tulsyan nec ltd share price Directors report

Dear Members,

Your Directors take immense pleasure in presenting the Seventy Sixth (76th) Boards Report of your Company along with the audited standalone and consolidated financial statements and the Auditors Report of the Company for the financial year ended March 31, 2023.

FINANCIAL HIGHLIGHTS:

(Rs. In Lakhs)

	Standalone		Consolidated
Particulars	FY 2023	FY 2022	FY 2023	FY 2022
Total Revenue	95,260.56	75,239.43	102,383.49	85,004.06
Total Expenses	97,211.05	76,683.09	104,591.05	86,325.97
Profit before tax and exceptional items	(1,950.49)	(1,443.66)	(2,207.55)	(1,321.90)
Exceptional Items	0.00	(80,437.80)	(21,087.13)	(80,437.80)
Current Tax	0.00	0.00	0.00	0.00
Tax Expenses Deferred Tax	5,723.47	0.00	5762.38	29.39
Income Tax Earlier Years	(67.14)	0.00	(67.14)	0.00
Profit for the year	24,792.98	78,994.14	24,574.82	79,086.51
Other comprehensive income, net	(16.61)	(56.37)	(16.61)	(56.37)
Total comprehensive income	24,776.37	78,937.77	24,558.21	79,030.13
Earnings per Basic share (EPS)	149.79	536.87	148.48	537.50
Diluted	149.79	536.87	148.48	537.50

STANDALONE AND CONSOLIDATED FINANCIAL STATEMENTS

The standalone and consolidated financial statements of the Company have been prepared in accordance with the Indian Accounting Standards (‘Ind AS) as notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended. The financial highlights and the results of the operations, including major developments have been further discussed in detail in the Management Discussion and Analysis Report.

RESULTS OF OPERATIONS AND STATE OF COMPANYS AFFAIRS AND FUTURE OUTLOOK

During the Financial Year ended March 31, 2023, India continues to be the second largest producer of crude steel. Steel Industry faced with increased input costs which resulted in increased selling prices subdued the demand by the consumers.

Despite such difficulties faced, the turnover of the Company increased to Rs.95,045.82 Lakhs from Rs.75,231.82 Lakhs which is 20.85% increase compared to the turnover of the previous year mainly on account of the improvement increased sales. TMT sales increased from 103389 Tons to 136987 Tons registering a growth of 32%. Profit after tax during the year is Rs.24,792.98 Lakhs as compared to profit after tax of Rs. 78,994.14 Lakhs in the previous year. The profit is on account of writing back of interest and principal on the term loans and working capital as the company entered into a compromise settlement settled with lenders during the year under review.

Debt Reduction:

During the year 2021-22 and 2022-23, the company entered into compromise settlement with the Banks in which the unpaid interest outstanding and some portion of the Term loans was waived by the Banks. The company on March 28, 2023 repaid the entire amount of compromise settlement in accordance with the terms of the settlement. Waiver of interest and the principal has been recognised as Exceptional Income in the financial statements.

Corporate Events:

• Issue of Secured Non-Convertible Debentures: During the year, the company has issued 2,690 Secured Non-convertible Debentures of Rs.10 Lakhs each to Alternate investment Funds amounting to Rs.269 Crores. The debentures so issued are secured by Exclusive hypothecation of the present and future current assets of the Company and Exclusive charge on the land, manufacturing plant and other fixed assets of the Company (including all non-core assets), Pledge of promoters shares and further secured by the personal guarantee of the promoters. The Charges in favour of the debenture trustee is being registered with the registrar of companies during the FY 23-24. The particulars of these debentures are given in the notes forming part of accounts.

• Issue of Equity Shares on Preferential basis: During the financial year, the Company has issued, subscribed and allotted 1,666,666 (Sixteen Lakhs Sixty Six Thousand Six Hundred and Sixty Six) equity shares of face value of Rs. 10 each on preferential basis, at a price of Rs. 36 including a premium of Rs. 26 per Equity Share aggregating upto Rs. 6,00,00,000 (Rupees Six Crores) to India Special Assets Fund III (a scheme of ISAF III) & ISAF III Onshore Fund (a scheme of Edelweiss Credit Opportunities Trust), both advised by Edelweiss Alternative Asset Advisors Limited and both are Category II Alternative Investment Funds ("AIFs").

As on the date of the Balance sheet, the funds raised through Preferential allotment have not been utilised and are held in a deposit account with a Bank. During the financial year 2023-24, the funds will be utilised towards part finance capital expenditure.

