Sandur Manganese & Iron Ores Ltd

Dear Members,

The Board of Directors are pleased to present the report of the business and operations of the Company along with audited financial statements for the financial year ended 31 March 2024 (year under review/FY 2023-24).

FINANCIAL RESULTS

The summary of the standalone and consolidated financial results are as follows:

(Rs in lakh)

PERFORMANCE REVIEW AND STATE OF THE COMPANY'S AFFAIRS

During the year under review, the Company has a turnover amounting to Rs1,25,213 lakh and Earnings before Interest, Tax, Depreciation and Amortisation (EBITDA) of Rs40,198 lakh. The production activities for both manganese ore and iron ore have significantly increased following the enhancement of the Maximum Permissible Annual Production (MPAP) limits in February 2024. The Company has fully utilized the enhanced pro-rata MPAP limits for FY24, leading to a rapid ramping up of production in the last quarter. Although sales of the mined ore saw a parallel increase, the surplus quantity mined could not be immediately offered to the market, resulting in some closing stock at the end of the financial year. Iron ore realisations have seen improvement in the last quarter, while manganese ore realisations have remained flattish. However, the Company expects this to improve in the next financial year. The Company's primary focus remains on mitigating inventory losses due to fluctuating coking coal prices, followed by the production of coke for energy generation. Decrease in gross turnover compared to previous financial year was majorly due to lower realisation in ferroalloys segment coupled with high volatility in coke segment. The Company has seen improvement in realisations in ferroalloys post year end, however the constraint of lower power generation will persist until coke volumes recover.

Following the recent expansion of MPAP limits from 1.60 to 3.81 Million Tonnes Per Annum (MTPA) of iron ore and from 0.286 to 0.462 MTPA of manganese ore in February 2024, the Company is actively pursuing further expansion to 4.36 MTPA of iron ore and 0.582 MTPA of manganese ore, duly complying with the parameters prescribed by the Hon'ble Supreme Court of India. The Company is progressing towards obtaining clearances from the Karnataka State Pollution Control Board (KSPCB).

The segment wise revenue growth/(decline) against previous year for mining, ferroalloys and coke & energy segments were 25%, (57)% and (81)% respectively.

The Company recorded profit before tax of Rs32,417 lakh after charging Rs5,784 lakh towards depreciation and amortisation expense on property, plant and equipment and Rs1,997 lakh towards finance costs. The profit before tax decreased by 10% compared to the previous year inspite better realisation and increased volumes from the mining segment due to negative contribution from the ferroalloys and coke segment. The decrease in average selling price and market volatility in ferroalloys and coke has contributed to the degrowth in these segments. Further, energy segment's profit decreased due to an annual maintenance shutdown in July 2023, and planned shutdowns from August 2023 to optimize operations. The segment wise result growth/(decline) against previous year for mining, ferroalloys and coke & energy segments were 22%, (104)% and (145)% respectively.

After charging income tax of Rs9,096 lakh, deferred tax of Rs(480) lakh, the Profit After Tax (PAT) for the current year has been Rs23,801 lakh. There has been a reduction in the PAT as compared to previous financial year.

The subsidiary company is yet to start its operations while the associate company has started its operations during the current year. The performance of these companies is insignificant to the Company's overall performance.

Downhill Conveyor System

The Company's proposal for setting up a 300 tonne per hour Downhill Conveyor System (DCS) from the Company's Kammaturu iron ore mine to PMBR railway sidingiscompleted.Withcurrentstatus,theDCSproject is envisaged to be commissioned after Stage 2 approval of Forest Clearance under Section 2 of the Forest (Conservation) Act, 1980, by the Government of India, which is under process. Successful implementation of this project is a testimony towards the Company's vision of sustainable growth as it is a step towards cleaner energy. This will lead to seamless movement of product and higher realizations as product will be delivered directly at railway sliding.

Power Purchase

The Company had entered into a Share Subscription and Shareholders' Agreement (SSSHA) with ReNew Green Energy Solutions Private Limited and ReNew Sandur Green Energy Private Limited (RSGEPL) and Power Purchase Agreement with RSGEPL for the purpose of captive consumption of renewable power at the Company's metal and ferroalloys plant. Pursuant to SSSHA, the Company has invested an amount of Rs3,864 lakh towards subscription of 3,51,30,000 equity shares of Rs10 each at a premium of Rs1 each as at 31 March 2024.

During the year under review, 33 MW solar power plant and 9.9 MW wind turbine generators with associated electrical equipments interconnecting the power with Karnataka Power Transmission Corporation Limited (KPTCL) grid has been successfully commissioned at Kudligi Taluk, Vijayanagara District, Karnataka State. With successful commissioning and injection of above power to the grid, the procurement of power at cheaper cost to operate all the three existing furnaces of ferroalloy plant and other expansion activities at Vyasankere, Hosapete Taluk, Vijayanagara District, Karnataka State has been achieved.

Future Projects:

The Company is exploring different strategic possibilities and evaluating the opportunities from different parameters in order to sustain growth, achieve substantial market share and meet its future needs. Future market for the envisaged products, availability of infrastructure facilities and utilities are some of the critical aspects that the Company is considering as part of next phase of expansion into beneficiation of ores, manufacturing of pellets and setting up an integrated steel manufacturing facility. Appropriate decisions in this regard will be taken by the Company based on the expert opinion, analysis and evaluation.

