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NMDC Ltd.

BSE: 526371 Sector: Metals & Mining
NSE: NMDC ISIN Code: INE584A01023
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OPEN 120.65
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VOLUME 405509
52-Week high 131.85
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P/E 5.58
Mkt Cap.(Rs cr) 34,757
Buy Price 0.00
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Sell Price 0.00
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OPEN 120.65
CLOSE 119.60
VOLUME 405509
52-Week high 131.85
52-Week low 70.27
P/E 5.58
Mkt Cap.(Rs cr) 34,757
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

NMDC Ltd. (NMDC) - Auditors Report

Company auditors report

(Issued consequent to Audit enquiry dated: 20th July 2022 byoffice of the Director General of Commercial audit AG's Office Complex SaifabadHyderabad and it supersedes our Independent audit report dated: 26th May 2022)

To

The Members NMDC Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofNMDC Limited (hereinafter referred to as "the Company") which comprise theStandalone Balance Sheet as at March 312022 the Standalone Statement of Profit and Loss(including Other Comprehensive Income) the Standalone Statement of Changes in Equity andthe Standalone Cash flow statement for the year then ended and notes to the Standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as the "standalone financialstatements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and its profit other comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Opinion

We conducted our audit in accordance with the standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone financial statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with the ethical requirements that are relevant to ouraudit of the standalone financial statements under the provisions of the Act and the Rulesmade thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Key Audit Matter How our audit addressed the key audit matter
1 Capital Work-in progress (NISP): Our audit procedures included the following:
(Refer Note No.2.2 2.2.1 2.2.2 2.2.3 & 2.2.4 of the standalone financial statements) We obtained an understanding and evaluation of the system of internal control over the capital work in progress with reference to identification and testing of key controls.
Capital Work-in progress (CWIP) as on 31.03.2022 in the books of the unit is Rs 17045.14 Crores out of which Incidental expenditure during Construction (IEDC) amounts to Rs 2610.44 Crores. We have assessed the progress of the project and examined the management view on delay in project completion.
Since the amount involved is substantial and the original schedule date of completion has passed inappropriate classification of IEDC could result in material misstatement of CWIP and hence this is a key audit matter. We also assessed the intention and ability of the management to carry forward and bring the asset to its state of intended use.
Based on the above procedures performed we did not identify any significant exceptions in the managementRss assessment of Capital Work in Progress of NISP.
2 Trade Receivables from Monitoring Committee: Our audit procedures included the following:
(Refer Note No.2.8.1 & 2.34.6 of the standalone financial statements) We analyzed the ageing of trade receivables.
As at 31st March 2022 current financial assets in respect of trade receivables includes receivables from monitoring committee as specified in aforesaid notes. We obtained the list of long outstanding receivables from the monitoring committee and assessed the recoverability of these through inquiry with management and by obtaining sufficient corroborative evidence to support these conclusions.
Trade receivables from Monitoring committee is a key audit matter due to the size of the receivable and involvement of management judgement in determining the impairment provision Based on the above procedures performed we did not identify any significant exceptions in the managementRss assessment and presentation of trade receivables and impairment provision thereof.
3 Mine Closure Obligation (MCO): Our audit procedures included the following:
(Refer Note-1(x) and Note no. 2.14.4 to the standalone financial statement) We have reviewed the recommendations of the committee for mine closure obligations.
The company creates Mine closure obligation (MCO) liability based on the present cost of closure of mining project of the latest mine. The rate of closure arrived at based on such cost is uniformly applied to other mines for arriving at the total MCO liability. We have reviewed the methodology to arrive at the liability for mine closure obligation at a rate per MT on the cumulative RoM quantity for mine closure obligations.
The matter was considered to be a key audit matter because there is estimate involved as per managementRss policy We have verified the arithmetical accuracy of the mine closure obligation provision based on the recommendation of the committee.
Based on the above procedures performed we did not identify any significant exceptions in the managementRss assessment in Mine closure obligation provision
4 Investment in Legacy Iron Ore Ltd. Australia (LIOL) Our audit procedures included the following:
(Refer Note No. 2.4.1 & 2.34.10 of the standalone financial statements) We performed inquiries of management about the current market conditions supporting the evaluation of potential impairment indicators tested the key assumptions used and performed procedures on LIOLs stage of exploration.
We evaluated the review conducted by LIOL on the Exploration and Evaluation assets for impairment and the conclusion derived after testing of compliance of certain critical conditions. The Company accounts for equity investments in subsidiaries associates and joint ventures at cost (subject to impairment assessment) and other investments at fair value.
The accounting for investments in LIOL is a Key Audit Matter as the determination of recoverable value for impairment assessment/fair valuation involves significant management judgement. The company has equity investments in LIOL as referred in above notes.
We have also considered the averment that the Market capitalization is more than its Net asset
Based on the above procedures performed we did not identify any significant exceptions in the managementRss assessment in relation to the carrying value of equity investments in LIOL

