Sunflag Iron & Steel Company Ltd

To ,

The Members,

Your Directors take pleasure in presenting the 38^th Annual Report along with the Audited Financial Statements of the Company for the Financial Year 2023-24 ended 31^st March, 2024.

The Indian steel industry remained strong during the year under review. However, owing to input price volatility, margin was under pressure. India's domestic steel industry is especially vulnerable to cheaper imports and demand fluctuation. The slump in domestic steel consumption and decrease in investment across sectors have affected the overall growth and profitability of the steel industry. Sunflag during the financial year ended 31^st March, 2024, have adopted various measures to keep the margin at a sustainable level. Export market continued to remain sluggish and was not remunerative for Sunflag. Further, Sunflag achieved its completion target and executed it's on going projects and plant improvement.

During the Financial Year 2023-24, the total income decreased by 2.12% with reduction of 37.67% in profit before exceptional items compared to previous financial year.

1. FINANCIAL RESULTS AND STATE OF AFFAIRS

The summarised Financial Results for the year are as follows :- (' in Lakh, except EPS

* The exceptional items are pertaining to settlement of pending dispute with Lloyds Metals and Energy Limited (LMEL), through Arbitration in pursuance to the Arbitral Award dated 22.04.2022 read with Additional / Supplementary Arbitral Award dated 28.04.2022. The settlement has been made by LMEL in the form of issue of 6,00,00,000 (Six Crore) Optionally Fully Convertible Debentures (OFCD's) to the Company and upon exercising conversion option by the Company, the OFCD's were converted into 6,00,00,000 (Six Crore) Equity Shares of LMEL.

# Other Comprehensive Income (Net of Taxes) includes MTM gain on Equity Shares held by the Company in LMEL recognized at its fair value.

2. FINANCE

The Total Income of your Company for the Financial Year 2023-24 stood at ' 3,42,135 Lakh as compared to ' 3,49,544 Lakh of the previous Financial Year. Your Company has ended the Financial Year 2023-24 with a profit after tax from the ordinary activities of '14,161 Lakh as against the previous Financial Year's '1,11,432 Lakh [inclusive of an exceptional item of '1,19,286 Lakhs (' 89,264 Lakh Net of tax) pertaining to Company's past period claims on Lloyds Metals and Energy Limited (LMEL), which has been settled through Arbitral Award dated 22.04.2022 read with Additional / Supplementary Arbitral Award dated 28.04.2022]. After taking into account the brought forward profit of ' 2,30,128 Lakh, your Company has carried forward an amount of ' 2,46,073 Lakh to the Balance Sheet.

3. DIVIDEND

The Company requires more funds through internal accruals to cope up with the terms and conditions of the lending banks and financial companies financing the ongoing capital projects under the expansion programme, which will enable future growth of the Company.

Due to the need to support capex for long-term sustainability in future, your directors took a prudent decision to plough back the profits into the business and not to recommend any dividend for the Financial Year 2023-24.

4. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations') the Board of Directors of the Company (the 'Board') has formulated and adopted the Dividend Distribution Policy ('Policy').The Policy is available on the Company's website www.sunflagsteel.com and can be accessed at: https://sunflagsteel.com/wp-content/uploads/2021/06/SISCO-Dividend-Distribution-Policy.pdf

5. SHARE CAPITAL

During the Financial Year 2023-24 under review, there is no change in the capital structure of the Company and accordingly, the issued, subscribed and paid-up Share Capital of the Company stood at ' 1,80,21,94,480/- divided into 18,02,19,448 equity shares of face value of ' 10/- each, as on 31^st March, 2024.

6. MARKET SCENARIO

Indian steel industry witnessed robust growth over the past 12 years. India, the world's second-biggest crude steel producer remains a bright spot globally with robust demand from its construction and automotive sectors. Steel consumption in India jumped 13.4 per cent to 136 million metric tons during FY 23-24, reflecting buoyant demand for the alloy in one of the world's fastest-growing economies. India's steel demand is likely to stay strong as the government expects economic growth will outpace the global economy in the next fiscal year. During FY 23-24, India's finished steel exports were at 7.5 million metric tons, up 11.5 per cent on year. Crude steel output stood at 143.6 million metric tons, growth of 12.9% from earlier year and Finished steel output stood at 138.5 million metric tons with growth of 12.4% from earlier year.

