trained over time. 8319 27.10 When senior officials 8000 40 responsibilities and behaviour as they come visit the mines, safety 7000 35 e e

y is among the first topics

o through the ranks l s r

6000 30 p

u discussed. m o at MSPL. e h

5000 25 r g e n p i

4062 30.54 3860 3.16 n s

i 4000 20 r a u r t o

3000 15 h Meda Venkataiah Meda Venkataiah g

156 4.33 n i Executive Director - Mines Executive Director - Mines

2000 10 n i MSPL Limited a MSPL Limited r 1000 5 t

0 0 Managers Officers Staff Workers employee categories International Council on Mining and Metals Sustainable Development Framework Principle 05:

training was imparted to mine staff who Seek continual improvement of our have come up through the system and health and safety performance have shown the potential to assume Joining MSPL was like greater roles with more responsibilities. a dream come true. We are convinced that these training workforce safety Our mining operations have a safety committee that looks into all aspects The last 14 years of sessions will benefit our people in their personal and professional lives. Our and health of workplace safety. At our wind farms, service have been investments in the development of our third party experts that look after a wonderful experience. people will also equip MSPL to excel in a Safety is a priority at MSPL. We ensure operations ensure safety performance positive economic scenario and build that all necessary measures have been and monitoring. set in place for the safety of all people resilience in a downcast economic We are proud to have maintained an scenario. within our premises and those on the periphery of our operational areas. impeccable safety record with no Uma C. S. Though we do not have a written policy Safety trainings and refresher courses reportable injuries or fatalities in the Secretary to CMD to ensure maximum contribution from are imparted to all associated reporting period. MSPL Limited local suppliers, we have a long-standing personnel across our mining, mineral This year, we took initial steps in relationship with several local suppliers. processing and wind energy counseling our employees on the risks operations. of certain diseases. We focussed on

7 8 Gavisiddapa MSPL EOU1 Year of joining: 1977 We are proud to have been able to maintain an impeccable safety record with no reportable injuries I started as a loading labourer. Within 2-3 months, I was presented with an opportunity to work as a driller helper and blaster helper. After close to 3 years or fatalities in the reporting period of on the job training I received while assisting my seniors, my senior colleagues encouraged me to prepare and appear for the blaster examination. On clearing raising awareness and counseling on the examination, I was promoted to the rank of blaster. On account of my HIV/AIDS. The National AIDS Control performance, I was offered a position of a Mine Mate in 1981. Between 1981 Organisation's (NACO) Red Ribbon and 1984, I gained a tremendous amount of practical experience on mine Express (RRE) that ran through India in operations. Vocational training was imparted at the training centre and hands 2008 visited Hospet in August. We on inputs were continuously provided by senior mines officers. By 1992, after After completing my having appeared for the mines foreman examination, I was promoted as mines seized this excellent opportunity to degree, I joined MSPL foreman. Today, I work as a Senior Mines foreman at VIOM's Export Oriented increase awareness among our in September, 1981. Unit-I. The support that I received from my mentors at the company in the form of employees on HIV/AIDS. MSPL training, guidance, financial assistance for examinations and the stability that is employees were encouraged to visit My first few months associated with a regular job, has allowed me to achieve what I have today. In the Red Ribbon Express at Hospet with the firm - the 1977, over thirty years ago, when I was recruited as a loading labourer, never Railway station. satisfaction that I drew had I imagined that I would become a Senior Foreman. In the coming years, we will take up from working with a more disease awareness, prevention business that conducts and counseling activities for our itself in a fair manner employees as well as the communities Ramappa MSPL EOU1 within which we operate. - and the engagement Year of joining: 1981 with the proprietors MSPL has evolved in to an convinced me that this My education up to the 7th standard, stood in the way of me getting a organisation which encourages respectable job that could help me build a good career. MSPL had a reputation employees to achieve their full would be my first and as a good employer that afforded people the opportunity to develop a career. I potential, whilst being reassured of last employment. sought employment with them and joined as a helper in 1981. After gaining some experience and having participated in a number of trainings, my supervisors entrusted me with the responsibility of being a compressor operator in 1988. Since then, there has been no looking back. I have gone from strength to strength and have been promoted thrice. Right now I am working as a senior S. Mruthyunjaya operator. The encouragement of my supervisors and the support that I received AGM - Administration for training materials and guidance at MSPL has motivated me to achieve my I have had two stints MSPL Limited potential. This is where I want to be. with MSPL. The reason for my second stint is the personal connection job security and stability through employment opportunities for their R V Hanumantha MSPL VIOM and the bond that I had families. developed with the Year of joining: 1985 company, its personnel At MSPL, we believe in the right of every employee to fully develop to I joined MSPL as a driller helper in 1985. Soon, I realised that MSPL rewarded employees who showed promise and interest in career development. With this in and the people who her/his full potential. Moreover, mind and through encouragement from my seniors and peers, I worked hard on run it. I feel like a part sincere efforts are made to ensure that certifications. Today, I've moved up the ranks from being a helper, to a drilling of the family. workers, doing even the most basic of operator, then to a senior driller and am now a driller operator. The culture at jobs are given opportunities through MSPL to reward its employees for strong performance is also a motivational mentoring and training to develop factor. Among the awards and recognitions that I've received through my time within the organisation. Due to this with MSPL, I am most proud of the first prize that I received for safe drilling Manoj Kumar Agrawal culture, we are proud that many procedures. Now, it is up to people like me who have benefitted from MSPL's Vice President - Material employees have stayed with us for commitment to preserve this culture and carry on the tradition. This career has MSPL Limited decades and have developed given my family a sense of stability. For someone with only a primary education, remarkable careers. I am truly lucky to have been given an early opportunity with MSPL. Since then, there has been no looking back.

9 10 International Council on Mining and Metals living. At the national level, human be nationally and internationally development indices and indicators coherent. We have consciously sought Sustainable Development Framework Principle 09: across States have been computed. to align our activities with national and international goals and standards. Contribute to the social, economic As per the HDI, Bellary is one of the These include Prime Minister's 10 and institutional development of the most backward districts in Karnataka Point Social Charter for Indian State and is at 17th place among the corporate houses, the United Nations' communities earlier configuration of 20 districts. Its Millennium Development Goals HDI is 0.42 as compared to State HDI (UN MDGs), ICMM and its Indian of 0.47. Our presence in the Bellary counter part yet to be formalised, supporting a wide range of socio- region makes our responsibility community economic, educational and health namely Federation of Indian Mining towards the community even more Industries (FIMI) principles, Indian development initiatives. The Baldota Group of greater. companies has long recognised the Mining Initiatives. We have also adhered to and have sought funding We consistently work towards need to earn community support and Through our empowered sustainability from International Finance Corporation integrating Corporate Social ensure sound environmental committee that looks into our social (IFC) against its stringent Environment, Responsibility (CSR) into the values, performance for business viability. initiatives we realised that our Health & Safety Standard(s). culture, operations and business programs should not only address the The United Nations Development needs of the local communities but decisions at all levels of the Programme's (UNDP) Human organisation. We believe that Development Index (HDI) – is a community service is an integral part of summary composite index that The Baldota Group has long recognised the need to our business responsibilities. At MSPL measures a country's average earn community support and ensure sound our constant endeavour has been to achievements in three basic aspects bring a positive change to the of human development: health, environmental performance for business viability underprivileged communities by knowledge, and a decent standard of

Urban and Health & Sanitation Rural Infrastructure Educational Impetus Women Empowerment

Assistance towards up Providing / improving Teachers training SHG formation gradation of hospital road ways facilities Distribution of educational Addressing woman and Construction of Public material health Creation of a blood bank facilities - bus shelters and walk over bridge Upgradation of school Provisions of livelihood Assistance towards facilities opportunities heaIthcare and healthcare Construction of costs recreational facilities for Recognising / awarding Awareness programs on employees and children talent and merit health and sanitation Addressing material and child health Construction of schools and Assistance towards sports Educational assistance educational institutions and entertainment facilities and motivation for girl Health awareness students campaigns Provision of drinking water Educational assistance

