kiocl ltd share price share price Directors report

Dear Shareholders,

The Board of Directors hereby submits the 47^th Annual Report on the business and operations of your Company ("the Company" or "KIOCL") and its Audited Financial Statements for the financial year ended March 31, 2023 (FY23), together with the Auditors Report and Comments on the Accounts by the Comptroller and Auditor General (CAG) of India.

FINANCIAL RESULTS AND STATE OF COMPANYS AFFAIRS

(H in crores, Except EPS & Book Value)

Particulars	FY 2023	FY 2022
Total Revenue / Turnover	1623.81	3080.74
Revenue from Operations	1543.42	3006.45
Other Income	80.39	74.29
Earnings Before Interest and Tax	(109.12)	423.24
Profit / (Loss) Before Tax	(122.76)	411.03
Tax Expense / Saving (including deferred taxes)	25.09	97.62
Profit / (Loss) After Tax	(97.67)	313.41
Add: Other Comprehensive Income (Net of Tax)	4.08	3.47
Total Comprehensive Income	(93.59)	316.88
EPS (Basic & Diluted)	(1.61)	5.16
Average Net Worth	2072.84	2064.81
Average Capital Employed	2290.18	2270.62
Book Value per Share	32.94	35.27
Return (EBDITA) on average Capital Employed (%)	(3.66)	20.01
Return on Average Net Worth (%)	(4.71)	15.18
Capital expenditure	422.83	290.45
Contribution to Exchequer: -
Central:	63.44	167.97
State:	21.85	3.06

Impact of Export Duty @ 45%

Export duty @ 45% on Pellets was levied by Govt. of India vide Customs Notice No. 29/2022 - Customs dated 21-05-2022. Accordingly, mainly due to unviable operation in view of levy of export duty, the Companys Pellet Plant operation was suspended for 187 days and was operated only for 178 days during the year.

However, Govt. of India vide notification No. 58/2022-Customs dated 18-11-2022 withdrew the export duty w.e.f. 19-11-2022.

Despite the aforesaid challenges posed, your Companys production during the year was 1.510 Million Tonnes (Mt) and dispatch was 1.460 Million Tonnes (against FY22 production and dispatch of 2.030 Mt and 2.072 Mt respectively).

Impact of Russia-Ukraine War

The year under review was a tumultuous year for the steel industry. Globally, the industry started well on the back of a strong post-Covid recovery and the infrastructure investments that many governments across the world had announced to support this recovery. However, the conflict in Ukraine made worse the inflationary pressures being felt due to supply chain bottlenecks in the post Covid world. Gas prices shot up as did coal prices which led to steel prices shooting up. Economic crisis induced by war caused decreasing steel demand and redirection of trade flows. The war worsened current economic situation globally.

Revenue

During the year, your Company earned a Revenue from Operations of H1543.42 crores as compared to H 3006.45 crores in the previous year. Revenue from export witnessed a downward trend by 46% to H 1361.43 crores as compared to the previous Financial Year figure of H 2928.97 crores.

Your Company achieved total export sales of 1.273 million tonnes of Pellets, against previous years export of 2.032 million tonnes. Your Company achieved 88% of total revenue from operations through export. Income from Sale of Services (O&M Operations and Mineral Exploration Services) during the year was H 20.47 crores against H 24.91 crores of previous year. Other Income comprising of Income from Treasury Operation and other Miscellaneous Income has increased to H 80.39 crores from H 74.29 crores.

Profits / Loss

Due to imposition of duty @ 45% on export of Iron Ore Pellets vide Customs Notification dated 21-05-2022, w.e.f. 22-05-2022, your Company was not in a position to export Iron Ore Pellets post duty imposition regime and coupled with high produce prices for domestic market, your Company incurred a Loss Before Tax of H 122.76 crores against a Profit Before Tax of H 411.03 crores in the previous year.

DIVIDEND AND APPROPRIATIONS

Your Company being a CPSE, pays dividend in compliance with DIPAM guidelines issued from time to time by Ministry of Finance and Board approved Dividend Distribution Policy in terms of the Regulation 43A of SEBI (LODR) Regulations, 2015 which is available at weblink https://kioclltd.in/table. php?id=282&lang=EN.

However, the Board of Directors had not recommended payment of dividend for the year 2022-23 due to absence of distributable profits. The Board has not recommended dividend based on the parameters laid down in the Dividend Distribution Policy. Further no amount is transferred to reserves of the Company.

DIVIDEND HISTORY OF LAST 7 YEARS

(Excluding DDT)

Years		Rate (%)	Per Share (Rs)	Amount (Rs in crs)
2016-17	Interim	1.1	0.11	6.98
	Final	2.6	0.26	16.50
2017-18	Interim	2.7	0.27	17.13
	Final	7.9	0.79	50.13
2018-19	Final	13.3	1.33	82.72
2019-20	Final	7.0	0.70	43.54
2020-21	Final	16.4	1.64	99.67
2021-22	Interim	9.8	0.98	59.56
	Final	7.9	0.79	48.01

Financial Saliency

As on 31-03-2023, the Company had a net cash and Bank Balance of Rs 773.29 crores as against Rs 1107.58 crores as on 31-03-2022. The reduction in cash is due to capital expenditure.

Treasury Management / Investment of Surplus Funds

The long-term requirements to fund the CAPEX of Rs 422.83 crores was met through internal resources during the year and Term Loan in the Debt Equity ratio of 2:1 for forward and backward integration of the existing Blast Furnace plant at Mangalore from Canara Bank aggregating to Rs 21.83 Crores.

The short-term borrowing requirements were met through surplus funds invested with Liquid Fund of Public Sector Mutual Fund and availment of Overdraft against Fixed Deposits from different banks at competitive rate of interest to optimize its cost of working capital.

Your Company has a Board approved policy for investment of surplus funds since 06-04-2016. The policy is being reviewed and amended from time to time by the Board in line with DPE Guidelines.

Subsidiaries, Joint Ventures and Associates

During the FY 2022-23, the Company has no Subsidiaries, Joint Ventures and Associates.

Credit Rating

The Credit rating of the Company is covered in the Corporate Governance Report of the Company.

Details of Deposits

The Company has not accepted any deposits during the year.

Short Term Loans

Short Term borrowings of Rs 380.82 crore (previous year Rs NIL crore) were outstanding as on 31-03-2023.

Debt Equity Ratio

Debt equity ratio as on 31-03-2023 was 0.206:1 as compared to 0.004:1 of previous year due to increase in borrowings.

CAPEX

During the year under review the total CAPEX was Rs 422.83 crores, which was 110% of the Budget Estimate (BE) of Rs 384.63 crores and against previous years CAPEX of Rs 290.45 crores.

KIOCLs ranking at Stock Exchange – A Top 500 Company

Your Company had been included amongst the top 500 listed Companies as per Market Capitalization on NSE and BSE and stands at No. 319 and 323 with Market Capitalisation of Rs 10,243.64 crores and H 10,246.68 crores, respectively, as on 31-03-2023.

MoU Performance

MoU - 2021-22 - Performance of your Company in terms of the Memorandum of Understanding (MoU) with the Ministry of Steel, Government of India for the Financial Year 2021-22 was rated as "Good". MoU - 2022-23 - Due to imposition of duty @ 45% on export of Iron Ore Pellets vide Customs Notification dated 21-05-2022, w.e.f. 22-05-2022, the Company was not in a position to export Iron Ore Pellets post duty imposition regime during the FY 2022-23. Accordingly, at the Inter-Ministerial Committee (IMC) Meeting held on 19-10-2022 for finalization of MoU 2022-23, Ministry of Steel informed IMC that the Company was primarily engaged in export of iron pellets which amounts to around 80% of Companys revenue. However, due to increase in export duty, the export revenue stream was no more viable, and Companys domestic operations was also not very promising on account of high produce prices. Therefore, the Company was proposed to be exempted from MoU signing. IMC agreed to this view point and based on the request of Company and subsequent confirmation from administrative Ministry, the Company was exempted from signing MoU for the Financial Year 2022-23.

