unimode overseas ltd share price Directors report

To,

The Members,

Your Directors are pleased to present the 35th Annual Report along with the Standalone and Consolidated Audited Financial Statements of your Company for the Financial Year ended on March 31, 2023.

financial results

The Company has adopted Indian Accounting Standards (Ind AS) from 1st April, 2017. The figures for the Year ended 31st March, 2023 are also Ind AS compliant.

The financial highlights are depicted below:

( In Lacs)

PARTICULARS	Standalone		Consolidated
	Year Ended 31.03.2023	Year Ended 31.03.2022	Year Ended 31.03.2023	Year Ended 31.03.2022
Revenue from operations
Other Income	240.56	240.00	1777.47	2033.26
Total Income	40.91	43	40.36	40.59
Total Expenditure	281.47	283.00	1817.83	2073.85
Profit / (Loss) before Finance Cost, Depreciation	487.54	531.10	2053.43	2275.52
& Amortization and Tax Expenses	180.63	187.23	170.52	256.87
Finance Cost	37.54	0.26	37.57	0.27
Depreciation & Amortization	349.16	435.07	368.55	458.27
Profit/(Loss) Before Tax	(206.07)	(248.10)	(235.60)	(201.67)
(i) Current Tax	--	--	--	12.00
(ii) Deferred Tax	45.06	61.75	(49.60)	(60.99)
(iii) Earlier period tax (written back)	--	--	0.10	(0.12)
Total Tax (i+ii)	45.06	61.75	(49.50)	(49.11)
Profit /(Loss) after Tax	(161.01)	(186.35)	(186.11)	(152.56)
Other Comprehensive Income	10.83	6.51	10.83	6.51
Items that will not be reclassified to profit and loss	15.27	(1.90)	15.27	(1.90)
Total Comprehensive Income	(150.19)	(181.73)	(175.28)	(147.94)

Note: The above figures are extracted from the standalone and consolidated financial statements.

PERFORMANCE HIGHLIGHTS

The key aspects of revenue and profits for the financial year 2022-23 from the Companys Standalone and Consolidated Results are as follows:

REVENUE STANDALONE

Our total income on a Standalone basis for the financial year is Rs 240.56 lacs which is same as Rs 240.00 lacs in the previous year. Net loss for the year decreased from Net loss for the year decreased from Rs 186.35 lacs to Rs 161.01 lacs in the current year.

REVENUE CONSOLIDATED

Our total income on a consolidated basis decreased to Rs 1777.47 lacs from Rs 2033.26 lacs in the previous year. Net loss for the year increased from Net loss for the year increased from Rs 152.56 lacs to Rs 186.11 lacs in the current year.

STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK

With a view to curb the invariable expenditure and also generate a fixed monthly income, the Company decided and entered into a Dry Lease Agreement with its Group Company viz. M/s. N K Proteins Private Limited on 15^th April, 2019, whereby the Factory Premise of the Company situated at Kadi Mehsana has been given on lease to M/s. N K Proteins Private Limited. The said agreement was extended for a further period of one year vide supplemental agreement dated 1^st April, 2023.

CHANGE IN NATURE OF BUSINESS, IF ANY

There was no change in the nature of business activity of the Company during the year under review.

SUBSIDIARY/ JOINT VENTURE COMPANIES\ASSOCIATES

Your Company has three wholly owned subsidiaries as on 31^st March, 2023. The Board of Directors also reviewed the affairs of the subsidiary companies. In accordance with the provisions of Section 129(3) of the Companies Act, 2013, we have prepared Consolidated Financial Statements of the Company and its Subsidiaries, which forms part of this Annual Report. The accounts of Joint Venture i.e. AWN Agro Private Limited has not been consolidated for the current year. The reason for nonconsolidation is due to discontinuation of control on the management and financial affairs of the Joint Venture Company.

Further a statement containing the salient features of the financial statements of our Subsidiary Companies and Joint Venture Company in the prescribed format AOC-1 is appended as "Annexure-A" to the Boards report.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as at March 31,2023 stood at?6,00,99,000. During the year under review, the Company has neither issued any shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2023, none of the Directors of the Company hold any instruments convertible into equity shares of the Company.