11 12 The absence of a quality green Through these Sabha meetings we recreational space in the city of Hospet village adoption were able to take on focal issues for spurred us to build a children's park, action namely health, hygiene, last year, that meets needs in terms of In an effort to address every need of livelihood generation, sports, My vision is to provide a clean, green, safe and fun place to village communities around us, we children's education and providing urban facilities to play. Some of our employees come have thus far adopted ten villages that basic village amenities. rural areas. from across the length and breadth of are in close proximity to our mines and the country and have made Hospet wind farms. their home. To help them integrate Last year we adopted the villages of better in their new environment, we Danapur, Galemmanagudi, Ingaligi, Narendrakumar A. Baldota have constructed a company club that Hanumanahalli and Kanavihally. This takes care of their recreational and Any need that is Chairman & Managing Director year five additional villages namely brought to our notice MSPL Limited & Baldota Group entertainment needs. Jaisingapura, Basapura, Halavarthi, and if we see our We realise that the need for education Hosahalli, and Shankarnagar in is pivotal for the growth of a society. Karnataka have been adopted. Through contribution towards it a demographic study in the adopted Our partnership with neighbouring Towards this we have plans to establish as necessary, we will villages, the Gram Sabha village communities dates back to 1961. a school in Hospet. During the year, we do it. representatives along with the village Over the years we have contributed initiated a study conducted by the community decide the priority areas for towards community and village Kuvempu University to look into the improvement. On an ongoing basis the development as we firmly believe that existing educational system and Gram Sabha meets once in every six economic development begins with facilities available in Hospet and near months or in case of emergencies, to Narendrakumar A. Baldota community development. by Koppal Districts, so that a rational deliberate on issues of development Chairman & Managing Director decision can be taken by us to build a MSPL Limited & Baldota Group In spite of our long-standing school in the forthcoming years in and also to take stock of ongoing relationship with communities around Hospet. activities. us through philanthropic contributions, we wanted our contributions to be more sustained. This year we have adopted additional five villages - We also wanted to focus on areas where communities felt a need, so Jaisingapura, Basapura, Halavarthi, Hosahalli, and that the impacts of our contributions Most companies in the Shankarnagar in Karnataka are maximised and sustainability of mining business do our initiatives is also taken care off. some kind of social Our initiatives have been to improve activities, but at MSPL facilities in and around Hospet town we have a systematic Greening our villages for the betterment of communities as well as development of the villages way of planning and We have distributed around 60 Kg. kitchen around us. For the betterment of the addressing social needs. garden seeds for vegetables and 5,500 fruit town, we have realised the importance plants to 1,075 families in our adopted of development and cleanliness, and villages through women SHG members. This has been done to not only make the villages assisted in making arrangements for greener but address malnutrition among certain public facilities. We do have H. K. Ramesh AGM - CSR women and children as these plants bear assisted in construction of bus MSPL Limited fruits like Sapota, Lemon, Guava, and papaya shelters, walk over bridge for a college regularly. These fruits would help in etc., to improve basic facilities. improving family health. We have planted 540 saplings along the roads in Basapura, Hanumanahalli and Danapur villages. With our long-standing relationship with communities around us through philanthropic contributions, we wanted our contributions to be sustained

13 14 United Nations Millennium Development - Goal 3 We have formed 45 women SHGs that cover a Promote gender equality and total of 757 families in 9 villages with the assistance empower women of our CSR department

intervention which is an effective women of the village to come together, are then burdened by stringent strategy for poverty alleviation, discuss, share information and women's welfare & domestic and financial responsibilities. human development and social motivate each other on vital issues empowerment Additionally, only 54 percent of Indian empowerment. In the previous year such as women and child health, women are literate as compared to 76 we had contributed to 35 SHGs and in family planning, AIDS/HIV, pregnancy, Gender discrimination continues to be percent of men. Women receive little the current year 10 new SHGs have pre & post natal care, education, an enormous problem within the schooling and face barriers in terms of been included. Thus in all we have sanitation, alcoholism among men, Indian society. This drastically affects addressing issues of education, formed 45 women SHGs that cover a and family financial issues. women's health, financial status, financial dependency and also in Our community workers also educate education, and involvement on all exercising their basic rights. These and bring about awareness on these fronts of decision making. Women are issues are further aggravated among issues and assist SHGs in taking commonly married very young, poor and rural women. informed decisions on vital issues that become mothers at an early age, and Problems of women arise primarily out have changed their lives. Our SHG of the lack of access to resources at initiative by its grass-roots and both the household and the village participatory implementation methods level. Women's development has to go has fuelled our success across our Is it really possible for beyond the economic realm and we community development SHG members whose wanted to place emphasis on issues interventions. relating to equality, autonomy and self- members are largely reliance at the individual level and on total of 757 families in 9 villages with illiterate and can at the solidarity of the community (of women) the assistance of our CSR department. most write only their at the Group level. To address issues of 27 SHGs out of the total 45 have been linked with a bank and were able to name and read empowerment and to bring in financial independence we mooted the formation mobilise a seed fund of INR 985,000. The initiation of SHG numerals maintain of SHGs in our adopted villages. We have trained women to handle the these documents? books of accounts and maintain on formation and assistance Our experience has Women's Self Help Groups (SHGs) in savings and credit list and also towards construction of particular, represent a form of independently transact with the sanitation facilities have shown that once an banks. SHG realises the been the two major importance of literacy ratio For effective community development, highlights of MSPL's we firmly believe that women act as maintaining records contribution towards enablers of change. SHGs apart from society that has members themselves 100 being our deliberate attempt towards invest the time and 76 strengthening the financial handling drastically changed effort to manage good 54 and decision making power of women, people's lives. 50 have proven to be a strong and close account keeping. knit women's group that has been effectively utilised to propagate 25 awareness on key village issues that Srikar S. Bhattbhatt H. K. Ramesh need to be addressed. The members of Vice President - Corporate Affairs the SHG meet every week to undertake & Company Secretary AGM - CSR 0 MSPL Limited Female Male savings and credit activities. MSPL Limited The SHG provides a platform for

15 16 SHGs for village development

The Self Help Group (SHG) movement has brought certain changes in the lives of the women. It has allowed poor women to move from their earlier position of silence to one of gaining voice, reduced Building homes through our SHGs fatalism, improved living standards, and increased their collective bargaining powers within their family and community as well as empowered their status in the communities. My name is Mumtaz. I am 24 years of age and reside in Danapur village. I work as a representative in Kaveri women Self Help Group, formed by MSPL. We are fourteen members working in our SHG, which is growing day by day with growth in our savings and loan recovery. MSPL families coverage details

I am basically from a poor family and my parents work as daily labourers. We through SHG as on 31st March, 2009 are 5 members in the family and live in a small hut, which is not sufficient for Covered by MSPL us. We planned to build a new house for which we got an amount of INR 0.3 lac from the Village Panchayat, under the Ashraya scheme. But this amount sr. village total no. of percentage was insufficient. Since I was working as a representative in the Kaveri SHG, I no. name families families could borrow an additional INR 0.1 lac with a low rate of interest. This helped us to construct the new house. 1 Hanumanahalli 550 213 39 I am thankful to the Kaveri Self Help Group & to MSPL, due to which we could 2 Danapur 320 96 30 build our dream home. This has also helped me to contribute to my family's requirement, of which I am really proud. 3 Galemmanagudi 203 55 27 4 Ingaligi 210 38 18 5 Kanavihally 392 167 43 6 Basapura 235 84 36 7 460 45 10 Providing livelihood opportunities Halavarthi 8 Jaishingpura 203 45 22 9 Vyasankere 30 14 47 My name is Manjula and I am 20 years old. I am from Hanumanahalli village and I have studied till the 7th standard. My parents are agriculture labourers. 757 30 For further studies I had to travel to my neighbouring village, but my family's Total 2603 financial situation did not allow me to continue my schooling further. So I had to quit schooling and started supporting my mother with the household work. At the same time I was also searching for other opportunities to earn an income.

I came to know that in Mariyammanahalli village someone was running a tailoring training centre, which I was interested in. But my parents did not allow me as they did not want me to travel to another village and this disappointed me. Later I was hopeful when I got to know that MSPL is providing free tailoring training for unemployed women in my own village. I immediately joined classes and have completed six months of tailoring training successfully. I have learnt a lot of things and this has made my dreams come true.

MSPL has also given me a sewing machine for free. I have now started earning a monthly income of INR 1,500 to 2,000 through tailoring.

The help & support from MSPL, has changed my lifestyle and so has my family's financial position. I thank MSPL for helping me gain self respect & income. I have saved around INR 7,000 from my income in the past six months and also joined the SHG.