India has emerged as the strongest driver of steel demand growth since 2021 and projections suggest Indian steel demand will continue to charge ahead with 8% growth in its steel demand over 2024 and 2025, driven by continued growth in all steel using sectors and especially by continued strong growth in infrastructure investments. In 2025, steel demand in India is projected to be almost 70 million tonnes higher than in 2020.

The Indian steel industry is modern, with state-of-the-art steel mills. It has always strived for continuous modernisation of older plants and up-gradation to higher energy efficiency levels. In the past 10-12 years, India's steel sector has expanded significantly. Production has increased by 75% since 2008, while domestic steel demand has increased by almost 80%. The capacity for producing steel has grown concurrently, and the rise has been largely organic.

Sunflag is now looking forward to expand its market base in other segments viz. Aero space, Defense, nuclear & thermal energy boiler applications where super alloy steel are consumed. Besides, the Company is also looking forward to acquire coal and iron ore mines with the aim to increase its business volume.

7. COMPANY'S OPERATIONS OR OVERALL WORKING PERFORMANCE

During the Financial Year 2023-24 under review, the operational (production) details of the Company are as under:

Production in MT and Power in Lakh kWh

8. PROJECTS Steel Plant:-

The Company during the year commissioned its Blooming mill. Few approvals from customers for super alloy products have been received and accordingly the Company is now developing various grades of steel to cater to these customers.

Sunflag Power Limited [CIN - U31200UR2003PLC027802]

There were no specific developments or updates for reporting and the process of obtaining necessary approvals were continued for implementation and commencement of operations of Hydro Power Project of the Company at Hanol-Tuini in the State of Uttarakhand. Khappa Coal Company Private Limited [CIN - U10100MH 2009 PTC191907]

In view of order of the Hon'ble Supreme Court of India dated 24^th September, 2014, the Khappa & Extn. Coal Block which was allocated to Khappa Coal Company Private Limited, stood de-allocated with immediate effect. The closure of the said Company solely depends upon the outcome of final decision regarding bank guarantee and compensation from the appropriate authorities.

Sunflag Foundation [CIN - U74999MH2017NPL289961]

Sunflag Foundation, a Section 8 Company (a Company not for profits) was incorporated on 27^th January, 2017 as a Wholly-owned Subsidiary of Sunflag Iron and Steel Company Limited. The said Company was appointed as an implementing Agency to carry out the Corporate Social Responsibility (CSR) activities as per CSR Policy of the Company within the framework of applicable provisions of law. Associate / Joint Venture (JV) Companies:-

Madanpur (North) Coal Block Private Limited [CIN-U10101CT2007PTC020161] and C T Mining Private Limited [CIN - U10100JH2008PTC013329]

In view of order of the Hon'ble Supreme Court of India dated 24^th September, 2014, the Coal Block(s) which were allocated to Madanpur (North) Coal Block Private Limited in the state of Chhattisgarh and to C T Mining Private Limited in the state of Jharkhand, stood de- allocated with immediate effect. The closure of the said Companies solely depends upon the outcome of final decision regarding bank guarantee and compensation from the appropriate authorities.

Daido D.M.S. India Private Limited [CIN - U28113HR2015FTC054839]

Daido D.M.S. India Private Limited, is a Joint Venture (JV) Company of Sunflag Iron and Steel Company Limited, Daido Steel Co. Ltd., Japan and Daido Die and Mold Steel Solutions Co. Ltd., Japan. During the period under review Sunflag has invested INR 2,01,94,000 by subscribing the Rights issue of Shares. Consequently, as on 31st March, 2024 the Company has total investment of INR 56,194,000/- (INR Five Crore Sixty-one Lakh Ninety-four thousand) constituting 17.56% in the capital of the said JV Company. The JV Company is engaged in the business of manufacturing, import, export and distribution in die, mold steel (tool steel and other metallic materials), processed products and mold parts. The Company is in operation.

During the Financial Year 2023-24 Daido D.M.S. India Private Limited reported the total income of '6060.59 lakh as compared to '3160.56 Lakh in the previous Financial Year. Further the Net Profit for the year under review was ' 531.36 Lakh as compared to ' 213.25 Lakh in the previous Financial Year.

