1:ff l!'f ~ ~ R;t ~ts NMDC Limited (1fl«I ~ C6'T \J!Ff) (A GOVT. OF INDIA ENTERPRISE) ~ CJ>lllictll: ·~ ~ .. 10-3-311!1:!". ~ ~. lfRW{ ~ . ~C:"<lillC:- 500 028. Regd. Office: 'Khanij Bhavan' 10-3-311/A, Castle Hills, Masab Tank, Hyderabad - 500 028. NMDC ':)Trq ~~I Corporate Identity Number: L 13100AP1958 GOI 001674 No. 18(1)/2019-Sectt 6th August 201 9 1) The BSE limited 2) National Stock Exchange of India Ltd., Phiroze Jeejeebhoy Towers, Exchange Plaza, C-1, Block G, Dalal Street, Mumbai- 400001 Bandra Kurla Complex, Bandra (E), Mumbai - 400 051 3) The Calcutta Stock Exchange limited, 7, Lyons Range, Kolkata - 700001 Dear Sir I Madam, Sub: 61 st Annual Report of NMl;>C limited for the F. Y. 2018-19 along with Notice of Annual General Meeting Ref: Regulation 34(1) of the Securities and Exchange Board of India (listing Obligations and Disclosure Requirements) Regulations, 2015; Security ID: NMDC Please find attached the 61 st Annual Report of NMDC Limited for the F.Y . 2018-19 along with Notice of 61 st Annual General Meeting of the Company scheduled to be held on Friday the 30th August 20 19 at 1130 hours at Trillion Ball Room, The Pa rk Hotel, 22, Raj Bhavan Road, Somajiguda, Hyderabad - 500082, Telangana. Thanking you Yours faithfully, NMDC Limited J. ~ A ardha Saradhi Company Secretary Encl: A/a ~I Phones: 23538713-21 (9 Lines), 23538723, 23538767 ~I Fax: +91-40-23538711 ~-l)c;J I E-mail : [email protected] ~I Website : www.nmdc.co.in INDIA’S NO.1 MERCHANT IRON ORE PRODUCER NMDC Limited (A Government of India Enterprise) Annual Report | 2018-19 Eco-Friendly Miner Review meeting of NMDC with Ministry of Steel CONTENTS CORPORATE INFORMATION Strategic Vision & Mission 6 Statutory Auditors Report CMD’s Message 8 M/s. Tej Raj & Pal History & Milestones 12 Hyderabad, Telangana FY2019 Financial Highlights 14 Our Footprint 16 Branch Auditors How We Create Value 18 M/s. O P Totla & Co. Board of Directors 20 Raipur, Chhattisgarh Senior Management 22 M/s. Vijay Panchappa & Co. Serving India’s 24 Dharwad, Karnataka DEMAND FOR STEEL M/s. Amit OM & Co. India’s largest 26 IRON ORE PRODUCER Allahabad, Uttar Pradesh Advancing up 28 THE VALUE CHAIN Secretarial Auditors A philosophy of Sustainable 30 D.Hanumanta Raju & Co. Development Hyderabad, Telangana Corporate Social Responsibility 32 Cost Auditors Statutory Directors’ Report 34 M/s. Tanmaya S. Pradhan & Co. Reports Management Discussion 58 & Analysis Sambalpur, Odisha Report on Corporate 72 Governance Main Banker Business Responsibility Report 111 State Bank of India Financial Standalone Statements Regd. Office: Statements Independent Auditor’s Report 144 NMDC Limited Balance Sheet 162 “Khanij Bhavan”, Statement of Profit and Loss 163 10-3-311/A, Castle Hills Notes 167 Masab Tank, Hyderabad - 500 028 Consolidated Statements CIN : L13100TG1958GOI001674 Independent Auditor’s Report 223 Website : www.nmdc.co.in Balance Sheet 230 Statement of Profit and Loss 231 Share Transfer Agent Notes 235 M/s Aarthi Consultants Pvt Ltd D.No. 1-2-285, Domalguda Notice 290 Hyderabad - 500 029. Phone Nos. 040-27638111/27634445 Fax No. 040-27632184 Email: [email protected] Shri N. Baijendra Kumar, CMD, NMDC meets Shri Dharmendra Pradhan, Hon’ble Union Minister of Petroleum & Natural Gas and Minister of Steel Shri N. Baijendra Kumar, CMD, NMDC meets Shri Faggan Singh Kulaste, Hon’ble Union Minister of State for Steel As India’s largest iron ore miner, we are intrinsic to our nation’s progress. N M D C LIMITED Strategic Report 4 Annual Report 2018-19 Our strategic management plan, 'Vision 2025' is to take our total iron ore production capacity from 43 MTPA today to 67 MTPA. With a judicious mix of greenfield and brownfield expansions of earmarked assets, along with strategic joint ventures, we plan to maintain our peer position as India’s largest iron ore producer. We produce one of the best quality iron ore in the world. FY2019 ` 12,153 crore ` 7,519 crore turnover of NMDC as on EBITDA from operations 31st March, 2019 ` 7,199 crore ` 4,642 crore Profit Before Tax as on Profit After Tax as on 31st March, 2019 31st March, 2019 ` 25,952 crore ` 1,690 crore net worth of cash returns declared to shareholders (dividend) Strategic Report N M D C LIMITED Annual Report 2018-19 5 NMDC continues to pursue Awards & Accolades policies and programmes for the Year 2018-19 to create superior value for y NMDC received the prestigious S&P Platts Global Metal shareholders by meeting India’s Award under CSR category, organised by S&P Platts. y NMDC received Hindustan Ratan Award in the category demand for steel, maximising of Best Financial Performing PSE cash from our world-class y NMDC received Rajbhasha Samman (First Prize) amongst PSEs of Ministry of Steel during the meeting assets and allocating capital of Hindi Advisory Committee of Ministry of Steel. with discipline. y NMDC received Finalist Award in “Cloud Migration & Data Centre Operation” at Webscale Conference organised by