REC Ltd

Dear Members,

Your Directors are pleased to present the 9^th Annual Report on the performance of your Company, together with the Auditors' Report and Financial Statements for the year ended 31^st March 2024 and the Report thereon by the Comptroller and Auditor General of India.

1.0 BACKGROUND

Ministry of Corporate Affairs vide order dated 06.10.2022, had accorded approval of Scheme of Arrangement between NMDC Ltd. (Demerged Company) and NMDC Steel Ltd. (Resulting Company) and their respective shareholders and creditors involving demerger of 3 MTPA capacity greenfield Integrated Steel Plant in Nagarnar, located 16 km from Jagdalpur, Chhattisgarh. It is strategically located near NMDC's Bailadila mines consisting of high-grade iron ores. It is connected to Visakhapatnam seaport via rail & road and is around 300 km away from the capital of Chhattisgarh State, Raipur. Special care and focus have been maintained for making sure that every possible unit of energy could be saved by utilizing energy-efficient technologies such as Pulverized Coal Injection, Coke Dry Quenching and Top Recovery Turbine, waste heat recovery options and efficient alternate fuel resources.

The date of Commencement of Commercial Operations (DCCO) for the said plant was declared as 31^st August 2023.

1.1 State of Company's Affairs & Performance Highlights

The performance of the Company during the period from commencement of commercial operations till 31^st March, 2024 was as under:-

*DCCO - Date of Commencement of Commercial Operations

1.2 Other Financial Parameters

2.1 Production

The details of the actual production for the period from 31.08.2023 to 31.03.2024 are given below:

* DCCO declared on 31.08.2023 2.2 Product - wise Sales

There has been no change in the nature of business for the year under review.

3.0 TRANSFER TO RESERVES

The company has not transferred any amount to the General Reserve during the financial year 2023-24.

3.1 Dividend

The Board has not recommended / declared any dividend for the financial year ended 31^st March 2024.

3.2 Share Capital: The details of the Share capital are as follows:

a) Authorized Share Capital

As on 31^st March, 2024, the Authorized share capital of the Company was ?3,000 crores divided into 300,00,00,000 equity shares of ? 10/- each.

b) Paid-up Share Capital

As on 31^st March, 2024, the Paid-up Share Capital of the Company was ?2,930.61 crores divided into 293,06,05,850 equity shares of ?10/- each.

3.4 Deposits

During the financial year, the company has not accepted any deposits falling within the purview o Section 73 of the Companies Act, 2013 and Rules made thereunder.

3.5 Non-Convertible Debentures (NCDs)

Pursuant to Order of Ministry of Corporate Affairs dated 6^th October, 2022 sanctioning the Scheme of Arrangement for demerger of Iron & Steel Plant from NMDC Ltd. (Demerged Company) into NMDC Steel Ltd. (Resulting Company), the NonConvertible Debentures (NCDs) amounting to ?523.80 crores were transferred to the books of NMDC Steel Ltd. During the year under review, the company did not issue any further NCDs.

4.0 INTERNAL CONTROL SYSTEMS W.R.T. FINANCIAI STATEMENTS

Necessary disclosure in respect of Internal Control Systems and their adequacy has been made in Annexure-C to the Independent Auditors' Report dated 27.05.2024 which forms part of the Annual Report.

5.0 STATUS OF SUBSIDARY, JOINT VENTURE AND ASSOCIATE COMPANY:

The Company does not have any subsidiary, joint venture or associate company.

AND INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013

Necessary details in this regard have been disclosed in the financial statements.

(b) PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES DISCLOSURES

Disclosure on related party transactions forms part of the Notes to the Financial Statements. Further, the details of prescribed related party transactions are also annexed in Form AoC-2 annexed to this Report.

(c) MAINTENANCE OF COST RECORDS

Section 148(1) of the Companies Act, 2013 specifies the provisions of maintenance of Cost Records of the company. The company is maintaining such records as per Rule 4(2) of the Companies (Cost Records and Audit) Rules 2014 under both regulatory and nonregulatory services.

7.0 (a) STATUTORY AUDITOR'S REPORT

The Auditors' Report for Financial Statements for the financial year 2023-24 is unmodified and does not contain any qualification, reservation or adverse remark.

(b) Comments of C&AG on financial statements

f Comptroller & Auditor General of India (C&AG)

vide letter dated 01.08.2024 have given their comments on the financial statements of the Company for the financial year ended 31.03.2024 under Section 143(6)(b) of the Companies Act, 2013 and the Management's replies thereon, are at Annexure - V to this Report.