Emphasis of Matter

We draw your attention to the followings forming part of the financialstatements without modifying our opinion in respect of:

i. Note No: 2.34.7 regarding show cause notice having been served onBaildilla Project by the District collector South Bastar Dantewada pursuant to judgmentof Honorable Supreme court of India with the demand of Rs 1623.44 Crores against whichcompany has paid an adhoc amount of Rs 600 Crores under protest and filed writ petition inthe Hon'ble High court of Bilaspur Chhattisgarh and a Revision application with MinesTribunal Ministry of mines Government of India and disclosure of contingent liability asmentioned in the said note.

ii. Note no.2.34.15(ii) of Notes forming part of accounts for theperiod ended 31st March 2022 which describes balance of trade receivables payables aresubject to confirmation/reconciliation and consequential adjustment if any.

iii. Note No: 2.34.11 regarding test of impairment of investment andLoan to Neelachal Ispat Nigam Ltd (NINL) Cabinet Committee on Economic Affairs (CCEA) hadaccorded in principle approval for strategic disinvestment of 100% shareholding of NMDCand other Public Sector Undertakings (PSUs) along with transfer of Management control to aStrategic Buyer and as per the loan agreement dated 30th December 2019 the loan amountoutstanding along with interest shall be paid back to NMDC as first charge from thedisinvestment proceeds as per the applicable laws before payment of other liabilities ofNINL. TATA Steel Long Products (TSLP) has purchased the NINL at a price of Rs 12100Crores and Govt has already signed share sale and purchase agreement on 10th March 2022.Total assets of NINL is more than the total liabilities. In view of high bid by TSLPmanagement has felt no impairment of investment and Loan to NINL is necessary as explainedin the said note.

iv. Note No:2.34.3 regarding the demerger of NMDC Iron & SteelPlant (NISP) which is in progress.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Management and Board of Directors are responsible for theother information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance Report and Shareholder Informationbut does not include the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance including other comprehensive income cash flows and changes inequity of the Company in accordance with the Indian Accounting Standards (Ind-AS)prescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended and other accounting principles generally accepted inIndia

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern.

If we conclude that a material uncertainty exists we are required todraw attention in our auditor's report to the related disclosures in the standalonefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

We did not audit the financial statements and other financialinformation of 6 branches included in the accompanying standalone financial statements ofthe Company whose financial statements/financial information reflect total assets of Rs31820.72 Crores as at March 31 2022 and total revenues of Rs 26221.39 Crores for theyear ended on that date. The financial statements and other financial information of thesebranches have been audited by the branch auditors whose reports have been furnished to usand our opinion in so far as it relates to the amounts and disclosures included in respectof these branches is based solely on the report of such branch auditors. Our opinion isnot qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit wereport that;

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books and properreturns adequate for the purposes of our audit have been received from the branches notvisited by us.

c) The reports on the accounts of the branch offices of the Companyaudited under Section 143(8) of the Act by branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report.

d) The Standalone Balance Sheet the Standalone Statement of Profit andLoss (including other comprehensive income) Standalone Statement of changes in equity andthe Standalone Statement of Cash Flow dealt with by this Report are in agreement with thebooks of account and with the returns received from the branches not visited by us.

e) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules2014.

f) The provisions of Section 164(2) of the Act in respect ofdisqualification of directors are not applicable to the company being a Governmentcompany in terms of notification no:- G.S.R.463(E) dated 5th June 2015 issued by Ministryof Corporate Affairs Government of India.

g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure -A".

h) With respect to the other matters to be included in the auditor'sreport in accordance with the requirements of Section 197(16) of the Act as amended:

We are informed that the provisions of section 197 read with Schedule Vof the Act relating to managerial remuneration are not applicable to the company being aGovernment Company in terms of Ministry of Corporate Affairs notification no- G.S.R.(E)5th June 2015.

i) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

a. The Company has disclosed the impact of pending litigations on itsfinancial position in its Standalone Financial Statements - Refer Note 2.31to thefinancial statements

b. The company has made provisions as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts.

c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the company.

d. i. The management has represented that to the best of its knowledgeand belief no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the Company to or in any otherpersons or entities including foreign entities ("Intermediaties") with theunderstanding whether recorded in writing or otherwise that the Intermediary shall:

• Directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever ("Ultimate Beneficiaries") by or onbehalf of the Company or

• Provide any guarantee security or the like to or on behalf ofthe Ultimate Beneficiaries.

ii. The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any persons or entitiesincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall:

• Directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever ("Ultimate Beneficiaries") by or onbehalf of the Funding Party or

• Provide any guarantee security or the like form or on behalf ofthe Ultimate Beneficiaries; and

iii. Based on such audit procedures as considered reasonable andappropriate in the circumstances nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (d) (i) and (d)(ii) contain any materialmis-statement.

e. The Dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.

2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of Section143(11) of the Act we give in "Annexure B" a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.

3. We are enclosing our report in terms of section 143(5) of the Acton the basis of such checks of books and records of the company as we consider appropriateand according to the information and explanations given to us in "Annexure-C"on the directions issued by the Comptroller & Auditor General of India.

"ANNEXURE - A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1(g) under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of NMDC Limited of evendate)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of NMDC Limited ("the Company") as of March 31st 2022 in conjunctionwith our audit of the standalone financial statements of the company for the year ended onthat date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act

Auditors' Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under section 143 (10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

"ANNEXURE - B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of NMDC Limited of even date)

(1) (a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant &Equipment.

(B) The Company has maintained proper records showing full particularsof Intangible assets.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has a regularprogramme of physical verification of its Property Plant and equipment by which all theProperty Plant and equipment are physically verified by the management over a period ofthree years. In our opinion the periodicity of the physical verification is reasonablehaving regard to the size of the company and the nature of fixed assets. In accordancewith this program certain Property Plant and equipment were verified during the year andno material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the company as to whether the title deedsof immovable properties (other than immovable properties where the Company is the lesseeand the lease agreements are duly executed in favour of the lessee) disclosed in thefinancial statements are held in the name of the company our observations are listedbelow:

Description of property Gross carrying value (In Crores) Held in name of Whether promoter director or their relative or employee Period held - indicate range where appropriate Reason for not being held in name of company*
KIRANDUL
Land at Madadi Village - Not in the name of Company No 31-03-2006 Panchnama done by Railway Revenue NMDC officials is available with the Project.
Railway Land - Not in the name of Company No 29-10-2014 Panchnama done by Railway Revenue NMDC officials is available with the Project.
Freehold Land 0.0023 Not in the name of Company No 31-03-1966 Sale Deed available with the management for total 19.09 Hectares. Appeal against the order issued by the Tahsildar Bade Bacheli is being prepared by the advisor (Revenue) and same will be submitted before the SDM Bade Bacheli.
Revenue Land - Not in the name of Company No File has been sent to Head Office for approval so that proper application can be submitted before district Administration for the allotment of Land. It is under Progress.
Bacheli
Forest Land for Uniflow Rly. Dispatch system 0.124 Forest Department No 07-06-2002 This is Forest Land. (MOEF Letter No. 8B/007/2002/FCW/1313 dated 07.06.2002)
Land for Shankhni pump House & pipeline hect 4.68 0.0103 Forest Department No 14-03-2002 This is Forest Land (MOEF clearance Letter dated 14.03.2002).
Lease of Dep- 10(FO) 13.92 Forest Department No 10-07-2019 This is Forest Land (MoEF letter dated 10 July 2019).

taken from Govt Forest and Railway authorities .These land are not incompany's name.