In an effort to develop skills among rural women we decided to impart tailoring skills. This initiative started in 2007 has empowered women to become self-reliant and infused confidence in them to face the world. Since then women have been undergoing tailoring

17 18 The school drop out rates are still high especially among girls from poor and rural backgrounds. According to UNICEF, currently, only 34 percent of Our children will never India's girls are completing their schooling in India know they can have a better life if they don't and from disadvantaged social groups At the primary level, the Abheraj receive education. across the country. Baldota Foundation has been With proper education distributing free notebooks to schools Programs such as the 'Sarva Shiksha in and around Hospet region for the and support, Abhiyan'- The 'Education for All' we believe that we are past 3 years. We have been assisting training and receive constant movement, a flagship program of the schools in terms of providing encouragement and support from the shaping the growth of Government of India, has made computers and free computer training Group. This year we trained 139 youth who are pillars education free and compulsory for to children of higher classes. women on tailoring and distributed of societal growth. children in the age group of 6 -14 160 sewing machines to trained years. women to continue their newly learnt Notebook Distribution In spite of many such programs we still skill cum profession. Post training see high school drop out rates some women have established their H. K. Ramesh especially among girls from poor and own tailoring business whereby they AGM - CSR rural backgrounds in most parts of the receive a regular income to support MSPL Limited country including Karnataka. their families. It is an unfortunate fact that female Women liberation is a complex issue by providing assistance like payment literacy in India today is still and our foremost priority is to address of fees, books and uniforms. Our considerably lower than male literacy. this through education. In an effort to efforts yielded results as we got 10 girl According to UNICEF, currently, only reduce the school drop out rates of children to rejoin schooling, especially 34% of girls complete their schooling girls, we conducted a house-to-house in the age groups of 11 to 17 years. in India. Yet in Karnataka, as per last survey in all our 10 adopted villages. Our plan now is to continue this in the forthcoming years and schedule our census held in 2001, the percentage Children from poor and rural In households where a girl child had counseling activities well in advance. of female literacy in the state was background find it hard to buy books dropped out of school, the family and Our target is to re-enroll 100 girl 57.45%. and notebooks. Their economic the girl child were counseled by us to children in the forthcoming academic We firmly believe that empowerment situation is so bad that simplest of resume schooling. We motivated them year. of women is through education and things like notebooks can deter their self sufficiency. Our activities hence education. The Abheraj Baldota have been through a combined Foundation launched free notebook approach of propagating education of distribution program for the year on educational impetus the girl child along with providing 30th June 2008. livelihood opportunities for the adult The program inaugurated by Capt. women. Dr. Rajendra, Asst. Commissioner, United Nations Millennium Development - Goal 2 Our other efforts towards education, Hospet, witnessed the distribution of apart from the girl child education, has 120,000 notebooks to 21,024 Achieve universal primary education been supporting education at the students across 88 schools in Hospet primary, secondary and graduate taluka and five schools in Koppal levels across socio-economic taluka. We pledge to continue this on segments and beyond geographical a yearly basis to motivate children Literacy in general plays a vital role in The Department of Education under boundaries. towards their pursuit of higher the overall development of any the Ministry of Human Resource education. society. District statistics show that Development, towards the Special classes for 10th and 12th (2nd the literacy rate of the Bellary district Universalisation of Elementary PUC) standard students were We supported the Education is 58.04%. We believe that Education has made primary organised to improve student's Department, in organising a science contribution towards education is key education more accessible and competency level through hiring exhibition in Hospet. More than 24 to investment in the social sector. effective for children, especially girls teachers and providing other facilities. schools participated in this program and those from deprived communities

19 20 Our activities hence have been through a combined We also contributed and honoured towards the entire M. Tech education approach of propagating education of the girl child academic achievers of the expenses of four candidates. We also Proudadevaraya Institute of Technology distributed laptops to the Mineral along with providing with livelihood opportunities and gold medals were awarded to 6 Exploration graduates. The Abheraj for income generation for adult women top rankers in different branches of Baldota Foundation's special program engineering. The Baldota Fellowship also supports ten academically for Masters in Technology (M. Tech) in brilliant students to pursue college meant to create interest and provide them with free education, text mineral exploration, in the current year education in engineering and medical awareness on science and its books, notebooks, other stationery involved a grant of INR 1.2 Million studies. importance in the minds of school etc. These have been some of our children. humble contributions to sustain and provide essential education to the We have offered financial support to youth of growing India. hire teachers wherever there has been a shortage of teaching staff. We To create awareness on environment, conducted a teachers' training community and public health issues, program where four teachers were we provided a sound system to a trained for computer education. We well-known theatre group in have donated teaching material and Mariyammanahalli. This team has over the years put up plays, in the village, to disseminate messages on community issues, public health and environmental issues and children's education. This theatre group also works on educating children on environment, anti-social issues, child rights and patriotism by staging dramas in schools and villages. They also publicise information and messages on these vital issues through the public address system provided by us. supporting sports

To address the educational needs of Apart from education, we believe that promoting talent, to reward and higher and mature students we a sport is an integral part of an recognise achievement. We have encourage aspiring students and individual's all round development. contributed INR 200,000 each to assist them to achieve their aims by We are facilitating talented sports honour the Olympic Games medalists ensuring that their financial situation also assisted towards mid-day meals persons in rural communities to Mr. Vijendra Singh (Boxing) and does not affect their zest for schemes for 10 schools and 15 perform to their true potential. We Mr. Sushil Kumar (Wrestling). education. We have made various anganvadis in adopted villages by sponsor prizes and certificates for the contributions for graduate students Beyond education and sports, we are providing vessels etc. Upgradation of winners of various sports competitions who are pursuing their business, also working to ensure equal access basic facilities in Government schools in high schools and higher primary engineering, medical or computer and opportunity to enhance quality of have been carried out by providing schools at the taluka and zonal levels. education. We financially supported life of students. chairs and tables. We also provided We provided sports kits to youth 24 poor talented students to pursue 50 desks, 4 tables and 4 chairs for groups. We also organised sports higher studies in the field of The ABF contributes towards music Halavarthi school. event at the zonal and taluka levels in engineering, medicine and training in schools especially for the and around Hospet. ABF encourages poor and physically challenged We run a primary school for the management. talented sportspersons to achieve students. We contributed to award the children of our mine workers and their dreams and have sponsored the winners of the Pratibha Karanji Program youth basket ball teams for - organised by the Department of Public To promote and improve rural student's competency participating in the state level Instruction at the district and taluka championship. We have also provided levels to promote cultural competitions level and reduce drop outs, we have also supported financial assistance to talented such as dancing, singing, drama, art, financially to hire teachers wherever there has been sportspersons for participating in handicraft, science, speech, etc. a shortage of teaching staff to handle classes international tournaments. Besides among school children.

21 22 United Nations Millennium Development - Goal 6 Combat HIV/AIDS, malaria & other diseases support for healthcare AIDS Awareness Over the past few years India has seen need to contribute towards and Blood Donation an impressive economic growth and augment efforts in providing health UNICEF estimates indicate that Hospet has a history of high accident progress on the human development facilities. Over the years our prime goal approximately 2.4 million rate with over 300 accidents recorded front. The growth rates of the country has been to provide sustained (2 million - 3.1 million) people in each year till 2001. This called for an were as high as nine per cent in contributions for existing hospitals to India were living with HIV in 2007. The imminent need to have a blood bank. 2006-07, while the population below upgrade, their facilities and also in national adult HIV prevalence of the On 17th December 2001, the poverty line gradually declined. Yet assisting individuals towards their country is 0.3%; the epidemic Smt. Vasantidevi Baldota Blood Bank we have not been fast or equitable healthcare needs and associated continues to affect large numbers of was established and since then there enough to reach the disadvantaged costs. people in the country. The district of has been a dedicated drive to populations. Access to healthcare is Bellary also has alarming HIV figures encourage blood donation as we assist among basic necessities, but still out We are also taking a more holistic when compared to other districts in the local communities to use this of reach for many. approach to our social activities. We have aligned our initiative with the state. We perceive that this is an precious resource in their hour of need. Better health is the key to wealthy national development targets of the epidemic that needs to be addressed The blood bank is the only one in the societies. Almost 40% of the Indian Government of India, which are through education and awareness. region within a radius of 100km and populations cite health as the main derived from and address the United has been a blessing for the people. We have been part of the campaign by concern before issues such as Nations Millennium Development Utmost care is taken to follow all safety The Rajiv Gandhi Foundation National financial problems, housing or crime. Goals of providing access to standards at every stage. The blood AIDS Control Organisation and Nehru We realise that good health makes an sanitation, clean water, education and bank is managed by a trained and Yuva Kendra Sangathan which in the important contribution to economic empowerment of women and qualified staff consisting of a Convenor, year 2004 was one of the largest rural progress, as healthy populations live eliminate poverty along side a Medical Officer, four technicians, a campaigns on rails, to create longer, are more productive and save developmental targets. Pharmacist and two other staff awareness on HIV/AIDS. As part of more. We are sharing this huge members. this campaign in Hospet, a three-day responsibility with the Government to campaign was conducted. We Since the inception of the blood bank improve the access to quality participated and contributed by the number of units of blood collected healthcare for the communities we making arrangements for rural women has gradually increased from 399 units interact with and operate in. to attend the campaign, since it is of in 2001-2002 to 5,799 units in 2008- Healthcare specifically for the rural Even in this period of prime importance to us that women 2009 and with an increase in average poor and the vulnerable (women and recession, our social make decisions and protect their per day collections from 2.19 units in children), is the focus of our action on activities have actually health and that of their family. 2001-2002 to 15.9 units in 2008-2009. this front. increased than in any other year. Recent statistics from the Bellary no. of units of blood health council enumerate that out of collected the 7 talukas in the district, there are 5799 only 54 Primary Health Centres (PHC) 6000 and 6 hospitals to serve the district Narendrakumar A. Baldota 5000 population of 2,025,242. With large Chairman & Managing Director 3739 populations still without access to MSPL Limited and Baldota Group 4000 2860 basic healthcare, we recognised the 3000

