Nilachal Refractories Ltd

Dear Members,

Nilachal Refractories Limited

Your Directors are pleased to present the Forty Seventh (47th) Annual Reports together with the Audited accounts of your Company for the year ended 31st March, 2024.

FINANCIAL HIGHLIGHTS:

(Rupees in crores)

FINANCIAL REVIEW

Your Company is making all-round efforts for its revival and the prospects of such efforts should bear fruits in the Financial Year 2024-25.

The Directors are quite hopeful that the operations of your Company will improve henceforth compared to past unforeseen difficult period.

During the year, there has been no change in the nature of business of the Company.

DIVIDEND:

In view of brought forward losses, your directors are unable to recommend any dividend for the financial year ended 31st March, 2024.

TRANSFER TO RESERVES

No amount was transferred to Reserves during the F.Y. 2023-24.

HOLDING, SUBSIDIARY, ASSOCIATE COMPANY

The Company has no holding, subsidiary or associate Company therefore disclosures in this regard have not been provided in this Report.

MATERIAL CHANGES AND COMMITMENTS

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this report.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered during the year were in the ordinary course of business and were on arm's length basis. There were no materially significant related party transactions enteredby the Company during the year with the Promoters, Directors, Key Managerial Personnel or other persons which may have a potential conflict with the interest of the Company.

The policy on related party transactions as approved by the Audit Committee and the Board of Directors is hosted on the website of the Company i.e. www.nilachal.in

Since all related party transactions entered into by the Company were in the ordinary course of business and were on arm's length basis, therefore the requirement of furnishing the details in Form AOC-2 is not applicable to the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year under review the Company has not provided any loan, given any guarantee or made any investment governed under Section 186 of the Companies Act, 2013.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status of the Company's operation in future.

RISK MANAGEMENT

Risk Management is the process of identification, assessment and prioritization of risks followed by coordinated efforts to minimize, monitor and mitigate/control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. The Company has laid down a comprehensive Risk Assessment and Minimization Procedure which is reviewed by the Board from time to time. These procedures are reviewed to ensure that executive management controls risk through means of a properly defined framework.

DIRECTORS

In accordance with the provisions of the Companies Act, 2013, and Article 115 of the Article of Association of the company, Mr. Vimal Prakash, Director of the company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offer himself for reappointment.

The independent directors have submitted the declaration of independence, pursuant to Section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub-section (6) of Section 149 of the Companies Act, 2013.

KEY MANAGERIAL PERSONNEL

Mr. Krishna Chandra Pusti, Manager, Mr. Ashish Kumar Bhalotia, Company Secretary and Mr. Dukhabandhu Prusty, Chief Financial Officer are Key Managerial Personnel of the Company in accordance with the provisions of Section(s) 2(51), 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

MEETINGS OF BOARD OF DIRECTORS

During the financial year under review, the board met Seven times i.e.

The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013 and SEBI (LODR) Regulations, 2015.

The details with respect to Committee Meetings and attendance thereat have been provided in the Corporate Governance Report forming part of the Annual Report.

EXTRACT OF ANNUAL RETURN

The Company's Annual Return in form MGT-7 can be viewed on the Company's website at http://www.nilachal.in

INDUSTRIAL RELATIONS

Industrial relations at Dhenkanal Plant of the Company remained harmonious and cordial during the year under review. The Directors wish to convey their sincere appreciation for the cooperation and support provided by the employees of the Company.

DIRECTORS' RESPOSIBILITY STATEMENT

In terms of the provisions of section 134(5) of the Companies Act, 2013, your "Directors" hereby confirm

a) In the preparation of the annual accounts for the financial year ended 31st March, 2024, the applicable accounting standards had 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 as at 31st March, 2024, and of the profit/loss of the Company for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequate accountingrecords in accordance with the provisions of the Companies Act, 2013, for safe guarding the assetsof 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 had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively;

f) The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

PARTICULARS OF EMPLOYEES

Your Company comes under the provisions of the rule 5 of Companies (Appointment and Remuneration of Managerial Personnel)Rules, 2014, there by the Company Secretary was paid 1,81,000/- and the Chief Financial Officer was paid Rs. 2,31,000/-.

FORMAL ANNUAL EVALUATION HAS BEEN MADE BY THE BOARD OF ITS OWN PERFORMANCE, ITS DIRECTORS, AND THAT OF ITS COMMITTEES

The Companies Act 2013, and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 stipulates the performance evaluation of the Directors including Chairman, Board and its committees considering the said provisions the Company has devised the process and the criteria for the performance evaluation which has been recommended by the Nomination Committee and approved by the Board.

The Criteria for performance evaluation are as under :-

Attendance at meeting; Participation and Contribution; Responsibility towards stakeholders; Contribution in Strategic Planning; Compliance and Governance; Participation, Updating of Knowledge; Leadership; Relationships and Communications; resources; Conduct of Meetings.

Performance Evaluation of Board:-

Composition and Diversity of Board; Committees of the Board; Board & Committee Meetings; Understanding of the Business of the Company and Regulatory environment; Contribution to effective corporate governance and transparency in Company's Operation; deliberation/decisions on the Company's Strategies; Monitoring and implementation of the strategies and the executive management performance and quality of decision making.

Performance Evaluation of the Board Level Committees:-

The performance and effectiveness of the Committee, Frequency and duration, spread of talent and diversity in the Committee; Understanding of regulatory environment and development; interaction with the board.

