Gujarat Mineral Development Corporation Ltd Directors Report.

To

The Shareholders,

Gujarat Mineral Development Corporation Limited

Your Directors have pleasure in presenting 56th Boards Report along with the audited accounts of your company for the financial year 2018-19.

1. FINANCIAL RESULTS

Our profit after tax for the year is Rs 138.79 crore as against Rs 428.27 crore last year.

Particulars 2018-19 2017-18
Rs In Lakh Rs In Lakh
Total Income from Operations (net) 2,02,225.52 2,18,938.65
Net Profit/(Loss) for the period (before Tax and Exceptional items) 60,495.08 55,054.87
Net Profit/(Loss) after tax (after Exceptional items) 13,878.68 42,822.69
Total Comprehensive Income for the period [Comprising Profit/(Loss) after tax and Other Comprehensive Income (after tax)] 1,898.11 54,132.40

2. REVIEW OF THE BUSINESS OPERATIONS

2.1 LIGNITE PROJECTS:

During the year, the Company operated six lignite mines, namely, Panandhro, Mata-No-Madh, Rajpardi, Tadkeshwar, Bhavnagar and Umarsar Lignite Mines. During the year under review, 91.90 lakh MT of lignite were produced from these mines. The mine-wise production figures are as follows:

Sr. No. Name of mine Lignite production in lakh MT
1 Panandhro 7.08
2 Mata-No-Madh 32.81
3 Raipardi 9.98
4 Tadkeshwar 19.43
5 Bhavnagar 6.72
6 Umarsar 15.88
Total 91.90

2.2 POWER PROJECT - NANI CHHER

During the year under review, 2 x 125 MW Akrimota Thermal Power Station is running successfully. This year the Power Plant generated 1187.43 MUs having 54.22% PLF.

2.3 WIND AND SOLAR POWER

Wind Farm Projects of 200.9 MW are situated at different locations in Gujarat and 5 MW Solar Power Project is situated at Panandhro Lignite Project, which are running satisfactorily. The 200.9 MW Wind Projects have achieved 24.35% PLF (Plant Load Factor), whereas Solar Project is running at 16.91% CUF (Capacity Utilization Factor).

2.4 BAUXITE AND MANGANESE

2.4.1 Gadhsisa Group of Bauxite Mines - Kutch

In the Financial year 2018-19, Company has sold 1,11,560.60 MT of (<52% Al2O3) Non Plant Grade Bauxite along with 6,636.93 MT of mine dust from Gadhsisa Group of mine, District Kutch.

2.4.2 Mevasa Bauxite Mines, Devbhoomi Dwarka

In the Financial year 2018-19, Company has sold 5,125.48 MT (> 52% Al2O3) Plant Grade Bauxite and 54,513.74 MT of (<52% Al2O3) Non Plant Grade Bauxite from Mevasa Mine, District Devbhoomi Dwarka.

2.4.3 Manganese

In the Financial year 2018-19, Company has sold 48,713.68 MT of Sub grade Manganese Ore from Waste dump of Shivrajpur Project, District Panchmahal.

3. DIVIDEND

Your Directors have pleasure to recommend a dividend of 100% i.e. Rs 2.0 per share on equity shares. An amount of Rs 6,360 lakh on paid up equity share capital of Rs 6,360 lakh shall be paid as dividend.

4. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

In terms of Section 124 of The Companies Act, 2013 and applicable provisions of Companies Act, 2013, any unclaimed dividend or unpaid dividend relating to the financial year 2011-12 will be transferred to the Investor Education and Protection Fund established by the Central Government on due date. Further, as per the provisions of IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, the company will also transfer the shares of the shareholders who have not claimed their dividend for a consecutive seven years. The necessary approval and the authorization for this purpose have already been completed. In line with the instructions to be received from Ministry of Corporate Affairs, the company will transfer such shares to IEPF authority.

5. CONTRIBUTION TO CENTRAL EXCHEQUER:

The company has contributed Rs 197.63 crore towards income tax for the year under consideration.

6. SHARE CAPITAL

During the year under review, the issued, subscribed and paid-up share capital remained constant at Rs 63.60 Crore divided into 31.80 crore equity shares of Rs 2 each.

7. TAXATION

Income Tax assessment of the Company has been completed up to the Financial Year 2014-15.

8. INTERNAL AUDIT

M/s G S V & Co. Chartered Accountants and M/s R S Patel & Co., Chartered Accountants are the internal auditors of the company.

9. STATUTORY AUDIT

M/s. S C Ajmera & Co., Chartered Accountants were appointed Statutory Auditors of the Company by the Comptroller & Auditor General of India for the Financial Year 2018-19.

