Auditor Report of NMDC Ltd.

Mar 31, 2025

We have audited the accompanying Standalone Financial
Statements of NMDC Limited (hereinafter referred to as "the
Company"), which comprise the Standalone Balance Sheet
as at March 31, 2025, the Standalone Statement of Profit and
Loss (including Other Comprehensive Income), the Standalone
Statement of Changes in Equity and the Standalone Statement
of Cash Flows for the year then ended, and notes to the
Standalone Financial Statements, including material accounting
policy information and other explanatory information (hereinafter
referred to as the "Standalone Financial Statements").

In our opinion and to the best of our information and according to
the explanations given to us, the aforesaid Standalone Financial
Statements give the information required by the Companies Act,
2013 ("the Act") in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind
AS") and other accounting principles generally accepted in India,
of the state of affairs of the Company as at March 31, 2025, its
profit and other comprehensive income, changes in equity and
its cash flows for the year 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 those Standards are further described in
the “Auditor''s Responsibilities for the Audit of the Standalone
Financial Statements” section of our report. We are independent
of the Company in accordance with the Code of Ethics issued by
the Institute of Chartered Accountants of India ("ICAI") together
with the ethical requirements that are relevant to our audit of the
Standalone Financial Statements under the provisions of the
Act and the Rules made thereunder, and we have fulfilled our
other ethical responsibilities in accordance with the provisions
of the Act and the ICAI’s Code of Ethics. We believe that the
audit evidence obtained by us and the branch auditors in terms
of their report referred to in “Other Matter” paragraph below, is
sufficient and appropriate to provide a basis for our opinion on
the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the Standalone
Financial Statements of the current period. These matters were
addressed in the context of our audit of the Standalone Financial
Statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.

We have determined the following matters to be the Key audit
matters to be communicated in our report. The description
of how our audit addressed the Key audit matter is provided
in that context.

Sl No	Key Audit Matter	How audit addressed the Key Audit Matter
1.	Revenue from Operations and Related Royalty & Levies. A) Revenue from Operations (INR 23,668.32 crores): • Revenue from operations constitute revenue from sale of iron ore and pellets. The Company deals with different sizes of iron ore. Amounts invoiced is adjusted with the price of ‘Fe’ content in the product sold. This involves substantial effort in establishing accuracy of revenue recognised. Hence, this was identified as Key Audit Matter. • The sale price of Iron-ore is based on the presence of “Fe” content in the Iron-ore. The sale price in the e-auction (advance) as well as Long Term Agreement are fixed for standard “Fe” grade and revenue are recognized at standard “Fe” and adjustments for the revenue recognized are made (Bonus / Penalty) based on the certified actual “Fe” grade.	The audit procedures in relation to revenue recognised, royalty and other statutory dues payable included the following: • Assessing the appropriateness of the Company’s revenue recognition accounting policies in line with Ind AS 115. • Understanding and testing of design and operating effectiveness of Internal controls in place relating to recognition and measurement of revenue, royalty and other cess payable. • Testing of relevant information technology general controls, automated controls, and the related information used in recording and disclosing revenue. • Performed Cut off procedures as on year end with respect to revenue, royalty and other cess paid based on quantity dispatched.

Sl No	Key Audit Matter	How audit addressed the Key Audit Matter
	B) Royalty & Levies (INR 9,705.35 crores) • Royalty and other statutory dues on sale of Iron-ore are required to be paid on the basis of Mines and Minerals (Development and Regulation) Act on advance basis to the respective statutory authorities. The Royalty and other statutory dues are computed on the basis of the “Fe” grade and rate published by Indian Bureau of Mines (IBM). • We identified Royalty & other statutory dues as Key Audit Matter, considering the quantum of royalty and other statutory dues, inherent risk involved in accurately recognizing royalty and other statutory dues and complexities involved with respect to Fe grade, rates prescribed, timing of despatches. (Refer Note 2.33, 2.49(3) & 2.41 to the Standalone Financial Statements)	• Recomputed royalty and other cess payable for the current year as per IBM rates based on “Fe” quantities sold and reconciled the provision made. • Performed analytical procedures on current year revenue, royalty and other cess and where appropriate, conducted further enquiries and testing. • Substantive testing of revenue, royalty and other cess with the underlying documents on a sample basis. • Substantive testing of quantity despatched on sale with the sales recorded in books and substantive testing of royalty and other cess paid on sample basis with reference to quantity dispatched.
2.	Capital Work-in progress (INR 4,737.48 crores): Considering the nature, duration, estimated amount and amount incurred on projects carried out, Capital Work in Progress is determined as a key audit matter. (Refer Note 2.3 to the Standalone Financial Statements)	The audit procedures in relation to Capital Work in Progress included the following: • Reviewed the accounting policies for CWIP. • Understanding and testing of design and operating effectiveness of Internal controls in place relating to approval process for capitalisation. • Tested the control procedure for identification of cost incurred for specific projects. • Performed substantive procedures on sample basis for amounts capitalised and amounts added to CWIP during the year. • Examined the disclosures made in respect of CWIP in compliance with Ind AS-16 and Schedule III to the Companies Act 2013.
3.	Mine Closure Obligation (MCO) (INR 1,332.14 crores): The Company has recognized a provision towards Mine Closure Obligation (MCO) based extractable reserves and progressive mine closure plan for each mine. This estimation involves significant management judgement, including technical and commercial assumptions relating to future costs and mine reserves. Given the materiality of the provision and the inherent estimation uncertainty, this has been considered as a key audit matter. (Refer Note 2.49(4) to the Standalone Financial Statements)	The audit procedure performed in relation to provision for Mine Closure Obligation included the following: • Obtained an understanding of the methodology and key assumptions adopted by management for estimating the mine closure obligation. • Evaluated the reasonableness of underlying assumptions used, which include technical parameters and compared the total extractable reserves with the approved IBM Progressive Mine Closure Plan. • Reviewed the approach adopted for determining the closure liability on a per metric tonne on the basis of cumulative Run of Mine (ROM) quantity for each mine and tested the arithmetical accuracy of the computation of provision • Verified the cost components considered for the closure activities, which were based on the benchmark rates notified by public authorities adjusted suitably for arriving at current rates.

Sl No	Key Audit Matter	How audit addressed the Key Audit Matter
		• Performed sample verification of the quantities used in estimating closure costs. • Verified the computation with reference to inputs of internal technical experts engaged by the Company for the purpose of technical and commercial evaluations.
4.	Trade receivables (INR 7,734.19 crores) Total trade receivables amounting to INR 7,734.19 crores represent significant portion of the total assets of the Company as at March 31,2025. These includes amounts receivable from Central Public Sector undertakings which constitutes 99% of the total trade receivables. In assessing the recoverability of the aforesaid balances and determination of allowance for expected credit loss, management’s judgement involves consideration of ageing status, historical payment records, evaluation of litigations, the likelihood of collection based on the terms of the contract and the credit information of its customers. We considered this as key audit matter due to the materiality of the amounts and significant estimates and judgements as stated above. (Refer Note 2.12, 2.49(5.vi) & 2.51(8.a) to the Standalone Financial Statements)	The audit procedure relating to trade receivables included the following: • Understood and tested on a sample basis the design and operating effectiveness of management controls over the recognition and the recoverability of the trade receivables. • Performed test of details and tested relevant contracts, documents and subsequent receipts for material trade receivable balances. • Tested the ageing of trade receivables at the year end. • Performed additional procedures, in respect of material over-due trade receivables i.e. tested historical payment records, correspondence with customers. • Reviewed the independent/ external expert’s accounting guidance on expected credit loss model for in respect of overdue receivables. • Discussed with management and obtained information on various measures undertaken by the management of those central PSUs for revival and improving business which will result in recovery of these dues. • Assessed the allowance for expected credit loss made by management.
5.	Contingent Liabilities (INR 21,329.87 crores) The Company is involved in various taxes and other disputes for which final outcome cannot be predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions, which require the use of judgements, and such judgements relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgement required, the materiality of such litigations and the complexity of the assessment process, this area is a key matter for our audit. (Refer Note 2.48(A) to the Standalone Financial Statements)	The audit procedures in relation to contingent liabilities included the following: • Understood and tested the design and operating effectiveness of controls as established by the management for obtaining all relevant information for pending litigation cases. • Discussed with the management regarding any material developments thereto and latest status of legal matters. • Read various correspondences and related documents pertaining to litigation cases and relevant external legal opinions obtained by the management. • Examined management’s judgements and assessments in respect of whether provisions are required and discussed with the management. • Reviewed the adequacy and completeness of disclosures.

Emphasis of Matter

We draw attention to the following matters forming part of the Standalone Financial Statements

a. Note No. 2.48 (A.1.3.1) regarding the Karnataka (Mineral Rights and Mineral Bearing Land) Tax Bill, 2024 proposing retrospective
levy of taxes amounting to INR 13,975.07 crores, which is pending the assent of the Hon’ble President of India.

b. Note No. 2.49 (5.vi) regarding recoverability of dues from NMDC Steel Limited (“NSL”), representing an amount of INR 2,151.39
crores arising from demerger and INR 3,793.21 crores of trade and other receivables.

c. Note No. 2.51 (8.a) regarding recoverability of trade
receivables from RashtriyaI Ispat Nigam Limited (RINL)
amounting to INR 4,049 crores.

d. Note No. 2.49 (5.iv) regarding status of advance of INR
639.61 crores paid by the Company to a subsidiary M/s
Karnataka Vijayanagar Steel Limited (KVSL).

e. Note No. 2.48 (A.1.3.2) regarding demand of INR 1,623.44
crores relating to compensation based on common cause
judgement, which is sub-judice.

f. Note No. 2.48 (A.1.3.3) regarding order/ notice alleging
mineral dispatches without timely Railway Transit Passes
(RTP), resulting in a penalty of INR 1,620.50 crores
which is sub-judice.

g. Note No. 2.49 (5.xi) regarding financial position of Legacy
Iron Ore Ltd, a foreign subsidiary of the Company.

The impact of the above on the Standalone Financial Statements
is dependent on the outcome of the proceedings/ matters as
described in the said notes.

Our opinion is not modified in respect of the above matters.

Information Other than the Standalone Financial
Statements and Auditor’s Report Thereon

The Company''s Management and Board of Directors are
responsible for the preparation of the other information.

The other information comprises the information included in
the Management Discussion and Analysis, Board''s Report
including Annexures to Board''s Report, Business Responsibility
and Sustainability Report, Corporate Governance Report
and Shareholder Information (collectively called as “Other
Information”), but does not include the Standalone Financial
Statements and our auditor''s report thereon. The Other
information as above is expected to be made available to us after
the date of this auditor’s report.

Our opinion on the Standalone Financial Statements does not
cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the Standalone Financial
Statements, our responsibility is to read the other information
identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent
with the Standalone Financial Statements or our knowledge
obtained during the course of our audit or otherwise appears to
be materially misstated.

When we read the other information, if we conclude that there is
a material misstatement therein, we are required to communicate
the matter to those charged with governance and take
appropriate actions, as applicable under the relevant laws and
regulations, if required.

Responsibilities of Management and Those
Charged with Governance for the Standalone
Financial Statements

The Company''s Management and Board of Directors are
responsible for the matters specified in section 134(5) of the
Act, with respect to the preparation and presentation of these
Standalone Financial Statements that give a true and fair
view of the standalone financial position, standalone financial
performance, standalone other comprehensive income,
standalone changes in equity and standalone cash flows of the
Company in accordance with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, (“Ind
AS”) and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the Act
for safeguarding of the assets of the Company and for preventing
and detecting frauds and other irregularities; selection and
application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and the design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Standalone Financial
Statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, the Board of
Directors are responsible for assessing the Company''s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern
basis of accounting unless Board of Directors either intends to
liquidate the Company or to cease operations, or has no realistic
alternative but to do so.

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

Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether
the Standalone Financial Statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor''s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these Standalone Financial Statements.

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

• Identify and assess the risks of material misstatement of the
Standalone Financial Statements, whether due to fraud or
error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.

• Obtain an understanding of internal financial controls
relevant to the audit in order to design audit procedures
that are appropriate in the circumstances. Under section
143(3)(i) of the Act, we are also responsible for expressing
our opinion on whether the Company has adequate
internal financial controls system with reference to
Standalone Financial Statements in place and the operating
effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by Board of Director’s.

• Conclude on the appropriateness of management''s use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast
significant doubt on the Company''s ability to continue as
a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor''s
report to the related disclosures in the Standalone Financial
Statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor''s
report. However, future events or conditions may cause the
Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content
of the Standalone Financial Statements, including the
disclosures, and whether the Standalone Financial
Statements represent the underlying transactions and
events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements
regarding independence, and to communicate with them
all relationships and other matters that may reasonably be
thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the Standalone Financial Statements
of the current period and are therefore the key audit matters.

We describe these matters in our auditor''s report unless law or
regulation precludes public disclosure about the matter or when,
in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.

