Kanoria Chemicals & Industries Ltd

TO THE SHARE HOLDERS

Your Directors have pleasure in presenting the Sixty Fourth Annual Report, along with the Audited Accounts of the Company for the nancial year ended 31 March 2024.

Detailed information on the performance of your Company appears in the Annual Report. A discussion on the operations of the Company is given in the section titled 'The Year in Review'. Some of the statutory disclosures, however, appear in this Report. This Report, read along with the other sections, provides a comprehensive overview of the Company's performance and plans.

FINANCIAL RESULTS

The nancial performance of the Company for the year ended 31 March 2024 is summarized below:

STATE OF COMPANY'S AFFAIRS

During the year under review, the operational performance of the Company's chemical plants situated in Ankleshwar, Vizag, and Naidupeta remained robust and the plants were running ef ciently. Both the manufacturing output and sales volumes of our product exceeded those of the preceding scal year. It is, however, imperative to note that the prevailing market conditions, coupled with in ux of imported goods from traditional exporting nations, have adversely affected the Company's pro tability during the year under review. The situation since then has improved with the imposition of anti dumping duty in May, 2024 on import of Pentaerythritol, one of the key products manufactured by the company.

The Company has a vision and comprehensive long-term growth strategy entitled "Vision-2030", encompassing a diverse array of projects spanning new as well as existing product lines. Our objective is to achieve signi cant expansion in both revenue and pro tability by the year 2030. As an initial step towards realizing this vision, the Company successfully inaugurated its Phenolic Resin plant in Ankleshwar, Gujarat during the scal year 2022-23, thereby establishing itself as the only indigenous Phenolic Resin manufacturer with a presence on both the West and East coasts of the Country. The Company is currently augmenting the capacity of its Formaldehyde plant at Ankleshwar by 345 TPD, thus taking the overall capacity to 1400 TPD across all locations. Commercial production is expected by August 2024. Additionally, the Company is also increasing the capacity of Hexamine by 18 TPD by setting up a second plant at Ankleshwar, thus increasing the overall capacity to 52 TPD across all plants, with commercial production slated to commence by September 2024. The Company has made signi cant strides in the development of various Pentaerythritol Derivatives, with ongoing endeavours focused on introducing a range of novel products into the market.

The Company's Solar Power Division located at Village Bap in Jodhpur District in the state of Rajasthan was engaged since 2012 in the generation of power from solar energy using Photo Voltaic (PV) technology. The 5.0 MW capacity plant was set up under the Renewable Energy Certi cate (REC) scheme.

The returns from the said solar business have not been commensurate with the investments and risks involved in it. The Company therefore, vide a resolution passed by circulation on 3 May, 2024, approved the sale of the solar business by way of slump sale.

No material changes and commitments have occurred after the close of the nancial year 2023-24 till the date of this Report, which affect the nancial position of the Company.

A brief description of the operations of the subsidiaries of the Company appears later in this report.

DIVIDEND

The Board of Directors has not recommended any dividend for the nancial year ended 31 March 2024.

The Dividend Distribution Policy as approved by the Board may be accessed on the Company's website at the following link:

https://a.storyblok.com/f/209886/x/fd9ac34653/dividend-distribution-policy.pdf

TRANSFER TO RESERVES

The Company has not transferred any amount to Reserves for the nancial year ended 31 March 2024. .

CREDIT RATINGS

Care Ratings Limited has revised the rating for the long-term bank facilities of the Company as CARE BBB; Stable (Triple B; Outlook: Stable) from the existing rating of CARE BBB+; Stable (Triple B Plus; Outlook: Stable) and rating for the short-term bank facilities as CARE A3+ (A Three Plus) from the existing rating of CARE A2 (A Two).

CONSOLIDATED FINANCIAL STATEMENT

As per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”) and provisions of the Companies Act, 2013 (“Act”), the audited Consolidated Financial Statement for the year ended 31 March 2024 has been annexed with the Annual Report.