Future Outlook: Steel

Planned Capital Expenditure:

The company is in the process of implementing a Capex program at an estimated cost of Rs.18 Crores which will debottleneck production processes to enhance the billet production capacity by about 36000 tons per annum. Further, the expenditure is being incurred to increase the power supply voltage of the unit to 110 KVA which will reduce cost of operations. With enhanced own production of billets the company will reduce dependence on the market for the billets and substantial requirement of the company will be met by its own means. This process also enhances the efficiency of Direct billet charging to rolling mill which will saves power costs and also improves profitability. The project is expected to be completed in FY 2023-24.

Installation of Shredding Machine:

Company has installed a Shredding machine which shreds the bundled scrap before it is consumed which removes non-metal particles from the scrap and cuts it into small pieces. This process reduces the process time and improves efficiency.

Increase in Turnover:

With enhanced billet capacity the company will improve its TMT sales which hitherto were a constraint. Steel Marketing team has been strengthened for a better market outreach and also improve the Dealers network.

Introduction of Welded Wire Mesh:

The company has created a facility for manufacture of Welded Wire Mesh and has introduced to the Market. The product aims to expedite all construction processes. The Weld Mesh is strong, long lasting, and rust-resistant and the product consists of rebars (the size and sections can be customized according to the end users requirement) that are welded together to form a grid-like pattern. The Company offers cold rolled wire mesh from 4.7mm to 12mm, and hot rolled wire mesh from 5.5mm to 16mm. Our weld mesh has a maximum width of 3 meters and maximum length of 8 meters.

As mentioned earlier, the aim is to make the construction process more efficient and effective. The Weld Mesh reduces the construction time as it eliminates activities like cutting, marking, and spacing of bars. A revolutionary solution for the industry is to evolve.

Few advantages are:

• Instant and optimized savings in costs, manual labor, and time.

• Reduction in scrap.

• Odd sections can be provided as per requirement, so there will be steel saving.

• Thinner steel can provide greater strength due to welding,

• Better precision with less manpower.

• Better output.

• Stronger bonding involving the rebar, due to welding.

Impact of Economy and Industry and other factors relating to performance of steel:

Government policies and initiatives affect the working of the sector and the Government policies and the initiatives on the steel sector are as follows:

National Steel Policy 2017:

National Steel Policy (NSP) 2017 aims to increase focus on expansion of MSME sector, improve raw material security, enhance R&D activities, reduce import dependency and cost of production, and thus develop a "technologically advanced and globally competitive steel industry that promotes economic growth" eyeing self-sufficiency in production, developing globally economical steel manufacturing capabilities by facilitating investments and cost efficient productions with adequate availability of raw materials. With focus on R&D, the technology would be of utmost focus over the next decade and MSME steel plants would be the key drivers to achieve the additional capacity required for the Indias consumption led growth and improvement in the overall productivity and quality.

TULSYAN NEC LIMITED

Expected Outcomes of the policy:

The other expected outcomes are as under:

• India to be world leader in energy efficiency and sustainability.

• Cost-effective and quality steel destination.

• Attain global standards in Industrial Safety & Health.

• Substantially reduce the Carbon footprint of the Industry.

• Domestically meet the entire demand of high grade automotive steel, electrical steel, special steel and alloys.

Policy for providing preference to Domestically Manufactured Iron and Steel:

The Government had introduced DMI&SP Policy on 8th May, 2017 to provide preference to domestically produced iron & steel material in Government tenders. Further, to fine tune this objective the Policy was revised on 29th May, 2019 and on 31st December, 2020 respectively.

Steel Import Monitoring System (SIMS) for import data dissemination:

With a view to ensure prior availability of granular data like end-use, IS grade etc. regarding steel import in public domain, before the entry of such imports in India, a Steel Import Monitoring System (SIMS) was notified by DGFT on 5th September, 2019 and became effective from 1st November, 2019. SIMS requires the importer to submit advance information online for import of all steel tariff lines at 8-digit HS Code level wherein they get an automatic registration number for carrying out imports. A token registration fee has been prescribed for this purpose. SIMS initially covered only 284 HS codes of Chapter 72, 73 and 86 but has since been extended to all items under Chapter 72, 73 and 86 of ITC HS codes. SIMS is very useful for the Indian domestic steel industry in responding to the market conditions in a more dynamic manner.

