Tulsyan NEC Ltd Directors Report

Dear Members,

We are pleased to present the Seventy Seventh (77th) Boards Report along with the audited standalone and consolidated financial statements and the Auditors Report of the Company for the financial year ended March 31,2024.

FINANCIAL HIGHLIGHTS:

Particulars		Standalone		Consolidated
		FY 2024	FY 2023	FY 2024	FY 2023
Total Revenue		97,352.52	95,260.56	99,459.04	102,383.49
Total Expenses		102,181.04	97,211.05	104,225.55	104,591.05
Profit before tax and exceptional items		(4,828.12)	(1,950.49)	(4,766.51)	(2,207.55)
Exceptional Items		0.00	21,087.13	0.00	(21,087.13)
Tax Expenses	Current Tax	0.00	0.00	0.00	0.00
	Deferred Tax	0.00	5,723.47	(44.04)	5762.38
	Income Tax Earlier Years	188.93	(67.14)	188.93	(67.14)
Profit for the year		(5,017.05)	24,792.98	4,911.40	24,574.82
Other comprehensive income, net		223.73	(16.61)	223.73	(16.61)
Total comprehensive income		(5,240.78)	24,776.37	5,135.13	24,558.21
Earnings per share (EPS)	Basic	(30.31)	149.79	(29.67)	148.48
	Diluted	(30.31)	149.79	(29.67)	148.48

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, 2024, India continues to be the second largest producer of crude steel. Steel Industry faced free fall in the output prices with not tandem reduction in input costs which resulted unfavourable margins and subdued the demand by the consumers.

Despite such difficulties faced, the turnover of the Company increased to Rs.95,600 Lakhs from Rs.95,046 Lakhs which is 0.6 % increase compared to the turnover of the previous year.

TMT sales increased to 1,40,156 Tons from 1,36,987 Tons registering a growth of 2.3%. Despite achieving higher quantum of sales during the year, the drop in prices affected margin increase in the turnover. Loss after tax during the year is Rs. 5,017 Lakhs as against profit of Rs.24,792.98 Lakhs in the previous year. Previous years profit was 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 and during the year under review, there was no such write backs and also the operations were not profitable due to drop in steel prices.

FUTURE OUTLOOK:

Steel

Initiative to produce Green Steel

CII- Green Products and Services Council has issued a certificate that “Manufactured by Tulsyan NEC Ltd. at Gummidipoondi, Tamil Nadu, meets the requirements of GreenPro Ecolabel and qualifies as Green Product. This certification is valid till December 2026”.

• Certificate has been granted for Fe 500, Fe 500 D, Fe 500 CRS, Fe 500 D CRS, Fe 550, FE 550 D, Fe 550 D CRS, Fe 600, Fe 600 CRS & Steel Wire Rods

Importance of Green Pro Certification:

Green Pro certification is a mark of sustainability and environmental responsibility, specifically tailored for the Indian context by the Indian Green Building Council (IGBC). For a steel plant, obtaining this certification can bring numerous advantages. Obtaining Green Pro certification for a steel plant offers substantial advantages, including enhanced environmental performance, improved market competitiveness, regulatory compliance, operational efficiency, and cost savings.

Green Pro certification evaluates various parameters, including energy efficiency, water conservation, waste management, materials used, indoor environmental quality, and innovation.

The future potential for scoring under Green Pro certification can be significantly improved through targeted initiative. Upgrading to more energy-efficient machinery and processes, implementing renewable energy sources like solar or wind power, and optimizing energy management systems. Installing advanced water recycling and rainwater harvesting systems, reducing water usage through efficient processes, and treating wastewater for reuse. Enhancing waste segregation and recycling processes, reducing raw material wastage and implementing Zero waste to landfill initiatives.

Benefits of Green Certificate

• Having Green Pro certification can enhance the plants reputation and marketability. Customers, particularly those with sustainability goals, are more likely to choose products from certified plants.

• Green Pro certification helps in complying with environmental regulations and standards, which are becoming increasingly stringent. Additionally, it can make the plant eligible for government incentives, grants, and subsidies aimed at promoting sustainable practices.

