Khaitan Chemicals & Fertilizers Ltd

To the Members,

Your Directors are pleased to present the 43rd Annual Report of your Company alongwith Audited Financial Statement for the financial year ended 31st March, 2025.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March, 2025 is summarized below:

' (Rs. in Lacs)

REVIEW OF OPERATIONS

FERTILIZER, CHEMICALS & SPECIALITY CHEMICALS DIVISION:

FY 2024-25 first quarter, continued to present operational and market- related challenges for the Company. The lingering impact of the previous year's delayed monsoon and reduced subsidy structure had a carryover effect, creating a cautious sentiment among farmers and distributors. Despite the minor increase in Nutrient Based Subsidy (NBS) rates, the anticipated correction in raw material prices did not materialize to the extent and contrary to international trends in fertilizer and input prices.

However, after the first quarter, support to the SSP Industry by allowing it freight subsidy and correction in raw material prices, increase in NBS rates for Kharief 2024, inventory and cost control by the management helped the company to turn around it's performance gradually and achieve a positive outcome finally.

The Company has produced 3,73,870 MT (previous year 4,35,810 MT) of Single Super Phosphate (SSP) Fertilizer and 1,89,223 MT (previous year 1,96,143 MT) of Chemicals & Specialty Chemicals and sold 4,40,365 MT of SSP (previous year 3,45,851 MT) &1,19,036 MT of Chemicals (previous year 1,07,533 MT) respectively.

During the current year, the turnover of your Company increased from Rs. 53,739.46 lacs in FY 2023-24 to Rs. 72,102.58 lacs in FY 2024-25. Operating income improved significantly, rising from a loss of Rs. 2,864.41 lacs in FY 2023-24 to a profit of Rs. 2,391.66 lacs in FY 2024-25. Cash loss reduced notably from Rs. 6,034.18 lacs to Rs. 589.04 lacs over the same period. Further, the Company reported a net profit after tax of Rs. 139.91 lacs in FY 2024-25, compared to a net loss of Rs. 7,048.99 lacs in the previous year.

In response to the trend in international fertilizer prices, the Government of India (GOI) increased the NBS rates to Rs. 4804 per MT(earlier Rs 3540) from April 2024 to September 2024, and subsequently increased to Rs. 5121(earlier Rs 4804) per MT from October 2024 to March 2025. This helped improve the profitability of the SSP Industry. The prices of

Rock Phosphate 30% grade (which is the major raw material for SSP) also saw a correction by around 20%.

The Preliminary indicators for year 24-25 suggest the likelihood of normal monsoon. The NBS rates have been further increased to Rs 7263 per MT (earlier Rs 5121). The Ministry of fertilizers has also indicated of continued support with freight subsidy as given to other “phosphatic and potassic' fertilizers. A favorable monsoon would support higher sowing activities, improved farm incomes, and consequently increased consumption of fertilizers. Increase in NBS rates gives scope to improve the marketability of SSP fertilizer, the main product of the Company. This could lead to improved sales volumes and better capacity utilization for SSP manufacturers.

However, the Company remains cautiously optimistic, as subsidy policies, global raw material pricing, and competitive pressures will continue to influence market dynamics. The Company is however confident that strategic planning, strong distribution networks, and operational efficiency will enable the it to capitalize on any upswing in demand during FY 2025-26.

DIVIDEND

The Board of Directors has decided not to recommend any dividend for the financial year 2024-25 in order to conserve resources and strengthen the financial position of the Company.

DIVIDEND DISTRIBUTION POLICY:

Pursuant to Regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, The Board has approved and adopted the Dividend Distribution Policy and the detail of the Dividend Distribution Policy has been uploaded on the Company's website, Web-link: http://kcfl.co.in/wp- content/uploads/2022/05/Dividend-Distribution-Policv-.pdf SHARE CAPITAL

The paid up Equity Share Capital as on 31st March, 2025 was Rs. 969.89 Lacs divided into 9,69,89,200 shares of Re. 1/- each. During the year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

RESERVES AND SURPLUS

The Company has not transferred any amount to General Reserves for the financial year 2024-25

INVESTORS EDUCATION & PROTECTION FUND

Dividend which was declared by the Company for the financial year ended March 31,2018 at the Annual General Meeting held on August 9, 2018 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central Government on October 7, 2025 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March, 31, 2018 from the shareholders.

PROJECTS & FINANCE

The Company did not avail of any major term loan during FY 2024-25. However, it repaid a net term loan of Rs. 7.61 crores during the year. In comparison, a net term loan of Rs. 7.57 crores was repaid in FY 2023-24.

FIXED DEPOSITS

The Company has not accepted any deposits from the public during the year under review, pursuant to the provisions of Section 73 of the Companies Act, 2013 & the Deposit Rules made there under.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Information required under section 134(3)(m) of the Companies Act, 2013 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed in Form-A of Annexure 'A' and forms part of the report.

Your directors are of the opinion that the Company has already opted for latest technology for producing Single Super Phosphate and Sulphuric Acid. Hence, information specified to be given in Form-B of Annexure ‘A' is not applicable.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In accordance with Schedule V(B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report forms part of this Report(Annexure-B). FOREIGN EXCHANGE EARNING AND OUTGO The Company has earned Rs. NIL on export of goods (Previous year Rs. NIL) and incurred Rs.3193.73 lacs (Previous year Rs. 29,124.62 lacs) on import of Raw Materials, Fees & Subscription and Interest on Foreign Currency Loan.