Strategic business acquisition of Arjas Steel Private Limited

Upon exploring avenues for strategic growth to accelerate its journey of forward integration into steel, value-added products and unlock potential for numerous synergies, the Company which currently is into the business of mining manganese and iron ores, generation of power and manufacturing ferroalloys and coke has decided to pursue an inorganic growth strategy by acquiring a pre-existing business.

The Board of Directors at its meeting held on 25 April 2024, considered and approved strategic business acquisition through purchase of 80% equity share capital of Arjas Steel Private Limited (ASPL), by entering into a Share Purchase Agreement (SPA).

ASPL is an integrated specialty steel (alloy and micro-alloy) manufacturer located in Tadipatri with upstream and downstream facilities. ASPL is among the top 5 players in India, primarily catering to the automotive sector. ASPL has a wholly owned subsidiary, Arjas Modern Steel Private Limited (AMSPL), which has an electric arc furnace-based steel plant located in Mandi Gobindgarh, Punjab. The aforesaid business acquisition shall also result in the indirect acquisition of AMSPL, to such an extent. The acquisition of ASPL is expected to complete on or before November 2024, subject to completion of customary closing conditions as per the SPA.

Business acquisition of ASPL is a strategic investment which brings potential benefits that aligns with strategic vision and future road map of the Company to become a national integrated player in the steel industry.

APPROVALS

The following approvals has been received by the Company during the year under review:

Grant of Environmental Clearance for increase in iron ore production from 1.60 to 4.50 MTPA along with proposed 7.0 MTPA Beneficiation Plant and a Downhill Conveyor System

Ministry of Environment, Forest and Climate Change (MoEFCC), Government of India, examined the Company's application under EIA Notification 2006 and its further amendments thereto, and after accepting the recommendation of Expert Appraisal Committee (EAC) during 9^th EAC (Non-Coal Mining) meeting held during 17-18 January 2023 and 12^th EAC meeting held during 21-22 March 2023, has accorded Environmental Clearance (EC) on 25 April 2023 for enhancing iron ore production from 1.60 to 4.50 MTPA, retaining the Environmental Clearance for manganese ore production at 0.60 MTPA. MoEFCC has also granted approval for the proposed 7.0 MTPA ore beneficiation plant, 1.2 km downhill conveyor system and 0.15 MTPA crushing & screening plant of iron ore and manganese ore in the Company's Mining Lease area of 1860.10 ha (ML No: 2678).

Receipt of Consent For Establishment - Expansion (CFE-EXP)

The Company has received CFE-EXP from KSPCB, Bengaluru, for increase in iron ore production from 1.60 to 4.50 MTPA along with proposed 7.0 MTPA Beneficiation Plant and a Downhill Conveyor System, vide their Consent Order No. CTE-339450 dated 4 September 2023.

Approval from Central Empowered Committee (CEC) for enhancement in MPAP of iron ore from 1.60 to 3.81 MTPA in the Company's Mining Lease No.2678

The Company has received approval from CEC for enhancement in MPAP from 1.60 to 3.81 MTPA of iron ore for the Company's Mining Lease No.2678 from CEC vide their Letter No. 2-75/CEC/SC/2020-Pt.XI dated 19 October 2023.

Receipt of Consent For Operation (Expansion)

The Company has received Consent For Operation (Expansion) from KSPCB, Bengaluru for enhancement in iron ore production from 1.60 to 3.81 MTPA and manganese ore from 0.286 to 0.462 MTPA vide Consent Order No.AW-341719 dated 2 February 2024.

Receipt of Maximum Permissible Annual Production

The Company has received the MPAP from Monitoring Committee to operate at the enhanced levels for Mining Lease No.2678 vide letter dated 16 February 2024. As per this, the total MPAP allocated is 3.81 MT of iron ore and 0.462 MT of manganese ore. Considering the pro-rata allocation, the MPAP for financial year 2023-24 is 1.9684 MT for iron ore and 0.315 MT for manganese ore. Production target for the revised MPAP has been achieved.

AWARDS AND RECOGNITIONS 5 Star Rated Mines Award

The Ministry of Mines, Government of India and Indian Bureau of Mines have introduced the concept of assessing the mining leases under Sustainable Development Framework (SDF) and have undertaken a system of rating mining leases. The Company has been receiving Five Star Rating from the inception of SDF in the year 2014-15, consecutively received the Five Star Award for the 8^th time and has now been invited to receive the 5 Star Rated Mines Award pertaining to the financial year 2022-23 for the 9^th time on 7 August 2024.

Mines Safety Award

All India Mines Safety Association under the aegis of Directorate General Mines Safety (DGMS), Government of India, has organised for the first time, inspection of the mines in the categories of coal, metal, oil and gas, at the national level. The Company's Deogiri Manganese & Iron Ore Mine has bagged 1^st prize in the category of Open Cast Metal Mines and was presented the award on 28 July 2024.

