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<dhhead•Management Discussion & Analysis Report for the year 2022-23</dhhead•

1. NMDC: An overview

1.1 Introduction

NMDC Limited is a prominent player in the Mining and Mineral sector, operating since November 1958. As a Navratna public sector company under the Ministry of Steel, NMDC has established itself as a highly profitable entity. NMDC has extensive experience in exploring and extracting various minerals, including iron ore, copper, rock phosphate, limestone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and beach sands.

NMDC takes pride in being the largest iron ore mining company in India with its average annual production consistently exceeding 40 million tonnes. In FY23, NMDC achieved an iron ore production of approximately 40.82 million tonnes, contributing to around 16% of the domestic production (excluding captive iron ore production). With an average grade of 64% Fe, NMDC supplies one of the highest-quality iron ores globally. The company offers a wide range of ore grades and sizes tailored to meet the specific requirements of its customers.

NMDC has ambitious plans to expand its production capacity in the near future, aiming to increase the capacity of its three mining complexes from the current 51.8 million tonnes per annum (MTPA) to 67 MTPA. This expansion is in response to the growing demand for iron ore in the Indian steel sector. Further more, NMDC is actively diversifying its operations beyond exploration and mining. The company has invested in the construction of a 3 MTPA integrated steel plant in Nagarnar, Chhattisgarh. (Now demerged as a separate legal entity as NMDC Steel Limited) and a 1.2 MTPA pellet plant in Donimalai (Karnataka). NMDC has also ventured into the mining of coal through the allocation of two coal blocks in Jharkhand on nomination basis by the Government of India. NMDC has appointed MDO for Tokisud North Coal Block and plans to start its operations in FY24.

NMDC places a strong emphasis on productivity improvement and cost optimization, resulting in consistently high profitability. FY22 was a golden year for the mining industry, mainly due to post-covid recovery and prices of iron ore touching record high figures. However, iron ore prices have taken a downward trend in FY23 and the overall mining industry has been affected as a result of the same. In FY23, NMDC has recorded a revenue of Rs.l 7667 crores, with a decline of 32% over last year. NMDC recorded a Profit (before tax) of Rs.6399 crores in FY23 and a net worth of Rs. 22,332 crores (as on 31^st March 2023). NMDC has a strong history of rewarding investors with an average dividend payment of around 798.19% in the last 5 years, which is the testimony to consistently creating value for its stakeholders.

NMDC remains dedicated to delivering longterm value to all its stakeholders through the implementation of various policies and programs. The company has also made substantial investments in the socio-economic development of local communities, particularly those residing near its mining projects.

1.2 Operating Projects

NMDC operates three highly-mechanized iron ore mine complexes in the states of Chhattisgarh and Karnataka. Two of the complexes are located in Dantewada (Chhattisgarh), namely Kirandul Complex and Bacheli Complex, that produce around 30 MTPA. The third complex in Bellary (Karnataka), namely, Donimalai Iron Ore Complex produces 12 MTPA (from the two pits- Kumaraswamy & Donimalai). NMDC also has a 1.2 MTPA pellet plant at Donimalai.

NMDC also operates the Diamond Mining Project, Panna (M.R), which is the only mechanized diamond mine in Asia.

Apart from the above, NMDC has wide presence across the country as shown in the map.

1.3 Global Presence

Legacy Iron Ore, Perth, Australia

* Legacy Iron Ore Ltd is an ASX listed entity based in Perth, Australia with a focus on Gold, Iron ore and base metals. NMDC has 90.05% equity in the company.

* Legacy Iron holds significant interest in Mt Bevan, Magnetite project in Western Australia with 1.17 billion tonnes of JORC Inferred & Indicated resource (@34.9% Fe). Legacy Iron also has Gold, Base metals & Tungsten tenements in Western Australia. Legacy has 24 tenements-Iron ore (01 tenement), Gold (19 tenements), Base Metals and Tungsten (04 tenements). All these tenements are in different exploration stages. Mt Celia is reaching Pre-feasibility Stage and Mt Bevan has defined Iron Ore resources. Other projects have valid targets of different commodities.

* Exploration: So far Legacy has conducted 19,111 m of RC and 2850m of diamond drilling in Mt Beven Magnetite Project, 2429 Mts RC drilling for Mt Bevan Nickel

exploration, 31,613 Mts RC drilling and 1150 Mts diamond drilling in gold tenements and 2133 Mts drilling in Base metal tenements. Presently RC drilling is underway at the Mt. Celia and Sunrise Bore projects.

* JORC resource at Mt. Celia Gold project now stands at 312,600 ounces @1.39 g/t gold (as of Feb 2022). Legacy Iron is conducting Pre-feasibility studies in its Mt Celia Gold project with an aim to develop viable gold mining project.

* Joint Development of Mt Bevan: To

progress Mt Bevan iron ore project and conduct the pre-feasibility studies, Legacy (60% stake) along with its partner Hawthorn Resources (40% stake) had signed JV agreement with M/s Hancock Magnetite Prospecting Ltd. Pursuant to this arrangement, M/s Hancock will invest and undertake the developmental works in Mt Bevan. Current holding for the tenement is Legacy at 42%, Hancock at 30 % and Hawthorn at 28 %. After completion of the pre-feasibility studies, Legacy will have 29.4% stake in Mt Bevan JV.