2000

1000

0 2006-07 2007-08 2008-09

23 24 Sanitation and Health

Chairman as we initiated provision of marginal investment by individual sanitation facilities for the individual houses. The number of toilets households across our adopted constructed by us in villages have villages. We conducted a survey grown form 130 to 288 in 2008-2009. Our commitment for among individual households which the future is to construct pointed that our initiative to assist We recognise the fact that community households for toilet constructions involvement in sanitation, health and 1,500 toilets by 2010 was whole-heartedly welcome. This hygiene has to be built through exercise also proved to be a vehicle for sustained campaigns. Apart from women to voice their concerns and addressing the need for sanitation Some 2.5 billion people, almost half demand for their basic needs. facilities, we also realised the need to Narendrakumar A. Baldota the developing world's population, consolidate our efforts on this front. Chairman & Managing Director lives without proper sanitation This initiative is also in line with the Hence we narrowed our efforts towards MSPL Limited and Baldota Group facilities. Today, even as India enjoy UN Millennium Development Goals of activities such as construction of soak more than a half century after addressing maternal and child health pits for safe disposal of waste water, independence, it is still struggling to as well as empowering women to make construction of drains, support for provide sanitation and clean drinking decisions. Our interactions with the drinking water, conducting health water to its teeming millions. According community indicate that the need for camps and building awareness among to the Government of India, more than toilet facilities is felt more so for the community members on the Sanitation is more half a billion people practice open privacy and safety of women. We importance of hygiene and sanitation. important than defecation. observed that women were truly independence, concerned of being burdened with As per the Bellary district statistics, the The lack of adequate sanitation and birth rate in the district is 27. The ratio Mahatma Gandhi said safe water has significant negative of infant death to 1000 live births is it once. We believe in it health impacts. It has been estimated 35.60, which is higher than the and have made national average. The ratio of maternal by the World Health Organisation in conscious efforts over 2002 that around 700,000 Indians die death to 1000 births in the district is each year from diarrhea and according 2.20. These statistics highlight the the years to address to the Planning Commission Report in stark reality on the status and nature of this issue for India (2003) almost 400,000 to women and children's health in our our communities. 500,000 children under the age of five area. We therefore remain focused on die due to water borne diseases such maternal and child health. as diarrhea, hepatitis and typhoid in We have also undertaken the the country. responsibility of providing households H. K. Ramesh with clean and safe drinking water. We AGM - CSR Governments across the world, additional tasks and correlated the MSPL Limited distribute around 10,000L of water per including the Government of India, economic costs imposed by poor day to Vyasankere - an adopted village have agreed to the eight Millennium sanitation in terms of increased that has around 40 households. Apart Development Goals (MDGs) to reach disease occurrence and mortality, from this, we supply water to the targets addressing extreme poverty. especially that of children. Goal seven aims to reduce the number village that faces, acute shortage of of people without access to sanitation We initiated work by hiring water supply. A case in point are the by half, till 2015. independent contractors who built Hanumahalli and Danapur villages, toilets as per approved toilet designs. where we supplied drinking water for 4 The importance of providing sanitation We have contributed majority of the days, till the local water supply was facilities was recognised by our expenses for construction with only a resumed.

25 26 The Abheraj Baldota Foundation baba ramdevji's visit to hospet

people where they learnt the art of purchase of an ambulance cum yoga, good health and the art of good emergency Intensive Care Unit (ICU) living. to a hospital in Ahmednagar, Maharastra that undertakes cardiac As a part of this mega event, we took surgery and care for poor people. the opportunity to bestow his Eye camps were conducted at a knowledge and wisdom on the nearby hospital - Nethralakshmi Baldota Group employees and their Vaidyalaya. We also contributed to family members. During the meet the Anandrishiji Hospital and people learnt stress management, Medical Research Center, work ethics management and yoga. Ahmednagar for providing health Yogishri Swami Baba Ramdevji Also various other events were services to poor and needy Maharaj is one of the most Eminent patients. coordinated by us during Swami Baba Yoga Gurus in India. Ramdeviji's presence in Hospet. A Apart from contributing towards He is well known in the country for his Yoga teachers' training was held for The Abheraj Baldota Foundation health in the Hospet region, we also around 400 teachers from all over (ABF) was established in the name ability to address and cure illnesses aided the Endoscopy Research through the practice of yoga. The Karnataka. A camp for school children of our Founder Chairman Shri Foundation in Mumbai. This helped was also conducted. Swamiji also Abheraj Hirachand Baldota who Baldota management organised a six- the foundation establish the day yoga science camp by Swamiji and inaugurated the newly constructed was a well-known industrialist, Abheraj Baldota Cancer Detection bus stop and a walk over bridge at philanthropist and social worker. his team for the entire township of Centre at the Institute of Advanced Hospet from 11th to 16th January Vijayanagar College, Hospet. The foundation is a registered Endoscopy. 2009. The camp was attended by over charitable trust, through which we This state-of-the-art centre 11,000 people from Hospet and near route our contributions to social facilitates early detection and cure by towns. Apart from the daily yoga welfare including provision of of cancer ailments, specifically that camps conducted, 40 Ayurvedic healthcare facilities and assistance of the abdomen. The centre also has physicians accompanying Swamiji for the same. For the last 30 years, reservations for patients referred were present at the OPD the whole day the foundation has been a vehicle from Government or Municipal to attend to the health problems of the for our social endeavours and Hospital, thus providing access to entire town of Hospet. contributions. the smallest sections of the society. The camp was a welcome event that We have supported patients by Apart form healthcare, community rejuvenated the minds and hearts of contributing for their infrastructure facilities have also hospitalisation, surgery and been addressed through our medical expenses. We have also foundation. The ABF has financially supported hospitals contributed towards street lights which needed upgradation and and also constructed a bus stop additional facilities. Contribution near Vijayanagar College, Hospet. was also made towards the

27 28 6

GRI INDEX & ANNEXURES GRI Index 1 Acronyms & 7 Abbreviations Glossary of 9 mining terms Annexure - I 11 This Sustainability Report, Code of Conduct is a GRI Checked Annexure - II 14 Application Level A+ Report, ICMM Principles signifying the highest level of transparency. Annexure - III 18 Further Indicators Reference Independent 20 Assurance Statement GRI index

STANDARD DISCLOSURES PART I: Profile Disclosures Performance Booklet / Status of Indicator Description Page nos. reporting Profile Booklet / Status of Disclosure Description Page nos. reporting EC2 Financial implications and other risks 3 / 10 Reported*** and opportunities for the organisation's activities 1. Strategy and Analysis due to climate change.

1.1 Statement from the most senior 1 / Reported EC3 Coverage of the organisation's defined benefit 3 / 5 Reported decision-maker of the organisation 1-4, 5-10 plan obligations.

1.2 Description of key impacts, risks, and opportunities 3 / 1-6 Reported EC4 Significant financial assistance received 3 / 6 Reported from government. 2. Organisational Profile EC5 Range of ratios of standard entry level wage 2.1 to 2.9 Organisation profile 1 / 14-18 Reported compared to local minimum wage at significant locations of operation. 2.10 Awards received in the reporting period 1 / 19-20 Reported EC6 Policy, practices, and proportion of spending on 5 / 7 Reported 3. Report Parameters locally-based suppliers at significant locations of operation. 3.1 to 3.3 Report Profile 1 / Cover Reported inside EC7 Procedures for local hiring and proportion of 2 / 9-10 Reported senior management hired from the local community 3.4 Contact point for questions regarding the report or 1 / 4 Reported at significant locations of operation. its contents EC8 Development and impact of infrastructure investments – Not applicable 3.5 to 3.11 Report Scope and Boundary 1 / Cover Reported* and services provided primarily for public benefit (Please refer inside through commercial, in-kind, or pro bono engagement. annexure - III)

3.12 GRI Content Index 6 / 1-5 Reported EC9 Understanding and describing significant indirect 3 / 2 Reported economic impacts, including the extent of impacts. 3.13 Assurance 6 / 17-19 Reported

*** *Materiality to MSPL is addressed in section - Foreward (booklet 1 / pg. 1-4) and is covered all through the Financial implications and other risks and opportunities for the organisation's activities due to report with topics prioritised under each section. Report boundary also includes impact of identified climate change is discussed in the entire section - Response & Opportunity (booklet 3 / pg. 7-12) stakeholders reported in section - Stakeholder Engagement & Issue identification (booklet 2 / pg. 16-18). Environmental 4. Governance, Commitments, and Engagement EN1 Materials used by weight or volume. 4 / 4 Reported 4.1 to 4.10 Governance 2 / 11-14 Reported EN2 Percentage of materials used that are recycled 4 / 4 Reported 4.11 to 4.13 Commitments to External Initiatives 2 / 14-15 Reported input materials.