Other Awards

• Min es Safety Association of Karnataka, the aegis of Directorate General Mines Safety, Government of India, had organised for inspection of all the mines of the Company namely Deogiri, Kammaturu, Subbarayanahalli and Ramghad. Each of the mine was inspected under the guidance and supervision of Director of Mines Safety (DMS) and the mines units of the Company have been awarded a total of 46 prizes in State Level and Zonal Level, including the Trade Tests Prizes.

• Mines Environment & Mineral Conservation Association, Karnataka, under aegis of Indian Bureau of Mines, had organised for inspection as part of Mines Environment & Mineral Conservation Week of both the Mining Leases. Both the mines have been awarded total of 6 prizes including overall second prize.

• The Company's plant in Vyasanakere has been awarded with Utthama Suraksha Puraskara by National Safety Council, Karnataka Chapter.

LISTING OF EQUITY SHARES ON NATIONAL STOCK EXCHANGE OF INDIA LIMITED

During the year, the Company's shares got listed on National Stock Exchange of India Limited (NSE) on

7 September 2023. This historic moment marked a pivotal point in the Company's journey.

CHANGE IN THE CAPITAL STRUCTURE

During the year under review, the authorised share capital of the Company was increased from Rs11,500 lakh divided into 11,40,00,000 Equity Shares of Rs10 each and 1,00,000 ‘B' Series 16% (or such other rate as may be permissible at law and agreed to by the Board of Directors) Redeemable Cumulative Preference Shares of Rs100 each to Rs20,000 lakh divided into 20,00,00,000 Equity Shares of Rs10 each.

The Board of Directors at its meeting held on 18 December 2023, had accorded its approval to issue Bonus Equity Shares of Rs10 each in the ratio of 5 new fully paid-up Equity Shares of Rs10 each for every 1 existing fully paid-up Equity Share of Rs10 each, held by the eligible equity shareholders of the Company and whose names appear in the Register of Members and in the beneficial records of the Depositories as on the ‘Record Date' i.e., Friday, 2 February 2024, subject to the Members' approval. The Members approved the said issue through special resolution passed by Postal Ballot on 20 January 2024. Accordingly, the Bonus Equity

Shares were credited to the eligible shareholders of the Company from 8 to 13 February 2024 and the said Shares was listed and admitted to dealings on BSE Limited (BSE) and NSE from 15 February 2024. The Bonus Equity Shares so allotted rank pari-passu with the existing share capital of the Company. under As on 31 March 2024, the issued, subscribed and fully paid-up share capital of the Company was Rs16,204 lakh comprising of 16,20,34,938 Equity Shares of Rs10 each.

The Company has neither issued equity shares with differential rights as to dividend, voting or otherwise nor shares (including sweat equity shares) to employees of the Company under any scheme. Further, the Company has not issued debentures, bonds, convertible or non-convertible securities or warrants and has not held any shares in trust for the benefit of employees where the voting rights are not exercised directly by the employees. The Company has not bought back any of its securities during the year.

CHANGE IN THE NATURE OF THE BUSINESS

During the year under review, there was no change in nature of business of the Company.

DIVIDEND DISTRIBUTION POLICY

The Dividend Distribution Policy as adopted and formulated by the Board in terms of Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations) is available on the Company's website at https://www.sandurgroup. com/downloads/Corporate-Governance/Policies/15-Dividend-Distribution-Policy.pdf and annexed to this Report as ‘Annexure A'.

DIVIDEND

The Board have recommended a dividend of Rs1 per Equity Share of Rs10 each (10%) for the year ended

31 March 2024. The said dividend is subject to the approval of the Members at the ensuing Annual General Meeting (AGM) of the Company. The Board has recommended the dividend based on the parameters laid down in the Dividend Distribution Policy and dividend will be paid out of the profits for the year under review.

According to the Finance Act, 2020, dividend income shall be taxable in the hands of the Members w.e.f., 1 April 2020, and the Company is required to deduct tax at source from the dividend payable to the Members at prescribed rates as per the Income Tax Act, 1961.

TRANSFER TO RESERVES

As permitted under the Companies Act, 2013 (the Act), the Board does not propose to transfer any amount to General Reserve and has decided to retain the entire amount of profit for the financial year 2023-24 in the Statement of Profit and Loss.

TRANSFER OF AMOUNT TO INVESTOR EDUCATION AND PROTECTION FUND

As per Section 124(5) of the Act read with Rules made thereunder, dividends remaining unpaid/unclaimed for a period of seven years from the date of transfer to the unpaid dividend account is required to be transferred to Investor Education and Protection Fund (IEPF). Further, the shares in respect of which dividend has not been paid or claimed for seven consecutive years shall be transferred by the Company in the name of IEPF.

In pursuance of the above, the dividend remaining unpaid/unclaimed in respect of final dividend declared for financial year 2015-16 amounting to Rs1,45,383/- and 1^st interim dividend declared for financial year 2016-17 amounting to Rs1,43,644/- have been transferred to IEPF during the financial year 2023-24. Consequently, 1,023 shares belonging to 7 Members and 204 shares belonging to 8 Members in respect of which dividends remained unpaid/unclaimed for seven consecutive years were also transferred to IEPF.

The Company had also transferred 92,780 shares belonging to 168 shareholders being the Bonus Shares pertaining to the shares which were already transferred to IEPF as per Rule 6(8) of Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016.