Other Matters

We did not audit the financial statements of six branches
included in the audited Standalone Financial Statements of the
Company, whose financial statements reflects total assets of
INR 23,108.61 crores as at March 31,2025; total revenues of
INR 24,003.45 crores and total net profit before tax of
INR 8,523.19 crores, for the year ended March 31,2025 as
considered from the respective audited financial statements of
the Branches included in the Standalone Financial Statements of
the Company. The financial statements of these branches have
been audited by the respective independent branch auditors
whose reports have been furnished to us, and our opinion in
so far as it relates to the amounts and disclosures included
in respect of these branches, is based solely on the report of
such branch auditors and the procedures performed by us are
as stated under Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements section above after considering
the requirements of Standard on Auditing (SA 600) on “Using the
work of Another Auditor” including materiality.

Our opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory
Requirements

1. As required by the Companies (Auditor''s Report) Order,
2020 ("the Order") issued by the Central Government of
India in terms of Section 143(11) of the Act, we give in the
"Annexure A" a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit
we report that.

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

b) In our opinion, proper books of account as required
by law have been kept by the Company so far as it
appears from our examination of those books except
for the matters stated in the paragraph 2(j)(vi) below on
reporting under Rule11(g) of the Companies (Audit and
Auditor’s) Rules, 2014.

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

d) The Standalone Balance Sheet, the Standalone
Statement of Profit and Loss (including other
comprehensive income), Standalone Statement of
changes in Equity and the Standalone Statement of
Cash Flows dealt with by this Report are in agreement
with the books of account and other records
maintained for the purpose of preparation of the
Standalone Financial Statements.

e) In our opinion, the aforesaid Standalone Financial
Statements comply with the Indian Accounting
Standards (“Ind AS”) specified under Section
133 of the Act.

f) The provisions of Section 164(2) of the Act, in respect
of disqualification of directors are not applicable

to the company, being a Government company in
terms of notification no: - G.S.R.463(E) dated 5th
June 2015 issued by Ministry of Corporate Affairs,
Government of India.

g) The modifications relating to the maintenance of
accounts and other matters connected therewith
are as stated in the paragraph 2(b) above on
reporting under Section 143(3)(b) of the Act and
paragraph 2(j)(vi) below on reporting under Rule
11(g) of the Companies (Audit and Auditor’s) Rules,
2014, as amended.

h) With respect to the adequacy of the internal financial
controls with reference to Standalone Financial
Statements of the Company and the operating
effectiveness of such controls, refer to our separate

report in "Annexure -B", wherein we have expressed
an unmodified opinion.

i) With respect to the other matters to be included in the
auditor''s report 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 V of the Act, relating to
managerial remuneration are not applicable to the
company, being a Government Company, in terms
of Ministry of Corporate Affairs notification no-
G.S.R.463(E) 5th June 2015.

j) With respect to the other matters to be included
in the Auditor''s Report in accordance with Rule
11 of the Companies (Audit and Auditor’s) Rules,

2014, as amended, in our opinion and to the
best of our information and according to the
explanations given to us:

i. The Company has disclosed the impact of
pending litigations on its financial position in its
Standalone Financial Statements - Refer Note
2.48 to the Standalone Financial Statements.

ii. The company does not have any long-term
contracts including derivative contracts for which
there were any material foreseeable losses.

iii. There has been delay in transferring unclaimed
dividend amounts and related equity shares, that
are required to be transferred, to the Investor
Education and Protection Fund by the company
as detailed below:

a. Unclaimed amount of dividend:

Year	Amount involved	Due date of amount to be transferred to IEPF	Actual date of transfer
2016-17 (Interim Dividend)	0.25	13-04-2024	22-05-2024
2016-17 (Final Dividend)	0.07	29-10-2024	27-11-2024

b. Equity shares related to unclaimed dividend:

Year	No of shares	Due date of shares to be transferred to IEPF	Actual date of transfer
2016-17 (Interim Dividend)	20,998	13-04-2024	29-07-2024
2016-17 (Final Dividend)	3,432	29-10-2024	06-12-2024

iv.

a. The management has represented that,
to the best of its knowledge and belief,
as disclosed in Note 2.51(12.a) to the
Standalone Financial Statements, no
funds have been advanced or loaned or
invested (either from borrowed funds or
share premium or any other sources or
kind of funds) by the Company to or in any
other person(s) or entity (ies), including
foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall:

• Directly or indirectly lend or invest in
other persons or entities identified

in any manner whatsoever by or on
behalf of the Company ("Ultimate
Beneficiaries") or

• Provide any guarantee, security
or the like on behalf of the
Ultimate Beneficiaries.

b. The management has represented, that,
to the best of its knowledge and belief,
as disclosed in Note 2.51(12.b) to the
Standalone Financial Statements, no
funds have been received by the company
from any person(s) or entity(ies), including
foreign entities ("Funding Parties"), with the
understanding, whether recorded in writing
or otherwise, that the company shall:

• Directly or indirectly, lend or invest
in other persons or entities identified
in any manner whatsoever by or on
behalf of the Funding Party ("Ultimate
Beneficiaries") or

• Provide any guarantee, security or
the like on behalf of the Ultimate
Beneficiaries; and

c. Based on the audit procedures performed
by us that have been considered reasonable
and appropriate in the circumstances,
nothing has come to our notice that

has caused us to believe that the
representations under sub-clause (iv)(a) and
(v)(b) contain any material misstatement.

v. The interim dividend declared and paid by the
company during the year and until the date of
this audit report is in accordance with section
123 of the Act.

The final dividend paid by the Company during
the financial year 2024-25 which was declared for
the previous financial year 2023-24 and approved
by the members at Annual General Meeting is in
accordance with section 123 of the Act, to the
extent it applies to payment of dividend.

As stated in note 2.52.3(c) to the Standalone
Financial Statements, the Board of Directors of
the Company has recommended Final dividend
for the year which is subject to the approval of
the members at ensuing Annual General Meeting.
The dividend declared is in accordance with
section 123 of the Act to the extent it applies to
declaration of dividend.

vi. Based on our examination which included test
checks and the report of the auditors of the six
branches and according to the information and
explanations given to us and as stated in Note No
2.51.13 to the Standalone Financial Statements,
the Company has used the accounting software
for maintaining its books of account which has
a feature of audit trail (edit log) facility and the
same has operated throughout the year for
all the relevant transactions recorded in such
software except that:

The feature of recording audit trail (edit log)
facility was not enabled at the database
level to log any direct data changes for the
accounting software used for maintaining the
books of account.

During the course of our audit, we did not come
across any instance of audit trail feature being
tampered with and the audit trail has been
preserved by the Company as per the statutory
requirements for record retention.

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

For VARMA & VARMA

Chartered Accountants
FRN 004532S

P R Prasanna Varma

Partner

Place: Hyderabad M No. 025854

Date: May 27, 2025 UDIN: 25025854BMOBJP8695

---

Mar 31, 2024

We have audited the accompanying Standalone Financial Statements of NMDC Limited (hereinafter referred to as "the Company"), which comprise the Standalone Balance Sheet as at March 31, 2024, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Statement of Cash flows for the year then ended, and notes to the Standalone Financial Statements, including material accounting policy information and other explanatory information (hereinafter referred to as the "Standalone Financial Statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, its profit and other comprehensive income, changes in equity and its cash flows for the year 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 those Standards are further described in the "Auditor''s Responsibilities for the Audit of the Standalone Financial Statements" section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with the provisions of the Act and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Standalone Financial Statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

For each Key audit matter below, description of how our audit addressed the Key audit matter is provided in that context. We have determined the following matters to be the Key audit matters to be communicated in our report:

Sl No Key Audit Matter

Auditor''s Response

1. Revenue from Operations and Related Royalty & Levies. A) Revenue from Operations: ¦ Revenue from operations constitute revenue from sale of iron ore and pellets. The Company deals with different sizes of iron ore. Amounts invoiced is adjusted with the price of ''Fe'' content in the product sold. This involves substantial effort in establishing accuracy of revenue recognised. Hence, this was identified as Key Audit Matter.

The audit procedures in relation to revenue recognised, royalty and other statutory dues payable included the following: ¦ Assessing the appropriateness of the Company''s revenue recognition accounting policies in line with Ind AS 115. ¦ Understanding and testing of design and operating effectiveness of Internal controls in place relating to recognition and measurement of revenue, royalty and other cess payable.

Sl No Key Audit Matter	Auditor''s Response
¦ The sale price of Iron-ore is based on the ¦	Testing of relevant information technology
presence of "Fe" content in the Iron-ore.	general controls, automated controls, and
The sale price in the e-auction (advance)	the related information used in recording and
as well as Long Term Agreement are fixed	disclosing revenue.
for standard "Fe" grade and revenue are ^ recognized at standard "Fe" and adjustments for the revenue recognized are made (Bonus	Performed Cut off procedures as on year end with respect to revenue, royalty and other cess
/ Penalty) based on the certified actual "Fe"	paid based on quantity dispatched.
grade. ¦	Recomputed royalty and other cess payable
B) Royalty & Levies	for the current year as per IBM rates based on "Fe" quantities sold and reconciled the provision
¦ Royalty and other statutory dues on sale	made.
of Iron-ore are required to be paid on the basis of Mines and Minerals (Development	Performed analytical procedures on current
and Regulation) Act on advance basis to the	year revenue, royalty and other cess and where
respective statutory authorities. The Royalty and other statutory dues are computed	appropriate, conducted further enquiries and testing.
on the basis of the "Fe" grade and rate ¦	Substantive testing of revenue, royalty and other
published by Indian Bureau of Mines (IBM).	cess with the underlying documents on a sample
¦ We identified Royalty & other statutory dues	basis.
as Key Audit Matter, considering the quantum ¦	Substantive testing of quantity despatched
of royalty and other statutory dues, inherent	on sale with the sales recorded in books and
risk involved in accurately recognizing royalty	substantive testing of royalty and other cess
and other statutory dues and complexities involved with respect to Fe grade, rates prescribed, timing of despatches.	paid on quantity dispatched.
(Refer Note 2.18 and 2.34.14 to the Standalone Financial Statement)
2. Capital Work-in progress: The audit procedures in relation to Capital Work in
Progress included the following: Considering the nature, duration, estimated
amount and amount incurred on projects carried ¦ out, Capital Work in Progress is determined as a key audit matter.	Reviewed the accounting policies for CWIP. Understanding and testing of design and operating effectiveness of Internal controls
(Refer Note 2.2 to the Standalone Financial	in place relating to approval process for
Statement)	capitalisation.
¦	Tested the control procedure for identification of cost incurred for specific projects.
¦	Performed substantive procedures on sample basis for amounts capitalised and amounts added to CWIP during the year.
¦	Examined the disclosures made in respect of CWIP in compliance with Ind AS-16 and Schedule III to the Companies Act 2013.

Sl No	Key Audit Matter	Auditor''s Response
3.	Mine Closure Obligation (MCO): The company provides for Mine closure obligation (MCO) based on the present cost of closure of mining project based on a representative mine. The rate of closure arrived at based on such cost is uniformly applied to other mines for arriving at the total MCO liability.	The audit procedure performed in relation to Mine Closure Obligation included the following: ¦ Our Audit procedure comprise of identification and understanding of the reasonableness of the principal assumptions used by the management to the MCO which involves technical evaluation and data of production of ore.
	As the provision for mine closure involves estimate and Management judgement, the amount involved is significant, the same is considered as a Key Audit Matter.	¦ We have reviewed the methodology to quantify the liability for mine closure obligation at a rate per MT on the cumulative Run of Mine quantity for mine closure obligations.
	(Refer Note 2.14.4 to the Standalone Financial Statement)	¦ We have verified the arithmetical accuracy of the provision for mine closure obligation based on the recommendation of the Committee formed for this purpose.
4.	Contingent Liabilities The Company is involved in various taxes and other disputes for which final outcome cannot be predicted and which could potentially result in significant liabilities. The assessment of the risks associated with the litigations is based on complex assumptions, which require the use of judgements and such judgements relates, primarily, to the assessment of the uncertainties connected to the prediction of the outcome of the proceedings and to the adequacy of the disclosures in the financial statements. Because of the judgement required, the materiality of such litigations and the complexity of the assessment process, the area is a key matter for our audit. (Refer Note 2.31 to the Standalone Financial Statement)	The audit procedures in relation to contingent liabilities included the following: ¦ Understood and tested the design and operating effectiveness of controls as established by the management for obtaining all relevant information for pending litigation cases. ¦ Discussed with the management regarding any material developments thereto and latest status of legal matters. ¦ Read various correspondences and related documents pertaining to litigation cases and relevant external legal opinions obtained by the management. ¦ Examined management''s judgements and assessments in respect of whether provisions are required and discussed with the management.
		¦ Reviewed the adequacy and completeness of disclosures.

Emphasis of Matter

We draw attention to the following matters forming part of the Standalone Financial Statements

I. Note No. 2.34.4 regarding dues from NMDC Steel Limited ("NSL"), which includes an amount of INR 2,502.64 crores arising from demerger;

II. Note No.2.32.5 regarding advance of INR 639.61 crores paid by the Company to a subsidiary M/s Karnataka Vijayanagar Steel Limited (KVSL); and

III. Note No. 2.34.7 regarding demand of INR 1,623.44 Crores, shown as ''Contingent Liability'' relating to compensation based on common cause judgement, which is sub-judice.