4.14 to 4.17 Stakeholder Engagement 2 / 16-18 Reported EN3 Direct energy consumption by primary energy source. 4 / 16 Reported STANDARD DISCLOSURES PART II: Disclosure on Management Approach (DMAs)** EN4 Indirect energy consumption by primary source. 4 / 17 Reported Booklet / Status of EN5 Energy saved due to conservation and 4 / 16 Reported G3 DMA Description Page nos. reporting efficiency improvements.

DMA EC Disclosure on Management Approach EC 3 / 2 Reported EN6 Initiatives to provide energy-efficient or renewable 4 / 17 Reported energy based products and services, and reductions DMA EN Disclosure on Management Approach EN 4 / 2 Reported in energy requirements as a result of these initiatives.

DMA LA Disclosure on Management Approach LA 5 / 2 Reported EN7 Initiatives to reduce indirect energy consumption 4 / 17 Reported and reductions achieved. DMA HR Disclosure on Management Approach HR 5 / 2 Reported EN8 Total water withdrawal by source. 4 / 9-11 Reported DMA SO Disclosure on Management Approach SO 5 / 2 Reported EN9 Water sources significantly affected by 4 / 9-10 Reported DMA PR Disclosure on Management Approach PR 3 / 2 Reported withdrawal of water.

**DMA presented in this report is consolidated and it includes organisations commitment and goals EN10 Percentage and total volume of water recycled 4 / 9 Reported and performance, however detailed DMA can be accessed in MSPL's 07-08 Sustainability Report and reused. accessible at http://www.mspllimited.com/images/MSPL%20CSR%203_15-6-09%20(2).pdf EN11 Location and size of land owned, leased, managed in, 4 / 5, 13 Reported STANDARD DISCLOSURES PART III: Performance Indicators or adjacent to, protected areas and areas of high biodiversity value outside protected areas. Performance Booklet / Status of Indicator Description Page nos. reporting EN12 Description of significant impacts of activities, 4 / 5 Reported products, and services on biodiversity in protected Economic areas and areas of high biodiversity value outside protected areas. EC1 Direct economic value generated and distributed, 3 / 5-6 Reported including revenues, operating costs, employee EN13 Habitats protected or restored. 4 / 13-15 Reported compensation, donations and other community investments, retained earnings, and payments to EN14 Strategies, current actions, and future plans for 4 / 13-14 Reported capital providers and governments. managing impacts on biodiversity.

1 2 GRI index Performance Booklet / Status of Performance Booklet / Status of Indicator Description Page nos. reporting Indicator Description Page nos. reporting

EN15 Number of IUCN Red List species and national – Not applicable LA5 Minimum notice period(s) regarding significant – Not applicable conservation list species with habitats in areas (Please refer operational changes, including whether it is specified (Please refer affected by operations, by level of extinction risk. annexure - III) in collective agreements. annexure - III)

EN16 Total direct and indirect greenhouse gas emissions 4 / 16 Reported LA6 Percentage of total workforce represented in 5 / 5-6 Reported by weight. formal joint management-worker health and safety committees that help monitor and advise on EN17 Other relevant indirect greenhouse gas emissions 4 / 16 Reported occupational health and safety programs. by weight. LA7 Rates of injury, occupational diseases, lost days, 5 / 8-9 Reported EN18 Initiatives to reduce greenhouse gas emissions and 3 / 11-12 Reported and absenteeism, and number of work-related reductions achieved. fatalities by region.

EN19 Emissions of ozone-depleting substances by weight. 4 / 3 Reported LA8 Education, training, counseling, prevention, and 5 / 6-7 Reported risk-control programs in place to assist EN20 NOx, SOx, and other significant air emissions by type 4 / 7-8 Reported workforce members, their families, or and weight. community members regarding serious diseases.

EN21 Total water discharge by quality and destination. 4 / 12 Reported LA9 Health and safety topics covered in formal agreements – Not applicable with trade unions. (Please refer EN22 Total weight of waste by type and disposal method. 4 / 5-6 Reported annexure - III)

EN23 Total number and volume of significant spills. 4 / 6 Reported LA10 Average hours of training per year per employee 5 / 7 Reported by employee category. EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel LA11 Programs for skills management and lifelong 5 / 6-8 Reported Convention annexure I, II, III, and VIII, and percentage of learning that support the continued employability transported waste shipped internationally. of employees and assist them in managing career endings. EN25 Identity, size, protected status, and biodiversity value – Not applicable of water bodies and related habitats significantly (Please refer LA12 Percentage of employees receiving regular 5 / 6-7 Reported affected by the reporting organisation's discharges annexure - III) performance and career development reviews. of water and runoff. LA13 Composition of governance bodies and breakdown of 5 / 5 Reported EN26 Initiatives to mitigate environmental impacts of 4 / 2, 4 Reported employees per category according to gender, products and services, and extent of impact mitigation. 3 / 2 age group, minority group membership, and other indicators of diversity. EN27 Percentage of products sold and their packaging – Not applicable materials that are reclaimed by category. (Please refer LA14 Ratio of basic salary of men to women by – Not applicable annexure - III) employee category. (Please refer annexure - III) EN28 Monetary value of significant fines and total number – Not reported of non-monetary sanctions for non-compliance with (Please refer Social: Human Rights environmental laws and regulations. annexure - III) HR1 Percentage and total number of significant investment – Not reported EN29 Significant environmental impacts of transporting 4 / 7-8 Reported agreements that include human rights clauses or (Please refer products and other goods and materials used for the that have undergone human rights screening. annexure - III) organisation's operations, and transporting members of the workforce. HR2 Percentage of significant suppliers and contractors – Not reported that have undergone screening on human rights (Please refer EN30 Total environmental protection expenditures and – Not reported and actions taken. annexure - III) investments by type. (Please refer annexure - III) HR3 Total hours of employee training on policies and 5 / 6-7 Reported procedures concerning aspects of human rights Social: Labor Practices and Decent Work that are relevant to operations, including the percentage of employees trained. LA1 Total workforce by employment type, employment 5 / 5 Reported contract, and region. HR4 Total number of incidents of discrimination 5 / 2 Reported and actions taken. LA2 Total number and rate of employee turnover by 5 / 5-6 Reported age group, gender, and region. HR5 Operations identified in which the right to exercise 5 / 2 Reported freedom of association and collective bargaining LA3 Benefits provided to Reporting-time employees 2 / 9-10 Reported may be at significant risk, and actions taken that are not provided to temporary or part-time to support these rights. employees, by major operations. HR6 Operations identified as having significant risk for – Not applicable LA4 Percentage of employees covered by – Not applicable incidents of child labor, and measures taken (Please refer collective bargaining agreements. (Please refer to contribute to the elimination of child labor. annexure - III) annexure - III)

3 4 GRI index Performance Booklet / Status of Performance Booklet / Status of Indicator Description Page nos. reporting Indicator Description Page nos. reporting

HR7 Operations identified as having significant risk for 5 / 2 Reported PR5 Practices related to customer satisfaction, including 2 / 16-18 Reported incidents of forced or compulsory labor, and 6 / 14 results of surveys measuring customer satisfaction. measures to contribute to the elimination of forced or compulsory labor. PR6 Programs for adherence to laws, standards, and 4 / 3 Reported voluntary codes related to marketing communications, 3 / 2 HR8 Percentage of security personnel trained in – Not applicable including advertising, promotion, and sponsorship. the organisation's policies or procedures (Please refer concerning aspects of human rights that are relevant annexure - III) PR7 Total number of incidents of non-compliance with – Not applicable to operations. regulations and voluntary codes concerning (Please refer marketing communications, including advertising, annexure - III) HR9 Total number of incidents of violations involving – Not applicable promotion, and sponsorship by type of outcomes. rights of indigenous people and actions taken. (Please refer annexure - III) PR8 Total number of substantiated complaints regarding – Not applicable breaches of customer privacy and losses of (Please refer Social: Society customer data. annexure - III)

SO1 Nature, scope, and effectiveness of any programs and 1 / 2-3 Reported PR9 Monetary value of significant fines for – Not applicable practices that assess and manage the impacts of non-compliance with laws and regulations concerning (Please refer operations on communities, including entering, the provision and use of products and services. annexure - III) operating, and exiting.

