N K Industries Ltd

To,

The Members,

Your Directors are pleased to present the 36^th Annual Report along with the Standalone and Consolidated Audited Financial

Statements of your Company for the Financial Year ended on 31^st March, 2024.

1. F INANCIAL RESULTS

The Company has adopted Indian Accounting Standards (Ind AS) st from April, 2017. The figures 1 31^st March, 2024 are also Ind AS compliant.

The financial highlights are depicted below:

( In Lacs)

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

2. PERFORMANCE HIGHLIGHTS

The key aspects of revenue and profits for the financial year 2023-24 from the Company's Standalone and Consolidated Results are as follows:

3. REVENUE STANDALONE

Our total income on a Standalone basis for the financial 240.00 Lakhs which is same asyear is 240.56 Lakhs in the previous year. Net loss for the year decreased from 161.01 Lakhs to 116.81 Lakhs in the current year.

4. REVENUE CONSOLIDATED

Our total income on a consolidated basis increased to 1912.21 Lakhs in previous year from 1777.47 Lakhs in the current year. Net loss for the year decreased from 186.11 Lakhs to 103.05 Lakhs in the current year.

5. STATE OF COMPANY'S AFFAIRS AND FUTURE OUTLOOK

With a view to curb the invariable expenditure and also generate a fixed monthly income, the Company decided and entered into a Dry Lease Agreement with its Group Company viz. M/s. N K Proteins Private Limited on 15th April, 2019, whereby the Factory Premise of the Company situated at Kadi Mehsana has been given on lease to M/s. N K Proteins Private Limited. The said agreement was extended for a further period of one year since then and the same has been further extended vide supplemental agreement dated 01st April, 2024.

6. CHANGE IN NATURE OF BUSINESS, IF ANY

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

7. SUBSIDIARY/ JOINT VENTURE COMPANIES\ASSOCIATES

Your Company has three wholly owned subsidiaries as on 31st March, 2024. The Board of Directors also reviewed the affairs of the subsidiary companies. In accordance with the provisions of Section 129(3) of the Companies Act, 2013, we have prepared Consolidated Financial Statements of the Company and its Subsidiaries, which forms part of this Annual

Report. The accounts of Joint Venture i.e. AWN Agro Private Limited has not been consolidated for the current year. The reason for non-consolidation is due to discontinuation of control on the management and financial affairs of the Joint

Venture Company.

Further a statement containing the salient features of the financial statements of our Subsidiary Companies and Joint

Venture Company in the prescribed format AOC-1 is appended as “Annexure-A” to the Board's report.

8. SHARE CAPITAL

As on March 31, 2024, the Authorized Share Capital of the Company is 25,00,00,000/- (Rupees Twenty Five Crores) divided into 2,50,00,000 (Two Crores Fifty Lakhs) Equity Shares of 10/- (Rupees Ten) each and Paid-up Share Capital of the Company is 6,00,99,000/- divided into 60,09,900 (Sixty Lakh Nine Thousand Nine Hundred) Equity Shares of

10/- (Rupees Ten) each. The Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

9. DIVIDEND AND RESERVES

Your Directors express their inability to recommend any dividend for the year 2023-24 owing to accumulated losses of the Company. In view of this, your Company was unable to transfer any funds to the Reserves and Surplus Account.

The Company has neither invited nor accepted any deposits within the meaning of Section 73 of the Companies Act,

2013 and the Companies (Acceptance of Deposits) Rules, 2014 from the public during the year ended 31st March, 2024.

There were no unclaimed or unpaid deposits as on 31st March, 2024.

All related party transactions entered into during FY 2023-24 were on an arm's length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013 (‘the Act') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

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

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

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

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

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

“Annexure C”.

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

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

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

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

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

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

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

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

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

In accordance with the provisions of Section 152(6) of the Companies Act and Articles of Association, Mr. Hasmukhbhai K. Patel (DIN: 06587284) Whole Time Director of the Company, shall retire by rotation and being eligible offers himself for reappointment at the ensuing Annual General Meeting of the Company.

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

1. Ms. Mansheel Kaur resigned w.e.f. 03rd August, 2023 as an Independent Woman Director of the Company.

2. Ms. Himanshi Shah is appointed on 01st November, 2023 as Independent Woman Director of the Company subject to the approval of Shareholders in this Annual General Meeting.

3. Mr. Divyesh Aswar resigned w.e.f 16th January, 2024 as the Company Secretary and Compliance Officer of the

Company.

