ccccccccccccccccccccccccccccccccccccccccccccccccc NMDC LIMITEDc

(A Government of India Enterprise)

The National Mineral Development Corporation Limited (incorporated 1958) is a public

sector undertaking of the Government of India. It is fully owned by the Government of India
and is under administrative control of the Ministry of Steel.

It is involved in the exploration of iron ore, copper, rock phosphate, limestone, dolomite,
gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite etc.

It is India's largest iron ore producer and exporter producing about 30 million tons of iron ore
from 3 fully mechanised mines in Chhattisgarh and Karnataka. It also operates the only
mechanised diamond mine in the country at Panna in Madhya Pradesh.

Operating mines

½c èailadila Iron Ore Mine, Kirandul Complex

½c èailadila Iron Ore Mine, èacheli Complex
½c onimalai
½c Panna

Strong back up of an ISO 9001 certified R& centre, which has been declared as the "Centre
of Excellence" in the field of mineral processing by the Expert Group of UNIO.

NMC has made valuable and substantial contribution to the national efforts in the mineral
sector during the last five decades and has been accorded the status of schedule-A Public
Sector Company. The company has been recently categorized by the epartment of Public
Enterprises as "NAVA RATNA" Public Sector enterprise.

The story of NMC is woven around the dreamy hills and the deep jungle land of èastar in
Chattigrah, known as andakaranya from the epic periods. The èailadila iron ore range ±
"The hump of an ox" ± in the local dialect, was remote, inaccessible and replete with wildlife.
The range contains 1200 million tonnes of high-grade iron ore distributed in 14 deposits. The
entire area was brought to the mainstream of civilisation by the spectacular effort of NMC
by the opening-up of mines. Today, èailadila is a name to reckon with in the world iron ore
market because of its super high grade iron ore. èailadila complex possesses the world's best
grade of hard lumpy ore having +66% iron content, with negligible deleterious material and
the best physical and metallurgical properties needed for steel making.

In the past, NMC had developed many mines like Kiriburu, Meghataburu iron ore mines in
èihar, Khetri Copper deposit in Rajasthan, Kudremukh Iron Ore Mine in Karnataka,
phosphate deposit in Mussorie, some of which were later handed over to other companies in
public sector and others became independent companies.

NMC is presently producing about 22.8 million tonnes of iron ore from its èailadila sector
mines and 6.98 million tonnes from onimalai sector mines.

èecause of its excellent chemical and metallurgical properties, the calibrated ore from
èailadila deposits has substituted the iron ore pellets in sponge iron making and hence
became an important raw material for three major gas-based sponge iron steel producers like
Essar Steel, Ispat industries Ltd and Vikram Ispat. In addition to these three, the entire
requirement of the Visakhapatnam Steel Plant is also being met from èailadila.

The demand for steel will continue to grow in the years to come and this in turn would call
for increased demand for iron ore. NMC is gearing itself to meet the expected increase in
demand by opening up new mines ± eposit-11è in èailadila sector and Kumaraswamy in
onimalai sector and this would add in allowing the production capability to reach around 50
million tonnes per year 2014-15

NMC is also diversifying into other raw materials for steel industry like low silica
limestone. Production of ead èurnt magnesite and further value addition is under study
through its subsidiary J K Mineral evelopment Corporation Limited.

NMC has taken over a Silica Sand mining and beneficiaton project from Uttar Pradesh
State Mineral evelopment Corporation Ltd., The plant has been designed to produce high
purity beneficiated silica sand of around 300,000 tonnes per year which is a raw material for
production of float/sheet glass.

With a view to capture the opportunities now available following the NAVARATNA
recognition and its expertise in the field of mineral exploration and mining, NMC is
venturing into development of high value minerals like gold, diamond etc., as joint ventures
in some of the African countries.

A memorandum of understanding has been signed between NMC, Indian Rare Earths

Limited, (IRE) and Andhra Pradesh Mineral evelopment Corporation to establish a joint
venture for the development of èheemunipatnam èeach Sand. The project envisages mining
of beach sands, setting up of mineral separation plant for Ilmenite concentrate and a
downstream value addition plant for conversion of Ilmenite into synthetic Rutile/TiO2
slag/TiO2 pigment with pig iron as by-product

India's single largest iron ore producer and exporter, presently producing about 30 million
tons of iron ore from 3 fully mechanized mines viz., èailadila eposit-14/11C, èailadila
eposit-5, 10/11A (Chhattisgarh State) and onimalai Iron Ore Mines (Karnataka State)
which are awarded ISO 9001-2000 certification.

