NMDC Steel Ltd. के अकाउंट के लिये नोट

Mar 31, 2025

ix. Provisions & Contingent Liability:

All the provisions are recognized as per Ind AS
37. Provisions are recognized when the Company
has a present obligation (legal or constructive)

as a result of a past event, it is probable that an
outflow of economic benefits will be required to
settle the obligation and a reliable estimate can
be made of the amount of the obligation.

The amount recognized as a provision is the
best estimate of the consideration required to
settle the present obligation at the end of the
reporting period, taking into account the risks
and uncertainties surrounding the obligation.

When some or all of the economic benefits
required to settle a provision are expected to
be recovered from a third party, the receivable
is recognized as an asset, if it is virtually
certain that reimbursement will be received
and the amount of the receivable can be
measured reliably.

Provisions for onerous contracts are recognized
when the expected benefits to be derived by
the Company from a contract are lower than
the unavoidable costs of meeting the future
obligations under the contract. Provisions for
onerous contracts are measured at the present
value of lower of the expected net cost of
fulfilling the contract and the expected cost of
terminating the contract.

Contingent liabilities are possible obligations
that arises from past events, the existence
of which would be confirmed only by the
occurrence or non-occurrence of one or more
uncertain future events not wholly within the
control of the company or a present obligation
for which payment is not probable or the
amount cannot be measured reliably. These
are disclosed in the financial statements till the
possibility of any outflow in settlement is remote

x. Non- Current Assets Held for Disposal:

Company classifies a non-current asset as held
for sale if its carrying amount will be recovered
principally through a sale transaction. This
condition is principally met only when the asset
is available for immediate sale in its present
condition and its sale is highly probable.

xi. Statement of Cash flows

Statement of Cash flows is prepared as per
indirect method prescribed in the Ind AS 7
''Statement of Cash Flows''. Cash flows are
reported using the indirect method, whereby
net profit before tax is adjusted for the effects
of transactions of a non-cash nature and any
deferrals or accruals of past or future cash
receipts or payments. The cash flows from

operating, investing and financing activities of
the Company are segregated.

For the purposes of the cash flow statement,
cash and cash equivalents include cash on
hand, in banks and demand deposits with banks,
net of outstanding bank overdrafts that are
repayable on demand and are considered part of
the Company''s cash management system.

Certain arrangements entered with financiers
have been classified as borrowings by the
Company. The Company presents cash outflows
to settle the liability arising from financing
activities in its statement of cash flows.

xii. Revenue recognition:

Revenue from contracts with customers is
recognized when control of the goods or
services is transferred to the customer at an
amount that reflects the consideration to which
the Company expects to be entitled in exchange
for those goods or services.

If the consideration in a contract includes a
variable amount, the Company estimates the
amount of consideration to which it will be entitled
in exchange for transferring the goods to the
customer. The variable consideration is estimated
at contract inception and constrained until it is
highly probable that a significant revenue reversal
in the amount of cumulative revenue recognized
will not occur when the associated uncertainty
with the variable consideration is subsequently
resolved. Revenue is adjusted for variable
consideration such as discounts, rebates, refunds,
credits, price concessions, incentives, or other
similar items in a contract when they are highly
probable to be provided.

All revenue from sale of goods is recognized at
a point in time.

The timing of transfer of control in case of sale
of goods varies depending upon individual
transfer terms of the contract.

Export sales: In Export sales control passes to
the customer on the date of Bill of Lading.

Domestic sales: Control passes to the customer
on the date of delivery which is generally the
forwarding note (rail dispatches)/ lorry receipt/
delivery challan. However, in case of spot auction
under electronic mode, control passes to the
customer on conclusion of the auction and
receipt of money.

Obsolete stores & scrap: Control passes to the
customer on the date of realization.

Contract asset

A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognized for
the earned consideration that is conditional.

Trade receivables

A receivable represents the Company''s right to
an amount of consideration that is unconditional
(i.e., only the passage of time is required before
payment of the consideration is due).

Contract liability

A contract liability is the obligation to transfer
goods or services to a customer for which
the Company has received consideration (or
an amount of consideration is due) from the
customer. If a customer pays consideration
before the Company transfers goods or services
to the customer, a contract liability is recognized
when the payment is made or the payment is
due (whichever is earlier). Contract liabilities
are recognized as revenue when the Company
performs under the contract.

xiii. Finance income and expense

Finance income consists of interest income on
funds invested, dividend income and gains on
the disposal of Fair value through profit and
loss account financial assets. Interest income is
recognized as it accrues in the statement of profit
and loss, using the effective interest method.

