To ,

The Members,

Your Directors take pleasure in presenting the 40 Annual Report along with the Audited Financial Statements of the Company for the

Financial Year 2025-26 ended 31 March, 2026.

Despite industry-wide challenges ranging from raw material volatility and energy cost escalation to supply chain disruptions and economic uncertainty due to middle east crisis has delivered excellent financial performance, maintained operational excellence, and reinforced its commitment to quality, innovation, and sustainability.

During the financial year 2025-26, the Company's total income increased by 11.37%, accompanied by an increase of 41.47% in profit before tax as compared to the previous financial year

1. FINANCIAL RESULTS AND STATE OF AFFAIRS

The summarised Financial Results for the year are as follows:

(` in Lakh, except EPS)

* The exceptional items are pertaining to impact arising out of Government of India's notification of four Labour Codes on November 21, 2025. Considering the impact arising out of an enactment of the new legislation, the Company has recognised the same under "Exceptional Items".

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

2. FINANCE

The Total Income of your Company for the Financial Year 2025-26 stood at ` 3,95,575 Lakh as compared to ` 3,55,205 Lakh of the previous Financial Year. Your Company has ended the Financial Year 2025-26 with a profit after tax from the ordinary activities of ` 20,066 Lakh as against the previous Financial Year's ` 16,175 Lakh.

The Earnings Per Share (EPS) for the year increased to ` 11.13 from ` 8.98 in the previous year, indicating improved shareholder value and operational efficiency. After taking into account the brought forward profit of ` 2,63,994 Lakh, your Company has carried forward an amount of ` 2,84,458 Lakh to the Balance Sheet.

3. DIVIDEND

Your Board of Directors recommend the payment of Final Dividend @ 10% (i.e ` 1.00/- per share) on Equity Shares of Face Value of ` 10/- ( ` Ten) each for the Financial Year ended 31 March, 2026.The payment of dividend is subject to the approval of members at the ensuing Annual General Meeting ('AGM') and deduction of income tax at source.

Upon approval at the AGM, the Dividend will be paid to those members whose names will appear in the Register of Members/ Beneficial Owners as at the close of business hours on 11 September, 2026 i.e. Record Date.

4. DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ('Listing Regulations') the Board of Directors of the Company (the 'Board') has formulated and adopted the Dividend Distribution Policy ('Policy').

The Policy is available on the Company's website www.sunflagsteel.com and can be accessed at: https://sunflagsteel.com/wp-content/uploads/2021/06/SISCO-Dividend-Distribution-Policy.pdf

5. SHARE CAPITAL

During the Financial Year 2025-26 under review, there is no change in the capital structure of the Company and accordingly, the issued, subscribed and paid-up Share Capital of the Company stood at ` 1,80,21,94,480/- divided into 18,02,19,448 equity shares of face value of ` 10/- each, as on 31 March, 2026.

6. MARKET SCENARIO

The Indian steel industry continued to demonstrate resilience during FY 2025-26 despite persistent global economic uncertainties, geopolitical tensions, volatile raw material prices and increasing trade protectionism across several economies. India retained its position as the world's second-largest crude steel producer and remained one of the fastest-growing steel consuming nations, supported by robust domestic demand.

During the year, demand for steel was primarily driven by sustained Government expenditure on infrastructure, railways, roads, urban development, housing, renewable energy, defence manufacturing and capital goods. Continued growth in the automotive, engineering and construction sectors also supported healthy domestic steel consumption. While global steel demand remained subdued, India's domestic market continued to outperform most major economies.

The domestic steel industry, however, witnessed increased imports, particularly from China, South Korea and Japan, resulting in pricing pressure in certain product categories. The Government continued to monitor import trends and evaluate suitable trade measures to ensure a level playing field for domestic manufacturers. At the same time, volatility in coking coal prices, freight costs and energy expenses continued to exert pressure on industry margins.

India's long-term outlook for the steel sector remains positive. The National Steel Policy envisages increasing the country's steelmaking capacity to 300 million tonnes by 2030-31, while the Government's vision for a developed India by 2047 targets a capacity of nearly 500 million tonnes. Growth is expected to be supported by continued investments in infrastructure, manufacturing, defence, renewable energy, urbanisation and the "Make in India" initiative. Your Company also expects sustained demand growth from these sectors over the medium to long term.