DIVIDEND AND RESERVES

Your Directors express their inability to recommend any dividend for the year 2022-23 owing to accumulated losses of the Company. In view of this, your Company was unable to transfer any funds to the Reserves and Surplus Account.

FIXED DEPOSITS

The Company has neither invited nor accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 from the public during the year ended March 31,2023. There were no unclaimed or unpaid deposits as on March 31,2023.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188.

All related party transactions entered into during FY 2022-23 were on an arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (the Act) and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

All related party transactions are placed before the Audit Committee for review and approval of the Committee and also to the Board for approval. The policy on materiality of related party transactions and dealing with related party transactions as approved by the Board is available on the Companys website.

The details of related party transactions entered into by the Company are provided in Form AOC-2 given as "Annexure B" of Directors Report. There are no materially significant related party transactions made by the Company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict with interest of the Company at large. The Company has developed a Related Party Transactions Policy through Standard Operating Procedures for the purpose of identification and monitoring of such transactions.

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

There are no other material changes that would affect the Financial position of the Company.

CORPORATE GOVERNANCE

All the mandatory provisions of Corporate Governance as prescribed in Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to the Company as it does not fall under the criteria of its applicability pursuant to Regulation 15 of SEBI Listing Regulations.

MANAGEMENT DISCUSSION AND ANALYSIS REPORTS

In terms of the Regulation 34(e) read with Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, MDA covering details of Risks and Concerns, Internal Control Systems and their Adequacy, Discussion on Financial Performance with respect to Operational Performance etc. for the year under review is set out in this Annual Report as "Annexure C".

PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 of Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is annexed as "Annexure D"

Further no employee of the Company was employed during the year drawing remuneration exceeding the limits as prescribed under Rule 5(2) of the (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Hence the information under Rule 5(2) is not applicable.

BOARD DIVERSITY

The Company recognizes and embraces the benefits of having a diverse Board of Directors and believes that increasing diversity at Board level is an essential element for maintaining a competitive advantage in the complex business that it operates.

The Board of Directors has also adopted a policy on Board Diversity which sets out the approach to diversify the Board of Directors. The Board Diversity Policy is available at our website: https://nkindustriesltd.com/investor/.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given any loans or guarantees during the year under review within the purview of section 186 of the Companies Act, 2013. The details of the investments made by Company are given in the notes to investments in the financial statements.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declaration from each Independent Director of the Company under section 149 (7) of the Companies Act, 2013 that he/she meets the criteria of independence laid down in section 149 (6) of the Companies Act, 2013.

BOARD EVALUATION

The Companies Act, 2013 states that the formal annual evaluation needs to be made by Board of its own performance and that of its Committees and individual Directors, Schedule IV of the Companies Act, 2013 states that performance evaluation of the Independent Directors shall be done by the entire Board of Directors, excluding the director being evaluated.

The evaluation of all the Directors and the entire Board was conducted based on the criteria and framework adopted by the Board.

The Board approved the evaluation results as allotted by the Nomination and remuneration committee. The Companies Act, 2013 states that the formal annual evaluation needs to be made by board of its own performance.

APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152(6) of the Companies Act and Articles of Association, Mr. Nimesh Patel (DIN: 00240621) Chairman & Managing of the Company, shall retire by rotation and being eligible offers himself for reappointment at the ensuing Annual General Meeting of the Company.

Further during the year under review and upto the date of this report the following changes occurred in the composition of Board and Key Managerial Personnel of the Company:

1. Ms. Pooja H Khakhi resigned w.e.f 20^th September, 2022 as the Company Secretary and Compliance Officer of the Company.

2. Mr. Divyesh Aswar has been appointed as the Company Secretary and Compliance Officer of the Company by the Board in the meeting held on 7^th November, 2022.

3. Mr. Nimesh Patel is re-appointed as Chairman & Managing Director of the Company subject to the approval of Shareholders in this Annual General Meeting w.e.f 1^st April, 2023 upto 31^st March, 2028.

Save and except aforementioned, there were no other changes in the Board and Key Managerial Personnel of the Company during the year.