PANNA
Plot No. 1236/3 Land at Panna 0.027 No comments could be offered for the reason no document were made available for our verification.
Plot No. 76/2 Land at Panna 0.0005 No comments could be offered for the reason no document were made available for our verification.
Plot No. 1237/2 Land at Panna 0.0003 No comments could be offered for the reason no document were made available for our verification.
Plot No. 1236/2 Land at Panna 0.00074 No comments could be offered for the reason no document were made available for our verification.
Plot No. 1236/3 Land at Panna 0.0030 No comments could be offered for the reason no document were made available for our verification.
NISP
Land 0.80 Govt. of CG NA 25-05-2010 Requested District Collector Bastar to calculate the value from the date of allotment. However allotment order dt. 17.05.2010 is in the name of NMDC for Construction of CSR School
Land 0.07 Petitioners NA 01-04-2001 Presently the case is in Hon'ble Supreme Court of India in the revenue record the land is in favour of 05 petitioners however the land is in the possession of NISP
Land - Govt. of CG NA 17-05-2010 The Area of Land of 22.39 Hectares (GOVT.LAND) has taken over from District Industries Centre Jagdalpur which is not included in the above Land Schedule as on 31.03.2022. This is utilised for construction of Steel Plant near Nagarnar and has been alloted in the name of NISP however the same has not been brought into the books as the amount payable is not yet ascertainable in the absence of any demand from the concerned authorities.
Land - Forest Land NA 25.720 Hect. dt. 25.07.2014 10.763 Hect dt. 27.02.2015 & 26.136 Hect dt. 24.05.2018 The Permission has been obtained from the Govt. Of Chhattisgarh (Forest Dept.) for use of Forest land having Area 62.619 hectares for construction of Steel Plant at Nagarnar. But the Land is not in the name of NMDC.
HEAD OFFICE
R&D Centre (Leased Premises) 9.12 Acres Lease period completed but lease agreement to be extended.
PALONCHA
SIU NMDC Ltd Paloncha 11.35 Acres Not yet registered
SIU NMDC Ltd Paloncha 2.08 Acres During the survey 2.08 Acres found shortage out of 13.43 Acres is pending confirmation from APIIC.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not revaluedits Property plant and equipment (including Right-of-use assets) or Intangible assets orboth during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there are no proceedingsinitiated or pending against the Company for holding any benami property under theProhibition of Benami Property Transactions Act 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the managementduring the year in our opinion the frequency of such verification is reasonable andprocedures and coverage as followed by management were appropriate. No discrepancies werenoticed on verification between the physical stocks and the book records that were 10% ormore in the aggregate for each class of inventory

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the company the Company has beensanctioned working capital limits in excess of five crore rupees in aggregate from bankson the basis of security of current assets. In our opinion the quarterly returns orstatements filed by the company with such banks are in agreement with the unaudited booksof account of the Company of the respective quarters.

(iii) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has madeinvestments stood guarantee granted advances in the nature of loans secured orunsecured and the details are given below:

(' In Crores)

S No Particulars Guarantees Investments Loans Advances
A. Aggregate amount granted/provided during the Year:
Subsidiaries --- 0.05 1.24
Joint ventures --- --- 0.01
Associates --- 2.50 2.67
B. Balance outstanding as at balance sheet date in respect of above cases:
Subsidiaries --- 216.91 642.22
Joint ventures 504.22 251.03 43.18
Associates --- 519.47 80.52 ---

(b) The Company has not provided any advances in the nature of loans orsecurity to any other entity during the year.

According to the information and explanations given to us and based onthe audit procedures conducted by us. We are of the opinion that the terms and conditionsof the loans given are prima facie not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the company the company has granted loansto one of its associates Neelachal Ispat Nigam Ltd. The repayment of principal and paymentof interests are not received as per due dates stipulated in loan agreement and thedetails of which are given below:

Name of entity : Neelachal ispat Nigam Ltd

S.No Particulars Amount (' in crores) Due date Extent of delay Remarks
1 Loan 1 50.57 01st Jan 2021 to 31Mar 2022 30 days to 455 days Note 1
2 Loan 2 5.07 01st Jan 2022 to 31Mar 2022 30 days to 90 days Note 2
3 Loan 3 0.52 01st Sept 2021 to 01st Feb 2022 30 days to 60 days Note 3

Note 1 : 15 Monthly installments(principal Rs 40.82 crores and interestRs 9.75 crores) are overdue. Note 2 : 3 Monthly installments(principal Rs 2.72 crores andinterest Rs 2.35 crores) are overdue. Note 3 : 1 Monthly installments(principal Rs 0.51crores and interest Rs 0.01 crores) are overdue.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the Company there is overdue amount formore than ninety days in respect of loans given to one of associates Neelalchal IspatNigam Ltd and the details of which are given below:

(' In Crores)

No of cases Principal amount Interest overdue Total overdue
1 32.39 9.25 41.64

(e) According to the information and explanation given to us and on thebasis of our examination of the records of the Company there is no loan given falling dueduring the year which has been renewed or extended of fresh loan given to settle the overdues of existing loans given to the same party.