Sunflag's Performance and Outlook

During FY 2025-26, your Company continued to focus on enhancing operational efficiencies, improving product quality, increasing value-added steel production and optimising its product mix. Despite a challenging pricing environment and higher input cost volatility, the Company maintained its emphasis on serving niche and specialised steel segments where quality, consistency and technical capability provide sustainable competitive advantages.

The Company continued to strengthen its presence in value-added alloy and special steel products catering to automotive, engineering, bearing, railways, oil & gas and industrial applications. In line with its long-term strategy, the Company is also expanding its presence in high-value sectors such as Aerospace, Defence, Nuclear Power, Thermal Power Boilers and Super Alloys, which offer superior margins and significant growth opportunities. Further, the Company continues to evaluate opportunities for securing strategic raw material resources, including coal and iron ore mines, to strengthen supply security and improve long-term cost competitiveness.

The management remains confident that the Company's integrated manufacturing facilities, strong customer relationships, continuous technology upgradation, diversified product portfolio and focus on specialty steel will enable it to capitalise on emerging opportunities and create sustainable value for all stakeholders.

7. COMPANY'S OPERATIONS OR OVERALL WORKING PERFORMANCE

During the Financial Year 2025-26 under review, the operational (production) details of the Company are as under:

Production in MT and Power in Lakh kWh

8. PROJECTS

Steel Plant:-

The Company continued to keep upgrading its existing steel making facilities and focusing on new grade developments and enhance its capability to cater in the new market segments.

Subsidiary Companies :-

Sunflag Power Limited [CIN U31200MH2003PLC0448189]

There were no specific developments in Project as the matter has remained sub judice since 2023. The Company is awaiting the outcome of the court proceedings before taking further steps toward obtaining the necessary approvals and implementing and commencing operations of its Hydro Power Project at Hanol Tuini in the State of Uttarakhand.

Khappa Coal Company Private Limited [CIN U10100MH2009PTC191907]

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

Sunflag Foundation [CIN U74999MH2017NPL289961]

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

Associate / Joint Venture (JV) Companies:-

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

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

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

Daido D.M.S. India Private Limited, is a Joint Venture (JV) Company of Sunflag Iron and Steel Company Limited, Daido Steel Co. Ltd., Japan and Daido Die and Mold Steel Solutions Co. Ltd., Japan. The JV Company is engaged in the business of manufacturing, import, export and distribution in die, mold steel (tool steel and other metallic materials), processed products and mold parts. The Company is in operation.

During the Financial Year 2025-2026 Daido D.M.S. India Private Limited reported the total income of ` 7,387.49 Lakh as compared to ` 5,952.72 Lakh in the previous Financial Year. Further the Net Loss for the year under review was ` 283.99 Lakh as compared to Net Loss of ` 7.47 Lakh in the previous Financial Year.

Ramesh Sunwire Private Limited [CIN U28999MH2016PTC287281]

Sunflag jointly with 3S Applied Technologies Limited (erstwhile Stumpp Schuele & Somappa Springs Private Limited), Bengaluru has formed and incorporated a Joint Venture (JV) Company Ramesh Sunwire Private Limited on 31 October, 2016 in the state of Maharashtra. During the period under review, Sunflag has invested INR 3,43,00,000 in the capital of the said JV Company.

Consequently, as on 31 March, 2026 the Company has total investment of INR 13,23,00,000 (INR Thirteen Crore Twenty-three Lakh) constituting (49%) in the capital of the said JV Company.The main object of the JV Company is manufacturing high quality of alloy steel wire for automobile and auto component industries, both in domestic and export market. The Company is in operation.

During the Financial Year 2025-2026 Ramesh Sunwire Private Limited reported the total income of `4,007.57 Lakh as compared to ` 3,659.82 Lakh in the previous Financial Year. Further the Net Profit for the year under review was `108.23 Lakh as compared to ` 100.93 Lakh in the previous Financial Year.

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

Sunflag jointly with Renew Green Energy Solution Pvt. Ltd. has formed a Joint Venture (JV) Company ReNew Green (MPR Three) Private Limited for setting up 71.34 MW Solar Photovoltaic Power Project at Village-Bagapur, Yawatmal, Maharashtra. As on 31 March, 2026 the Company has total investment of INR 33,90,48,000 (INR Thirty-three Crore Ninety Lakh Forty-eight Thousand) constituting (31.2%) in the capital of the said JV Company.

