We have the pleasure in presenting the 42^nd Annual Report of the Company and the audited statement of accounts for the year ended 31^stMarch, 2024.

FINANCIAL PERFORMANCE

A summary of the financial results is given below:

(Rs. Tn Crores)

REVIEW OF OPERATIONS

The company is operating mainly two segments

1) Paper and

2) Industrial Chemicals.

The Company achieved Total Income of Rs. 325.22 Cr as compared to Rs. 414.12 Cr recorded in previous year. The fall in turnover was because of lower utilization of capacities due to shutting downs of plants for Capacity Expansion, Modernization and Energy Saving Projects undertaken by the Company.

We are pleased to inform to the stake holders that as all the projects undertaken by the company have successfully been implemented and the company is going to have very good results in the ensuing year.

The projects under taken by the company for Rs 90 Crores outlay consisted mainly of the expansion of capacity and cost reduction projects viz

a. Installation of co-generation power plant of 2 MW unit Rama Paper,

b. Enhancement of sulphuric acid manufacturing capacity from 280 TPD to 500 TPD and installation of 3.3 MW Turbine,

c. Installation of efficient online coating machine with capacity of 9000 TPD p.a. and

d. Installation of pulping street offering flexibility in uses of raw materials

All the above projects were completed in last quarter of the year and now operational at its planned capacities.

For implementation of above projects, synchronization with existing set up, trial runs and addressing initial teething issues, the plants were required to shut down frequently which impacted the performance of the company. Revenue from operation was decreased from Rs. 414.12 Cr to Rs. 325.22 Cr. However, despite drop in turnover, under utilisation of its capacities, and under recovery of overheads, the company was able to record Profit Before Tax of Rs. 0.77 Cr as against Rs. 0.22 Cr recorded in previous year.

Apart from the projects, the operations of Paper Divisions were also impacted due to continuation of war between Russia-Ukrain and freshly broken out war between Iran-Israel. The sanctions placed by United Nations and European Nations resulted in weak global demands which adversely impacted industries in India having exports. Similarly, the sanctions also resulted in short supply of few commodities, sudden increase in ocean freights, refusal by insurance companies to take risk exposure on middle east route disrupted the scheduled supplies which adversely impacted supply chain. It was a double whammy situation which also impacted operations as well as the margins. Further the measures taken across the world to control inflation also resulted in decrease in consumption which also led to reduction in demand. Increase in interest rates also further added to demand cycle adversely. Mismatch in supply and demand also resulted in pressure on margins.

In Chemical Unit, Company has successfully commissioned new plant of Sulphuric acid manufacturing with capacity of 320 TPD by replacing old plant of 100 TPD capacity and now the total capacity of sulphuric acid manufacturing is 500 TPD. The commissioning of new plant involved dismantling of existing plant and installing a new plant for which the operations of plant no. 1 were shut for almost 9 months. Company has also installed 3.3 MW turbine in the place of 2 MW Turbine, which will generate electricity from the steam generated in manufacturing process sufficient enough to fulfil the electricity requirement of chemical unit. With 500 TPD capacity, Unit will have surplus steam which can be exported to paper division or can be exported as Green Energy to other companies. This will bring additional revenue to the company.

Despite all these odds, company is profitable and generating profits because of its customised product offerings, flexibility in manufacturing profitable product mixes and ability to use different variety of raw material mix. Installation of co-generation power plant in Unit Rama Paper will substantially reduce the requirement of electricity from grid. Installation of 3.3 MW turbine will make electricity requirement from grid of Unit Nath Chemical virtually zero and it will have surplus steam and power which can be exported to paper division or exported to others as green energy.

The continuous efforts in research and developments in its customised paper product offerings have resulted in global demand for its paper. Company has accredited with “TWO STAR Export House” by the Directorate General of Foreign Trade in recognition of its export performance. Company is again honoured with “Export Excellence Award” Gold for FY 202021 and Silver for FY 2021-22 in Multi Product (Non-MSME) category by Federation of Indian Export Organization, Western Region. Company is recipient of this award for 4 consecutive years.