Enhancing the scope of the Quality Control Orders on Steel:

Ministry of Steel gave major thrust to Steel Quality Control Order (SQCO) from 2015 onwards thereby banning substandard/ defective steel products to ensure that only quality steel conforming to the relevant BIS standards is made available to the end users.

Recent Initiatives:

• Ensuring raw material security for the Steel sector.

• MoU with Russia: A MoU has been signed between Ministry of Steel and the Russian Federation on 14th October, 2021 for cooperation in the field of coking coal, used for steel making. The MoU will benefit the Indian steel sector by diversifying the sources of coking coal which may lead to reduction in input cost for the steel players due to long term commitment of supply of high quality coking coal to India (up to 40 MT till 2035).

• DRI Making through Coal Gasification in Iron & Steel Making.

Key initiatives for Atmanirbhar Bharat:

• Production Linked Incentive (PLI) Scheme for Specialty Steel

Power Division Performance and Outlook:

The power sector especially the thermal power sector where our company is invested in, is facing big constraints on account high coal prices at which the operations are unviable. However, Indias dependence on Thermal power about 50% currently, will keep the sector going in the near future. The market dynamics would reconcile to a sustainable level of costs and revenue of produces and consumers overtime subject however to robust government policies.

Future outlook:

Since end of June 2023, the international coal prices have softened and are quickly reaching back to their original positions. Company estimates that the coal prices would remain stable at the reduced levels and the company can improve its utilisation levels thereupon. Outlook from Sep 2023 onwards is expected to be favourable.

Synthetic Division – Performance and Outlook:

The Synthetic Division performance was affected due to recession in the international markets due to which the turnover was down by about 40%. The markets have shown improvement recently and the future looks to be good at present as the demand and prices seem to improve.

Impact of the Covid-19 Pandemic:

The Company has overcome the effects of Covid-19 impact and has reached normalcy.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year alongwith their status as at the end of the financial year:

• The company has not made any application under Insolvency and Bankruptcy code 2016 for resolution during the year under review nor any application for insolvency proceeding has been made against the company.

• Union Bank of India had instituted insolvency proceedings against the company under section 7 of IBC which has since been withdrawn upon compromise settlement entered into with the Bank.

• The company is a respondent in an application filed by the IRP of Cauvery Power Generation Chennai Private Limited seeking payment of Rs.174.01 Lakhs being the value of coal supplied by the said company to us. Whereas supply so made by the said company was towards amount due to the company. The application is pending with the NCLT and we are confident that the claim is not maintainable and is not a preferential payment.

Details of difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the banks or financial institutions along with the reasons thereof:

The company entered into a Compromise settlement with all the Banks. The Value of Securities at the time of Grant of the Facilities by the Bank with whom the company has entered into a compromise settlement was Rs.406.94 Crores and the value of the same securities at the time of settlement stood at Rs.426.91 Crores. The net increase in the overall security value is on account of appreciation in the valuation of land, reduction in value of Machinery and building on account of depreciation/wear and tear and reduction in respect of stocks and book debtors is on account of losses incurred in the last five years.

CREDIT RATINGS

Company has not issued any instruments during the year requiring credit rating. Credit rating exercise was carried out for issue of Listed Secured Non-Convertible Debentures and rating issued for the proposed instrument was "ACUITE C". However, later the Company dropped the proposal of listing of the debentures.

DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

The Company doesnt have any Joint Venture and Associate Companies. However, the Company had 2 wholly owned subsidiaries during the FY 2022-23. Color Peppers Media Private Limited, wholly owned subsidiary, is under the process of voluntary liquidation. Therefore, as on March 31, 2023, the Company has only one wholly owned subsidiary i.e. Chitrakoot Steel and Power Private Limited. Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing the salient features of the financial statements of Subsidiary in the prescribed Form AOC-1 is annexed to this Report as ‘Annexure-A. The statement also provides the details of the performance of the Subsidiary Company, financial position of the subsidiary and its contribution to the overall performance of the Company during the period under report. In accordance with the provisions of Section 136 of the Companies Act, 2013 and the amendments thereto, read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations), the audited financial statements, including the consolidated financial statements and related information of the Company and financial statement of the subsidiary company will be available on our website at www.tulsyannec.in.

The Company has also formulated a policy for determining ‘material subsidiaries pursuant to the provisions of the SEBI Listing Regulations. The policy is available on the website of the Company at www.tulsyannec.in.