During the Financial Year 2025-2026 ReNew Green (MPR Three) Private Limited reported the total income of ` 5,271.44 Lakh as compared to ` 1,694.99 Lakh in the previous Financial Year. Further the Net Profit for the year under review was ` 459.59 Lakh as compared to Net Loss of `84.48 Lakh in the previous Financial Year.

Other Investment :

Sunsure Solarpark Thirty Seven Private Limited [CIN U35105HR2024PTC126567]

During the period under review, Sunflag executed a Share Subscription and Shareholders' Agreement with Sunsure Energy Private Limited (Promoter of Power Producer Company) and Sunsure Solarpark Thirty Seven Private Limited (Power Producer Company), to acquire and maintain at least 26% of the stake in Power Producer Company in order to procure the power generated from its 11.00 MW

AC/16.5 MWp DC, grid connected solar (photovoltaic) electric generating facility/ solar photovoltaic project at Ajande Kh, Taluka Sindhkeda, District Dhule, Maharashtra, India, 425404.

As of 31 March 2026, the Company's total investment in Sunsure Solarpark Thirty Seven Private Limited amounted to INR 1,44,36,828 (Rupees One Crore Forty-four Lakh Thirty-six Thousand Eight Hundred Twenty-eight only), representing 36.27% of its equity share capital.

Present Status of Coal and Mineral Mines:-

9. NATURE OF BUSINESS ACTIVITIES AND CHANGES THEREOF

During the Financial Year 2025-26 under review, the Board of Directors, though exploring addition to existing business and commercial activities, but till date there is no change in nature of business and commercial activities of the Company. As such, no specific details regarding change in nature of business activities are required to be given or provided.

10. PUBLIC DEPOSITS

During the Financial Year 2025-26 under review, the Company has neither invited nor accepted any public deposits within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 (as amended). As such, no specific details prescribed in Rule 8(5) of the Companies (Accounts) Rules, 2014 (as amended) have been given or provided.

11. DIRECTORS AND KEY MANAGERIAL PERSONNEL

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

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

1. Pursuant to the provisions of Section 152 of the Companies Act, 2013 ('the Act'), the Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 39 Annual General Meeting held on 26 September, 2025, consented to the re-appointment of Mr. Suhrit Bhardwaj (DIN: 02318190), Director [Category - Non-Independent, Non-Executive] of the Company, who retired by rotation and being eligible offered himself for reappointment.

2. Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 39 Annual General Meeting held on 26 September, 2025 approved the reappointment of Mr. Pranav Bhardwaj (DIN - 00054805), as the Managing Director (Category - Promoter, Executive), designated Key Managerial Personnel of the Company not liable to retire by rotation for a further period of five (5) years effective 17 January, 2026.

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

There has been no change in relation to the Executive Director/s and Key Managerial Personnel during the year except as specified in I(2) above.

III. CHANGES RELATED TO THE INDEPENDENT DIRECTOR/S:

1. Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 39 Annual General Meeting held on 26 September, 2025 approved the reappointment of CA Vinita Bahri, as a Director (Category Non-executive, Independent) not liable to retire by rotation, to hold the office for a fixed second term of five (5) consecutive years, from 21 September, 2025 till 20 September, 2030.

2. Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 39 Annual General Meeting held on 26 September, 2025 approved the reappointment of CA M. A. V. Goutham, as a Director (Category Non-executive, Independent) not liable to retire by rotation, to hold the office for a fixed second term of five (5) consecutive years, from 12 August, 2025 till 11 August, 2030.

3. Members of the Company, on the recommendation of the Nomination and Remuneration Committee (NRC) and the Board of Directors, at their 39 Annual General Meeting held on 26 September, 2025 approved the reappointment of Mr. Tirthnath Indranath Jha, as a Director (Category Non-executive, Independent) not liable to retire by rotation, to hold the office for a fixed second term of five (5) consecutive years, from 3 September, 2025 till 2 September, 2030.

4. Mr. Sajiv Dhawan (DIN-00160085), ceased to be the Director (Category - Non-executive, Independent) of the Company effective 10 August, 2025, due to resignation on personal reasons/grounds i.e. his other pre-occupations and other personal commitments. He has also confirmed that there were no other material reasons for his resignation other than those provided.

5. CA Neelam Kothari (DIN - 06709241), ceased to be the Director (Category - Non-executive, Independent) of the Company effective 20 September, 2025, due to completion of her second term.