• ICVL, a joint venture company of SAIL, RINL & NMDC, acquired a coking/thermal coal mine in Mozambique in 2014 and operation of the same was taken over by ICVL. NMDC holds 26% stake in ICVL. Benga mine, one of the operational asset of ICVL, has produced about 1.63 Million tons in FY23 (Both low ash & high ash) and exported 1.71 Million Tons.

1.4 Growth plan

• NMDC has made a comprehensive strategic management plan to enhance its iron ore production capacity to 67 MTPA by FY-26 and further to 100 MTPA by FY-30 to meet the growing requirements of iron ore in the Indian Steel sector. The strategy focuses on growth largely through brownfield expansion of existing mines and improving the evacuation infrastructure.

• NMDC also envisages expanding through the development of Deposit-! 3 & Deposit-4 (greenfield projects), under a Joint Venture company of NMDC Limited and Chhattisgarh Mineral Development Corporation (NCL).

• NMDC is in the process of setting up a slurry pipeline, along with an associated beneficiation plant & pellet plant, in phases, for economical transportation of iron ore to locations from where the pellets /ore can be supplied to the industry. The construction of the Beneficiation Plant at Bacheli and 15 MTPA Slurry Pipeline from Bacheli to Nagarnar and 2 MTPA Pellet Plant at Nagarnar is likely to be completed by FY24.

• Efforts to increase evacuation capacity through doubling of Kirandul-Kothavalasa (KK) line is also in full swing and few completed sections have been opened for traffic. Out of 150 km of planned doubling of railway line, 79% of work has already been completed.

• NMDC has developed an intermediate iron ore stockyard at Kumarmaranga in Chhattisgarh for uninterrupted supplies to customers. This stockyard became operational in FY23.

• NMDC is pursuing the allocation of new iron ore deposits both through participation in auction and reservation through government dispensation route (section 17A(2A) of the revised MMDR Act, 2015) for further expansion in capacity.

• NMDC had emerged as a preferred bidder for Chigargunta-Bisanatham gold block, Andhra Pradesh in the auction process conducted in July18. Mining Plan preparation and obtaining statutory clearances of Chigargunta-Bisanatham Gold Block is under progress. NMDC has paid 1st & 2^nd instalments of upfront payments (10%+10%) amounting to Rs 2.48 crores and deposited the Performance Security (i.e Bank Guarantee for amount of Rs.l 2.39 Cr) to DMG, GoAR The Joint DGPS Survey of the Gold Block is completed. Efforts are on to seek all the clearances for execution of the Mining lease within stipulated time of October 2025.

• Ministry of Coal has allocated two Coal Blocks namely Tokisud North Coal block & Rohne Coal Block on 17^,h March 2020 for commercial sale & captive purposes.

NMDC has appointed MDO for Tokisud North Coal Block and plans to start its operations in FY24.

• NMDC Steel Limited (NSL) is in the advanced stages of setting up a 3.0 MTPA greenfield Steel Plant at Nagarnar in Chhattisgarh, which is expected to operationalize in FY24.

1.5 Exploration & Reserve Estimation:

• NMDC has a dedicated exploration wing at Raipur, fully equipped to undertake the exploration of minerals. NMDC has conducted more than 12,150 meters of core drilling in FY23, at existing mines. NMDC is also conducting exploration in different blocks of Iron ore, Manganese, & Diamond in M.R under MOU route. NMDC conducted 664 meters of drilling for manganese in Jabalpur district, and 5571 meters drilling for Diamond in Madhya Pradesh. Besides, it has also established a well-equipped Centre for Geostatistics and has a Remote sensing lab at

Corporate Office, Hyderabad. NMDC has full-fledged mine planning wings at Corporate office as well as at project sites for orebody modeling, reserve estimation, pit design & scheduling, with advanced software like Surpac, Whittle & Mineshed.

1.6 Research & Development:

• NMDC operates a state-of-the-art Research & Development (R&D) Centre at

Hyderabad, which has been declared as a "Centre of Excellence" by the United Nations Industrial Development Organisation (UNIDO). Recently R&D center has developed technology for dry beneficiation of iron ore using compressed air, and patent for same was filed in the year 2020 with application no 202041006098. The R&D Centre undertakes different projects to mitigate the operational challenges of different units of NMDC and provide solutions in terms of improvement in the system or change in technology, to achieve a continual enhancement in its processes & operations. The Centre provides solutions to external agencies as well. NMDC holds 21 patents for its innovations at R&D centre. NMDC innovation and incubation centre (NICE) launched with i-TIC foundation, NT, Hyderabad and running successfully for last four years.

2 Industry Structure and Developments Market Environment:

2.1 Economy:

2.1.1 Global:

• The global economy is showing signs of improvement but the upturn remains weak, amid significant downside risks. Lower energy prices are helping to bring down headline inflation and ease strains on household budgets, and the earlier-than-expected reopening of China after the series of lockdowns, has provided a boost to global activity. However, core inflation is proving persistent and the impact of higher interest rates is increasingly being felt across the economies.