A report of the salient features and a summary of the financial performance of the subsidiary is presented as below:

Chitrakoot Steel and Power Private Limited

Chitrakoot Steel and Power Private Limited is a wholly owned subsidiary of Tulsyan NEC Limited. It was incorporated on October 21, 2003 and is engaged in the business of manufacturing of Sponge Iron.

Chitrakoot Steel and Power Private Limited registered a total revenue of Rs. 95,25,67,123 and a net loss of Rs. 2,95,96,943 in the FY 22-23 as against a total revenue of Rs. 1,01,15,97,909 and a net profit of Rs. 1,04,90,537 in FY 21-22.

PERSONNEL & INDUSTRIAL RELATIONS

Overall, the industrial relations in all our manufacturing units are harmonious and cordial in nature. Your Company strictly believes that maintaining cordial industrial relations is the key to progress of the firm, individuals, management, industry and nation.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company have occurred between March 31, 2023 and the date of this report.

DIVIDEND

During the financial year, the Company has not recommended any payment as dividend to its shareholders.

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO IEPF

Pursuant to the provisions of Section 124(5) of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, all dividends which remains unpaid or unclaimed for a period of seven years from the date of their transfer to the unpaid dividend account are required to be transferred by the Company to the Investor Education and Protection Fund ("IEPF"), established by the Central Government. Further, as per IEPF Rules, the shares on which dividend has not been paid or claimed by the members for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Further, as per Rule 6(8) of IEPF Rules, all benefits such as bonus shares, split, consolidation except right issue, accruing on shares which are transferred to IEPF, shall also be credited to the demat account of the IEPF authority.

The shareholders may note that there are no further unpaid or unclaimed dividend amounts/shares left with the Company for transfer to the IEPF Authority.

SHARE CAPITAL

The detailed capital structure of the Company as on March 31, 2023 is as follows:

Authorized Share Capital

The Authorized Share Capital of the Company is Rs.36,00,00,000/- (Rupees Thirty Six Crores) divided into 2,60,00,000 Equity Shares of Rs.10/- each and 1,00,00,000 6% Non-Convertible Redeemable Preference Shares of Rs.10/- each.

The Authorised Share Capital of the Company was reclassified in the Extra Ordinary General Meeting held on March 23, 2023.

Issued Share Capital

The Issued Share Capital of the Company is Rs.25,50,96,660/- (Rupees Twenty Five Crores Fifty Lakhs Ninety Six Thousand Six Hundred and Sixty) divided into 16,666,666 Equity Shares of Rs.10/- each and 88,43,000 6% Non-Convertible Redeemable Preference Shares of Rs.10/- each.

Subscribed and Paid-up Share Capital

The Subscribed and Paid-up Share Capital of the Company is Rs.25,39,44,292/- (Rupees Twenty Five Crores Thirty Nine Lakhs Forty Four Thousand Two Hundred and Ninety Two) divided into 16,461,407 Equity Shares of Rs.10/- each, 1,10,444 Equity Shares of Rs.3/- each (Partly Paid-up), 94,815 Equity Shares of Rs.6/- each (Partly paid-up) and 88,43,000 6% Non-Convertible Redeemable Preference Shares of Rs.10/- each. During the financial year under review, the Company has issued, subscribed and allotted 1,666,666 (Sixteen Lakhs Sixty Six Thousand Six Hundred and Sixty Six) equity shares of face value of Rs. 10 each on preferential basis, at a price of Rs. 36 including a premium of Rs. 26 per Equity Share aggregating upto Rs. 6,00,00,000 (Rupees Six Crores) to India Special Assets Fund III (a scheme of ISAF III) & ISAF III Onshore Fund (a scheme of Edelweiss Credit Opportunities Trust), both advised by Edelweiss Alternative Asset Advisors Limited and both are Category II Alternative Investment Funds ("AIFs"). The listing approval for such shares is pending with the BSE Limited.

TRANSFER TO RESERVES

No amount is proposed to be transferred to reserves for the financial year ended March 31, 2023.

DEPOSITS

During the financial year, the Company did not raise any funds which could be classified within the ambit of the term "Deposits" under Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 and Circulars as amended from time to time.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments pursuant to the provisions of Section 186 of the Companies Act, 2013, for the FY 22-23, are disclosed under the notes to the Financial Statements forming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

In terms of the provisions of the Companies Act, 2013 read with the Rules made thereunder, as amended, the Annual Report on CSR activities in the format prescribed under Annexure II of the said Rules is annexed to this Report as ‘Annexure-B.

The CSR Policy including the composition of the CSR committee is uploaded on the Companys website at www.tulsyannec.in .