4. Ms. Jelin Dodiya has been appointed as the Company Secretary and Compliance Officer of the Company by the Board in the meeting held on 23rd January, 2024.

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

The Board of the Company is endlessly focused for the growth, expansion of the Company. It is further involved to strategize the optimum utilization of the available resources and to reduce cost so as to improve the profitability of the

Company and also to generate additional opportunities for better performance as a whole.

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

The Board met 7 times during the year under review viz. on 02nd May, 2023, 07th August, 2023, 25th August, 2028, 01st

November 2023, 09th November, 2023, 18th December, 2023 & 23rd January, 2024. The Board held at least one meeting in each quarter and the gap between any two meetings was not more than one hundred and twenty days as prescribed under the Companies Act, 2013.

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

*Ms. Mansheel Kaur resigned as an Independent Director w.e.f. 03rd August, 2023.

**Ms. Himanshi Shah was appointed as an Additional Independent Woman Director on the Board of the Company w.e.f 01st November, 2023.

As per Schedule IV of the Companies Act, 2013, a separate meeting of Independent Director was held on 1st November,

2023 at office of the company situated at Ahmedabad to discuss the agenda items as required under the Companies Act,

2013.

As on 31st March, 2024 the Board had three committees i.e. Audit Committee, Nomination and Remuneration Committee and Stakeholders Relationship Committee. All committees are properly constituted with proper composition of Independent Directors as mentioned in relevant provisions of Companies Act, 2013.

Audit Committee met 4 times during the year under review on 02nd May, 2023, 07th August, 2023, 09th November,

2023 & 23rd January, 2024.

*Ms. Mansheel Kaur resigned as an Independent Director w.e.f. 03rd August, 2023.

**Ms. Himanshi Shah was appointed as an Additional Independent Director on the Board of the Company w.e.f 01st November, 2023.

Nomination and Remuneration Committee met 4 times during the year under review on 02nd May, 2023, 07th August,

2023, 01st November, 2023 and 23rd January, 2024.

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

*Ms. Mansheel Kaur resigned as an Independent Director w.e.f. 03rd August, 2023.

**Ms. Himanshi Shah was appointed as an Additional Independent Director on the Board of the Company w.e.f 01st November, 2023.

Stakeholders Relationship Committee met 4 times during the year under review on 02nd May, 2023, 07th August, 2023, 09th November, 2023 & 23rd January, 2024.

*Ms. Mansheel Kaur resigned as an Independent Director w.e.f. 03rd August, 2023.

**Ms. Himanshi Shah was appointed as an Additional Independent Director on the Board of the Company w.e.f 01st November, 2023.

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

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

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Clause (c) of Sub-Section (3) of Section 134 of the Companies Act, 2013, which states that? a) in the preparation of the annual accounts for the year ending 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the period; company for that c) the directors had taken proper and sufficientcare for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities; d) the directors had prepared the annual accounts on a going concern basis; e) the Directors have laid down Internal Financial Controls to be followed by the Company and that such Internal

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

As per the provisions of Section 139, 141 of the Companies Act, 2013 and rules made thereunder (hereinafter referred to as “The Act”), the Company at its 35th Annual General Meeting(‘AGM”) held on 25th September, 2023 approved the appointment of M/s. (Pankaj R. Shah & Associates, Chartered Accountants (FRN- 107361W) as Statutory Auditor for a period of 5 years commencing from the conclusion of 35th AGM till the conclusion of the 40th AGM to be held in the year 2027.

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

I. National Spot Exchange Limited (NSEL) has served a notice to N K Proteins Private Limited (Formerly known as N K

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

Further, the Home Department, Government of Maharashtra has issued a notification under the MPID Act, 1999 securing the attachment of Land & Building and Plant & Machinery of the Company. Against this the Company had challenged the notification issued by Home department, Government of Maharashtra, before the Hon'ble High Court of Gujarat.

The Hon'ble Gujarat High Court had disposed off the application of the Company vide its order dated 29th March, 2017 against the said order the Company had preferred a Special Leave Petition before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India had disposed off the Special Leave Petition on 17th April, 2017, with an observation to file an application before the Hon'ble Bombay High Court. The Company has filed petition before the Hon'ble Bombay High Court in June 2017. Besides the above, the Company has also filed its objections against the attachment notification before the Designated SPL MPID Court, Mumbai. The matter is subjudice.