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

1. Pursuant to Section 152 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended), Mr. Ravi Bhushan Bhardwaj (DIN - 00054700), Director (Chairman) [Category - Non-executive Director & Promoter] of the Company, who retires by rotation and being eligible, offers himself for re-appointment. The Board recommends his re- appointment as a Director (with existing category) of the Company for the approval of the Members at the ensuing 40 Annual General Meeting in the interest of the Company.

2. Pursuant to provisions of Section 196, 197, 198, 203 and other applicable provisions, if any, of the Act, Schedule V to the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modifications and/or re-enactment thereof for the time being in force) and the Listing Regulations, the Board of Directors at its 207 Meeting held on 11 August, 2026, on the recommendation of the Nomination and Remuneration Committee (NRC) of the Board, has approved and recommended the reappointment of Mr. Ramchandra Vasant Dalvi (DIN - 00012065), as a Director (Technical), designated Key Managerial Personnel of the Company liable to retire by rotation, for a further period of three (3) years effective 14 August, 2026, in the interest of the Company.

3. The term of Mr. Mukund Prabhakar Chaudhari (DIN: 05339308), as an Additional Director (Category Non-executive, Independent) of the Company, appointed by the Board in its meeting dated 11 August, 2026, is expiring at the conclusion of the ensuing 40 Annual General Meeting of the Company. The Board recommends appointment of Mr. Mukund Prabhakar Chaudhari, as an Independent Director [Category Non-executive, Independent] not liable to retire by rotation, to hold the office for a fixed first term of Forty (40) months i.e. from 11 August, 2026 up to 10 December, 2029, in the interest of the Company. The Company has received a self-declaration from Mr. Mukund Prabhakar Chaudhari to the effect that he meets the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.

The Company has also received the self-declaration/s from Mr. Ravi Bhushan Bhardwaj, Mr. Ramchandra Vasant Dalvi and Mr. Mukund Prabhakar Chaudhari, inter-alia to the effect that, (i) they were/are not disqualified from being appointed as the Director of the Company in terms of the provisions of Section 164 of the Act and have submitted their consent to act as the Director of the Company; (ii) they were or are not debarred from holding the office of the Director pursuant to any order of the SEBI or such other authority in terms of SEBI's Circular No. LIST/COMP/14/2018-19 dated 20 June, 2018 on the subject "Enforcement of SEBI Orders regarding appointment of Directors by listed Companies".

The Company has received a notice in writing under Section 160 of the Act from Members proposing the candidatures of Mr. Ramchandra Vasant Dalvi and Mr. Mukund Prabhakar Chaudhari for the office of the Directors of the Company.

Except the above, there is no change in the composition of the Board of Directors for being placed before the Members for their approval.

The Company has received the necessary declaration from each Independent Director that they meet the criteria of independence as provided in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations. In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience(including proficiency in terms of Section 150(1) of the Companies Act, 2013 and applicable rules thereunder) in respect of all Independent Directors on the Board.

12. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year 2025-26 under review, 5 meetings of the Board of Directors of the Company were held on (i) 27 May, 2025, (ii) 21 July, 2025, (iii)11 August, 2025, (iv) 13 November, 2025 and (v) 13 February, 2026, the details of which are given in the Corporate Governance Report, which forms part of the Board's Report.

13. DIRECTORS' RESPONSIBILITY STATEMENT

The Board of Directors confirms:-

i. That in the preparation of the Annual Accounts (Financial Statements), the applicable Accounting Standards had been followed along with proper explanation, relating to material departures; ii. That the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that Financial Year;

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

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

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

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

14. COST RECORDS

Pursuant to the amendment to the Companies (Accounts) Rules, 2014 vide MCA's Notification dated 31 July, 2018, the Board of Directors do confirm that the maintenance of cost records as specified by the Central Government under Sub-section (1) of Section 148 of the Act, is required by the Company and accordingly, such accounts and records are made and maintained by the Company for the Financial Year 2025-26.

15. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the Company has prepared the Business Responsibility and Sustainability Report for the year 2025-26, which forms a part of this Annual Report and has also been disseminated on the Company's website and can be accessed at www.sunflagsteel.com.

16. COMMITTEE(S) OF THE BOARD

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

17. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's policy is to have an appropriate mix of executive, non-executive and independent directors to maintain the independence of the Board, and separate its functions of governance and management. As of 31 March, 2026, the Board had Eight (8) members, two of whom are executive directors, two non-executive and non-independent directors and four independent directors. One of the independent directors on the Board is woman. The details of Board and Committee composition, tenure of directors, areas of expertise and other details are available in the Corporate Governance Report that forms part of the Board's Report.