The impact of the above on the Standalone Financial Statements is dependent on the outcome of the proceedings/ matters described in the said notes.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

The Company''s Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis, Board''s Report including Annexures to Board''s Report, Business Responsibility and Sustainability Report, Corporate Governance

Report and Shareholder Information (collectively called as "Other Information") but does not include the Standalone Financial Statements and our auditor''s report thereon. The Other information as above is expected to be made available to us after the date of this Auditors'' report.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance/ conclusion on the other information.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

When we read the other information, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate actions, if required.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s Management and Board of Directors are responsible for the matters specified in section 134(5) of the Act, with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the standalone financial position, standalone financial performance, standalone other comprehensive income, standalone cash flows and standalone changes in equity of the Company in accordance with the Indian Accounting Standards (Ind-AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Standalone Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the Standalone Financial Statements, the Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going

concern and using the going concern basis of accounting unless Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the Standalone Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Standalone Financial Statements.

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

¦ Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

¦ Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system with reference to financial statements in place and the operating effectiveness of such controls.

¦ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

¦ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether

a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern.

If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s

report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern; and

¦ Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matters

1. We did not audit the financial statements of five branches included in the audited Standalone Financial Statements of the Company, whose financial statements reflects total assets of INR 13,867.36 Crores as at March 31, 2024; total revenues of INR 21,400.76 Crores, total net profit before tax of INR 7,194.68 Crores, for the year ended March 31, 2024 as considered in the respective audited financial statements of the Branches included in the Standalone Financial Statements of the Company. The financial statements of these branches have been audited by the respective branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors and the procedures performed by us are as stated under Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section above after considering the requirements of Standard on Auditing (SA 600) on "Using the work of Another Auditor" including materiality.

2. The Standalone Financial Statements includes the audited Standalone Financial Statements for the year ended March 31, 2023 which was audited by the predecessor auditor of the Company who had expressed an unmodified opinion on those audited Standalone Financial Statements vide their report dated May 23, 2023. We have audited the restatement adjustments, as disclosed in Note 2.34.13 to the Standalone Financial Statements, which have been made to the comparative Standalone Financial Statements presented for the years prior to year ended March 31, 2024 in accordance with the requirements of applicable Ind AS.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act, based on our audit we report that.

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as

it appears from our examination of those books except for the matters stated in the paragraph 2(j)(vi) below on reporting under Rule11(g) of the Companies (Audit and Auditor''s) Rules, 2014.

c) The reports on the accounts of the branch offices of the Company audited under Section 143(8)

of the Act by branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) The Standalone Balance Sheet, the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of changes in equity and the Standalone Statement of Cash Flows dealt with by this Report are in agreement with the books of account.

e) In our opinion, the aforesaid Standalone Financial Statements comply with the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.

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

g) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2(b) above on reporting under Section 143(3)(b) of the Act and paragraph 2(j)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditor''s) Rules, 2014, as amended.

h) With respect to the adequacy of internal financial controls with reference to Standalone Financial Statements of the Company and operating effectiveness of such controls, refer to our separate Report in "Annexure -B", wherein we have expressed an unmodified opinion.

i) With respect to the other matters to be included in the auditor''s report 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 V of the Act, relating to managerial remuneration are not applicable to the company, being a Government Company, in terms of Ministry of Corporate Affairs notification no-G.S.R.463(E) 5th June 2015.

j) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditor''s) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note 2.31 to the Standalone Financial Statements.

ii. The company does not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company as detailed below:

a. Unclaimed amount of dividend: (INR in Crores)

Year	Amount involved	Due date of amount to be transferred to IEPF	Actual date of transfer
2015-16	0.15	26-Apr-2023	26-Jun-2023

b. Equity shares related to unclaimed dividend:

Year	No of shares	Due date of shares to be transferred to IEPF	Actual date of transfer
2015-16	3776	26-Apr-2023	07-Jun-2023 & 08-Jun-2023

iv.

a. The management has represented that, to the best of its knowledge and belief, as disclosed in Note 2.34.17 to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium

or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever

by or on behalf of the Company ("Ultimate Beneficiaries") or

• Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b. The management has represented, that, to the best of its knowledge and belief, as disclosed in Note 2.34.17 to the Standalone Financial

Statements, no funds have been received by the Company from any persons or entities, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall:

• Directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or

• Provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

c. Based on the audit procedures performed by us that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (iv)(a) and (v)(b) contain any material misstatement.

v. The interim dividend declared and paid by the company during the year and until the date of this audit report is in accordance with section 123 of

the Act, 2013.

The final dividend paid by the Company during the financial year 2023-24 which was declared for the previous financial year 2022-23 and approved by the members at Annual General Meeting is in accordance with section 123 of the Act, to the extent it applies to payment of dividend.

As stated in note 2.34.24 to the Standalone Financial Statements, the Board of Directors of the Company has recommended Final dividend for the year which is subject to the approval of the members in ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.

vi. Based on our examination which included test checks and the report of the auditors of the five branches and according to the information and explanations given to us, the Company has used the accounting software for maintaining its books of account which has a feature of audit trail (edit log) facility and the same has operated throughout the year for all the relevant transactions recorded in such software except that:

The feature of recording audit trail (edit log) at the data base level to log any direct changes for the accounting software used for maintaining the books of account was not enabled.

During the course of our audit, we did not come across any instance of audit trail feature being tampered with for the period for which audit trail was enabled.

In the first year of applicability, the reporting on preservation of audit trail for record retention is not required as per "Implementation guide in Reporting on Audit Trail under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 issued by ICAI.

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

For VARMA & VARMA

Chartered Accountants FRN 004532S

P R Prasanna Varma

Place: Hyderabad Partner

Date: May 27, 2024 M No. 025854

UDIN:24025854BKGPYV6233

---

Mar 31, 2023

NMDC Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of NMDC Limited (hereinafter referred to as "the Company"), which comprise the Standalone Balance Sheet as at March 31, 2023, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash flow statement for the year then ended, and notes to the Standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Ad") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under sedion 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit, other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under sedion 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the following matters to be the Key Audit matters to be communicated in our report.

SI. No.	Key Audit Matter	How our audit addressed the key audit matter
1	Capital Work-in progress (BACHELI): Our audit procedures included the following: The estimated project cost of Iron Ore We obtained a view of the management and Processing Plants at Kirandul and Bacheli, examined the process of capitalization. The Kirandul-Bacheli-Nagarnar Iron Ore management has given a reply that the account of Concentrate Slurry Pipeline and Pellet Plant At IEDC amounting to Rs. 182.57 crores as on Nagarnar, as per DPR of Mecon dtd. Feb- 31.03.2023 will be reviewed in accordance with 2014 is Rs. 4080.94 crores. However, the the Ind AS-16 during capitalization of the asset, revised cost estimate is not available. The cumulative capital work in progress

Cl I . Key Audit Matter No.:		How our audit addressed the key audit matter
	(CWIP) as on 31.03.2023 is Rs.l 170.70 crores which includes incidental expenditure during construction (IEDC) amounting to Rs.l 82.57 crores. Further this IEDC includes certain item of revenue in nature as well as not directly attributable to the project. This is considered to be a key audit matter.
2	Trade Receivables from Monitoring Committee: (Refer Note No.2.8.1 & 2.34.6 of the standalone financial statements) As at 31st March 2023, current financial assets in respect of trade receivables includes receivables from monitoring committee as specified in aforesaid notes. 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	Our audit procedures included the following: We analyzed the ageing of trade receivables. 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. Based on the above procedures performed, we did not identify any significant exceptions in the management''s assessment and presentation of trade receivables and impairment provision thereof.
3	Mine Closure Obligation (MCO): (Refer Note-1 (x) and Note no. 2.14.4 to the standalone financial statement) 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. The matter is considered to be a key audit matter because there is an estimate involved as per management''s policy.	Our audit procedures included the following: We have reviewed the recommendations of the committee for mine closure obligations. 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. 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 management''s assessment in Mine closure obligation provision.
4	Investment in Legacy Iron Ore Ltd., Australia (LIOL) (Refer Note No. 2.4.1 & 2.34.10 of the standalone financial statements) The Company accounts for equity investments in subsidiaries, associates and joint ventures at

SI. No.	Key Audit Matter	How our audit addressed the key audit matter
	cost (subject to impairment assessment) and other investments at fair value. The company has equity investments in LIOL as referred in above notes. 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.

Emphasis of Matter

We draw your attention to the following matters forming part of the financial statements without modifying our opinion in respect thereof:

I Note No: 2.34.7, regarding show cause notice having been served on Baildilla Project by the District collector, South Bastar, Dantewada pursuant to judgment of Honorable Supreme court of India with the demand of Rs.l 623.44 Crores against which company has paid an adhoc amount of Rs.600 Crores under protest and filed writ petition in the Hon''ble High court of Bilaspur, Chhattisgarh and a Revision application with Mines Tribunal, Ministry of mines, Government of India and disclosure of contingent liability as mentioned in the said note.

ii. Note No.2.8.1 & 2.15.3 of Notes forming part of accounts for the period ended 31st March 2023 which describes that the balances of Trade Receivables and Trade Payables respectively are subject to confirmation/ reconciliation and consequential adjustments, if any.

iii. Note No: 2.34.3, regarding the demerger of NMDC Iron & Steel Plant (NISP) which has been given effect from the Appointed date i.e 1st April, 2021 as per the Sanctions of the Ministry of Corporate Affairs vide its Order dated 6th October, 2022. Accordingly, the financial information in the financial statements in respect of the prior periods is

restated effective from the Appointed date.

iv. Note No:2.32.5 (iv), The Company has given an Advance of Rs 639.61 Crores to Karnataka Vijaynagar Steels Ltd (KVSL) towards cost of 2857.54 Acres of land handed over by KIADB to KVSL. In view of the timeline for commencement of production at the allotted site, KVSL and the Company are pursuing with KIADB / Govt of Karnataka for extension of the Lease period. Financial impact, if any, depend upon the final decision and mutual agreement between KIADB /

Govt of Karnataka and KVSL.

Our opinion is not modified in respect of these matters.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

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

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have 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 the matters stated in section 134(5) of the Act, with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind-AS) prescribed under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibility for the Audit of the Standalone Financial Statements

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

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

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

• Obtain an understanding of internal financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(lf the Act, we are also responsible for expressing our opinion on whether the

Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with

governance regarding, among other matters, the

planned scope and timing of the audit and

significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

We did not audit the financial statements and other financial information of 5 Branches/Units (Kirandul, Bacheli, Donimalai, Panna & RO Vizag) included in the accompanying standalone financial statements of the Company whose financial statements/financial information reflect total assets of Rs. 13589.01 Crores as at March 31,2023 and total revenues of Rs. 1 7797.29 Crores for the year ended on that date. The financial statements and other financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors. Our opinion is not modified 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 we report that;

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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

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

e) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.

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

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure -A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone financial statements.

h) With respect to the other matters to be

included in the auditor''s report 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 V of the Ad, relating to managerial remuneration are not applicable to the company, being a Government 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''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

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

b. The company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contrads.

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

d. i. The management has represented

that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• Directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the

Company or

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

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

• Directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

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

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

e. The Dividend declared or paid during the year by the Company is in compliance 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 Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in 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 Act, on the basis of such checks of books and records of the company as we consider appropriate and according to the information and explanations given to us, in "Annexure-C" on the directions issued by the Comptroller & Auditor General of India.

For Sagar & Associates

Chartered Accountants

Firm''s Registration No: 00351 OS

CA. Ajay Kumar Mishra

Partner

Membership No.205468 UDIN: 23205468BGZHQZ4361

Place: Hyderabad

Date: 23.05.2023

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Mar 31, 2022

generally accepted in India, of the state of affairs of the Company as at March 31, 2022, and its profit, other comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of NMDC Limited (hereinafter referred to as "the Company”), which comprise the Standalone Balance Sheet as at March 31,2022, the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Standalone Statement of Changes in Equity and the Standalone Cash flow statement for the year then ended, and notes to the Standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements").

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles

We conducted our audit in accordance with the standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone financial statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI”) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made

thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

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

Sr. No Key Audit Matter

How our audit addressed the key audit matter

1 Capital Work-in progress (NISP): (Refer Note No.2.2, 2.2.1, 2.2.2, 2.2.3 & 2.2.4 of the standalone financial statements) Capital Work-in progress (CWIP) as on 31.03.2022 in the books of the unit is '' 17,045.14 Crores, out of which Incidental expenditure during Construction (IEDC) amounts to '' 2610.44 Crores. 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.

Our audit procedures included the following: 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. We have assessed the progress of the project and examined the management view on delay in project completion. 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 management''s assessment of Capital Work in Progress of NISP.