• Sustainable practices help in mitigating risks associated with resource scarcity, regulatory changes, and environmental impacts. This proactive approach can safeguard the plants operations against future uncertainties.

• Green Pro certification enhances the corporate image and brand value of the steel plant. It demonstrates a commitment to sustainability. 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 2024-25.

Investing in a 110kV substation to replace an existing 33kV substation is a significant capital expenditure (Capex) that will bring numerous benefits to our plant, particularly as we are operating an induction furnace. This upgrade can notably enhance the Plants power supply capacity and operational efficiency. These advantages collectively ensure that our Plant can meet current and future production demands efficiently and sustainably.

Few benefits of this Capex investment

• Increased Maximum Demand Capacity

• Enhanced Melt Rate and Productivity

• Improved Power Quality and Reliability

• Long-term Cost Efficiency

• Scalability for future growth

• Enhanced operational flexibility

• Competitive advantage and

• Environmental benefits.

Future capex plans

Additional furnace and scrap processing yard: Company has on its drawing board the following plans which are expected to improve and benefit the company summary of which is given below:

Additional New Furnace:

• Investing in a new furnace and a steel scrap processing facility following the installation of a 110kV substation can significantly enhance the productivity and efficiency of a steel plant. Heres an analysis of the potential productivity gains and efficiency improvements.

• Increase in Production Capacity; With the new furnace, assuming it has a similar capacity to the upgraded 22-ton furnace, the plants melting capacity will effectively triple.

• The improved energy infrastructure with the 110kV substation ensures more stable and efficient power delivery, reducing energy losses and operational disruptions.

• Newer furnace technologies often come with better thermal efficiency and energy recovery systems, leading to reduced energy consumption per ton of steel produced.

Steel Scrap Processing Facility

• On-site scrap processing reduces the dependency on external suppliers, ensures a steady supply of processed scrap, and lowers costs.

• Control over the quality of processed scrap ensures better input material for the furnaces, reducing impurities and enhancing the quality of the final product.

• Efficient scrap processing reduces waste and promotes recycling, aligning with sustainability goals and potentially reducing raw material costs.

Other Initiatives

• Face lift to be given to existing plant by upgrading/updating the technological advancement prevailing at present. Steel structures of building to be strengthened and to refurbish plant and machinery to give life for another ten to fifteen years.

• Current focus is on Energy management, to bring expertise and experience together a suite of Industry 4.0 digitalization solutions which can add a great value in helping our plant with predictive and timely alerts with report generation, aiding in proper upkeep and efficient functioning of the plant.

• Installation of smart meters for Energy Monitoring & Management System at HV & LV power distribution for SMS, CCM, Rolling Mill &

* Auxiliaries area (31 meters). The system should collect all the data without any human intervention and thus create transparency among the stakeholders.

• In addition, the water resources limited to bore wells in house. Depletion of water table in bores may cause scarcity of water requirement for future projects. Hence to work on rain water harvest, STP and zero water discharge in future.

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.

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:

• Production Linked Incentive (PLI) Scheme for Specialty Steel.

• Allocation of 3.3% of GDP toward Infrastructure Development in the last budget.

• Indias wish to become a developed nation by 2047 hinges significantly on improving its infrastructure.

• Focus of such expenditure is on the transport and logistics segments.

• Roads & Highways account for the highest share, followed by Railways and Urban Public Transport. The government has set ambitious targets for the transport sector, including development of 2 lakh-km national highway network by 2025 and expanding airports to 220.

• Additionally, plans include operationalizing 23 waterways by 2030 and developing 35 Multi-Modal Logistics Parks (MMLPs).

• 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.

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:

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 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.

• 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:

During the financial year under review, there were no such instances where the Company required the valuation for one time settlement or while taking the loan from the Banks or Financial institutions.