The policy of the Company on directors' appointment and remuneration, including the criteria for determining qualifications, positive attributes, independence of a director and other matters, as required under sub-section (3) of Section 178 of the Act, is available on our website at https://sunflagsteel.com/wp-content/uploads/2020/02/Remuneration-Policy-SISCO.pdf

18. RISK MANAGEMENT

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

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

19. AUDITORS

I. STATUTORY AUDITORS AND THEIR REPORT

M/s. Lodha & Co. LLP, Chartered Accountants, New Delhi (ICAI Firm Registration No. 301051E/E300284; Peer Review Certificate No. 016523), were appointed as the Statutory Auditors of the Company at the 39 Annual General Meeting (AGM) of the Company held on 26 September, 2025 for a fixed first term of 5 years from the conclusion of 39 Annual General Meeting until the conclusion of the 44 Annual General Meeting to be held for the Financial Year 2029-30, in place of M/s. NSBP & Co., Chartered Accountants, New Delhi (ICAI Firm Registration No. 001075N, Peer Review Certificate No. 009284), whose term of appointment has been competed on the conclusion of 39 Annual General Meeting.

The Independent Auditors' Report (Standalone and Consolidated) submitted by M/s. Lodha & Co. LLP, Chartered Accountants, New Delhi, the Statutory Auditors to the Members of the Company for the Financial Year 2025-26 do not contain any qualification. The observations made by the Statutory Auditors in their report are self-explanatory and have also been further amplified in the Notes to the Financial Statements and as such, do not call for any explanations.

During the Financial Year 2025-26 under review:

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

b) the observations made by the Statutory Auditors on the financial statements for the Financial Year 2025-26 under review including the affairs of the Company are self-explanatory and do not contain any qualification, reservation, adverse remarks or disclaimer.

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

II. COST AUDITORS AND THEIR REPORT

Pursuant to Section 148 of the Companies Act, 2013, the Board of Directors, on the recommendation of the Audit Committee of the Company, has appointed M/s. G. R. Paliwal & Company, Cost Accountants, Nagpur (Firm Registration No. 100058), as the Cost Auditors of the Company, for the Financial Year 2026-27 and has also recommended their remuneration to the Members of the Company for their ratification at the ensuing 40 Annual General Meeting of the Company.

Pursuant to the applicable provisions of the Act read with the Rules made there under, the Statements, Annexures, Proforma, annexed to the Cost Audit Report in Form No. CRA-3, required to be submitted by the said Cost Auditors with the Central Government in e-Form No. CRA-4, for the Financial Year 2024-25 was filed vide SRN AB6464420 dated 04 September, 2025.

Moreover, the Statements, Annexures, and Proforma annexed to the Cost Audit Report in Form No. CRA-3, to be submitted by the said Cost Auditors with the Central Government in e-Form No. CRA-4, for the Financial Year 2025-26, do not contain any adverse remarks and qualifications, is self-explanatory and do not call for any further explanation/s by the Company.

III. SECRETARIAL AUDITORS AND THEIR REPORT

M/s. Mukesh Parakh & Associates, Company Secretaries, Nagpur [Unique Identification Number S2015MH344000], who were appointed as the Secretarial Auditors of the Company, for the Financial Year 2024-25, resigned as the Secretarial Auditor of the Company, effective 03 June, 2025, due to personal reasons.

Thereafter, the Board of Directors of the Company at its 202 Meeting held on 21 July, 2025 has appointed M/s. DM & Associates Company Secretaries LLP, Mumbai [Firm Registration Number L2017MH003500 and Peer Review Certificate No 6584/2025], as the Secretarial Auditors of the Company for the Financial Year 2024-25.

M/s. DM & Associates Company Secretaries LLP, Mumbai [Firm Registration Number L2017MH003500 and Peer Review Certificate No 6584/2025], were appointed as the Secretarial Auditors of the Company at the 39 Annual General Meeting (AGM) of the Company held on 26 September, 2025 for a fixed first term of 5 years from the conclusion of 39 Annual General Meeting until the conclusion of the 44 Annual General Meeting to be held for the Financial Year 2029-30.

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

IV. INTERNAL AUDITORS AND THEIR REPORT

M/s. Pricewaterhousecoopers Services LLP (LLPIN: AAI-8885) were appointed as the 'Internal Auditors' of the Company for the Financial Year 2025-26.