As on the date of this Report, the dividend remaining unpaid/unclaimed in respect of 2^nd interim dividend declared for financial year 2016-17 amounting to Rs54,617/- has been transferred to IEPF. Consequently, 932 shares belonging to 4 Members in respect of which dividends remained unpaid/unclaimed for seven consecutive years were also transferred to IEPF.

In the interest of the Members, the Company sends periodical reminders to the Members to claim their dividends to avoid the transfer of dividends or shares to IEPF Authority. Notices in this regard are also published in the newspapers and the details of unpaid/unclaimed dividends and the Members whose shares are liable to be transferred to IEPF Authority, are uploaded on the Company's website at https://www.sandurgroup. com/unpaid-unclaimed-dividend and https:// www.sandurgroup.com/downloads/Shareholder-Information/7-Unclaimed-Dividend/2-shares-due-to-be-transferred-Nov-2024.pdf respectively.

The unpaid/unclaimed final dividend declared for the financial year 2016-17, along with the underlying shares are due to be transferred to IEPF by 2 November 2024. The Members who have not encashed the dividend warrant(s) from financial year 2016-17 onwards, may forward their claims to the Company/Registrar and Transfer Agent (RTA) on or before 18 October 2024, to avoid any transfer of dividend or shares to IEPF Authority.

The information in respect of unpaid/unclaimed dividends and shares thereto along with due date for transfer to IEPF are given below:

The voting rights on the shares lying with IEPF shall remain frozen till the rightful owner claims the shares. The benefits arising out of the shares transferred to IEPF is credited to IEPF Authorities. The Members can claim the same from IEPF Authorities.

The Members whose unpaid/unclaimed dividends or shares are transferred to IEPF can request the Company/RTA as per the applicable provisions in the prescribed e-form IEPF-5 for claiming the unpaid/ unclaimed dividend or shares out of IEPF. The process for claiming the unpaid/unclaimed dividends or shares out of IEPF is also available on the Company's website at https://www.sandurgroup.com/others.

Mohammed Abdul Saleem - Whole Time Director, Company Secretary & Compliance Officer is the Nodal Officer under the provisions of IEPF Rules till 5 August 2024.

SUBSIDIARY COMPANY, ASSOCIATE COMPANY AND JOINT VENTURE

As on 31 March 2024, the Company has a Wholly Owned Subsidiary (WOS) company named Sandur Pellets Private Limited. The WOS is yet to start its business operations.

During the year under review, the Company does not have any material subsidiary as per Regulation 16(1)(c) of Listing Regulations. The Policy for determining Material Subsidiary is uploaded on the Company's website at https://www.sandurgroup. com/downloads/Corporate-Governance/Policies/9-Policy-for-determining-Material-Subsidiary.pdf.

The Company has an associate, ReNew Sandur Green Energy Private Limited (RSGEPL). During the year under review, the Company subscribed additional 70,26,000 equity shares of RSGEPL and continues to hold 49% of equity share capital.

The Company does not have any joint venture.

The disclosure pursuant to first proviso to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 is annexed with this Report as ‘Annexure B'. Further, as per the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company along with relevant documents and separate audited financial statement in respect of the Company's subsidiary, are available on the Company's website at https://www.sandurgroup.com/annual-reports and https://www.sandurgroup.com/subsidiaries respectively.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY

There are no significant and material orders passed by the Regulators/Courts/Tribunals that would impact the going concern status of the Company and its future operations.

MATERIAL CHANGES AND COMMITMENT, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THESE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE REPORT

Subsequent to the year end, on 25 April 2024, the Company has signed a definitive agreement for strategic business acquisition to acquire 80% equity stake in Arjas Steel Private Limited (ASPL) at an Enterprise value of Rs3,00,000 lakh. The said strategic business acquisition will help the Company to accelerate its journey of forward integration into steel, value-added products and unlock potential for numerous synergies. The acquisition of ASPL is expected to complete on or before November 2024, subject to completion of customary closing conditions as per the SPA.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

During the year under review, all related party transactions entered into by the Company were on an arm's length basis and in ordinary course of business. All related party transactions are placed before the Audit Committee of the Company and placed before the Board for information/approval, as and when required. With a view to ensure continuity of day-to-day operations, an omnibus approval is obtained for related party transactions which are of repetitive nature, entered in the ordinary course of business and at arm's length basis. A statement giving details of all related party transactions entered pursuant to the omnibus approval so granted, is placed before the Audit Committee on a quarterly basis for its review.

Further, the Company has not entered into any contract/arrangement/transaction with related parties which are considered to be material as per Regulation 23 of Listing Regulations and the Company's Policy on Related Party Transactions. In terms of Regulation 23(9) of Listing Regulations, the Company submits the details of related party transactions as per the specified format to the stock exchange on a half yearly basis.

In line with the requirements of the Act and Listing Regulations, the Company has formulated a Policy on Related Party Transactions and the same can be accessed on the Company's website at https://www. sandurgroup.com/downloads/Corporate-Governance/ Policies/11-Policy-on-Related-Party-Transactions-Revised.pdf.