Ramesh Sunwire Pr?vate Limited [CIN - U 28999 MH 2016 PTC 287281]

Sunflag jointly with Stumpp Schuele & Somappa Springs Pr?vate Limited, Bengaluru has formed and incorporated a Joint Venture (JV) Company - Ramesh Sunwire Private Limited on 31^st October, 2016 in the state of Maharashtra. The main object of the JV Company is manufacturing high quality of alloy steel wire for automobile and auto component industries, both in domestic and export market. The Company is in operation.

During the Financial Year 2023-2024 Ramesh Sunwire Private Limited reported the total income of ' 3470.31 lakh as compared to ' 3765.14 Lakh in the previous Financial Year. Further the Net Profit for the year under review was ' 122.60 Lakh as compared to ' 141.25 Lakh in the previous Financial Year

ReNew Green (MPR Three) Private Limited [CIN - U40106DL2022PTC400111]

During the period under review, Sunflag jointly with ReNew Green Energy Solution Pvt. Ltd. has formed a Joint Venture (JV) Company - ReNew Green (MPR Three) Private Limited for setting up 71.34 MW Solar Photovoltaic Power Project at Village-Bagapur, Yawatmal, Maharashtra and Sunflag has invested INR 9,03,87,780/- (INR Nine Crore Three lakh Eighty-seven Thousand Seven Eighty) constituting 31.2% in the capital of the said JV Company.

Present Status of Coal and Mineral Mines:-

9. NATURE OF BUSINESS ACTIVITIES AND CHANGES THEREOF

During the Financial Year 2023-24 under review, the Board of Directors, though exploring addition to existing business and commercial activities, but till date there is no change in nature of business and commercial activities of the Company. As such, no specific details regarding change in nature of business activities are required to be given or provided.

10. PUBLIC DEPOSITS

During the Financial Year 2023-24 under review, the Company has neither invited nor accepted any public deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as amended). As such, no specific details prescribed in Rule 8(5) of the Companies (Accounts) Rules, 2014 (as amended) have been given or provided.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The changes amongst the Board of Director/s including Executive Director/s and Key Managerial Personnel during the period under review are as follows:

I. CHANGES RELATED TO THE PROMOTER DIRECTOR(S):

1. Pursuant to the provisions of Section 152 of the Companies Act, 2013 ('the Act'), the Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 37^th Annual General Meeting held on 21^st September, 2023, consented to the re-appointment of Mr. Suhrit Bhardwaj (DIN: 02318190), Director [Category - Non-Independent, Non-Executive] of the Company, who retired by rotation and being eligible offered himself for re- appointment.

2. Pursuant to the provisions of Section 152 and all other applicable provisions, if any, of the Companies Act, 2013 ('the Act') read with the Rules made there under and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (as amended), the Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 37^th Annual General Meeting held on 21^st September, 2023 approved the continuation of Mr. Ravi Bhushan Bhardwaj [DIN - 00054700], Non-executive Chairman of the Company from non- rotational Director to a Director liable to retire by rotation, on the existing terms and conditions of the appointment.

II. CHANGES RELATED TO THE EXECUTIVE DIRECTOR/S AND KEY MANAGERIAL PERSONNEL (KMP):

1. Pursuant to the succession planning policy of the Company and based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on 9^th February, 2024 has approved the revision in the original term of appointment of Mr. Surendra Kumar Gupta, Dy. Managing Director (DIN:00054836) i.e. from 30.07.2023 to 29.07.2026 to the revised tenure from 30.07.2023 to 29.02.2024. Accordingly, Mr. Surendra Kumar Gupta ceased to be the Director and Dy. Managing Director of the Company on the closure of the business hours of 29^th February, 2024.

2. The Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 37^th Annual General Meeting held on 21^st September, 2023, consented to the re-appointment of Mr. Ramchandra Vasant Dalvi (DIN: 00012065), as a Director (Technical), designated Key Managerial Personnel of the Company, liable to retire by rotation, for a further period of three (3) years effective 14^th August, 2023.

3. CA R. Muralidhar (DIN: 00982212) ceased to be the Director and Director (Finance) of the Company w.e.f. 13^th August, 2023 on completion of his term of appointment.

III. CHANGES RELATED TO THE INDEPENDENT DIRECTOR/S:

The Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 37^th Annual General Meeting held on 21^st September, 2023 have re-appointed Mr. Anand Sadashiv Kapre (DIN - 00019530), as a Director (Category- Non-executive, Independent) of the Company, for a fixed second term of consecutive three (3) years i.e. from 21^st September, 2023 till 20^th September, 2026.