Dividend income is recognized in the statement
of profit and loss on the date the Company''s
right to receive payment is established.

Finance expenses consist of interest expense
on loans and borrowings. Borrowing costs are
recognized in the statement of profit and loss
using the effective interest method.

Foreign currency gains and losses are reported
on a net basis. This includes changes in the fair
value of foreign exchange derivative instruments,
which are accounted at fair value through
profit or loss.

xiv. Income tax

Tax comprises current and deferred tax. Income
tax expense is recognized in the statement of

profit and loss except to the extent it relates to

items directly recognized in equity or in other

comprehensive income.

a) Current income tax

Current income tax for the current and
prior periods are measured at the amount
expected to be recovered from or paid to
the taxation authorities based on the taxable
income for the period. The tax rates and tax
laws used to compute the current tax amount
are those that are enacted or substantively
enacted by the reporting date and applicable
for the period. The Company offsets current
tax assets and current tax liabilities, where it
has a legally enforceable right to set off the
recognized amounts and where it intends
either to settle on a net basis or to realize the
asset and liability simultaneously.

b) Deferred income tax

Deferred income tax is recognized using the
balance sheet approach. Deferred income
tax assets and liabilities are recognized
for deductible and taxable temporary
differences arising between the tax base
of assets and liabilities and their carrying
amount in financial statements, except
when the deferred income tax arises from
the initial recognition of goodwill or an
asset or liability in a transaction that is not
a business combination and affects neither
accounting nor taxable profits or loss at the
time of the transaction. Deferred income
tax asset is recognized to the extent that
it is probable that taxable profit will be
available against which the deductible
temporary differences, and the carry
forward of unused tax credits and unused
tax losses can be utilized. Deferred income
tax liabilities are recognized for all taxable
temporary differences. The carrying amount
of deferred income tax assets is reviewed
at each reporting date and reduced to the
extent that it is no longer probable that
sufficient taxable profit will be available
to allow all or part of the deferred income
tax asset to be utilized. Deferred income
tax assets and liabilities are measured at
the tax rates that are expected to apply
in the period when the asset is realized or
the liability is settled, based on tax rates
(and tax laws) that have been enacted or
substantively enacted at the reporting date.

xv. Earnings per share

Basic earnings per share is computed using
the weighted average number of equity shares
outstanding during the year.

Diluted EPS is computed by dividing the net
profit after tax by the weighted average number
of equity shares considered for deriving basic
EPS and also weighted average number of
equity shares that could have been issued upon
conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed
converted as of the beginning of the year,
unless issued at a later date. Dilutive potential
equity shares are determined independently
for each year presented. The number of equity
shares and potentially dilutive equity shares are
adjusted for bonus shares, as appropriate.

xvi. Borrowing costs:

Borrowings costs directly attributable to
acquisition or construction of an asset that
necessarily takes a substantial period of time
to get ready for its intended use or sale are
capitalised as part of the cost of the asset. All
other borrowing costs are expensed in the perioc
in which it occurs. Borrowing costs consists of
interest and other costs that an entity incurs in
connection with the borrowing of funds.

xvii. Lease:

a. Lease liability is initially recognised and
measured at an amount equal to the
present value of minimum lease payments
during the lease term that are not yet paid.

b. Right of use asset is recognised and
measured at cost, consisting of initial
measurement of lease liability plus any
lease payments made to the lessor at or
before the commencement date less any

lease incentives received, initial estimate of
the restoration costs and any initial direct
costs incurred by the lessee.

c. The lease liability is measured in
subsequent periods using the effective
interest rate method. The right-of-use asset
is depreciated over the lease term.

d. The following leases are fully
charged to expense-

i) Leases for which the underlying asset
valuing Rs.20 lakhs.

ii) Short term leases of 12 months or less.

xviii. Prepaid Expenses:

Expenses are accounted under prepaid
expenses only when the amount relating to
the unexpired period exceeds rupees Two
crore in each case.

xix. Restatement of earliest prior period financials
on material error/omissions

The value of error and omissions is construed to
be material for restating the opening balances of
assets and liabilities and equity for the earliest
prior period presented if the amount in each case
of earlier period income/expenses exceeds 1.00%
of the previous year turnover of the company.

xx. Segment Reporting

An operating segment is a component of the
company that engages in business activities
from which it may earn revenues and incur
expenses and for which discrete financial
information is available. All operating segments''
operating results are reviewed regularly by the
Board of Directors to make decisions about
resources to be allocated to the segments and
assess their performance.