(c) SECRETARIAL AUDIT REPORT

The Secretarial Audit for the financial year 2023-24 has been conducted by M/s B R i Agrawal & Associates, Company Secretaries

and the same does not contain any L qualification, reservation or adverse remark.

8.1 Environmental clearances

Your company has obtained the following Environmental Clearances from the Ministry of Environment, Forest and Climate Change, New Delhi.

a) Environment Clearance (EC) for 03 MTPA NSL, Nagarnar granted by MoEFCC, Delhi on dated.25.09.2009 and same is amended vide dated 14.08.2018.

8.2 Consent to Establish, Consent to Operate & Authorization under Hazardous Waste

a) Consent to Establish (CTE) for 03 MTPA NSL, Nagarnar granted by CECB, Raipur on 28.08.2010 and same is amended vide letter No. 5274/TS/CECB/2018 dated 26.09.2018.

b) Consent to Operate (CTO) for 03 MTPA NSL, Nagarnar granted by CECB, Raipur on dated.13.09.2019

c) Authorization under the Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 granted and issued on 04.06.2024

8.3 Forest clearances

Your company has obtained the following Forest

Clearances from the Ministry of Environment,

Forest and Climate Change, New Delhi.

a) Forest clearance for construction of integrated Steel plant (03 MTPA) at Nagarnar, Tahsil-Jagdalpur, Dist-Bastar (CG) , Forest land-25.72 Ha on 06.05.2011

b) Forest clearance for construction of Railway Lining for integrated Steel plant (03 MTPA) at Nagarnar, Tahsil-Jagdalpur, Dist-Bastar (CG) , Forest land-10.763 Ha on 17.5.2010

c) Forest clearance for Laying of U/g water pipeline from Kolab (shabri) river near Tiriya to Nagarnar for integrated Steel plant (03 MTPA) at Nagarnar, Tahsil-Jagdalpur, Dist- Bastar (CG) , Forest land-26.136 Ha

8.4 Certified Compliance Report (CCR)

NA

8.5 Environmental Initiatives.

• Coke Dry Quenching - Waste Heat Recovery Boiler

• High Pressure Liquor Ammonia Aspiration (HPLA) System

• Hydro Jet Door Cleaners

• Land Based Pushing Emission Control (PEC)

• H2S recovery

• MBR based Coke Oven ETP

• Top Pressure Recovery Turbine (TRT) in Blast

Furnace

• Coal Dust Injection (CDI) in Blast Furnace

• Cast House & Stock House Dedusting Systems

• Sinter Plant and Blast Furnace Waste Energy Recovery

• Dog House for BOF Converters

• Use of Continuous Casting Technology

• Thin Slab continuously casting and Rolling

• Zero Liquid Discharge

• Installation of recovery-based Coke Oven Plant having By-product plant facility for recovery of various by-products, which is equipped with sulphur recovery units for minimizing SO2 emission.

• In SMS Plan, Basic Oxygen Furnace for waste gas recovery for use in plant as fuel.

• In the Plant units for emission control purposes, Multiple Electro-Static Precipitators, Bag Filters, Dry Fog Dust Suppression Systems, Scrubbers, cyclone separators along with various allied machineries are installed.

• Establishment of Effluent Treatment Plant at all the major plant units having Primary and Secondary followed by Final UF-RO Treatment process for recycling of treated water in respective process units. In addition, Centralized Zero Liquid Discharge Plant is installed for treatment of RO reject water centrally and recycling of the same in plant process. Cascading use of water is also ensured through primary to secondary usage for water conservation purposes.

• Development of green cover in and around NSL, Nagarnar. Presently, around 112 Ha area of green belt is being developed and it is being carried out to achieve the target of more than 33% green belt area (~240 ha) as per MoEFCC guidelines. Additionally, plantation activities are being carried out in the 13 surrounding villages of NSL, Nagarnar.

• For effective implementation and monitoring of Environment Quality Parameters,

Integrated Management system has been implemented in NSL plant for ISO 14001 (Environmental Management System) along with other standards such as ISO 9001 (Quality Management System), ISO 45001 (Occupation Health and Safety Management System) and ISO 50001 (Energy Management System).

• Continuous Emission Monitoring System is installed at all process stacks and data connectivity to the central server of CPCB/ CECB for real time data monitoring

• Sustainability reporting through ESG is also under process for implementation.

9.0 IMPLEMENTATION OF INTEGRITY PACT:

After demerger of NSL from NMDC, the integrity pact of NMDC has been adopted at NSL also and the threshold value has been decreased to ' 1.0 crore for both Procurement and Contracts.