The Internal Audit finding/s and report/s submitted by M/s. Pricewaterhousecoopers Services LLP (LLPIN: AAI-8885), from time to time, during the Financial Year 2025-26 put before the Audit Committee of the Company, do not contain any adverse remarks and qualifications and they are self-explanatory and do not call for any further explanation/s by the Company.

Further, the Board of Directors at its meeting held on 13 February, 2026, on the recommendation of the Audit Committee, has reappointed M/s. Pricewaterhousecoopers Services LLP (LLPIN: AAI-8885) as the 'Internal Auditors' of the Company for the Financial Year 2026-27.

20. PERSONNEL / PARTICULARS OF EMPLOYEES

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

a) The ratio of the remuneration of each Executive Director to the median remuneration of the employees of the Company for the Financial Year 2025-26 ended on 31 March, 2026:

b) The percentage increase in remuneration of each Director, Chief Executive Officer, Chief Financial Officer, Head Company

Secretary in the Financial Year 2025-26 ended on 31 March, 2026:

c) The percentage increase in the median remuneration of employees in the Financial Year 2025-26 ended 31 March, 2026: 8.82%.

d) The number of permanent employees on the rolls of Company as on 31 March, 2026: 1318.

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

l The average percentage increase in the salary of the Company's employee excluding Managerial Personnel was 14.51%. The percentage increase in salary of Managerial Personnel during the period was 22.76%.

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

g) Statement of Particulars of Employees as per Section 197 of the Act, read with rule 5(2) and (3) of the Companies (Appointment and

Remuneration of Managerial Personnel) Rules, 2014 as amended, and forming part of the Directors' Report for the year ended 31 March, 2026 is as below:

Note :

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

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

iii* Mr. Dev Dyuti Sen joined the Company effective from 14 November, 2025 and Mr. Brijendra Kumar Tiwari ceased w.e.f. 31 October, 2025; hence, their remuneration is only for the part of the Financial Year.

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

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

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

The particulars of Loans, Guarantees or investments given or made by the Company under Section 186 of the Act, are disclosed in the Notes to the Financial Statements of the Company for the Financial Year 2025-26.

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

a) Details of contracts or arrangements or transactions not at arm's length basis: There are no such transactions and hence not applicable.

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

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

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

Note: Particulars of contracts or arrangements or transactions with related parties are not given in Form AOC-2, during the Financial Year 2025-26 under review as the Company has not entered into any contracts or arrangements or transactions which are material in nature or are not at arm's length.

24. LISTING OF SHARES

The Equity Shares in the capital of the Company continued to be listed with and actively traded on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The listing fees for the Financial Year 2026-27 have been paid to both the Stock Exchanges (BSE and NSE) within the stipulated time.

25. DEMATERIALISATION OF SHARES

As on 31 March, 2026, there were 11,30,73,176 Equity Shares dematerialised through depositories viz. National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL), which represents about 62.74% of the total issued, subscribed and paid-up capital of the Company.

26. ANNUAL RETURN

Pursuant to the provisions of Sections 92(3) and 134(3)(a) of the Act, the draft Annual Return for the Financial Year 2025-26 is available on the Company's website www.sunflagsteel.com and same can be accessed at the web-link:https://sunflagsteel.com/wp-content/uploads/2026/07/Annual-Return-March-2026.pdf

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

The detailed information related to the dividend declared by the Company in the previous year/s together with the amount remained unpaid or unclaimed, its transfer to the Investor Education and Protection Fund are provided in the Notes annexed to the Notice convening the 40 Annual General Meeting of the Company. To avoid repetition, the Shareholders of the Company are advised to refer the said Notes for detailed information on the subject matter.

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

Ministry of Corporate Affairs (MCA) has notified "Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016" (the Rules), which have come into force from 7 September, 2016. The said Rules, amongst other matters, contain provisions for transfer of all shares in respect of which dividend has not been claimed for 7 consecutive years or more, in the name of 'IEPF Demat Account'. Accordingly, the Company has transferred the shares in respect of whose dividend has not been claimed st for 7 consecutive years or more, to the IEPF Demat Account. Resulting as of 31 March 2026, IEPF holds 43,64,550 Equity Shares constituting about 2.42% of the total issued, subscribed and paid-up capital. The voting rights on these shares shall remain frozen till the rightful owner of such shares claim the Equity Shares from the IEPF Authority. The IEPF Authority has laid down the detailed procedure for claiming both Dividend as well as Equity Shares, by the Shareholders/ Investors of the Company.