BOARD MEETINGS/ DETAILS OF OTHER MEETINGS

The Board of the Company is endlessly focused for the growth, expansion of the Company. It is further involved to strategize the optimum utilization of the available resources and to reduce cost so as to improve the profitability of the Company and also to generate additional opportunities for better performance as a whole.

The Management of the Company is also striving towards becoming a 100% compliant entity and to improve its investor relations by sharing latest and correct information with its stakeholders and thereby creating a transparent atmosphere.

The Board met 6 times during the year under review viz. on 19^th May, 2022, 02^nd August, 2022, 24^th August, 2022, 07^th November 2022, 03^rd February, 2023 & 20^th March, 2023. The Board held one meeting in each quarter and the gap between any two meetings was not more than one hundred and twenty days as prescribed under the Companies Act, 2013.

Details of the Directors, their positions, attendance record at Board meetings and last Annual General Meeting held and convened during the financial year are as follows:

Sr. Name of directors No.	Designation	Number of Meetings Attended / Total Meetings held during the year 2022-23	Attended AGM on 19th September, 2022
1. Mr. Nimish K. Patel	Chairman and Managing Director	6/6	V
2. Mr. Hasmukh K. Patel	Whole Time Director	6/6	V
3. Mr. Snehal Patel	Independent Director	6/6	V
4. Ms. Mansheel Kaur *	Independent Director	6/6	V

*Ms. Mansheel Kaur has Resigned as Independent Director on the Board of the Company w.e.f 03^rd August, 2023.

INDEPENDENT DIRECTORS MEETING

As per Schedule IV of the Companies Act, 2013, a separate meeting of Independent Director was held on 7^th November, 2022 at office of the company situated at Ahmedabad to discuss the agenda items as required under the Companies Act, 2013.

COMMITTEES MEETING

As on 31^st March, 2023 the Board had three committees i.e. Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. All committees are properly constituted with proper composition of Independent Directors as mentioned in relevant provisions of Companies Act, 2013.

A. AUDIT COMMITTEE AND ITS MEETINGS:

Audit Committee met 4 times during the year under review on 19^th May, 2022. 2 ^nd August, 2022. 07^th November, 2022 & 03^rd February, 2023.

Constitution of Audit Committee was as per the following:

Sr. No. Name of the Director	Status in Committee	DIN	Total Meetings Attended/ Total Meetings Held
1. Mr. Snehal Patel	Chairman & Member	01655758	4/4
2. Mr. Hasmukh Patel	Member	06587284	4/4
3. Ms. Mansheel Kaur	Member	09184066	4/4

B. NOMINATION AND REMUNERATION COMMITTEE AND ITS MEETINGS:

Nomination and Remuneration Committee met 4 times during the year under review on 19^th May, 2022, 02^nd August, 2022, 07^th November, 2022 and 20^th March, 2023.

Constitution of Nomination and Remuneration Committee was as per the following:

Sr. No. Name of the Director	Status in Committee	DIN	Total Meetings Attended/ Total Meeting Held
1. Mr. Snehal Patel	Chairman & Member	01655758	4/4
2. Mr. Hasmukh K Patel	Member	06587284	4/4
3. Ms. Mansheel Kaur	Member	09184066	4/4

C. STAKEHOLDERS RELATIONSHIP COMMITTEE AND ITS MEETING:

Stakeholders Relationship Committee met 4 times during the year under review on 19^th May, 2022, 27^th July, 2022, 07^th November, 2022 & 03^rd February, 2023.