PAPER DIVISION

Despite planned shutting downs of paper plants for installation of Co-generation power plant, installation of new coating machine, new pulping street and challenges in supply chain management because of on-going wars between Russia-Ukrain and Israel-Iran, the paper division has recorded total income of Rs. 267.82 Cr as against the turnover of Rs. 304.63 Cr recorded in previous year. The war posed challenges in the form of sudden increase in ocean freights, denial of marine and other insurance coverages by the insurance companies to some countries which resulted in postponement of despatch schedules.

However things are normalized now and company is witnessing revival of demand in both domestic as well as overseas market.

CERTIFICATIONS

Certifications and awards do have a significant impact on a company's Growth journey. reflecting its credibility, and reputation. On its continued journey to achieve Excellence, Company is awarded the status of 2 Star Export house. At the same time Company’s compliances of sustained Eco friendly and Save Environment moves dedicated to afforestation have, persuaded the World forestry organization FSC COC to continue the validation for following code of conduct for its products quality. In order to match the Global standards of procedure the company adheres to ISO 9001:2015 and 14001:2015

The excellence in quality of products has crowned your company to receive “Export Excellence Award”- Gold in Multi Products Category for three years consecutively for year 2018-2019, year 2019-2020 and year 2020-2021. More proudly the company placed itself in a Global leadership position in related segments.

PRODUCTS AND NEW PRODUCTS LAUNCH

Company’s existing products range of Absorbent Kraft , Bag Kraft ( Mac D) , MG White Tissue , Colour tissue and Gift Tissue are well established and has Global acceptance. This year company proposes to launch a niche grade in Absorbent kraft to be named as Diamond to fill in the space created by shifting of country’s few premiere producers to other areas. Good margins and an edge over quality along with vital growth is assured with our presence in this segment. Last year your company had successful launched the kraft for square bottom paper bags named as Mac D to support state’s ban on Single use Plastic movement. The Mac D Kraft/ Shoppers Bags Kraft are now well accepted.

Other product produced by Company such as One Time Carbon Base Paper and print Transferring Base paper are already well accepted and moving in Global markets.

Unstoppable move and continuous Research & Development work in laboratory to evaluate and develop new products is scheduled to come out with new elite products like Gold Rust and Masking paper, Protection paper by this year end or early 2025, are slated only to bring higher revenue and reputation to the company.

MARKETING STRATEGIES

Plans of action set to achieve specific business goals and objectives is all time vision for Company’s Marketing strategies to promote and channelise it’s policy to increase the sales and revenues and attain sustainable advantage in markets. Consistency in product’s quality and sales after service per excellence contribute an important role in expanding and retaining the market share. Company’s Marketing strategies are mainly based on following three steps -

> Product: We develop the products that meet customer /consumer needs.

> Price: prices are designed to balance revenue and affordability to meet level playing field.

> Promotion: Through strong and dedicated distribution network and other media partners.

The global paper industry is expected to grow at a compound annual growth rate (CAGR) of 3.80 % from 2024 to 2032. Increasing demand for paper packaging and other segments is expected to increase due to the growth of e-commerce as well as the other solutions.

We are on leading position in domestic market and more focused on expanding export markets for our products like Absorbent Kraft, White Tissue and Colour Tissues and M G Kraft from South East Asian countries, Middle East to Africa, Europe and South America and encash the maximum potential of industrial and commercial growth in these regions.

Company’s products Absorbent Kraft and Gift wrap Tissues and their synergic components are heading to capture a sizable part of the phenomenal growth in international demand. The growth in demand of Laminates and Decorative laminates is estimated to USD 12.50 Billion between 2024 to 2028.

CHEMICAL DIVISION

UNIT-NATH CHEMICAL

Chemical industry also faced the adverse impact of rising interest rates, inflation, melting down global demand and Unit Nath Chemical was no exception. The products produced by Unit Nath Chemical are mainly used in agro-chemicals, fertilizers, dyes and pigments, pharmaceuticals, textile and various industries. Agro chemical, fertilizers, textiles industries were badly impacted in FY 23-24. Dumping of chemicals and textiles by China resulted in reduction of export of chemicals, textiles and other products which in turn also impacted demand for our product. Because of slow-down in demand and over supply, prices of chemicals were impacted.