10.0 IMPLEMENTATION OF OFFICIAL LANGUAGE POLICY

• Official Language Fortnight was organized from 14 September to 28 September 2023, during which various competitions were organized for Officers/ Employees and the winners were given prizes and citations.

• Official Language committee meetings were organized in all four quarters. Under which committee has decided to follow:

i) Issuance of all documents bilingually.

ii) Correspondence status or usage of Hindi.

iii) Letters received in Hindi should be answered in Hindi.

iv) Annotating the files in Hindi.

v) Training in Hindi Language (Writing and Typing) to be provided

vi) Hindi font to be made available in Departmental I.T. infrastructure.

vii) Encouraging employees to do their work in Hindi.

• A monthly Hindi usage incentives scheme was implemented and an incentive amount was given to employees/Officers for the work done in Hindi.

• The Articles written by employees and Officers were selected and published in Khanij Bharti magazine.

• Provided a multilingual facility (Unicode) installed in the computers of the project and to provide Hindi font tool in the computers of Officers and employees, so that they could

easily type/write in Hindi.

• Training was organized to the newly appointed trainees in the project by the Human Resources Department. After this, it was assured by the present members that they would discuss with the subordinate officers/employees in their sections and motivate them to comply with the training given to promote the works in Hindi.

• Participated in the half-yearly meetings organized under the aegis of the City Official Language Implementation Committee, Jagdalpur.

11.0 DETAILS REQUIRED TO BE FURNISHED IN TERMS OF MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006 (MSMED).

The Company has taken following steps to procure goods and services from MSE firms, MSE SC/ST & Women entrepreneurs.

NSL has participated in exclusive MSE SC/ST vendor meets at Chhattisgarh and Hyderabad and informed the Vendors about the requirements of NSL and tendering process being followed at NSL to encourage their participation. NSL has participated in various Vendor meets organized by Ministry of Micro, Small and Medium Enterprises in association with FICCI/DICCI. NSL had also organized Vendor meets at Raipur and Jagdalpur to inform the Vendor about the requirements and tendering procedures pertaining to NSL.

Besides this Delegates from some of the MSME Vendor Associations from Chhattisgarh have visited NSL during Nov'2023 and interacted with NSL officials to understand the detail requirements and tendering process being followed at NSL.

For encouraging MSME firms, procurements are done through GeM Portal and Price preference to MSE firm as per GeM guidelines are being followed. During the year 2023-24 NSL has achieved the targets as per Public Procurement Policy. Details are as follows:

12.0 MANPOWER

The manpower strength of the Company as on 31.03.2024 was 1,607.

Apart from the above manpower, NSL has awarded various Operation & maintenance Contracts for different plant units.

2014 as amended.

NIL

12.2 Disclosure under Section 22 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013

No complaint has been received and no case has been filed under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 during the financial year 2023-2024.

13.0 HUMAN RESOURCES DEVELOPMENT

At NMDC Steel Limited, we believe that considering a value-driven approach when developing business strategies can be vital to long-term success. We continuously adapt, innovate, and stay ahead of the competitor from new digital technologies to innovations in the market. We believe to foster a culture of continuous learning and knowledge creation at all levels. We recognize the importance of adapting to change, acquiring new knowledge, and leveraging insights to improve performance and

achieve strategic objective.

Towards 2023-24 learning and development initiatives are aligned with our business goals and NMDC Steel Limited has commissioned its Plants and commenced steel manufacturing. In the midst of the busy schedule, NSL took initiative to strengthen its Employees knowledge and skill by imparting suitable technical training along with necessary Safety awareness programmes to all the Employees and contractually engaged persons.

Training Programmes (In House/External)

NSL HRD has Organized In-Housetraining Programmes in Technical areas:

1. Pump and Valve Maintenance

2. Motors - Inspection and Maintenance

3. Basic Industrial Hydraulic Training

4. Training on alignment of Rotating Equipment

5. Oil Lubrication & Grease System

6. O&M: EOT, Hoist& Mobile Equipment

7. DC Electromagnetic Brakes

8. Electric Circuit.

9. O&M of FMD

10. Material handling System-SMS

Safety Awareness Programme such as:

1. Knowledge Sharing & Process Safety awareness of Sinter Plant;

2. Knowledge Sharing & Process Safety awareness of Blast Furnace;

3. Safety Refresher Training;

4. Electrical Safety and Hazardous mitigation; and

5. Training on Switch Gear, Protection &Maintenance of Electric system.

M/s Daneili Corous BV, Netherlands has imparted OEM Training on:

1. Basics of Blast Furnace Operation;

2. Modern Blast Furnace Iron making; and

3. Operation of Technological Equipment. General Awareness Training:

1. Training on Indian Contract, Act 1872 and Specific Relief Act, 1963. Arbitration and Conciliation, Act 1996 and ADR (Alternate Dispute Resolution). Contract Labour (Regulation & Abolition Act), 1970;

2. Reservation Policy for SC/ST, OBC, Ex Servicemen, PWD and EWS in PSE;

3. Sexual Harassment of Women at Work Place (Prevention, Prohibition & Redressal ACT 2013);

4. Online Training Programme for Inquiry Officers (IOs) & Presenting Officers (POs) by CBI Academy; and

5. Workshop on Negotiation Skills.

Behavioral Training:

1. Enhancing Effectiveness of the Employees

2. Office Management;

3. Communication Skills for Executives.

NMDC Steel Limited has taken Initiative to impart training programme and Workshops on Culture Building and Happiness to the Executives and their family members.

No Executives were sent abroad for foreign training programme during 2023-24.

Skill Development Training:

For the construction of Steel plant, the land has been taken from the local persons and such displaced persons have been given employment as per Land Acquisition, Rehabilitation and Rearrangement Act 2013.

In order to make these land displaced persons suitable for Steel plant operation, the Company

has entered into MoU with Directorate General of Training (DGT) to impart ITI training under Flexi- MoU Scheme which is equal to the ITI. Under Flexi MoU six trades have been identified to impart the ITI training. They are Fitter, Electrician, Welder, Crane Operator, Computer Operator and Programming Assistant and Heavy earth Moving Machinery.

Employees have attended Theory classes,

Practical Training and on-the-Job Training in NMDC Steel Limited as per Syllabus prescribed and approved by DGT

- Under this Scheme 1^st batch of 97 NSL Employees have undergone Fitter and Electrician trades ITI Training and 92 employees have successfully cleared examination conducted by DGT inJune 2023.

- Second Batch of 95 NSL Employees are undergoing ITI training in Welder and Crane Operator Trades and will be assessed by DGT in the month of June 2024.

Pre Employment Training:

NSL HRD has organized pre-employment training to Land displaced persons and who will undergo six months Pre-Employment Training which includes two months class room training in NSL Training Centre.

During the two months, Steel Plant Process and its operation along with process flow training will be imparted.

In order to provide skill development training to the land displaced persons training will be imparted at local Government ITI during balance 4 months. NSL will enter into MoU with Government ITI, Jagdalpur to impart training invarious trades such as Fitter, Electrician, COPA, Welder, Motor Mechanic Vehicle (MMV), Steno and Driver cum Mechanic (DCM).64 land displaced persons have completed Preemployment training in FY 2023-24.

SAFETY

NMDC Steel Limited has an exclusive safety induction training center that is well-equipped with the necessary requirements for effective functioning. This center caters to the needs of basic safety training as well as workplace safety. For refresher trainings, training halls are maintained by the HRD department for upskilling of employees, ensuring they are well-versed in the organization's safety policies, procedures, and emergency protocols. The program emphasizes the importance of workplace safety and equips personnel with the knowledge and skills necessary to identify hazards, respond appropriately to incidents, and maintain a safe working environment.

Safety Committees:

Safety Committees have been established as required under section 73 - I of CG Factories rules, 1962 in every major department and auxiliary unit, each tasked with enhancing workplace safety. These committees hold monthly safety meetings to discuss safety-related issues, review incident reports, and identify potential hazards. They implement corrective actions and proactive measures to mitigate risks, ensuring a safer work environment. Through this collaborative approach, the committees address safety concerns promptly, share best practices, and promote compliance with safety regulations. This systematic process helps in reducing accidents, enhancing occupational health, and maintaining a safe and productive workplace.

A tier two safety review system on a monthly basis is established at NSL, involving senior officials from both NSL and Mecon O&M. These meetings focus on discussing safety aspects based on their severity. Recommendations are then made and implemented to enhance safety measures.

This collaboration ensures alignment between organizations, prioritizing and addressing safety concerns promptly. By regularly reviewing and updating safety protocols, NSL aims to minimize risks and create a safer working environment for all employees.

Internal safety audits of Operation and Maintenance are being conducted by crossfunctional team and this audit involves various departments working together to identify and mitigate any safety risks, ensuring the safety and efficiency of operations. Also, External safety audits are being done at NSL. Recently, National Safety Council and SAIL Safety Organisations have carried out external safety audits at NSL.