Constitution of Stakeholders Relationship Committee was as per the following:

Sr. Name of the Director No.	Status in Committee	Nature of Directorship	Total Meetings Attended/ Total Meeting Held
1. Mr. Snehal Patel	Chairman & Member	Independent Director	4/4
2. Mr. Hasmukh K Patel	Member	Whole Time Director	4/4
3. Ms. Mansheel Kaur	Member	Independent Director	3/4

D. OTHER INFORMATION RELATED TO BOARD COMMITTEES:

Name of the Committee	Highlights of Duties, Responsibilities and Activities
Audit Committee	• All recommendations made by the audit committee during the year were accepted by the Board.
	• The Company has adopted the Vigil mechanism for Directors and employees to report concerns about unethical behavior, actual or suspected fraud, or violation of the Companys Code of Conduct and Ethics.
	• In accordance with the requirements of the Companies Act, 2013, the Company has formulated policies on related party transactions. The policies, including the Vigil Mechanism Policy, are available on our website:- https://nkindustriesltd.com/investor/
Nomination and Remuneration Committee	• The committee oversees and administers executive compensation, operating under a written charter adopted by our Board of Directors.
	• The committee has designed and continuously reviews the compensation program for our Directors with business objectives and to link compensation with the achievement of measurable performance goals.
	• The nomination and remuneration committee has framed the nomination and remuneration policy. The said policy is available on the website of the Company https://nkindustriesltd.com/investor/
Stakeholders Relationship Committee	• The Committee reviews and ensures to redress investor grievances.
	• The Committee noted that all the grievances of the shareholders during the year have been resolved.

NOMINATION AND REMUNERATION POLICY

The Policy of the Company on Directors appointment and remuneration including criteria for determining qualifications, positive attributes, Independency of a Director and other matters provided under sub-section (3) of section 178 of The Companies Act, 2013, adopted by the board is available on the website i.e. https://nkindustriesltd.com/investor/.

We affirm that the remuneration paid to the Directors is as per the term laid out in the Nomination and remuneration policy of the company.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, which states that?

a) in the preparation of the annual accounts for the year ending March 31,2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) 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 and loss of the company for that period;

c) 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;

d) the directors had prepared the annual accounts on a going concern basis;

e) the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal Financial Controls are adequate and were operating effectively; and

f) The Directors have devised proper system to ensure compliance with the provisions of all applicable laws and that such system were adequate and operating effectively.

AUDITORS

i. Statutory Auditors

M/s Parikh and Majmudar, Chartered Accountants, (Firm Registration No: 107525W), were appointed as the Statutory Auditors of the Company for a consecutive period of 4 years from 31st AGM till the conclusion of 35th AGM. Further, M/s Parikh and Majmudar, Chartered Accountants, (Firm Registration No: 107525W), Chartered Accountants, the current Statutory Auditors of the Company is about to completed their two terms of five consecutive years as Statutory Auditors of the Company. M/s Parikh and Majmudar, Chartered Accountants, are not statutorily eligible for re-appointment with effect from the conclusion of ensuing 35th Annual General Meeting to be held for F.Y 2022-2023.

Accordingly, on completion of term of appointment of Statutory Auditors at the conclusion of the 35th AGM and pursuant to provisions of Sections 139, 141 & 142 of the Act and applicable Rules and other applicable provisions of the Act, the Board of Directors at its meeting held on May 2, 2023 has approved the appointment of M/s Pankaj R. Shah & Associates, Chartered Accountants (FRN- 107361W), as Statutory Auditors for five consecutive years from conclusion of the 35th Annual General Meeting to be held for F.Y 2022-2023 till the conclusion of the 40th Annual General Meeting of the Company, subject to the approval of shareholders of the Company at this ensuing AGM.

Further the Company has received written consent(s) and certificate(s) of eligibility from the proposed Statutory Auditors - M/s Pankaj R. Shah & Associates, Chartered Accountants (FRN- 107361W), Chartered Accountant in accordance with Sections 139 and 141 of the Act and applicable Rules and other provisions of the Act and holds a valid certificate issued by the Peer Review Board of the ICAI. They have further confirmed that they are not disqualified to be appointed as the Statutory Auditors in terms of the Act and Rules made thereunder.

There are certain qualifications made by the Auditors in their Standalone Report for which the Board of Directors hereby give its comments/explanation as under:

I. National spot Exchange Limited (NSEL) has served a notice to N K Proteins Private Limited (Formerly known as N K Proteins Limited) who was a Trading and Clearing Member at NSEL and N K Industries Limited was only a client Company of Trading Member i.e. N K Proteins Limited. As regards, the balances of trade receivables and trade payables arising out of the transactions through NSEL platform, the same cannot be confirmed pursuant to the pendency of litigations and as the matter is still pending before the respective authorities.