In the opinion of the Board, Mr. Anand Sadashiv Kapre (DIN - 00019530), Independent Director reappointed during the period under review is person of integrity with due expertise and experience and has been exempted from the proficiency test.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under both Section 149(6) of the Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ['Listing Regulations'].

IV. PROPOSED CHANGES RELATED TO DIRECTOR/S TO BE PLACED BEFORE THE MEMBERS FOR THEIR APPROVAL :

Pursuant to Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended), Mr. Ramchandra Vasant Dalvi (DIN - 00012065), Director (Technical) (Category - Non-Promoter, Executive) of the Company, who retires by rotation and being eligible, offers himself for re-appointment. The Board recommends his re-appointment as a Director (with existing category) of the Company for the approval of the Members at the ensuing 38^th Annual General Meeting in the interest of the Company.

Except the above, there is no change in the composition of the Board of Directors during the period under review.

12. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2023-24 under review, 4 meetings of the Board of Directors of the Company were held on (i) 29^th May, 2023, (ii) 11^th August, 2023, (iii) 9^th November, 2023 and (iv) 9^th February, 2024.

13. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors confirms:-

i. That in the preparation of the Annual Accounts (Financial Statements), the applicable Accounting Standards had been followed along with proper explanation, relating to material departures;

ii. That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that Financial Year;

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

iv. That the Directors had prepared the Annual Financial Statements on a going concern basis;

v. That the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

14. COST RECORDS

Pursuant to the amendment to the Companies (Accounts) Rules, 2014 vide MCA's Notification dated 31^st July, 2018, the Board of Directors do confirm that the maintenance of cost records as specified by the Central Government under Sub-section (1) of Section 148 of the Act, is required by the Company and accordingly, such accounts and records are made and maintained by the Company for the Financial Year 2023-24.

15. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Listing Regulations have introduced the new reporting on Environmental, Social & Governance ('ESG") parameters called the Business Responsibility and Sustainability Report ("BRSR"), in place of the Business Responsibility Report ("BRR"). The BRSR reporting has been made applicable to the top 1000 listed entities (by market capitalisation) on a mandatory basis from FY 2022-23. Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company has prepared the Business Responsibility and Sustainability Report for the year 2023-24, which forms a part of this Annual Report and has also been disseminated on the Company's website and can be accessed at www.sunflagsteel.com.

16. COMMITTEE(S) OF THE BOARD

The Board has constituted all the requisite Committee(s) of the Board, namely Audit Committee, Nomination and Remuneration Committee, Stakeholders' Relationship Committee, Corporate Social Responsibility (CSR) Committee, Share Transfer Committee, Risk Management Committee, Project Monitoring Committee and Sub-committee of the Board, pursuant to the provisions of the Act, read with the rules made there under, the Listing Regulations etc. The details of its constitution, objective or terms of reference and other related information have been provided in the Corporate Governance Report, which forms part of the Board's Report.

17. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The current policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of 31^st March, 2024, the Board had Ten(10) members, Two(2) of whom are Executive Directors, two(2) Non-executive and Non-independent Directors and Six(6) Independent Directors. Two(2) of the Independent Directors on the Board are women. The details of Board and Committee composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report that forms part of this Integrated Annual Report.

The policy of the Company on Directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, Independence of a Director and other matters, as required under sub-section (3) of Section 178 of the Act, is available on our website at www.sunflagsteel.com.

18. RISK MANAGEMENT

The Risk Management Committee assists the Board in ensuring that all material risks including but not limited to the risks related to business operations, cyber security, safety, compliance, control etc. have been identified, assessed and adequate risks mitigation controls are in place. The details of Risk Management Committee, its constitution, objective/ terms of reference and other related information have been provided in the Corporate Governance Report, which forms part and parcel of the Board's Report.

The Company has developed and implemented Risk Management Policy including identification therein of elements of risk, which in the opinion of the Board may threaten the existence of the Company. The Risk Management Policy is available on the Company's website at www.sunflagsteel.com.

I. STATUTORY AUDITORS AND THEIR REPORT:-

M/s. NSBP & Co., Chartered Accountants, New Delhi (ICAI Firm Registration No. 001075N, Peer Review Certif?cate No. 009284), were appointed as the Statutory Auditors of the Company at the 34^th Annual General Meeting (AGM) of the Company held on 21^st September, 2020 for a fixed first term of 5 years from the conclusion of 34^th Annual General Meeting until the conclusion of the 39^th Annual General Meeting to be held for the Financial Year 2024-25.