10. AUDIT BY COMPTROLLER AND AUDIT GENERAL OF INDIA (C & AG)

Being a Government Company, the C & AG has carried out supplementary audit of your Company pursuant to Provisions of Section 143 (6) of the Companies Act, 2013. The C & A G has not offered any averse comment upon or supplementary to statutory audit report.

11. COST AUDIT

M/s Dinesh Birla & Co. was appointed as Cost Auditors of the company for the year 2018-19. The Cost Audit Report has been filed on 6th September, 2018 for the Financial Year 2017-18.

12. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013, the Company has appointed M/s. Pinakin Shah & Co., Company Secretary in Practice to undertake the Secretarial Audit of the Company for the year 2018-19. Their secretarial audit report is given in Annexure I forms part of this report.

13. STATUS OF VARIOUS JOINT VENTURES

13.1 Naini Coal Company Limited

Naini Coal Block was allocated jointly to the Company and Pondicherry Industrial Promotion Development & Investment Corporation Limited (PIPDICL) and to develop the Coal Block, Naini Coal Company Limited was incorporated as the joint venture company. Due to slow progress on the project because of non-receipt of PL approval from Govt. of Odisha, Ministry of Coal, Govt. of India, de-allocated the block, invoking 50% of the Bank Guarantee. The Honble Supreme Court of India has cancelled all the allocated coal blocks which include Naini Coal Block also. Hence this joint venture will be closed in due course. GMDC has filed a petition in the Honble High Court in respect of invocation of Bank Guarantee and is pending for disposal.

Meanwhile, approval of the State Government has been received for closing the company.

13.2 Gujarat Credo Mineral Industries Limited

Dry beneficiation of low grade bauxite and Zeolite manufacturing plant has been commissioned.

13.3 Alumina and Aluminium Smelter Plant

Land required for the project has been allocated by Government and part possession has been taken. Detailed Project Report for 0.5 Million TPA plant got prepared by NALCO and is not viable. Hence they had requested GMDC to drop the project for which approval of Govt. of Gujarat has been received.

13.4 Fluorspar Beneficiation Plant

GMDC along with M/s. Gujarat Fluorochemicals Limited and M/s Navin Fluorine International Limited is setting up the fluorspar beneficiation plant, a single largest project of 40,000 MTPA capacity at Kadipani. Based on pilot test report, Global tender will be floated for selection of EPC contract. Valuation report for Kadipani assets has been received. Based on report, land will be leased on hire basis to JV Company and asset transfer will be carried out in favour of JV Company.

13.5 Aikya Chemicals Private Limited

Manganese Oxide, Manganese dioxide and Manganese Sulphate plant set by JVC has been commissioned. GMDC has so far invested Rs 3.90 crore as equity in the company.

13.6 Bhavnagar Energy Company Limited

During the year, Bhavnagar Energy Company Ltd. has been merged with Gujarat State Electricity Corporation Ltd. vide Notification dated 27th August, 2018 issued by Energy and Petrochemicals Department, Government of Gujarat. GMDC has been given one share of GSECL of Rs 10 fully paid against the total investment of Rs 29,765.00 lakh in 29,76,50,000 equity shares of BECL of Rs 10 each, fully paid.

14. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which these financial statements relate and the date of this report.

15. ENVIRONMENTAL PROGRAMME

Environmental Programme refers to the Management of an Organizations Environmental Programmes in a Systematic, Sustainables and Planned Manner along with its documentation, implementation & review.

During the year 2018-19, GMDC has planted total 1,36,518 plants saplings covering 58.91 hectares of mine lease and residential colony areas involving State Forest Department, local villagers, societies etc. For efficient use of water drip irrigation networks are used for plantation.

Under statutory compliance, as a part of monthly environmental monitoring for air, water and noise pollution is being done through the laboratory approved by Ministry of Environment and Forests/ Gujarat Pollution Control Board as well as through in-house facility. Annual Environment Audit at GMDC Projects is being done by GPCB approved Schedule I / II Auditors, as applicable.

Primary Effluent Treatment Plants (PETPs have been commissioned at major lignite mines of GMDC for the treatment of acid mine drainage water. These ETPs are prefabricated movable structure so can be easily shifted to other location after completion of project. We are using Caustic Lye as neutralizing agent to neutralise mine drainage water which produces less amount of sludge as well also work as alkali coagulant in precipitation of metals present in effluent. It is automatic plant which automatically adjust its process based on input characteristics of water and all parameters are connected to Cloud Based Technology so that its performance can be monitored from anywhere.