• Global GDP growth in 2023 is projected to be 2.8%, the lowest annual rate since the global financial crisis, with the exception of the 2020 pandemic period. A modest improvement to 3% is foreseen for 2024.

• The balance of risks remains tilted to the downside, but adverse risks have moderated since the October 2022 publication of World Economic Outlook (WEO). On the upside, a stronger boost from pent-up demand in numerous economies or a faster fall in inflation are plausible. On the downside, severe health outcomes in China could hold back the recovery, Russia-Ukraine war could escalate, and tighter global financing costs could worsen debt distress. Financial markets could also suddenly reprice in response to adverse inflation news, while further geopolitical fragmentation could hamper economic progress.

• Commodity prices eased the early gains of CY 2022 amidst supply chain issues and Chinas Zero Covid policy due to the demand slowdown. Metal prices, however, stabilized following Chinas reopening and measures to revive its economy and retracing inflation in advanced economy like USA and EU.

• Global inflation is expected to fall from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 percent in 2024, still above prepandemic (2017-19) levels of about 3.5 percent.

• In most economies, amid the cost-of-living crisis, the priority remains achieving sustained disinflation. With tighter monetary conditions and lower growth potentially affecting financial and debt stability, it is necessary to deploy macro prudential tools and strengthen debt restructuring frame works. Fiscal support should be better targeted at those most affected by elevated food and energy prices, and broad-based fiscal relief measures should be withdrawn. Stronger multilateral cooperation is essential to preserve the gains from the rules-based multilateral system and to mitigate climate change by limiting emissions and raising green investment.

Overview of World Economic Outlook Projections

Region/Country	Projections
	2021	2022	2023	2024
World	6.1	3.4	2.8	3.0
Advanced Economies	5.2	2.7	1.3	1.4
US	5.7	2.1	1.6	1.1
EU	5.3	3.5	0.8	1.4
UK	7.4	4.0	-0.3	1.0
Canada	4.6	3.4	1.5	1.5
Emerging market & developing economies	6.8	4	3.9	4.2
Russia	4.7	-2.1	0.7	1.3
China	8.1	3	5.2	4.5
India*	8.9	6.8	5.9	6.3
Brazil	4.6	2.9	0.9	1.5

Mote: * For India, the data and forecasts are presented in a fiscal year basis with FY 2022-23 (April22 - Mar23) shown in the 2022 column.

2.1.2 India

Recovering from pandemic- inducedcontraction, effects of Russian- Ukraine conflict and inflation, Indian economy is staging a broad based recovery across sectors, positioning to ascend to the pre-pandemic growth path in FY23.

The overall growth remains robust and is estimated to be 6.8 percent for the full year with real GDP growing 7.7 percent year-on- year during the first three quarters of fiscal year 2022-23.There were some signs of moderation in the second half of FY 22-23. Growth was underpinned by strong investment activity bolstered by the governments capex push and buoyant private consumption, particularly among higher income earners.

Inflation remained high, averaging around

6.7 percent in FY22-23 but the current- account deficit narrowed in Q3 on the back of strong growth in service exports and easing global commodity prices.

As per the Economic Survey report of 2022- 23, the performance of the agriculture and allied sector has been buoyant over the past several years, much of which is on account of the measures taken by the government to augment crop and livestock productivity, ensure certainty of returns to the farmers through price support, promote crop diversification, improve market infrastructure through the impetus provided for the setting up of farmer-producer organizations and promotion of investment in infrastructure facilities through the Agriculture Infrastructure Fund. The industry sector is estimated to witness modest growth of 4.1 per cent in FY 2022-23 relative to 10.3 per cent in FY 2021-22.

Support for Indias economic growth will come from path-breaking measures like PM Gati Shakti, National Logistics Policy and Production-Linked Incentives schemes. According to the survey, while roads, railways and waterways have seen unprecedented expansion in the last eight years, ports and airports have been substantially upgraded.

With a population of nearly 140 crore, India has a massive demand for energy from all sectors including primary, secondary and tertiary. Affordable and reliable availability of power is critical for Indias aspirations for the manufacturing sector to be fulfilled, the Survey said. Further, with the growing importance of clean energy, there has been a renewed push towards non-fossil fuel-based energy sources in the power sector. The government, along with the private sector, has progressively worked towards increasing the share of renewables. This will ensure a gradual but calibrated energy transition, meeting the countrys sustainability targets and giving primacy to its national developmental requirements.

However, India will continue to be the bright spot in the world economy, accounting for ~15 percent of global growth in 2023. Despite strong global headwinds and tighter domestic monetary policy, India is still expected to grow between 6.5 percent and 7.0 percent. This reflects Indias underlying economic resilience and ability to recoup, renew, and re-energize the growth drivers of the economy.

2.2 Iron Ore Industry Outlook:

Global: Steel & Iron Ore

• Global steel production has increased from 850 MT in 2000 to 1,878.5 MT in 2022 , due to an increase in demand (majorly because of rapid industrialization).