Sr. No	Key Audit Matter	How our audit addressed the key audit matter
2	Trade Receivables from Monitoring Committee: (Refer Note No.2.8.1 & 2.34.6 of the standalone financial statements) As at 31st March 2022, current financial assets in respect of trade receivables includes receivables from monitoring committee as specified in aforesaid notes. 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	Our audit procedures included the following: We analyzed the ageing of trade receivables. 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. Based on the above procedures performed, we did not identify any significant exceptions in the management''s assessment and presentation of trade receivables and impairment provision thereof.
3	Mine Closure Obligation (MCO): (Refer Note-1(x) and Note no. 2.14.4 to the standalone financial statement) 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. The matter was considered to be a key audit matter because there is estimate involved as per management''s policy	Our audit procedures included the following: We have reviewed the recommendations of the committee for mine closure obligations. 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. 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 management''s assessment in Mine closure obligation provision
4	Investment in Legacy Iron Ore Ltd., Australia (LIOL) (Refer Note No. 2.4.1 & 2.34.10 of the standalone financial statements) 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 company has equity investments in LIOL as referred in above notes. 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.	Our audit procedures included the following: 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. 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 management''s 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 financial statements without modifying our opinion in respect of:

i. Note No: 2.34.7, regarding show cause notice having been served on Baildilla Project by the District collector, South Bastar, Dantewada pursuant to judgment of Honorable Supreme court of India with the demand of '' 1623.44 Crores against which company has paid an adhoc amount

of '' 600 Crores under protest and filed writ petition in the Hon''ble High court of Bilaspur, Chhattisgarh and a Revision application with Mines Tribunal, Ministry of mines, Government of India and disclosure of contingent liability as mentioned in the said note.

ii. Note no.2.34.15(ii) of Notes forming part of

accounts for the period ended 31st March 2022 which describes balance of trade receivables payables are subject to confirmation/reconciliation and consequential adjustment, if any.

iii. Note No: 2.34.11, regarding test of impairment of investment and Loan to Neelachal Ispat Nigam Ltd (NINL), Cabinet Committee on Economic Affairs (CCEA) had accorded in principle approval for strategic disinvestment of 100% shareholding of NMDC and other Public Sector Undertakings (PSUs) along with transfer of Management control to a Strategic Buyer and as per the loan agreement dated 30th December 2019, the loan amount outstanding along with interest shall

be paid back to NMDC as first charge from the disinvestment proceeds as per the applicable laws before payment of other liabilities of NINL. TATA Steel Long Products (TSLP) has purchased the NINL at a price of '' 12,100 Crores 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 TSLP, management has felt no impairment of investment and Loan to NINL is necessary as explained in the said note.

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

Our opinion is not modified in respect of these matters.

Information Other than the Standalone Financial Statements and Auditor''s Report Thereon

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

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

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

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have 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 the matters stated in section 134(5) of the Act, with respect to the preparation of these standalone financial statements that give a true and

fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Indian Accounting Standards (Ind-AS) prescribed under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

Auditor''s Responsibility for the Audit of the Standalone Financial Statements

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

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

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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

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

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

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

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter

should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Other Matter

We did not audit the financial statements and other financial information of 6 branches included in the accompanying standalone financial statements of the Company whose financial statements/financial information reflect total assets of '' 31,820.72 Crores as at March 31, 2022 and total revenues of '' 26,221.39 Crores for the year ended on that date. The financial statements and other financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors. Our opinion is not 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 we report that;

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

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

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

e) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,2014.

f) The provisions of Section 164(2) of the Act, in respect of disqualification of directors are not applicable to the company, being a

Government company in terms of notification no:- G.S.R.463(E) dated 5th June 2015 issued by Ministry of Corporate Affairs, Government of India.

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

h) With respect to the other matters to be included in the auditor''s report 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 V of the Act, relating to managerial remuneration are not applicable to the company, being a Government 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''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

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

b. The company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts.

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

d. i. The management has represented

that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities (“Intermediaties") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall:

• Directly or indirectly lend or invest in other persons or entities identified in any

manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or

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

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

• Directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Funding Party or

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

iii. Based on such audit procedures as

considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (d) (i) and (d)(ii) contain any material mis-statement.

e. The Dividend declared or paid during the year by the Company is in compliance 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 Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in 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 Act, on the basis of such checks of books and records of the company as we consider appropriate and according to the information and explanations given to us, in "Annexure-C" on the directions issued by the Comptroller & Auditor General of India.

For Sagar & Associates Chartered Accountants

(Firm''s Registration No: 003510S)

CA. B. Srinivasa Rao

Partner

Place: Hyderabad Membership No.202352

Date: 25.07.2022 UDIN: 22202352ANPBHL9428

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Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS Financial Statements of NMDC Limited (“the Company”), which comprises the Balance Sheet as at 31st March 2018, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors are responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in the equity of the company in accordance with the accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on those standalone Ind AS Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under, and the Order issued under section 143(11) of the Act.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at March 31, 2018, and its financial performance including other comprehensive income, its Cash Flow and Changes in Equity for the year ended on that date.

Other Matter

1 . The comparative financial information of the Company on the transition date opening Balance Sheet as at 1st April 2015 included in these Standalone Ind AS Financial Statements are based on the previously issued statutory Financial Statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report dated 23.05.201 5 for the year ended 31st March 2015, expressed an unmodified opinion on the said standalone Financial Statements, as adjusted for the differences in the accounting principles adopted by the Company on the transition to the Ind AS which have been audited by us.

We did not audit the Financial Statements/ information of 6 branches included in the standalone Financial Statements of the Company whose Financial Statements / financial information reflect total assets of Rs.19,318.47 Crore as at 31st March, 2018 and total revenues of Rs.11614.15 Crore for the year ended on that date, as considered in the standalone Financial Statements. The Financial Statements/information of these branches has been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) as amended issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the “ANNEXURE A” a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. As required by Section 143 (5) of the act, we give in “ANNEXURE - B”, a statement on the matters specified by the Comptroller and Auditor General of India for the Company.

3. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and reports of other auditors.

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

d) The Balance Sheet, the Statement of Profit and Loss and the statement of Cash Flow and statement of the Changes in Equity dealt with by this report are in agreement with the books of account;

e) In our opinion, the aforesaid standalone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;

f) As per notification No. GSR 463(E) dated 5th June 201 5 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Companies Act, 2013 is not applicable to the Company;

g) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “ANNEXURE - C”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reorting.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS Financial Statements;

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts;

iii. There are no amounts required to be transferred, to the Investor Education and Protection Fund by the Company.

“Annexure A” to the Independent Auditor’s Report

(Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of the members of NMDC Ltd of even date)

(1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company is in the process of carrying out physical verification of fixed assets, a regular programme of physical verification of its fixed assets by which all the fixed assets are physically verified by the management over a period of three years. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the company and the nature of fixed assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, as to whether the title deeds of immovable properties are held in the name of the Company, our observations are listed below:

A. Below are the Leasehold Lands (General/ Social Amenties) for which no comments could be offered for the reason no documents were made available for our verification.

1. Land Lease Hold of Dep No. 10 for Iron Ore Measuring 306.13 (Hectares) and valuing Re.1/-;

2. Land Lease hold of Pocket No. 1,2, and 3 Near Bhansi Measuring 189.956 (Hectares) and Valuing Re.1/-;

3. Land Lease Hold of Bacher Float One Measuring 99.956 (Hectares) and Valuing Re.1/-;

4. Land Lease Hold of Dep-11 C Mines & Fine Ore Dump measuring 122.619 (Hectares) valuing Rs. 21,84,430/-;

5. Mining Lease of Dep-14 measuring 17.81 (Hectares) and valuing Rs. 57,31,362/-;

6. Land Lease Hold (for Town Ship) Tye II Qtr in Krandul measuring 20.81 (Hectares) and valuing Nil.

7. Land acquisition for screening Plant Measuring 470.00 (Acres) and valuing Nil.

8. Land Acquisition for Intake Arrangement (Location. Bachell) Measuring 14.13 (Acres) and valuing Nil.

9. Land for Sankiral Nala Wsupply Scheme for 10 & 11A Project measuring 3 (Hectares) and valuing Nil.

10. Land for4 Sankini Nalla Wsuply Scheme for 10 & 11A project measuring 3 (Hectares) and valuing Nil.

11. Land for Balodia Estate as jadgaiur measuring 10 (Acres) valuing Nil.

12. Land for Operation Township at Hiltop valuing Nil;

13. Buildings (Social Amenities) with Gross Block Rs. 72,17,92,2689/- and Net Block Rs.68,22,65,758/-;

B. Below are the Freehold Lands (General / Social Amerities) for which no comments could be offered for the reason no documents were made available for our verification.

1. Land Areas in Bachell Pargana measuring 14.4 (Acres) and valuing Rs. 4,953/-;

2. Land Areas in Bachell Pargana (Kameli Kala) measuring 2.10(Acres) and valuing Rs.557/-;

3. Land Areas in Bachell Pargana (Porokameli) measuring 3.27 (Acres) and valuing Rs. 1,341/-;

4. Land Areas in Kodernar Pargana measuring 5.16 (Acres) and valuing Rs. 1,606/-;

5. Land Areas in Kirandul Pargana measuring 19.22 (Acres) and valuing Rs. 13,995/-;

6. Land Areas in Bada Bacheli measuring 1.46 (Acres) and valuing Rs. 384/-;

7. Land Areas in Bada Bacheli Pargana measuring 6.56 (Acres) and valuing Rs. 2,468/-;

8. Land Areas in Padapur Pargana measuring 4.28 (Acres) and valuing Rs. 2,468/-;

9. Land Areas in Jagdaipur measuring 5.825 (Hectares) and valuing Rs. 1,05,778/-;

10. Land for Accumulation of Sames measuring 39.58 (Acres) and valuing Rs. 7,09,502/-;

11. Land at Madad VII measuring 15.79 (Acres) and valuing Rs. 4,46,722/-;

12. Land Freehold in Keardul Pargana Measuring 47.18 (Acres) and valuing Rs. 72,565/-;

13. Land Freehold (Construction of 100 permanent Type C one) measuring 75.90 (Acres) and valuing Rs. 46,200/-;

14. Land Freehold for Construction of K.V. School Near Pradesh Vidyalaya measuring 21.62 (Acres) and valuing Rs. 22,39,610/-;

15. Land for Bharp Camp (Locacon Bachel) valing Rs. 7,840/-;

16. Land accounted for Const of lease water Supply to Correcting Plant (Location Bachel) measuring 14(Acres) and valuing Rs. 18.907/-;

17. Value of Private Land from Advances for Pipeline from nieres Dam to screening plant (Location Bachel) measuring 1.54 (Acres) and valuing Rs. 7,376/-;

18. Value of Private Land for Ordocaon Pand (Location Bachel) measuring 17.17 (Acres) and valuing Rs. 13,290/-;

19. Land for Rly Siding at Bachell measuring 4 (Acres) and valuing Rs. 5,502/-;

20. Land acquired from Advesi for Talling Dam near parapur measuring 81.39 (Acres) and valuing Rs. 2,11,395/-;

21. Acquisition of Land for traing Dam valuing Rs. 30,635/- for which no measurement details are available.

22. Forest Land for uniflowly Dispatch System measuring 2(Hectares) and valuing Rs. 12, 40,000/-;

23. Buildings (General) with Gross Block Rs. 37,46,50,472/- and Net Block Rs. 33,56,95,306/-;

24. Land valued at Rs.2,68,392/- for which no measurement details are available.

25. Land at Panna (Plot No. 1236/13) measuring 2.063 (Acres) and valued at Rs. 5,176/-.

26. Land at Panna (Plot No. 76/2) measuring 1.821 (Acres) and valued at Rs. 3,304/-.

27. Land at Panna (Plot No. 1237/2) measuring 2.063 (Acres) and valued at Rs. 7,370/-.

28. Land at Panna (Plot No. 1236/2) measuring 15.873 (Acres) and valued at Rs.30,085/-.

C. Below are Leasehold Lands (General) for which the company holds possession letter issued by Joint Secretary, Mining resources Department Raipur:

1. Land Lease Hold Dep No. 14 Mines measuring 407.55 (Hectares) valuing Rs.41,31,185/-

2. Land Lease Hold Dep No. 14 Non Mining measuring 546.882 (Hectares) valuing Rs.66,49,906/-

3. Land Lease Hold of Dep No. 11 For Iron Ore measuring 1,809.23 (Hectares) and valuing Re.1/-

D. Below are Leasehold Lands (General) for which the Company holds possession Letter Issued by Chief Secretary, Mining resources Dept. M.P:

1. Land Lease Hold of Dep No. 14 for Float Ore measuring 317.79 (Hectares) valuing Rs. Nil;

E. Below are the Freehold Lands for which the Company holds possession letter (Kabja Praman Patra) issued by Tahsidar, Jagdalpur.

1. Land at Villages Nagamar, Kasturi, Amaguda & Maganpur measuring 788.79 (Hectares) and valuing Rs. 7,27,58,374/-;

2. Land at village Bhamani measuring 1.82 (Hectares) and valuing Rs. 1,36,380/-;

3. Land at villages Nagarnar, bajaput, Upanal, Kasturi, Amaguda, Macpal, Chokawada & Maganpur measuring 318.74 (Hectares) and valuing Rs. 88,08,16,636/-;

4. Land at village Chokawada measuring 7.20 (Hectares) and valuing Rs. 26,31,600/-;

5. Land at village Nagannar measuring 155.55 (Acres) the value for which has not been finalised;

F. Below are the Leasehold Lands for which the company holds possets on letter (Kabja Praman Patra) issued by Tahsidar, Jagdalur.