II. With regard to search and seizure carried out by the Directorate of Enforcement, Government of India on 30th May,

2018 on the group company NKPPL, the Company along with group Company and Promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Hon'ble High Court of Delhi and the Hon'ble High Court has set aside the show cause notice. Further against the attachment of the assets of the Company, the Company has issued fresh show cause dated 30th August, 2018 and the Company has filed an appeal before the PMLA Appellate

Tribunal, Delhi.

III. Government of Maharashtra has filed supplementary charge sheet dated 25th December, 2018, under the MPID Act against the Company and the Chairman. The Company has complied with all the summons under the said charge sheet and the matter was adjourned to 7th November, 2019 and further adjourned to various dates and now the matter was further adjourned to 29th August, 2024.

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

1. We draw attention to Note 30 in Standalone Ind AS Financial Statements and according to the same A Search &

Seizure action U/S 132 of the Income Tax Act took place on 24th February, 1999. The Income Tax department had raised demand of Rs. 3312 lakhs vide the block assessment Order dt. 30th April, 2001. In case of the company, the Hon'ble Income Tax Appellate Tribunal (ITAT), Ahmedabad has subsequently given partial relief to the extent of Rs.

2884 lakhs. The company had preferred an appeal before the Hon'ble High Court of Gujarat against the order of Hon'ble ITAT, Ahmedabad. The Hon'ble Gujarat High Court vide its order dated 20th June, 2016 had given partial relief on some of the grounds and had also dismissed some of the grounds of the company. Against the grounds dismissed by Hon'ble High Court of Gujarat, the company had further preferred an appeal before Hon'ble Supreme Court of India, and the Hon'ble Supreme Court of India vide order dated 16th January, 2017 had dismissed the appeal of the Company. The Company had already provided an amount of Rs 288 lakh against the grounds dismissed by Hon'ble ITAT, Ahmedabad during F.Y 2002-03 as well as Rs 127 lakh was provided in the books of accounts for the

Assessment year in question for the interest payable up to 31th March, 2005 during F.Y 2004-05. However, in view of the management and on the basis of the Judgment of the Hon'ble Gujarat High Court, the amount provided/paid by the company towards total demand shall result in refund to the company. Pending effect of the various orders of adjudicating authorities by the Income Tax Department, the Company is yet to provide final entries in its books of accounts even during the year under review.

2. Attention is invited to Note 31 in Standalone Ind AS Financial Statements and according to the same:

31 (a) No provision is made during the year for interest receivable on various advances amounting to Rs 3001.21 Lakhs (P.Y. Rs 3001.21 Lakhs) as the same are considered doubtful.

• 31 (b) The Company has obtained a legal opinion from an expert and in view of the said opinion as the money has been given as loans and advances prior to the commencement of Companies Act, 2013, the provisions of Section 186(7) of the Companies Act, 2013 is not applicable. Further, based on the said legal opinion, the Company has not provided any interest on the outstanding loans and advances of NK Oil Mills Pvt Ltd up to financial year 2017. This being a technical matter, Auditors have relied upon the opinion of the expert.

3. Attention is invited to note 33 in Standalone Ind AS Financial Statements and according to which the company is having accumulated losses (after taking into account the balance of reserves) of Rs 34,864.94 lakhs as at 31st March, 2024 and the net worth of the company is negative However, as per the business plan and future cash flow projections submitted by the management to us and accepted by us. The Company is making sincere efforts for the revival of the Business & the management is confident to recover the losses through improved profitability in foreseeable future. Therefore, no provision for the impairment has been made and accounts for the year have been prepared on “going concern basis.” Further the above projections also contains business plan/ projected cash flow prepared by the management and accepted by us with respect to the subsidiaries company i.e. Banpal Oil Chem Private limited and NK OIL Mills Private Limited, (Except Tirupati Retail India Pvt Ltd where proper provision of Impairment has been done ) the management is confidentto also revive the operations of the loss making subsidiary companies, hence no provision for impairment in the fair value of the investment made in the said subsidiary companies has been made in the books of accounts.