SO2 Percentage and total number of business units – Not reported analyzed for risks related to corruption. (Please refer annexure - III)

SO3 Percentage of employees trained in organisation's – Not reported anti-corruption policies and procedures. (Please refer annexure - III)

SO4 Actions taken in response to incidents of corruption. 6 / 13 Reported

SO5 Public policy positions and participation in 2 / 4, 14 Reported public policy development and lobbying.

SO6 Total value of financial and in-kind contributions to – Not applicable political parties, politicians, and related institutions (Please refer by country. annexure - III)

SO7 Total number of legal actions for anti-competitive – Not applicable behavior, anti-trust, and monopoly practices and (Please refer their outcomes. annexure - III)

SO8 Monetary value of significant fines and – Not reported total number of non-monetary sanctions for (Please refer non-compliance with laws and regulations. annexure - III)

Social: Product Responsibility

PR1 Life cycle stages in which health and safety 5 / 8 Reported impacts of products and services are assessed 3 / 2 for improvement, and percentage of significant products and services categories subject to such procedures.

PR2 Total number of incidents of non-compliance with 5 / 8 Reported regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

PR3 Type of product and service information required – Not reported by procedures, and percentage of significant (Please refer products and services subject to such annexure - III) information requirements.

PR4 Total number of incidents of non-compliance with 3 / 2 Reported regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

5 6 acronyms and abbreviations

ABF Abheraj Baldota Foundation GJ Giga Joules MEAI Mining Engineers' Association R&D Research and Development of India AGM Assistant General Manager GoI Government of India RMML Ramgadh Mines and Minerals MoEF Ministry of Environment Limited AIDS Acquired Immuno Deficiency GRI Global Reporting Initiative and Forests Syndrome RSPM Respirable Suspended Ha Hectare MT Metric Tonnes Particulate Matter AIR All India Radio HDI Human Development Index MTPA Million Tonne Per Annum SAP System application products AISL Aaress Iron and Steel Ltd. HIV Human Immunodeficiency Virus MW Mega Watt SHG Self Help Group BCF Business and Community Foundation HR Human Rights NACO National AIDS Control Organisation SMIORE Sandur Manganese Iron Ore Co. Ltd. BOD Biochemical Oxygen Demand HSD High Sulphur Diesel NGO Non Governmental Organisation SOx Oxides of Sulphur CA Corporate Affairs IBM Indian Bureau of Mines NOx Oxides of Nitrogen SPM Suspended Particulate Matter CAPEXIL Chemicals & Allied Products ICMM International Council on O&M Operation & Maintenence Export Promotion Council Mining and Metals SPV Special Purpose Vehicle OHSAS Occupational Health & Capt. Captain ICU Intensive Care Unit Safety Assessment Series SWaN Society for Wildlife and Nature

CDM Clean Development Mechanism IFC International Finance Corporation P.U.C Pre University Education UN United Nations

CFO Chief Financial Officer ILO International Labour Organisation PCB Pollution Control Board UNFCCC United Nations Framework Convention on Climate Change CMD Chairman and Managing Director IMF International Monetary Fund PHC Public Health Centre UNICEF United Nations Children's Fund COD Chemical Oxygen Demand INR Indian Rupees PLF Plant Load Factor UN MDGs United Nations Millenium Development Goals CPCB Central Pollution Control Board IPCC Intergovernmental Panel on PPE Personal Protective Equipment Climate Change USD United States Dollar CS Company Secretary PRA Participative Research Assessment IPO Initial Public Offering VIOM Vyasankere Iron Ore Mines CSR Corporate Social Responsibility PRCI Public Relations Council of India ISO International Organisation for WHO World Health Organisation DGM Deputy General Manager Standardisation PVS P. Venganna Shetty and Brothers

ED Executive Director ITI Industrial Training Institutes

EIA Environmental Impact IUCN International Union for Assessment Conservation of Nature

EMS Environmental Management Kg Kilo Grams Systems KIAD Karnataka Industrial Areas EOU Export Oriented Unit Development Board

Fe Iron KPI Key Performance Indicator

FICCI Federation of Indian Chambers of KSPCB Karnataka State Commerce & Industry Pollution Control Board

FIMI Federation of Indian Mineral KwH Kilo Watt Hour Industries M. Tech. Masters in Technology FKCCI Federation of Karnataka Chambers of Commerce & m3 Cubic Meter Industry MD Managing Director FY Financial Year

7 8 glossary of mining terms

Beneficiation Overburden The treatment of ore & making it more in mineral content. The associated waste rocks occurring with Iron Ore is termed as overburden. Stripping is the operation of removing the overburden prior Blasting to the working of the mineral. Process of detonating explosives to loosen rock for excavation. Pellet A marble-sized ball made from iron ore fused with additives Byproduct clay and coke. It is intermediate product for use in A secondary metal or mineral product recovered in the milling steelmaking. process.

Reclamation Drill The process of returning the land to another productive use There are various types of drills for exploration such as a after mining has been completed. The restoration of land diamond drill (produces core) or reverse circulation drill and environmental values to a surface mine site after the (produces chips). Other types of drills are used in the mining ore is extracted. Reclamation operations are usually process which do not produce a core, but are used to make underway as soon as the ore has been removed from a mine circular holes in the rock which are filled with explosives for site. The process includes restoring the land to its blasting to loosen the rocks. approximate original appearance by restoring topsoil and planting native grasses and ground covers.

Exploration Prospecting, sampling, mapping, diamond drilling and other Recovery work involved in searching for ore. The percentage of valuable metal in the ore that is recovered by metallurgical treatment.

Mineral A naturally occurring homogeneous substance having Resource definite physical properties and chemical composition and, if The calculated amount of material in a mineral deposit, formed under favourable conditions, a definite crystal form. based on limited drill information.

Open Pit Run of Mines A mine, that is entirely on surface. Not being underground. The iron ore mined in its natural unprocessed state at the pit Also referred to as, open-cut or open-cast mine. head prior to treatment of any sort.

Ore Reserves Tailings The calculated tonnage and grade of mineralisation which Material rejected from a mill after most of the recoverable can be extracted profitably; classified as possible, probable valuable minerals have been extracted. and proven according to the level of confidence that can be placed in the data. Zone An area of distinct mineralisation.

9 10 annexure - I code of conduct

Corporate and Organisational Values 6 Environmental Commitment

1 Integrity - doing what is right The Company's business will be conducted in an environmentally friendly and responsible manner. Personal integrity, upheld on a day-to-day basis, is the unshakable foundation for corporate integrity. Long-term, trusting business relationships are built by being Employees shall: honest, open and fair. • ensure compliance with the spirit and intent of environmental laws, Employees are expected to uphold the highest professional standards. regulations and standards; • incorporate environmental protection as an integral part of the design, production, operation and maintenance of Company's facilities. 2 Gifts Employees will not solicit any gifts from their business relationships. Employees 7 Safety shall reject unsolicited gifts that may be perceived as intended to / likely to influence any business decision. Acceptance of cash gift is prohibited. Company assigns highest priority to the safety of its employees and all those who are influenced by the operations of the Company. No job is important enough to justify unsafe operations. Supervisors and managers are responsible for 3 Conflict of Interest monitoring the use of all reasonable safeguards in the workplace including Employees, whether dealing in personal or official capacity, are expected to avoid adherence to Company procedures, safe work practices, and wearing personal activities, agreements, positions, business investments or interests, and other protective equipment so as to ensure health, safety and welfare of all concerned. situations that are in conflict or appear conflicting with interests of the Company However, ultimately all employees are responsible for their own safety. Every or that may interfere with their individual performance. Towards this, employees employee must, for his or her own and fellow workers' health, safety and welfare are required to make disclosures to the Compliance Officer (Company Secretary) abide by the Company procedures and safe work practices, and use all relating to all material, financial and commercial transactions, where there appropriate personal protective equipment. personal interest may have potential conflict with the interest of the Company at large (eg. Dealing with Company's shares, Commercial dealings with Baldota Group Companies). Such disclosure should be made as soon as an employee 8 Confidential and Proprietary Information develops personal interest in any transaction conflicting with the interest of the Company information, including self-generated computer software applications, Company at large. may be confidential or proprietary. Employees have to be careful about Employees may not knowingly engage in any conduct or activities that are disclosure of such information to people outside the Company or to employees inconsistent with the Company's best interests. who need not know or possess the same. Concerns about conflicts of interest may be addressed through either: When there is a legitimate business need to share confidential or proprietary • prior approval in writing of or information with outsiders, it may be disclosed after prior approval of appropriate authority and under an appropriate confidentiality agreement protecting such • complete and timely disclosure to appropriate organisational authority. information. It is always conflict of interest to work simultaneously for a competitor, material Confidential and proprietary information must not be treated casually or left customer or supplier. unprotected. Employees are prohibited from using Company's property or information, or their 4 Legal Compliance position within the Company, for personal gain. The Company's policy on legal compliance requires every employee to adhere to