(f) According to the information and explanation given to us and on thebasis of our examination of the records of the Company the Company has granted loans oradvances in the nature of loans either repayable on demand or with out specifying anyterms or period of repayment to wholly owned Subsidiaries Joint venture and Associatecompanies which are repayable on demand and the details of which are given below:

(' In Crores)

Particulars All other parties Related parities Promoters
Aggregate amount of loans/ advances in nature of loans
A). Repayable on demand 468.70 88.73 ---
B). Agreement does not specify any terms or period of repayment -- 688.40 ---
Total (A+B) 468.70 777.13 ---
%age of loans /advances in the nature of loans to the total loans --- 88.58% ---

(iv) According to the information and explanation given to us and onthe basis of our examination of the records the Company has not given any loans orprovided any guarantee or security as specified under section 185 of the Companies Act2013 and the Company has not provided any guarantee or security as specified under section186 of the Company has compiled with the provisions of section 186 of the Companies Act2013 in relation to loans given and investments made.

(v) The Company has not accepted any deposits or amounts which aredeemed to be deposits form the public. Accordingly clause 3(v) of the order is notapplicable.

(vi) According to the information and expiations given to us CentralGovernment has prescribed the maintenance of cost records under section 148(1) of theCompanies Act 2013 for the products manufactured by it (and or services provided by it).Accordingly Company is generally maintaining proper cost records as specified by theCentral Government under sub-section (1) of section 148 of the Companies Act 2013.

(vii) (a) The Company does not have liability in respect of sales tax.Service tax Duty of excise and value added tax during the year since effective 1 July2017 these statutory dues has been subsumed into GST.

According to the information and explanation given to us and on thebasis of our examination of the records the Company amounts deducted/ accrued in thebooks of accounts in respect of undisputed statutory dues including Goods and Services Tax(GST') provident fund Employees State Insurance Income- tax Duty of customs Cess andother material statutory dues have generally been regularly deposited with the appropriateauthorities except the following:

i) . Donimalai Unit does not collect/remit GST on:

a) . Liquidated damage/penalty collected from the suppliers and

b) . Interest received from monitoring committee.

ii) . Also the branch could not deduct/remit TDS on commission chargeslevied by Monitoring Committee.

According to the information and explanation given to us no undisputedamounts payable in respect of GST provident fund Employees State Insurance Income- taxDuty of customs Cess and other material statutory dues were in arrears as at 31 March2022 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us there areno dues of GST provident fund employees State Insurance Income- tax Sales tax Servicetax Duty of Customs Value added tax Cess or other statutory dues which have not beendeposited by the Company on accounts of disputes except for the following:

Unit Statute Nature of Dues Period Forum where Dispute is Pending Amount (In ' Crore)
Kirandul Export Tax 1995-96 1996-97 2008-09 To 2020-21 Export Tax Hon'ble High Court of Bilaspur 5.83
Interest on Export Tax 1995-96 1996-97 2008-09 To 2020-21 Interest on Export Tax Hon'ble High Court of Bilaspur 14.25
Conservancy Tax 1997-98 to 2005062014-15 to 2017-18 Conservancy Tax Hon'ble High Court of Bilaspur 1.72
Property Tax 2013-14 to 2016-17 Property Tax Hon'ble High Court of Bilaspur 77.51
The Finance Act 1994 Service Tax 2017 - 2018 CESTAT New delhi 0.65
The Finance Act 1994 Service Tax July'2012 - June'2014 Service Tax Appellate Tribunal 20.09
MP Commercial Tax Act1994 Commercial Tax 2002- 03 2005-06 2008-09 Dy. Commissioner of Commercial Tax (Appeal) 1.60
Goods & Services Tax GST 201718to 2019-20 Hon'ble High Court of Bilaspur 8.85
DFO Dantewada and State of Chhattisgarh Forest Permit Fee 14.06.2002to 31.10.2012 Bilaspur bench of Hon'ble High Court Chhattisgarh 63.64
MMDR Act Common Cause Notice 2018-19 Hon'ble High Court Of Bilaspur 317.47
Donimalai Karnataka Forest Act 1963 Forest Development Tax 2008-09 to 2010-11 Hon'ble Supreme Court of India 243.69
Central Excise Customs and Service Tax Service tax on services provided to CISF 2012 - 13 to 2017-18 Commissioner of Central Excise (Appeals) 0.27
Central Excise Customs and Service Tax Service Tax on LD and penalty 2013 - 14 to 2017-18 Commissioner of Central Excise (Appeals) 0.96
Indirect taxes and customs Trans-1 Credit FY 2017-18 Super indent of central tax (CGST) Hospet 0.49
Panna Commercial Tax Sales & Entry tax 2016 - 2017 DCIT Sagar 0.05
Commercial Tax Sales & Entry tax 2013-14 DCIT Sagar 0.23
Bacheli Nagarpalika Bacheli Export tax March'2010 to March'2021 Hon'ble High Court of Bilaspur 1.34
Nagar Palika Bacheli Property Tax 2015-16 Hon'ble High Court Bilaspur 26.12
DFO Dantewada and State of Chhattisgarh Forest Permit Fee 14.06.2002 to 31.10.2012 Bilaspur Bench of Hon'ble High Court Chhattisgarh 80.51
GST Authority Interest on GST for DMF and NMET 01.07.2017 to 28.02.2020 GST Authority 9.30
Nagarpalika Bacheli Interest on Export tax March'2010 to March'2021 Hon'ble High Court of Bilaspur 1.69
High Court Common Cause Notice 2018-19 Hon'ble High Court of Bilaspur 705.97
RO Vizag Service Tax Authority Demand cum show cause Notice for service Tax on Screening of ore 2007-08 to 2011-12 2007-08 to 2011-12 Service tax appellate tribunal 3.35
Service Tax Authority Service Tax cases of MMTC for which amount has to be borne by NMDC as per agreement between MMTC & NMDC 2017-18 The matter is in Appeal stage 2.97
Commissioner of Customs Custom Duty cases of MMTC for which amount has to be borne by NMDC as per agreement between MMTC & NMDC 2021-22 The case is being heard by Appellate Authority and is in the process of going to CESTAT Hyderabad 1.59
Directorate of Revenue Intelligence DRI cases of MMTC for which amount has to be borne by NMDC as per agreement between MMTC & NMDC 2012-13 The case is pending with Appellate tribunal Hyderabad (CESTAT) 2.31
Directorate of Revenue Intelligence DRI cases of MMTC for which amount has to be borne by NMDC as per agreement between MMTC & NMDC 2011-12 The case is pending with AP High Court. 4.18

(viii) According to the information and explanations give to us and onthe basis of our examination of the records of the Company the Company has notsurrendered of disclosed any transactions Previously unrecorded as income in the books ofaccount in the Tax assessments under the Income-tax Act 1961 as income during the year.

(ix) (a) According to the information and explanations give to us andon the basis of our examination of the records of the Company The Company has notdefaulted in repayment of loans or other borrowings or in the payment of interest thereonto any lender during the year. Accordingly clause 3 (ix) (a) of the order is notapplicable.

(b) According to the information and explanations give to us and on thebasis of our examination of the records of the Company the Company has not been declareda willful defaulter by any bank of financial institution or government of governmentauthority.

(c) According to the information and explanations give to us by themanagement in our opinion term loans availed by the Company were applied by the Companyduring the year for the purposes for which the loans were obtained.

(d) According to the information and explanations given to us and on anoverall examination of the balance sheet of the Company we report that no funds have beenraised on short- term basis by the Company. Accordingly Clause 3(ix) (d) of the Order isnot applicable.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the company. We report that the Companyhas not taken any funds from any entity or person on account of or to meet the obligationof its subsidiaries as defined under the Companies Act 2013. Accordingly Clause 3(ix)(e) of the order is not applicable.

(f) According to the information and explanations given to us andprocedures performed by us we report that the Company has not raised loans during theyear on the pledge of securities held in its subsidiaries as defined under the CompaniesAct 2013. Accordingly Clause 3(ix) (f) of the order is not applicable.