Risk Management

Pursuant to the requirement of Regulation 21 of the Listing Regulations, the Company had constituted a Board level Risk Management Committee w.e.f. 26-03-2019 and has a robust Risk Management Policy framework to identify, evaluate and prevent / reduce impacts of the risks on Companys Business. Risk preventive work culture with strength to mitigate / reduce the risks impacts are developed within the organisation to enhance Companys performance. The details of Committee and its terms of reference are set out in the Corporate Governance Report. In line with Risk Management Policy, your Company have an established procedure to proactively identify, analyse and mitigate risks.

Implementation of Risk Management Policy

The Company has been continuously assessing its risks to ensure sustained business operations aligned with its long-term objectives. The following are the roles and responsibilities for effective implementation of Risk Management System across the organization: -

Roles	Responsibilities
Chief Risk	Oversees the establishment of Risk Management System. Informs Risk Management Committee and Board for its implementation and its compliance. Ensures providing required resources for mitigating Risk.
Officer
Steering	Ensures successful implementation of Risk Management System. Reviews once in three months for continuous improvement and guides the Risk Management Team.
Committee
	Chairman of Steering Committee maintains Companys Risk Register. Based on recommendation by Steering
	Committee, update the Companys Risk Register once in three months.

 

Roles	Responsibilities
Risk Officer	Conducts Risk Awareness Programme, co-ordinate with Steering Committee and HoDs for implementation of Risk Management Policy across the Organization.
Risk Owner	Each HoD is the Risk Owner and conducts brain storming session, identifies risks, risk evaluation and indexing, short lists for mitigation, nominates risk champion for each risk, gets the mandate from Functional
	Director/CMD for the required resources, mitigates, adds or deletes and maintain risk register for the Department with the approval of Unit In-charge or Functional Director as the case may be. Sends a copy of Department Risk Register to Chairman Steering Committee with the status of implementation once in three months.
Risk Champion	Assists concerned HoD in implementation of RMP, responsible for mitigating the identified risk/risks, monitor and review for continuous improvement.

The Company has identified following major risks: -

MARKETING & SALES RISK

Discerption of Risk	Risk Contributing Factors	Risk Treatment Plan
Volatility in Iron Ore &	- Longer lead time of iron ore sourced from market.	Reduction of cost of production and entering
Pellet market	- High volatility in demand and price of Pellets.	into back-to-back contracts.
	- Market forces led uncertainty in sales volumes and revenue.
	- Inventory holding at times of lower sales.
	- Sale of Pellets in spot market.
	- High Internal lead time for conversion of Iron Ore
	Fines into Pellets.
Govt Policies and Guidelines	Implementation of new policies and changes in taxation policies by Govt.	Taking up the matter with concerned Govt authorities.
Reputation Risk – Brand Image	Any dent to the brand image / reputation of KIOCL product will severely affect the demand in the market which in turn affects the overall business activity.	- Adhering to contractual specification, terms and conditions for supply.
		- Production of pellets with quality as per end user requirements.
		- Addressing quality concerns and taking corrective actions.
Changes in	Likely to receive demand notice from Customs / GST	An Indirect Tax Experts (GST & Customs
Customs Act, Rules, Customs Duty and GST tariff rates		Duty) appointed to guide / advice Company regarding any changes / impacts in the regulations and provide suggestions to take necessary preventive / remedial actions.

OPERATIONAL RISK

Discerption of Risk	Risk Contributing Factors	Risk Treatment Plan
Delay in	- Delay in Permission to enter Forest Area.	- Resolution of pending issues with Forest Dept.
Development and Commencement of	- Delay in appointment of raising contractor.	- Appointment of consultant for Transaction Advisory Services
Mining Operations of Devadari Iron ore mine	- Unfavourable decision in the WP No. 13311/2021 (PIL).	- Defending the WP No.13311/2021.(PIL)
Failure of Steel	- Ageing of structures	- Periodical inspection of structures and evaluating the stability and safety and taking corrective actions.
Structures	- Adverse coastal weather conditions
		- Structural strengthening / replacement / painting.
Fire at Furnace oil	- Nature / property of the material	- Dedicated CISF Fire wing inside the plant.
storage area	- Leakage of furnace oil	- Regular inspection and taking necessary corrective action.
	- Grass growth surrounding the Furnace
	Oil tank.
Procurement of Iron	Long Term Agreement validity.	- Long Term Agreement with M/s NMDC,
Ore		- Participation in e-auctions, Tolling (Supply and buy back), diversification of sourcing.
Adverse weather conditions and environmental accidents at Lakya Dam, Kudremukh	Weather vagaries, landslides etc.	- Regular monitoring and maintenance work along with EAP.
		- Providing necessary resources to maintenance and monsoon preparatory works.

FINANCIAL RISK

Discerption of Risk	Risk Contributing Factors	Risk Treatment Plan
Contingent Liability	Adverse decision of CESTAT for demand of Special Additional Duty on DTA clearance of Pellets during Oct10 to Apr12 amount to H 58,48,31,145/- & applicable interest towards the demand raised alongwith penalty)	- Case is sub-judice before CESTAT.
		- Consultant/s appointed by Company will represent before CESTAT.

PEOPLE RISK

Discerption of Risk	Risk Contributing Factors	Risk Treatment Plan
Succession Plan	Shortage of Manpower can cause a volatile work environment leaving other employees and their subordinates feeling unmotivated to do their jobs.	Complete Manpower study by September 2023.

Directors and Officers insurance

The Company has undertaken Directors and Officers Liability insurance (‘D and O insurance) Policy for all its Directors, including Independent Directors and Officers.

Particulars of Loans, Guarantees or Investments

There was no loan, guarantee or investment made under Section 186 of the Companies Act, 2013.

Related Party Transactions (RPTs)

During the period under review, no transactions were entered with Related Parties as defined under the Section 188 of Companies Act, 2013 read with Regulation 34(3) and Para A of Schedule V of the SEBI Regulations, 2015, as such annexure AOC-2 is not furnished.

Further, details of related party transactions entered by the Company, in terms of Ind AS-24 have been disclosed in the notes no. 28.2.4 to the financial statements forming part of Annual Accounts 2022-23. The same were also disclosed to Stock Exchanges on half yearly basis as required under Regulation 23(9) of SEBI (LODR), Regulations, 2015.

The Board approved Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions is available on the Companys Website at https://kioclltd.in/ table.php?id=280&lang=EN.

Material Changes and Commitments, if any, affecting Financial Position

There was no material change / commitment occurred affecting the financial position of the Company after the financial year ended 31-03-2023 till the date of this report and there was no change in business.

Management Discussion and Analysis Report

The Managements discussion and analysis report is set out in this Annual Report in terms of the provisions of Regulation 34(2)(e) of the SEBI (LODR) Regulations, 2015.

Business Responsibility & Sustainability Report

In accordance with Regulation 34(2)(f) of the SEBI Listing Regulations, the Securities and Exchange Board of India (‘SEBI), in May 2021, introduced new sustainability related reporting requirements to be reported in the specific format of Business Responsibility and Sustainability Report (‘BRSR). BRSR is a notable departure from the existing Business Responsibility Report and a significant step towards giving platform to the companies to report the initiatives taken by them in areas of Environment, Social and Governance. Further, SEBI has mandated top 1,000 listed companies, based on market capitalisation, to transition to BRSR from FY2022-23 onwards. Accordingly, we are glad to present our inaugural

BRSR for FY2022-23, which forms part of this year directors report.

BUSINESS AND OPERATIONAL REVIEW

Pellet Plant Unit

Your Company produced 1.510 million tons of Pellets during the year 2022-23 as compared to 2.030 million tons in the previous year and sold 1.460 million tons of Pellets as against 2.072 million tons in the previous year. Out of the total quantity sold, exported quantity was 1.273 million tons which was about 87.19 % of the total sales.