NMC has the only mechanized diamond mine in the country with a capacity of 1.00 lakh
carats / annum at Panna ( Madhya Pradesh State ). The mine remained non-operational since
22.08.2005 as per the directives of MP Pollution Control èoard. The issues have now been
resolved and Sunsequently Panna iamond Mine of NMC, the only mechanized diamond
mine in Asia, has been revived with the Hon¶ble Supreme Court of India granting permission.
Hon¶ble Union Minister for Steel Sri Virbhadra Singh has rededicated the project in the
service of the nation on 21st August 2009.

Strong back up of an ISO 9001 certified R& Centre, which has been declared as the "Centre
of Excellence" in the field of mineral processing by the Expert Group of UNIO.
 èoard of director
Rana Som (Chairman-cum-Managing irector)
è S Meena (irector)
U
Singh (irector)
Uddesh Kohli (irector)
Ms M
rabhavathi (irector)
R  James Kuttickattu (irector)
Y K Sharma (irector)
Dr ndira Misra (irector)
R N Aga (irector)
Ms Teresa èhattacharya (irector)

S Upadhyaya (irector (Technical)

K R enkatesawarlu (irector (Finance)
 K Sharma (irector (Commercial)
S enkatesan (irector (Production)
Kumar Raghavan (Company Secretary & E (L&CC)

lant Locations:

The mines of the Company are located in the following locations:

1-. èailadila Iron Ore Mine

Kirandul Complex
P.O. Kirandul
istt: antewada (Chhattisgarh)

2-èailadila Iron Ore Mine

èacheli Complex
P.O. èacheli
ist: antewada (Chattisgarh)

3. onimalai Iron Ore Mine

onimalai Township
ist: èellary - 583 118, Karnataka

4. iamond Mining Project

Majhgawan, Panna - 488 001 (MP)
Management Discussion & Analysis Report

1 c ndustry structure and developments

Established in 1958, over the years, NMC has grown to be India's largest single iron ore
producer, operating its mines in Chhattisgarh and Karnataka. Adopting modern technologies
and commitment to quality of its products, NMC is determined to be a world-class eco-
friendly mining organization. NMC has been paying dividends for the last 19 years. The
iron ore industry being cyclic in nature, NMC is exposed to sharp fluctuation in demand for
its products. The demand for Iron ore is related to growth of Indian economy and also that of
the global economy reflected primarily in the growth of the infrastructure sector. The sharp
fall in the Iron and steel sector in the prevailing recessionary conditions globally has led to
short fall in global consumption of Iron and steel.

Production

Results 2007-08 2008-09

Iron Ore Production (L+F) 29.78 mt 28.52 mt

Iron Ore Sales (L+F) 28.18 mt 26.47 mt

Sales Income Rs 5,711 crore Rs 7,564 crore

Profit before tax Rs 4,947 crore Rs 6,648 crore

No. of Employees 5655 (31.3.08) 5652 (31.3.09)

SWOT analysis of ³NMDC´

Strength and weakness

Strength

ƒc Financial strength characterized by high net worth, zero debt, good credit rating.

ƒc Good work culture - skilled, experienced and dedicated workforce.

ƒc èrand image of NMC's iron ore in domestic/international market.

ƒc Highly mechanized iron ore mines.

ƒc Availability of technology and infrastructure of existing projects in èailadila to add

new
ƒc projects in the area with comparatively less investment.

ƒc Core competence in iron ore mining. In-house R& capability.

Weakness
ƒc Remote location of the projects acting as deterrent in attracting and retaining talent
and also for reaching supplies and services.

ƒc elay in forest and environmental and other clearances affecting time schedules for
opening and commissioning new mines and affecting our investment plans.

ƒc Extreme foggy weather conditions causing stoppage of mining operations at èailadila

complex during monsoon months.

ƒc The Company has not diversified into other sector. As such, any adverse impact on
the mining sector hits the profitability of the Company.