DEPOSITS

During the year under review, the Company has not accepted any deposits from the public and that as at the end of the year there were no outstanding deposits under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal nancial controls with respect to nancial statements. The Company's Internal Control Systems are commensurate with the nature, size and complexity of its business and ensure proper safeguarding of assets, maintaining proper accounting records and providing reliable nancial information. The policies and procedures adopted by the Company ensure prevention and detection of frauds and errors, accuracy and completeness of the records and timely preparation of reliable nancial statements. No reportable material weakness in the design or operation was observed during the year.

DIRECTORS

During the year under review, following changes took place in the Directorships:

Shri Sidharth Kumar Birla (DIN: 00004213) was re-appointed as Independent Director of the Company with effect from 18 May, 2023, for a second term of 5 ( ve) consecutive years with effect from May 18, 2023 to May 17, 2028. His re-appointment was approved by the shareholders on May 15, 2023 by way of Postal Ballot.

Shri R.V. Kanoria (DIN: 00003792), was re-appointed as the Managing Director of the Company for a further period of 3 (three) years with effect from 10 January, 2024. His re-appointment was approved by the shareholders on December 29, 2023 by way of Postal Ballot.

Except the above, there has been no change in the Board of Directors during the Financial Year ended March 31, 2024.

On the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on 5 August, 2024:

a) Proposed the appointments of Smt. Meeta Makhan (DIN: 07135150) and Shri Sumanta Chaudhuri (DIN: 01998420) as Additional Directors of the Company, in the category of Independent Directors, not liable to retire by rotation for a period of 5 years effective from 4 September 2024, subject to the shareholders' approval. The Board is of the opinion that Smt. Meeta Makhan and Shri Sumanta Chaudhuri are persons of integrity, expertise, and are competent and pro cient to serve the Company as Independent Directors.

b) Proposed appointment of Shri Hemant Kumar Khaitan as Non Executive and Non Independent Director, liable to retire by rotation, effective from 4 September 2024, subject to the shareholders' approval, vide end of his second term of Independent Directorship with effect from the close of business hours of 3 September, 2024. The Nomination and Remuneration Committee and the Board are of the view that given the contribution by Shri Hemant Kumar

Khaitan to Board processes and his knowledge, experience and performance, his continued association would bene t the Company. rd

Further, Shri Amitav Kothari and Shri A. Vellayan will also retire as Independent Directors, with effect from the close of business hours of 3 September, 2024, vide end of second term of their Independent Directorship. Shri Saumya Vardhan Kanoria (DIN: 02097441) retires by rotation at the ensuing AGM under the applicable provisions of the Act and being eligible, offers himself for re-appointment as a Director of the Company.

Additional information, pursuant to the Listing Regulations and Secretarial Standard on General Meetings (SS2) of ICSI in respect of Directors seeking appointments and re-appointment is given in the AGM Notice of the Company.

Further, as declared by them, none of the Directors of the Company is disquali ed from being appointed as a Director, as speci ed in section 164(2) of the Companies Act, 2013 and rule 14(1) of the Companies (Appointment and Quali cation of Directors) Rules 2014 or is debarred or disquali ed from being appointed or continuing as Director of companies by the SEBI/Ministry of Corporate Affairs or any such statutory authority.

The Company has received declarations from all Independent Directors con rming that they meet the criteria of independence as prescribed under Section 149 (6) of the Companies Act and Regulation 16 (1) (b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In the opinion of the Board, the said Directors ful ll the conditions for appointment/re-appointment/continuation as Independent Directors as speci ed in the Act and the Listing Regulations and they are also independent of the Management.

KEY MANAGERIAL PERSONNEL

Save and except as stated above, there are no other changes in the KMPs during Financial Year 2023-24. For details on changes in senior management, please refer Report on Corporate Governance.