• Further, the Home Department, Government of Maharashtra has issued a notification under the MPID Act, 1999 securing the attachment of Land & Building and Plant & Machinery of the Company. Against this the Company had challenged the notification issued by Home department, Government of Maharashtra, before the Honble High Court of Gujarat. The Honble Gujarat High Court had disposed off the application of the Company vide its order dated 29th March 2017.Against the said order the Company had preferred a Special Leave Petition before the Honble Supreme Court of India. The Honble Supreme Court of India had disposed off the Special Leave Petition on 17/04/2017, with an observation to file an application before the Honble Bombay High Court. The Company has filed petition before the Honble Bombay High Court in June 2017. Besides the above, the Company has also filed its objections against the attachment notification before the Designated Spl MPID Court, Mumbai. The matter is subjudice.

II. With regard to search and seizure carried out by the Directorate of Enforcement, Government of India on 30.05.2018 on the group company NKPPL, the Company along with group Company and Promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Honble High Court of Delhi and the Honble High Court has set aside the show cause notice. Further against the attachment of the assets of the Company, the Company has issued fresh show cause dated 30/08/2018 and the Company has filed an appeal before the PMLA Applellate Tribunal, Delhi.

III. Government of Maharashtra has filed supplementary charge sheet dated 25th December, 2018, under the MPID Act against the Company and the Chairman. The Company has complied with all the summons under the said charge sheet and the matter was adjourned to 7th November, 2019 and further adjourned to various dates and further adjourned to various dates and now the matter was further adjourned to 25th May, 2023.

In addition to the above, the Auditors have made observations under the head "Emphasis of Matter", reply to the said observations is as under:-

1. We draw attention to Note 33 to the Standalone Ind AS Financial Statements and according to the same, the company is having accumulated losses (after taking into account the balance of reserves) of Rs 345.80 Crores as at 31.03.2023 and the net worth of the company is negative However, as per the business plan and future cash flow projections submitted by the management to us and accepted by us. The Company is making sincere efforts for the revival of the Business & the management is confident to recover the losses through improved profitability in foreseeable future. Therefore no provision for the impairment has been made and accounts for the year have been prepared on "going concern basis." Further the above projections also contains business plan/ projected cash flow prepared by the management and accepted by us with respect to the subsidiaries

company ,the management is confident to also revive the operations of the loss making subsidiary companies, hence no provision for impairment in the fair value of the investment made in the said subsidiary companies has been made in the books of accounts.

2. Attention is invited to note 39 of the Standalone Ind AS Financial Statements which states that the Income Tax Department had carried out survey u/s 133 of the Income tax Act, 1961(the IT Act) on the company along with other group companies during FY 2013-14 and had ordered a special audit of the books of the company u/s 142(2A) of the IT Act, 1961, for AY 2011-12 & A.Y 12-13. The department had raised a demand of Rs 133 Crores (Rs 6.63 Crores for A.Y 10-11, Rs57.07 crores for A.Y 11-12, Rs 60.33 Crores for A.Y 12-13, Rs 7.97 Crores for A.Y 2013-14& Rs.0.86 Crores for A.Y2014-15) on the company for the aforesaid assessment years and the said demand has been disputed by the company and the company has initiated appellate proceedings before appropriate authorities. The said amount has been shown as contingent liability under Note No. 27 of the notes forming part of standalone financial statements. Further ,Income tax department has passed an attachment order on 22.04.2015 & 14.08.15 by which it has attached properties of the company in pursuant to a demand, the details of the properties attached which are in the name of company is as under:

• 803, Manas Complex, Opp Star Bazaar, Nr Jodhpur Cross road, Satellite, Ahmedabad 380015.

• 603, Manas Complex, Opp Star Bazaar, Nr Jodhpur Cross road, Satellite, Ahmedabad 380015.

• Land, situated at Survey Nos.719, 720, 721, 732/1, 732/2, 733, 741, 743, 744, 745, Kadi Thol Road, Village

Kadi Kasba ,taluka- Kadi, District Mehsana-382715.