Unit Nath Chemical has successfully completed the project undertaken viz increasing Sulphuric Acid manufacturing capacity from 280 TPD to 500 TPD and also replaced its 2 MW Turbine with advance and efficient turbine of 3.3 MW. Enhancement in acid manufacturing capacity with installation of efficient and high capacity turbine has fulfilled power requirement of Unit Nath Chemical. It has virtually made Unit Nath Chemical a Power Surplus unit.

Enhancement in manufacturing capacity has also resulted in surplus steam generation even after meeting its steam requirement and conversion of steam into power to meet its power requirement. The surplus steam which is also in significant quantity can be exported as Green Energy which will add to its revenue and profitability significantly.

DIVIDEND

The Board of Directors have not recommended Dividend for the Current year due to conservation of profit for the future operations and continued investments.

TRANSFER TO RESERVES

The Board of Directors have decided not to transfer any amount to the Reserve for the Current Year.

SUBSIDARY COMPANY, JOINT VENTURE OR ASSOCIATE COMPANIES

As on 31.03.2024, Company doesn’t have any Subsidiary, Joint Venture and Associate Company.

PUBLIC DEPOSIT

The Company has not accepted deposits from the public during the financial year under the review within the meaning of Section 73 of the Companies Act, 2013, read with companies (Acceptance of Deposits) Rules, 2014.

EXTRACT OF ANNUAL RETURN

The company is having website i.e. www.nathindustries.com and Annual Return in form no MGT-9 of the company has been published on website and form part of the Boards Report in Annexure-I.

CORPORATE GOVERNANCE

The Company has adopted best corporate practices and committed to conducting its business in accordance with the applicable laws, rules and regulations. The Company’s Corporate Governance practices are driven by effective and strong Board oversight, timely disclosures, transparent accounting policies and high level of integrity in decision making. A separate Report on Corporate Governance together with a certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this report and given in Annexure-II.

NUMBER OF MEETINGS HELD DURING THE YEAR

A total Six Board Meetings were held during the financial year 31^st March 2024. The names of the members of the Board, their attendance at the Board Meetings is given in Para 2 of Annexure-II.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

CSR liability for the FY 2023-24 is NIL because of non-applicability of provisions laid down in Section 135 of the Companies Act 2013. However Company is still active as far as the CSR initiative undertaken in earlier years by reviewing the CSR activities carried out by the implementing agency. No amount is unspent on account of CSR as on 31^st March 2024.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis of the financial condition and results of consolidated operations of the Company under review, is annexed and forms an integral part of the Directors' Report, is given in Annexure-IV.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Pursuant to the provisions of Section 152 of the Companies Act, 2013 and Rules made there under, Ms Nupur Lodwal (DIN 10150318) Director of the Company, shall retire by rotation at this Annual General Meeting and being eligible, offer herself for re-appointment, for which necessary resolution has been incorporated in the notice of the meeting. The Board of Directors recommends the re-appointment of Ms Nupur Lodwal as a Director of the Company.

Mr Kashinath Iyer Ganapathy was appointed as an independent director of the Company pursuant to Section 149 of the Act, read with the Companies (Appointment and Qualification of Directors) Rules, 2014 (“the Appointment Rules”) by the Board, effective 21.03.2020, to hold office up to 20.03. 2025. The members at the AGM held on 30.09.2020 had approved the same. He is due for retirement from the first term as an independent director on 20.03.2025. The Nomination and Remuneration Committee (NRC), after taking into account the performance evaluation of Mr Kashinath Iyer Ganapathy during his first term and considering his knowledge, expertise, experience and substantial contribution and time commitment, has recommended to the Board his reappointment for a second term of 5 (five) years.

Based on the recommendation of the NRC, the Board, recommended the reappointment of Mr Kashinath Iyer Ganapathy as an independent director, for your approval for a second term of 5 (five) years effective 21.03.2025, to 20.03.2030 (both days inclusive).