1. Land at villages Chanpunji measuring 20.28 (Hectares) and valuing Rs. 3,10,20,964/-;

G. Below are the Leasehold Lands for which the company holds possession letter issued by Mining Officee District South Bastor, Dantewads;

1. Mining Lease of Dep 05 measuring 1334.463 (Acres) valuing Rs. 53,99,96,215/-;

2. Mining Lease of Dep 10 measuring 764.379 (Acres) valuing Rs. 29,89,00,815/-;

3. Mining Lease of De 10(FO) measuring 352.858 (Acres) valuing Rs. 13,91,64,937/-;

4. Mining Lease of Dep 11A measuring 764.379 (Acres) valuing Rs. 38,45,514/-;

H. Below are the Leasehold Lands for which the Company holds possession letter of Lease Deed issued by Tahisdar, Bastar M.P.

1. Land Acquired for Central Workshop Location Bachel measuring 23.39 (Acres) and valuing Rs. 62,594/-;

I. Below are the Leasehold Lands (General social Amembies) for which the Company holds possession letter issued by M.P. Govt Gazette Notification;

1. Land Magazine Building and Service Centre (Location : Hilitop) measuring 755.27 (Acres) and valuing Nil;

2. Land for Bhansi Base Camp (Location Bacheli) measuring 30 (Acres) and valuing Nil;

3. Land for Bachel Township (Lease Paid to DFO & Cost of stamp for Regn) measuring 200(Acres) and valuing Nil;

J. Below are the Leasehold Lands (General) for which the company holds possession letter (Kabja Praman Patra) issued by New Raipur Development Authority;

1. Land at Jhani Raipur measuring 1.82(Hectares) valuing Rs. 60,82,220/-;

K. Industrial Free Hold Land Having Provisional Allotment Letters of 13.43 Acres Measuring 11.35(Acres) and valuing Rs. 139.21 (Crores);

L. Industiral Free hold Land of 26.39 Acres Purchased from M/s Allyn Watches Ltd, measuring 24.23 (Acres) and valuing Rs.5.88 (Crores);

M. Industiral Free hold land of 1.32 Acres acquired from Chhattisgarh Housing Board measuring 1.43(Acres) and valuing Rs.0.83 (Crores)

N. Buildings (General Leasehold) with Net Block Rs. 21,28,51,322/- constructed on mines lease area;

O. Buildings (Social Ammeries Freehold) with Net Block Rs. 64,97,52,288/- have been constructed over the land for which no but deeds are available.

(2) (a) The management has conducted the physical verification of inventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

(3) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly the provisions of clause (3) (iii) (a) to (c) of the order are not applicable to the Company and hence not commented upon.

(4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security as applicable.

(5) The Company has not accepted any deposits during the year and does not have any unclaimed deposits as at March 31, 2018 and therefore the provisions of the clause 3(V) of the Order are not applicable to the Company.

(6) The Central Government has prescribed the maintenance of cost records under Section 148(1) of the Act. Company is generally maintaining proper cost records as specified by the Central Government under sub-Section (1) of Section 148 of the Companies Act, 2013.

(7) According to information and explanations given to us, in respect of Statutory dues.

(a) The Company has generally been regular in depositing undisuted statutory dues, including Provident Fund Employees State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Goods and Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess and other material statutory does in arrears as at March 31,2018 for a period of more than six months form the date they become payable.

(c) According to the information and explanation given to us, there are no dues of income tax, sales tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, except the followings:

Unit	Name of Statue	Nature of Dues	Period	Forum where Dispute is Pending	Amount (In Rs. Crores)
Kirandul	The Finance Act, 1994	Service Tax	July 2012 -June 2014	The Appellate Tribunal	11.71
	The Finance Act, 1994	Service Tax on Royalty	2016-17, 2017-2018	Chhattisgarh High Court, Bilaspur	71.16
	MP Commercial Tax Act	Commercial Act	2002-03, 2005-06, 2008-09	Dy. Commissioner of Commercial Tax (Appeal)	1.60

Donimalai	Karnataka Forest Act 1963	Forest Development Tax	2008-09 to 2010-11	Hon’ble Supreme Court of India	243.69
	Karnataka Sales Tax Act 1957	Tax on ERP Licenses	1991-92, 1992-93	Dy. Commissioner of Commercial Tax, Bellary	0.51
	Central Excise,	Service Tax	2012-13 to 2014-15	Commissioner of Central	0.20
	Customs and Service tax			Excise (Appeals)
	The Finance Act, 1994	Service Tax on royality	2016-2017, 2017-2018	Director General of Intelligence, Belgam	87.14
	Karnataka Sales Tax Act 1957	CST/VAT on FDT	2011-12	JCCT, Davangere, Karnataka	0.18
Panna	The Finance Act, 1994	Service Tax on royality	2016-2017, 2017-2018	Jabaiur High Court Madhya Pradesh	0.85
	Commercial Tax	Sales & Entry Tax	2013-14	DCIT, Sagar	0.23
					0.04
					0.68
Bacheli	The Finance Act, 1994	Service Tax	July 2012-June 2014	The Appellate Tribunal	54.36
	The Finance Act, 1994	Service Tax on Royality	2016-2017, 2017-2018	Jabalpur high-Court	90.80
Head Office	Income Tax Act, 1961	Income Tax	2009-10, 2010-11, 2012-13,2014-15	CIT(A)	139.84
			2010-1 1, 2005-06, 1990-00 & 2001-02 2006-07 to 2009-10 to 2011-12	High Court	1271.40
			2012-13, 2013-14	ITAT, Hyderabad	318.60
	The Finance Act, 1994	Service Tax	01.10.2013 to 30.09.2014 & 01.10.2007 to 31.10.2012	CESTAT	28.28
			01.07.2012 to 31.03.201 5	COM.(A), Mysore	0.17
RO Vizag	The Finance Act, 1994	Service Tax	2007-2008 to 2011-2012	The Customs, Excise and Service Tax Appellate Tribunal Hyderabad	22.42
			Total		2,342.53

(8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans and borrowing to any financial institution, banks government or dues to debenture holders.

(9) The Company has not raised monies by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of Clause 3 (ix) of the Order are not applicable to the Company.

(10) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(11) In our opinion and according to the information and explanations given to us, the Company has paid Provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act.

(12) The Company is not a Nidhi Company and hence reporting under Clause 3 (xiii) of the Order are not applicable to the Company.

(13) In our opinion, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable, for all transaction with the related parties and the details of related party transaction have been disclosed in the standalone Financial Statements as required by the applicable Accounting Standards.

(14) During the year, the Company has not made any preferential allotment or private placement of shares of fully or party paid constable debentures and hence reporting under clause 3(XIV) of the Order is not applicable to the company.

(15) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors of persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

(16) The Company is not required to be registered under section 45-1A of the Reserve Bank of India Act, 1934.

For Tej Raj & Pal

Chartered accountants

Firm’s Reg No: 304124E

CA B. Vijay

Partner

Membership No. 214678

Hyderabad, May 28,2018

---

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS Financial Statements of NMDC Limited (“the Company”), which comprises the Balance Sheet as at 31st March 2017, the Statement of Profit and Loss (Including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and a summary of significant accounting policies and other explanatory information (herein after referred to as “Standalone Ind AS Financial Statements”) which supersedes our earlier Independent Auditor’s report dated 25th May 2017 in the light of the observations of the Comptroller and Auditors General of India u/s 143 (6) (b) of the Companies Act, 2013 read with subsection 5 of Section 143.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors are responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in the equity of the company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with relevant rules issued there under.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on those standalone Ind AS Financial Statements based on our audit.

We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS Financial Statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the standalone Ind AS Financial Statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS Financial Statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including the Ind AS, of the financial position of the Company as at March 31, 2017, and its financial performance including other comprehensive income, its Cash Flow and Changes in Equity for the year ended on that date.

Other Matter

1. The comparative financial information of the Company on the transition date opening Balance Sheet as at 1st April 2015 included in these Standalone Ind AS Financial Statements are based on the previously issued statutory Financial Statements prepared in accordance with the Companies (Accounting Standards) Rules, 2006 audited by the predecessor auditor whose report dated 23.05.2015 for the year ended 31st March 2015, expressed an unmodified opinion on the said standalone Financial Statements, as adjusted for the differences in the accounting principles adopted by the Company on the transition to the Ind AS which have been audited by us.

2. We did not audit the Financial Statements/ information of 6 branches included in the standalone Financial Statements of the Company whose Financial Statements / financial information reflect total assets of Rs.18,031.42 Crore as at 31st March, 2017 and total revenues of Rs.8,887.37 Crore for the year ended on that date, as considered in the standalone Financial Statements. The Financial Statements/information of these branches has been audited by the branch auditors whose reports have been furnished to us and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) as amended issued by the Central Government of India in terms of sub-Section (11) of Section 143 of the Act, we give in the “ANNEXURE A” a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. As required by Section 143 (5) of the act, we give in “ANNEXURE - B”, a statement on the matters specified by the Comptroller and Auditor General of India for the Company.

3. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and reports of other auditors.

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

d) The Balance Sheet, the Statement of Profit and Loss and the statement of Cash Flow and statement of the Changes in Equity dealt with by this report are in agreement with the books of account;

e) In our opinion, the aforesaid standalone Ind AS Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules issued there under;

f) As per notification No. GSR 463(E) dated 5th June 2015 issued by the Ministry of Corporate Affairs, Government of India, Section 164(2) of the Companies Act, 2013 is not applicable to the Company;

g) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in “ANNEXURE - C”.

h) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS Financial Statements;

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts;

iii. There are no amounts required to be transferred, to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its standalone Ind AS Financial Statements as to holdings as well as dealings in specified bank notes during the period from 8th Nov 2016 to 30th Dec 2016 and these are in accordance with the books of accounts maintained by the Company.

“Annexure A” to the Independent Auditor’s Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal & Regulatory Requirement’ of our report of even date to the Financial Statements of the Company for the year ended March 31, 2017:

(1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company is in the process of carrying out physical verification of fixed assets, a regular programme of physical verification of its fixed assets by which all the fixed assets are physically verified by the management over a period of three years. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the company and the nature of fixed assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

(c) As the physical verification is in process, the shortage/excess arising out of the same will be dealt with in the books on completion of verification. According to the information and explanations given to us and on the basis of our examination of the records of the Company, as to whether the title deeds of immovable properties are held in the name of the Company, our observations are listed below:

Sl. No.	Description of Assets	Type of Asset	Area	Amount (in Rs. Crores)	Remarks
01	General / Social Amenities for which no comments passed	Leasehold Lands (in Acres)	2337.91	1.87
		Building (Net Block)		80.27	Gross Block 100.16 Crores
02	General Amenities for which Company holds possession letter issued by Joint Secretary	Leasehold Lands (in Acres)	6826.25	17.66
03	General Amenities for which Company holds possession letter issued by Mining Officer	Mining Lease (in Acres)	3216.07	120.72
04	General Amenities for which Company holds possession letter issued by Chief Secretary, Mining Resources	Leasehold Lands (in Acres)	784.94	0.0018
05	General / Social Amenities for which no comments passed	Free Hold Land (in Acres)	400.06	129.36
		Building (Net Block)		75.73	Gross Block-101.60 Crores
06	Industrial land having Provisional allotment letters of 13.43 Acres.	Freehold Land (in Acres)	11.35	139.21
07	Industrial Land of 26.39 Acres Purchased from M/s Allyn Watches Ltd.	Freehold Land (in Acres)	24.23	5.88
08	Industrial land of 1.32 Acres acquired from Chhattisgarh Housing Board	Freehold Land (in Acres)	1.43	0.83
		Total	13602.24	571.53

(2) (a) The management has conducted the physical verification of inventory at reasonable intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

(3) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly the provisions of clause (3) (iii) (a) to (c) of the order are not applicable to the Company and hence not commented upon.

(4) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.

(5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(6) The Central Government has prescribed the maintenance of cost records under Section 148(1) of the Act. Company is generally maintaining proper cost records as specified by the Central Government under sub-Section (1) of Section 148 of the Companies Act, 2013.

(7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income - Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2017 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, except the followings:

Unit	Name of Statue	Nature of Dues	Period	Forum where Dispute is Pending	Amount (In Rs. Crores)
Kirandul	The Finance Act, 1994	Service Tax	July 2012 -June 2014	The Appellate Tribunal	10.40
	The Finance Act, 1994	Service Tax on Royalty	2016-17	Jabalpur High Court & Karnataka High court	46.89
	MP Commercial Tax Act	Commercial Act	2002-03, 2005-06, 2008-09	Dy. Commissioner of Commercial Tax (Appeal)	1.60
Donimalai	Karnataka Sales Tax Act 1957	Tax on ERP Licenses	1991-92, 1992-93	Dy. Commissioner of Commercial Tax, Bellary	0.51

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	2012-13 to till date	Commissioner of Central Excise (Appeals)	0.20
Panna	Royalty	Service Charges	2004-05	Diamond Officer	0.89
	Commercial Tax	Sales & Entry Tax	2012-13 & 2013-14	DCIT, Sagar	0.42
	Commercial Tax	Sales Tax	2014-15	DCIT, Sagar	0.04
	Income Tax	TDS	2007-08 to 2016-17	DCIT(TDS), Jabalpur	0.68
Bacheli	The Finance Act, 1994	Service Tax	July 2012-June 2014 & 01.04.201631.03.201 7	The Appellate Tribunal & Jabalpur High-Court	108.03
Head Office	Income Tax Act, 1961	Income Tax	201 3-14, 2012-1 3, 201 1-12, 2010-1 1 & 2009-10	CIT(A)	368.45
			2010-1 1, 2005-06, 1990-00 & 2001-02 2006-07 to 2009-10	High Court	1263.28
			2011-12	ITAT, Hyderabad	30.80
	The Finance Act, 1994	Service Tax	01.10.2013 to 30.09.2014 & 01.10.2007 to 31.10.2012	CESTAT	28.28
			01.07.2012 to 31.03.201 5	COM.(A), Mysore	0.17
			Total		2104.65

(8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.

