Palash Securities Ltd Directors Report

Dear Members,

Your Directors present herewith the 10th Annual Report on the business & operations of the Company alongwith the Audited Statement of Accounts for the financial year ended 31st March, 2024.

1. Financial Results

A summary of standalone and consolidated Financial Performance of the Company for the financial year ended on 31st March 2024, are summarized below:

(Rs. in lakhs)

	Standalone		Consolidated
Particulars	Year ended 31st March, 2024	Year ended 31st March, 2023	Year ended 31st March, 2024	Year ended 3 1st March, 2023
Total Revenue from Operations	23.31	484.41	4094.90	5319.40
Other Income	35.49	37.84	41.57	74.82
Total Income	58.80	522.25	4136.47	5394.22
Profit before Finance Costs, Tax, Depreciation and Amortization	25.93	480.48	(1103.21)	(1077.33)
Less: Depreciation & Amortization Expenses	1.73	2.05	71.93	79.21
Less: Finance Cost	3.57	10.72	258.48	298.03
Profit/(Loss) Before Tax	20.63	467.71	(1433.62)	(1454.57)
Profit/(Loss) After Tax	16.36	426.34	(1576.02)	(1625.73)

2. Operating Performance / State of Affairs of the Company

Details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.

A detailed analysis of the Companys operations, future expectations and business environment has been given in the Management Discussion & Analysis Report which is made an integral part of this Report and marked as Annexure "A"

3. Financial Performance 2023-24

During the Financial Year 2023-24, the Company incurred a profit after tax of Rs. 16.36 lakhs on standalone basis. On consolidated basis the loss after tax stood at Rs. 5394.22 lakhs.

There is no change in the nature of business of the Company. There were no significant or material orders passed by regulators, courts or tribunals impacting the Companys operation in future.

There were no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year i.e. 31st March 2024 and date of this report.

4. Dividend

The Board of Director did not recommend any dividend on equity shares for the period under review.

5. Amount transferred to Reserves

The Company has transferred of Rs. 16.36 Lakhs to the general reserves for the financial year under review.

6. Public Deposits

The Company has not accepted any deposits from the public and as such there are no outstanding deposits within the meaning of the provisions of the Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 2016 and the provisions of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules 2014.

7. Share Capital

As on 31st March, 2024, the Authorized Share Capital of the Company stood at Rs. 15,00,00,000/- (Rupees fifteen crore) divided into 1,35,00,000 (One crore thirty five lakhs) Equity Shares of Rs. 10/- (Rupees ten) each and 15,00,000 (Fifteen Lakhs) Preference Shares of Rs.10/- each and there is no change in the authorised capital during the year. Paid up Share capital comprised of 1,00,03,102 Equity Shares with a face value of Rs.10/- each totaling to Rs.10,00,31,020/- (Rupees ten crore thirty one thousand twenty).

During the year under review, the Board of Directors vide its resolution dated May 11,2023, has redeemed in full the 13,00,000 8.5% NonConvertible Cumulative Redeemable Preference Shares (NCCRPS) of Rs. 10/- (Rupees ten) each, aggregating to Rs. 1,30,00,000/- (Rupees One Crore Thirty Lakhs) along with accrued dividends thereon.

Your Company has not issued any shares/securities during the Financial Year 2023-24.

8. Subsidiary, Associate and Joint Venture

As on 31st March, 2024, the Company has 5 (five) subsidiaries named as Morton Foods Limited, Champaran Marketing Co. Ltd, Hargaon Investment & Trading Co. Ltd, OSM Investment & Trading Co. Ltd and Hargaon Properties Ltd. The Company has in place a policy for determining material subsidiaries in line with the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and can be accessed at https://www.birla-sugar.com/Assets/Palash/Policy%20for%20Determining%20Material%20Subsidiary-29-5-24.pdf The consolidated financial statements presented by the Company include financial information of its subsidiaries prepared in compliance with applicable Accounting Standards.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, the details containing salient features of the financial statement of subsidiary companies in Form AOC-1 forms part of this Report and marked as Annexure "F"

9. Human Resources

The Company continued to create a productive, learning and caring environment by implementing robust and comprehensive HR processes, fair transparent performance evaluation and taking new initiatives to further align its Human Resource policies to meet the growing needs of its business.

10. Directors

The Board comprises of 5 (five) Non-Executive Directors having experience in varied fields and 1 (one) Executive Director. Out of five NonExecutive Directors, four of them are Independent Directors. Mrs. Shalini Nopany, Non-Executive Woman Director is the Chairperson of the Company.

Mr. Chand Bihari Patodia (DIN: 01389238) will retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re- appointment as Director of the Company in terms of Section 152(6) of the Companies Act, 2013.

The tenure of Mr. Suresh Kumar Khandelia is expiring in 7th February, 2025 and he has been proposed to be re-appointed as Independent Director in the Company for a further period of five years at the ensuing Annual General Meeting.