In terms of clause (h) of Section 134(3) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014, the particulars of the contracts or arrangements entered into by the Company with its related parties as referred to in Section 188(1) of the Act in Form No. AOC-2 is annexed with this Report as

‘Annexure C'.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The particulars of investments made under Section 186 of the Act have been disclosed in the financial statement. The Company has not granted any loans or provided guarantees under Section 186 of the Act.

DEPOSITS

The Company does not have any deposits at the beginning of the financial year and has neither accepted nor renewed any deposits during the year under review. Thus, provisions of Section 73 of the Act are not applicable to the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

As on the date of this Report, the Board consists of seven members - one Managing Director, one Whole Time Director, four Independent Directors (including one Woman Director) and one Non-Executive Non-Independent Director. The Chairman of the Board is a Non-Executive Non-Independent Director.

Appointment/Re-appointment

During the year under review, the following appointment/re-appointments were made by the Company:

• At the 69^th AGM held on 20 September 2023: a. In terms of the provisions of Section 152(6) of the Act, T. R. Raghunandan (DIN: 03637265), Director of the Company, liable to retire by rotation and who being eligible, offered himself for reappointment, was re-appointed by the Members. b. Dr. Latha Pillai (DIN: 08378473) was reappointed as an Independent Director, for a further term of five consecutive years commencing from 8 March 2024 to 7 March 2029 (both days inclusive), not liable to retire by rotation. The Board opined that she is a person of integrity and possess relevant expertise and experience (including proficiency) and satisfies the criteria of independence as laid down under the Act and Listing Regulations.

• The Board of Directors at its meeting held on

8 November 2023 has appointed Mohammed Abdul Saleem - Whole Time Director as Company Secretary & Compliance Officer of the Company with effect from 21 November 2023.

During the period from 1 April 2024 till the date of this Report, subject to the approval of the Members, the following appointment/re-appointment(s) are proposed to be made:

• In terms of the provisions of Section 152(6) of the Act, Mohammed Abdul Saleem (DIN: 00061497), Director of the Company is liable to retire by rotation at the ensuing AGM and being eligible, offered himself for re-appointment.

• The Board of Directors at its meeting held on

15 May 2024, based on the recommendation of the Nomination and Remuneration Committee, appointed Anand Sen (DIN: 00237914) as an Additional Director on the Board of the Company under the provisions of the Section 161 of the Act with effect from 15 May 2024. Further, the Company has received a notice in writing from a Member proposing his candidature for the office of Director pursuant to Section 160 of the Act. In terms of Section 161(1) of the Act, Anand Sen holds office up to the date of the ensuing AGM and is eligible for appointment as a Director.

Further, in accordance with the provisions of Section 149 read with Schedule IV of the Act and relevant provisions of Listing Regulations, he was also appointed as an Independent Director of the Company, to hold office for a period of five consecutive years commencing from 15 May 2024 to 14 May 2029 (both days inclusive), not liable to retire by rotation, subject to the Members' approval in the ensuing AGM. The Members approved the said appointment vide Postal Ballot on 19 July 2024. The Board opined that he is a person of integrity and possess relevant expertise and experience (including proficiency) and satisfies the criteria of independence as laid down under the Act and Listing Regulations.

Cessation

• Dur ing the year under review, Bijan Kumar Dash has tendered his resignation from the post of Company Secretary & Chief Compliance Officer of the Company with effect from 20 November 2023. The Board expressed gratitude for the invaluable assistance and the guidance provided to the Board by Bijan Kumar Dash.

• During the period from 1 April 2024 till the date of this Report, Jagadish Rao Kote (DIN: 00521065) has tendered his resignation from the position of Independent Director with effect from

15 May 2024 and accordingly ceased to be the Independent Director of the Company thereafter. The Board of Directors and the management of the Company placed on record their profound appreciation for the contributions made by Jagadish Rao Kote during his association with the Company over the years.

As on 31 March 2024, the following were the Key Managerial Personnel of the Company as per Section 2(51) and 203 of the Act:

• Bahirji Ajai Ghorpade - Managing Director

• Mohammed Abdul Saleem - Whole Time Director, Company Secretary & Compliance Officer

• Uttam Kumar Bhageria - Chief Financial Officer & Chief Risk Officer

During the period from 1 April 2024 till the date of this Report, the Board of Directors at its meeting held on 5 August 2024, based on the recommendation of the Nomination and Remuneration Committee:

• Appointed Krishnendu Sanyal as Chief Executive Officer designated as Key Managerial Personnel of the Company with effect from 5 August 2024.

• Relieved Mohammed Abdul Saleem from the position of Whole Time Director, Company Secretary & Compliance Officer (Key Managerial Personnel) of the Company and redesignated him as Non-Executive Director of the Company with effect from 5 August 2024.

BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on the Company's business policies and strategies apart from other regular and important business items. However, in case a special and urgent business requires approval of the Board, such approval is taken by passing resolution through circulation, as permitted by law, which is taken on record in the subsequent Board meeting.

During the financial year 2023-24, the Board met 7 times i.e., 17 May 2023, 3 August 2023, 27 September 2023, 8 November 2023, 18 December 2023, 8 February 2024 and 28 March 2024. The details and particulars of Board meetings are given in the Corporate Governance Report forming part of this Report.

POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company has adopted Policy on Nomination and Remuneration of Directors, Key Managerial Personnel (KMPs) and other employees which inter-alia includes criteria for determining qualification, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Act and relevant provisions of Listing Regulations. The Members may refer Corporate Governance Report for details regarding this Policy. The Policy is also available on the Company's website at https://www. sandurgroup.com/downloads/Corporate-Governance/ Policies/5-Policy-on-Nomination-and-Remuneration-of-Directors-Key-Managerial-Personnel-KMPs-and-other-employees.pdf.

DECLARATION BY INDEPENDENT DIRECTORS

All the Independent Directors of the Company meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1)(b) of Listing Regulations and declarations to this effect have been received from them. Further, in terms of Regulation 25(8) of Listing Regulations, they have confirmed that they are not aware of any circumstance or situation which exists or may reasonably be anticipated that could impair or impact their ability to discharge their duties. During the financial year 2023-24, there has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Independent Directors have also complied with the Code for Independent Directors prescribed in Schedule IV to the Act and Code of Conduct for Board Members and Senior Management formulated by the Company under Regulation 17(5) of Listing Regulations. The Independent Directors of the Company have undertaken requisite steps towards inclusion of their names in the Databank of Independent Directors maintained with the Indian Institute of Corporate Affairs, in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

BOARD EVALUATION

The Nomination and Remuneration Committee and the Board have laid down the manner in which formal evaluation of the performance of the Board, Committees, individual Directors and the Chairman has to be made annually.

During the evaluation process, it was ensured that all the provisions relating to Board evaluation of the Act and Listing Regulations, are followed. The criteria for evaluation were based on the Guidance Note on Board Evaluation issued by Securities and Exchange Board of India (SEBI) and the guidelines issued by Institute of Company Secretaries of India (ICSI). The Board evaluation was done internally. All Directors responded through a structured questionnaire giving feedback about the performance of the Board, its Committees, individual Directors and the Chairman. The questionnaire for evaluation of Board was based on several parameters like structure of the Board, meetings of the Board, functions of the Board, relationship and communication between Board and management and professional development of Directors. Similarly, the evaluation criteria for Committee, individual Directors, and the Chairman were set on different parameters.

At the Board meeting that followed the meeting of the Independent Directors on 8 February 2024, the outcome of evaluation was discussed. The feedback received on the performance evaluation of individual Directors was intimated separately to each Director.

MEETING OF INDEPENDENT DIRECTORS

A separate meeting of Independent Directors for the financial year 2023-24 as per Clause VII(1) of Schedule IV under Section 149(8) of the Act and Regulation 25(3) of Listing Regulations was held on 8 February 2024, wherein the Independent Directors reviewed the performance of Non-Independent Directors, Chairman of the Board and the Board as a whole.

TRAINING AND FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

Details of training and familiarisation programme are provided in the Corporate Governance Report forming part of this Report.

BOARD COMMITTEES

The Board has constituted six Committees to assist the Board in effectively discharging its functions and responsibilities. These Committees support the Board's work in line with the applicable provisions of the Act and Listing Regulations, namely:

1. Audit Committee;

2. Nomination and Remuneration Committee;

3. Stakeholders' Relationship Committee;

4. Corporate Social Responsibility Committee;

5. Risk Management Committee;

6. Corporate Sustainability Committee.

The details of the Committees including composition, terms of reference, meeting details etc., are provided in the Corporate Governance Report forming part of this Report.

The recommendations, if any, of these Committees are submitted to the Board for approval. During the year under review, the Board had accepted recommendations of the Committees.

VIGIL MECHANISM

The Company believes in conducting its affairs in a fair andtransparentmannerbyadoptinghigheststandards of professionalism, honesty, integrity and ethics. The Company has established a vigil mechanism towards this approach. In accordance with Section 177(9) of the Act read with Rule 7(2) of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company's Audit Committee oversees the vigil mechanism which has been established to address genuine concerns about unethical behaviour, actual or suspected fraud, leak of Unpublished Price Sensitive Information or violation of the Company's Code of Conduct and Ethics Policy, if any, expressed by the Director(s) or employees or any other person.

The Company has adopted a Whistle Blower Policy which provides for adequate safeguards against victimisation of Director(s) or employee(s) or any other person who avail such mechanism. The Company has also provided direct access to the Chairman of the Audit Committee in matters concerning financial, accounting and concerns relating to officers belonging to above Senior General Manager level.

The Whistle Blower Policy is available on the Company's website at https://www.sandurgroup.com/downloads/ Corporate-Governance/Policies/13-Whistle-Blower-Policy.pdf.

DIRECTORS' RESPONSIBILITY STATEMENT

In accordance with the provisions of Section 134(3)(c) of the Act, the Directors confirm that: (a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(b) the Directors 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 as at 31 March 2024 and of the profit and loss of the Company for the year ended 31 March 2024;

(c) the Directors 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;

(d) the Directors have prepared the annual accounts for the financial year ended 31 March 2024 on a ‘going concern' basis;

(e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OF THE ACT OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT

The Auditors have not reported any frauds during the year under review.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has established a robust framework for internal financial controls. The Company has in place adequate controls, procedures and policies, ensuring orderly and efficient conduct of its business, including adherence to the Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. The Company has a well-defined delegation of power with well-defined authority and responsibility matrix defining the financial limits for approving revenue as well as capital expenditure. Segregation of duties has been well defined to remove the concentration of power within few officials. The Company uses a state-of-the-art Enterprise Resource Programming (ERP) system to record data for accounting, consolidation and management information purposes and connects to different locations for efficient exchange of information. It has continued its efforts to align all its processes and controls with global best practices.