• The worlds crude steel output, saw its first decline in seven years in 2022, as production dropped by 4.2 percent to 1,878.5 MT. Chinas crude steel production declined by 2.1 percent to 1.01 BT, largely due to a subdued economy amidst its zero-COVID policy and uncertainties over its real estate market. Japan recorded a 7.4 percent decline in production to 89.2 MT as auto production slowed on account of chip shortage. Global crude steel output in countries other than China fell by ~2 percent in 2022, expected due to a 15 percent drop in CIS (Commonwealth of Independent States) production following Russias invasion of Ukraine. There was a fall of 9 percent in the EU due to the economic impact of the war resulting in rising energy and power prices.

• However, India was the only country that saw an increase of 5.5 percent in steel output amongst the five major steel-producing countries, producing 124.72 MT of crude steel in CY 2022.

• The global consumption trend of steel has witnessed an increasing trend in CY-2022, unlike the production trend. Global consumption of steel was estimated at 1,840 MT in 2022 against the total production volume of 1,878.5 MT. The strong growth in construction activity and rising automotive output saw a rise in crude steel consumption in 2022. China dominates global crude steel consumption with a 50 percent market share in 2022. The major driving industry is the construction sector, which accounts for Chinas 55 percent finished steel consumption. The EU is the worlds second- largest consumer of steel, accounting for 8 percent of global consumption in 2022. As energy prices surged after Russia invaded Ukraine, Europes economy faced a sharp slowdown in the second half of 2022, declining the EUs steel consumption by 7 percent year-on-year.

• Global iron ore production stood at 2600 MT in 2022, growing at a CAGR of ~1.4% from 2018. Iron ore production saw a slight decrease in 2022 due to rising global inflation, which resulted in decreased steel demand and consumption.

• The global iron ore production landscape is dominated by Australia and Brazil, which together account for approximately 50%, following China at 15% and India at 11%. Collectively, these four nations, contribute about 75% of the worlds iron ore production.

Global Crude Steel Production vs Apparent Steel Use:

India:

• India is the second-largest producer of crude steel globally with 125.5 MT of crude steel production in FY 23, registering an increase of —4.8 percent compared with 119.8 MT produced in FY 22.

• Indias finished steel consumption grew at a CAGR of —6 percent in the past five years to 110 MT in FY23. The buildings and construction industry is the primary demand driver that consumes —62 percent of the total production, followed by the capital goods and automotive industry with shares of 15 percent and 9 percent, respectively. The Indian governments initiatives and schemes, such as Gati Shakti Master Plan, Make in India, Pradhan Mantri Awas Yojna - Housing for all, Urban infrastructure development scheme for small and medium towns, etc., have created prospects for significant consumption of steel.

• Although India is the second-largest consumer of finished steel, its per capita consumption of 76 kgs is noticeably below the world average of 233 kgs. Some of the leading countries include South Korea

(1,075.6 kgs), Taiwan (885.6 kgs), Czech Republic (775 legs), China (666.5 legs),

Austria (516.9 kgs), Italy (439.4 kgs), and Germany (426.1 kgs). The per capita consumption of steel declined significantly across most economies in 2020, due to the COVID-19 crisis. However, Indias per capita consumption of steel is growing at the highest rate, after China, amongst other countries across the globe.

• Iron ore mining sector also registered highest ever production figure of 257.34 MT in FY 2023, a growth of —2% over the 251.11 MT production in FY 2022. The top iron ore producers in FY 2023 included NMDC, SAIL, Tata Steel, and OMC. Export of iron ore in FY 2023 was 14.96 MT of which 91 % of consignment was sent to China.

• The steel product prices, however, have been volatile. The domestic long steel prices reached highs of —70,000/tonne during April 2022, as raw material prices increased following the Russia-Ukraine war. However, with increase in export duty during May- December, 2022, the prices fell as domestic market-focussed producers liquidated inventories. Prices recovered back to 60,000/tonne levels during March 2023 with reversal of export duty, and subsequent uptick in export orders along with improved domestic demand.

• Measures such as PLI scheme, FAME etc. are also expected to attract more investment in the steel sector. The expansion in steel capacity and improvement in profit margins of steel players would be a major driver. However, the present trend of low profit margin has led to contraction in the plant utilization. The situation can improve in future depending upon the relative decline in the input cost of iron ore and coal - peak demand from power sector has pulled the prices up, and steel and how the progress in the various government schemes drives the demand up.

3 NMDC - Opportunities & Threats

a) Opportunities

i) Envisaged growth in domestic steel production on account of the factors mentioned below would lead to higher demand for Iron Ore in the country:

• The construction and infrastructure sectors account for more than 60 percent of the overall steel consumption. The infrastructure development activities by the Government of India to drive the growth of the construction, automotive, consumer durables sectors etc. are expected to boost the iron and steel sector demand in India.

• Indias low per capita steel consumption and ample scope of urbanization, rural steel consumption is expected to play a pivotal role in the Indian steel industrys growth. Multiple key initiatives by the government along with a host of consumption enablers are expected to drive up the steel demand in key end-use sectors of the rural economy (food processing and storage, agriculture and farming, dairy and animal husbandry, and rural infrastructure development). Government initiatives for Self-Reliant India creating new avenues to set-up new industries is leading to demand in iron and steel.

