Annual Report & Directors' Report

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Annual Report & Directors' Report Shri Faggan Singh Kulaste, Hon’ble Union Minister of State for Steel and Rural Development Govt. of India reviews performance of NMDC Limited Union Minister of State for Steel, Shri Faggan Singh Kulaste visits Bailadila Mines of NMDC TABLE OF CONTENTS Strategic FY21 Highlights 2 CORPORATE INFORMATION Report Chairman's Message 3 Statutory Auditors About us 6 M/s. Sagar & Associates Hyderabad, Telangana Vision / Mission and Objectives 9 How We Create Value 10 Branch Auditors Financial Highlights 12 M/s. Agasti & Associates Durg, Chhattisgarh Board of Directors 14 M/s.Yoganandh & Ram LLP Senior Management 15 Bengaluru, Karnataka M/s. Amit OM & Co. Corporate Social Responsibility 16 Civil Line, Allahabad, UP Statutory Directors’ Report 17 Secretarial Auditors M/s. D.Hanumanta Raju & Co. Reports Management Discussion & Analysis Report 53 Hyderabad, Telangana Report on Corporate Governance 69 Business Responsibility Report 94 Cost Auditors M/s. B. Mukhopadhyay & Co. Kolkata, West Bengal Financial Standalone Statements Main Banker Statements Independent Auditor’s Report 136 State Bank of India Balance Sheet 153 Statement of Profit and Loss 154 Regd. Office: NMDC Limited Notes 158 “Khanij Bhavan”, Consolidated Statements 10-3-311/A, Castle Hills Masab Tank, Hyderabad - 500 028 Independent Auditor’s Report 214 Telangana State Balance Sheet 221 CIN : L13100TG1958GOI001674 Statement of Profit and Loss 222 Website : www.nmdc.co.in Notes 226 Share Transfer Agent M/s Aarthi Consultants Pvt Ltd D.No. 1-2-285, Domalguda Notice 277 Hyderabad - 500 029. Telangana State Phone Nos. 040-27638111/27634445 Fax No. 040-27632184 Email: [email protected] Annual Report 2020-21 1 FY21 HIGHLIGHTS 8% 6% YOY Increase in Production YOY Increase in Sales 341.50 LT 332.52 LT 31% 25% YOY Increase in YOY Increase in Revenue from Operations Avg. Sales Realisation ` 15370 Cr ` 4581/T 45% 73% YOY Increase in PBT YOY Increase in PAT ` 8902 Cr ` 6253 Cr `102 `20.62 BVPS EPS 76% 21% RoCE as aganist 48% in FY20 ROE/RONW 2 NMDC LIMITED CHAIRMAN'S MESSAGE Your company continues to aggressively pursue capacity augmentation and technology up-gradation initiatives across its projects for quantum increase in output and improve overall efficiency Annual Report 2020-21 3 Dear Shareholder company achieved production of 34.15 MT and sales of I hope you and your dear ones have been able to 33.25 MT during the year. complete the COVID 19 vaccination schedule and Driven by strategic imperatives, NMDC has forayed continue to stay safe. Thank you for staying invested in into pellet making and the integrated steel plant at NMDC Ltd – India’s largest merchant iron ore producer. Nagarnar. The 3 MTPA steel plant with state-of-the-art FY21 has been a landmark year for us with respect technologies, is in an advanced stage of construction to production, sales and turnover considering the and getting ready for its commissioning of various units challenges faced due to covid pandemic. Donimalai progressively. The Plant will be producing an impressive Iron Ore Mine of NMDC Ltd has also resumed mining array of products viz. HR Plates, API - 5L Quality Plates, operations since 18.02.2021. Another significant event HR Sheets, HR Coils, High Carbon Steel, Silicon Steel during the year has been that the Board of Directors at and Automotive Steel. We are already operating a its 539th meeting held on 13.07.2021 inter alia, approved Minehead based 1.2 MTPA pellet plant in Donimalai. the Scheme of Arrangement between the Company and In addition a 15 MTPA Slurry pipeline from Bacheli to NMDC Steel Limited and their respective creditors and Jagdalpur, Beneficiation Plant at Bacheli including a 2 shareholders, entailing inter-alia demerger of NISP. MTPA Pellet Plant at Nagarnar are under construction. FY21 was challenging for the entire world due to COVID We continue to aggressively pursue our capacity 19 pandemic. India having one of the largest populations augmentation and technology up-gradation initiatives in the world, was most affected after the United States. across our sites. During the year we commissioned Yet on all per million parameters such as positive cases additional screening line up-gradation of existing and casualties, India was the most resilient. Stepping conveyor at Kirandul. Additionally, the Screening Plant III into FY22 after overcoming the second wave of the of Kirandul, Doubling of KK Line between Kirandul and pandemic, the Nation wide vaccination drive is making Jagdalpur, additional screening line and up-gradation the country immune as well as enabling economic of existing downhill conveyor at Dep-5 Bacheli are recovery. However, we must continue to be vigilant and progressing. Multiple projects for capacity expansion are follow covid appropriate behaviour to end this pandemic. also being envisaged at locations to increase our output and efficiency. The pandemic of Covid-19 & lockdowns across the country in Q1 FY’21 had impacted