the legal and regulatory requirements, in all material respects, that affect his or 9 Financial Information her job. Employees must adhere to this policy on legal compliance and associated reporting. Financial information on Company's operations and performance provided to shareholders, equity analysts, creditors, newspapers and such others, whether It is essential that information provided to the regulators is accurate and not statutory or voluntary, must be accurate and reliable. misleading. Disclosure of financial and business information to the public at large or to any interested person shall be governed by the “Code of Corporate Disclosure 5 Respect for People Practices For Prevention of Insider Trading” prescribed by SEBI. Employees are expected to treat co-employees and business associates fairly Communication to the Press or such other media will be organised by the Office of and, irrespective of hierarchical level, with dignity and respect. Being treated Chairman & Managing Director and Employees should not talk about Company fairly means that employees shall be judged on merits. matters with a reporter, either on or off the record, without first contacting the Office of Chairman & Managing Director. Senior Management Cadre must maintain an open line of communication and listen to all employees.

11 12 annexure - I annexure - II code of conduct ICMM principles

In order to protect the investing public, securities laws make it illegal for those 01 Implement and maintain ethical business practices and sound systems of with 'unpublished price sensitive information' to buy or sell securities (stocks, corporate governance. bonds, options, etc.). Employees must not indulge in insider trading and abide by the Company's Code of Conduct for Prevention of Insider Trading. 02 Integrate sustainable development considerations within the corporate decision- making process.

10 Company Assets, Computer Network Use and Security 03 Uphold fundamental human rights and respect cultures, customs and values in dealings with employees and others who are affected by our activities. Employees must make responsible use of Company assets in their personal possession such as telephones, computers and other hardware, software, 04 Implement risk management strategies based on valid data and sound science. Internet connection, networks and the information that runs on them in a 05 Seek continual improvement of our health and safety performance. responsible manner. 06 Seek continual improvement of our environmental performance. Employees must: • use telephone, computers and peripherals and internet responsibly and 07 Contribute to conservation of biodiversity and integrated approaches to land use primarily for legitimate business purposes and personal uses should be planning. reasonable and kept to a minimum. 08 Facilitate and encourage responsible product design, use, re-use, recycling and • protect the security of computer systems. disposal of our products. • not engage in electronic communications that might be considered offensive, 09 Contribute to the social, economic and institutional development of the derogatory, defamatory, harassing, obscene or otherwise vulgar. communities in which we operate. • not use Company electronic communications systems to improperly 10 Implement effective and transparent engagement, communication and disseminate copyrighted or licensed materials, or proprietary information. independently verified reporting arrangements with our stakeholders. • not use Company electronic communications systems to transmit chain letters, advertisements or solicitations (unless authorized). Principle 01 • not visit inappropriate Internet sites; and • always protect information used to access computers, networks or systems. Implement and maintain ethical business practices and sound systems of corporate governance. Company's electronic communications system and information will be monitored for compliance with Company policy and applicable laws. Employees must note • Develop and implement company statements of ethical business principles, and that they are not entitled to privacy privilege in respect of the same. practices that management is committed to enforce. • Implement policies and practices that seek to prevent bribery and corruption. 11 Records Maintenance and Management • Comply with or exceed the requirements of host-country laws and regulations. Employees must maintain and manage appropriate records and information pertaining to affairs of the Company under their purview, including records and • Work with governments, industry and other stakeholders to achieve appropriate information in electronic form like e-mails, computer files etc. and effective public policy, laws, regulations and procedures that facilitate the mining, minerals and metals sector's contribution to sustainable development within national sustainable development strategies. Compliance with the Code As a condition of employment / association with the Company, Employees are expected to comply with and strictly adhere to the standards of conduct Principle 02 contained in this Code and underlying policies and procedures. Failure to comply Integrate sustainable development considerations within the corporate decision- the code may result in disciplinary actions. When in doubt, this Code casts the making process. responsibility on the employee to seek clarification and guidance as to the proper course of conduct from appropriate person in the Senior Management. • Integrate sustainable development principles into company policies and Employees who are aware of any misconduct under this Code, illegal activity, practices. fraud or abuse of Company assets must report such matters to the Chairman & • Plan, design, operate and close operations in a manner that enhances Managing Director. The employees reporting any misconduct shall be suitably sustainable development. protected and no unjust action will be taken against any such employee for making such a report. • Implement good practice and innovate to improve social, environmental and economic performance while enhancing shareholder value.

13 14 annexure - II ICMM principles

• Encourage customers, business partners and suppliers of goods and services to • Provide all employees with health and safety training, and require employees of adopt principles and practices that are comparable to our own. contractors to have undergone such training. • Provide sustainable development training to ensure adequate competency at all • Implement regular health surveillance and risk-based monitoring of employees. levels among our own employees and those of contractors. • Rehabilitate and reintegrate employees into operations following illness or injury, where feasible. • Support public policies and practices that foster open and competitive markets.

Principle 06 Principle 03 Seek continual improvement of our environmental performance Uphold fundamental human rights and respect cultures, customs and values in dealing with employees and others who are affected by our activities. • Assess the positive and negative, the direct and indirect, and the cumulative environmental impacts of new projects - from exploration through closure. • Ensure fair remuneration and work conditions for all employees and do not use forced, compulsory or child labour. • Implement an environmental management system focused on continual improvement to review, prevent, mitigate or ameliorate adverse environmental • Provide for the constructive engagement of employees on matters of mutual impacts. concern. • Rehabilitate land disturbed or occupied by operations in accordance with • Implement policies and practices designed to eliminate harassment and unfair appropriate post-mining land uses. discrimination in all aspects of our activities. • Ensure that all relevant staff, including security personnel, are provided with • Provide for safe storage and disposal of residual wastes and process residues. appropriate cultural and human rights training and guidance. • Design and plan all operations so that adequate resources are available to meet • Minimise involuntary resettlement, and compensate fairly for adverse effects on the closure requirements of all operations. the community where they cannot be avoided. • Respect the culture and heritage of local communities, including indigenous Principle 07 people. Contribute to conservation of biodiversity and integrated approaches to land use planning Principle 04 • Respect legally designated protected areas. Implement risk management strategies based on valid data and sound science. • Disseminate scientific data on and promote practices and experiences in • Consult with interested and affected parties in the identification, assessment biodiversity assessment and management. and management of all significant social, health, safety, environmental and • Support the development and implementation of scientifically sound, inclusive economic impacts associated with our activities. and transparent procedures for integrated approaches to land use planning, • Ensure regular review and updating of risk management systems. biodiversity, conservation and mining • Inform potentially affected parties of significant risks from mining, minerals and metals operations and of the measures that will be taken to manage the potential Principle 08 risks effectively. • Develop, maintain and test effective emergency response procedures in Facilitate and encourage responsible product design, use, re-use, recycling and collaboration with potentially affected parties. disposal of our products • Advance understanding of the properties of metals and minerals and their lifecycle effects on human health and the environment. Principle 05 • Conduct or support research and innovation that promotes the use of products Seek continual improvement of our health and safety performance and technologies that are safe and efficient in their use of energy, natural resources and other materials. • Implement a management system focused on continual improvement of all aspects of operations that could have a significant impact on the health and • Develop and promote the concept of integrated materials management safety of our own employees, those of contractors and the communities where we throughout the metals and minerals value chain. operate. • Provide regulators and other stakeholders with scientifically sound data and • Take all practical and reasonable measures to eliminate workplace fatalities, analysis regarding our products and operations as a basis for regulatory injuries and diseases among our own employees and those of contractors. decisions.