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that they meet the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 read with Regulation 25 of SEBI (LODR) Regulations, 2015. Declarations have also been received by all the appointed Independent Directors of the Company with regard to registration on the databank of Independent Directors maintained by the Indian Institute of Corporate Affairs, Manesar (Haryana) in accordance with the provisions of Section 150 of the Companies Act, 2013.

In pursuance of the provisions of the Companies Act, 2013 and according to Regulation 25(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Performance Evaluation Criteria has been laid down for effective

evaluation of performance of the Board of Directors, the Committees thereof and individual Directors including the Chairperson of the Company. After detailed discussion at Board level as well as taking input from each Director, Nomination and Remuneration Committee finalized the format / questionnaires containing various parameters to evaluate the performance of Board and its committee(s), Individual Directors and Chairperson of the Company. The performance evaluation parameters are based on their roles and responsibilities, contribution to the Companys goals, decision making process, flow of information and various other aspects. The evaluation of performance of the Board as a whole, Committees of the Board, Individual Directors including the Chairperson of the Company was carried out for the Financial Year 2023-24. Nomination and Remuneration Committee evaluated the performance of the individual Directors.

The Independent Directors in their separate meeting held on 14th February, 2024 carried out the evaluation of the Board of Directors as a whole, Chairperson of the Company and Non-Independent Directors. The evaluation of Independent Directors was carried out without the presence of concerned Director.

The Chairman of Nomination and Remuneration Committee has submitted report of the respective evaluations to the Chairperson of the Company. Based on the questionnaires received from the Directors and considering the reports of Chairman of Nomination and Remuneration Committee, the Board has evaluated its own performance and that of its committees and individual directors including independent directors.

11. Key Managerial Personnel

The following directors / executives of your Company are whole-time Key Managerial Personnel (KMPs) as on 31st March, 2024 in accordance with the provisions of Section 203 of the Companies Act, 2013:

a) Mr. Chand Bihari Patodia - Managing Director

b) Mr. Deepak Kumar Sharma - Chief Financial Officer

c) Mr. Vikram Kumar Mishra - Company Secretary

All Directors, Key Managerial Personnel and Senior Management of the Company have confirmed compliance with the Code of Conduct applicable to Directors & employees of the Company and a declaration to the said effect made by the Managing Director forms part of this report. The Code is available on the Companys website at the weblink http://birla-sugar.com/Assets/Palash/Palash-Securities-Code-of- Conduct.pdf

12. Remuneration Policy

The Board has framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Nomination and Remuneration Policy as adopted by the Board of Directors is available on the weblink https://www.birla-sugar.com/Assets/Palash/ Nomination%20and%20Remuneration%20Policy-29-5-24.pdf The Nomination & Remuneration Committee has also framed criteria for performance evaluation of every Director and accordingly has carried out the performance evaluation during the year under review.

The Nomination and Remuneration Policy, inter-alia, includes the appointment criterion & qualification requirements, process for appointment & removal, retirement policy and remuneration structure & components, etc. of the Directors, Key Managerial Personnel (KMP) and other senior management personnel of the Company. The Nomination and Remuneration Policy also contains provisions about the payment of fixed & variable components of remuneration to the Whole-time Director/Managing Director and payment of sitting fee & commission to the non-executive directors.

13. Familiarisation Programme

Periodic presentations are made at the Board Meetings with respect to business performance and updates on business strategy of the Company. The details of the familiarisation programme (other than through meeting of Board and its Committees) imparted to Independent Director are uploaded on the website of the Company that can be accessed at https://www.birla-sugar.com/Assets/Palash/ Familiarisation%20Programme%202023-24.pdf

Further at the time of appointment of an Independent Director, the Company issues a formal letter of appointment outlining his/ her role, duties and responsibilities. The format of such letter of appointment is also available at the website of the Company at https://www.birh- sugar.com/Assets/Palash/Terms%20and%20conditions%20of%20appointment%20of%20Independent%20Directors.pdf

14. Corporate Social Responsibility Policy

The provisions of Section 135 of the Companies Act, 2013 relating to Corporate Social Responsibility are not applicable to the Company.

15. Meetings

A calendar of Meeting is prepared and circulated in advance to the Directors. The Board evaluates all the decisions on a collective consensus basis amongst the Directors. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013. During the financial year ended 31st March 2024, 4 (Four) Meetings of the Board of Directors of the Company were held. The details of the Board Meetings held during the financial year 2023-24 have been furnished in the Corporate Governance Report which forms part of this Annual Report.

The Company has complied with the applicable Secretarial Standards prescribed under Section 118(10) of the Companies Act, 2013.