4. Attention is invited to note 36 in Standalone Ind AS Financial Statements and according to which The Company had entered into financial arrangement with National Spot Exchange Ltd (NSEL) through trading and

N.K. Proteins Private Ltd (erstwhile N. K. Proteins Limited (NKPL) (Group Company) by way of purchase and sales of various goods up to financial year 2012-13. The trade payables and trade receivables arising out of the said transactions through National Spot Exchange Limited (NSEL) from the concerns other than the group concerns are subject to confirmations by the respective parties/NSEL and reconciliations/adjustments, has suspended the trading on 31st July, 2013, as per the directions issued by the Government of India, Ministry of Consumer Affairs. NSEL has initiated recovery proceedings against the group company NKPL and also against the company by filing a civil suit in the Hon'ble High Court of Mumbai for an alleged amount of around Rs. 937

Crores plus interest and the said proceedings are pending as on date. Further, the home department, Government of Maharashtra has issued a notification under the Maharashtra Protection of Interest of Depositors (in financial establishments)-Act, 1999 (MPID Act) attaching the Land, Building & Plant & Machinery of the company located at Kadi, Gujarat. The company had challenged the notification issued by Home department of Maharashtra before

Hon'ble Gujarat High Court which was disposed of vides its order dated 29th March 2017. The company preferred a Special Leave Petition before the Hon'ble Supreme Court of India against the order of Hon'ble Gujarat High Court and The Hon'ble Supreme Court of India had disposed off the Special Leave Petition on 17th April, 2017 with an observation to file an application before Hon'ble Bombay High Court, Mumbai, and as informed by the management, the company has filed petition before the Hon'ble Bombay High Court in June 2017 which is pending. Besides the above, the company has also filed its objections against the attachment notification before the Designated Special

MPID Court, Mumbai.

5. Attention is invited to note 37 in Standalone Ind AS Financial Statements and according to which The Directorate of

Enforcement, Government of India has initiated proceedings against the company under section 5(1) of the prevention of Money Laundering Act, 2002, along with group company NKPL, and by virtue of the provisional attachment order dated 10th March, 2015, attached the assets of the company comprising of Land, building, plant and machinery situated at Survey Nos. 719, 720, 721, 732/1, 732/2, 733, 741, 743, 744, 745, Kadi Thol Road, Village Kadi Kasba,

Taluka- Kadi, District Mehsana ? 382715, Gujarat. As explained to us, The Company has preferred an appeal before the Hon'ble Appellate Tribunal under the Prevention of Money laundering Act, 2002 against the order of Adjudicating

Authority. Further, the Director of Enforcement (hereinafter referred to as ED), Government of India had initiated proceedings of search/seizure on 30th May, 2018 on the group company NKPL, the promoters of the company late Shri Nilesh Patel and Shri Nimish Patel, one of the family member as well as on the company and thereafter on 29th August,

2018, the ED, Government of India, had preferred an application u/s 17(4) of the Prevention of Money Laundering Act,

2002 before the Adjudicating Authority, New Delhi, vide it's Application No. OA/236 of 2018 against the company as well as group company NKPL and the promoters for retention of the seized properties and for continuation of order of freezing the properties, till finalization of the proceedings, of the properties mentioned in the application u/s 17(4) of the PMLA Act, 2002. The company along with Group Company and promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Hon'ble High Court of Delhi and the Hon'ble High Court has set aside the said show cause notice. The Director of Enforcement has attached assets of the company, group company NKPL and the promoters of the company by issuing a fresh show cause notice dated 30th August, 2018 and the company has filed an appeal before PMLA Appellate Tribunal, Delhi.

6. Attention is invited to note 38 in Standalone Ind AS Financial Statements and according to which The Government of

Maharashtra, (at the instance of Economic wing offence Mumbai), has filed supplementary Charge sheet dated 25th

December, 2018 under the various sections of IPC AND MPID Act against the company and its chairman Shri Nimish Patel. Further MPID Court on the basis of above supplementary charge sheet has issued summons dated 19th March, 2019 against the company asking them to remain present on 26th April 2019. The Company has complied with the said summons and the matter was adjourned to 7th November, 2019 and further adjourned to various dates and now the matter is further adjourned 29th August 2024. Thus, in view of the fact that the said criminal proceedings which have been initiated, inter alia, against the company and its Chairman Shri Nimish Patel are pending.