(9) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised monies by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of Clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

(10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act.

(12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of Clause 4 (xii) of the Order are not applicable to the Company.

(13) In our opinion, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable Accounting Standards.

(14) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

(15) Based upon the audit procedures performed and the information and explanations given by the management, the company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of Clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

(16) In our opinion, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of Clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For Tej Raj & Pal

Chartered accountants

ICAI Reg No: 304124E

CA Dinakar Mohanty

Partner

Membership No. 059390

Place : Bhubaneswar

Date : 1 1.07.2017

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Mar 31, 2016

We have audited the accompanying standalone financial statements of NMDC Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its Profit and its Cash Flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") as amended issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "ANNEXURE A" a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. As required by section 143 (5) of the act, we give in "ANNEXURE - B", a statement on the matters specified by the Comptroller and Auditor General of India for the Company.

3. As required by Section 143 (3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on March 31, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "ANNEXURE - C".

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. There are no pending litigations for the Company that will impact the financial position of the Company;

ii. There are no foreseeable losses on long-term contracts including derivative contracts;

iii. There are no amounts required to be transferred, to the Investor Education and Protection Fund by the Company.

"Annexure A" to the Independent Auditor''s Report

Referred to in paragraph 1 under the heading ''Report on Other Legal & Regulatory Requirement'' of our report of even date to the financial statements of the Company for the year ended March 31, 2016:

(1) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all the fixed assets are physically verified by the management over a period of three years. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the Company and the nature of fixed assets. In accordance with this program, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the company as to whether the title deeds of immovable properties are held in the name of the company, our observations are listed below:

A. Below are Leasehold Lands (General / Social Amenities) for which no comments could be offered for the reason no documents were made available for our verification:

1. Land for Bailadila Estate at Jagdalpur measuring 10 (Acres) valuing Rs.7,333/-;

2. Land acquisition for Screening Plant measuring 470 (Acres) valuing Rs.3,16,416/-;

3. Land acquisition for intake arrangement measuring 14.13 (Acres) valuing Rs.23,769/-;

4. Land for Sankini Nalla W/supply scheme for 10 & 11A proj. measuring 2 (Hectares) valuing Rs.10,97,400/-;

5. Land for Sankini Nalla W/supply scheme for 10 & 11A proj. measuring 3 (Hectares) valuing Rs.18,04,200/-;

6. Land Lease Hold of Dep No. 10 for Iron Ore measuring 308.13 (Hectares) valuing Re.1/-;

7. Land Lease Hold of Pocket No. 1, 2 and 3 Near Bhansi measuring 189.956 (Hectares) valuing Re.1/-;

8. Land Lease Hold of Bacheli Float Ore Area measuring 99.956 (Hectares) valuing Re.1/-;

9. Land Lease Hold Dep No. 11C Mines & Fine Ore Dump measuring 122.619 (Hectares) valuing Rs.1,53,44,299/-;

10. Land for operation township at Hill top Location: Hilltop (Measurement is Under reconciliation) valuing Rs.10,564/-;

11. Building (Social Amenities) with Gross Block - Rs.75,73,23,199/- and Net Block Rs.63,18,65,570/-;

12. Land Lease Hold (for Town Ship) Type II Qtr in Kirandul measuring 20.81 (Hectares) valuing Rs.1,00,590/-;

13. Buildings (General) with Gross Block - Rs.24,43,22,980/- and Net Block Rs.17,07,51,184/-

B. Below are Leasehold Lands (General) for which the company holds possession letter issued by Joint Secretary, Mining resources Department Raipur:

1. Land Lease Hold Dep No. 14 Mines measuring 407.55 (Hectares) valuing Rs.6,99,87,154/-

2. Land Lease Hold Dep No. 14 Non Mining measuring 546.882 (Hectares) valuing Rs.10,66,22,023/-

3. Land Lease Hold of Dep No. 11 For Iron Ore measuring 1,809.23 (Hectares) valuing Re.1/-

C. Below are Leasehold Lands (General) for which the Company holds possession Letter Issued by Mining Officer District, South Bastar, Dantewada:

1. Mining Lease of DEP No. 05 measuring 1334.463 (Acres) and valuing Rs.68,30,81,258/-

2. Mining Lease of DEP No. 10 measuring 764.379 (Acres) and valuing Rs.34,76,68,456/-

3. Mining Lease of DEP No 10 (FO) measuring 352.858 (Acres) and valuing Rs.14,92,37,757/-

4. Mining Lease of DEP No 11A measuring 764.379 (Acres) and valuing Rs.2,71,92,866/-

D. Below are Leasehold Lands (General) for which the Company holds possession Letter Issued by Chief Secretary, Mining resources Dept. M.P:

1. Land Lease Hold of Dep No. 14 for Float Ore measuring 317.79 (Hectares) valuing Rs.18,770/-

E. Portion of total land at Research & Development Center measuring 9.12 acres which had expired during Feb 07 (6.66 acres) and the balance in Feb 10 (2.46 acres).

F. Below are Freehold Lands (General / Social Amenities) for which no comments could be offered for the reason no documents were made available for our verification:

1. Private land from Adivasi for Pipe line from Nerli Dam to Screening Plant measuring 1.54 (Acres) valuing Rs.7,375/-

2. Land for Bhansi camp Location: Bhansi valuing Rs.7,840/-

3. Land acquired for Const. of Intake water supply to Screening Plant Location: Bacheli measuring 14 (Acres) valuing Rs.18,987/-

4. Value of PVT Land for Oxidation Pond Location: Bacheli measuring 17.77 (Acres) valuing Rs.13,294/-

5. 4 Acres land for Rly Siding at Bacheli Location: Bacheli measuring 4 (Acres) valuing Rs.5,502/-

6. Land acquired from Adivasi for Tailing Dam near Parapur measuring 81.39 (Acres) valuing Rs.2,11,395/-

7. Acquisition of Land for Tailing Dam and diff of Amt. paid vide JV NO/1246 1/88. (Measurement under Reconciliation) valuing Rs.30,635/-

8. Forest land for uniflow rly. Dispatch system measuring 2 (Hectares) valuing Rs.12,40,000/-

9. Buildings (General) with Gross Block - Rs.39,41,46,810.00 & Net Block - Rs.26,86,59,423/-

10. Land Areas in Bacheli Pargana measuring 14.40 (Acres) valuing Rs.49,53,000/-

11. Land Area in Bacheli Pargana (Kameli Kala) measuring 2.1 (Acres) valuing Rs.5,57,000/-

12. Land Area in Bacheli Pargana (Poro Kameli) measuring 3.27 (Acres) valuing Rs.13,41,000/-

13. Land Areas in Kodenar Pargana measuring 21.32 (Acres) valuing Rs.1,46,85,000/-

14. Land Area in Bada Bacheli measuring 1.46 (Acres) valuing Rs.3,84,000/-

15. Land Areas in Bada Bacheli Pargana measuring 6.33 (Acres) valuing Rs.23,10,000/-

16. Land Areas in Padapur Pargana measuring 9.28 (Acres) valuing Rs.24,43,000/-

17. Land - Area in Kodenar Pargana measuring 3.48 (Acres) valuing Rs.9,16,000/-

18. Land - Area in Jagdalpur measuring 5.823 (Hectares) valuing Rs.10,57,78,000/-

19. Land for Accumulation of Slimes measuring 39.58 (Acres) valuing Rs.70,95,02,000/-

20. Land at Madadi VIL measuring 15.79 (Acres) valuing Rs.44,67,22,000/-

21. Land Freehold in Kirandul Pargana measuring 47.18 (Acres) valuing Rs.22,569/-

22. Land Freehold (Construction of 100 Permanent Type-C Qtrs) measuring 75.9 (Acres) valuing Rs.46,200/-

23. Land Free Hold for Construction of K.V. School Near Praleosh Vidyalaya measuring 21.62 (Acres) valuing Rs.22,39,610/-

24. Buildings (Social Amenities) with Gross Block - Rs.62,18,21,873/- and Net Block - Rs.48,86,76,147/-

25. Land Area in Bada Bacheli Pargana measuring 0.32 (Acres) valuing Rs.1,58,000/-

(2) (a) The management has conducted the physical verification of inventory at reasonable Intervals.

(b) The discrepancies noticed on physical verification of the inventory as compared to books records which has been properly dealt with in the books of account were not material.

(3) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly the provisions of clause (3) (iii) (a) to (c) of the order are not applicable to the company and hence not commented upon.

(4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security.

(5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

(6) The Central Government has prescribed the maintenance of cost records under section 148(1) of the Act. Company is generally maintaining proper cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

(7) (a) According to information and explanations given to us and on the basis of our examination of the books of account, and records, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income - Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute, except the following:

Name of the Nature of dues Period to which Statute/Authority it relates

Nagar Palika, Export Tax 1995-96 Kirandul

Nagar Palika, Conservancy 1997-98 to Kirandul Tax 2005-06, 2014-15 2015-16

MP Commercial Commercial 2002-03 Tax Act, 1994 Tax 2005-06 2008-09

Nagarpalika, Export Tax May 2001 to Bade Bacheli July 2002 and March 2010 to March 2016

DFO, Dantewada Forest Permit Jun''2002 to and State of Fee Oct''2012 Chhattisgarh

GHMC, Hyderabad Property Tax 2011-12

Karnataka Forest Forest 2008-09 to Tax Act,1963 Development 2010-11 Tax

Karnataka Sales Tax on REP 1991-92 to Tax Act, 1957 Licenses 1992-93

Karnataka Motor Road Tax on 2003-04 Vehicle Taxation Dumpers Act 1957

MMDR Act Royalty Sept-1977 to Aug-2005

Service Tax Act Service Tax 2007-08 to 2011-12

Commercial Tax Entry Tax 2008-09 Department, Government of Chhattisgarh

Sales Tax Authority Sales Tax 2006-7, 2012-13 2013-14

Nagarpalika Property Tax 2016 Parishad, Bade Bacheli

Name of the Statute/ Authority Forum Amount (Rs. in Crores)

Nagar Palika,Kirandul High Court, Chhattisgarh 11.01

Nagar Palika,Kirandul High Court, Chhattisgarh 0.63

MP Commercial Dy.Commissioner of 1.60 Tax Act, 1994 Commercial Tax (Appeal), Sagar

Nagarpalika High Court of Chhattisgarh 0.67 Bade Bacheli

DFO, Dantewada and State of High Court, Chhattisgarh 143.80 Chhattisgarh

GHMC, Hyderabad GHMC, Hyderabad 0.10

Karnataka Forest High Court of Karnataka, 243.68 Tax Act,1963 Bangalore

Karnataka Sales Deputy Commissioner of 0.80 Tax Act, 1957 Commercial Taxes, Bellary

Karnataka Motor Regional Transport Officer, 0.96 Vehicle Taxation Hospet Act 1957

MMDR Act Madhya Pradesh State Govt. 0.89

Service Tax Act Commissioner of Customs, 1.12 Central Excise & Service Tax, Hyderabad

Commercial Tax Department, Commissioner (Appeals) 0.01 Government of Commercial Tax Department, Chhattisgarh Government of Chhattisgarh

Sales Tax Authority Sales Tax Authority 0.52

Nagarpalika Nagar Palika Bacheli 56.07 Parishad, Bade Bacheli

(8) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks.

(9) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not raised moneys by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the Company and hence not commented upon.

(10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(11) Based upon the audit procedures performed and the information and explanations given by the management, the managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(12) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.

(13) In our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

(14) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

(15) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.