In terms of our report of even date

For M/s. Sharad & Associates For and on behalf of the Board of Directors

Chartered Accountants
FR No: 06377S

(Sharad Sinha) (Priyadarshini Gaddam) (Amitava Mukherjee)

Partner Director (Personnel) & Chairman-cum-

Director (Finance) (Addl. Charge) Managing Director

Membership No.: 202692 DIN:10977645 DIN :08265207

Place : Hyderabad (K.Raj Shekhar) (Aniket Kulshreshtha)

Dated : 27th May 2025 Chief Financial Officer Company Secretary

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Mar 31, 2024

ix. Provisions & Contingent Liability:

All the provisions are recognized as per Ind AS 37. Provisions (including mine closure) are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.

Contingent liabilities are possible obligations that arises from past events, the existence of which would be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation for which payment is not probable or the amount cannot be measured reliably. These are disclosed in the financial statements till the possibility of any outflow in settlement is remote.

x. Revenue recognition:

Revenue from contracts with customers is recognized when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal in the amount of cumulative revenue recognized will not occur when the associated uncertainty with the variable consideration is subsequently

resolved.

All revenue from sale of goods is recognized at a point in time.

The timing of transfer of control in case of sale of goods varies depending upon individual transfer terms of the contract.

Export sales: In Export sales control passes to the customer on the date of Bill of Lading.

Domestic sales: Control passes to the customer on the date of delivery which is generally the forwarding note (rail dispatches)/ lorry receipt/ delivery challan. However, in case of spot auction under electronic mode, control passes to the customer on conclusion of the auction and receipt of money.

Obsolete stores & scrap: Control passes to the customer on the date of realization.

Contract asset

A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Company performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognized for the earned consideration that is conditional.

Trade receivables

A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).

Contract liability

A contract liability is the obligation to transfer goods or services to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized when the payment is made or the payment is due (whichever is earlier). Contract liabilities are recognized as revenue when the Company performs under the contract.

xi. Finance income and expense

Finance income consists of interest income on funds invested, dividend income and gains on the disposal of Fair value through profit and loss account financial assets. Interest income is recognized as it accrues in the statement of profit and loss, using the effective interest method.

Dividend income is recognized in the statement of profit and loss on the date the Company''s right to receive payment is established.

Finance expenses consist of interest expense on loans and borrowings. Borrowing costs are recognized in the statement of profit and loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis. This includes changes in the fair value of foreign exchange derivative instruments, which are accounted at fair value through profit or loss.

xii. Income tax

Tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

a) Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.

b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction. Deferred income tax asset is recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred income tax liabilities are recognized for all taxable temporary differences. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

xiii. Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the year.

Diluted EPS is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. Dilutive potential equity shares are determined independently for each year presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate.

xiv. Borrowing costs:

Borrowings costs directly attributable to acquisition or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which it occurs. Borrowing costs consists of interest and other costs that an entity incurs in connection with the borrowing of funds.

xv. Government Grants:

Grants from the government are recognised when there is reasonable assurance that:(i) the Company will comply with the conditions attached to them; and (ii) the grant will be received. Government grants related to revenue are recognised on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs which they are intended to compensate. Such grants are deducted in reporting the related expense. When the grant relates to an asset, it is recognized as income over the expected useful life of the asset. Where the Company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a non-monetary asset is given free of cost it is recognised at a fair value. When loan or similar assistance are provided by government or related institutions, with an interest rate below the current applicable market rate, the effect of this favorable interest is recognized as government grant. The loan or assistance is initially recognized and measured at fair value and the government grant is measured as the difference between the initial carrying value of the loan and the proceeds received.

Grant related to income are presented as part of profit or loss, as a deduction to the related expenses.

xvi. Lease:

a. Lease liability is initially recognised and measured at an amount equal to the present value of minimum lease payments during the lease term that are not yet paid.

b. Right of use asset is recognised and measured at cost, consisting of initial measurement of lease liability plus any lease payments made to the lessor at or before the commencement date less any lease incentives received, initial estimate of the restoration costs and any initial direct costs incurred by the lessee.

c. The lease liability is measured in subsequent periods using the effective interest rate method. The right-of-use asset is depreciated over the lease term.

d. Low Value leases up to Rs.20 lakhs p.a. per lease and short-term leases of 12 months or less are fully charged to expense.

xvii. Exploration and Evaluation:

Exploration and evaluation expenditure comprise costs that are directly attributable to:

- researching and analysing existing exploration data;

- conducting geological studies, exploratory drilling and sampling;

- examining and testing extraction and treatment methods; and/or

- compiling pre-feasibility and feasibility studies.