15 16 annexure - II annexure - III ICMM principles further indicators reference (not reported and not applicable)

• Support the development of scientifically sound policies, regulations, product standards and material choice decisions that encourage the safe use of mineral ECONOMIC and metal products. EC8 MSPL has a proven track record of undertaking various community projects (investment in infrastructure) to develop local communities and local Principle 09 economies, thus satisfying the needs of local community without the intention of direct benefit from the same. (Refer booklet 5 / pg. 19 of section Contribute to the social, economic and institutional development of the communities Nurturing Employees). Hence, reporting on this indicator is not applicable to in which we operate MSPL as it does not encourage commercial, in-kind or pro bono engagement. • Engage at the earliest practical stage with likely affected parties to discuss and respond to issues and conflicts concerning the management of social impacts. ENVIRONMENT • Ensure that appropriate systems are in place for ongoing interaction with affected parties, making sure that minorities and other marginalised groups have EN15 MSPL has obtained all required environmental clearances from the national equitable and culturally appropriate means of engagement. government to perform mining activity in the specified area which confirms • Contribute to community development from project development through that the activity is safe and does not possess any threat to the environment. closure in collaboration with host communities and their representatives. Therefore MSPL's activity does not pose any threat to environment and accordingly this indicator is not applicable to report. • Encourage partnerships with governments and non-governmental organisations to ensure that programs (such as community health, education, local business EN25 MSPL practises efficient water management and treatment system. No water development) are well designed and effectively delivered. is discharged into any water bodies, rather MSPL took efforts and avoided • Enhance social and economic development by seeking opportunities to address run-offs affecting surrounding habitats and water bodies by constructing poverty. earthen bunds and dykes. Thus this indicator is not applicable to MSPL. EN27 As mined iron ore is MSPL's main product, its operations / products do not Principle 10 involve / require any packaging material, hence this indicator is not applicable for MSPL. Implement effective and transparent engagement, communication and independently verified reporting arrangements with our stakeholders EN28 This indicator is not reported in this report because there was no incident of non-compliance, either with environmental laws and regulations or any • Report on our economic, social and environmental performance and contribution other regulation. Keeping in mind the complex and sensitive nature of to sustainable development. business, MSPL ensures compliance at all levels of mining operation. As a • Provide information that is timely, accurate and relevant. result of better practices in place it does not fall into any circumstances of non-compliance that may lead to clean-up obligations or other costly • Engage with and respond to stakeholders through open consultation processes. environmental liabilities.

EN30 Expenditure was incurred by MSPL towards waste management system; however MSPL made considerable investments towards training personnel on environment and some services for environmental management. In view of the same MSPL did not incur any extra costs towards environmental management, thus this indicator has not been reported in this report.

LABOUR PRACTICES AND DECENT WORK

LA 4 No agreements (trade unions etc.) exist at MSPL's organisation level or at work place. Also MSPL did not come across any issues related to the same. MSPL does understand the importance of collective bargaining agreement and is working on the same to have a system in place.

LA 5 Mining operation does not undergo / involve significant operational changes as the nature of operations is standard. If technology improvement happens that may lead to significant operational changes, MSPL employees will be trained and communicated on the same. Collective bargaining is yet to be in place for MSPL, hence this indicator is not applicable and not reported.

17 18 annexure - III further indicators reference (not reported and not applicable)

LA 14 This indicator is not applicable as MSPL is an equal opportunity employer and benefits for all employee remains same (no difference in ratio arises).

HUMAN RIGHTS

HR1 & MSPL have plans to extend its responsibility along the supply chain and will HR2 demand statutory compliance from all its suppliers. This indicator is not The Board of Directors reported as screening on human rights and related practices for the supply MSPL Limited chain / significant stakeholders is in the planning stage. Baldota Enclave HR6 As part of MSPL's Human Rights policy, it does not employ child labour. Thus Abheraj Baldota Road this indicator is not applicable for MSPL. Hospet 583203 Karnataka, India HR8 MSPL security personnel / guards are contracted. MSPL ensures that guards are briefed and trained on basic issues by the contract. MSPL has planned to record such training and will present enhanced report in forth coming years. OUR ENGAGEMENT

HR9 This indicator is not applicable as no separate group namely indigenous We, Ernst & Young Pvt. Ltd. (EY) have been engaged by MSPL Limited (the 'Company') people exists. The villages and community, which come under vicinity of to provide assurance to its Corporate Sustainability Report 2008-2009 (the 'Report'). MSPL's operation, are being taken care and their needs are effectively addressed. MSPL will have policy for handling grievances of employees, The Company's management is responsible for the contents of the Report, including customers and other stakeholder issues. identification of key sustainability issues, engagement with stakeholders and its presentation. EY's responsibility is to provide an independent assurance on the Report content as described in the scope of assurance. SOCIETY Our responsibility in performing our assurance activities is to the management of the SO2 & MSPL functions with vigilance and carries out preventive measures to Company only, and in accordance with the terms of reference agreed with the Company. SO3 eliminate any inconsistencies in business processes which includes We do not therefore accept or assume any responsibility for any other purpose or to any awarding and execution of contracts. It plans to comply with these indicators other person or organisation. This assurance statement should not be taken as a basis and report them in the future. for interpreting the Company's performance across the scope of issues covered in the SO6 Refer EN28 of this section (G3 Content Index) wherein the explanation has Report. SO7 & been provided for not reporting. SO8 REPORTING CRITERIA AND ASSURANCE STANDARD

The Company has mentioned its intention of applying the GRI 2006 (GRI-G3) Guidelines PRODUCT RESPONSIBILITY issued by Global Reporting Initiative (GRI) for the Report.

PR3 MSPL is dedicated to minimising the risk and impact associated with mining Our assurance is in accordance with International Federation of Accountants' (including waste management) and also its R&D efforts are aimed at International Standard for Assurance Engagements Other than Audits or Reviews of reducing their environmental impact to enhance sustainability. This Historical Financial Information (ISAE 3000), and our conclusions are for 'limited' indicator is not reported as MSPL's products and service does not involve assurance as set out in ISAE 3000. any packaging. OUR SCOPE PR7 Refer EN28 of this section (G3 Content Index) wherein the explanation has PR8 & been provided for not reporting. The scope of our assurance covers sites and indicators considered relevant with respect PR9 to the Company's operations and their impact on Sustainability, and include:

Data and information related to the Company's sustainability performance reported for the period 1st April 2008 to 31st March 2009;

The Company's internal protocols, processes, and controls related to the collection and collation of sustainability performance data;

19 20 Review of selected data streams pertaining to GRI indicators to determine the The Company needs to further strengthen their sustainability data base level of accuracy of reported data. management system for collection and collation of data across all operations and functions; LIMITATIONS AND EXCLUSIONS The Company has developed a Sustainability Policy this year, to lend further Our assurance scope excludes: focus on sustainability performance;

Aspects of the Report other than those mentioned above; The Company could set up a specific internal task force which could be cross functional to effectively implement the sustainability policy through defining Data and information outside the defined reporting period (1st April 2008 to key targets/framing score cards. 31st March 2009); OUR CONCLUSIONS The Company's statements that describe expression of opinion, belief, aspiration, expectation, aim or future intention provided by the Company; On the basis of our scope of review and methodology, nothing has come to our attention that would cause us not to believe that: Data and information on economic and financial performance of the Company. The Report presents the Company's sustainability performance across its 'triple bottom line' covering economic, environmental and social indicators OUR APPROACH and the sustainability challenges faced by it.

The nature and scope of our work was based on our professional judgment and we have The report contents are presented fairly, in material respects, in keeping with performed all the procedures deemed necessary to provide a basis for our conclusions. the Global Reporting Initiative's 2006 Sustainability Reporting (GRI-G3) Within the scope of our engagement, we requested evidence on a sample basis based on principles and criteria. materiality criteria. The reported information on non-financial sustainability parameters are The approach to the assurance exercise included interaction with key personnel of the supported by documentary evidences and internal records. Company to identify the processes in place to capture sustainability performance data and information as per GRI 2006 (GRI-G3) guidelines, followed by reviews of the processes for collecting, compiling, and reporting on these indicators at the corporate and operating unit levels. for Ernst & Young Private Limited

EY's team visited the Company's corporate office in Hospet, Vyasankere Iron Ore Mines (VIOM) in Vyasankere village and Export Oriented Units (EOUs) (1&2) in Vyasankere and Ingaligi villages respectively in Hospet taluka, Bellary district, Karnataka, to review the systems for managing and reporting on sustainability activities. Information pertaining to other locations was made available to us at the Company's corporate office in Hospet. Sudipta Das Assumptions made for arriving at reported numbers against the sustainability Partner performance indicators were understood and necessary clarifications obtained. Stakeholder engagement process was reviewed through interviews with concerned September 12, 2009 personnel. Sufficient, relevant and appropriate evidences to support the conclusions in Kolkata this assurance report were obtained from the Company, to support our conclusion.

OUR ASSURANCE TEAM

Our assurance team, comprising of multidisciplinary professionals, has been drawn from our Climate Change and Sustainability Services that undertakes similar engagements with a number of significant Indian and international businesses.

OUR OBSERVATIONS

During the course of our work, we have observed that:

The Company has made efforts to report on its sustainability performance as per A+ application level of the GRI 2006 (GRI-G3) guidelines;

A member firm of Ernst & Young Global Limited Regd. Office: 22, Camac Street, Block 'C', 3rd Floor, Kolkata - 700 016.

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