the demand for NMDC is the first-ever CPSE to implement the state- steel. Most of the downstream industries were closed of-the-art Enterprise Resource Planning (ERP) solution or operated at low capacity. Under the impact of low on SAP S/4 HANA in January 2021. The implementation demand & economic slowdown across the globe, future project known as “KALPATRU” has the distinction plans of various industries including iron & steel had of being the largest of its kind and with all Core SAP been impacted severely. However, quick recovery of modules being implemented. ERP solutions have been iron ore & steel demand in the international market, implemented with minimal or no disruptions to business especially from China, the domestic Iron & Steel activity. Implementation was planned within 18 months industry have recovered fast from the impact of COVID. and Go-live was achieved in 21 months despite Covid-19 Your company has undertaken the vaccination drive challenges. for its employees, their family members and contract NMDC has also embarked on a journey of digital associates across its projects and units. Despite the first transformation and is in process of implementing a Fleet and second waves of the pandemic, our company has Management system, automatic sampling, development been able to achieve excellent physical performance of a vision enhancement system for foggy weather through our continual push towards higher volumes. The and 3D volumetric laser scanner which will improve 4 NMDC LIMITED productivity, efficiency and safety. Social Commitment: NMDC takes pride in transforming Mineral Exploration: The company continues to explore people and societies through community engagement, potential mining blocks at various locations in India and infrastructure building, creating massive educational abroad. Exploratory drilling of 17,712.50 mts against infrastructure and providing health services. the MoU target of 17,500 mts has been achieved during Contributing to social development is engraved in our 2020-21 to establish additional resources in multiple vision. Our social objectives are aimed at improving states & enhance the life of Mines for better quality the quality of life of people in general and the socio- control. Details of the locations and mineral blocks are economic environment in and around our mining given in the Directors’ Report. locations. During the year we spent close to 160 crore on various social development activities. Education, Highlights of the Financial Performance: During the year Health & Hygiene, skill development and Livelihood our turnover for the year under review was Rs.15,370 developments programmes were the key areas of our crores as against Rs. 11,699 crores in the CPLY – an social interventions. Particulars of our CSR initiatives are increase of 31.38 %. The Company achieved a record detailed in this report. turnover for the 4th Quarter and also Annual Turnover. Both are highest since inception. Profit before tax Going forward: The demand for steel has shrunk 14.8 (PBT) from continuing operations was Rs. 8,901 crores per cent sequentially in the June quarter, largely due compared to Rs. 6,123 crores in the CPLY – an increase to lockdowns. Due to the second wave of the pandemic of 45.37 %. Profit after tax (PAT) was Rs. 6,253 crores construction activities were impacted. However, with the compared to Rs. 3,610 crores in the CPLY – an increase pandemic under control and economic activities along of 73.21%. with the Government of India’s focus on infrastructure and construction sectors, the steel demand is expected Human Resources: At NMDC, our human capital and to touch the pre-covid days in the coming quarters. business share a bond of co-creation, we enable them to rise to their best and in turn, they help us to drive We expect the recent pricing volatilities in iron ore to excellence. Augmenting the quality of human capital not stabilise along with the increase in global demand for only motivates employees but also fosters innovation steel. The World Steel Association (world steel) forecast thereby increasing the competitive advantage of your that global steel demand will climb 5.8% in 2021 to reach company. We continue to progress on our Human 1.874 billion metric tons (mt). Demand will further grow Resource initiatives and Industrial relations. by 2.7% in 2022 to reach 1.925 billion mt. NMDC has fostered a culture that rewards continuous At NMDC we have the required operational agility to learning, collaboration and talent for the organization absorb the cyclical volatilities in the iron ore and steel to be future-ready and to meet the challenges posed by sector and stay ahead on a growth trajectory. ever-changing market realities. Capability building of the workforce is achieved by combining formal learning Thank you and stay safe. with vigorous on-the-job development, coaching and Jai Hind feedback which has led to executives and workmen improving their performance and advancing their careers in significant ways.
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