• Factory Building Situated at survey No 745, Kadi Thol Road, Village Kadi Kasba , taluka- Kadi, District Mehsana-382715.

3. Attention is invited to note 40 of the Standalone Ind AS Financial Statements and according to it the company has received a notice from Income tax department for the attachment of its registered office at 7th Floor, Popular House, opp Sales India, Ashram Road, Ahmedabad 380009 with respect to demand raised by them as detailed in note 39 of the financial statements.

4. Attention is invited to note 30 of the Standalone Ind AS Financial Statements and according to which a Search & Seizure action U/S 132 of the Income Tax Act took place on 24.2.99. The Income Tax department had raised demand of Rs. 33.12 Crores vide the block assessment Order dt. 30.4.2001. In case of the company, the Honble Income Tax Appellate Tribunal (ITAT), Ahmedabad has subsequently given partial relief to the extent of Rs. 28.84 Crores. The company had preferred an appeal before the Honble High Court of Gujarat against the order of Honble ITAT, Ahmedabad. The Honble Gujarat High Court vide its order dated 20th June,2016 had given partial relief on some of the grounds and had also dismissed some of the grounds of the company. Against the grounds dismissed by Honble High Court of Gujarat, the company had further preferred an appeal before Honble Supreme Court of India, and the Honble Supreme Court of India vide order dated 16th January,2017 had dismissed the appeal of the Company. The Company had already provided an amount of Rs 2.88 Crore against the grounds dismissed by Honble ITAT, Ahmedabad during F.Y 2002-03 as well as Rs 1.27 Crores was provided in the books of accounts for the Assessment year in question for the interest payable up to 31 -03-2005 during F.Y 2004-05. However in view of the management and on the basis of the Judgment of the Honble Gujarat High Court, the amount provided/paid by the company towards total demand shall result in refund to the company. Pending effect of the various orders of adjudicating authorities by the Income Tax Department, the Company is yet to provide final entries in its books of accounts even during the year under review. In view of non-availability of order of the appeal effects from the Income Tax Department, we are unable to opine on the same.

5. Attention is invited to note 41 of the Standalone Ind AS Financial Statements and according to which the Sales Tax Department has completed the assessment proceedings for various assessment years and raised demand of Rs. 33.14 Crores (net of recovery) for the earlier financial years. The company has not made any provision for the above demand raised by the sales tax authority in its books of accounts as in view of the Management, the said demand shall not withstand before the Appellate Authorities and the company has already preferred an appeal before the appellate authority which is still pending. In view of the above, the said amount has been shown as contingent liability under Note No. 28 of the notes forming part of standalone financial statements..

6. Attention is invited to Note 45 of the Standalone Ind AS Financial Statements which states that the balance confirmation from the suppliers, customers as well as to various loans or advances given have been called for, but the same are awaited till the date of audit. Thus, the balances of receivables, capital advances, trade payables as well as loans and advances and certain bank balances have been taken as per the books of accounts submitted by the company and are subject to confirmation from the respective parties.

7. As per the information obtained from the website of the Ministry of Corporate Affairs (MCA), a suit has been filed against the company and its officers u/s 383A(1A), 372A(9), 58A(6)(A)(I) of the Companies Act, 1956 for the year 2016. As informed by the management, the company is having basic information about such suit filed as reflected on the website of the MCA. However, the company does not have any communication of such proceedings against the company and its officers. As the matter is still subjudice, we are unable to quantify the final liability and its impact, if any, on the company and its officers. (Refer Note No 42 of the standalone Ind AS financial statements)

The qualification made by the Auditors in their Consolidated Report for which the Board of Directors hereby give its comment/explanation as under

IV. The National Spot Exchange Limited (NSEL) has initiated recovery proceedings against the Group Company N K Proteins Private Limited (Formerly known as N K Proteins Limited) who was a trading and clearing member at NSEL. As regards the said recovery proceedings initiated by NSEL and has also made Tirupati Retail (India) Private Limited, subsidiary Company a party to the said proceedings, the matter is sub-judice and still pending before the respective Authorities.