Profit after tax on Standalone basis computed as per section 198 of the Companies Act, 2013, being negative, the Company is not required to spend any amount on CSR activities.

RISK MANAGEMENT POLICY

The Company has developed and implemented a risk management policy including identification therein of elements of risk, if any, which in

TULSYAN NEC LIMITED

the opinion of the Board may threaten the existence of the Company. The Board and the Audit Committee periodically undertake a review of the major risks affecting the Companys business and suggests steps to be taken to control and mitigate the same.

VIGIL MECHANISM

The Vigil Mechanism / Whistle Blower Policy as envisaged in the Companies Act, 2013, the rules prescribed thereunder, and the SEBI Listing Regulations is implemented through the Companys Whistle Blower Policy to enable the Directors, employees and all stakeholders of the Company to report genuine concerns, to provide for adequate safeguard against victimisation of persons who use such mechanism and make provision for direct access to the Chairman of the Audit Committee.

Whistle Blower Policy of the Company is available on the Companys website at www.tulsyannec.in/investors and can be accessed therein.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of provisions of Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report for the financial year ended March 31, 2023 is given under separate section and forming part of this Annual Report.

CORPORATE GOVERNANCE REPORT

Your Company is committed to maintain the highest standards of corporate governance. We believe in adherence to good corporate practices, implement policies and guidelines and develop a culture of the best management practices and compliance with the law coupled with the highest standards of integrity, transparency, accountability and ethics in all business matters to enhance and retain investor trust, long-term shareholder value and respect minority rights in all our business decisions.

A separate section on Corporate Governance as stipulated under Schedule V (C) of the SEBI Listing Regulations forms part of this Report. The Corporate Governance Report along with the requisite certificate from the statutory auditors of the Company confirming compliance with the conditions of corporate governance as stipulated under SEBI Listing Regulations forms part of this Annual Report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

There were no significant related party transactions entered between the Company, Directors, Management and their relatives, except for those disclosed in the financial statements. All the contracts/arrangements/transactions entered by the Company with the related parties during FY 2022-23 were in the ordinary course of business and on an arms length basis, and whenever required the Company has obtained necessary approval as per the related party transaction policy of the Company.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) along with the justification for entering into such a contract or arrangement in Form AOC-2 does not form a part of this Report. The Company has formulated the policy on ‘Materiality of Related Party transactions and on dealing with Related Party Transactions, and the same is available on the website of the Company at: www.tulsyannec.in/investors. The details of related party disclosures forms part of the notes to the Financial Statements provided in the Annual Report.

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

The particulars as prescribed under section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 is annexed to this Report as ‘Annexure-C.

PARTICULARS OF DIRECTORS AND EMPLOYEES

A statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this report and is annexed to this Report as ‘Annexure-D.

Further, a statement containing particulars in terms of Section 197(12) of the Companies Act, 2013 read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is not applicable to the Company as no employees are drawing the remuneration in excess of the limits prescribed under the said rules.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(3)(c) read with Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that: a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures; b) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the Company for that period; c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) they have prepared the annual accounts on a going concern basis; e) they have laid down internal financial controls based on the internal controls framework established by the Company, which are adequate and are operating effectively; and f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys current policy is to have an appropriate mix of Executive and Non-Executive cum Independent Directors to maintain the independence of the Board and separate its functions of governance and management. For the purpose of selection of any Director, the Nomination and Remuneration Committee identifies persons of integrity who possess relevant expertise, experience and leadership qualities required for the position. A potential board member is also assessed based on independence criteria defined in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI Listing Regulations. In accordance with Section 178(3) of the Companies Act, 2013 and Regulation 19(4) of the SEBI Listing Regulations, as amended from time to time, and on recommendation of the Nomination and Remuneration Committee, the Board had adopted a remuneration policy for Directors, Key Managerial Personnel, Senior Management and other employees. This policy is available on the website of the Company at – www.tulsyannec.in/investors.

DECLARATION BY INDEPENDENT DIRECTORS

All Independent Directors of the Company have submitted the requisite declarations confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulation 16 and 25(8) of the SEBI Listing Regulations, as amended. The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Companys Code of Conduct. They have further confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties and that they are independent of the management. Further, the Independent Directors have also submitted their declaration in compliance with the provision of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, which mandated the inclusion of an Independent Directors name in the data bank of the Indian Institute of Corporate Affairs (‘IICA) for a period of one year or five years or life time till they continue to hold the office of an independent director.