Integrated Management System Certification (IMS):

The Company has implemented of the Integrated Management System is in progress and includes certifications for Quality Management System (QMS) ISO 9001:2015, Environmental Management System (EMS) ISO 14001:2015, Occupational Health and Safety Management System (OHSMS) ISO 45001:2018, Energy Management System ISO 50001:2018 and SA 8000:2014 Standards.

14.0 VIGILANCE

Vigilance department at NMDC Steel Limited during the fiscal year has taken initiatives for improvement of areas required for smooth functioning of the Steel plant and aiming towards Preventive Vigilance. This was done by means of Conducting preventive checks in Key areas, studying the existing procedure and practises after

commercial operation of plant, suggesting system improvements including training required.

Apart from above CVO, NMDC Steel Limited has conducted interactive sessions with key managerial staff of the organisation, sensitizing them about the common Pitfalls and lapses which may happen during day to day activities of the executives, benefitting senior executives of NMDC Steel Limited to take decision and creating awareness.

Throughout the fiscal year 2023-24, the Vigilance department at NMDC Steel Limited has conducted a total of 77 Preventive Checks, comprising of 22 surprise checks, 22 regular inspections, 21 file studies, 9 audit para inspections, and 3 CTE type inspections across NSL, Nagarnar.

Investigation and appropriate action are being taken on complaints received and recommendations depending on findings and gravity of the case are given. NMDC Steel Limited has received 20 complaints which were handled as per CVC guidelines. Emphasis has also been given for logical conclusion of complaint in timely manner.

The details of tenders floated are being uploaded in relevant websites of NMDC/GeM/CPPP as per nature of tender and details of contract awarded are also uploaded in NMDC's Website in line with the government guidelines.

Further to ensure transparency in vigilance works, action has been taken for rotation / repatriation of vigilance officers, and for inducting of new officers in Vigilance department for compliance of CVC guidelines. In this regard, 2 new officers have been inducted in June 2023 and 2 officers have been repatriated to their parent department.

Quarterly review meeting chaired by CVO has been conducted involving Vigilance officers of NSL in May 2023, September 2023, December 2023 & February 2024. Vigilance officers in open house discuss the matter pertaining to the organisation and share their suggestions.

NMDC Steel Limited (Resulting Company) has adopted Vigilance manual of NMDC Limited (Demerged Company), first edition of which was released in June 2022, with an attempt to provide information on essential guidelines and procedures established by the Central Vigilance Commission and other organizations involved in anti-corruption activities.

NMDC Steel Limited utilizes the Online Vigilance Portal of Demerged undertaking in an effort to ensure accountability, transparency and smooth data availability of vigilance related activities. Vigilance portal is an end-to end digital platform for all Vigilance functions from lodging of a

complaint to till its logical conclusion. This have provisions for recording various preventive, punitive and administrative matters of vigilance department. This portal is a digital repository for all vigilance activities and provide data analytics like age-wise pendency and status of complaints; department wise, area wise complaint/preventive check undertaken; frequency of complaint from same person or against same officials etc.

Trainings & System improvements suggested for Implementation during 2023-24:

As a part of Capacity building and sharing knowledge among the employees of the organisation, Vigilance department has suggested trainings which were conducted by Human resource department on Core Issues in Arbitration and Contracts on 20.01.2024 At NMDC Steel Ltd. Nagarnar, By Shri N. Janardhan Reddy, Advocate of High Court, Telangana, Hyderabad and Member Chartered Institute of Arbitrator, London & Sri U.N. Murthy, Advisor (Arbitration ) in NMDC, Hyderabad.

System improvement suggested during the financial year, several of which are attended and some of the major system improvement/ suggestion/recommendations given during the period are summarized below:

i. In view of the suggestions recommended as the outcome of the study from Vigilance department, a circular has been issued to all Package In-charges and their MECON O&M counterparts at NMDC Steel Limited (NSL), Nagarnar to be more vigilant in terms of storage and usages of expired materials at NSL vide letter No. NSL/ Vigilance/2023/10/01, dtd.27.10.2023.

ii. In view of suggestion recommended during inspection of unreleased EMD for the period of Mar'21 to June'23, an office order was issued from NSL vide order no. ED(Sectt)./ OO/2024/02 dated 15.02.2024 to ensure compliance towards refund of unsuccessful bidders.

iii. Surveillance system of the weighbridges have been strengthening by installation of cameras.