7. Attention is invited to note 39 in Standalone Ind AS Financial Statements and according to which The Income Tax Department had carried out survey u/s 133 of the Income tax Act, 1961(the IT Act) on the company along with other group companies during FY 2013-14 and had ordered a special audit of the books of the company u/s 142(2A) of the

IT Act, 1961, for AY 2011-12 & A.Y 12-13. The department had raised a demand of Rs. 86.00 lakhs A.Y. 2014-15 on the company for the aforesaid assessment years and the said demand has been disputed by the company and the company has initiated appellate proceedings before appropriate authorities. The said amount has been shown as contingent liability in the notes forming part of standalone financial statements. Further, income tax department has passed an attachment order on 22th April, 2015 & 14th August, 2015 by which it has attached properties of the company in pursuant to a demand, the details of the properties attached which are in the name of company is as under:

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

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

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

Kasba, Taluka- Kadi, District Mehsana-382715

Factory Building Situated at Survey No 745, Kadi Thol Road, Village Kadi Kasba, Taluka- Kadi, District

Mehsana-382715.

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

9. Attention is invited to Note 41 in Standalone Ind AS Financial Statements which states that in case of one the

Subsidiary Company viz. Banpal Oil Chem Pvt Ltd, the Directorate of Enforcement, Government of India has initiated proceedings against the company under section 5(1) of the prevention of Money Laundering Act, 2002, and by virtue of the provisional attachment order dated 27th August, 2014, attached the assets of the subsidiary company comprising of Factory Plant, Land, Building & Plant & Machinery of the company located at plot No. 144/64, 65, 66 of Chandisar Industrial Area. GIDC Mauje chandisar, Taluka-Palanpur, Dist- Banaskantha, Gujarat. As explained to us, the said Subsidiary company has preferred an appeal before the Hon'ble Appellate Tribunal under the Prevention of Money laundering Act, 2002. However, matter is subjudice, and we are unable to quantify the liability and its impact if any, on the loss of the consolidated accounts.

10. Attention is invited to Note 42 in Standalone Ind AS Financial Statements in which Sales Tax Department has completed the assessment proceedings for various assessment years and raised demand of Rs. 3314.22 lakhs (net of recovery) for the earlier financial years. The company has not made any provision for the above demand raised by the sales tax authority in its books of accounts as in view of the Management, the said demand shall not withstand before the Appellate Authorities and the company has already preferred an appeal before the appellate authority which is still pending.

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

12. On the basis of certificate received from the Management of Holding any control on its joint Venture viz “AWN AGRO PRIVATE LIMITED” and hence no consolidation of the said joint venture is taken in to accounts while consolidation of accounts.

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

IV. The Holding Company financialarrangement with National Spot Exchange Ltd (NSEL) through trading had entered into and Clearing Member, N.K. Proteins Private Ltd (erstwhile N. K. Proteins Limited (NKPL) (Group Company) by way of purchase and sales of various goods up to financial year 2012-13. The trade payables and trade receivables arising out of the said transactions through National Spot Exchange Limited (NSEL) from the concerns other than the group concerns are subject to confirmations by the respective parties/NSEL and reconciliations/adjustments, if any. Further, NSEL has suspended the trading on 31st July, 2013, as per the directions issued by the Government of India, Ministry of Consumer

Affairs. NSEL has initiated recovery proceedings against the group company NKPL and also against the Holding company by filing a civil suit in the Hon'ble High Court of Mumbai for an alleged amount of around Rs. 937 Crores plus interest and the said proceedings are pending as on date. Further, the home department, Government of Maharashtra has issued a notification under the Maharashtra Protection of Interest of Depositors (in financialestablishments)-Act, 1999 (MPID Act) attaching the Land, Building & Plant & Machinery of the Holding company located at Kadi, Gujarat. The Holding company had challenged the notification issued by home department of Maharashtra before Hon'ble Gujarat High Court which was disposed of vides its order dated 29th March, 2017. The Holding company preferred a Special Leave Petition before the Hon'ble Supreme Court of India against the order of Hon'ble Gujarat High Court and the Hon'ble Supreme Court of

India had disposed of the Special Leave Petition on 17th April, 2017 with an observation to file an application before Hon'ble Bombay High Court, Mumbai, and as informed by the management, the Holding company has filed petition before the Hon'ble Bombay High Court in June 2017 which is pending. Besides the above, the Holding company has also filed its objections against the attachment notification before the Designated Special MPID Court, Mumbai.

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

1. National spot Exchange Limited (NSEL) has served a notice to N K Proteins Private Limited (Formerly known as N K Proteins Limited) who was a Trading and Clearing Member at NSEL and N K Industries Limited was only a client Company of

Trading Member i.e. N K Proteins Limited. As regards, the balances of trade receivables and trade payables arising out of the transactions through NSEL platform, the same cannot be confirmed pursuant to the the matter is still pending before the respective authorities.