• Numerous foreign companies are setting up their facilities in India on account of various Government initiatives like Make in India and Digital India.

• The government envisages bringing Indias GDP to US$ 5 trillion by FY25 and achieve upper-middle income status on the back of digitization, globalization, favorable demographics, and reforms that will create demand for steel in the domestic market.

• Increase in demand for high-grade ore worldwide considering environmental concerns. NMDCs iron ore is one of the best grades of ore in the world.

• Continuous thrust by the government to

use domestically manufactured iron and steel products in government procurement.

• Further capacity addition by steel players in near future, along with planned commissioning of NSLs steel plant in Nagarnar.

ii) IMF projections of 6% GDP growth in 2023, Production Linked Incentive scheme for specialty steel sector expected to attract addition investment of Rs. 40,000 Cr, PM Gati Shakti-National Master Plan for multimodal connectivity to reduce the logistic costs- All are expected to drive the steel demand vis-a-vis iron ore demand in future.

iii) Provisions under MMDR Act, 2021 such as grant/extension of mining lease for the government companies on the payment of additional revenue, transfer of statutory clearances valid till the expiry of ML will give NMDC competitive advantage over others.

iv) Development of National Mineral Index could help in further driving the profitability and investments in metal mining sector.

b) Threats

i) Rising inflation can impact consumption and lead to fiscal tightening increasing the cost of borrowings affecting investments.

ii) Intensification of geopolitical tension in Europe can disrupt the whole market dynamics.

iii) Uncertaintyin export duties of iron ore, pellets can lead to volatility in the prices of iron ore, further leading to reduced iron ore demand.

iv) Demand for Iron ore may fall in the international market in long term due to the decline in the Chinese steel production, shift towards EAF/IF route for recycling scrap steel and development of new techniques such as green steel.

v) New iron ore leases being auctioned and the recent amendments to MMDR Act allowing sale of 50% of the iron ore production of captive mines in open market may lead to increase in supply of iron ore and increase the competition in the market.

vi) Backward integration by Steelmakers into iron ore mining after the start of auctioned mines will affect the demand from the customers of the Company.

vii) Indian iron ore industry will continue to be uncompetitive on a global level due to higher rates of royalty and other levies such as DMF, NMET, Export duty etc. as well as significantly higher logistic costs.

viii) Increasing regulatory pressure on environment, health & safety and sustainability.

ix) Disturbances due to Maoist activities in Bailadila region from where the majority of NMDCs production comes. At the same time, the location of Bailadila has a logistic disadvantage.

NMDCs business would continue to be affected by developments impacting the demand-supply scenario & price fluctuations of iron ore in both the global and domestic markets.

4. Segment-wise or Product-wise performance 4.1 Physical Performance of NMDC

Details Production:	2018-19	2019-20	2020-21	2021-22	2022-23
Production:
Production of Iron Ore WMT (In lakh tonnes)	323.61	314.89	341.50	421.88	408.17
Production of Sponge Iron (tonnes)*	2,475.37	Nil	Nil	Nil	Nil
Production of Diamonds (carats)	38,148.77	28,537.23	13,681.01	Nil	Nil
Production Pellets (in tonnes)	1,15,623	1,10,482	83,751	1,82,299	2,02,330
Sales:
Sale of Iron Ore (in lakh tonnes)	323.56	315.16	332.52	406.68	382.23
Sale of Diamonds (carats)	29,345.54	33,722.99	22,248.84	25,218.95	Nil
Sale of Sponge Iron (tonnes)	495.58	1,943.88	Nil	Nil	Nil
Sale of Pellets (tones)	1,12,010	85,793	92,774	1,96,972	1,88,988

4.2 Financial Performance of NMDC

Details Production:	2018-19	2019-20	2020-21	2021-22	2022-23
Sale of Iron Ore	11,997.98	11,569.00	15,233.70	25,546.66	17447.40
Sale of Diamonds	38.86	34.29	21.10	62.93	Nil
Sale of Wind Power	5.51	5.40	5.17	4.99	6.08
Sale of Sponge Iron	0.94	4.39	Nil	Nil	Nil
Sales- Pellet	76.52	55.55	73.50	222.11	165.50
Sales - Others	32.86	30.59	36.59	45.10	47.91
Turnover	12,152.67	11,699.22	15,370.06	25,964.79	17,666.88
EBITDA	7,518.91	6,426.69	9,146.27	13,349.27	8047.64
PBT	7,199.06	6,123.48	8,901.10	13,023.36	7637.00
PAT	4,642.11	3,610.12	6,253.05	9,447.59	5529.00
Dividend	1,690.14	1,619.72	2,274.15	4,319.72	1933.98
Dividend as % of PAT	36%	45%	36%	46%	35%

5. Outlook for NMDC

NMDC proposes to augment its production capacity of iron ore to 67 million tonnes by FY26 and further to 100 MT by FY30. It has also embarked on value addition projects by setting up a 1.2 MTPA pellet plant utilizing slimes in Karnataka and a 3.0 MTPA integrated steel plant in Chhattisgarh (Now demerged as a separate legal entity as NMDC Steel Limited). NMDC-CMDC Limited (NCL), a JV company of NMDC Limited & CMDC Limited, will also start production from Dep-13 through MDO in the near future. Dep-4 has been also allocated to NMDC in Sepl 9, which will add further value to NMDC production & profit numbers. NMDC has also developed an intermediate stockpile at Kumarmaranga near Jagdlapur to ensure an uninterrupted supply of ore to the customers. To augment evacuation capacity, NMDC is supporting on Doubling of K-K line (Kirandul- Kotvatsala), Rowghat-Jagdalpur line, Slurry Pipeline, etc.