(16) In our opinion, the Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

For Tej Raj & Pal

Chartered accountants

ICAI Reg No: 304124E

CA B Vijay

Partner

Mem No 214678

Place : Hyderabad

Date : 27-05-2016

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Mar 31, 2015

We have audited the accompanying financial statements of NMDC Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss, and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

The Company's management is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position and financial performance of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

a) As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A to this report a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

b) As required by section 143 (5) of the Companies Act 2013, we give in the Annexure B to this report, a statement on the directions issued by Comptroller & Auditor General of India, to the extent applicable.

c) As required by Section 143 (3) of the Act, we report that:

1. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

2. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

3. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow

Statement dealt with by this Report are in agreement with the books of account;

4. In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

5. On the basis of the written representations received from the directors as on March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164 (2) of the Act; and

6. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion, and to the best of our information and according to the explanations given to us:

i. There are no pending litigations for the company that will impact the financial position of the company;

ii. There are no foreseeable losses on long-term contracts including derivative contracts;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditors' Report

The Annexure A referred to in our Independent Auditor's Report to the members of the Company on the standalone financial statements for the year ended March 31, 2015, we report that:

i) a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b) The Company has a regular programme of physical verification of its fixed assets by which all the fixed assets are physically verified by the management over a period of three years. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies have been noticed on such verification.

ii) a) The inventories have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material.

iii) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companied Act, 2013 ('the Act'). Consequently, clauses 3 (iii) (a) and 3 (iii) (b) of the Order are not applicable to the Company.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories fixed assets and sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

v) The Company has not accepted any deposits from the public. Consequently, the clause 3(v) of the order is not applicable to the Company.

vi) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under sub-section (1) of Section 148 of the Companies Act, 2013, in respect of the mining activities carried on by the Company and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

vii) a) According to the information and explanations given to us and on the basis of examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth- tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts are payable in respect of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax or cess and other material statutory dues which were in arrears as at March 31,2015, for a period of more than six months from the date they became payable.

b) As at March 31,2015, there have been no disputed dues, which have not been deposited with the respective authorities in respect of Income tax, Wealth-tax, Service tax, duty of customs, duty of excise, value added tax and Cess, except the following:

Name of the Nature of dues Period to statute/Authority which it relates

Nagar Palika, Kirandul Export Tax 1995-96

Nagar Palika, Conservancy 1997-98 to Kirandul Tax 2005-06, 2014-15

MP Commercial Commercial 2002-03 Tax Act, 1994 Tax 2005-06 2008-09

Nagarpalika, Export Tax May 2001 to Bade Bacheli July 2002 and March 2010 to March 2015 DFO, Dantewada and State of Forest Permit Jun'2002 to Chattisgarh Fee Oct'2012

GHMC, Hyderabad Property Tax 2011-12 Karnataka Forest Forest 2008-09 to Tax Act,1963 Development 2010-11 Tax

Karnataka Sales Tax Tax on REP 1991-92 Act,1957 Licenses to 1992-93

Karnataka Motor Vehicle Taxation Road Tax 2003-04 Act 1957 on Dumpers

MMDR Act Royalty Sept-1977 to Aug-2005

APGST Sales Tax 2004-05

AP VAT VAT 2006-07

Service Tax Act Service Tax 2007-08 to 2011-12

Commercial Tax Entry Tax 2008-09 Department, Govt. of Chhattisgarh

Income Tax Act, Tax Deducted 2007-08 1961 at Source

Name of the Forum Amount Statute/Authority (Rs. in Crores)

Nagar Palika, High Court, Chhattisgarh 10.97 Kirandul

Nagar Palika, High Court, Chhattisgarh 0.59 Kirandul

MP Commercial Dy.Commissioner of Tax Act, 1994 Commercial Tax(Appeal), Sagar 1.60

Nagarpalika, High Court of Chhattisgarh 0.64 Bade Bacheli

DFO, Dantewada High Court, Chhattisgarh 143.80 and State of Chattisgarh

GHMC, Hyderabad GHMC, Hyderabad 0.10

Karnataka Forest High Court of Karnataka, Tax Act,1963 Bangalore 247.95

Karnataka Sales Tax Deputy Commissioner of Act,1957 Commercial Taxes, Bellary 0.80

Karnataka Motor Regional Transport Officer, Vehicle Taxation Hospet 0.96 Act 1957

MMDR Act Madhya Pradesh State Govt. 0.89

APGST ADC, Warangal 0.01

AP VAT ADC, Warangal 0.02

Service Tax Act Commissioner of Customs, Central Excise & Service Tax, Hyderabad 1.12

Commercial Tax Commissioner (Appeals) Department, Govt Commercial Tax Department, of Chhattisgarh Government of Chhattisgarh 0.01

Income Tax Act, Commisioner of Income Tax, 1961 (Appeals) Hyderabad 5.23

viii) The Company has no accumulated losses and has not incurred cash losses in the financial year covered by our audit and the immediately preceding financial year.

ix) The Company has not taken any term loan from financial institutions and banks. Consequently, the question of defaulting in payment of any loan installment or interest thereon does not arise.

x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions. Consequently, the clause 3 (x) of the order is not applicable to the Company.

xi) According to the information and explanations given to us, the Company has not obtained any term loans. Consequently, the clause 3 (xi) of the Order is not applicable to Company.

xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY

Chartered Accountants

FRN: 004671S

(P.V.SRI HARI)

Place : Hyderabad Partner

Date : 28-05-2015 Membership No.021961

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Mar 31, 2014

We have audited the accompanying financial statements of NMDC Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss into which are incorporated the accounts of Six Projects/Units audited by Branch Auditors and of Head Office, Sponge Iron Unit and R&D Labs audited by us, and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in sub section (3C) of section 211 of Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements, together with the Accounting Policies and Notes to Accounts, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. The Company has informed that Department of Company affairs vide the notification No.GSR 829(E) dt October 21,2003, notified that Section 274(1)(g) of the Companies Act, 1956, is not applicable to the Government Companies. Hence Clause regarding disqualification of directors is not applicable.

f. The Company has provided for cess under section 441A of the Companies Act, 1956 but the same has not been deposited, pending notification specifying the manner of payment.

Annexure to the Independent Auditor''s Report Re: NMDC LIMITED [Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date]

(i) In respect of Fixed Assets:

(a) The company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, a few fixed assets have been disposed off/ identified for disposal by the company. On the basis of information and explanations given to us, we are of the opinion that disposal of the part of fixed assets has not affected the going concern status of the company.

(ii) In respect of Inventories:

(a) The inventory has been physically verified by the management during the year applying ABC system except the inventory with Third parties. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) According to the information and explanation given to us, the company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us, the company has neither granted nor taken any loans secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 (The Act), hence clauses iii (a, b, c, d, e, f and g) of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, there are no contracts or agreements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956. As there are no such contracts or agreements, Clause v (b) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003, is not applicable.

(vi) In our opinion and according to the information and explanation given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

(vii) The company has an internal audit system commensurate with the size and nature of its business.

(viii) The Company has come under the ambit of Cost Audit of mining of Iron Ore in addition to Sponge Iron activity. Considering this, we have broadly reviewed the books of account maintained by the Company pursuant to Companies (Cost Accounting Records) Rules, 2011, and Companies (Cost Audit Report) Rules, 2011, and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor education and protection fund, Employees'' state insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are dues of Forest Development Tax, Forest Permit fee, Income Tax, Entry Tax, Sales Tax, Export Tax, Conservancy Tax, Road Tax and Property Tax which are not deposited on account of dispute which are as follows:

Name of the Nature of dues Period to statute/Authority which relates which it relates

Nagar Palika, Export Tax 1995-96 to Kirandul 2003-04

Nagar Palika, Conservancy 1997-98 to Kirandul Tax 2005-06

MP Commercial Commercial 2002-03 Tax Act, 1994 Tax 2005-06 2008-09

Nagarpalika, Export Tax May 2001 to Bade Bacheli July 2002 and March 2010 to March 2014

DFO, Dantewada Forest Permit Jun''2002 to and State of fee Oct''2012 Chattisgarh

GHMC, Hyderabad Property Tax 2011-12

Income tax Act, Income-tax 2006-07 1961 2007-08

2008-09 2009-10

Karnataka Forest Forest Tax Act, 1963 Development Aug''08 to Tax Mar''12

Karnataka Sales Tax on REP 1991-92 to Tax Act, 1957 Licenses 1992-93

Karnataka Motor Road Tax on 2003-04 Vehicle taxation Dumpers Act, 1957

MMDR Act Royalty Sept-1977 to Aug-2005

APGST Sales Tax 2004-05

AP VAT VAT 2006-07



Name of the statue/Authority Forum Amount (Rs. In Crores)

Nagar Palika, Kirandul High Court, Chhattisgarh 5.50

Nagar Palika, Kirandul High Court, Chhattisgarh 0.56

MP Commercial Tax Act, 1994 Dy.Commissioner of Commercial Tax(Appeal), Sagar 1.44

Nagarpalika, Bade Bacheli High Court of Chhattisgarh 0.61

DFO, Dantewada and State of Chattisgarh High Court, Chhattisgarh 143.80

GHMC, Hyderabad GHMC, Hyderabad 0.10

Income tax Act, 1961 CIT (Appeals), Hyderabad ITAT, Hyderabad 402.32

Karnataka Forest Tax Act, 1963 Dy.Conservator of Forests, Bellary 247.96

Karnataka Sales Tax Act, 1957 Deputy Commissioner of Commercial Taxes, Bellary 0.80

Karnataka Motor Vehicle taxation Act, 1957 Regional Transport Officer, Hospet 0.96

MMDR Act Madhya Pradesh State Govt. 0.89

APGST ADC, Warangal 0.01

AP VA ADC, Warangal 0.02

Name of the Nature of dues Period to statute/Authority which relates which it relates

Service Tax Act Service Tax 2007-08 to 2011-12

Commercial Tax Entry Tax 2008-09 Department, Government of Chhattisgarh

Commercial Tax Value Added 2008-09 Department, Tax Government of Chhattisgarh

MP VAT Act, Value Added 2006-07 2002 Tax

Income Tax Act, Tax Deducted 2007-08 1961 at Source

Central Sales Central Sales Tax Act Tax 2007-08

Name of the statue/Authority Forum Amount (Rs. In Crores)



Service Tax Act Commissioner of Customs, Central Excise & Service Tax, Hyderabad 1.12

Commercial Tax Department, Government of Chhattisgarh Commissioner (Appeals) Commercial Tax Department, Government of Chhattisgarh 0.01

Commercial Tax Department, Government of Chhattisgarh Commissioner (Appeals) Commercial Tax Department, Government of Chhattisgarh 0.03

MP VAT Act, 2002 Asst. Commissioner of Commercial Taxes, Sagar 0.09

Income Tax Act, 1961 Commissioner of Income Tax (Appeals), Hyderabad 4.11

Central Sales Tax Act CTO, Bellary 3.13

(x) In our opinion, the company has no accumulated losses as at 31.03.2014 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not taken any loans from financial Institution or Banks and has not issued any debentures. Therefore, the provisions of clause xi of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xii) In our opinion and according to the information and explanation given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause xii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, the provisions of clause xiii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause xiv of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the Company has not obtained any term loans. Therefore, the provisions of clause xvi of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds were raised by the Company. Accordingly, the provisions of clause xvii of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xviii) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause xviii of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the company.

(xix) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

(xx) According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor''s Report) Order, 2003, are not applicable to the Company.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY,

Chartered Accountants FRN: 004671S

(P.V.SRI HARI)

Partner Membership No.21961

Place : Hyderabad Date : 30-05-2014

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Mar 31, 2012

We have audited the attached Balance Sheet of NMDC LIMITED (The Company) as at March 31, 2012, and also the Statement of Profit and Loss of the Company for the year ended on that date annexed thereto, into which are incorporated the accounts of Seven Projects / Units audited by Branch Auditors and of Head Office, Sponge Iron Unit and R&D Labs audited by us, and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003, issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order, to the extent applicable.

1. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us. The Branch Auditors' Reports have been forwarded to us and have been appropriately dealt with;

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the Projects / Units;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) The Company has informed that Department of Company affairs vide notification No. GSR 829(E) dt October 21,2003, notified that Section 274(1)(g) of the Companies Act, 1956, is not applicable to the Government Companies. Hence, Clause regarding disqualification of directors is not applicable.

(f) The company has provided for cess under section 441A of the Companies Act, 1956 but the same has not been deposited, pending notification specifying the manner of payment.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Significant Accounting Policies and Notes there on give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31.03.2012;

(ii) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

(i) In respect of Fixed Assets:

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, a few fixed assets have been disposed off by the Company. On the basis of information and explanations given to us, we are of the opinion that disposal of the part of fixed assets has not affected the going concern status of the Company.

(ii) In respect of Inventories:

(a) The inventory has been physically verified by the management during the year applying ABC system except the inventory with Third parties. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) According to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book record were not material except to the extent of 1,46,042 tons of Lump ore excess found in Kumaraswamy mines which as per the management was due to retrieval of ore embedded in between boulders, troughs, curve surfaces, undulations and small ditches.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans secured or unsecured to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 (The Act), hence clauses iii (a, b, c, d, e, f and g) of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, there are no contracts or agreements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956. As there are no such contracts or agreements, Clause v (b) of paragraph 4 of the Companies (Auditor's Report) Order, 2003, is not applicable.