Blast Furnace Unit

The Blast Furnace Unit (BFU) remained under suspension due to uneconomic price of Pig Iron and high Coke Price since August 2009. Your Company is in the process of implementing the backward integration of BFU (Coke Oven) to make its operations economically viable.

A snapshot of production target vis-a-vis actual achievement with capacity utilization and sales performance during last five years including current year are depicted at Table 1 & 2.

Table 1: Capacity Utilisation

(Qty. In Million Tons)

Year	MOU Target	Actual Production	capacity utilisation (%)
2022-23	NIL*	1.510	43
2021-22	2.800	2.030	58
2020-21	2.500	2.210	63
2019-20	2.300	2.375	68
2018-19	2.170	2.238	64

(Installed capacity of Pellet Plant is 3.500 million tons / annum). * The Company was exempted from signing MoU.

Table 2: Sales Performance

(Qty: in Million Tons, Value: H In crores.)

	Pellets		Pig Iron		Total
Year	Qty	Value	Qty	Value	Qty	Value
2022-23	1.460	1518.02	0.004	4.71	1.464	1522.73
2021-22	2.072	2980.15	0.001	1.15	2.073	2981.30
2020-21	2.311	2343.80	0.003	3.55	2.314	2347.35
2019-20	2.356	1878.97	0.003	5.20	2.359	1884.17
2018-19	2.206	1,825.97	0.002	2.80	2.208	1,828.77

Mineral Exploration Works

A total of nineteen (19) number of Mineral Exploration Projects for NMET, Govt. of Karnataka and M/s JSW Steel Limited with cumulative approved project value of H 134.95crores (including GST) were handled during the year.

Additionally, Mineral Exploration works of Devadari Iron Ore Block (captive mine block) with approved project value of H 24.86 Crores (including GST) was also handled.

Your Company: -

- entered into regime of providing mineral exploration services to private agencies by securing five (5) number of Iron Ore Mine Lease (for assessment of BHQ / silicious ore) Projects from M/s JSW Steel Limited, Tornagallu, Bellary, Karnataka with order value of H 12.27 crores (Including GST).

- carried out G4 level of Mineral Exploration as per the technical directions of National Mineral Exploration Trust (NMET), Ministry of Mines, Govt of India for: -

• basemetal minerals in Anaji Basemetal Block, Obalapura Basemetal Block, Chitradurga (Dist.), Karnataka and

• kyanite mineral in Kallahalli Kyanite Block, Mysore (Dist.), Karnataka.

- diversified in to the arena of handling basemetal ME Projects through executing copper exploration works at Anaji and Obalapura basemetal blocks in the state of Karnataka.

- Completed G3 level of ME works in HR Gaviyappa Amalgamated Iron Ore Block (Block ID: KIOCL_10_KA) under GoK Funding with submission of Geological Report to DMG, GoK and the Block is under auction by Department of Mines and Geology, Govt of Karnataka.

- Generated a revenue of H 6.40 crores (Including GST) during FY 2022-23 and cumulative revenue of H 23.25 Crores (Including GST) from past 5 years.

- Placed a request to Director General, Geological Survey of India for entering into MoU for carrying out NGPM works (National Geo Physical Mapping Programme - baseline data generation programme) in 22 nos of toposheets over an extent of 15,735 sqkm in the state of Tamilnadu.

- Continual efforts are in place for securing 15 potential blocks in the state of Karnataka for bulk and base metals for future ME works through GoK and NMET funding.

Operation and Maintenance - M/s. OMC at South Kaliapani, Odisha: -

KIOCL has taken up the project of completing the balance works of COBP 2, OMC at South Kaliapani through a mutual contract agreement. The work involves erection, commissioning and handover the chrome ore beneficiation plant of M/s OMC. The work of commissioning of balance of equipment of new COBP plant of M/s OMC has been completed on 27-06-2022. The no load test was carried out during July-October 2022 since tailing pond of OMC was not available. The load test of the plant was conducted during 10-11-2022 to 10-12-2022 as per contract. The plant modification jobs were done from 11-12-2022 to 31-01-2023 to stabilise the plant operation and finally the plant was declared as commissioned on 10-02-2023. M/s OMC has issued commissioning certificate on 16-03-2023. TheplantishandedovertoM/sOMCforrunning.YourCompany has earned a net revenue of H 56 crores towards works and supply of equipment.

EXPANSION OF MARKET BASE

China, being the consumer of more than 50% of the iron ore produced in the world has been the major market for KIOCL Pellets. In continuation with its efforts to sell pellets in the non-Chinese Market to minimize dependency on the Chinese market and to expand its Market presence, about 54.38% of the total exports made were to markets other than China in comparison with about 57.93% during the previous year. Efforts Continued for market share diversification by reaching end-users in Oman, Indonesia, Italy, Turkey, and Netherlands. China controls about 70-80% of sea borne iron ore trade and hence finding market alternative to China for KIOCL pellets is in line with Companys expansion of business plan.

[Source: PMAI, Steel Mint, MoS, IBEF, World Steel, Media Report, PIB, Union Budget, WSA etc.]

CAPEX AND GROWTH PLAN

For long term sustainability / viability of your Company in the competitive market environment and forward consistent steady growth, your Board made the following efforts:

DEVELOPMENT & COMMENCEMENT OF DEVADARI IRON ORE MINE

Govt. of Karnataka vide notification dated 23-01-2017 reserved an area of 470.40 ha in Devadari Range, Sandur Taluk, Bellary District for Iron Ore and Manganese in favour of KIOCL Ltd., under the provisions of Section 17A (2) of MMDR Act, 1957. Director, Mine & Geology, GoK vide letter dated 13-02-2017 directed KIOCL to obtain statutory clearance viz Mining plan approval from IBM, Environment clearance from MoEF&CC, Forest clearance from MoEF&CC, GoI, CFE from KSPCB to take further necessary action for execution of mining lease deed.

Final approval / Stage – II approval

Ministry of Environment, Forest and Climate Change (Forest Conservation Division), Government of India vide its Letter dated December 16, 2022 intimated that the Central Government has accorded Final approval / Stage – II approval under the Forest (Conservation) Act, 1980 for the diversion of 401.5761 hectare (388.00 ha for mining + 13.5761 ha. for approach road=401.5761 ha.) of forest land in Swamimalai Block Forest, Sandur Taluk, Ballari District, Karnataka state for Iron Ore and Manganese Ore Mining in Devadari Hill Range in favour of M/s KIOCL Ltd, subject to the conditions mentioned in said letter.

Execution of deed for grant of a Mining lease between GoK & KIOCL

Govt. of Karnataka executed the Mining Lease deed on January 2, 2023 with KIOCL Ltd. for grant of a mining lease for Iron Ore and Manganese Ore, over an extent of 388 ha for a period of 50 years in Devadari Range, Sandur Taluk, Ballari District, Karnataka State.

Registration of Mining Lease Deed document

The Mining Lease deed document executed between Govt. of Karnataka and KIOCL has been registered at the Office of Sub-Registrar, Sandur taluk on 18-01-2023 by paying total amount of H 329.17 crores which includes the stamp duty, cess on stamps and fees for registering documents.

Issue of Govt. Order for handing over of forest land

Government of Karnataka issued Govt order for final diversion of Forest land 401.57610 ha on 11-04-2023, on handing over of forest land by DCF Ballary to KIOCL, Company will start the activities for commencement & development work at Devadari Iron Ore Mine.

Shri Nagendranath Sinha, IAS, Secretary, Ministry of Steel, Govt. of India visited Devadari iron Ore Mine site on February 25 & 26, 2023 and reviewed the status of commencement and Development work and also chaired the meeting with NMDC, KIOCL & MECON official for the same.