To diversify further its business, NMDC is planning to start one of the Coal Mine, namely Tokisud North, Jharkhand in FY24. NMDC will also start actions to operationalize the other allocated Coal Block, Rohne, in the next 2-3 years. NMDC also participated in the auction of the Gold mine & declared as preferred bidder for Chigugunta-Bisanatham Gold Block in Andhra Pradesh. The AP state govt has issued Letter of Intent (LOI) on 07.10.2022 after the Honble High Court of A.R dismissed the W.Rs on 05.08.2022. Joint Survey was carried out in Dec 22 to mark the boundary pillars. Land type survey was carried out in February - March 23. The Preliminary report finalized by the revenue Department and sent for seeking directives from DC, Chittor in July 23. After meeting with NMDC on 13th July ,DC has directed to issue NOC for area in Chigargunta and part area (only Norther Part) for Bisanatham. Revenue authorities are seeking consent of villagers. Based on the NOC, action will be taken for land acquisition and R&R.

NMDC has recently prepared its International Strategy to venture into various identified

minerals & geographies & will continue to look for opportunistic assets based on the recommendation & strategy in the formulated report.

NMDC is committed to focusing on maintaining cost competitiveness in the global and domestic markets in a scenario where prices are expected to remain subdued. Further, NMDC is taking various initiatives towards automation & digitization of its operation to further improve its cost competitiveness.

Along with robust strategic planning to support its growth agenda, NMDC continues to enhance organizational capabilities and other enablers to achieve its short-term and long-term objectives.

6. Risks and Concerns

NMDC is exposed to sharp fluctuations in demand for its products and volatility in prices. Falling prices of iron ore, specially in international market will support the import by the steel players & exert pressure on domestic supply & prices.

Introduction of Auction rule has increased risks for NMDC as its major customers have acquired captive mines in mineral-rich states, mainly JSW & AM-NS. Both JSW & AM-NS have already started production from newly acquired mines & planned to increase it further in the near future. New tranches of auction are likely to add further capacity of iron ore to steel players as well as other merchant players in near future. This is likely to adversely impact the market for NMDC over the medium to long term.

One of the major risks that NMDC is facing is the disturbances due to Maoist activities in Bailadila region. The Company is in contact with the Government agencies at all levels for support and protection of its employees and installations.

Although NMDC is entering into Coal Mining, the opening of the Coal sector for Commercial mining will increase the competition for NMDC in the short to medium term.

Timely enhancement of evacuation capacity in line with production plans also remains a potential risk. This could impact production and inventory levels for NMDC.

7. Internal control systems and their adequacy

Necessary disclosure in respect of Internal Control Systems and their adequacy has been made in Annexure-C to the Independent Auditors Report dated 23^rdMay, 2023 which forms part of the Annual Report.

8. Discussion on financial performance with respect to operational performance

During the year under review, the Companys revenue from operations decreased by 32% from Rs.25,965 crores to Rs.l 7,667 crores mainly on account of:

• Decrease in Iron ore Sales quantity by 6.01% from 406.68 Lakh Tons to 382.23 Lakh Tons.

• Realization was lower by 27.52% during this period from Rs 6,298/- per ton to Rs 4,565/- per ton.

Details on financial performance with respect to operational performance are given in detail in the Directors Report.

9. Material developments in Human Resources/ Industrial Relations front, including number of people employed.

The human capital of NMDC has been its key driving factor and its greatest asset. The company has made concerted efforts in keeping the workforce highly engaged and motivated.

On one hand, continuous improvement is made to improve the quality of life at the townships with investments in parks, community halls, up-gradation/construction of new quarters, clubs, gymnasium, facilities for different sports such as tennis, badminton, table-tennis, cricket, etc. NMDC has also taken revisions in various welfare measures & advance from time to time. It also focuses on various types of insurances beneficial to the employees.

During Covid time, NMDC has taken various initiative to give the health & safety of the

employees utmost priority. Apart from supporting the employees in various sanitization & health measures, Ex-Gratia of Rs 15 Lakhs for deceased employees family has been also started, which is over and above the existing facility of payment of last Basic + DA every month for family of deceased employees. Various additional facilities for families of deceased employees have also been extended.