Exploration expenditure relates to the initial search for deposits with economic potential.

Evaluation expenditure relates to a detailed assessment of deposits or other projects that have been identified as having economic potential. All evaluation and exploration expenses till high degree of confidence is achieved are expensed.

Evaluation expenditure are capitalised as Intangible assets when there is a high degree of confidence that the Company will determine that a project is commercially viable, that is the project will provide a satisfactory return relative to its perceived risks, and therefore it is considered probable that future economic benefits will flow to the Company.

The carrying values of capitalized evaluation expenditure are reviewed for impairment every year by management.

xviii. Stripping cost:

Development stripping cost:

Overburden and other mine waste material removed during the initial development of a mine in order to access mineral deposit are capitalized as Intangible Asset. Amortization of the same is done based on the life estimated by the management.

Production stripping cost:

During the Production phase, the stripping activity cost is charged to revenue to the extent the benefit from the stripping activity is realized in the form of inventory produced.

To the extent the benefit is improved access to ore, the entity shall recognise these costs as a non-current asset i.e., Stripping Activity Asset, if and only if all the following conditions are met:

a. It is probable that the future economic benefits associated with the stripping activity will be realized.

b. The component of the ore body for which access has been improved can be identified; and

c. The costs relating to the stripping activity associated with the improved access can be reliably measured.

To the extent the current period stripping ratio exceeds the planned stripping ratio as per mine plan, shall be considered as "Stripping Activity Asset''.

The "Stripping Activity Asset" is subsequently depreciated on a unit of production basis over the life of the identified component of the ore body that become more accessible as a result of the stripping activity and is then stated at cost less accumulated depreciation and impairment loss, if any.

xix. Prepaid Expenses:

Expenses are accounted under prepaid expenses only when the amount relating to the unexpired period exceeds rupees Two crore in each case.

xx. Restatement of earliest prior period financials on material error/omissions

The value of error and omissions is construed to be material for restating the opening balances of assets and liabilities and equity for the earliest prior period presented if the amount in each case of earlier period income/ expenses exceeds 1.00% of the previous year turnover of the company.

Subject to our Report of even date

For M/s. Sanjiv Shah & Associates For and on behalf of the Board

Chartered Accountants FR No: 003572S

(Hitesh Jain) (Vinay Kumar) (Amitava Mukherjee)

Partner Director Technical Chairman-cum -Managing Director

Membership No: 232064 DIN: 10172521 (Addl. Charge) & Director (Finance)

DIN:08265207

Place: Hyderabad (Aniket Kulshreshtha)

Date: 27.05.2024 Company Secretary

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Mar 31, 2023

"As per Clause 1.3 of Part B of the ‘Scheme of Arrangement''- “All immovable properties of the Demerged Company in relation to the Demerged Undertaking including land together with the buildings and structures standing thereon and rights and interests in immovable properties of the Demerged Company in relation to the Demerged Undertaking, whether freehold or leasehold or otherwise and all documents of title, rights and easements in relation thereto shall stand vested in and/or be deemed to have been vested in the Resulting Company, by operation of Applicable Law. Such assets shall stand vested in the Resulting Company and shall be deemed to be and become the property as an integral part of the Resulting Company by operation of Applicable Law. The Resulting Company shall always be entitled to all the rights and privileges attached in relation to such immovable properties and shall be liable to pay appropriate rent, rates and Taxes and fulfil all obligations in relation thereto or as applicable to such immovable propertiesThe title to such properties shall be deemed lo have been mutated and recognized as that of the Resulting Company and the mere filing thereof with the appropriate registrar or sub registrar or with the relevant Government Authority if and as may be required shall suffice as record of continuing title with the Resulting Company and shall be constituted and deemed mutation and substitution hereof. The Resulting Company shall be entitled to the delivery and possession of all documents of title for such immovable properties in this regard. It is hereby clarified that all the rights and title and interest of the Demerged Undertaking in any lease hold properties shall without any further act. instrument or deed be vested to or be deemed to have been vested in the Resulting Company"".Accordingly, all the relevant immovable assets have been transferred in the books of accounts of NMDC Steel Ltd., the Resulting Company."