STATEMENT OF INTEGRITY, EXPERTISE AND EXPERIENCE OF INDEPENDENT DIRECTORS

All the Independent Directors of the Company have been registered and are members of Independent Directors Databank maintained by Indian Institute of Corporate Affairs at Manesar (IICA). They have con rmed their compliance with Rules 6 (1) and 6 (2) of the Companies (Appointment and Quali cation of Directors) Rules, 2014 as amended. In the opinion of the Board, the Independent Directors of the Company have vast experience, expertise and integrity and their continued association would be of immense bene t to the Company.

PERFORMANCE EVALUATION

The Company has framed the criteria for performance evaluation of Independent Directors, the Board, the Board Committees and other individual Directors.

Criteria for performance evaluation of the Chairman & Managing Director, Executive Director and Non-Independent Directors have also been framed.

The criteria, among others includes factors such as preparation, participation, engagement, personality and conduct, value addition, strategic planning and vision, team spirit and consensus building, leadership quality, understanding and focus on key business issues, independent thinking and judgment, quality of analysis, experience and business wisdom, management qualities, awareness, motivation, integrity, ethics and receptivity. The criteria for evaluating the Board's functioning/effectiveness inter alia includes its structure, strategic review, business performance review, internal controls, process and procedures.

The evaluation forms containing the criteria as framed were circulated and on the basis of responses, the Board evaluated the performance of individual Directors, its own performance and that of its Committees. The Independent Directors in their separate Meeting also carried out the performance evaluation of the Chairman & Managing Director, Executive Director and other non-independent Directors as well as the Board of the Company. The Directors expressed overall satisfaction on the performance and functioning of the Board, its Committees and the Directors. No action was required to be taken on the previous year's observations and also no action is required to be taken on this year's observations.

FAMILIARISATION PROGRAMMES

The Board Members are provided with necessary documents, reports and internal policies to enable them to familiarise with the Company's procedures and practices. Periodic presentations are made at the Board and Board Committees, on business and performance updates of the Company. Relevant statutory changes encompassing important laws are regularly made available to the Directors. Efforts are also made to familiarise the Directors about the Company, their roles, rights, responsibility in the Company, nature of the industry in which the Company operates, business model/ procedures/ processes of the Company, etc. through various programmes including plant visits. The details of the familiarisation programmes for Independent Directors are put on the website of the Company and can be accessed at the link: https://a.storyblok.com/f/209886/x/174a5373f7/familiarisation-programme-for-independent-directors.pdf

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the Financial Year 2023-24, the Company held 5 ( ve) Meetings of the Board of Directors. The details of the Meetings and attendance of each of the

Directors thereat are provided in the Report on Corporate Governance forming part of the Annual Report.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Shri Amitav Kothari, Shri H. K. Khaitan and Shri Sidharth Kumar Birla, Independent Directors and

Shri R. V. Kanoria, Chairman & Managing Director of the Company. Shri Amitav Kothari is the Chairman of the Committee. During the Financial Year 2023-24, the Company held 5 ( ve) Meetings of the Audit Committee. The details of the Meetings and attendance of each of the Members thereat are provided in the

Report on Corporate Governance forming part of the Annual Report.

The terms of reference of the Committee have also been provided in the Corporate Governance Report.

There has been no such incidence where the Board has not accepted the recommendation of the Audit Committee during the year under review.

STAKEHOLDERS' RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee of the Company comprises of Shri H. K. Khaitan and Shri Amitav Kothari, Independent Directors and Shri S. V. Kanoria, Wholetime Director of the Company. Shri H. K. Khaitan is the Chairman of the Committee. The Committee met once during the year under review, details of which are provided in the Report on Corporate Governance forming part of the Annual Report. The terms of reference of the Committee have also been provided in the Corporate Governance Report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Company comprises of Shri H. K. Khaitan, Shri Sidharth Kumar Birla and Shri A Vellayan, Independent

Directors, and Shri R. V. Kanoria, Chairman & Managing Director of the Company. Shri H. K. Khaitan is the Chairman of the Committee.