The Independent Auditors' Report (Standalone and Consolidated) submitted by M/s. NSBP & Co., Chartered Accountants, New Delhi, the Statutory Auditors to the Members of the Company for the Financial Year 2023-24 do not contain any qualification. The observations made by the Statutory Auditors in their report are self-explanatory and have also been further amplified in the Notes to the Financial Statements and as such, do not call for any explanations.

During the Financial Year 2023-24 under review :

a) there has been no fraud occurred, noticed and/or reported by the Statutory Auditors under Section 143(12) of the Act, read with the Companies (Audit and Auditors) Rules, 2014 (as amended);

b) the observations made by the Statutory Auditors on the financial statements for the Financial Year 2023-24 under review including the affairs of the Company are self-explanatory and do not contain any qualification, reservation, adverse remarks or disclaimer.

As such, no specific information, details or explanations are required to be given or provided by the Board of Directors of the Company.

II. COST AUDITORS AND THEIR REPORT

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors, on the recommendation of the Audit Committee of the Company, has appointed M/s. G. R. Paliwal & Company, Cost Accountants, Nagpur (Firm Registration No. 100058), as the Cost Auditors of the Company, for the Financial Year 2024-25 and has also recommended their remuneration to the Members of the Company for their ratification at the ensuing 38^th Annual General Meeting of the Company.

The said Cost Auditors have furnished a Certificate of their eligibility for appointment pursuant to Section 141(3)(g), Section 148(5) of the Act, read with the rules made there under, Certificate for independence and arms' length relationship with the Company and have also confirmed about their not being disqualified for such appointment within the meaning of Section 141(3) of the Act. Pursuant to the applicable provisions of the Act read with the Rules made there under, the Statements, Annexures, Proforma, annexed to the Cost Audit Report in Form No. CRA-3, required to be submitted by the said Cost Auditors with the Central Government in e-Form No. CRA-4, for the Financial Year 2022-23 was filed vide SRN F63284970 dated 19^th August, 2023. Moreover, the Statements, Annexures, and Proforma annexed to the Cost Audit Report in Form No. CRA-3, to be submitted by the said Cost Auditors with the Central Government in e-Form No. CRA-4, for the Financial Year 2023-24, do not contain any adverse remarks and qualifications, is self-explanatory and do not call for any further explanation/s by the Company.

III. SECRETARIAL AUDITORS AND THEIR REPORT

M/s. Mukesh Parakh & Associates, Company Secretaries, Nagpur [Unique Identification Number S2015MH344000], were appointed as the Secretarial Auditors of the Company, for the Financial Year 2023-24.

The Secretarial Audit Report in Form No. MR-3 submitted by the said Secretarial Auditors is attached as an Annexure - III, which forms an integral part of the Board's Report, do not contain any adverse remarks and qualifications, is self-explanatory and do not call for any further explanations by the Company.

Further, the Board of Directors of the Company at its 198^th Meeting held on 12^th August, 2024 has approved the re-appointment of M/s. Mukesh Parakh & Associates, Company Secretaries, Nagpur [Unique Identification Number S2015MH344000], as the Secretarial Auditors of the Company for the Financial Year 2024-25.

IV. INTERNAL AUDITORS AND THEIR REPORT

M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi (ICAI Firm Registration No. 000756N) were appointed as the 'Internal Auditors' of the Company for the Financial Year 2023-24.

The Internal Audit finding/s and report/s submitted by M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi, from time to time, during the Financial Year 2023-24 put before the Audit Committee of the Company, do not contain any adverse remarks and qualifications and they are self-explanatory and do not call for any further explanation/s by the Company.

Further, the Board of Directors at its meeting held on 9^th February, 2024, on the recommendation of the Audit Committee, has re- appointed M/s. S. S. Kothari Mehta & Co., Chartered Accountants, New Delhi (ICAI Firm Registration No. 000756N) as the 'Internal Auditors' of the Company for the Financial Year 2024-25.