GMDC has procured the state-of-the-art mobile water treatment vehicle for efficient treatment & better utilization of mine seepage water. It has capacity to treat mine seepage water to convert it to the standard of drinking water.

Unique features of mobile water treatment vehicle are as below:

• Mobile, self-contained independent and automatic

• Produce drinking water from any contaminated water source

• Connect to any possible Water source (rivers, lakes, oceans, brackish water, wells, highly turbidity water)

• Plug & Play configuration

• High transferability and high level of safety

• Integrated water storage tank/distribution system

• Independent energy source

• Resistance to all weather conditions

In our seven mines Environment Clearnace conditions compliance was verified by MOEF, Bhopal successfully & verification reports received.

To create environmental awareness among all employees and surrounding communities including schools, various environmental awareness programmes have been conducted through celebration of World Environment Day and Van Mahotsav in various GMDC projects.

16. INDUSTRIAL RELATIONS, HEALTH AND SAFETY

The relations between the company and its employees continued to be cordial throughout the year. The company is also committed to the health and safety of not only its staff but also of the people engaged through its contractors and community living in and around its project areas.

Dispensaries with qualified doctors and para-medical staff are in operation at Panandhro, Akrimota Thermal Power Plant, Rajpardi and Kadipani Projects. Mobile medical vans facilities are also operational at various projects. At every project, GMDC provides ISI & DGMS safety shoes and other safety devices and adopts best safety practices.

The Company is an OHSAS 18001 certified company. Regular health check up of employees engaged in Mining and Power segment including employees engaged through contractors, transporters etc. are conducted.

17. PARTICULARS OF EMPLOYEES

GMDC did not have any employee who was employed throughout the financial year and in receipt of remuneration of Rs 60 lakh or more, or employed for part of the year and in receipt of Rs 5 lakh or more a month, under Rule 5 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The table containing other particulars of employees in accordance with the provisions of Section 197 (1) of the Companies Act, 2013, read with Rule 5 (1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is appended at Annexure II to the Boards Report.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required by the Section 134 (3) (m) of the Companies Act, 2013 read with Rule, 8 (3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure III and forms part of this report.

19. STATEMENT CONCERNING DEVELOPMENT AND IMPLEMENTATION OF RISK MANAGEMENT POLICY OF THE COMPANY

Looking to the profile of GMDC, i.e., Mining and Power Operations, GMDC has inbuilt risk management practices to address various operational risks. GMDC has standard operating processes for various mining operations in order to mitigate procedures and prevent risk arising out of various operations. GMDC has no external borrowings. Hence, there is no financial risk that can impact GMDCs Financial Position. GMDC primarily deals with natural resources. Hence, Policy of Government may impact GMDCs operational strategy.

GMDCs risk management process revolves around following parameters:

1. Risk Identification and Impact Assessment

2. Risk Evaluation

3. Risk Reporting and Disclosure

4. Risk Mitigation

GMDC has also set up a Risk Management Committee.

20. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS MADE UNDER SECTION 186 OF THE COMPANIES ACT, 2013

There were no loans and guarantees given by the company under Section 186 of the Companies Act, 2013.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

During the Financial Year, the transactions entered into by the company with the related parties were in the ordinary course of business at arms length. The company has not entered into contracts / arrangements / transactions with Related Parties which could be considered material in accordance with Section 188 of the Act and the Policy of the company for Related Party Transactions. Hence, the disclosure in Form AOC - 2 under Section 134 (3) of Companies Act, 2013 is not required. The Policy on Related Party Transactions may be accessed on the website of the company at https://www.gmdcltd.com/en/ corporate-polices-gmdc.

22. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There are no such comments.

23. GMDCS POLICY RELATING TO DIRECTORS APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

GMDC being a Government Company, the Government of Gujarat appoints its Directors, except the Independent Directors. GMDC does not pay any remuneration to its Directors except, the sitting fees and out of pocket expenses. The Independent Directors are appointed by the Shareholders in their General Meeting. Except the Managing Director, all the Directors of GMDC are nonexecutive directors.

24. EXTRACTS OF ANNUAL RETURN

The extracts of Annual Return pursuant to the provisions of Section 92 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is appended in Annexure IV to this report.

25. NUMBER OF BOARD MEETINGS CONDUCTED DURING THE YEAR UNDER REVIEW

GMDC had conducted 4 Board Meetings in the financial year under review.

26. DIRECTORSRs RESPONSIBILIY STATEMENT

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, the Board hereby submits its Responsibility Statement:-

a. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The Directors has selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of financial year and of the profit and loss of the company for that period;

c. The Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. The Directors had prepared the annual accounts on a going concern basis;

e. The Directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

27. DEPOSITS

GMDC has neither accepted nor renewed any deposits during the year under review.