CREDIT RATINGS

Company has not issued any instruments during the year requiring credit rating. Credit rating exercise was carried out in the previous year for issue of Listed Secured Non-Convertible Debentures and rating issued for the proposed instrument was “ACUITE C”. As the company did not list the debentures, the rating issued has been withdrawn. CARE which had rated the Bank Borrowings of the company in the past has withdrawn the rating on account of the compromise settlement and payment of such settlement.

DETAILS OF SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES

Color Peppers Media Private Limited, Wholly Owned Subsidiary of the Company have been dissolved and struck off from the Registrar of Companies (ROC) w.e.f. December 30, 2023.

Therefore, as on March 31, 2024, the Company have only one wholly owned subsidiary company 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 the 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 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. 1,15,23,59,458 and a net profit of Rs. 1,05,60,904 during the FY 23-24 as against a total revenue of Rs. 95,25,67,123 and a net loss of Rs. 2,95,46,942 during the FY 22-23.

^ 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 the end of the financial year March 31,2024 of the Company and the date of this Report.

DIVIDEND

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

TRANSFER OF UNPAID AND UNCLAIMED AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND (‘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 7 (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 the IEPF Rules, the shares on which dividend has not been paid or claimed by the members for 7 (seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Further, as per Rule 6(8) of the IEPF Rules, all benefits such as bonus shares, split, consolidation except rights issue, accruing on shares which are transferred to IEPF, shall also be credited to the demat account of the IEPF authority.

The Members may note that there are no further unpaid or unclaimed dividend amounts/shares pending with the Company for transferring to the demat account of the IEPF Authority.

SHARE CAPITAL

During the year under review, there has been no change in the share capital of the Company. The detailed capital structure of the Company as on March 31,2024 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.

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 2022-23, the Company had issued, subscribed and allotted 16,66,666 (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 Company received the listing approval for such shares from the BSE on August 22, 2024.

* TRANSFER TO RESERVES

No amount is proposed to be transferred to reserves for the financial year ended March 31,2024.

DEPOSITS

During the financial year under review, 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. Therefore, disclosure under Rule 8(5)(v) and (vi) of the Companies (Accounts) Rules, 2014 is not applicable to the Company.

During the financial year under review, the Company has obtained short-term unsecured loan from its Executive Directors and has received a Declaration, pursuant to Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014, where the Directors have confirmed that the loan amount so given is from their owned funds.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 forms part of the notes to the Financial Statements provided in this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR) POLICY

In terms of the provisions of the Companies Act, 2013 read with the Rules made thereunder, a detailed report regarding Corporate Social Responsibility is annexed to this Report as ‘Annexure-B.

The CSR Policy developed and implemented by the Company 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 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 and can be accessed at www.tulsyannec.in/investors. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Pursuant to Regulation 34 of the SEBI Listing Regulations, the Management Discussion and Analysis Report for the financial year under review, is given under separate section and forming part of the 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, implementing effective policies and guidelines and developing a culture of the best management practices and compliance with the law at all levels. Our corporate governance practices strive to foster and attain 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 practising company secretary 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 materially 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 2023-24 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 this 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 none of the employees of the Company 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 judgements 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 were 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 were adequate and operating effectively.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Companys current 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.

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.

x 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. The Independent Directors have also confirmed that they have complied with Schedule IV of the Companies Act, 2013 and the Companys Code of Conduct.

They have further confirmed that they are not aware of any circumstances or situations 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, ethnicity, country of origin and nationality. The Board has adopted the Board Diversity Policy which sets out the approach to diversity of the Board. The policy is available on 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 2023-24, 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, 2024, the Board of Directors comprised of 8 (eight) members, consisting of 4 (four) Executive Directors and 4 (four) Non-Executive Independent Directors including 1 (one) Woman Non-Executive Independent Director. The Board has an appropriate mix of Executive Directors and Non-Executive 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 under review, the Board of Directors at its meeting held on June 21,2023, based upon the recommendation of Nomination and Remuneration Committee, had approved the following appointments / re-appointments and recommended the same for approval of the Members at the 76th AGM of the Company which was held on September 15, 2023:

• Mr. Lalit Kumar Tulsyan (DIN: 00632823), Executive Director, who was liable to retire by rotation and being eligible, was re-appointed as a Director, liable to retire by rotation.