Appointment of Agencies for preparation of R&R Plan

Your Board has appointed Federation of Indian Mining Industries (FIMI) for collection of data / information from KIOCL, review of data / information and compilation of data for preparation of Rehabilitation & Reclamation Plan by Indian Council of Forestry Research and Education (ICFRE) for Devadari Iron Ore Mine. The Board has also appointed Indian Council of Forestry Research and Education (ICFRE) for preparation of Rehabilitation & Reclamation (R&R) Plan for Devadari Iron Ore Mine.

SETTING UP OF COKE OVEN AND DISP PROJECTS OF BFU

Your Company has planned to re-activate the existing Blast Furnace of 350 Cu.M capacity by suitable upgradation with forward integration project of 2.0 lakh TPA DISP and

1.8 Lakh TPA, Coke Oven Plant with waste recovery Power Plant under backward integration projects of existing Blast Furnace Unit. KIOCLs Board and Public Investment Board (PIB) had approved the project with total capital outlay of H836.90 crores. MoEF&CC has granted environmental clearance (EC) and KSPCB has accorded consent for expansion in June 2021 valid up to June 2026.

M/s MECON has been appointed as EPCM consultant for the project. Main technological packages envisaged are NRHR type Coke Oven Plant, Waste heat recovery Power Plant, Ductile Iron Spun Pipe, Pulverised Coal Injection Plant (PCI), Oxygen and Nitrogen Plants. Captive coke oven and PCI System will reduce the input raw material cost of Blast furnace operation. The Coke Oven Plant agreement was signed with M/s Tuaman Engg. Ltd, Kolkata on 22-11-2021 and Tripartite agreement was entered among KIOCL, M/s Tuaman Engg. Ltd and M/s. CIMFR, Dhanbad, Technology provider under Atmanirbhar Bharath Initiative. The total project cost for Coke Oven is H218.00 crores. The tenders floated for DISP Plant, Power Plant, Pulverized Coal Injection (PCI), Oxygen and Nitrogen plants have been cancelled due to high price and change in procurement policy of GoI. Further process of re-tendering is being reviewed by Company as per the guidelines of Ministry of Steel.

INSTALLATION OF VERTICAL PRESSURE FILTERS

The existing vacuum disc filters at Pellet Plant are not able to handle Iron ore having high Alumina content and slimy in nature. KIOCL Board approved the project in its 257^th Meeting held on 26-03-2019 with the estimated cost of H 158.60 crores. Four (04) vertical Pressure filters have been installed at Pellet Plant supplied by M/s METSO to have flexibility to utilize the ore received from any part of the country. Auxiliary equipments are also being supplied by various vendors and commissioning of Vertical Pressure filters is expected during the year 2023. Company has appointed M/s MECON as consultant for installation of vertical pressure filters. The total savings in production cost by installation of vertical pressure filters is expected to be H 45.3 crores per annum and it would also improve the capacity utilization with flexibility in using iron ores of different types.

INSTALLATION OF DUAL BURNER SYSTEM

Your Board in its 277^th Meeting held on 04-02-2022 as a part of green initiative, has taken up the project of installing dual burner system in the indurating machine of Pellet Plant to utilise Natural Gas as an alternative to the Furnace Oil being used currently. The project cost is H 36.80 Crores. The installation of non-recovery coke plant of capacity 1.8 LTPA with indigenous technology provider Central Institute of Mining and Fuel Research (CIMFR), Dhanbad is taken up under Atma Nirbhar Bharath initiative.

INFORMATION TECHNOLOGY FOR DIGITAL TRANSFORMATION

Single Integrated Information System / ERP

SAP S/4 Hana ERP on cloud platform has gone live on April 1, 2023 with core modules. The project is named as "Ashwa Megha". The ERP implementation is a major milestone towards digital transformation of the Company.

Upgradation of Networking System

The network is upgraded with managed L2 and L3 core managed switches with OFC and copper cables with managed network architecture with NMS server having Active Directory (AD) and Authentication, Authorisation and Accounting (AAA) software for central management admin console to monitor the data traffic.

Data and Cyber Security

The Company relies on state-of-the-art technologies to ensure that the confidentiality, integrity and availability of all its online services and its data are adequately secured from the prevailing cyber security threats. The Company safeguards its data with advanced security systems and successfully defends the system against malicious virus or other cyber threats. The networks of the Company are secured by using Fortinet Next Generation Firewall and Bit Defender End Point Security for protection of end point devices. IT audit and VAPT was carried out during the year.

HUMAN RESOURCE MANAGEMENT AND INDUSTRIAL RELATIONS

Human Capital

Total number of employees on the rolls of the Company as on 31-03-2023 was 654 consisting of 195 Executives, 41 Supervisors and 418 Non executives.

Table: 3 Breakup of employees on rolls as on March 31, 2023

Group	Total Employees	SC	ST	PWD	Women Employees
A	195	35	16	4	14
B	41	6	2	3	7
C	395	57	26	1	2
D&D(S)	23	2	3	3	1
Total	654	100	47	11	24

Employee Welfare

The Company continues to extend welfare benefits to the employees and their dependents by way of comprehensive Medical Facilities for self & dependents, retired employees, Housing Facilities, Canteen Facilities, Sports Facilities, First Aid Centre, Ambulance, Recreation centre etc.

Persons with Disabilities Act, 1995

Your Company ensures compliance under Persons with Disabilities act, 1995. Suitable provisions / modifications are made in the work place to meet the requirements of persons with disability.

Prevention of Sexual Harassment of Women at Workplace

KIOCL has a zero tolerance towards sexual harassment at the workplace. In line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013 (POSH Act), an ‘Internal Complaints Committee has been constituted in the Company for redressal of complaint(s) against sexual harassment of women employees. No complaint was filed during the year under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Women in the Workforce and their Empowerment

KIOCL is a Corporate Life Member of the Forum of Women in Public Sector (WIPS) a body functioning under aegis of Standing Conference of Public Enterprises (SCOPE). Women employees are life members of the Forum. Conducting several constructive programmes for the betterment of Women. Several training sessions on empowerment of Women have been conducted for enlightening women and for the contract workers.

Industrial Relations and Employees Welfare

Your Company continued to maintain harmonious industrial relations, co-operation between the elected representative bodies of employees and management.

Recruitment & Superannuation

During the year: -

a) Company recruited seven recruited seven (7) Executive Trainees, Eight (8) Graduate Engineer Trainees in group ‘A;

b) Company recruited three (3) employees at lateral entry;

c) Fifty-Two (52) employees superannuated on attaining the age of superannuation.

d) No employee was released under VRS scheme.

Human Resource Development

Various Training programs including in-house training programs, nominations for external seminars, conferences, participation in training programs organized by DPE etc., were carried out to enhance the skillset of employees.

Revision of Perquisites

Ministry of Steel vide its letter dated 10-04-2023 conveyed the presidential directive to your Company to implement revision of perquisites of Board level and below Board level Executives and Non-Unionised Supervisors from existing rate of 20% to 35% w.e.f. the date of issue of presidential directives strictly as per DPE OM dated 03-08-2017 subject to conditions as mentioned in said letter. In pursuance to Presidential directive perquisites of Board level and below Board level Executives and Non-Unionised Supervisors were revised from 20% to 35% w.e.f. 10-04-2023.

Remuneration Policy

The Policy of Remuneration to Directors, KMP & other Employees in pursuance to Schedule II Part D (1) of the SEBI

(Listing Obligations and Disclosure Requirements) Regulations, 2015 is available on Company website at weblink https://www. kioclltd.in/table.php?id=282&lang=EN. Your Company is a Government Company within the meaning of Section 2 (45) of the Companies Act, 2013 and being a Central Public Sector Enterprise under Ministry of Steel, the remuneration and other benefits of the employees of the Company are fixed / decided by the Department of Public Enterprises (DPE), Govt. of India.