16. Audit Committee

The Audit Committee was constituted on 30th March, 2017. The Committee comprised of Mr. Chhedi Lal Agarwal, Mr. Dinesh Kacholia, Mr. Arun Kumar Newar, Independent Directors and Mr. Chand Bihari Patodia, Managing Director. Mr. Chhedi Lal Agarwal, Independent Director acts as the Chairman of the Audit Committee and the Company Secretary acts as the Secretary to the Committee. Chief Financial Officer is a permanent invitee to the meetings. During the year there were no instances where Board has not accepted the recommendation of Audit Committee.

The details of the terms of reference, number and dates of meetings held during the financial year 2023-24, attendance of the Directors and remuneration paid to them are separately provided in the Corporate Governance Report.

17. Stakeholders Relationship Committee

The Stakeholders Relationship Committee was constituted on 30th March, 2017. The Committee comprised of Mr. Chhedi Lal Agarwal, Mr. Arun Kumar Newar, and Mr. Dinesh Kacholia. Mr. Chhedi Lal Agarwal, Independent Director acts as the Chairman of the Stakeholders Relationship Committee and the Company Secretary acts as the Secretary to the Committee.

The details of the terms of reference, number and dates of meetings held, attendance of the Directors and remuneration paid to them are separately provided in the Corporate Governance Report.

18. Nomination and Remuneration Committee

The Nomination and Remuneration Committee was constituted on 30th March, 2017. The Committee comprised of Mr. Chhedi Lal Agarwal, Mr. Arun Kumar Newar, and Mr. Dinesh Kacholia. Mr. Arun Kumar Newar, Independent Director acts as the Chairman of the Nomination & Remuneration Committee and the Company Secretary acts as the Secretary to the Committee.

The details of the terms of reference, number and dates of meetings held, attendance of the Directors and remuneration paid to them are separately provided in the Corporate Governance Report.

19. Loans, Guarantee and Investments

During the year under review, the Company has not given any loans and corporate guarantees covered under the provisions of Section 186 of the Companies Act, 2013. Details on particulars relating to investments under Section 186 of the Companies Act 2013 are given in Notes of the financial statements.

20. Related Party Contracts / Arrangements

All Related Party Transactions entered during the year were on arms length basis and in the ordinary course of business. There have been no materially-significant related party transactions made by the Company with the Promoters, the Directors or the Key Managerial Personnel which may be in conflict with the interests of the Company at large. Accordingly, disclosure of contracts or arrangements with Related Parties as required under section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable.

The Company has developed a Related Party Transactions Policy for purpose of identification and monitoring of such transactions and accordingly all Related Party Transactions are placed before the Audit Committee and the Board for approval. The Related Party Transaction Policy appears on the Companys website at https://www.birla-sugar.com/Assets/Palash/Policy%20on%20Related%20Party%20Transaction.pdf

The details of related party transactions entered during the year as per the provisions of Indian Accounting Standard ("Ind AS") 24 have been disclosed in the Notes to the Financial Statements.

21. Suspense Escrow Demat Account

The Company has opened a Suspense Escrow Demat Account with Depository Participants In accordance with SEBI circular and guidelines for crediting unclaimed shares in dematerialised form lying in the Companys Demat Suspense Account.

22. Risk Management

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities.

23. Internal Financial Controls

The Company has laid down internal financial controls, through a combination of Entity level controls, Process level controls and IT General controls inter-alia to ensure orderly and efficient conduct of business, including adherence to the Companys policies and procedures, accuracy and completeness of accounting records and timely preparation and reporting of reliable financial statements/ information, safeguarding of assets, prevention and detection of frauds and errors. The evaluations of these internal financial controls were done through the internal audit process and were also reviewed by the Statutory Auditors. Based on their view of these reported evaluations, the directors confirm that, for the preparation of financial statements for the financial year ended 31st March, 2024, the applicable Accounting Standards have been followed and the internal financial controls are generally found to be adequate and were operating effectively & that no significant deficiencies were noticed.

24. Vigil Mechanism/Whistle Blower Policy

The Company has established a vigil mechanism and adopted whistle blower policy, pursuant to which whistle blowers can report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct and instances of leak of Unpublished Price Sensitive Information which are detrimental to the Companys interest. The vigil mechanism provides for adequate safeguards against victimization of the Director(s) and employee(s) who avail of this mechanism. No person has been denied access to the Chairman of the Audit Committee. The Whistle-Blower Policy of the Company can be accessed on the Companys website at https://www. birla-sugar.com/Assets/Palash/Whistle-Blower-Policy-Palash-29-5-24.pdf

25. Corporate Governance & Annual Return

Your Directors strive to maintain highest standards of Corporate Governance. The Corporate Governance Report for the Financial Year 2023-24 is attached as Annexure "B" to this Report.