ƒc As a mining Company, NMC is subject to extensive regulations surrounding health,

safety of the people and environment. However, regulatory standards and community
expectations are constantly evolving and as a result the Company is exposed to
increased litigation compliance cost and unforeseen environmental remediation
expenses apart from constraints in operations

Opportunities and Threats

Opportunities

ƒc iversification in steel production

ƒc Financial powers for investment in new projects as a Navaratna Company.

ƒc Exploration and mining opportunities in India and abroad for high value minerals.

ƒc iversification into other areas for sustained growth.

Threats

ƒc isturbances due to Maoists activities in èailadila area.

ƒc Intense competition from private sector in securing fresh mining leases, resulting in
denial of
ƒc leases in many cases and litigation delaying actions.

ƒc Entry of MNCs and other Indian private companies into iron ore mining.

ƒc The industry being cyclic in nature, NMC is exposed to sharp fluctuations in

demand for its
ƒc products.

ƒc The Company faces risks in respect of high inventory of stocks and its disposal.
Corporate social responsibility
As part of its Corporate Social Responsibility, NMC initiated various programmes towards
peripheral/ community development in surrounding villages of its various production
projects. Some of the thrust areas of peripheral development/ community development
programme under Corporate Social Responsibility were:

ƒc Medicare
ƒc Education
ƒc rinking Water
ƒc Infrastructure evelopment

While the process of providing Medicare and drinking water facilities were initiated long
back, more structured developmental works in the identified thrust areas commenced around
1989 in a big way. Some of the development works NMC carried out, more or less
commonly in the all the project areas have been:

ƒc Providing school building/ additional class rooms, uniforms, teaching aids etc and
cash awards to meritorious students.

ƒc Free medical treatment (both indoor and outdoor) in the project hospitals to local
tribal¶s/ villagers.

ƒc Organizing free health camps separately and in conjunction with the State
Government epartments.

ƒc Providing drinking water to the nearby villages by constructing open wells, hand
pumps etc
.
ƒc Providing all-weather roads, culverts etc. Connecting neighbouring villages

ƒc Providing community buildings, Ashrams, Anganwadis etc., in the nearby villages.

ƒc Skill development training to local advise youths

.
ƒc To adopt villages for intensive CSR works and to expand CSR activities in Health,
Education etc. in different districts around NMC Projects as also elsewhere.

ƒc NMC committed a sum of Rs. 50 crore and has already paid Rs. 20 crore for
establishment of a Medical College at Jagdalpur.

ƒc As decided by èoard of NMC, budget for CSR expenditure of every year is to be

taken as 5% of retained earnings of previous year (from the year 2006-07).

ƒc NMC has become a Member of the Global Compact Forum under the aegis of
United Nations Organisation (UNO).
DEELO
MENT OF èACKWARD LLAES

èased on the report of Planning Commission, a list of 8 backward districts has been identified
in which NMC is planning various activities. Letters were written to all the Collectors to
provide the list of most backward villages in the istrict in respect of literacy rate, per capita
income etc., to undertake developmental activities.

EDUCATON

ƒc uring the year, 5992 School Uniforms were distributed in èailadila Sector and 651
in onimalai Sector during the year.

ƒc As part of infrastructural development for education, 41 numbers of Schools were

covered during 07-08 with activities like construction of boundary walls for 10
number of Schools, additional classrooms/facilities in 31 number of Schools.

ƒc Mid-day Meal Programme has been launched in onimalai on 8th February 2008,
initially covering 1000 children from schools of surrounding villages. The programme
is administered through "Akshayapatra" foundation. Two customized vehicles have
been donated for distribution of food to various schools from the centralized kitchen.
The scheme is being extended to another 1150 children of the surrounding schools
from March 2008. The cost of the Scheme is about Rs.25 lakhs per annum.

RAMEEN
UST YOJANA

'Grameen Pusti Yojana' a unique program to provide nutritious food to children below six
years, pregnant women, lactating mothers and adolescent girls, has been launched at èailadila
by the Hon'ble Steel Minister on 15 th January 2008. This will be administered through UN-
World Food Programme (UNFP). This program takes care of all the villages in antewada
istrict. The distribution will be through the Anganwadi Centers which are about 1215 in
antewada istrict. Under this program, the food cooked at Anganwadi Centers for serving
to children should be fortified by adding nutrients. 'India Mix' is a micronutrien. fortified mix
of Wheat and Soya enriched with vitamins and minerals and will be issued to other
beneficiaries from Anganwadi Centers along with Take Home Ration.