Remuneration of Whole Time Directors

The salary and/or allowances of the Whole Time Directors are decided by the President of India.

Remuneration of Independent Directors

Independent Directors are appointed by the President of India. The remuneration to Independent Directors is paid by way of sitting fee for attending Board of Directors meeting and Committees meetings thereof. The sitting fee is being paid to Independent Directors within the ceiling limit prescribed under Section 197 (5) read with Rule 4 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Remuneration of Government Directors

No remuneration either by way of salary / allowances or sitting fee is paid to a Government Director representing Ministry of Steel.

Remuneration of KMPs other than Directors

The Salary / allowances of KMPs other than Directors are paid as per the scale of pay determined based on DPE Guidelines.

Man-days Trainings

During the year 6085 of Man-days training was imparted to the employees. Further, the Company in its commitment to good corporate governance, also imparts skill development training to contract workers, apprentices, students from managerial and technical institutes as well as for local population.

INTELLECTUAL CAPITAL

Class 16 of the Trade Marks Act, 1999

In pursuance to the Trade Marks Act, 1999, registration certificates under two applications filed under class 16 were registered during the year 2018 and were valid for a period of ten years from the date of application i.e., upto 06-05-2023. Accordingly, your Company has re-submitted two applications during the year under Class 16 to the Trade Marks Registry. Registrar for Trade Marks has renewed Registration for Trade Mark No. 2526716 and 2526717 in class 16 for a period of ten years from 07-05-2023.

Class 6 and 35 of the Trade Marks Act, 1999

For two applications each filed during the year 2013 under Class 35 (Device Mark - Advertising, Business Management, Business Administration, Office Functions) and Class 6 (Device Mark - Iron Oxide Pellet, Pig Iron Ore Concentrate) of the Act, opposition proceedings are pending.

Particulars of Employees

Ministry of Corporate Affairs vide its notification dated June 5, 2015 exempted Government Company with the applicability of Section 197 of the Companies Act, 2013. However, the remuneration received by the employees of the Company, had not exceeded the limit prescribed under Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Public/Staff Grievance Redressal

Your Company has framed a well-defined grievance procedure, evolved under the ‘Code of Discipline. Staff Grievances received are redressed to the satisfaction of the aggrieved. With respect to public grievance, as and when any complaints are received, necessary remedial action is taken promptly. Complaints/ grievances other than the staff grievance are categorized into customer / consumer complaints / grievances from the Contractors, NGOs / General Public etc. The respective project heads are empowered to dispose of the grievances concerning their areas.

CORPORATE GOVERNANCE

Pursuant to Regulation 34(3) and Para-C of SEBI (LODR) Regulations, 2015, a separate section on Corporate Governance along with certificate from Practising Company Secretary confirming the level of compliance is attached and forms a part of the Boards Report.

Directors and Other Key Managerial Personnel

As on financial year ended March 31, 2023, the Board consists of six members, two of whom were executive or whole-time Directors, two non-executive Director, representing Ministry of Steel and two Independent Directors. Details of sitting fees / remuneration paid to Directors and to KMPs respectively are provided at table no. 15 in Corporate Governance Report.

Declaration by Independent Directors

The Company received necessary declaration from Independent Directors under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of the Listing Regulations. The Board of Directors at its 285^th Meeting held on 05-04-2023, noted the declarations. Independent Directors of the Company have registered themselves with Independent Directors databank in compliance with Companies (Creation and Maintenance of database of Independent Directors) Rules, 2019 and Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

Women Directors

As on Financial Year ended March 31, 2023, the Company had two women Directors, Smt. Sukriti Likhi, Non-Executive Govt. Nominee Director representing Ministry of Steel and Dr. Usha Narayan, Independent Director.

Changes in the Composition of the Board

Inductions / Cessations

In terms of Article 91 of the Articles of Association of the Company, the President of India is vested with the power to appoint the Directors of the Company from time to time and shall determine the term of office of such Directors. Accordingly, the following appointments/cessations on the Board of your Company were affected as per the directives of the President of India: -

• Shri Devidatta Satapathy, Dy. Secretary, Ministry of Steel was appointed as an Additional Director and designated as Govt. Nominee Director on the Board of the Company with effect from 30-04-2022. Having so appointed, Shri Devidatta Satapathy was regularized with the approval of shareholders by way of postal ballot on 23-07-2022 by virtue of Section 110 of the Companies Act, 2013 read with Regulation 17 of SEBI (LODR) Regulations, 2015.

• Shri Binay Krushna Mahapatra was appointed as Director (Commercial) w.e.f. 30-08-2022.

• Shri Nirmalendu Mohapatra ceased to be the Independent Director on the Board of the Company w.e.f. 20-10-2022 on completion of his tenure.

• Shri G. Ramasamy ceased to be the Independent Director on the Board of the Company w.e.f. 21-11-2022 on completion of his tenure.

• Shri S. K. Gorai ceased to be the Director (Finance) of the Company w.e.f. close of business hours of 31-01-2023, consequent upon attaining the age of superannuation.

• Shri K. V. Bhaskara Reddy ceased to be the Director (Production & Projects) of the Company w.e.f. close of business hours of 31-01-2023, consequent upon attaining the age of superannuation.

• Ministry of Steel vide its order dated 03-05-2023 appointed Dr. Sanjay Roy, Joint Secretary, Ministry of Steel as Govt. Nominee Director on the Board of Company vice Shri Devidatta Satapathy, Director, Ministry of Steel.

• Shri Ganti Venkat Kiran assumed the charge of Director (Production & Projects) w.e.f. 09-05-2023 pursuant to MoS order dated 08-05-2023.

• Shri Manoj Kumar Jhawar assumed the charge of Director (Finance) w.e.f. 26-05-2023 pursuant to MoS order dated 24-05-2023.

Additional Charge assigned to Directors

• Shri T. Saminathan, Chairman-cum-Managing Director was holding the post of Additional Charge of Director (Commercial) upto 30-08-2023. Further, he was holding the post of Additional Charge - Director (Production & Projects), from 01-02-2023 to 09-05-2023.

• Shri Binay Krushna Mahapatra, was holding the Additional Charge for the post of Director (Finance), from 01-02-2023 to 26-05-2023.

Appointments / Resignations of KMP

During the year under review, there was no appointment / resignation of KMP. However, Shri S.K. Gorai, ceased to be Director (Finance) and Chief Financial Officer of the Company w.e.f. close of business hours of 31-01-2023, consequent upon attaining the age of superannuation.

Ministry of Steel vide its order dated 24-05-2023 appointed Shri Manoj Kumar Jhawar as Director (Finance) of the Company and he took the charge of the post w.e.f. 26-05-2023. Further Board appointed Shri Manoj Kumar Jhawar as Chief Financial Officer of the Company w.e.f. 30-05-2023.

Key Managerial Personnel

In terms of Section 203 of the Act, the Key Managerial Personnel of the Company are Shri T. Saminathan, Chairman-cum-Managing Director & Chief Executive Officer, Shri Manoj Kumar Jhawar, Director (Finance) & Chief Financial Officer and Shri P.K. Mishra, Company Secretary & Compliance Officer.

Directors Retiring by Rotation

In terms of Section 152 (6) of the Companies Act, 2013, Shri T. Saminathan, (DIN: 08291153) Chairman-cum-Managing Director and Shri Binay Krushna Mahapatra, (DIN: 09613777), Director (Commercial) being longest in office shall retire by rotation at the ensuing AGM and being eligible for reappointment, offers themselves for re-appointment. The Board recommends their re-appointment.

Number of Meetings of the Board

The Board met seven (7) times during the year under review, the details of which are given in the Corporate Governance Report. The maximum interval between any two Meetings did not exceed 120 days. The Meetings were conducted in compliance with relevant regulations of Listing Regulations and Secretarial Standard -1 issued by The Institute of Company Secretaries of India (ICSI).