In the opinion of the Board, all the Independent Directors have integrity, expertise and experience.

BOARD DIVERSITY

The Company recognises and embraces the importance of a diverse board in contributing to its success. Adequate diversity on the Board is essential to meet the challenges of business globalisation, rapid deployment of technology, greater social responsibility, increasing emphasis on corporate governance and enhanced need for risk management. The Board enables efficient functioning through differences in perspective and skill, and fosters differentiated thought processes at the back of varied industrial and management expertise, gender, knowledge and geographical backgrounds. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board. The policy is available at the website of the Company at www.tulsyannec.in/investors.

BOARD EVALUATION

Pursuant to the provisions of Section 134 of the Companies Act, 2013 and Regulation 19 of the SEBI Listing Regulations, the annual performance evaluation of the Board, Board level Committees and individual directors was conducted during the year, in order to ensure that the Board and Board level Committees are functioning effectively and demonstrating good governance. For the FY 2022-23, the Board had undertaken this exercise through self-evaluation questionnaires.

The evaluation was carried out based on the criteria and framework approved by the Nomination and Remuneration Committee. A detailed disclosure on the parameters and the process of Board evaluation has been provided in the Report on Corporate Governance which forms part of this Annual Report.

DETAILS OF DIRECTORS AND KEY MANAGERIAL PERSONNEL: Directors

As on March 31, 2023, the Board comprised of 6 (six) members including 1 (one) woman member. The Board has an appropriate mix of Executive Directors and Non-Executive cum Independent Directors, which is in compliant with the Companies Act, 2013, the SEBI Listing Regulations and is also aligned with the best practices of Corporate Governance.

Appointment / Re-appointment

During the year, at the 75th AGM of the Company held on September 30, 2022:

• Mr. Sanjay Agarwalla who was liable to retire by rotation and being eligible, re-appointed as a Director liable to retire by rotation.

• Mr. Lalit Kumar Tulsyan was re-appointed as a Managing Director (Executive Chairman) of the Company for a further period of five years w.e.f. July 11, 2022.

• Mr. Sanjay Tulsyan was re-appointed as a Managing Director of the Company for a further period of five years w.e.f. September 30, 2022.

• Mr. Sanjay Agarwalla was re-appointed as a Whole Time Director of the Company for a further period of five years w.e.f. September 21, 2022.

The Board at its meeting held on June 21, 2023, upon recommendation of Nomination and Remuneration Committee, had approved the following appointment(s) / re-appointment(s) and separate Resolution(s) shall be placed before the members for their approval at the ensuing 76th AGM of the Company:

• Mr. Lalit Kumar Tulsyan is liable to retire by rotation at the ensuing AGM and being eligible, seeks re-appointment as a Director liable to retire by rotation.

• The present term of Mr. Manogyanathan Parthasarathy as Independent (Non-Executive) Director of the Company will be expired on November 13, 2023 and being eligible, seeks re-appointment for a further period of five consecutive years w.e.f. November 13, 2023.

• The appointment of Mr. Ravi Muthusamy as an Independent (Non-Executive) Director of the Company will be regularised for a term of five consecutive years w.e.f. June 21, 2023.

• The appointment of Mr. S Chandrasekaran as a Whole Time (Executive) Director of the Company will be regularised for a term of five consecutive years w.e.f. June 21, 2023.

In the opinion of the Board, all the Directors, as well as the directors proposed to be appointed / re-appointed possess the requisite qualifications, experience, expertise and hold high standards of integrity and relevant proficiency.

None of the Directors of the Company are disqualified as per the provisions of Section 164(2) of the Companies Act, 2013. Your Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and the SEBI Listing Regulations.

Key Managerial Personnel

The Key Managerial Personnel(s) of the Company as on March 31, 2023 are:

• Mr. Lalit Kumar Tulsyan, Managing Director (Executive Chairman);

• Mr. Sanjay Tulsyan, Managing Director;

• Mr. Sanjay Agarwalla, Whole Time Director;

• Mr. Shantha Kumar RP, Chief Financial Officer; and

• Mrs. Parvati Soni, Company Secretary & Compliance Officer.

There were no changes in the composition of Board of Directors and Key Managerial Personnels of the Company during the FY 2022-23.

MEETINGS OF THE BOARD AND ITS COMMITTEES

The meetings of the Board are scheduled at regular intervals to discuss and decide on matters of business performance, policies, strategies and other matters of significance. The schedule of the meetings is circulated in advance, to ensure proper planning and effective participation. In certain exigencies, decisions of the Board are also accorded through circulation.