The Committee met twice during the year under review, details of which have been provided in the Corporate Governance Report.

The terms of reference of the Committee have also been provided in the Corporate Governance Report.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, has formulated the Nomination and Remuneration Policy, which contains the matters with regard to criteria for appointment of Directors and determining Directors' independence and policy on remuneration for Directors, Senior Managerial Personnel and other employees, and the same may be accessed at the Company's website at the following link: https://a.storyblok.com/f/209886/x/d31aa193a6/nomination-and-remuneration-policy.pdf

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee of the Company comprises Smt. Madhuvanti Kanoria, Director, Shri R.V. Kanoria, Managing Director and Shri H. K. Khaitan, Independent Director. Smt. Madhuvanti Kanoria is the Chairperson of the Committee. The Committee met twice during the year under review, details of which have been provided in the Corporate Governance Report.

The terms of reference of the Committee have also been provided in the Corporate Governance Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company, in keeping with its philosophy, always strives to conduct its business in an inclusive, sustainable, socially responsible and ethical manner. The Company has in place a Corporate Social Responsibility Policy (CSR Policy) indicating the activities to be undertaken by the Company. The Corporate Social Responsibility Policy of the Company enables it to continue to make a responsible contribution towards the welfare of society. The Company will undertake the CSR activities as are enumerated in Schedule VII of the Act. However, primarily the Company's focus will be on the following areas:

Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation.

Promoting education, including special education and employment enhancing vocational skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.

Rural Development activities/projects.

Promoting gender equality, Empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens.

Ensuring environmental sustainability and ecological balance.

Social economic development and relief and welfare of the scheduled caste, tribes, other backward classes, minorities and women;

The Company may also take other CSR activities as may be prescribed under the applicable statute from time to time. In addition, the Company may take such other appropriate activities for the society, from time to time, as may be thought t by the CSR Committee and approved by the Board. During the year, the Company has spent an amount of Rs. 2.57 million as CSR expenditure during the nancial year 2023-24 against the Budget of Rs. 2.57 million (Rs. 0.03 million surplus of earlier year set off against the total budget of Rs. 2.60 million during the year). There is no unspent amount towards CSR expenses. The Annual Report on the CSR activities, pursuant to Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is provided as Annexure to this Report.

The CSR Policy may be accessed on the Company's website at the following link: https://a.storyblok.com/f/209886/x/656982d5c3/corporate-social-responsibility-policy.pdf

RISK MANAGEMENT COMMITTEE

The Risk Management Committee of the Company comprises Shri R.V. Kanoria, Managing Director, Shri S.V. Kanoria, Wholetime Director, Shri H.K. Khaitan,

Independent Director and Shri N.K. Nolkha - Group Chief Financial Of cer. Shri R.V. Kanoria is the Chairman of the Committee. Shri Ranjeet Singh, Chief Executive

- Chemicals Business ceased to be a member of the Committee with effect from 1 September, 2023, vide his resignation, with effect from that date. The Committee met twice during the nancial year 2023-24, details of which have been provided in the Corporate Governance Report. The terms of reference of the Committee have also been provided in the Corporate Governance Report.

RISK MANAGEMENT

The Company's management systems, organisational structures, processes, codes of conduct together form the basis of risk management system that governs and manages associated risks. The Risk Management Committee of the Company assesses the signi cant risks that might impact the achievement of the Company's objectives and develops risk management strategies to mitigate/minimise identi ed risks and designs appropriate risk management procedures. The Board does not foresee any risk which may threaten the existence of the Company.

COMMITTEE OF DIRECTORS

The Board of Directors renamed the existing Finance Committee of the Company as the “Committee of Directors” of the Company with effect from 14 February, 2024.