Directors Responsibility Statement

Pursuant to Section 134 of the Act (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), the Directors of the Company state that:

a) In the preparation of the Annual Accounts for the Financial Year ended March 31, 2023, the applicable Accounting Standards had been followed along with proper explanation relating to material departure.

b) The Company has selected such Accounting Policies and applied them consistently and made judgments & estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit & Loss of the Company for that period.

c) The Company has taken proper and sufficient care towards the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) The Company have prepared the Annual Accounts on a going concern basis.

e) The Company has laid down Internal Financial Controls, which are adequate and are operating effectively.

f) The Company has devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The aforesaid statement has also been reviewed and confirmed by the Audit Committee and the Board of Directors of the Company.

Annual Return

The Annual Return of the Company as on March 31, 2023 in Form MGT-7 in accordance with Section 92(3) read with Section 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, is available on the website of the Company at weblink https://www.kioclltd.in/data. php?id=191&lang=EN.

MCA-21 e-filings

During the year under review, the Company filed all the statutory forms and returns electronically as per the manner and conditions for filing prescribed under Companies (Registration Offices and Fees) Rules, 2014. The financial statements for the year under review were filed in accordance with the requirements of Section 134 read with Companies (Filing of Documents and Forms in Extensible Business Reporting Language) Rules, 2015.

Compliance with Secretarial Standards

The Company complies with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

Other disclosure

The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year alongwith their status as at the end of the financial year.	There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review.
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.	Not Applicable

Statutory Auditor

The C&AG of India vide its letter dated 30-08-2022 had appointed M/s YCRJ & Associates, Chartered Accountants as the Statutory Auditor of the Company under Section 139 of the Companies Act, 2013 for the financial year 2022-23. The Auditors have confirmed that they are not disqualified from being appointed as Auditors of the Company. The Auditors remuneration for the year was fixed at H8.50 Lakhs plus applicable taxes for Statutory Audit. The total amount paid to the Statutory Auditors for all services rendered to the Company during 2022-23 was H12.15 Lakhs.

The Statutory Auditors have issued an unmodified opinion on the financial statements for the financial year 2022-23 and the Auditors Report forms part of Annual Report.

Cost Records and Cost Audit

The Company is maintaining the cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013. The Cost Audit Report for the Financial Year 2021-22 was filed with the Ministry of Corporate Affairs on 07-10-2022. The Cost Audit Report for Financial Year 2022-23 is under finalisation and will be submitted to the Ministry of Corporate Affairs within the prescribed timeline.

Cost Auditor

The Company maintains cost records as required under the provisions of the Companies Act. The Company had appointed Cost Auditors for conducting the audit of the cost records maintained for its Pellet Plant Unit during the Financial Year 2022-23. A remuneration of H 50,000/- was fixed by the Board for payment to the cost auditors for Financial Year 2022-23, which was ratified by the shareholders in the last AGM. The cost audit reports are filed with the Central Government in the prescribed form within the stipulated time. For the Financial Year 2023-24, the Board on the recommendations of the Audit Committee, had re-appointed M/s R. M. Bansal & Co., Cost Accountants to audit the cost records. The remuneration payable to the Auditor being placed before the members in this Annual General Meeting (AGM) for their ratification vide Resolution at Item No. 8 of the Notice convening the AGM.

The Cost Audit Report for the financial year 2022-23 does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company appointed M/s P.S. Bathla & Company Secretaries, Practicing Company Secretary for conducting the Secretarial Audit for the Financial Year 2022-23. The Secretarial Audit Report for the Financial Year 2022-23 forms part of the Directors Report.

The Secretarial Audit Report and Secretarial Compliance Report for the financial year 2022-23 forms part of this report.

Internal Auditor

Pursuant to provisions of Section 138 of the Companies Act, 2013 read with rule 13 of Companies (Accounts) Rule 2014 and based on the recommendation of the Audit Committee, the Board of your Company had appointed M/s Manohar Chowdhry & Associates, Chartered Accountants, Bangalore as the Internal Auditor of the Company for conducting Internal Audit for the Financial Year 2022-23 at audit fees of H13,80,000/-. The objective of internal auditing is to assist the Audit Committee/ Management in the effective discharge of their responsibilities by furnishing them with analysis, appraisals, recommendations and pertinent comments concerning the activities reviewed. Besides conducting transaction audit with adherence to legal and regulatory requirements, Internal Audit is to evaluate the adequacy of risk management and internal control system in the Company. While focusing on effective risk management and control in addition to appropriate transaction testing, the Internal Audit offers suggestions for mitigating current risks and also anticipate areas of potential risks. The quarterly Internal Audit Report is being placed before the Audit Committee for its information and review.

Reporting of Frauds by Auditors

During the year under review, Auditors has not reported to the Audit Committee (under Section 143 (12) of the Companies Act, 2013) any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

C&AG Audit

The Comptroller & Auditor General of India (C&AG) vide its letter dated 21-07-2023 has conveyed "Nil" comments on the accounts of the Company for the year ended March 31, 2023. Copy of the same is annexed to this Report.

Adoption of new Memorandum of Association and Articles of Association

In line with the approval of the Board at its Meeting held on 11-02-2020, the proposal for adoption of new set of Memorandum of Association and Articles of Association had been taken up with the Administrative Ministry for its approval vide Companys letter dated 11-03-2020. The approval from Ministry is awaited.

CORPORATE SOCIAL RESPONSIBILITY

During the Financial Year 2022-23, the Company has spent H589.96 lakhs towards CSR expenditure, including projects identified as ongoing for FY 2022-23 and to be completed during FY 2023-24 of H196.10 lakhs, set-off of excess CSR spends of H34.98 lakhs, in terms of the CSR activity recommended by the CSR Committee and approved by the Board of Directors, from time to time. The brief outline of the Corporate Social Responsibility (CSR) initiatives undertaken by the Company during the year under review form a part of this Report as an Annexure in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014 and amendments. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on weblink https://www.kioclltd.in/table.php?id=282.

KEY INITIATIVES

Environmental Management and Pollution Control Measures

Your Company has taken initiatives to address the cause of global environmental issues and as a part of the initiatives, following has been carried out:

• A 80 KLD capacity Sewage Treatment Plant is operational in Pellet Plant Unit. A 2 Km length sewerage system is connected to the STP. The sewage is being treated adopting Membrane Bio Reactor. The treated effluent is completely recycled in the process.

• A mobile water sprinkler of 6 KLD capacity is continuously operated for suppression of fust in Plant premises.

Safety

The Onsite Emergency Plan approved by Director of Factories is in existence for both Pellet Plant and Blast furnace unit. The same will be updated as and when there is a change in plant condition as well as emergency team members and emergency mock drills are conducted to practice the role of each member of emergency teams. The previous mock drill was conducted on 13-12-2022 in CPP-PPU. Workers participation in Safety Management System is one of the important subjects as per the Factories Act. The Company has formed area wise safety committees. Workers participation in these Safety Committees is ensured in PPU and BFU units of KIOCL. The safety committee meetings are conducted on 24-03-2022, 20-07-2022, 25-10-2022, and 04-01-2023 in PPU and 07-05-2022, 27-01-2023 (BFU). The Safety Audit by an external agency has been conducted in the month of May 2022 through a reputed Govt. agency M/s National Safety Council, Mumbai, as per statutory requirement and to maintain the plant premises in a safe condition. The next is planned in May, 2024. A very effective administrative tool of educating the employees regarding safety is tool box talk which is being in practice in both units on daily basis to educate all the workmen including contractors.

Safety Inspections are carried out regularly once in a week and once in two months by the Safety officer/staff along with concerned department engineers and Safety committee members. The observations made during Inspection are noted and reported to concerned departmental heads for compliance.