M/s. P. Chandrasekar LLP, Chartered Accountants, have been appointed to oversee and carry out internal audit of Company's activities. The audit is based on an internal audit plan, which is reviewed each year in consultation with the Statutory Auditor and approved by the Audit Committee. In line with international practice, the internal audit plan is focused towards review of internal controls and risk in operations. The Audit Committee review audit report submitted by the internal auditor. Suggestions for improvement are considered and the Audit Committee follows up on them. During the year, such controls were assessed and no reportable material weaknesses in the design or operation were observed. Accordingly, the Board is of the opinion that the Company's internal financial controls were adequate and effective during the financial year 2023 24.

The Statutory Auditor's Report has stated that the Company has, in all material respects, an adequate internal financial controls with reference to standalone and consolidated financial statements and such internal financial controls with reference to standalone and consolidated financial statements were operating effectively as at 31 March 2024, based on the criteria for internal financial control with reference to standalone and consolidated financial statements established by the respective Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

ANNUAL RETURN

A copy of Annual Return, in Form MGT-7, pursuant to the provisions of Section 92(3) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 as amended from time to time is available on the website of the Company at https://www. sandurgroup.com/agm-postal-ballots.

AUDITORS Statutory Auditor

M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No.008072S), were appointed as Statutory Auditor of the Company at the 68^th AGM held on 28 September 2022 in terms of the provisions of Section 139 of the Act, to hold office until the conclusion of 73^rd AGM.

The Auditor's Report on standalone and consolidated financial statements of the Company for the year ended 31 March 2024, is forming part of this Report.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors at its meeting held on 3 August 2023, appointed N. D. Satish, Practicing Company Secretary (having ICSI Membership No.F10003 and Certificate of Practice No.12400) as Secretarial Auditor of the Company for the financial year 2023-24. The Secretarial Audit Report is forming part of this Report as ‘Annexure D'.

In accordance with Regulation 24A of Listing Regulations, the Company has obtained Secretarial Compliance Report for the financial year ended

31 March 2024 from the Secretarial Auditor of the Company and the same has been submitted to the Stock Exchanges namely BSE and NSE on 17 May 2024.

Cost Auditor and Cost Records

In terms of Section 148(2) of the Act read with Rule 4 of the Companies (Cost Records and Audit) Rules, 2014, the Company is required to get its cost accounting records audited by a Cost Auditor. The Board of Directors at its meeting held on 3 August 2023, appointed M/s. K. S. Kamalakara & Co., as Cost Auditor for the financial year 2023-24 and the same was ratified by the Members at the 69^th AGM of the Company.

The Board, after considering recommendations of the Audit Committee, reappointed M/s. K. S. Kamalakara & Co., as Cost Auditors for the financial year 2024-25. A resolution seeking approval of the Members for ratifying the remuneration payable to the Cost Auditor for financial year 2024-25 is provided in the Notice of the ensuing AGM.

The cost accounts and records as required to be maintained under Section 148(1) of the Act are duly made and maintained by the Company.

Internal Auditor

The Board of Directors at its meeting held on

3 August 2023, has appointed M/s. P. Chandrasekar LLP, Chartered Accountants as Internal Auditor of the Company as mandated under provisions of Section 138 of the Act to evaluate the internal controls and financial reporting for the financial year 2023-24.

AUDITOR'S OBSERVATION

There are no qualifications, reservations, adverse remarks or disclaimers made by the Statutory Auditor, Secretarial Auditor, Internal Auditor and Cost Auditor in their respective reports.

SECRETARIAL STANDARDS

Pursuant to the provisions of Section 118 of the Act, the Company has complied with the applicable provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India and notified by Ministry of Corporate Affairs except for delay in circulation of Agenda papers of Board/Committees in few instances. However, all the members of the Board/Committees approved minutes of the meetings and the same were taken note of in the subsequent meeting.

CORPORATE GOVERNANCE

The Corporate Governance Report forms part of this Report. A Certificate on Corporate Governance Report as required under Regulation 34(3) read with Schedule

V of Listing Regulations, issued by M/s. Deloitte Haskins

& Sells, Chartered Accountants, is annexed to this Report as ‘Annexure E'.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report as required under clause (e) of Regulation 34(2) read with Schedule V of Listing Regulations, forms part of this Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Business Responsibility & Sustainability Report as required under clause (f) of Regulation 34(2) of Listing Regulations depicting initiatives taken by the Company from an environmental, social and governance aspect forms part of this Report.

STATEMENT CONCERNING DEVELOPMENT ANDIMPLEMENTATIONOFRISKMANAGEMENT POLICY OF THE COMPANY

The Board has constituted Risk Management Committee to proactively identify, assess and mitigate risks in order to protect its business, improve Corporate Governance and enhance stakeholders' value. The Risk Management Committee lays down procedures for risk assessment and minimization. It serves as the ‘eyes and ears' for the Company so as to ensure that the Company is insulated from risks both at the macro and micro level. The Risk Management Committee periodically reviews the various risks associated with the Company's business, industry, operation and recommends steps to be taken to control, monitor and mitigate the risk.