The Committee of Directors comprises of Shri R.V. Kanoria, Managing Director, Shri H.K. Khaitan, Shri Amitav Kothari, Independent Directors and

Shri S. V. Kanoria, Wholetime Director. Shri R. V. Kanoria is the Chairman of the Committee.

The Committee met once during the year under review, details of which have been provided in the Corporate Governance Report.

The terms of reference of the Committee have also been provided in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis is a part of the Annual Report.

SUBSIDIARIES

A) APAG

APAG Holding AG, Switzerland (“APAG”) is a subsidiary of the Company. APAG Elektronik AG, APAG Elektronik s.r.o, CoSyst Control Systems GmbH, APAG Elektronik LLC and APAG Elektronik Corp. are step-down subsidiaries of the Company. Kanoria Africa Textiles Plc, Ethiopia (“KAT”) is a wholly owned subsidiary of the Company. APAG CoSyst Electronic Control Systems designs, develops, and produces ECUs and lighting for the automotive and industrial sectors. After a turbulent time with the severe and unprecedented global shortage of semiconductors, the supply chain is easing somewhat and the short-term future looks brighter than it did. The long-term prospects remain bright with a strong sales pipeline in both markets Europe and North America. In Europe, inspite of several ongoing challenges, the breadth of over 250 nished products facilitates consistently healthy sales. This has aided in reducing inventory and freeing up some liquidity. Demand is staying strong and the company is on track for a healthy short to medium-term forecast.

In Canada, the shortage of semiconductors has resulted in more dif culties with the cancellation of various car model variants, while delay in others; causing further delay in achieving month to month breakeven sales. The growing stock because of either the inability to convert to sales (because of a missing portion of the bill of material), or a delay in customer demand further worsens the situation. In fact, because of a now foreseen period of 2-3 months of low demand, the company is exploring a temporary work-time reduction supported by the government. Following this period, sales are forecasted to grow to break-even levels. In the long-term, APAG is poised to grow. This scal year 2023-24 should see the company come very close to the CHF 100 mn. turnover. The next years will hopefully see APAG CoSyst develop into a strong player in the industry.

The Board at its Meeting held on 11 April, 2023, approved to sell 42 shares of APAG to a new strategic investor, Cosyst Holding AG, Switzerland (which is a wholly owned subsidiary of KPL International Ltd., India, a related party of the Company). Currently the Company holds 286 shares in APAG consisting about 55% of its share capital.

B) KAT

The Company's integrated denim manufacturing unit in Ethiopia, Africa is operating through its wholly owned subsidiary, Kanoria Africa Textiles plc (“KAT”) incorporated in Ethiopia.

The performance for the current year has been impacted due to mainly two reasons- An acute shortage of the foreign currency in the country and political crises in the Amhara region. The company could hardly receive any foreign exchange from the banks to import the essential raw materials and as a result could not meet the production and sales targets. The political crises in the Amhara region has impacted the local demand of fabric for almost more than six months.

There are some signs of improvement on the political front but the foreign exchange crises is likely to continue unless Ethiopia's ongoing discussion for funding with the International Monetary Fund concludes successfully.

The demand for the Denim fabric within the country has been improving and we expect a further increase in demand once the Amhara region political crisis has been resolved. The export performance of the company has been continuously improving as compared to the last year and increase in exports in the current year will reduce the foreign currency dependency to some extent.

A report on the nancial position of the subsidiaries of the Company, as per the Companies Act, 2013, is provided in the Annual Report and hence is not repeated here for the sake of brevity. The Policy for determining Material Subsidiaries as approved by the Board may be accessed on the Company's website at the following link: https://a.storyblok.com/f/209886/x/234f08894e/policy-for-determining-material-subsidiaries.pdf There is no change in the position of the Subsidiaries during the year under review. The Company does not have any Associates or joint ventures.