Internal cross departmental Safety audit has been conducted along with a Committee members, formulated by competent authority to conduct as per Standard checklist IS: 14489. The previous internal safety audit was held in Dec, 2021 and next external audit is planned in the month of May, 2023.

Suitable standard Personal Protective equipments such as Safety helmets, Shoes, Respirators, Rain coats, Gloves, Safety Goggles, Face shields, Aprons, Ear plugs/muffs are purchased and issued to all employees including Contract labors to protect them against work place hazards.

Various Training programmes are being conducted to inculcate Safety consciousness and to develop the human resources. The Refresher Training on SOPs and Maintenance activities, first aid, Firefighting training, Awareness programme on Environment, Occupational health, Safety, Vigilance Sustainable development, Productivity. The total training of 4185 Man days, provided for regular employees on the above said subjects and 1779 Man days for contractors workmen on Work place Safety asper IMS requirement and statutory requirements. Sixty-nine ATS trainees are given with 50 RI classes each and 3450 Man days training on, on-the job skill development training also 277 Technical college students are provided with one week each Internship training during 2022 and 2023.

As per The Factories Act 1948, the Company is conducting National Safety week celebrations. The previous National Safety week celebration was conducted on March 4, 2023 to March 10, 2023. The Safety Boards and Emergency contact telephone numbers boards are displayed in KIOCL PPU and BFU sites every year.

Steel Safety code

The Steel Safety Code is studied and adopted in the Company. Regular training is provided for all employees in phased manner to all Executives from top to front line supervisors.

ISO Certification

KIOCL was certified with ISO 9001: 2015 for Quality Management System, ISO 14001: 2015 for Environmental Management System and ISO 45001:2018 for Occupational Health and Safety Management System under registered number R191/9103. The accrediting Agency M/s International Certification Services Pvt Ltd, Mumbai, issued ISO recertification for all above mentioned standards as Integrated Management System (IMS) on 14-01-2022 and it is valid up 08-11-2024. To comply with IMS ISO standards, KIOCL is conducting internal departmental audits, management review meetings and apex committee meetings as per ISO standards. Every year, the certifying agency is conducting surveillance audit for confirming the electiveness of implementation of IMS system in accordance with required ISO standards. The last surveillance audit was done during the month of January 2023 and the agency recommended for continuation of IMS Certificate.

Implementation of Official Language Policy

To ensure compliance of Official Language Policy of the Union, the Rajbhasha Department of KIOCL Limited takes every action. This covers activities broadly divided into three main categories, i.e. (i) Training, (ii) Translation, and (iii) Implementation.

An employee of Company received prestigious Rajbhasha Nistha shield during Hindi Salahkar Samiti meeting chaired by Honourable Union Minister held in Gangtok on 13-05-2022. Shield was received by Chairman-cum-Managing Director, KIOCL Limited. As another achievement Pellet Plant Unit of Company secured third prize for Official Language excellence from TOLIC, Mangaluru.

During the year Rajbhasha Department scheduled Official Language Implementation Committee meetings, organised workshops and conducted Official Language inspections as per targets of the Annual Program 2022-23 of Department of Official Language (Ministry of Home Affairs). During the year Chairman-cum-Managing Director marked his remarkable presence in Hindi Salahkar Samiti Meeting held in Gangtok on 13-05-2022 and Varanasi on 31-08-2022 and received accolades from Honourable Minister of Steel. Chairman-cum-Managing Director received Bhartendu Harishchandra Award on 08-12-2022 from BEL Corporate Office in a competition conducted for Chief of Offices under aegis of TOLIC (PSU), Bengaluru.

Inspection was carried out by the third Sub-Committee of the Committee of Parliament on Official Language on 04-11-2022 at Corporate Office at Bengaluru. A Hasya Kavi Gosthi was organised on 31-12-2022 at Corporate Office and honourable Union Minister of State for Steel and Rural Development Shri Faggan Singh Kulaste graced the occasion as chief guest.

During the year Company participated in Second All India Conference on Official Language held in Surat on 14-09-2022. Subsequently the Company organised various Hindi competitions during Hindi Pakhwada, 2022 in which all groups of employees participated. Incentive scheme for original work in Hindi has been implemented in the organisation and total 41 employees were rewarded with cash prizes this year. The E-Magazine of Company ‘Shrigandha was published and the link of the e-magazine was also provided on the website of the Company and Official Language Department (Ministry of Home Affairs) under E-Pustakalay segment.

Vigilance

Preventive vigilance has been the thrust area of Vigilance Department all these years and the same has received focused attention during the year. A climate of preventive vigilance is generated to sensitize officials at all levels about the ill effects of corruption and malpractices. Regular Structured Meeting of Vigilance with the management is being conducted and issues related to system improvements, e-governance, Leveraging Technology, Tender Management, Award of Works, Recruitment Policy have been discussed.

The Vigilance Department is certified for compliance to ISO certification 9001-2015 standards to ensure continuous improvement in Quality Management System. Certificate is renewed and is valid till January 29, 2025. e-Procurement is in vogue and the threshold value for this is fixed at H 2 Lakhs and above. During the year, 94.51% of contracts by value are covered under this. All payments are being made through electronic mode. During the Year, 196 work/purchase/sale orders have been issued incorporating Integrity Pact Clause, covering 97.48% of contracts by value. No complaints have been received under Integrity Pact. 66 Scrutiny / examinations, 38 checks / inspections were carried out during the period and corrective actions, if any were suggested. Necessary action is taken as regards to the complaints received during the year.

As a new initiative, publication of quarterly "Vigilance Newsletter" commenced from January, 2022. These are circulated among Officers and employees through e-mail, WhatsApp and also available on the website of KIOCL. They bring out the latest O.M.s and Circulars issued by various Ministries/Departments of Government of India and Central Vigilance Commission which have bearing on the working of KIOCL for compliance with a view to keep employees abreast of Rules, Regulations and Guidelines. Also, articles on relevant topics and initiatives taken by other organizations in areas of systemic improvement and preventive vigilance which can be a model for adoption to improve working are shared which would add to the knowledge of the employees and benefit the Company. Vigilance Awareness Week was observed from October 31 to November 6, 2022 at all the locations/offices of KIOCL Limited. The theme of this years Vigilance Awareness Week was "Corruption free India for a developed Nation;

^??>MMMA ‘W?$ ^MAV - {DH${GV ^MAV". Workshops, Guest Lectures,

Sensitization programs & vendor meet were conducted during the week. Essay, slogan writing and quiz competitions were conducted among the employees. Essay writing competitions were also conducted for students of Schools & Colleges. On this occasion, the importance of observing the Vigilance Awareness Week and steps taken to strengthen vigilance activities were highlighted.

Vigil Mechanism

Your Company has a Whistle Blower Policy and has established the necessary vigil mechanism for Directors and Employees in confirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations, to report concerns about unethical behaviour. The details of the policy have been disclosed in the Corporate Governance Report, which forms part of this report and is available on link https://www.kioclltd.in/table. php?id=279. During the period under review, no person was denied access to the Chairman of the Audit Committee.

Integrity Pact

With the commitment to maintain the highest standard of transparency and governance, your Company has entered into an integrity Pact with Transparency International and has also appointed Independent External Monitors (IEMs). Structured Meetings are held with IEMs on regular intervals and threshold value is H 30 lakhs for signing of Integrity Pact for purchase / works contracts.

Details of Independent External Monitor (IEM)

Dr. Yatindra Pal Singh, IRSE (Retd.) and Shri. Paul Antony, IAS (Retd.) have been appointed as Independent External Monitors (IEMs) for Implementation of the Integrity Pact Programme in KIOCL Ltd with effect from 27-08-2022 for a period of three years.