• Mr. Manogyanathan Parthasarathy (DIN: 08277111) was re-appointed as an Independent (Non-Executive) Director of the Company for a second term of five consecutive years w.e.f. November 13, 2023 upto November 12, 2028 (both days inclusive).

• Mr. Ravi Muthusamy (DIN: 08066520) was regularised and appointed as an Independent (Non-Executive) Director of the Company for a term of five consecutive years w.e.f. June 21,2023 upto June 20, 2028 (both days inclusive).

• Mr. S Chandrasekaran (DIN: 10207445) was regularised and appointed as a Whole Time (Executive) Director of the Company for a term of five consecutive years w.e.f. June 21,2023 upto June 20, 2028 (both days inclusive).

The Members of the Company at their 76th AGM held on September 15, 2023, have also approved the aforesaid appointments / reappointments, based upon the recommendation of the Nomination and Remuneration Committee and the Board.

Further, as per the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Sanjay Tulsyan (DIN: 00632802), Executive Director, is liable to retire by rotation at the ensuing 77th AGM of the Company and being eligible, seeks re-appointment.

The Board of Directors at its meeting held on July 26, 2024, based upon the recommendation of Nomination and Remuneration Committee, have approved the re-appointment of Mr. Sanjay Tulsyan (DIN: 00632802) as an Executive Director of the Company, liable to retire by rotation, subject to approval of the Members at the ensuing 77th AGM of the Company.

Further, the Board of Directors, on recommendation of the Nomination and Remuneration Committee and through passing of Circular Resolution dated August 25, 2024, have approved the appointment of Mrs. J Sumathi (DIN: 10752449) as an Additional Director (categorized as an ‘Independent Woman Director) of the Company, not liable to retire by rotation, to hold the office for a term of 5 (five) consecutive years on the Board of the Company with effect from August 25, 2024 till August 24, 2029 (both days inclusive), subject to approval of the members at the ensuing 77th AGM of the Company.

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(1) and (2) of the Companies Act, 2013. The Directors have made necessary disclosures, as required under various provisions of the Companies Act, 2013 and the SEBI Listing Regulations.

Key Managerial Personnel

There were no changes in the key managerial personnel(s) of the Company during the FY 2023-24. The Key Managerial Personnel(s) of the Company as on March 31,2024 are:

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

• Mr. Sanjay Tulsyan, Managing Director;

• Mr. Sanjay Agarwalla, Whole Time Director;

• Mr. Shanthakumar R P, Chief Financial Officer; and

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

COMMITTEES OF THE BOARD

Currently, the Company has 4 (four) Board level Committees: Audit Committee (‘AC), Nomination and Remuneration Committee (‘NRC), Stakeholders Relationship Committee (‘SRC) and Corporate Social Responsibility Committee (‘CSR). The detailed composition of the above committees, as on March 31,2024, are disclosed in Corporate Governance Report, which forms part of this Annual Report.

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 2023-24, the Board met 5 (five) times virtually on June 21,2023; August 12, 2023; November 14, 2023; February 10, 2024; and March 21, 2024 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 Corporate Governance Report, which forms part of this Annual Report.

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, 2024 contains the following observations:

Qualification, Reservation or Adverse Remark or Disclaimer made by the Statutory Auditors	Managements Reply
1 Basis for Qualified Opinion: Balance confirmations and ECL Provisioning: For the financial year ending 31st March 2024, we have not received confirmation of balances in respect of trade payables and trade receivables except for a few. The management represented that these balances are realizable/settled in the ordinary course of business. In the absence of confirmation of balances, we were unable to determine whether any adjustments by way of Provision for Expected Credit losses/ Write-off / Write-back were necessary at the year end.	Company has sought confirmation of Balances from the Debtors and Creditors and based on the confirmation received suitable entries have been passed if so required. Further the communication given to the Debtors or creditors indicates clearly that if no information is received within the stipulated time the balance as per the companies books would be deemed to be correct.
2 Emphasis of Matter:	The management periodically assesses realizability of Debtors and liability in terms of the payables and makes suitable ECL provision. Company would make suitable assessment again and make suitable adjustment for credit losses or write backs.
During the financial year ended 31.03.2023, the Company had repaid the entire loans availed from Banks and obtained a no dues certificate from each bank 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 of the company has evaluated conditions such as financial, operating and other conditions that determine companys ability to continue its performance and improve the same further.
Further, the Company had obtained a techno-economic due diligence study on the viability of operations and projections for the future on 28.01.2023 from Cormed Management Services Pvt. Ltd. Though the Company has recorded losses for the financial year under audit, the management 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.	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.
The Company has also prepaid a portion of the loan borrowed, consequent to which it expects a reduction in the interest costs in the upcoming years (Reference is drawn to Note No.6 of the Standalone Financial Statements).

The Auditors Report is enclosed with the financial statements forming part of this 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 Companies Act, 2013 as specified by the Central Government. The Cost Audit Report, for the financial year ended March 31, 2023, 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 31,2024. The Cost Auditors have submitted their report to the Company on July 26, 2024 for the FY 2023-24.

The Board at its meeting held on May 30, 2024, 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 2024-25. 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 the Company.

In accordance with the provisions of Section 148 of the Companies Act, 2013 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 77th 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, Practicing Company Secretaries, Chennai, were re-appointed to conduct the Secretarial Audit of the Company for the FY 2023-24. The Secretarial Audit Report for the FY 2023-24 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 2023-24 contains the following observations:

Observations by Secretarial Auditors	Managements Reply
1. The Company has delayed in submission of the annual audited financial results for the financial year ended 31.03.2023 to the BSE as required under regulation 33(3) of SEBI (LODR). The Company submitted the results on 21.06.2023. The BSE levied fine for the aforesaid delay and the Company has paid the fine amount to the BSE on 03.07.2023.	The delay in submission of annual audited financial results for the financial year ended 31.03.2023 to the BSE was due to the technical issue in transition of the existing accounting software from ERP to SAP during the first year of implementation. The delay was unintentional and subsequently it was complied with.
2. The Company has not obtained the in-principle approval from the BSE before the issuance of 16,66,666 equity shares on preferential basis as required under Regulation 28(1) of SEBI (LODR). The BSE levied fine for the aforesaid non-compliance and the Company has paid the fine amount to the BSE on 20.06.2023 and have also filed the application for condonation of delay with SEBI for which the reply is still awaited.	The non-compliance was unintentional and caused due to inadvertence. It has occurred without any malafide intention on the part of the Company. Condonation of delay application was submitted to SEBI and BSE. The Company has received the listing approval from BSE on August 22, 2024.
3. The company has delayed 25 days in filing of listing application with the BSE after allotment of 16,66,666 equity shares on 31.03.2023 as required under Schedule XIX of SEBI ICDR read with SEBI circular - SEBI/HO/CFD/DIL2/CIR/P/2019/94 dated August 19, 2019. The Company has submitted the listing application on 16.05.2023, which is still pending with the BSE for approval. The BSE levied the fine for the aforesaid delay and the Company has paid the fine amount to the BSE on 30.09.2023.	The delay was unintentional and caused due to inadvertence. It has occurred without any malafide intention on the part of the Company. The Company has received the listing approval from BSE on August 22, 2024.

Pursuant to the SEBI circular no. CIR/CFD/CMD/1/27/2019 dated February 8, 2019, the Annual Secretarial Compliance Report for the FY 2023-24, 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 Companies Act, 2013, 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.

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 under review, 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.

ANNUAL RETURN

A copy of Annual Return of the company as per the provisions of Sections 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 under review, 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 financial controls with reference to the financial statements and which is 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.

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, executives, staffs and workers at all levels, bankers, financial institutions and other business associates 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: 26-07-2024	Lalit Kumar Tulsyan
	Executive Chairman
	DIN: 00632823