20. PERSONNEL / PARTICULARS OF EMPLOYEES

The information required to be provided pursuant to the provisions of Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

a) The ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company for the Financial Year 2023-24 ended on 31^st March, 2024:

b) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Head Company Secretary in the Financial Year 2023-24 ended on 31^st March, 2024:

# Since the remuneration of these Directors is only for part of the year, percentage increase/decrease in remuneration over previous year as well as the ratio of their remuneration to median remuneration is not comparable and hence not disclosed.

c) The percentage increase in the median remuneration of employees in the Financial Year 2023-24 ended 31^st March, 2024: 3.24%.

d) The number of permanent employees on the rolls of Company as on 31^st March, 2024: 1216.

e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

• The average percentage increase in the salary of the Company's employee excluding Managerial Personnel was 14.34%. The percentage increase in salary of Managerial personnel during the period was 5.11%.

f) Affirmation: Remuneration paid to Director/s, Key Managerial Personnel and Employees of the Company is as per the remuneration policy of the Company.

g) Statement of Particulars of Employees as per Section 197 of the Act, read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended, and forming part of the Directors' Report for the year ended 31^st March, 2024 is as below:

Note :

i. Remuneration includes Salary and allowances. In the case of Mr. Pranav Bharadwaj, it includes Salary, allowances and commission.

ii. None of the above employees are related to any Director or Manager except Mr. Pranav Bhardwaj, Managing Director who is relative of Mr. Ravi Bhushan Bhardwaj, Non-executive Chairman and Mr. Suhrit Bhardwaj, Non-executive, Non-Independent Director of the Company.

21. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in the Annexure - I to this report.

22. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013 (‘ACT')

The particulars of Loans, Guarantees or investments given or made by the Company under Section 186 of the Act, are disclosed in the Notes to the Financial Statements of the Company for the Financial Year 2023-24.

23. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES UNDER SECTION 188 OF THE COMPANIES ACT, 2013 (‘ACT')

a) Details of contracts or arrangements or transactions not at arm's length basis:

There are no such transactions and hence not applicable.

b) Details of contracts or arrangements or transactions at arm's length basis:

The details of contracts or arrangements or transactions in the ordinary course of business and at arm's length basis are as given below:

Pursuant to clause (h) of sub-section (3) of Section 134 of the Act, and Rule 8(2) of the Companies (Accounts) Rules, 2014 (as amended):

Note: Particulars of contracts or arrangements or transactions with related parties are not given in Form AOC-2, during the Financial Year 2023-24 under review as the Company has not entered into any contracts or arrangements or transactions which are material in nature or are not at arm's length.

24. LISTING OF SHARES

The Equity Shares in the capital of the Company continued to be listed with and actively traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The listing fees for the Financial Year 2024-25 have been paid to both the Stock Exchanges (BSE and NSE) within the stipulated time.

25. DEMATERIALISATION OF SHARES

As on 31^st March, 2024, there were 11,16,23,853 Equity Shares dematerialised through depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), which represents about 61.94% of the total issued, subscribed and paid-up capital of the Company.

26. ANNUAL RETURN

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act, the Draft Annual Return for the Financial Year 2023-24 is available on the Company's website www.sunflagsteel.com and same can be accessed at weblink: https://sunflagsteel.com/wp- content/uploads/2024/08/Annual_Return_March_2024.pdf

27. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The detailed information related to the dividend declared by the Company in the previous year/s together with the amount remained unpaid or unclaimed, its transfer to the Investor Education and Protection Fund are provided in the Notes annexed to the Notice convening the 38^th Annual General Meeting of the Company. To avoid repetition, the Shareholders of the Company are advised to refer the said Notes for detailed information on the subject matter.

28. TRANSFER OF SHARES TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Ministry of Corporate Affairs (MCA) has notified "Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016" (the Rules), which have come into force from 7^th September, 2016. The said Rules, amongst other matters, contain provisions for transfer of all shares in respect of which dividend has not been claimed for 7 consecutive years or more, in the name of 'IEPF Demat Account'. Accordingly, the Company has so far transferred 31,69,315 Equity Shares constituting about 1.759% of

the total issued, subscribed and paid-up capital. The voting rights on these shares shall remain frozen till the rightful owner of such shares claim the Equity Shares from the IEPF Authority. The IEPF Authority has laid down the detailed procedure for claiming both Dividend as well as Equity Shares, by the Shareholders or Investors of the Company.