4. During the year 2022-23 a review of residual and useful life of PPE was done and as per the review there is no change recommended. The Useful life of all the PPE is as per schedule II except for the following PPE whose life as given under is determined as per technical assessment.

1. Unsecured redeemable Non-Convertible Taxable Bonds in the nature of debentures, NMDC Limited Senes I 2020 of the face value of Rs. 10,00,000/- each (NCD’s) for an aggregate amount of Rs.523.80 crores at an interest rate of 7.30% for a tenure of 5 years have been allotUed on 28.08.2020. Subsequent to demerger and revision in the Rating from '' AAA'' to ‘A-‘ the coupon rate has been revised to 8.80% w.e.f. 16.02.2023.

2. Regarding TERM Loan- NMDC Board in its 525th meeting held on 10.12.2019 has accorded approval for borrowing up to a limit of Rs.5,000 crores for capex requirements of the company by raising terms loans from Banks/ Financial Institutions etc.. Accordingly, Rupee term Loan facility (RTLl of Rs. 4476.20 crores was availed from State Bank of India (SBI) for part funding of Nagarnar Integrated Steel Plant (NISPI, at an interest rate fixed at 7.10% p.a till the Date of Commencement of Commercial Operation and there after 15 bps above the six months MCLR. NMDC. as a security, has hypothecated the entire Fixed Assets of the Project INISP) including Plant and Machinery, equitable mortgage of Land & Building lexcept forest land! and First charge on the entire cash flows of the NI5P. The availability period of the loan is 6 months from the Date of commencement of Commercial Operation repayable in 30 quarterly instalments. The Common Loan Agreement has been entered on 10.06.2021 with SBI for RTL not exceeding Rs. 4476.20 crore and a drawdown of Rs. 3294.50 crores has been made till 31.03.2023 against the loan.

2.32 Disclosures under Accounting Standards:

2.32.1 Ind AS 19 Employee Benefits:

As per the Scheme of Arrangement between NMDC Limited and NMDC Steel Limited Clause No.2.1 of Part B. all staff and workmen and employees of the demerged company employed in relation to the demerged undertaking, as may be identified by the Board of the demerged company in service on the effective date shall be deemed to have become staff, workmen, employees of the resulting company from the appointed date based on continuity of service.

Pending a decision by the Board on the above, all the employees posted at NISP Unit of NMDC Limited are being maintained in the rolls of NMDC. Accordingly, the expenses pertain to Salaries & welfare expenses post-demerger effective date i.e., from 13.10.2022 till 31.03.2023 of Rs 47.44 Cr is grouped under the head - IEDC Other Expenses.

2.32.2 Segment Reporting as per Ind AS-108

1. The Company had not commenced commercial production as of 31-03-2023 and no Profit and Loss has been reported. No reportable operating segments are identified as per Ind AS 108- “Operating Segment".

2.32.3 Disclosures-RevenueflndAS 115)

The Company had not commenced commercial production during the reporting period of FY 2022-23. Hence No disclosures under Ind AS 115.

2.32.4: Accounting policies, change in Accounting Estimates and Errors (As per Ind-AS 8):

I. Adoption of Accounting Policies

Prior to demerger of NISP, the financial statements of NISP were being prepared in line with the standalone accounting policies of NMDC Ltd. Therefore, Ihe Company (NMDC Steel Limited) has adopted the accounting policies of NMDC Ltd with certain logical changes to maintain the continuity.

2.32.5: Related Party Disclosures (lndAS-24): i) List of related parties*.

A. The Company is not having any Subsidiaries, JV’s and Associate Companies.

B. NMDC Limited:

NMDC Steel Limited was a subsidiary of NMDC Limited upto the previous year ended 31-03-2022. However as per the Scheme of Arrangement (effective from 13-10-20221 between NMDC Limited and NMDC Sleet Limited, the Nagarnar Steel Plant got demerged from NMDC Limited and all the assets and Liabilities transferred to NMDC Steel Limited as per the Scheme of arrangement wilh the appointed date as 01.04.2021.

The Functional Directors and Govt. Nominee Directors of NMDC Limited are the Directors on Board of NMDC Steel Limited also.

2.32.7 Discontinuing Operations |lndAS-105)

The Company has not yet started its Commercial production as of 31.03.2023. There are no Discontinued Operations.