2. Further, the Home Department, Government of Maharashtra has issued a notification under the MPID Act, 1999 securing the attachment of Land & Building and Plant & Machinery of the Company. Against this the Company had challenged the notification issued by home department, Government of Maharashtra, before the Hon'ble High Court of Gujarat.

The Hon'ble Gujarat High Court had disposed off the application of the Company vide its order dated 29th March, 2017. Against the said order the Company had preferred a Special Leave Petition before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India had disposed off the Special Leave Petition on 17th April, 2017, with an observation to file an application before the Hon'ble Bombay High Court. The Company has filed High Court in June 2017. Besides this, the Company has also filed its objections against the attachment notification before the Designated Special MPID Court, Mumbai the matter is subjudice.

3. It is also clarified that the Company along with Group Company and promoters challenged the show cause notice issued by the adjudicating authority New Delhi, before the Hon'ble High Court of Delhi and the Hon'ble High Court has set aside the said show cause notice. The Director of Enforcement has attached assets of the company, group company NKPL and the promoters of the company by issuing a fresh show cause notice dated 30th August, 2018 and the company has filed an appeal before PMLA Appellate Tribunal, Delhi. Still the matter is sub-judice.

4. With regard to the supplementary charge sheet filed the Company has complied with the summons dated 19th March, 2019 to remain present before the MPID Court on 26th April, 2019 was adjourned to 07th November, 2019 and further adjourned to various dates and now the matter is further adjourned to 29th August, 2024. Therefore, the matter is sub-judice.

Clarification with regard to the remark in point no. (i)(c) of the CARO (Report) annexed with the Auditors Report on standalone financial statements. i. With reference to the said remark, it is to be clarified that the Company is in process of transferring the properties mentioned by the Auditors in their report in its name. ii. Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and

Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, M/s Chirag Shah & Associates,

Practicing Company Secretary (FCS - 5545, CP No. 3498) Ahmedabad to conduct a Secretarial Audit of the Company's Secretarial and related records for the year ended 31st March, 2024.

The Report on the Secretarial Audit for the year ended 31st March, 2024 is annexed herewith as “Annexure E” to this Board's Report. There were no qualifications/ observations in the report. iii. Cost Auditor

Provisions Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the Cost Audit records are not applicable to the company during the year 2023-24.

During the year, no significant and material order has been passed by going concern status and Company's operations.

{In pursuance to Section 92 and 134 (3) (a) of the Companies Act, 2013 (“the Act”) read with relevant Rules thereunder} The Annual Return of the Company for the Financial Year 2022-2023 in the prescribed format in Form MGT-7 is available on the website of the Company at: https://nkindustriesltd.com/investor/. And the Annual Return for the FY. 2023-24 shall be uploaded on the above link once the same is filed on MCA website.

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

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

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. To maintain its objectivity and independence the Company has appointed Independent Internal Auditor M/s. ADPRDP &

Associates, Chartered Accountants to submit Internal Audit reports to the Audit Committee of the Board.

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

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

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of

Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

There was no instance of fraud during the Financial Year 2023-24, which were required by the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of Act and Rules framed thereunder.

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

36. STATUTORY INFORMATION i. Conservation of Energy: a) Company ensures that the manufacturing operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved. b) No specific investment has been made in reduction in energy consumption. c) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately. d) Since the Company does not fall under the list of industries, which should furnish this information in Form-A as annexed to the aforesaid Rules, the question of furnishing the same does not arise.

Company's products are manufactured by using in-house know how and no outside technology is being used for manufacturing activities. Therefore, no technology absorption is required. iii. Foreign Exchange Earning and Outgo:

During the period under review the foreign exchange earnings and outflow was as follows:

The Consolidated Financial Statements of the Company prepared in accordance with Indian Accounting Standards (Ind

AS) 110 issued by the Ministry of Corporate Affairs, forms part of this Annual Report.

In view of increased cyber-attack scenarios, the cyber security maturity is reviewed periodically and the processes, technology controls are being enhanced in-line with the threat scenarios. Your Company's technology environment is enabled with real time security monitoring with requisite controls at various layers starting from end user machines to network, application and the data.

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

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

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

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

The Company's shares are listed at NSE Limited & BSE Limited and the listing fee for the year 2024-2025 has been duly paid.

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

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

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