The declaration of the Managing Director confirming compliance with the Code of Conduct of the Company is enclosed as Annexure "C" to this Report and Auditors Certificate confirming compliance with the conditions of Corporate Governance is enclosed as Annexure "D" to this Report

The Companys Annual Return in Form MGT-7 can be viewed on the Companys website and can be accessed at https://www.birla-sugar. com/Shareholders-Info-1/Palash-Annual-Returns

26. Auditors, Audit Qualifications and Boards Explanations

Statutory Auditors

In terms of Section 139 of the Companies Act, 2013 read with rules thereunder, Messrs. Agrawal Subodh Co., Chartered Accountants, (Firm Registration No: 319260E), were re-appointed as the Statutory Auditors of the Company for another term of 5(five) years to hold office from the conclusion of the 7th AGM till the conclusion of the 12th AGM to be held in the year 2026.

The Statutory Auditors Report on the financial statements for financial year 2023-24 forms part of this Annual Report. Statutory Auditors have expressed their unmodified opinion on the Standalone Financial Statements and their reports do not contain any qualifications, reservations, adverse remarks, or disclaimers.

However, the Auditors Report on Consolidated financial statements, contains a qualified opinion carried out from the audit report of M/s. Morton Foods Limited (MFL), one of subsidiaries of the Company, MFL had recognized Deferred Tax Asset (net) of Rs. 450.53 Lakhs for the year ended in March 31, 2022, based on the future profitability projections made by the Management. MFL, however, has not recognized any further DTA during the current year ended March 31 2024 and for the previous year ended in March 31, 2023 as a matter of prudence. In the opinion of the auditors of MFL, in the absence of convincing evidence that sufficient taxable profit will be available in future against which the unused losses can be utilized by the entity, as required in terms of Indian Accounting Standard 12, had the MFL reversed the above DTA, loss before tax for the year ended March 31,2024 would have been Rs. 2,453.19 lakhs as against the reported loss of Rs. 2,002.66 lakhs and other equity would have been Rs. (242.73) lakhs as against the reported figure of Rs. 207.80 lakhs.

The management of the MFL is confident that there would be sufficient taxable income in future to claim the tax benefit.

The Statutory Auditors hold valid certificate issued by the Peer Review Board of the ICAI, as required under Regulation 33 of SEBI (LODR) Regulations, 2015.

Statement on Impact of Audit Qualifications

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, your Company had appointed Messrs Vinod Kothari & Co., Practising Company Secretaries to undertake the Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report is annexed herewith as Annexure "E". The Report does not contain any qualification, reservation or adverse remark.

In addition to the above, pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Secretarial Audit Reports of the material unlisted subsidiaries of the Company viz-a-viz Morton Foods Limited, Champaran Marketing Co Ltd, Hargaon Investment & Trading Co. Ltd and OSM Investment & Trading Co Ltd is annexed herewith as Annexure "E1"Annexure "E2", Annexure "E3" & Annexure "E4" respectively, which is self- explanatory.

Internal Auditor

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and The Companies (Accounts) Rules, 2014, your Company has, on the recommendation of the Audit Committee re-appointed Messrs M Parasrampuria & Co., Chartered Accountants to conduct Internal Audit of the Company for the financial year 2024-25.

Cost Audit

The Companies (Cost Records and Audit) Rules are not applicable on the Company.

Reporting of frauds by Auditors

During the year under review, the Statutory Auditors and Secretarial Auditor of your Company have not reported any instances of fraud committed in your Company by the Companys officers or employees to the Audit Committee, as required under Section 143(12) of the Act.

27. Investor Education and Protection Fund

The provisions pertaining to Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, are not applicable to your company.

28. Disclosures Under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013

During the year under review, no complaint / case was either filed or pending pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

29. Energy Conservation, Technology Absorption and Foreign Exchange Earnings & Outgo

The provisions of Section 134(3)(m) of the Companies Act, 2013 do not apply to the Company. There was no foreign exchange inflow or

outflow during the year under review.

30. Particulars of Employees and Managerial Remuneration

There was no employee in the Company who was in receipt of remuneration as required to be disclosed under section 197 read with Rule,

5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

31. Directors Responsibility Statement

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 Section 134(3)(c) of the Companies Act, 2013:

a) that in the preparation of the annual financial statements for the year ended 31st March, 2024, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made 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 the year ended on that date;

c) that proper and sufficient care has been taken 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) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

32. CEO/CFO Certification

Mr. Chand Bihari Patodia, Managing Director and Mr. Deepak Kumar Sharma, Chief Financial Officer have submitted certificates to the

Board as contemplated under Regulation 17(8) of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

33. Other Disclosures

a) There is neither application nor any proceeding pending under the insolvency and bankruptcy code 2016 during the year along with their status as at the end of the financial year.

b) There has been no instance of any bank or financial institutions one-time settlement.

34. Acknowledgement

Your Directors wish to express their sincere thanks to the bankers and other stakeholders for their continued co-operation and assistance.