DRNKN WATER

64 nos of borewells have been dug in different tribal villages at èailadila Sector in the year
2007-08. 90 nos. Of borewells which were dug earlier, have been repaired in 2007-08.

ENAN NOs

ƒc NMC is vigorously pursuing with several NGOs for overall development of tribal

villages at èailadila.
ƒc UN-WFP has visited several tribal villages at èailadila to assess the needs and
requirements of the villagers to carry out integrated village development in a
sustainable manner within a timeframe of about 3-5 years. A proposal for adopting 30
villages is under preparation by UN-WFP.
 ƒc 'Shamayiatha Math' an NGO from èankura istrict of West èengal has visited
villages in èailadila and assessed the requirements for rural development over a
period of 3-5 years. A proposal for adopting 9 villages and carrying out health care
and allied activities in another 28 villages is under preparation by this organization.

ƒc 'Naandi' - an organization focusing on literacy improvement in primary schools,

improves the standard of child to the required level before and after school hours on
one hand and increases the percentage of school going children by counseling the
parents of the dropping-out children. This organization is surveying the status of
primary schools in about 50 villages in èastar area to carry out the literacy
improvement programme in these villages.

FLOOD RELEF MEASURES

an amount of Rs.4 crores has been paid to M/s. SAIL towards flood relief measures in UP,
èihar, Assam etc., in line with the decision taken in the CSR meeting on 07.08.2007 at MoS
A flood relief shelter is proposed to be constructed in Khusheshwar - Asthan Village in èihar
(istt: arbhanga) which is regularly affected by floods every year.

Meeting conducted by NMDC

Training and nformational Meetings

NMC staff members assigned to this program is trained and certified CèG administrators

and attend the following meetings:

ƒc Community evelopment Appreciation ay

ƒc 2009 CèG Implementation Workshop
ƒc One Training session designed by EC
ƒc One meeting with the Technical Assistance Program Manager
ƒc One Regional Application Workshop sponsored by EC

Special Regional
rojects

ƒc Submit a planning grant application to seek valuable input on the needs of

handicapped/disabled individuals
ƒc Assist communities affected by the May ay Flood of 2008

Annual eneral Meeting (AM)

ƒc The Companies Acts governs the running of these meeting

ƒc èy law all public limited companies (plcs) must hold an AGM annually to which all
shareholders are invited to attend.

The meeting allows shareholders to

ƒc discuss the company¶s performance during the year

ƒc The plans for the future
ƒc Elect office bearers
Extraordinary eneral Meeting (EM)

ƒc Called for a specific purpose which cannot be held over until the next AGM eg
possible takeover bid
ƒc All shareholders invited to attend

èoard Meetings

ƒc A èoard of irectors manage the plc

ƒc They meet at regular intervals and discuss and decide company policy (strategic
decisions)
ƒc They delegate powers and duties to managers and other committees which are formed
to carry out certain tasks.

Type of committee
Executive Committee

ƒc The board of directors is an example of an executive committee

ƒc The committee can make decisions which are legally binding on the company.

Advisory Committee

ƒc Formed to look at certain issues and make recommendations to the èoard of

irectors.

Standing Committee

ƒc Permanently in existence to deal with specific matters which have been assigned to it.

Joint Committee

ƒc Formed to co-ordinate the activities of two or more committees.

ƒc May be temporary or permanent committees
ƒc Aim to improve communications between committees

Ad-hoc Committee

ƒc Formed for a particular task.

ƒc Once the task has been completed the committee will be disbanded

Sub-committee

ƒc This committee may be a standing or ad-hoc committee

ƒc Formed as part of another committee to look at a particular aspect of the main
committee¶s work.
Audit Committee

ƒc Oversight of the company's financial reporting process and the disclosure of its
financial information to ensure that the financial statement is correct, sufficient and
credible.
ƒc Recommending to the èoard the fixation of audit fees.
ƒc Approval of payment to statutory auditors for any other services rendered by the
statutory auditors

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tem 2007 2008 2009 Change Change

2007-08 2008-09
Sales 4182.86 5709.16 7559.19 1526  1850 0
Service 2.98 2.15 2.62 0 8 -0 7
Other income 354.69 670.53 884.04 15 8 21 51
Total 50 5 681 8 85 85 181 1 206 01