(vi) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) During the year, the Company has come under the ambit of Cost audit of Sponge Iron Activity and Windmill power generation. Considering this, we have broadly reviewed the books of account maintained by the company pursuant to Companies (Cost Accounting Records) Rules 2011 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of these records.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the Company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor education and protection fund, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are dues of Forest Development Tax, Entry Tax, Sales Tax, Export Tax, Conservancy Tax, Road Tax and Property Tax which are not deposited on account of dispute which are as follows:

Name of the Nature of dues Period to statute / Authority which relates which it relates

Nagar Palika, Export Tax 1995-96 to Kirandul 2003-04

Nagar Palika, Conservancy 1997-98 to Kirandul Tax 2005-06

MP Commercial Commercial 2002-03 Tax Act, 1994 Tax 2005-06 2006-07

Nagarpalika, Export Tax May 2001 to Bade Bacheli July 2002

GHMC, Hyderabad Property Tax 2011-12

Income Tax Act, Income-Tax 2007-08 & 1961 2008-09

Karnataka Forest Forest Aug'08 to Tax Act, 1963 development Tax Mar'12

Karnataka Sales Tax on REP 1991-92 to Tax Act,1957 licenses 92-93

Karnataka Motor Road Tax 2003-04 Vehicle Taxation on Dumpers Act, 1957

MMDR Act Royalty SEP-1977 to AUG-2005

APGST Sales Tax 2004-05

AP VAT VAT 2006-07

Name of the Forum Amount Statute/Authority (Rs. In Crores)

Nagar Palika,Kirandul High Court, Chhattisgarh 10.64

Nagar Palika,Kirandul High Court, Chhattisgarh 0.49

M P Commercial Tax Dy.Commissioner of 1.93 Act,1994 Commercial Tax (Appeal), Sagar

Nagarpalika, Bade High Court of Chhattisgarh 0.54 Bacheli

GHMC Hyderabad GHMC, Hyderabad 0.02

Income Tax,Act 1961 CIT (Appeals), 1024.28 Hyderabad

Karnataka Forest Dy.Conservator of Forests, 257.16 Tax Act,1963 Bellary

Karnataka Sales Deputy Commissioner of 0.40 Tax Act, 1957 Commercial Taxes, Bellary

Karnataka Motor Regional transport officer, 0.96 Vehicle Taxation Act,1957 Hospet

MMDR Act Madhya Pradesh State Govt. 0.89

APGST ADC, Warangal 0.01

AP VAT ADC, Warangal 0.02

(x) In our opinion, the Company has no accumulated losses as at 31.03.2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the Company has not taken any loans from financial Institution or Banks and has not issued any debentures. Therefore, the provisions of clause xi of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xii) In our opinion and according to the information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause xii of Paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause xiii of Paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause xiv of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the Company has not obtained any term loans. Therefore, the provisions of clause xvi of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds were raised by the Company. Accordingly, the provisions of clause xvii of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xviii) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause xviii of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xix) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause xix of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xx) According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause xx of Paragraph 4 of the Companies (Auditor's Report) Order, 2003, are not applicable to the Company.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VENUGOPAL & CHENOY,

Chartered Accountants

FRN No: 004671S

(P.V. SRI HARI)

Partner

Membership No. 21961

Place : New Delhi

Date : 28.05.2012

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Mar 31, 2011

We have audited the attached Balance Sheet of NMDC LIMITED (The company) as at 31st March, 2011 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto, into which are incorporated the accounts of Seven Projects / Units audited by Branch Auditors and in respect of Head Office, Lalapur, Sponge Iron Unit and R&D Labs audited by us, and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditor's Report) Order, 2003 issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order, to the extent applicable.

1. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us. The Branch Auditors Reports have been forwarded to us and have been appropriately dealt with;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the Projects / Units;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) The Company has informed that Department of Company affairs vide the notification No. GSR 829(E) dt 21st October 2003 notified that Section 274(1)(g) of the Companies Act 1956 is not applicable to the Government Companies. Hence Clause regarding disqualification of directors is not applicable.

(f) The company has provided for cess under section 441A of the Companies Act, 1956 but the same has not been deposited, pending notification specifying the manner of payment.

(g) We invite the attention of members to the impact on the accounts, consequent to the change in accounting policies described in Schedule-24, Notes forming part of accounts.

(h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Significant Accounting Policies and Notes forming part of accounts appearing in Schedule No.24 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the company as at 31.03.2011;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to Auditor's Report Re: NMDC LIMITED [Referred to in our report of even date]

(i) In respect of Fixed Assets:

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, few fixed assets have been disposed off by the Company. On the basis of information and explanations given to us, we are of the opinion, that disposal of the part of fixed assets has not affected the going concern status of the Company.

(ii) In respect of Inventories:

(a) The inventory has been physically verified by the management during the year applying ABC system except the inventory with Third parties. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) According to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us, the Company has neither granted nor taken any loans secured or unsecured to/ from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 (The Act), hence clauses iii (a, b, c , d, e, f and g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, there are no contracts or agreements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956. As there are no such contracts or agreements, Clause (b) of paragraph 4(v) is not applicable.

(vi) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

(vii) The Company has an internal audit system commensurate with the size and nature of its business.

(viii) The maintenance of cost records under Section 209(1)(d) of The Act has not been prescribed by the Central government for the products of the Company.

(ix) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor education and protection fund, Employees' state insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are dues of Forest Development Tax, Entry Tax, Sales Tax, Property Tax, Export Tax, Conservancy Tax, Road Tax and Property Tax which are not deposited on account of dispute which are as follows:

Name of the statute/ Nature of dues Period to Forum Amount Authority which relates which it relates (Rs. In Crores)

Nagar Palika, 1995-96 to High Court, Chhattisgarh 10.67 Kirandul Export tax 2003-04

Nagar Palika, Conservancy 1997-98 to High Court, Chhattisgarh 0.47 Kirandul tax 2005-06

MP Commercial Commercial 1997-98 Dy.Commissioner of 1.93 Tax Act, 1994 Tax 2001-02 Commercial Tax (Appeal), 2003-04 Sagar

Nagarpalika, Export Tax May 2001 to High Court of Chhattisgarh 0.26 Bade Bacheli July 2002

CG VAT Act, 2005 VAT 2006-07 Dy.Commissioner (Appeal) 0.19 Commercial Tax, Raipur

CG VAT Act, 2005 CST 2006-07 Dy.Commissioner (Appeal) 0.17 Commercial Tax, Raipur

The Chhattisgarh Entry tax 2006-07 Dy.Commissioner (Appeal) 0.19 Sthaniya Kshetra Me Commercial Tax, Raipur Mal Ke. Pravesh Par Kar Adhiniyam, 1976

Karnataka Forest Forest August 2008 Dy.Conservator of Forests, 28.60 Tax Act, 1963 Development to March 2011 Bellary Tax

Karnataka Sales Tax on REP 1991-92 to Deputy Commissioner of 0.40 Tax Act, 1957 licenses 92-93 Commercial Taxes, Bellary

Karnataka Motor Road tax 2003-04 Regional transport officer, 0.96 Vehicle Taxation on dumpers Hospet Act 1957

MMDR Act Royalty SEP-1977 to Madhya Pradesh State Govt. 0.89 AUG-2005

APGST Sales tax 2004-05 ADC, Warangal 0.01

AP VAT VAT 2006-07 ADC, Warangal 0.02

(x) In our opinion, the Company has no accumulated losses as at 31.03.2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the Company has not taken any loans from financial Institution, Bank and has not issued any debentures. Therefore, the provisions of clause 4(xi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xii) In our opinion and according to the information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiii) In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) According to the information and explanations given to us, the Company has not obtained any term loans. Therefore, the provisions of clause 4 (xvi) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds were raised by the Company.

Accordingly, the provisions of clause (xvii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xviii) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause 4(xviii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xix) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xx) According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAMAMOORTHY (N) & Co., Chartered Accountants

(CA Surendranath Bharathi)

Partner

Membership No.23837

FRN No: 002899S

Place : New Delhi

Date : 27-May-2011

---

Mar 31, 2010

We have audited the attached Balance Sheet of NMDC LIMITED (The Company) as at 31st March, 2010 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto, into which are incorporated the accounts of Seven Projects / Units audited by Branch Auditors and in respect of Head Office, Lalapur and R&D Labs audited by us, and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 we enclose in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order, to the extent applicable.

1. Further to our comments in the Annexure referred to above, we report that:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us. The Branch Auditors Reports have been forwarded to us and have been appropriately dealt with;

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the Projects 1 Units;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(e) The Company has informed that Department of Company affairs vide the notification No. GSR 829(E) dt 21st October 2003 notified that Section 274(1 )(g) of the Companies Act 1956 is not applicable to the Government Companies. Hence Clause regarding disqualification of directors is not applicable.

(f) The Company has provided for cess under section 441A of the Companies Act, 1956 but the same has not been deposited, pending notification specifying the manner of payment.

(g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Significant Accounting Policies and Notes forming part of accounts appearing in Schedule No.23 give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31.03.2010;

(ii) In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

(iii) In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to Auditors Report Re: NMDC LIMITED [Referred to in our report of even date]

(i) In respect of Fixed Assets:

(a) The Company is generally maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, few fixed assets have been disposed off by the Company. On the basis of information and explanations given to us, we are of the opinion, that disposal of the part of fixed assets has not affected the going concern status of the Company.

(ii) In respect of Inventories:

(a) The inventory has been physically verified by the management during the year except the inventory with Third parties. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) According to the information and explanation given to us, the Company is maintaining proper records of inventory. The discrepancies, noticed on physical verification of inventory as compared to book records were not material.

(iii) According to the information and explanations given to us,

(a) The Company has neither granted nor taken any loans secured or unsecured to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 (The Act), hence clauses iii (a, b, c , d, e, f and g) are not applicable.

(b) There are no contracts or agreements that need to be entered into the Register maintained under section 301 of the Companies Act, 1956. As there are no such contracts or agreements, Clause

(b) of paragraph 4(v) is in applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to: correct major weaknesses in internal controls.

(v) In our opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA or any other relevant provision of the Act and the rules framed there under.

(vi) The Company has an internal audit system commensurate with the size and nature of its business.

(vii) The maintenance of cost records under Section 209(1 )(d) of The Act has not been prescribed by the Central government for the products of the Company.

(viii) In respect of Statutory Dues:

(a) According to the information and explanations given to us and the records of the Company examined by us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident fund, Investor education and protection fund, Employees state insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess were in arrears, as at 31.03.2010 for a period of more than six months from the date they became payable. (c) According to the information and explanations given to us, there are dues of Forest Development Tax, Entry Tax, Sales Tax, Property Tax, Export Tax, Conservancy Tax, Road Tax and Property Tax which are not deposited on account of dispute which are as follows:

Name of the Nature of dues Period to statute/Authority which relates which it relates

Karnataka Forest Forest Aug08 to Tax Act,1963 development tax Mar10

Madhya Pradesh Entry Tax 2001 -02 Entry Tax Act

Nagar Palika, Property tax 2008-09 & Kirandul 2009-10

Nagar Palika, Export tax 1995-96 to Kirandul 2009-10

Nagar Palika, Conservancy tax 1997-98 to Kirandul 2009-10

Nagarpalika, Export Tax May 2001 to Bade Bacheli July 2002

Madhya Pradesh Entry Tax 2000-01 Commercial Tax Act, 1994

Karnataka Sales Tax on REP 1991-92 to taxAct,1957 licenses 92-93

Karnataka Motor Road tax 2003-04 Vehicle taxation oh dumpers Act 1957

MMDRAct Royalty SEP-1977 to AUG-2005

CST Act, 1956 Sales Tax 2005-06

MP Commercial Commercial 1997-98

Tax Act, 1994 Tax/VAT 2001-02 2003-04



Name of the Forum Amount Statue/Authority (Rs. in Crores)

Karnataka Forest Tax Act, 1963 Dy.Conservator of Forests, 26.90 Bellary

Madhya Pradesh Entry Tax Act Commissioner of Commercial 0.01 Taxes(Appeal), Raipur

Nagar Palika, Kirandul Nagar Palika, Kirandul 0.10

Nagar Palika, Kirandul High Court, Chhattisgarh 11.48

Nagar Palika, Kirandul High Court, Chhattisgarh 0.44

Nagarpalika, Bade Bacheli High Court of Chhattisgarh 0.26

Madhya Pradesh Commercial Tax Act, 1994 Dy.Commissioner of 0.01 Commercial Tax(Appeal) Sagar

Karnataka Sales tax Act, 1957 Deputy Commissioner of 0.40 Commercial Taxes, Bellary

Karnataka Motor Vehicle taxation Act 1957 Regional transport officer, 0.96 Hospet

MMDR Act Madhya Pradesh State Govt. 0.89

CST Act, 1956 JCIT (Commercial Tax) 8.76 Davanagiri

MP Commercial Tax Act, 1994 Dy.Commissioner of 1.51 Commercial Tax(Appeal), Raipur

(ix) In our opinion, the Company has no accumulated losses as at 31.03.2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

(x) In our opinion and according to the information and explanation given to us, the Company has not taken any loans from financial Institution, Bank and has not issued any debentures. Therefore, the provisions of clause 4(xi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xi) In our opinion and according to the information and explanation given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly the provisions of clause 4(xii) of the Companies* (Auditors Report) Order, 2003 are not applicable to the Company.

(xii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiii) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xv) According to the information and explanations given to us, the Company has not obtained any term loans. Therefore, the provisions of clause 4 (xvi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xvi) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that the no funds raised on a short-term basis have been used for long-term investments.

(xvii) According to the information and explanation given to us, the Company has not made preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of The Act. Accordingly, the provisions of clause 4{xviii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xviii) According to the information and explanation given to us, the Company has not issued any debentures. Therefore, the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xix). According to the information and explanation given to us, the Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xx) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAMAMOORTHY (N) & Co.,

Chartered Accountants

(CA SURENDRANATH BHARATHI)

Partner Membership No.23837

Place : New Delhi Date : 22-May-2010