Vigilance awareness week:

CVC vide circular No. 08/09/23 dtd: 11.09.2023 has given directives for conducting vigilance awareness week, the Campaign Period from 16.08.2023 to 15.11.2023 (3 months campaign) & Vigilance Awareness Week-2023 from 30.10.2023 to 05.11.2023 has been observed in NMDC Steel Ltd with great enthusiasm and active participations of employees & related stake holders on the theme "Say No to Corruption; Commit to the Nation'

On the Inaugural day of VAW-2023, Integrity Pledge was administered to the employees of NMDC Steel Limited. Hyperlink for taking e-pledge was also provided to employees through website.

Several activities including awareness programmes and prescribed individual/groups competitions like Slogan writing, Essay writing, Quiz competition on the VAW theme were arranged for the employees during the Vigilance Awareness Week-2023.

Apart from the above day-wise activities, Vigilance Awareness Week celebrated by organizing various knowledge-sharing sessions on PIDPI and Preventive Vigilance and other outreach activities like skits, slogan, drawing, essay writing, interactive session & elocution with large number of participations covering wider groups of school /college students were involved for creating awareness about vigilance.

For propagation of VAW-2023 theme, wide display of banners & posters, newspaper release and use of social media was under taken. All the winners/ participants of various activities/competitions were given away the prizes during the Valedictory Function held on the concluding day of VAW-2023 at NSL.

15.0 DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii) they have 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 period;

iii) they have taken proper and sufficient care for the 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 fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

vi) they have devised proper systems to ensure compliance with the provisions of all

applicable laws and that such systems are adequate and operating effectively.

Based on the framework of internal financial controls and compliance systems establishe and maintained by the Company, the work performed by the internal, statutory and secretarial auditors and external consultants including the audit of internal financial controls over financial reporting by the statutory auditors and the reviews performe by management, the Board is of the opinion that the Company's internal financial control; were adequate and effective during FY 2023 24.

16.0 DECLARATION ON MEETING THE CRITERIA OF INDEPENDENCE AS PER THE COMPANIES ACT, 2013 AND SEBI (LODR) REGULATIONS, 2015 AND SEPARATE MEETING OF INDEPENDENT DIRECTORS.

There were no Independent Directors on the Board of the company during the financial year

31.03.2024. Being a Government Company, the power of appointment of Directors on the Board vests with the controlling ministry i.e. Ministry of Steel, Govt. of India. Accordingly, no such declaration was required to be obtained. Separate meeting of Independent Directors also could not be convened.

17.0 DIRECTORS & KMP's REMUNERATION:

NMDC Steel Ltd., being a Government Company, the terms and conditions of appointment and remuneration of Functional Directors are determined by the Government through its administrative Ministry, Ministry of Steel. Howevei since the Functional Directors of NMDC Ltd. are also acting as Functional Directors of NMDC Steel Ltd. on co-terminus basis in terms of Order received from Ministry of Steel, Government of India, therefore none of the Functional Directors draw any remuneration from the Company neither in capacity of Director or KMP. Further Nonexecutive Part-time Official Directors also do not draw any remuneration. Further, no remuneration was paid to KMP during the FY 2023-24.

18.0 NON CONSTITUTION OF STATUTORY COMMITTEES:

ln terms of Section 2(45) of the Companies Act, 2013, NMDC Steel Limited is a Government Company and pursuant to the Article 73 and 74 of Articles of Association of the Company, the power of appointment of Directors on the Board of the Company vests with the Hon'ble President of India acting through Administrative Ministry i.e. Ministry of Steel, Government of India. As on

31.03.2024, there were 6 (six) Directors on the Board of the Company comprising of 4 (four) Functional Directors including CMD and 2 (two) Government Nominee Directors. However, there

were no Independent Directors on the Board of the company.

Therefore, the Company is not in a position to constitute the Audit Committee, Nomination & Remuneration Committee, Risk Management Committee and Stakeholders' Relationship Committee. Accordingly, no meetings of the Board-level Committees could be held during the period under review. The same were disclosed to the Stock Exchanges while listing the shares of the company and also while seeking exemption from SEBI under Rule 19(2)(b) of the Securities Contracts (Regulation) Rules, 1957.

The company is in constant communication with the controlling Ministry i.e. Ministry of Steel, Govt. of India requesting them to appoint requisite number of Independent Directors including Woman Independent Director on the Board of the Company to enable the company to fulfill the requirements of the SEBI LODR Regulations, 2015 and Companies Act, 2013.

19.0 NUMBER OF BOARD MEETINGS HELD

During the year under review, 5 (five) meetings of the Board were held. For further details, reference may kindly be made to Corporate Governance Section of the Annual Report.