2.32.8 Intangible Assets (lndAS-38): R&D:

The Company has not yet started its commercial Production as of 31.03.2023. There are no R&D activities at present.

2.32.9 Impairment of Assets (Ind AS - 36):

The Steel Plant is in the construction phase as of 31.03.2023 and hence Impairment of Assets is not identified.

2.32.10 Provisions. Contingent Liabilities and Contingent Assets (lndAS-37):

Necessary details in regard to provisions have been disclosed in notes 2.14.4,2.17& 2.31.

2.33: Disclosure as required under Regulation 34(3! and 53(f) of 5EBI (LODR) Regulations, 2015.

2.33.1 Loans and advances in the nature of loans to Subsidiaries/Jvs’ where there is no repayment schedule or no interest: There are no Subsidiaries / JV''s. as of 31 -03-2023.

2.33.2 There are no Investments by the loanees as mentioned in 2.33.1 in the shares of NMDC Steel Ltd.

2.33.3 Loans to Associate Companies

There are no Associate Companies as of 31-03-2023.

2.33.4 There are no loans and advances in the nature of loans to firms/companies in which directors are interested except as stated above.

2.34 Others:

2.34.1: Scheme of Arrangement:

The demerger scheme of arrangement between NMDC Limited ("Demerged Company") and NMDC Steel Limited (NSLI ("Resulting Company" or the "Company") and their respective shareholders and creditors (the "Scheme") pursuant to the provisions of the Section 230-232 of the Companies Act. 2013 ("Act"), other applicable provisions and rules thereof thereunder (hereinafter referred to as the “Scheme"), involving demerger of NMDC Iron & Steel Plant Business Undertaking ("Demerged Undertaking" or “NISP") from Demerged Company to the Resulting Company has been duly sanctioned by the Ministry of Corporate Affairs CMCA I vide its order dated 06 October 2022 ("Order"). NMDC Limited received the Order on 11 October 2022 and filed the same with the concerned Registrar of Companies on 13 October 2022. Hence, the Scheme is operative from 13 October 2022 (Effective Date). The Appointed Date of the Scheme is 01 April 2021. Accordingly, with effect from the Appointed Date, the entire Demerged Undertaking of NMDC Limited has been transferred and vested into NMDC5teel Limited.

As per the share swap ratio approved in the Order, the Company has issued 1 (one) equity share of the Company ot Rs. 10 each fully paid-up for every 1 (Onel equity share held in the Demerged Company of Rs. 1 each fully paid-up.

Further, as per the Order, the existing Issued Share Capital of Rs. 11,00,000 consisting of 1,10,000 shares of 10 each held by Demerged Company shall stand cancelled on allotment of equity shares under share swap ratio.

The assets and liabilities pertaining to the Demerged Undertaking, transferred to and vested in the Resulting Company pursuant to the Scheme are recorded at their respective carrying values as appearing in the books of the Demerged Company.

Accordingly, the share capital account has been credited with the aggregate face value of the shares issued to the shareholders of Demerged Company pursuant to the Scheme and the difference has been accounted in the appropriate reserves within "Other Equity".

2.34.2: Disinvestment of NMDC Steel Limited:

Cabinet Committee on Economic Affairs ("CCEA"). in its meeting dated October 27. 2016, gave in-principle approval for strategic disinvestment ("Strategic Disinvestment"! of several CPSEs including the NISPunit of NMDC Ltd. Subsequently, on October 14, 2020, CCEA gave its ’in-principle’ approval to the demerger of NISP from NMDC and strategic disinvestment of the resulting entity by selling entire stake of Government of India I’Gol").

As per the Preliminary Information Memorandum and Request for Expression of Interest invited, GOI had decided to divest its 50.79% shareholding in Resulting Company I''NMDC Steel Limited" or "N5L") along with management control to strategic buyer. Additionally, Gol shall offer 10% stake in Resulting Company to NMDC Limited after the strategic buyer has been identified through the bidding process.

2.34.3: Change of Coupon rate for NCDs:

The Non-Convertible Debentures of Rs. 523.80 Cr were issued by NMDC Ltd at a coupon rate of 7.30% for a tenure of 5 years from the date of allotment i.e., 28th Aug,2020 to meet the capex requirement of the Steel Plant. The NCDs are unsecured, non-cumulative. non-convertible, redeemable taxable bonds of Rs. 10 Lakhs each (Series I-2020I issued at face value offered for private placement. The bonds are rated by ICRA Limited as "ICRA AAA" (pronounced as "ICRA Triple A” with outlook on the long term is stable) And India Rating and Research Private Limited as IND AAA" (pronounced as "IND Triple A" with outlook on the long term is stable) at the time of Issue by NMDC Ltd.