29. CORPORATE GOVERNANCE

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

Your Board of Directors are pleased to report that your Company has complied with the SEBI Guidelines on Corporate Governance for the Financial Year 2025-26 relating to the Listing Regulations. Certificates from CS Amit Rajkotiya, Company Secretary, Nagpur [Membership No. FCS-5561, COP No. 5162], confirming compliance with conditions as stipulated under Listing Regulations and Non-disqualification of Directors are annexed to the Corporate Governance Report, which forms an integral part of the Board's Report of the Company.

30. CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

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

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

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

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

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

i. Code of Conduct of Business Principles and Conduct;

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

iii. Code for Vigil Mechanism - Whistle Blower Policy;

iv. Code for Independent Directors; v. Corporate Social Responsibility (CSR) Policy;

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

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

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

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

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

xi. Nomination and Remuneration Policy;

xii. Dividend Distribution Policy; xiii. Sunflag Iron and Steel Company Limited Business Responsibility and Sustainability Policy; and xiv. Sunflag policy for Quality, Environment, Health and Safety, Stakeholders' Engagement, Human Rights, Waste Management, Biodiversity and Grievance Redressal of the Company.

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

32. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

HUMAN RESOURCE

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

The emphasis on the people of the organisation stems from the belief that human resource is the key factor to achieve success in any business. Sunflag Steel has always been a front runner in its human resource practices with many pioneering policies in the area of human resources. Our human resource practices are based on the values of Sunflag Steel with emphasis on respect, dignity, unity and fostering a culture of togetherness. Employees' competencies and skills were enhanced by imparting several internal and external trainings. Various measures were taken to improve motivation level of each employee. As a result, many improvements were seen, where initiatives were undertaken to bring about a change in culture and mind set of the workforce of the Company.

PREVENTION OF SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE

Sunflag Iron and Steel Company Limited ("the Company") has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and an Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees, etc.) are covered under this Policy. Pursuant to the amendment to the Companies (Accounts) Rules, 2014 vide MCA's Notification dated 31 July, 2018, the Board of Directors do confirm that the Company has complied with provisions relating to the constitution of an Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 [14 of 2013].

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

HEALTH AND SAFETY

Health and safety remains the Company's highest priority and aspires to be the steel industry benchmark in health & safety. The Health & Safety of the workforce is of utmost importance and hence the need was felt for the same to percolate from the top leadership in the form of learning and experience-sharing. Several initiatives were undertaken during the Financial Year to improve health and safety standards of the Company. Steps were taken to improve competency and capability for hazard identification and risk management. Further, departmental safety coordinator/s are at place for monitoring and training on safety related matters at shop-floor. The Safety Committee and Apex Committee are available for periodical review on health, safety and environment of all department/s of the Company. As a part of regular assignment, training programs on safety are being organised for New Joinee, as well as for regular employees and contract labour/s, and as a part of this, mock-drills are conducted for practical exposure to meet emergency need on quarterly basis. The Safety signage, SOPs / Work Instructions are displayed at various designated locations at the Works and Offices of the Company.

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

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

33. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has in place adequate internal control systems and procedures commensurate with the size and nature of business. These procedures are designed to ensure: a) that all assets and resources are used efficiently and are adequately protected; b) that all the internal policies and statutory guidelines are complied with; and c) that the accuracy and timing of financial reports and management information is maintained.

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

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

35. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

During the Financial Year 2025-26, no significant and material order is passed by any of the Regulators or Courts or Tribunals impacting the going concern status and the Company's operations in future. As such, no specific details are required to be given or provided.

36. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors confirms that the Company, has duly complied with the applicable Secretarial Standards, namely Secretarial Standard-1 ('SS-1') on Meetings of the Board of Directors, Secretarial Standard-2 ('SS-2') on General Meetings and Secretarial Standard-3 ('SS-3') on dividend during the Financial Year 2025-26.

37. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

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

38. OTHER DISCLOSURES

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

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

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

d) During the FY2025-26, the Company has complied with all the applicable provisions relating to the Maternity Benefit Act, 1961.

39. ENCLOSURES

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

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

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

d) Annexure IV : Certificate on Prevention of Sexual Harassment of Women at the Workplace and its Prohibition and Redressal.

40. ACKNOWLEDGEMENT

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

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

For and on behalf of the Board