Their report on Consolidated Financial Statements emphasizes on some additional points which the management has to reply as under:

1. National spot Exchange Limited (NSEL) has served a notice to N K Proteins Private Limited (Formerly known as N K Proteins Limited) who was a Trading and Clearing Member at NSEL and N K Industries Limited was only a client Company of Trading Member i.e. N K Proteins Limited. As regards, the balances of trade receivables and trade payables arising out of the transactions through NSEL platform, the same cannot be confirmed pursuant to the pendency of litigations and as the matter is still pending before the respective authorities.

2. Further, the Home Department, Government of Maharashtra has issued a notification under the MPID Act, 1999 securing the attachment of Land & Building and Plant & Machinery of the Company. Against this the Company had challenged the notification issued by Home department, Government of Maharashtra, before the Honble High Court of Gujarat. The Honble Gujarat High Court had disposed off the application of the Company vide its order dated 29^th March 2017. Against the said order the Company had preferred a Special Leave Petition before the Honble Supreme Court of India. The Honble Supreme Court of India had disposed off the Special Leave Petition on 17/04/2017, with an observation to file an application before the Honble Bombay High Court. The Company has filed petition before the Honble Bombay High Court in June 2017. Besides this, the Company has also filed its objections against the attachment notification before the Designated Special MPID Court, Mumbai the matter is subjudice.

3. With respect to point no.2 of qualified opinion of Auditors Report, it is hereby clarified that it is hereby clarified that the Company along with Group Company and promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Honble High Court of Delhi and the Honble High Court has set aside the said show cause notice. The Director of Enforcement has attached assets of the company, group company NKPL and the promoters of the company by issuing a fresh show cause notice dated 30/08/2018 and the company has filed an appeal before PMLA Appellate Tribunal, Delhi. Still the matter is sub-judice.

4. With regard to the supplementary charge sheet filed the Company has complied with the summons dated 19/03/2019 to remain present before the MPID Court on 26/04/2019. The matter is now adjourned to 25/05/2023, but new date of hearing is not yet updated. Therefore the matter is sub-judice.

Clarification with regard to the remark in point no. (i)(c) of the CARO (Report) annexed with the Auditors Report on standalone financial statements.

i. With reference to the said remark it is to be clarified that the Company is in process of transferring the properties as mentioned by the Auditors in their report in its name.

ii. 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 has appointed, M/s Chirag Shah & Associates, Practicing Company Secretary (FCS- 5545, COP 3498) Ahmedabad to conduct a Secretarial Audit of the Companys Secretarial and related records for the year ended 31st March, 2023.

The Report on the Secretarial Audit for the year ended 31st March, 2023 is annexed herewith as "Annexure E" to this Boards Report. There were no qualifications/ observations in the report.

iii. Cost Auditor

Provisions Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the Cost Audit records are not applicable to the company during the year 2021-22 and 2022-23. However, The Board of Directors on the recommendation of the Audit Committee has appointed M/s. N D Birla & Co., Cost Accountants, Ahmedabad as the Cost Auditors of the Company to carry out audit of cost accounting records of the Company for above financial year and have obtained the report for the year 2021-22. But their appointment is not proposed to be made for the year 2023-24 as the same is not applicable to the Company as per the criteria laid down in the rule 3 and rule 4 of with the Companies (Cost Records and Audit) Amendment Rules 2014.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS

An order dated 23/05/2022 was passed by Office of the Commissioner of Customs (Export) for duty forgone amount of Rs. 1.32 Crore on the goods imported duty free against the 12 Licenses issued to the Company, plus applicable interest thereon under the provision of Customs read with conditions of Bond executed in terms of Section 143 of the Customs Act, 1962. However, the Company has filed a writ petition before Bombay High Court Challenging the Order on the grounds of Limitation that after a period of 25 Years no inquiry can be made or can only be made after giving appropriate opportunity to the Petitioners

i.e. Company as the matter is 25 years old and licenses were issued during the period from 16.02.1996 to 27.03.1997. In the above matter the company has received positive response from the Bombay High Court, that has impugned the above order on 18/11/2022 and accordingly the above matter has been quashed and set aside.