Post-demerger of NISP from NMDC and part of NSL, the rating agencies M/s ICRA Limited and M/s India Ratings & Research have downgraded the ratings to ICRA A" on Rating watch with Developing Implications and Ind A-/Stable" respectively. As the lowest credit rating i.e.. "A-“ has been downgraded from AAA", by six notches and therefore the coupon rate works out to 8.80% from the existing rate of 7.30%. The above coupon rate of 8.80% is payable from 16th Feb’2023 i.e., from the date of downgrade of the Rating. Accordingly, the additional financial implication of Rs. 0.95 Cr has been provided for in the FY 2022-23.

2.34.4Term Loan:

NMDC Board in its 525th meeting held on 10.12.2019 has accorded approval for borrowing up to a limit of Rs.5,000 crores for capex requirements of the company by raising terms loans from Banks/ Financial Institutions etc.. Accordingly, Rupee term Loan facility (RTL) of Rs. 4476.20 crores were availed from State Bank of India (SBI) for part funding of Nagarnar Integrated Steel Plant {NISPl, at an interest rate fixed at 7.10% p.a till the Date of Commencement of Commercial Operation and there after 15 bps above the six months MCLR. NMDC Ltd., as a security, has hypothecated the entire Fixed Assets of the Project (NISPl including Plant and Machinery, equitable mortgage of Land & Building (except forest landl and First charge on the entire cash flows of the NISP. The availability period of the loan is 6 months from the Date of commencement of Commercial Operation repayable in 30 quarterly instalments.

The common Loan agreement has been entered on 10.06.2021 with SBI for RTL not exceeding Rs. 4476.20 crore and a drawdown of Rs.3294.50 crores have been made till 31.03.2023 against the loan.

2.34.5 CSR Expenditure:

The Company had not commenced the commercial operation as ot 31.03.2023 and accordingly, the average PBT for last three years is NIL. Therefore, as per Sec 135 & Sec 198 of the Companies Act‘2013, which requires spending of at least 2% of the last three years'' average PBT on CSR is not applicable on the company for FY 2022-23.

2.34.6 Cost Audit Applicability:

The Company has not commenced its commercial production as of 31-03-2023 and the Sates Turnover during FY 2022-23 is Nil. Hence maintenance of the cost recordsas per Section 148 of the Companies Act 2013 is not applicable.

11 Assets that are not financial assets (such as receivables from statutory authorities, prepaid expenses, advances paid and certain other receivables] as at March 31.2023 and March 31,2022 respectively are not included.

2| Other liabilities that are not financial liabilities Isuch as statutory dues payable, advances from customers and certain other accruals) as at March 31,2023 and March 31,2022 respectively are not included.

The carrying amounts of above financial assets and liabilities are considered to be same as their fair value, due to their short-term nature.

2.34.9 Financial Risk Management Risk Management Framework

The Company'' is exposed to various risks in relation to financial instruments. The Company sets appropriate risk limits and contcots and monitor risks and adherence to limits. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their rotes and obligations.

A. CREDITRISK:

Credit risk is the risk that counterparty will not meet its obligations to the Company under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its receivables, deposits with banks and Loans Credit Risk Management:

Receivables

The Company is in the construction stage and on verge of commissioning. Since Commercial production has not yet started, there are no receivables as yet.

Cash and Cash Equivalent

Credit risk related to cash and cash equivalents is managed by the company''s treasury department in accordance with DPE guidelines & company''s policy. Investments are made only with scheduled commercial banks having a minimum net worth of Rs 500 Cr and diversifying the bank deposits.

Other Financialassets

Other financial assets include loans and advances to employees and others. Credit risk related to these other financial assets is managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system in place ensure the amountsare within defined limits.

B. Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation. Besides Investments in FD''s is made with different maturity to ensure Liquidity. The Company is in talks with banks to obtain Working Capital & Rupee Term Loans for meeting its obligations. Any Delay in Commercial Operations/Sanction of Loans could lead to Liquidity risk.

C. Market Risk:

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates will affect the Company''s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.

Foreign Currency risk:

The Company has not yet started its commercial production as of 31 -03-2023. The company does not carry any material exposure to currency fluctuation risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates".