20.0 DETAILS OF DIRECTORS OR KMP APPOINTED OR RESIGNED DURING THE YEAR.

The following changes occurred during the financial year 2023-24:-

During FY 2023-24, Shri Vinay Kumar was appointed as Director (Technical) on the Board w.e.f. 19^th May 2023. Further, Shri Aniket Kulshreshtha was appointed as Company Secretary w.e.f. 11.08.2023 in place of Shri Chiman Lal Agrawal.

a Statutory Auditors

On the advice of the Comptroller and Auditor General of India, New Delhi, your Company appointed the following firms of Chartered Accountants as Statutory Auditors of the Company for the year 2023-2024:

Sanjiv Shah & Associates

Chartered Accountants

205, Second Floor, Lala II Oasis Plaza,

Tilak Road, Abids,

Hyderabad Telangana b. Cost Auditors

M/s B Mukhopadhyay & Co.

Cost Accountants B 20, Amarabati,

Sodepur

Kolkata - 700 110.

M/s B.R. Agrawal & Associates

Company Secretaries

C/o Goyal Enterprises, Opp Hotel Simran,

Civil Station Road, Raipur, Chhattisgarh-492009

22.0 IMPLEMENTATION OF RIGHT TO INFORMATION ACT, 2005

The number of RTI queries received and disposed during the financial year 2023-24 is as under:

23.0 DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATION IN FUTURE - NIL

24.0 VIGIL MECHANISM

The Board of Directors have established 'Whistle Blower Policy' and 'Code of Conduct' for the Directors & employees of the Company as required under the provisions of Sec. 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meetings of the Board and its Powers) Rules, 2014 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The said policy has been properly communicated to all the Directors and employees of the Company through the respective departmental heads and the new employees are being informed about the Whistle Blower Policyt at the time of their joining and also placed on the website of the Company.

25.0 DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SECTION 143(12) OTHER THAN WHICH ARE REPORTABLE TO CENTRAL GOVT - NIL

26.0 FORMAL ANNUAL EVALUATION OF BOARD, COMMITTEES AND INDIVIDUAL DIRECTORS.

In terms of Order of Ministry of Steel, Govt. of India, the CMD, Functional Directors and Government Nominee Directors of NMDC Ltd. and CMD, Functional Directors and Government Nominee Directors of NMDC Steel Ld. also on coterminus basis.

Further, in terms of Notification dated 5th June, 2015 issued by Ministry of Corporate Affairs,

Govt. of India, Government Companies have been exempted from applicability of some of the provisions /sections of the Companies Act, 2013 inter alia Sub-sections (2), (3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration.

27.0 DEVELOPMENT OF INFORMATION TECHNOLOGY

In the process of continuous improvement in the journey of digitization and innovative activities NMDC Steel Limited has made functional the following developments:

> Gate pass system: The system keeps track of all the gate passes issued to contract labour and employees of different contractors. Alert is generated before expiry of the gate pass issued.

> Asset Management System: The systems keep track of the entire life cycle of any asset and its maintenance record.

> CCTV surveillance system: The CCTV surveillance system has been installed in different parts of the plant including the product loading area. Railway wagon surveillance and weigh bridge surveillance is also being performed to ensure safety and security inside the plant.

> Facial Recognition system: The Facial Recognition system has been implemented for the NSL & Mecon employees which enables automated recording of the employee attendance.

> Helpdesk Management System: This system accepts service requests from users pertaining to various assets and effectively manages the service complaints while keeping the maintenance record of these assets.

28.0 ERP Implementation, Digitalization and IT Infrastructure

In the process of digitalization, all the modules of SAP including Production planning / Sales and Distribution / Plant Maintenance have gone live successfully from the first day of operation. This

was achieved by the combined efforts of NSL ERP team and Package-In-charges. The challenge of SAP Go live along with commissioning was successfully delivered as per the plan.

After that, all the production / Maintenance and dispatch activities are carried out in SAP on real time. In NSL, End to End "Order to Cash", Make to Order business process has been established for the proper visibility and accountability.

For the betterment and smooth functioning of SAP, NSL ERP Team is working with various stakeholders to get further inputs for custom reports and developments. Further NSL ERP team has also identified a scope for integration of Level- II systems with SAP, which will help the business to automate the processes on real time basis.

REMUNERATION OF ?8.5 LAKHS PER MONTH OR ?1.02 CRORES PER ANNUM UNDER SECTION 197 OF THE COMPANIES ACT, 2013 READ WITH COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 AS AMENDED.