During the financial year 2022-23, the Board met 8 (eight) times virtually on May 30, 2022; July 08, 2022; August 12, 2022; November 14, 2022; February 25, 2023; March 16, 2023; March 28, 2023 and March 31, 2023 respectively. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Companies Act, 2013. Detailed information regarding the meetings of the Board and its Committees are included in the report on Corporate Governance, which forms part of this Annual Report.

ANNUAL RETURN

An extract of Annual Return in Form MGT-9 as per the provisions of Section 134(3)(a) and 92(3) of the Companies Act, 2013, is available on the website of the Company at www.tulsyannec.in.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS

During the financial year, there are no significant and material orders passed by the regulators or courts or tribunals, impacting the going concern status of the Company and its operations in future.

INTERNAL FINANCIAL CONTROL

The company has proper and adequate system of internal controls commensurate with its size and nature of operations to provide reasonable assurance that all assets are safeguarded, transactions are authorized, recorded and reported properly and applicable statutes, the code of conduct and corporate policies are duly complied with.

AUDITORS Statutory Auditors

M/s. CNGSN & Associates LLP, Chartered Accountants, Chennai (Firm ICAI Registration No: 004925S/S200036) were re-appointed as the Statutory Auditors of the Company for a term of 5 (five) consecutive years, to hold office from the conclusion of the 74th AGM held on September 30, 2021 till the conclusion of the 79th AGM of the Company, at such remuneration as may be decided by the Board in consultation with the Statutory Auditors of the Company. The Auditors Report on the financial statements of the Company for the financial year ended March 31, 2023 contains the following observations:

Sl. Qualification, Reservation or Adverse Remark or Disclaimer made by the Statutory Auditors No.	Managements Reply
1 In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion section of our report, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended,("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, profit, (changes in equity) and its cash flows for the year ended on that date.	In the opinion of the management the company is a going concern which is evident from the operational improvement and the profitability achieved during the year under reporting.
	Standard on Auditing (SA 570), Going Concern issued by the Institute of Chartered Accountants of India lists events or conditions such as financial, operating and other conditions that are to be considered for determining whether such factors cast significant doubt about companys ability to continue as going concern.
Basis for Qualified Opinion:	Management has evaluated its respective position in respect of each of the Financial, Operating and other risk factors as enumerated in the said standard and finds that none of the risk factors are in existence.
In our opinion and based on the information and explanation provided to us, as on 31st March 2022, the companys ability to continue as a going concern was dependent on the successful implementation of Compromise Settlement obligations with the existing bankers.	Therefore, the basis of qualification is not on any of the risk factors covered under the standard but outside the standard.
During the current financial year, the Company has repaid the entire loans availed from Banks and have obtained confirmation of payment as per the compromise settlement entered into with them. The company has settled all its dues as per the terms of the Compromise Settlement with its bankers and does not expect any additional obligation out of the Compromise Settlement. The management also strongly believes that the Company will be able to implement the recommendation of the techno economic due diligence study report in all aspects and make a complete turnaround.	Auditors have stated that "Companys ability to continue as a going concern is essentially contingent on future events and successful implementation of the techno economic due diligence study report, alternative business plans and further inflow of funds for the capex and working capital requirements of the Company.
	Techno Economic Due dilligence report is the basis on which the company has attracted investment and could raise funds to clear its dues to the Banks, fund its capex and working capital requirement.
We draw attention to Note No. 60 to the standalone financial statements relating to material uncertainty relating to going concern which have been more fully described in the Material Uncertainty Relating to Going Concern section of this report.	As on the Date of this report company has already prepaid / redeemed in advance Secured Non-Convertible Debentures by Rs.49.50 Crores.
Those matters indicate that the Companys ability to continue as a going concern is essentially contingent on future events and successful implementation of the techno economic due diligence study report, alternative business plans and further inflow of funds for the capex and working capital requirements of the Company.	Accordingly the management does not concur with the inference drawn in this regard.

The Auditors Report is enclosed with the financial statements forming part of the annual report.

Reporting of Fraud by Auditors

During the year, the statutory auditors have not reported to the Audit Committee any material fraud on the Company by its officers or employees under Section 143(12) of the Companies Act, 2013, the details of which need to be provided in this report.