Compliance of recommendations made by the Committee on Papers Laid on the Table (Rajya Sabha) in its 150^th Report

Details of cases initiated / disposed-off during 2022-23: -

The details of vigilance cases initiated / disposed-off during 2022-23 are as under: -

No. of cases pending as on 31-03-2022	3
No. of cases initiated during 2022-23	0
No. of cases disposed-off during 2022-23	1
No. of cases pending as on 31-03-2023	2

Nature of pending cases: -

1. Favouritism in various recruitment and promotions made in KIOCL.

2. Irregularities in appointment of First Aid Superintendent in Port Trust Hospital, NMPT while on deputation from KIOCL.

Officers involved	2
Charge sheets issued on	26-08-2021 & 27-04-2022
Disciplinary proceedings	One is under finalisation.
	Second stage advise of CVC awaited in another case.

Audit Paras:

There is no pending Audit Para from C&AG during the year under review.

Expenditure on R&D

At KIOCL, R&D activities and innovation initiatives are being taken up departmentally based on the need on continuous basis to improve upon the existing process system, bring down the cost of production and to achieve the set targets. The expenses are also covered as per the provisions made in the budget. During the financial year 2022-23, following R&D activities have been taken up: -

• The High Efficiency Rotor Assembly is operating at full load most of the time. The design of the impeller is more than 35 years old and presently better design impellers with better efficiency are available. Hence the matter was taken up with various fan manufacturers for supply of better efficiency impeller which can be mounted on the existing foundation, bearing supports and casing. Already an Order no. 407360-I dated 15-12-2020 is placed on M/s. Boldrocchi India Pvt. Ltd. for the supply of high efficiency impeller. The High efficient Rotor assembly for VZ-31 FAN delivered on April 11, 2022. High Efficiency Rotor Assembly was installed in Recuperation Fan to improve operation. Performance checked and found satisfactorily. The expenditure on Design, manufacture and supply of High Efficiency Rotor Assembly is H 72,00,000/-

• Reduction in length of CB92 conveyor: - As the fines storage Silo is not being used, the length of the pellet loading conveyor CB92 was reduced by 120m by relocating the tail pulley. The advantages of this modification are (a) Reduced power consumption to the extent of 20% and (b) Reduced maintenance cost. Due to the reduction in length, we were able to reduce installed quantity of idlers, brackets, conveyor belts amounting to a cost of H 26,10,600/- there by leading to equivalent reduction in inventory costs.

• Fixing of VFD for Thickener underflow pump PS125, in place of fixed speed drive. With the fixed speed drive, PS125 was running at full load, which is not always desirable. Sometimes it is required to run at lesser RPM to control the pump density. With the fixing of VFD for PS125, the following advantages are achieved:

1) Better control of pump density which improves the process efficiency.

2) Reduction in power consumption, as the pump needs to run at on average of 75% of full load to achieve the desired density. The cost of VFD is H 3,78,800/-. This cost will be paid back in one year even if the pump runs at 75% load for 6 hours in a day for 300 days in a year.

Procurement of raw material from sources other than NMDC

During the year under review, your Company has procured around 20,616 MT of Iron Ore Fines from sources other than NMDC.

MSME Act, Section 21 & Filing of Form MSME-1

As per MSME Development Act 2006, where any MSME vendor supplies any goods or renders any services to any buyer, the buyer shall make payment within 45 days from the day of acceptance of goods/ services. Where any buyer fails to make payment to the supplier within 45 days, the buyer shall be liable to pay interest on that amount.

A total amount of H84.80 crores was paid to MSME vendors during the Financial Year 2022-23 and the details of the amount released and the number of days to which the payments were released are furnished below:

(H in crores)

0 - 15 days	15 - 30 days	30 - 45 days	> 45 days	Total
71.93	10.70	2.17	-	84.80

The Ministry of Corporate Affairs (MCA) issued a notification on 22-01-2019 states that specified Companies having outstanding dues to the MSME (Micro, Small and Medium) enterprises have to file the particulars of all current outstanding dues in Form MSME-1 with the ROC (Registrar of Companies). Since, your Company had no payments outstanding for more than 45 days to the MSME supplier, form MSME-1 was not required to be filed during the year.

Implementation of Public Procurement Policy for MSEs

In line with the Govt. of India guidelines as per MSME Development Act 2006 and keeping in view of the effective implementation of Public Procurement Policy for Micro and Small Enterprises (MSEs) Order 2012, following steps were taken by the Company:

• List of item components that could be sourced from MSEs were posted on the Companys website at www.kioclltd.in for the information of MSE vendors.

• Communication sent to all the registered vendors regarding the said policy with the objective of achieving an overall procurement from MSEs. Further, for enhancing the procurement from MSEs owned by SC/ST, all the vendors were approached for capturing necessary details and update the data bank.

• During the FY 2022-23, Company placed orders for Goods & Services for a value of H 163.48 crores from MSEs which constituted 39.15% of the total procurement value of H 417.62 crores (excluding iron ore fines and furnace oil).

The procurement from MSMEs complies to Public Procurement Policy during the financial year 2022-23 as placed below:

(Rs in crores)

1	Total annual procurement	417.62
2	Target %age of annual procurement	25%
3	Total value of goods and services procured from MSEs (including MSEs owned by SC/ST entrepreneurs)	163.48
4	Total value of goods and services procured from only MSEs owned by SC/ST entrepreneurs	4.38
5	% age of procurement from MSEs (including MSEs owned by SC/ ST entrepreneurs) out of total procurement		39.15%
6	% age of procurement from only MSEs owned by SC/ ST entrepreneurs out of total procurement		2.68%
7	% age of procurement from Women MSEs		3.62%

The deficit under the targets and sub-targets was due to non-availability of vendors, several initiatives were undertaken to identify the entrepreneurs for procurement of goods and services from MSEs owned by SC / ST enterprises.

Trade Receivables Discounting System (TReDS) platform

In exercise of powers conferred by Section 9 of the Micro, Small and Medium Enterprise Development Act, 2006 (27 of 2006), the Central Government has issued instructions that all CPSEs shall be required to get themselves on boarded on the Trade Receivables Discounting System (TReDS) platform, set up as per the notification of the Reserve Bank of India. In compliance with the above instruction, your Company is on the TReDS platform to facilitate financing of trade receivables of MSEs by discounting of their receivables and realisation of their payment before the due date. During FY 2022-23, no complaint was filed by the MSEs, on MSME SAMADHAN – Delayed Payment Monitoring System.

Procurement from Government e-Marketplace (GeM)

During the Financial Year 2022-23, the Company had placed 438 orders on GeM amounting to H315.91 crores against H 260.72 crores during the previous Year

Right to Information

In consonance with the spirit of Right to Information Act, 2005 the Company has created necessary mechanism as required under the Act. The Public Information Officers and Appellate Authorities are effectively responding to the requests and appeals of the applicants. The names of all PIOs/ Appellate Authorities are displayed on the Companys website. During the year, 40 RTI applications were received and were disposed-off within stipulated time.

Energy Conservation, R&D, Technology Absorption, Forex Earnings & Outgo

Details of Energy Conservation, R&D, Technology Absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule, 8 of the Companies (Accounts) Rules, 2014, is annexed to this report.

Appreciations and Acknowledgement

Your Directors gratefully acknowledge the support, co-operation and guidance received from the Honble Minister of Steel, Honble Minister of State for Steel, Honble Chief Minister of Karnataka, the Secretary, Ministry of Steel and other officials of the Ministry of Steel as well as other Ministries of the Government of India, Government of Karnataka, Odisha, Tamil Nadu and all other departments / agencies of Central and State Government in all the endeavours of the Company. The Board is also thankful to all its stakeholders, including bankers, investors, members, customers, consultants, technology licensors, contractors, vendors, etc., for their continued support and confidence reposed in the Company.

Your Directors appreciate and value the contribution made by every member of the KIOCL family.

For and on behalf of the Board of Directors

	Sd/-
	(T. Saminathan)
Date: 09-08-2023	Chairman-cum-Managing Director
Place: New Delhi	DIN: 08291153