29. CORPORATE GOVERNANCE

The Company is committed to maintaining the highest standards of Corporate Governance and adhere to the Corporate Governance practices or requirements as set out in the Listing Regulations by the sEbI, enforced through the Stock Exchange/s (BSE and NSE). The Company has also implemented several best Corporate Governance practices as prevalent globally.

Your Board of Directors are pleased to report that your Company has complied with the SEBI Guidelines on Corporate Governance for the Financial Year 2023-24 relating to the Listing Regulations. Certificates from M/s. Mukesh Parakh & Associates, Company Secretaries, Nagpur (Unique Identification Number S2015MH344000) confirming compliance with conditions as stipulated under Listing Regulations and Non-disqualification of Directors are annexed to the Corporate Governance Report, which forms an integral part of the Board's Report of the Company.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's Steel plant is located at Bhandara Road, Village Warthi, Tahsil Mohadi, District Bhandara in the State of Maharashtra. It is located at a distance of about 12 kilometers from the Bhandara District Headquarters. The unit is surrounded by 7 villages in the radius of 5 KMs. The Company is having its captive Coal Mines at Belgaon, Village Aathmurdi, District Chandrapur in the State of Maharashtra. The Company's cSr activities as per its CSR Policy are to the best possible implemented in all the areas close to the manufacturing facilities (Steel Plant) and Coal Mines of the Company.

All the activities and programs covered under SISCO CSR are being monitored by the CSR Committee and are implemented by the CSR Sub-committee through an Implementing Agency.

Sunflag Foundation (CIN-U74999MH2017NPL289961) - a Section 8 Company (A Company not for Profits) was incorporated on 27^th January, 2017 as a Wholly-owned Subsidiary of Sunflag Iron and Steel Company Limited. The said Company has been appointed as an implementing agency to carry out the Corporate Social Responsibility (CSR) activities as per CSR Policy of the Company within the framework of applicable provisions of law.

Accordingly, Sunflag Foundation is implementing all the CSR activities, budget and accounts for the same, the manner in which the CSR amount has been spent or to be spent, etc. and in turn, furnishes its report to the Company on regular basis. As required, the details pertaining to the Corporate Social Responsibility (CSR) activities together with details of expenditure is enclosed as an Annexure - II, which forms an integral part of the Board's Report of the Company.

31. CODES OF CONDUCT OF BUSINESS PRINCIPLES & ETHICS AND PREVENTION OF INSIDER TRADING AND OTHER CODES / POLICIES

The Board of Directors are pleased to report that your Company has complied with the:-

i. Code of Conduct of Business Principles and Conduct;

ii. Code of Prevention of Insider Trading in Sunflag Securities by the designated persons [Insider] (as amended from time to time);

iii. Code for Vigil Mechanism - Whistle Blower Policy;

iv. Code for Independent Directors;

v. Corporate Social Responsibility (CSR) Policy;

vi. Risk Management Policy, which includes identification of elements of risk, if any, which in the opinion of the Board of Directors may threaten the existence of the Company;

vii. Policy on Document Preservations (Regulation 9 of the SEBI (LODR) Regulations, 2015);

viii. Policy for determining of 'material' Subsidiary (Regulation 16 of the SEBI (LODR) Regulations, 2015);

ix. Policy on materiality of related party transaction/s and on dealing with related party transactions (Regulation 23 of the SEBI (LODR) Regulations, 2015);

x. Policy for determination of materiality, based on specified criteria and accordingly, grant authorisation for determination of materiality of events (Regulation 30 of the SEBI (LOdR) Regulations, 2015);

xi. Nomination and Remuneration Policy;

xii. Dividend Distribution Policy;

xiii. Sunflag Iron and Steel Company Limited Business Responsibility and Sustainability Policy; and

xiv. Sunflag policy for Quality, Environment, Health and Safety, Stakeholders' Engagement, Human Rights, Waste Management, Biodiversity and Grievance Redressal of the Company.

The aforesaid code(s) and policy(ies) are available on the Company's website www.sunflagsteel.com.

32. MATERIAL DEVELOPMENT IN HUMAN RESOURCES HUMAN RESOURCE

An improvement in employee productivity is the key focus area for the Company, whereby achieving benchmark performance in this area, year on year, is a major goal for the Company led by its Human Resource Department.