Cost Auditors

The Cost Records of the Company are maintained in accordance with the provisions of Section 148(1) of the Act as specified by the Central Government. The Cost Audit Report, for the financial year ended March 31, 2022, was filed with the Central Government within the prescribed time. The Board, on recommendation of the Audit Committee, had appointed M/s. Murthy & Co. LLP, Cost Accountants (Firm Registration Number S200001) as the Cost Auditors to conduct the audit of Companys cost records for the financial year ended on March 31, 2023. The Cost Auditors will submit their report for the FY 2022-23 on or before the due date.

The Board, on recommendation of the Audit Committee, has appointed M/s. Murthy & Co. LLP, Cost Accountants (Firm Registration Number S200001) as the Cost Auditors to conduct the audit of Companys cost records for the FY 2023-24. The Cost Auditors have confirmed that their appointment is within the limits of Section 141(3) (g) of the Companies Act, 2013 and have also certified that they are free from any disqualifications specified under Section 141(3) and proviso to Section 148(3) read with Section 141(4) of the Companies Act, 2013. The Audit Committee has also received a certificate from the Cost Auditors certifying their independence and arms length relationship with your Company.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, since the remuneration payable to the Cost Auditors is required to be ratified by the members, the Board recommends the same for approval by members at the ensuing 76th AGM of the Company.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Rules made thereunder, M/s. M. Damodaran & Associates, LLP, Company Secretaries in Practice, Chennai, were re-appointed to conduct the Secretarial Audit of the Company for the FY 2022-23. The Secretarial Audit Report for the FY 2022-23 issued by Mr. M. Damodaran (M. No. 5837, CP No. 5081), Managing Partner at M/s. M. Damodaran & Associates, LLP, in the prescribed Form MR-3 is annexed to this Report as ‘Annexure-E.

The Secretarial Audit Report for the FY 2022-23 contains the following observations:

Observations by Secretarial Auditors	Managements Reply
1. The Company has delayed in submission of the quarterly finan- cial results for the quarter ended 31.12.2022 to the stock ex- change as required under regulation 33(3) of SEBI LODR. BSE Limited has imposed penalty for the aforesaid non-compliance and the Company has paid the same.	The delay in submission of the results was due to some un- avoidable circumstances i.e. transition of the Companys ERP to SAP ERP. The Company had, thereafter, submitted the re- sults to the BSE on 25.02.2023. The delay was unintentional and later on it was complied with. The Company has paid the requisite penalty amount to the BSE for delay in submission of the results.

Pursuant to the SEBI circular no. CIR/CFD/CMD/1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report for the FY 2022-23, issued by Mr. M. Damodaran (M. No. 5837, CP No. 5081), Managing Partner at M/s. M. Damodaran & Associates, LLP, Practicing Company Secretaries, Chennai, was submitted with the BSE, where shares of the Company are listed, within the stipulated timeline.

SECRETARIAL STANDARDS ISSUED BY THE INSTITUTE OF COMPANY SECRETARIES OF INDIA (ICSI)

In terms of Section 118(10) of the Act, the Company has complied with the applicable Secretarial Standards i.e. SS–1, SS-2 and SS-4, relating to the ‘Meetings of the Board, ‘General Meetings and ‘Report of the Board of Directors respectively, as specified by the Institute of Company Secretaries of India (ICSI) and approved by the Central Government.

TULSYAN NEC LIMITED

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

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. An Internal Complaints Committee (‘ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral.

During the financial year, no complaints of sexual harassment were filed and no complaint is pending for closure as per the timelines of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

REVOCATION OF SUSPENSION

During the financial year under review, the suspension in trading of equity shares of the Company was revoked w.e.f. February 10, 2023.

ACKNOWLEDGEMENT

We place on record our appreciation for the committed services by every member of the Tulsyan family whose contribution was significant to the growth and success of the Company. We would like to thank all our shareholders, customers, suppliers, investors, vendors, bankers, financial institutions and other business associates, executives, staffs and workers at all levels for their continued support and encouragement during the year. We also thank the Government of India and Government of Tamil Nadu, Ministry of Corporate Affairs, Central Board of Indirect Taxes and Customs, Income Tax Department, and all other regulatory agencies for their assistance and co-operation during the year and look forward to their continued support in the future.

	By Order of the Board of Directors
	For Tulsyan NEC Limited
Place: Chennai	Sd/-
Date: 12-08-2023	Lalit Kumar Tulsyan
	Executive Chairman
	DIN: 00632823
Registered Office:
Apex Plaza, I Floor, New No.77,
Old No.3, Nungambakkam High Road
Chennai-600034