Fraud Reporting (Required by Companies Amendment Bill, 2014)

No case of fraud has been reported to the Audit Committee or Board during the year.

AUDIT AND AUDITOR'S REPORT

At the 46th AGM held on 11/11/2023, M/s. Jain Saraogi & Co. LLP Chartered Accountants (Firm Registration No. 305004E) were appointed as the Statutory Auditor of the Company for a period of Five Years, starting from the Financial Year 2023-24 to 2027-28.

The Statutory Auditors on the financial statement for the financial year 2023-2024 forms part of the annual report , the Statutory Auditors have expressed qualified opinion which is self explanatory and management assures necessary action towards the same including carrying out necessary strategic decisions i.e. diversify its business which can be carried on in alignment with the industry , its operating. Further the Management is trying to rope in investors.

SECRETARIAL AUDIT REPORT

The Company appointed Ms. Twinkle Agarwal, Company Secretary in Practice and her report is annexed herewith.

BOARD'S COMMENTS ON AUDITOR'S REPORT

The Auditors observations and remarks are explanatory and the management has taken note of the fact that the impairment of the Property, Plant and Equipment need to be carried out and will undertake measures to carry out the same in due course. Hence does not require any clarifications.

The management has taken note that the actuarial valuation for the provision for employee benefits needs to be done and the same will be done in due course however the impact if any will be in significant keeping in mind the number of employees and provision already accounted for.

COST RECORDS AND COST AUDIT

Maintenance of cost records and cost audit as prescribed under the provisions of Section 148(1) of the Companies Act, 2013 are not applicable to the company.

COMPOSITION OF AUDIT COMMITTEE

The constitution of the Audit Committee, Terms of Reference and the dates on which meetings of the Audit Committee were held are mentioned in the Corporate Governance Report for FY'23-24 forming a part of this Annual Report.

ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE ETC

Information pursuant to section 134(3)(m) of the Companies Act, 2013 read with rule 8 of Companies (Accounts) Rules, 2014 in respect of conservation of Energy and Technology Absorption and Foreign Exchange Earning and Outgo is given in Annexure - I, forming part of this Report.

PREVENTION OF SEXUAL HARRASMENT AT WORKPLACE

Your Company is committed to provide a work environment which ensures that every woman employee is treated with dignity, respect and equality. There is zero-tolerance towards sexual harassment and any act of sexual harassment invites serious disciplinary action. During the year under review there were no cases of sexual harassment reported to the Company.

INTERNAL COMPLAINTS COMMITTEE

During the year under review the Company has not employed any women and hence setting up of internal complaints committee is not required.

VIGIL MECHANISM

Pursuant to Section 177 of the Companies Act, 2013 and the rules framed there under and pursuant to provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company has established a mechanism through which all the stakeholders can report the suspected frauds and genuine grievances to the appropriate authority. The Whistle Blower Policy which has been approved by the Board of Directors of the Company has been hosted on the website of the Company http:/nilachal.in/head of policies.html. During the year under review, the Company has not received any complaint(s) under this policy.

CORPORATE GOVERNANCE

The Company is committed in maintaining the highest standards of Corporate Governance and adheres to the stipulations prescribed under SEBI (Listing Obligations and Disclosure requirements) Regulations, 2015.

A Report on Corporate Governance & Shareholders Information together with an Auditors' Certificate regarding Compliance of the same are annexed as a part of this Annual Report

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Management Discussion & Analysis Report is presented in a separate section, forms a part of the Annual Report.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Management continuously reviews the Internal Control Systems and procedures for the efficient conduct of the Company's business. The Company adheres to the prescribed guidelines with respect to the transactions, financial reporting and ensures that all its assets are safeguarded and protected against losses. Internal Control System are implemented to safeguard the Company's assets from loss or damage, to keep a constant check on the cost structure, to prevent revenue leakages, to provide adequate financial and accounting controls and implement accounting standards.

The Board has appointed a Chartered Accountant firm who are conducting the Internal Audit of the Company. The report thereof is placed before the Audit Committee.

INSURANCE

The assets of the Company are adequately insured against the loss of fire and other risks which are considered necessary by the management.

DEPOSITS

Your company has not accepted any public deposit during the year under review.

CAPITAL STRUCTURE

During the year under review, your Company has neither increased its authorized capital nor issued any shares.

LISTING

The equity shares of your Company continued to be listed on Bombay Stock Exchange Limited (BSE) and Calcutta Stock Exchange Limited (CSE).

CORPORATE SOCIAL RESPONSIBILITY:

Corporate Social Responsibility is the continuing commitment by the business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large.

As a part of its policy for corporate social responsibility, the Company undertakes a range of activities to improve living conditions of the people in the neighbourhood of all its plants. In structuring its efforts to the various aspects of Corporate Social Responsibilities, the Company takes account in guidelines and statements issued by stakeholders and other regulatory bodies. Corporate Social Responsibility and Sustainable development will continue to be the leading priorities at the Company which it shall consistently strive to touch lives and make a difference.

APPRECIATION

Your Directors record their sincere appreciation for the assistance, support and guidance provided by Company's Customers, Suppliers, Government Authorities, Bankers, investors, financial institution and shareholders for their consistent support to the company. The Directors also commend the continuing commitment and dedication of the employees at all levels which has been critical for the Company's growth. The Directors look forward for their continuing support in future.