Data Centre Dynamics, Bengaluru. We also believe in investing y NMDC received “Dun & Bradstreet PSU Award 2018 substantially into the socio- under the sector Mining- Metals & Minerals category” y NMDC’s Bacheli Complex received “Tata Steel Mining economic development of our Sustainability Award” for the year 2017-18 local communities, especially y NMDC received “India Green Energy Award – 2018” in the category of Outstanding Renewable Energy around our mining projects. Generation Projects by Public Sector-Wind y NMDC received Rajbhasha Award (2nd Prize) in PSU We are India’s largest iron ore mining company. category of ‘C’ Region With an annual production capacity of 43 million y NMDC received four Awards from Public Relations tonnes of iron ore, and production of around Society of India(PRSI) in the category of Corporate 32.4 million tonnes of iron ore in FY2019, we Sustainability Report, CSR Project of Women enjoy a market share of about 24% domestically Empowerment, Best PSU Organisation and Corporate (excluding captive iron ore production). Film y NMDC received Quality Circle Forum of India (QCFI) With a Profit (before tax) of ` 7,199 crore and a Award in the category of “Best Supporting Organization net worth of ` 25,952 crore (as on 31st March, Award in Public Sector” 2019), we are one of India’s top profit-making y NMDC received two Governance Now PSU awards for ‘Navratna’ public sector companies. We have a Best Performer (Financial) and Best Performer (CSR) under Navratna category. strong history of rewarding investors with an average dividend payment of about 690% in y NMDC received Swachh Abhiyaan Award (First Prize) the last 5 years. amongst PSEs of Ministry of Steel y NMDC received Public Relations Council of India (PRCI) Excellence Awards 2019 for its CSR Brochure, Corporate Advertising Campaign, Corporate Diary 2017, Wall Calender & Television Commercials. y NMDC awarded with 8th Annual Greentech HR Platinum Award 2018 under Training Excellence category. N M D C LIMITED Strategic Report 6 Annual Report 2018-19 NMDC is a forward looking company, aligning itself to the growth agenda of India, and its people’s aspirations. To meet the country’s demand for steel, we plan to augment our production capacity of iron ore to 67 MTPA. We have a clear purpose: as We have also embarked on value addition projects by pioneers in iron ore mining, we setting up pelletisation plants by utilising slimes and a 3.0 MTPA integrated steel plant in Chhattisgarh. This plant produce one of the most essential is now close to completion, with production expected during FY2021. materials required for India’s progress. At NMDC, we operate In addition to this, our JV company with CMDC Limited, is expected to start production in near future. We have also a portfolio of world-class assets developed an intermediate stock pile at Kumarmaranga near Jagdalpur to ensure uninterrupted supply of ore to that generate strong cash flows. regional customers. By doing this efficiently, we Government of India has charted a road map to augment deliver superior returns to our India’s Steel production capacity to 300 Mtpa by 2030-31 as per National Steel Policy. To fulfil this vision, NMDC proposes shareholders, while safeguarding to act as a facilitator and developer of greenfield steel plants by creating Special Purpose Vehicles (SPVs) in the mineral the environment and meeting our rich states of Jharkhand & Karnataka. obligations to wider society. NMDC also proposes to invest in strategic and critical raw materials which are required by our nation for long term supply security. In line with this strategy, NMDC has created ‘NMDC Global’ department and is scouting for rare earth minerals in India and abroad, along with IREL under an MOU. Going forward, we aim to become an intrinsic partner to India’s growth story. Strategic Report N M D C LIMITED Annual Report 2018-19 7 WE ARE COMMITTED TO MAINTAIN OUR GLOBAL COST COMPETITIVENESS AND TO COUNTER THE VAGARIES OF MARKET CYCLES ALONG WITH ROBUST STRATEGIC PLANNING TO SUPPORT OUR GROWTH AGENDA, WE ARE CONSISTENTLY ENHANCING OUR ORGANISATIONAL CAPABILITIES TO ACHIEVE OUR SHORT-TERM AND LONG-TERM OBJECTIVES. VISION MISSION To emerge as a global To maintain our leadership as environment friendly mining the largest iron ore producer in organisation and also as a India, while establishing ourselves quality steel producer with as a quality steel producer and a positive thrust on social expanding business by acquiring development. and operating various iron ore, coal, and other mineral assets in India and abroad, rendering optimum satisfaction to all its stakeholders. MTPA MTPA 67Iron ore production 3.0Integrated steel plant capacity planned in Chhattisgarh N M D C LIMITED Strategic Report 8 Annual Report 2018-19 Message from the Chairman-Cum-Managing Director FY2019 HIGHLIGHTS `12,153 crore turnover `1,690 crore cash returns declared to shareholders (dividend) `7,519 crore EBITDA N.