EXTRACTS OF ANNUAL RETURN

{In pursuance to Section 92 and 134 (3) (a) of the Companies Act, 2013 ("the Act") read with relevant Rules thereunder}

The Annual Return of the Company for the Financial Year 2021-2022 in the prescribed format in Form MGT-7 is available on the website of the Company at: https://nkindustriesltd.com/investor/. And the Annual Return for the FY 2022-23 shall be uploaded on the above link once the same is filed on MCA website.

CORPORATE SOCIAL RESPONSIBILITY

As per the provisions of the Companies Act, 2013 "Corporate Social Responsibility" (CSR), was not applicable to the Company during the year under review. Therefore, the Board of Directors has dissolved the Corporate Social Responsibility Committee (CSR) in its meeting held on 19^th April, 2018.

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has adopted a Vigil Mechanism/ Whistle Blower Policy to report genuine concerns or grievances. The Vigil Mechanism has been placed on the Website of the Company https://nkindustriesltd.com/investor/.

INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence the Company has appointed Independent Internal Auditor M/s. ADPRDP & Associates, Chartered Accountants to submit Internal Audit reports to the Audit Committee of the Board.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of Internal Auditor, Audit Committee undertakes corrective action, if any in their respective areas and thereby strengthens the controls. Significant audit observations and recommendations along with corrective actions, if any, thereon are presented to the Audit Committee of the Board.

ENVIRONMENT, HEALTH AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Company is committed to health and safety of its employees, contractors and visitors. The Company is conducting operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

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

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

INDUSTRIAL RELATIONS

The Company is committed to nurturing, enhancing and retaining top talent through superior Learning and Organizational Management. During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

STATUTORY INFORMATION

i. Conservation of Energy:

a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

b) No specific investment has been made in reduction in energy consumption.

c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

d) Since the Company does not fall under the list of industries, which should furnish this information in Form-A as annexed to the aforesaid Rules, the question of furnishing the same does not arise.

lYear2022-23	Amount in Rs
Foreign Earnings	-
Foreign Outflow	-

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of the Company prepared in accordance with Indian Accounting Standards (Ind AS) 110 issued by the Ministry of Corporate Affairs, forms part of this Annual Report.

PREVENTION OF INSIDER TRADING

The Company has adopted a Code of Conduct for Prevention of Insider Trading with a view to regulate trading in securities by the Directors and designated employees of the Company. The Code requires pre-clearance for dealing in the Companys shares and prohibits the purchase or sale of Company shares by the Directors and the designated employees while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed. The Board is responsible for implementation of the Code.

RISK MANAGEMENT POLICY

All the mandatory provisions of Corporate Governance as prescribed in Regulations 17 to 27 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are not applicable to your Company as the Company does not fall under the criteria of its applicability pursuant to Regulation 15 of SEBI Listing Regulations. However, all the Provisions, Rules and Regulations under the Companies Act, 2013 related to the Corporate Governance are applicable to the extent and have been comply by the Company.

LISTING OF SHARES

The Companys shares are listed at NSE Limited & BSE Limited and the listing fee for the year 2023-2024 has been duly paid. REPORTING OF FRAUDS

There was no instance of fraud during the Financial Year 2022-23, which were required by the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

DETAILS OF APPLICATION MADE OR PROCEEDINGS PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE 2016:

During the year under review, there were no applications made or proceedings pending in the name of the Company under the Insolvency and Bankruptcy Code, 2016.

DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS:

During the year under review, there has been no one time settlement of loan taken from Banks and Financial Institutions. CAUTIONARY STATEMENT

Statements in this Directors Report describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Companys operations include raw material availability and its prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

ACKNOWLEDGEMENT

Your Directors would like to express their appreciation for the assistance and co-operation received from the Companys customers, vendors, bankers, auditors, investors and government bodies during the year under review.

Your Directors place on record their appreciation of the contributions made by employees at all levels.

For and on behalf of the Board of Directors

Sd/-

Nimish K. Patel Chairman & Managing Director

DIN:00240621

Date: 25/08/2023 Place: Ahmedabad