The Company has in place an Enterprise Risk Management Policy to identify and evaluate various business risks and opportunities. The Board of Directors at its meeting held on 3 August 2023, amended the Enterprise Risk Management Policy. The same is available on website of the Company at https://www. sandurgroup.com/downloads/Corporate-Governance/ Policies/3-Risk-Management-Policy.pdf.

In terms of Regulation 21 of Listing Regulations, Uttam Kumar Bhageria is the Chief Risk Officer of the Company.

The Company believes that periodic review of various risks which has a bearing on the business and operations of the Company is vital to proactively manage uncertainty and changes in the internal and external environment so that it can limit the adverse impact and capitalize on opportunities.

The Company's risk management is embedded in the business processes as a part of review of business and operations. The Board with the support of the management periodically assesses various risks associated with the business and operations of the Company and considers appropriate risk mitigation processes. However, there are certain risks which cannot be avoided but the impact can only be minimized.

The Management Discussion and Analysis Report forming part of this Report also contain information on risk and concerns relating to industry. The Company has well defined roles and responsibilities of Board of Directors, Audit Committee, Risk Management Committee, Chief Risk Officer to have a seamless process in place regarding risk identification, assessment, mitigation and monitoring.

CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Act read with Rules made thereunder, the Corporate Social Responsibility Committee has been constituted by the Board for the purposes of recommending and monitoring the CSR initiatives of the Company. The details such as composition, terms of reference, meetings held etc., are mentioned in the Corporate Governance Report forming part of this Report.

DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

The Company as a responsible corporate citizen has been, for last seven decades, consciously contributing towards betterment of the local area and living standards of its people, and also protection and improvement of the environment. In accordance with Section 135 of the Act, the Company has undertaken CSR activities, projects and programs, excluding activities undertaken in pursuance of its normal course of business.

The Company shall continue to be mindful of its social and moral responsibilities towards consumers, employees, members, and the local community. Reaching out to under privileged communities is a part of the Company's philosophy and culture. The Company works primarily through Karnataka Seva Sangha (Implementing Agency) towards supporting projects in the areas of education, healthcare and sanitation, community development including protection of national heritage, restoration of historical sites, and promotion of art and culture, enhancing vocational skills, promoting healthcare including preventive healthcare, and rural development, environmental sustainability and ecological balance, promotion of traditional arts and handicrafts.

As against the approved budget of CSR contribution of Rs1,012 lakh for financial year 2023-24, Rs902 lakh was spent, and Rs110 lakh was transferred to unspent CSR account as per provision of Section 135 (6) of the Act. The unspent amount of Rs110 lakh will be spent during the financial year 2024-25 for the Ongoing Project of construction of Schools. The Annual Report on CSR activities of the Company undertaken during the year 2023-24 is furnished in ‘Annexure F'.

The Company's Corporate Social Responsibility Policy can be accessed on Company's website at https:// www.sandurgroup.com/downloads/Corporate-Governance/Policies/8-CSR-Policy.pdf. The Members may refer to the Annual Report on CSR for details regarding the Policy.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo as prescribed in Section 134(3)(m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are set out in ‘Annexure G' to this Report.

PARTICULARS OF EMPLOYEES

In terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the Members excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said statement is also open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary of the Company.

The statement containing information as required under the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in ‘Annexure H' and forms part of this Report.

REMUNERATION RECEIVED BY MANAGING DIRECTOR/WHOLE TIME DIRECTOR FROM HOLDING COMPANY OR SUBSIDIARY COMPANY

During the year under review, the Managing Director/Whole Time Director has not received any remuneration from holding company or subsidiary company.

CREDIT RATING

During the year under review, there has been change in the credit ratings of the Company. As on 31 March 2024, the Company had the following credit ratings:

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has adopted zero tolerance for sexual harassment at the workplace. In compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Rules, 2013, the Company has constituted an Internal Complaints Committee for the prevention and redressal of complaints related to sexual harassment at workplace.

During the year under review, no complaints were received relating to sexual harassment.

DISCLOSURE OF TRANSACTIONS OF THE COMPANY WITH ANY PERSON OR ENTITY BELONGING TO THE PROMOTER/PROMOTER GROUP WHICH HOLDS 10% OR MORE SHAREHOLDING IN THE COMPANY

The transactions with the person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the Company have been disclosed in the accompanying financial statements.

GENERAL DISCLOSURES

No disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review: a) the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year.

b) the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

ACKNOWLEDGEMENT

The Directors wish to thank members of judiciary, its associates and legal fraternity for their strong commitment to justice, fairness and equity. The Directors also extend their gratitude to the Union and the State Governments for their support as well as confidence and recognitions bestowed on the Company.

The Directors wish to place on record their appreciation of all its employees for their commendable teamwork, professionalism and dedication. And ultimately, the Directors wish to thank all the government agencies, promoters, business associates, banks and investors for their continued support and trust.