Training and skill up-gradation forms an important area where assessment is first made to understand employee needs and concerns and then, appropriate training programmes are organized throughout the year. Even during Covid time, NMDC continued its training programmes through Web-based learning initiatives. To enhance the training further, NMDC has initiated the process of purchasing 100 comprehensive world-class E-Learning Licenses through M/s Udemy. NMDC has further associated with reputed institutes like IIM, NT and ISB for imparting training.

NMDC has also started happiness building initiative by imparting specific training in line with IKIGAI, on happy workplace. As a result of the all-round measures being taken by the company, attrition from NMDC has been marginal, despite remote locations of the NMDC mines.

It is worth highlighting that industrial relations have been cordial all along during the year. Any difference is sorted out through bipartite discussions at appropriate fora. The cooperation and support of workmen represented by All India NMDC Workers Federation (AINMDCWF) in this regard are praiseworthy.

Keeping in view the various diversification projects viz. Steel Plant and Pellet Plant, & expansion of existing projects, the company has taken initiative to train its existing manpower and also to go for fresh induction.

Further, 55 executives, 93 Junior Officers, and 219 Workmen have been recruited in FY2022-23. All were provided on-the-job and off-the-job training in order to prepare

them for taking up the challenges of working in NMDCs production projects, as well as any new venture that Company may like to take up. The further recruitment process is in progress for upcoming projects.

During the last five years, the number of people on rolls as on 31^st March is as follows:

2017-18	5,382
2018-19	5,887
2019-20	5,722
2020-21	5,569
2021-22	5,539
2022-23	5,713

10. Details of significant changes in Key Financial Ratios:

Details of significant changes (i.e changes in 25% or more as compared to the immediately previous financial year in key financial ratios)

1) Debt Turnover Ratios : 6.30 ( R Y. 10.19)

Decrease in revenue from operation by 32% (Current Year Turnover decreases to Rs. 17,666 crore from Rs. 25,964 crore against previous year 2021-22)

2) Inventory Turnover: 8.21 (RY 19.58) Decrease in Sales by 32 % and increase in average inventory by 62 %

3) Interest Coverage Ratio : 107 ( P Y. 342) EBITDA is decreased by 40 % ( Current EBITDA is Rs 8048 crore against the previous year Rs. 13,349 crore)

4) Current Ratio : 3.75 ( R Y. 2.79) Decrease in Short term borrowings: Loan against FD for Rs. 1372 crore

5) Debt Equity Ratio : 0.02 ( RY. 0.10) Decrease in Short term borrowings: Loan against FD for Rs. 1372 crore

6) Net Capital Turnover Ratio : 1.53 (RY .2.58) Decrease in Short term borrowings: Loan against FD for Rs. 1372 crore

7) Operating Profit Margin : 39% ( RY 51%) Decrease in revenue from operation by 32%

(Current Year Turnover decreases to Rs.

1 7,666 crore from Rs. 25,964 crore against previous year 2021-22)

8) Return on capital employed (ROCE): 0.33 (RY. 0.77)

Decrease in PBT by 41%

9) Return on Net Worth : Current Year 24.76 (R Y. 52.85 - due to Demerger of NISP)

Decrease in PAT by 41 %

Sector Specific equivalent ratios as applicable

Figures of the F.Y 21-22 is restated due to demerger of NISR

11. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof (For Standalone Basis)

	2022-2023	2021-2022	(% of Change)
Net Worth (Rs. In crore)	22,332	1 7,875	(+) 24.93 %
PAT (Rs. in crore)	5,529	9,448	(-) 41.48%
Return on Net Worth	24.75(%)	52.85(%)

The Company declared 1^st Interim Dividends for FY 2022-23 @ Rs. 3.75 per share in the month of Feb 2023. Further, the Board has recomonded Final Dividends for FY 2022-23 @ Rs. 2.85 per share, subject to approval of shareholders.

Amount outgo towards 1^st interim Dividend for FY 2022-23 was Rs.l ,098.98 crores. The share of Government with equity stake of 60.79 % was Rs.668.07 crores.

12. Sustainability

NMDC is publishing Sustainability Report as per the Global Reporting Initiative (GRI) Standards, capturing initiatives taken by NMDC over the years in Economic, Environmental and Social aspects. As the world is now traversing more uncertainty than ever, NMDC is focusing on building sustainable and resilient businesses to survive in the long run and to make a meaningful

contribution to the battle against climate change through an increasing investing environment, social and governance (ESG) initiatives. Three Mines of NMDC has been Awarded 5 Star Rating by the Ministry of Mines.

12.1 Environment:

• The environmental monitoring studies are conducted through recognized laboratories of MoEFCC/ CPCB, covering all environmental parameters. Based on the results of environmental monitoring studies, it is concluded that all environmental parameters are well within the limits during FY 22-23. A total of 6 no.s Continuous Ambient Air Quality Monitoring Stations (CAAQMS) have been installed at Bacheli project (2 nos), Kirandul project (2 nos) and Donimalai Project (2 nos) for recording of Ambient air quality parameters such as PM10, PM2.5, S02, NOx and CO in real time. 2 no.s of CAAQMS were installed at Kumaraswamy Iron Ore Mines during June23.