The Company has received declarations from all the Independent Directors of the Company in terms of Section 149(7) of the Act, confirming that they meet criteria of independence as prescribed under section 149(6) of the Act and Regulation 25 of SEBI Listing Regulations, 2015.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act, 2013.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement Under Section 134 (3) (c) of the Companies Act, 2013 with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts for the year ended March 31, 2024, the applicable Accounting Standards have been followed and there are no material departures from the same;

b. The Directors have selected such Accounting Policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the State of affairs of the Company as at March 31,2024 and of the Profit of the Company for that period;

c. The Directors 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. The Directors had prepared the annual accounts of the Company on a going concern basis;

e. 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;

f. 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.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

In terms of Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the necessary disclosures have been annexed as “Annexure-V” of the Directors Report.

None of the employee including Whole Time Director of the company have received remuneration more than the limit set out in 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) Rule, 2014,

EVALUATION OF BOARD

The Board of Directors have evaluated the performance of all Independent Directors, NonIndependent Directors and its committees viz Audit Committee, Nomination and Remuneration Committee, Compliance Committee and CSR Committee. The Board deliberated on various evaluation attributes for all Directors and after due deliberations made an objective assessment and evaluated that all the directors in the Board have adequate expertise drawn from diverse industries and business and bring specific competencies relevant to the Company’s Business and operations. The manner in which the evaluation was carried out is mentioned in the Corporate Governance Report.

INTERNAL CONTROL SYSTEM

Internal Control System consist of policies and procedures designed and adopted to ensure correct and timely reporting of financial information, accuracy and completeness of accounting records, legal and statutory compliances, safeguarding of assets, prevention and detection of frauds and validation of Information Technology Security controls. The Company remains committed to have robust and effective internal control mechanism across all plants and offices that provides assurance of existence and effectiveness of internal control system.

The Internal Control System is in existence, implemented and effective is checked by the external team of Independent Auditor appointed by the Company. Observations and findings on internal control system is regularly shared by the Auditor and the same is reviewed by the Audit Committee. During the year, no major irregularity or deviation from the defined Internal Control System was observed and the Audit Committee has concluded that Internal Control System is implemented and effective.

The information about the Internal Control System and their adequacy are included in the Management Discussion and Analysis, which is a part of this report.

WHISTLE BLOWER POLICY / VIGIL MECHANISM

The Company has always strived to conduct its business fairly, ethically and with integrity. In line with this belief, the Company has in place Whistle Blower Policy Vigil Mechanism in compliance with the provisions of Sec 177(9) and (10) of the Companies Act 2013, for the Directors and employees to report their genuine concerns or grievances related to actual or suspected fraud, unethical and corrupt behaviour, or violation of Company’s code of conduct or Ethical Policy and any other incidence or event which would be detrimental to the interest of the company. The Vigil Mechanism Policy is uploaded on the website of the company at www.nathindstries.com.

During the year, no person has been denied access to the Audit Committee.

OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero tolerance policy as far as sexual harassment of women at work place. The Company has a documented policy as required under the Sexual Harassment of women at workplace (Prevention, Prohibition and Redressal) Act 2013. The Company has Internal Complaints Committee (ICC) at its work place to redress the complaints of women employees.

During the year, no complaint is filed with Internal Complaints Committee. Further no complaints are pending as on 31^st March 2024.

RISK MANAGEMENT POLICY

The Board of Directors have designed risk management policy in compliance to the provisions of Section 134(3) of the Companies Act, 2013. It helps in identification of risk, assessment of impact of risk and mitigation thereof. The implementation of Risk Management Policy helps in timely and corrective decision making and minimising the risk. The risk management policy is monitored, reviewed and revised to meet the strategic, operational and other goals set by the Company. Risk Management Policy of the Company is given in Annexure IV of the Annual Report.

STATUTORY INFORMATION

The Company is basically into the Paper and Chemical business and is the member of BSE Platform.

STATUTORY AUDITORS

The members, in the 41^st Annual General Meeting held on 29^th September, 2023, appointed M/s N R Agrawal & Co, Chartered Accountants, Mumbai (having Firm Registration No.100143W) as Statutory Auditors of the Company for a period of five years upto the conclusion of the 46th Annual General Meeting .