The emphasis on the people of the organisation stems from the belief that human resource is the key factor to achieve success in any business. Sunflag Steel has always been a front runner in its human resource practices with many pioneering policies in the area of human resources. Our human resource practices are based on the values of Sunflag Steel with emphasis on respect, dignity, unity and fostering a culture of togetherness.

Employees' competencies and skills were enhanced by exposing them to several internal and external training programs. Various measures were taken to improve motivation level of each employee. As a result, many improvements were seen, where initiatives were undertaken to bring about a change in culture and mind set of the workforce of the Company.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Sunflag Iron and Steel Company Limited ("the Company") has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and an Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy. Pursuant to the amendment to the Companies (Accounts) Rules, 2014 vide MCA's Notification dated 31^st July, 2018, the Board of Directors do confirm that the Company

has complied with provisions relating to the constitution of an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].

The Certif?cate by the Managing Director and Director (Technical) of the Company, to that effect is enclosed herewith as an Annexure - IV and forms an integral part of the Board's Report of the Company.

HEALTH AND SAFETY

Health and safety remains the Company's highest priority and SUNFLAESTEEL aspires to be the steel industry benchmark in health and safety. The Health and Safety of the workforce is of utmost importance and hence the need was felt for the same to percolate from the top leadership in the form of learning and experience-sharing.

Several initiatives were undertaken during the Financial Year to improve health and safety standards of the Company. Steps were taken to improve competency and capability for hazard identification and risk management. Further, departmental safety coordinator/s are at place for monitoring and training on safety related matters at shop-floor. The Safety Committee and Apex Committee are available for periodical review on health, safety and environment of all department/s of the Company. As a part of regular assignment, training programs on safety are being organised for New Joinee, as well as for regular employees and contract labour/s, and as a part of this, mock-drills are conducted for practical exposure to meet emergency need on quarterly basis. The Safety signage, SOPs / Work Instructions are displayed at various designated locations at the Works and Offices of the Company.

To ensure safety at work site, On-Line Safety Training is provided through "KIOSK" to concerned workers, mainly for safe working at height, safety while Fork Lift operation, safe material handling with Hydra Cranes and to truck drivers.

After successful completion of safety training, safety pass is being issued to them, which is valid for 6 months.

33. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure:

a) that all assets and resources are used efficiently and are adequately protected;

b) that all the internal policies and statutory guidelines are complied with; and

c) that the accuracy and timing of financial reports and management information is maintained.

34. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There have been no material changes and commitments, affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company under review to which the financial statements relate and the date of this Board's Report. As such, no specific details are required to be given or provided.

35. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the Financial Year 2023-24, no significant and material order is passed by any of the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in future. As such, no specific details are required to be given or provided.

36. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors confirms that the Company, has duly complied with the applicable Secretarial Standards, namely Secretarial Standard-1 ('SS-1') on Meetings of the Board of Directors and Secretarial Standard-2 ('SS-2') on General Meetings, during the Financial Year 2023-24.

37. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

A detailed review of operations, performance and future outlook of your Company and its businesses is given in the Management Discussion and Analysis, which forms part of this Report as stipulated under Regulation 34(2)(e) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

38. OTHER DISCLOSURES

a) The details regarding Board and its Committee Meeting/s, Evaluation of Board performance, Self-Declaration by the Independent Director/s, Remuneration policy for Director/s and KMP's, Induction, training and familiarisation programmes for the Director/s including Independent Director/s and such other related information has been provided under the Corporate Governance Report, which forms an integral part of the Board's Report of the Company.

b) During the year under review, there are no proceedings initiated/pending against your Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) which materially impact the business of the Company.

c) There were no instances where your Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

39. ENCLOSURES

a) Annexure - I : Report on Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo;

b) Annexure - II : Annual Report on Corporate Social Responsibility (CSR) activities together with expenditure details;

c) Annexure - III : Secretarial Audit Report in Form No. MR-3;

d) Annexure - IV : Certif?cate on Prevention of Sexual Harassment of Women at the Workplace and its Prohibition and Redressal.

40. ACKNOWLEDGEMENT

The Board of Directors acknowledge with thanks, co-operation and assistance received by the Company from the Shareholders, Consortium and other Banks or Lenders, Central, State Government and Local Authorities, and other external agencies involved in the overall business operations of the Company.

The Board of Directors also record its appreciation for the dedication of all the employees of the Company and their support and commitments to ensure that the Company continues to grow.