28. DECLARATION OF INDEPENDENT DIRECTORS

The Independent Directors have submitted their disclosures that they fulfill all the requirements as stipulated in Section 149(6) of the Companies Act, 2013 so as to qualify themselves to be appointed as Independent Directors under the provisions of the Companies Act, 2013 and the relevant rules.

29. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM

During the year under review, the Audit Committee consisted of the following members:

(i) Shri Bhadresh Mehta

(ii) Shri Sanjeev Kumar, IAS

(iii) Shri S B Dangayach

(iv) Shri Nitin Shukla

(v) Prof Shailesh Gandhi

GMDC has established a Whistle Blower / Vigil Mechanism Policy. GMDC has also provided adequate safeguards against victimization of employees and Directors who express their concerns. GMDC has also provided direct access to the chairman of the Audit Committee on reporting issues concerning the interests of employees and the Company.

30. SHARES

30.1 BUY BACK OF SECURITIES

GMDC has not bought back any of its securities during the year under review.

30.2 SWEAT EQUITY

GMDC has not issued any Sweat Equity Shares during the year under review.

30.3 BONUS SHARES

No Bonus Shares were issued during the year under review.

30.4 EMPLOYEES STOCK OPTION PLAN

GMDC has not provided any Stock Option Scheme to the employees.

31. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) Act, 2013

GMDC has in place Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

The following is a summary of sexual harassment complaints received and disposed off during the year 2018-19:

No. of complaints received : NIL No. of complaints disposed of : NIL

32. CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company have been prepared in accordance with Indian Accounting Standard (Ind AS) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standard) Rules, 2015 and other relevant provisions of the Act form part of this Annual Report. Further, a statement containing salient features of the Financial Statements of Subsidiaries / Associate Companies / Joint Ventures in the prescribed format AOC - 1 is given at Annexure V.

33. BOARD-OF-DIRECTORS

The tenure of Shri Bhadresh Mehta, Independent Director was completed on 31.3.2019 and hence, he ceased to be the Independent Director of company. After the end of the financial year, Smt. Gauri Kumar, IAS has been appointed as additional independent woman director w.e.f. 7.6.2019.

34. CORPORATE GOVERNANCE

As per requirement of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and as per the new listing agreement entered into with the various Stock Exchanges, the detailed report on the Corporate Governance is given in Annexure VI.

35. MANAGEMENT DISCUSSION AND ANALYSIS

As per requirement of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, and as per

the new listing agreement entered into with the various Stock Exchanges, Management Discussion and Analysis is given at Annexure VII and form part of this report.

36. CORPORATE SOCIAL RESPONSIBILITY (CSR) AND CSR POLICY

GMDC has been sensitive towards its Social Responsibility right from its inception. It has adopted a business model which has an inclusive approach. The company is always keen to address needs and requirements of the community within which it operates. Your company reaches out to various segments of society, in particular, of rural community by providing them critical rural infrastructure in various sectors, such as, Water, Health, Sanitation, Education, Employment, Livelihood, Agriculture etc. These initiatives of your company attempt to take the fruits of development to those people who are not yet included in the main stream. In the year passed by, your company has embarked upon a unique initiative of e-clinic whereby the modern medical facilities will be delivered at the door step of rural masses apart from this your company has also enriched the libraries of schools in rural areas of the state by providing them books. Under the CSR activities Modernization of Anganwadi and making it smart Anganwadi has been taken up.

The CSR Policy of the Company is also uploaded on the website of GMDC. The CSR Policy framework of the company is available elsewhere in this annual report. A CSR Report for Fiscal year 2018-19 as prescribed under Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014, forms part of this Report, and is annexed at Annexure VIII.

37. ACKNOWLEDGEMENT

Your Directors are pleased to place on record their deep appreciation for the sincere services and co-operation extended by the officers, employees and workmen of GMDC at all levels. They also wish to place on record their gratitude for the confidence placed in them by financial institutions and investors. Further, your Directors wish to thank various departments of the Central Government viz. the Ministry of Environment and Forest, Ministry of Coal, Ministry of Mines and various bodies of State Government of Gujarat viz. Industries & Mines Department, the Finance Department, Commissionerate of Geology and Mining and Gujarat State Pollution Control Board. The Directors also extend their heartiest thanks to the esteemed customers and shareholders of the Company for their valued co-operation.

For and on behalf of the Board-of-Directors

Arunkumar Solanki, IAS S B Dangayach
Managing Director Independent Director
DIN : 03571453 DIN : 001572754
Date :03rd August,2019
Place : Ahmedabad