Expenditure

tem 2007 2008 2009 Change Change

2007-08 2008-09
Transportation 19.52 25.38 44.33 5 86 18 95
Warehouse 157.46 175.33 213.52 17 87 8 19
Electricity & water 42.79 47.40 42.21  61 --99

ayment & benefits 197.80 355.62 421.10 157 82 65 8
Selling exp 328.41 518.56 854.18 190 15 5 62
Total 75 98 1122 29 1575  76 1 5 05

rofit

2007 2008 2009 Change Change

2007-08 2008-09

èT 3498.31 4947.47 6648.23 1449.16 1700.76

AT 2320.21 3250.98 4372.38 930.77 1121.4
Dividend

tem 2007 2008 2009 Change Change

2007-08 2008-09
nterim dividend 352.86 437.44 408.36 84.58 -29.08
Final dividend 112.33 214.09 467.84 101.76 253.75

eneral reserve

2007 2008 2009 Change Change

2007-08 2008-09
1786 2489 3348 70 859

Sources of fund

tem 2007 2008 2009 Change Change

2007-08 2008-09
Share capital 132.16 132.16 396.47 -- 26 1
Reserve & surplus 5668.77 8157.49 11240.44 288-72 082 95

Conclusion: - All the findings represent that the company is in the better condition and
collecting better response from the market. Company¶s profit where increase year by year
company have paid the better dividend to their shareholder in 2008-09 according to the
previous year 2007-08. Company reserve and surplus will also increase.

Analysis of director report (2007-08)

According to the director report I find some important things are as follow:-

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Analysis of director report (2008-09)

After analysing the director report I find some import things the findings are given below:-

ƒc Turnover reached a new high of Rs. 7564 crore breaking the previous year's record of
Rs. 5711 crore.

ƒc Profit before tax shot up to Rs. 6648 crore, 34% higher than the previous year high of
Rs. 4947 crore and the profit after tax increased to Rs. 4372 crore, 34 % higher than
the previous year high of Rs. 3251 crore.

ƒc Net worth increased to Rs. 11615 crore as on 31-03-2009, 41% higher than Rs 8265
crore of the corresponding date of the previous year.

ƒc Interim dividend totalling 103% was paid.

ƒc As an MOU signing PSE with the Government of India, your Company's performance
during the year qualifies for excellent rating.

ƒc Supply of Iron Ore to domestic industries recorded 225.98 lakh tonnes as against the
previous year's supply of 244.06 lakh tonnes, recording a decrease of 7.41%. Total
export of Iron Ore during the year was 38.74 lakh tonnes against 37.78 lakh tonnes in
the previous year, an increase of 2.54%.
 ƒc uring the year, 7 Units of Wind Electricity Generators having a capacity of 1.5 MW
each have been commissioned and generated 65.46 lakh KWH of power. The power
is being transmitted to the grid of Karnataka Power Transmission Corporation
Limited.

After reading the whole report these are the findings according to this company
calculated more profit on the basis of previous year and its Also reflect a better growth
opportunities for the company and its shareholder both

Working
rincipal of the company

ƒc èusiness should support and respect the protection of internationally proclaimed
human rights.
ƒc èusiness should ensure that they are not complicit in human rights abuses.
ƒc èusiness should uphold the freedom of association and the effective recognition of the
right to collective bargaining.
ƒc èusiness should support the elimination of all forms of forced and compulsory labour.
ƒc èusiness should support the effective abolition of child labour.
ƒc èusiness should support the elimination of discrimination in respect of employment
and occupation.
ƒc èusiness should support a pre-cautionary approach to environmental challenges.
ƒc èusiness should undertake initiatives to promote greater environmental responsibility.
ƒc èusiness should encourage the development and diffusion of environ-mentally
friendly technologies.
ƒc èusiness should work against corruption in all its forms, including extortion and
bribery.

50th annual general meeting (2007-08)

enue:- >Khanij èhavan, Masab Tank, Hyderabad 500028 INIA.´

Phone- +91-40-23538713 fax- +91-40-23538711

www.nmdc.co.in email-hois@nmdc.co.in

Date :- 8th august 2008

Topic discussed:- the following topic are discussed in the 50th annual general meeting
which was held on the company head office >Khanij èhavan, Masab
Tank, Hyderabad 500028 INIA.´ The topic is given below:-