• Every year Carbon Footprint studies are being conducted for disclosure of Greenhouse Gas Emissions under Carbon Disclosure Project (CDP). Water Audit is conducted at regular intervals at all projects of NMDC and recommendations of audit are being implemented to conserve water and to improve the efficiency of motors / pumps, arrest leakages, etc. Apart from this regular maintenance of water appurtenances is being done.

• Sustainable Mining Initiative audit is being done at all Iron Ore Mining projects of NMDC and recommendations are being implemented.

• The R&R works suggested by M/s Indian Council of Forest Research and Education (ICFRE, Dehradun) in the Environmental Management and Reclamation & Rehabilitation Plan for Kirandul Complex, Chhattisgarh and in Donimalai Complex, Karnataka are under implementation stage. The R&R plan for Bacheli complex is under final stage of submission and the reclamation measures suggested by ICFRE will be implemented.

• R&D works in the field of air, water, solid waste etc. were undertaken by engaging institutes of repute such as ISM Dhanbad,

NIT - Raipur and VNIT - Nagpur.

• The environmental pollution control works are undertaken such as de-silting of check dams / check bunds, tailing dams, construction of buttress walls at toe of waste dumps and geo-coir matting for stabilization of waste rock dumps.

• About 96 no.s wells are being monitored for water quality and water levels covering all 4-seasons in a year at iron ore projects. Studies are revealed that there has been an increasing trend in the ground water level due to hydraulic loading by the existing check dams and check bunds. Limited usage of ground water and continuous recharge helped in the process.

• NMDC has set-up Sewage Treatment Plant (STP) with advanced treatment technology (Sequential Batch Reactor) at Bacheli (2 MLD) and Donimalai (3 MLD) township for treatment of domestic waste water. STP works are in progress at Kirandul (3 MLD) and the treated water will be reused for green belt development.

• About 3 million saplings were planted in and around NMDC projects covering an area of 2300 Ha. NMDC is also actively contributing funds to Government of Chhattisgarh flagship programme "Hariyar Chhattisgarh" for undertaking block plantation in the state of C.G by CGRWN Limited.

12.2 Health & Safety

• Health & Safety continue to be our priority with employees & contractual workmen at our projects adhering to the SOPs & safety norms. NMDC appreciate that safety is a journey & is committed to continually improve its performance and set high standards.

• In each mining project of NMDC sufficient number of Workmen Inspectors are nominated/appointed for Mining operations,

Mechanical and Electrical installations as per statutory requirements for carrying safety inspections.

• Mine Level Tripartite Safety Committee Meetings have been conducted in each of the operating mines. This meeting is conducted once in a year at project level with senior officials, Union Representatives and DGMS Officials in which Safety Performance and its appraisal are made and the recommendations are implemented.

• Corporate Level Tripartite Safety Committee Meetings are being held regularly once in a year at Head Office and the recommendations are implemented.

• Safety Committees have been constituted in every operating mine and pit safety meetings are held every month discussing the safety matters and corrective actions related to work atmosphere.

• In order to ensure that safety systems are up to date & also comply with the latest safety regulations, a cross-project internal safety audit has been started in NMDC.

• Safety Management system has been implemented in all our mines. Risk Assessment studies are being conducted regularly.

• NMDC provides extensive safety training programmes to inculcate safety habits & mindset at work to its employees. Behavioral based safety trainings are also given to the employees.

• Severity Rate for the year 2022-23 is 15.09

(Severity Rate = Man-days lost per 100000 Man-days worked).

OHS Activities:

Occupational Health Services have been provided with adequate manpower and infrastructure and are functioning in full- fledged manner at all the projects, headed by Qualified Doctors trained in OHS at Central Labour Institute, Mumbai.

Periodical Medical Examination under statute is carried out regularly in all the projects.

NMDC strives to ensure that workers are not exposed to occupational hazards that negatively affect their health. NMDC also has well equipped hospitals with capable medical teams available 24/7 to support the health & wellbeing of the workers & the surrounding community.

12.3 Corporate Social Responsibility

• CSR is raison detre of NMDC and not just a part of business strategy. NMDCs CSR programmes are carried out in areas which are remote, backward and face serious law and order problems due to left-wing extremism. The area is among the most backward regions of India and inhabited predominantly by Scheduled Tribes and Scheduled caste population who are poor, underprivileged, deprived, suffer malnutrition and devoid of support for their socioeconomic needs. It is only because of its strong focus on social responsibility programmes aiming at enhancing the quality of life of the local communities that NMDC has been successfully mining in these areas.

• NMDC is the model PSE in the field of CSR and its model of stakeholder consultation mechanism for implementation of its CSR has been recommended by Department of Public Enterprises, Government of India for emulation by all other CPSEs.

• The Company is investing substantially in promoting education, development of physical infrastructure, providing healthcare services & clean drinking water along with imparting technical skill sets aimed at enhancing employability & income generation etc. among other initiatives primarily in surrounding areas of its operations.

• Apart from the above, NMDC has been at the forefront of CPSEs contributing to the fight against COVID-19 pandemic by assisting Govt. Authorities in the States, wherein it operates or has Units/Establishments.

Detailed disclosure on CSR forms part of the

Annual Report.