COST AUDITOR

The Board has appointed M/S RAJA DUTTA & CO, Cost Accountants (Firm Registration no. 101555, Membership no-30063, PAN no- AJDPD6775F) Daman for the financial year 2024-25. Company has maintained Cost record and conducted cost audit as specified by Central Government under Section 148 (1) of Companies Act, 2013.

SECRETARIAL AUDITOR

The Secretarial Audit for the FY 2023-24 was carried out by Ms. Neha P. Agrawal. The Secretarial Audit Report is self-explanatory and does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report forms the part of this report and annexed in Annexure-VII.

AUDITORS REPORT

The notes referred to by the Auditors in their report are self-explanatory and do not call for further explanation except with reference to the observation of auditors regarding transfer of title deeds of the amalgamating companies viz Nath Industrial Chemicals Limited and Nath Pulp and Paper Mills Limited. The company hereby informs that the legal formalities for transfer of titles deeds are already submitted to the concerned authorities and transfer formalities are under process.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

The Corporate Governance Report contains relevant details on the nature of Related Party Transactions and the policy formulated by the Board on materials Related Party Transactions.

During the year, Company has not entered into Contracts or arrangements which were material in nature and which may have conflict with the interest of the Company with Promoters, Key Managerial Person of other as referred to in Section 188(1) of the Companies Act 2013. Transactions carried out with related parties were carried out in the course of business and at Arms Length Prices are disclosed in Notes to Accounts of the Financial Statements. Since the transactions were carried out at Arms Length Prices, provisions relating to filing of form AOC-2 is not applicable.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Disclosure regarding loans given or guarantee provided or Investment made during the year as required under the provision of Sec 186 of the Companies Act, 2013 are given in Notes to the Financial Statements.

INSURANCE

All the properties and the insurable interest of the Company including building, plants and machineries and stocks wherever necessary and to the extent required have been adequately insured.

RESEARCH & DEVELOPMENT

The Company believes that “Change is the only thing which is permanent in life”. Continuous Research in the field of product development, cost reduction has helped the company in establishing itself as a leader in the field of Customized Speciality paper manufacturers, meeting the desired quality within permissible cost budgets.

ENERGY CONSERVATION MEASURES, TECHNOLOGY ABSORPTION AND R& D EFFORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information in accordance with the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014 are set out below:

(A) Conservation of Energy

Various measures were taken by the Company for conservation of energy and reduction of demand from grid power by aligning the various processes. The broad measures undertaken by the company are as under:-

i. Installation of 3.3 MW Turbine in Unit Nath Chemical which converts steam generated during the manufacturing process into power and the same is used captively. With the increased capacity of 500 TPD, the steam generation is high and the steam is surplus even after meeting the steam and power requirement of the Unit.

ii. Significant surplus quantity of steam is left with Unit Nath Chemicals even after meeting its power requirement. The same can be exported as green energy to others.

iii. Installation of 1 MW solar at Power Plant at Unit Nath Paper has generated 20,48,630 units in last year.

iv. Installation of co-generation power plant in Unit Rama Paper has also reduced the electricity requirement from Grid.

(B) Technology Absorption and Research Development

Being the manufacturer of specialty and customised papers, continuous research and development is an integral part of the Company’s business. R & D used in variety of spheres such as developing new grades of paper, manufacturing within permissible cost budget, achieving operating efficiencies etc. New Pepsi Pulping street commissioned in the previous financial year has brought the desired benefit in selection of raw materials and reduced dependency on imported waste paper.

(C) Foreign Exchange Earnings and Outgo

The Company has incurred the following expenses in foreign currency during the financial year 2023-24. The rupee equivalent of that amount has been given hereunder:

ACKNOWLEDGEMENT

The Board of Directors place on record with appreciation, the co-operation and unstinted support received from its Employees for commendable performance in the target sets by the Company in challenging times. The Board of Directors also express their sincere thanks to all the Customers, Suppliers, Bankers, Regulatory Authorities, Stock Exchange and Business Associates for their unconditional support. The Board of Directors acknowledges your confidence and continued support and looks forward for the same in future as well.

For and on behalf of the Board, Akash Kagliwal

Place: Mumbai Managing Director

Date: 26.08.2024 (DIN:01691724)