PARTICULARS OF INVESTMENTS MADE, LOANS, GUARANTEES GIVEN AND SECURITIES PROVIDED

Details of investments made, loans given, guarantees given and securities provided as covered under the provisions of Section 186 of the Act are given in the

Note Nos. 6 and 38 of the Standalone Financial Statements.

CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the nancial year with related parties were in the ordinary course of business and on arm's length basis and were approved by the Audit Committee and Board of Directors, as and when required. None of the transactions with any of the related parties were in con ict with the Company's interest. No Material RPTs, as per the materiality threshold, were entered during the year by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY 2023-24 and hence does not form part of this report.

The Policy on Related Party Transactions as approved by the Board may be accessed on the Company's website at the following link:

https://a.storyblok.com/f/209886/x/aa1b855e02/policy-on-related-party-transactions.pdf

STOCK EXCHANGE(S)

The Equity Shares of your Company are listed on two stock exchanges:

National Stock Exchange of India Limited, Exchange Plaza, Plot no. C/1, G- Block, Bandra-Kurla Complex, Bandra (East), Mumbai 400 051.

BSE Limited, PhirozeJeejeeboy Towers, Dalal Street, Mumbai 400 001.

The annual listing fees for the year 2023-24 have been paid to both the stock exchanges where the shares of your Company are listed.

CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company.

VIGIL MECHANISM

The Company promotes ethical behaviour in all its business activities and has put in place a mechanism of reporting illegal or unethical behaviour. In compliance with provisions of Section 177(9) of the Act and the Listing Regulations, the Company has in place a Whistle Blower Policy for its Directors, employees and any other stakeholder to report concerns about unethical behaviour, actual or suspected fraud or violation of applicable laws and regulations and the Company's Codes of Conduct or policies and leak or suspected leak of unpublished price sensitive information of the Company. The concerns may be reported to the Audit Committee through the Nodal Of cer and, in exceptional cases, may also be reported to the Chairman of the Audit Committee. The con dentiality of those reporting violations is maintained and they are not subjected to any discriminatory practice. During the year under review, no employee was denied access to the Audit Committee. The Whistle Blower Policy of the Company may be accessed on the Company's website at the following link: https://a.storyblok.com/f/209886/x/6e33061fc5/whistle-blower-policy.pdf

CORPORATE GOVERNANCE

The Company adheres to good governance practices. Corporate Governance at KCI extends to all stakeholders and is embodied in every business decision. The Company places prime importance on reliable nancial information, integrity, transparency, empowerment and compliance with the law in letter and spirit. While Management Discussion and Analysis Report appears in the Section titled 'the Year in Review' in the Annual Report, the Corporate Governance Report and the Certi cate from the Auditors of the Company con rming compliance of the conditions of Corporate Governance are annexed hereto and form a part of the Directors' Report.

There is a conscious effort to ensure that the values enshrined in the Codes of Conduct for the Directors and Senior Management Personnel and the Employees respectively, are followed in true spirit across all levels of the Company.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31 March 2024 may be accessed on the Company's website at the following link: https://www.kanoriachem.com/investors/annual-returns/

AUDITORS AND AUDITORS' REPORT

The Members had appointed M/s. Singhi & Co., Chartered Accountants (Firm Registration No. 302049E), as the Statutory Auditors of the Company at the 62 Annual General Meeting, to hold of ce as such, for a term of 5 years till the conclusion of the 67 Annual General Meeting.

The Auditors' Report for the nancial year ended 31 March 2024 does not contain any quali cation, reservation or adverse remark.

FRAUD REPORTING

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

COST AUDITORS

Pursuant to Section 148 of the Act, the Board, on the recommendation of the Audit Committee, has approved the appointment of M/s N. D. Birla & Co., Cost

Accountants (Firm Registration No. 000028), Ahmedabad, as the Cost Auditors for conducting the audit of the cost records of the Company for the nancial year ending on 31 March 2024, at a remuneration of Rs. 1,65,000/- (Rupees One Lakh Sixty Five Thousand only) plus applicable taxes and reimbursement of travelling and other incidental expenses to be incurred in the course of cost audit.

SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s Vinod Kothari & Co., Practising Company Secretaries (UIN: P1996WB042300), to conduct Secretarial Audit of the Company for the nancial year 2023-24. The Secretarial Audit Report for the nancial year 2023-24 is provided as an Annexure to this Report. The Report does not contain any quali cation, reservation or adverse remark.

SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year ended March 31, 2024 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by M/s Vinod Kothari & Co., Practising Company Secretaries, has been submitted to the Stock Exchanges within 60 days from the end of the Financial Year.

INTERNAL AUDITORS

The Board of Directors of the Company has appointed M/s. Pawan Gupta & Co. as Internal Auditors to carry-out extensive Internal Audit of the Company for the

Financial Year ended March 31, 2024.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, the Statutory Auditor, Internal Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Directors or Of cers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013 and therefore details of the same in this Report is not applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS/OUTGO

As required under Section 134 of the Act and the rules framed thereunder, the statement containing necessary information in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo is provided in the Annexure to this Report.

EMPLOYEES INFORMATION AND RELATED DISCLOSURES

As required under Section 197(12) of the Act read with the Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, disclosures of remuneration and other details/particulars of the Directors and employees of the Company are provided in the Annexure to this Report.

SAFETY AND ENVIRONMENT

The Company steadfastly upholds its dedication to sustainable development and the provision of a safe and healthy workplace. Our environmental management strategy adheres to the fundamental principle of ensuring a secure working environment through ongoing technological advancements, pollution prevention measures, resource conservation efforts, and waste recycling initiatives. Safety stands as a cornerstone value within our operations, and we are resolutely committed to the pursuit of zero injuries, re ecting our unwavering commitment to the well-being of our workforce.

The Company's Alco Chemical Division facilities, located in Ankleshwar, Vizag, and Naidupeta have consistently adhered to Environment, Health, Safety, and Quality standards, resulting in their certi cation under ISO 9001:2015 (Quality Management Systems), ISO 14001:2015 (Environment Management Systems and practices), and ISO 45001:2018 (Occupational Health and Safety Management Systems). Additionally, all Divisions hold RC 14001:2015 certi cation, indicative of their commitment to implementing Responsible Care management systems aimed at addressing community concerns associated with products and operations. Notably, the Company's Ankleshwar, and recently Vizag, units proudly display the Responsible Care Logo. This emblem symbolizes the Company's exceptional performance in safety, environmental stewardship, community engagement, and sustainability practices.

The Company has a documented Environment Health & Safety Policy that is communicated within the Company and made available to all interested parties.

With the view to achieve 'Zero Accidents status' the Company has developed health and safety procedures as well as safety targets and objectives.

Risk mitigation plans undergo regular review by a centralized Environmental, Health, and Safety (EHS) team. Various techniques such as Hazard and Operability Study (HAZOP), Hazard Identi cation and Risk Analysis (HIRA), and Quantitative Risk Assessment (QRA) are employed to identify hazards, ensuring the maximization of safe man-hours and the prevention of incidents at our manufacturing units during operations. The Company has implemented methodologies such as 5S and Kaizen to augment existing safety standards and provide a platform for employees to share their expertise on waste management practices related to process development, safety, health, and environmental concerns within the industry. Safety observations are disseminated among relevant stakeholders, and compliance statuses are routinely reviewed.

The Company is committed to sustainable development and has set ambitious goals supported by a robust EHS program. This commitment is demonstrated through initiatives such as the adoption of renewable energy sources (wind/solar) across all manufacturing locations, the implementation of "reuse, reduce, and recycle" practices facilitated by the installation of a Phenol recovery plant at Ankleshwar and Ion-Exchange technology at Ankleshwar & Vizag for waste stream management for the Hexamine plant. Furthermore, efforts are underway to reduce the carbon footprint by substituting coal with biomass as a renewable energy source for the steam generation boilers at the Ankleshwar unit.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The human resource development initiatives of the Company are underpinned by a robust framework of values aimed at fostering trust, transparency, and dignity among all personnel. Our policies are designed to cultivate a culture of mutual respect and collaboration within the workforce.