(x) (a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments). Accordingly Clause 3(x) (a)of the order is not applicable.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the Company The Company has not made anypreferential allotment or private placement of shares of fully of partly convertibledebentures during the year Accordingly Clause 3(x) (b) of the order is not applicable.

(xi) (a) Based on examination of the books and records of the Companyand according to the information and explanations given to us Considering the principlesof materiality outlined in Standards on Auditing we report that no fraud by the Companyor on the Company has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us noreport under sub-section (12) of section 143 of the Company Act 2013 has been filed bythe auditors in Form ADT -4 as prescribed under Rule 13 of Companies (Audit and Auditors)Rules 2014 with the central Government.

(c) We have taken in to Consideration the whistle blower complainsreceived by the Company during the year while determining the nature timing and extent ofour audit procedures.

(xii) According to the information and explanations given to us theCompany is not a Nidhi Company Accordingly Clause 3(xii) of the order is not applicable.

(xiii) In our opinion and According to the information and explanationsgiven to us the transactions with related parties are in complains with section 177 and188 of the Companies Act 2013 where applicable and the details of the related partytransactions have been disclosed in the standalone financials statements as required bythe applicable Indian Accounting Standards.

(xiv) (a) Based on information and explanations provided to us and ouraudit procedures in our opinion the company has an internal audit system commensuratewith the size and nature of its business.

(b) We have considered the internal audit reports of the company issuedtill date for the period under audit.

(xv) In our opinion and according to the information and explanationsgiven us the Company has not entered in to any non-cash transactions with its directorsor persons or persons connected to its directors and hence provisions of section 192 ofthe Companies Act 2013 are not applicable to the Company.

(xvi) (a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934 Accordingly Clause 3(xvi) (a) of the orderis not applicable.

(b) The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934 Accordingly Clause 3(xvi) (b) of the order is notapplicable.

(c) The Company is not a Core Investment Company (CIC) as defined inthe regulations made by Reserve Bank of India. Accordingly Clause 3(xvi) (c) of the orderis not applicable.

(d) According to the information and explanations provided to us duringthe course of audit the Group does not have any CIC Accordingly the requirements ofClause 3(xvi) (d) are not applicable.

(xvii) The company has not incurred cash losses in the current and inthe immediately preceding financial year.

(xviii) There has been no resignation of the statutory auditors duringthe year Accordingly Clause 3(xviii) of the order is not applicable.

(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dated of realisation of financialassets and payments of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not Capable of meeting its liabilities existing at thedate of balance sheet date. We however state that this is not an assurance as to thefutures viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date. Will get discharged by the Company as and when they fall due.

(xx) In our opinion and according to the information and explanationsgiven to us there is no unspent amount under subsection (5) of section 135 of CompaniesAct 2013 Pursuant to any project. Accordingly Clause 3(xx) (a) and 3(xx) (b) of theorder is not applicable.

"ANNEXURE - C" TO THE AUDITORS' REPORT

(Referred to in paragraph 3 under 'Report on Other Legal and RegulatoryRequirements' section of our report to the Members of NMDC Limited of even date)

Report on the Directions of the Comptroller and Auditor General ofIndia required under sub section 5 of Section 143 of the Companies Act 2013 ("theAct")

S No. Point Reply
1 Whether the company has system in place to process all the accounting transactions through IT system? If yes the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications if any may be stated. Yes the Company had an FAS System upto 31 December 2020 to process all the accounting transactions. From 01 January 2021 the company has migrated from legacy system (oracle-based FAS) to SAP-ERP package in a phased manner. The Units has system in place to process all the accounting transactions through IT system. However some process such as inventory valuation and costing is done manually.
2 Whether there is any restructuring of an existing loan or cases of waiver /write off of debts / loans / interest etc. made by a lender to the company due to the company's inability to repay the loan? If yes the financial impact may be stated. Not Applicable
3 Whether funds received /receivable for specific schemes from central/ state agencies were properly accounted for/ utilized as per its term and conditions? List the cases of deviation. Not Applicable
For Sagar & Associates
Chartered Accountants
(Firm's Registration No: 003510S)
D. Manohar
Partner
Place: Hyderabad Membership No.029644
Date: 25.07.2022 UDIN: 22202352ANPBHL9428

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