NIL

30. TRANSFER OF UNPAID & UNCLAIMED DIVIDEND & SHARES TO INVESTOR EDUCATION AND PROTECTION FUND

During the financial year, the company was not required to transfer any unpaid & unclaimed dividend & shares to the Investor Education and Protection Fund.

31. ANNUAL RETURN:

In accordance with the Companies Act, 2013, Annual return in the prescribed format is available at www.nmdcsteel.nmdc.co.in.

32. BUSINESS RISK MANAGEMENT:

The details of the Business risks are given in Management Discussion and Analysis Report enclosed with the Annual Report.

33. OTHER DISCLOSURES

During the year, no application was made and no proceeding is pending under the Insolvency and Bankruptcy Code, 2016. Further, there was no requirement for getting valuation done and therefore, reporting for the same is not applicable.

34. DISCLOSURE ON SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

35. ANNUAL EVALUATION OF THE BOARD PERFORMANCE

NMDC Steel Ltd., being a Government Company, the terms and conditions of appointment and remuneration of Functional Directors are determined by the Government of India through its Administrative Ministry, Ministry of Steel.

In terms of notification dated 5th June, 2015 and 13th June, 2017 issued by Ministry of Corporate Affairs, Govt. of India, Government Companies have been exempted from applicability of some of the provisions /sections of the Companies Act, 2013 inter alia Sub-sections (2),(3) & (4) of Section 178 regarding appointment, performance evaluation and remuneration.

36. VIGIL MECHANISM

The Board of Directors have established 'Whistle Blower Policy' and 'Code of Conduct' for the directors & employees of the Company as required under the provisions of Sec. 177 of the Companies Act, 2013 read with Rule 7 of the Companies (Meeting of Board and its powers) Rules, 2014 and Regulation 22 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The said policy has been properly communicated to all the directors and employees of the Company through the respective departmental heads and the new employees are being informed about the Whistle Blower Policy by the Personnel Department at the time of their joining and also placed on the website of the Company.

37. INTERNAL FINANCIAL CONTROLS

The Company has in place adequate internal & financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operations were observed.

38. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a separate management discussion and analysis report which forms an integral part of this Report is given as Annexure-l.

40. CORPORATE GOVERNANCE REPORT

Pursuant to provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, a separate section on corporate governance practices followed by the Company is enclosed at Annexure-III.

Certificate of non disqualification of Directors from Practicing Company Secretary and certificate from CEO under Regulation 17 of SEBI (LODR) Regulations, 2015 are forming an integral part of this Report as Annexure-IN(A) and IN(B) respectively. Further, the certificate from Practicing Company Secretary confirming compliance of conditions of Corporate Governance is enclosed at Annexure-III(C).

41. BUSINESS REPONSIBILITY AND SUSTAINABILITY REPORT

The 'Business Responsibility and Sustainability Report' (BRSR) of your Company for the year 2023-24 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is given as Annexure-IV. Your Company strongly believes that sustainable and inclusive growth is possible by using the levers of environmental and social responsibility while setting targets and improving economic performance to ensure business continuity and rapid growth.

42. CORPORATE SOCIAL RESPONSIBlLITY (CSR):

Pursuant to provisions of section 135(1) of the Companies Act, 2013 every Company having net worth of ' 500 crore or more, or turnover of ' 1000 crore or more, or net profit of ' 5 crore or more in the immediately preceding financial year are required to constitute CSR Committee comprising of at least one Independent Director. However, in the absence of Independent Directors on the Board, the said Committee could not be constituted.

Further, the company was not required to spend any amount on Corporate Social Responsibility (CSR) initiatives since the Company incurred a loss during the financial year 2023-24.

43. FRAUD REPORTED UNDER SECTION 143(12):

During the financial year the Company, there were no cases occurred which is falling under section 143(12) of the Companies Act, 2013.

44.0 SECRETARIAL AUDIT REPORT

Secretarial Audit Report in Form No.MR-3 pursuant to Section 204(1) of the Companies Act, 2013 and Regulation 24A SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is at Annexure-VI.

47.0. ACKNOWLEDGEMENT:

Your Directors gratefully acknowledge the support, cooperation and guidance received from the Ministry of Steel and Ministry of Forests & Environment and other Departments of Government of India and the State Government of Chhattisgarh for their support and cooperation.

The Board also acknowledges the assistance, support and valuable guidance given to the Company by NMDC Ltd.

Your Directors would also like to place on record sincere gratitude towards the shareholders, Bankers/Lenders, Investors, Vendors, Auditors, Consultants, State and Central Government authorities and other stakeholders of the Company. The Board also wholeheartedly acknowledges and appreciates the dedicated efforts and commitment of all employees of the Company.