In alignment with our strategic goal of becoming a strengths-based organization, the Company has implemented a comprehensive system to monitor and recognize individual employee contributions towards the realization of our vision and mission. As part of our commitment to Vision-2030, we have sustained our efforts in providing continuous internal and external training opportunities to employees at various levels.

Throughout the year, the Company maintained harmonious industrial relations with its employees and workers across all operational sites, fostering an environment of cooperation and mutual understanding.

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(5) of the Companies Act, 2013:

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

b) that such accounting policies have been selected and applied consistently and judgement 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 31 March 2024 and of the pro t of the Company for the year ended on that date; c) that proper and suf cient 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 nancial statements have been prepared on a going concern basis; e) that proper internal nancial controls to be followed by the Company have been laid down and that the nancial controls are adequate and are operating effectively; and f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the provisions of Section 124 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 and rules made thereunder, unclaimed dividend amount of Rs. 554,901/- of the Company for the Financial Year ended March 31, 2016 has been transferred to the Investor Education and Protection Fund (IEPF) established by the Central Government pursuant to Section 125 of the Companies Act, 2013.

During the year 15673 equity shares were transferred to IEPF.

The details are provided at the website of the Company at the following link: https://www.kanoriachem.com/investors/unpaid-dividend/

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION

AND REDRESSAL) ACT, 2013

The Company has constituted Complaints Redressal Committees across all its locations to consider and resolve sexual harassment complaints reported by women. During the year under review, no complaint was led pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and that there was no complaint pending at the end of the year. The Company regularly conducts awareness programs for its employees.

The following is a summary of sexual harassment complaints received and disposed off during the year:

CONSTITUTION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has constituted Complaints Redressal Committees across all its locations, as required under the Sexual Harassment of Women at Workplace

(Prevention, Prohibition and Redressal) Act, 2013. The Company has not received any complaints during the year.

INSURANCE

All properties and insurable interests of the Company have been fully insured.

COMPLIANCE WITH SECRETARIAL STANDARD

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

PREVENTION OF INSIDER TRADING CODE

As per SEBI (Prohibition of Insider Trading) Regulation, 2015, the Company has adopted a Code of Conduct for Prevention of Insider Trading. The Company has appointed Smt. Neha Saraf, Company Secretary as Compliance Of cer under the said Regulations. The said Code has been complied during the year under review.

RECONCILIATION OF SHARE CAPITAL AUDIT

The Practicing Company Secretary's quarterly Certi cate with regard to reconciliation of Share Capital Audit as required under the SEBI Listing Regulations is submitted to BSE and the NSE and is also placed before the Board of Directors.

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

During the year under review, no signi cant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

GENERAL

i. No material changes and commitments affecting the nancial position of the Company have occurred from the close of the nancial year ended 31 March, 2024 till the date of this Report.

ii. During the year under review, the Company has not issued sweat equity shares.

iii. During the year under review, the Company has not issued shares with differential voting rights

. iv. The Company has not revised any of its nancial statements or reports.

v. During the year under review, no application has been made or any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 against the Company.

vi. During the year under review, there were no instance of one-time settlement with banks or nancial institutions and hence the differences in valuation as enumerated under Rule 8 (5) (xii) of Companies (Accounts) Rules, 2014, as amended, do not arise.

ACKNOWLEDGEMENTS

Your Directors acknowledge with gratitude the commitment and dedication of the employees for their untiring personal efforts as well as their collective contributions at all levels that have led to the growth and success of the Company. The Directors would like to thank other stakeholders including lenders and business associates who have continued to provide support and encouragement.