Long term borrowings are normally at fixed rates & the conditions of borrowings specify the change in the interest rates on occurrence of events such as start of commercial production & changes in the rating of company.

The Company’s exposure to interest rate risk is subject to Credit Rating.

Note No. 2.34.10 CAPITAL MANAGEMENT:

Risk Management:

The primary objective of the Company''s capital management is to maximise the shareholders'' value. The Company''s objectives when managing the capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders.

The Board ‘s policy is to maintain a strong capital base so as to maintain investor, creditor and marked confidence and to sustain future development of the business. The Board of Directors and senior management monitors the return on capital, which the Company defines as result from operating activities divided by total shareholders'' Equity. However, the project is in construction stage and on the verge of commissioning. The Company has not yet started commercial production.

During the period under review and based on the documents, forms made available to me and the explanations/assurances provided by the management, the Company has generally complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following observations:

a. Pursuant to the provisions of Section 149 (4) of the Companies Act, 2013 and Regulation 17 (1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and pursuant to the Clause no. 3.1.4 of DPE Guidelines issued by Department of Public Enterprises, in case where the Chairman of the Board is executive then at-lcast half of the Board shall be Independent Directors. However, it has been observed that there were no Independent Directors on the Board of the Company as required under aforesaid provisions/regulations.

b. Pursuant to the provisions of Regulation 17 (1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 every top 500 Listed entity shall have at-leasl one Women Independent Director on its Board. However, it has been observed that there was no Women Independent Director on the Board of the Company.

c. Pursuant to the provisions of Section-177 of the Companies Act, 2013,

Regulation 18 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 and Clause No. 4.1 of DPE Guidelines issued by Department of Public Enterprises; the Company was required to Constitute Qualified and an Independent Audit committee. However, it has been observed that in absence of independent Director on the Board the Company has not constituted any Audit Committee and not complied the other provisions relating to Audit Committee.

d. Pursuant to the provisions of Sec-178 of the Companies Act, 2013,

Regulation 19 of Lhc SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 and Clause No. 5.1 of DPE Guidelines issued by Department of Public Enterprises, the Company was required to Constitute NRC/Remuneration committee. However, if has been observed that in absence of independent Director on the Board of the Company, the Company has not constituted any NRC/Remuneration Committee and not complied the other provisions relating to NRC/ Remuneration Committee.

e. Pursuant to the provisions of see-178 of the Companies Act, 2013,

Regulation 20 of the SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015, the Company was required to constitute the Stakeholders Relationship Committee. However, if has been observed that the Company has not constituted any Stakeholder Relatfat&ap, Committee till the end of the financial year. >

/. Pursuant to the provisions of Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. being covered under top 1000 Listed Company the Company was required to constitute the Risk Management Committee. However, it has been obsen/ed that the Company has not constituted any Risk Management Committee.

g. As per the secretarial standards, the notice of Board meeting is required to be given at least 7 (seven) days in advance of the meeting. However, during the financial year there were some instances the meetings of the Board were convened at a shorter notice. It was replied by the management that whenever meeting convened at shorter notice, it was always convened with the consent of the Board members.

Subject to observations as aforesaid. I further report that:

Subject to my observations given in para no. (a) & fb) above, I report that the Board of Directors of the Company is duly constituted as per the Articles of Association of the Company. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act. In term of the Article of Associations of the Company all appointments to the Board are made by Honhlc President of India through its administrative Ministry i.e. Ministry of Steel.

1 further report that there exists a system for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting. Majority decision is carried through while the dissenting members'' views, if any, are captured and recorded as part of the minutes.

1 further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.

1 further report that for the financial year 2022-23, National Stock Exchange of India Limited imposed fine of Rs. 4,40,000/- including GST for non-compliance of the requirements pertaining to the Compositions of the Board of Directors including Women Independent Director as per the Regulation 17(1), Constitution of Audit Committee as per the Regulation 18 (1), constitution of Nominations and Remunerations Committee as per the Regulation 19(1) &(2), constitution of Stakeholder Relationship Committee as per the Regulation 20(2)/(2A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It has been replied by the Company to the Stock Exchange that the Company is Public Sector Enterprises (CPSE) comes under the administrativq^if^{i^''''<)?>.Nv

Ministry of Steel, Government of India. As per the Article 74 of the Article of Associations of the Company, the President of India shall appoint all members of the Board of Directors and the appointments of Independent Directors are still awaited.

This report is to be read with my letter of even date which is annexed as Annexure A and forms an integral part of this report.