DIRECTORS

The Board is pleased for the re-appointment of Mr. Shailesh Khaitan (DIN: 00041247) as Chairman & Managing Director of the Company for a term commencing from April 1, 2025, to March 31, 2028, subject to Shareholders' approval

Additionally, the Board has announced the appointment of Mr. Praveen Uniyal (DiN: 08714038) as an Additional Director (Category: WholeTime Director) of the Company for a term of three (3) years, effective from January 16, 2025, until January 15, 2028, subject to the approval of the Shareholders of the Company.

The Members have approved their respective appointments on March 27, 2025, through an Extraordinary General Meeting.

Furthermore, Mr. Jagdishlal Chunilal Jajoo ceased to be a Director of the Company upon completion of his tenure as Whole-Time Director at the close of business hours on April 21,2025.

Particulars of the directors seeking appointment/re-appointment are provided in the notes forming part of the notice for the ensuing Annual General Meeting, as required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Company has received disclosures from all the directors and none of the directors has been disqualified as stipulated under Section 164 of the Companies Act, 2013 and rules made thereunder.

During the year, the Board of Directors met four (4) times. The details of the Board Meetings and the attendance of the Directors are provided in the Corporate Governance Report(Annexure - C).

KEY MANAGERIAL PERSONNEL:

The following employees were designated as whole-time key managerial personnel as required under section 203 of the Companies Act, 2013 by the Board of Directors during the year under review:

(a) Shri Shailesh Khaitan, Chairman & Managing Director;

(b) Shri Utsav Khaitan, Joint Managing Director;

(c) Shri Harsh Vardhan Agnihotri, President & Chief Financial Officer and

(d) *Ms. Sejal Maheshwari, Company Secretary & Compliance Officer

*Ms. Sejal Maheshwari was appointed as the Company Secretary of the Company w.e.f 23rd May 2024.

INDEPENDENT DIRECTORS DECLARATION

The Independent Directors have confirmed and declared that they are not disqualified to act as an Independent Director in compliance with the provisions of Section 149 of the Companies Act, 2013 read with Regulation 16 (B) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors.

CORPORATE GOVERNANCE

Your Company has always striven to maintain appropriate standards of good corporate governance. The report on corporate governance as stipulated under Schedule V (C) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms part of this Report. The requisite certificate confirming compliance with the conditions of corporate governance as stipulated under the said clause is attached to this report. (Annexure - C).

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES:

The Company has no Subsidiary/Joint Venture/Associate Company.

PARTICULARS OF LOAN, GUARANTEES, INVESTMENTS:

During the year under review, the Company has not made any investments or given loan or provided security or guarantees falling under the provisions of Section 186 of the “the Act”.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

As per the requirement of Section 177 (9) of the Companies Act, 2013, and Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,the Company has established a Vigil Mechanism called the ‘Whistle Blower Policy' for Directors and Employees to report concern of unethical behavior, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy and the details of the Whistle Blower Policy has been uploaded on the Company's website, Web-link: http://kcfl .co.in/wp- content/uploads/2022/05/Vigil-Mechanism-Policv.pdf

COMPOSITION OF AUDIT COMMITTEE

As per the requirement of Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with Section 177 of the Companies Act, 2013. The present strength of the Audit Committee comprises of Shri Deepak Kumar Khemka, Shri Inder Jit Singh, Mrs. Payal Gupta. Shri Deepak Kumar Khemka is the Chairman of the Audit Committee of the Company. All the members of the Audit Committee are independent and non-executive directors. The recommendations of audit committee were duly accepted by the Board of Directors.

NOMINATION & REMUNERATION COMMITTEE AND POLICY

Pursuant to Section 178 of the Companies Act, 2013, the rules made there under and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Nomination & Remuneration Committee, comprises of Shri Deepak Kumar Khemka, Chairman, Shri Inder Jit Singh, Mrs. Payal Gupta as its members.

The Nomination & Remuneration Committee framed a policy for selection and appointment, re-appointment, removal, appraisals of Directors and Senior Management and the same is stated in the Corporate Governance Report (Annexure - C).

AUDITORS & AUDIT REPORT

The Company had re-appointed M/s. NSBP & Co., Chartered Accountants, New Delhi as Statutory Auditors of the Company for carrying out the Statutory Audit of the Company for the Term of 5 years commencing from the conclusion of 40thAnnual General Meeting to the conclusion of 45thAnnual General Meeting of the Company (from Financial Year 2022-23 to 2026-27). The Company has received a certificate from them to the effect that their appointment as Statutory Auditors of the Company, would be within the limit prescribed u/s 139 & 141 of the Companies Act, 2013 & also received a peer review certificate issued by the ICAI ‘Peer Review Board', as required underthe provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

There have been no instances of fraud reported by the Statutory Auditors under Section143(12) of the Act and Rules framed there under, either to the Company or to the Central Government.

The notes on accounts referred to and the Auditors' Report are selfexplanatory and therefore do not call for any explanatory note.

COST AUDITOR:

The Board of Directors, in pursuance of an order under section 148 of the Companies Act, 2013, read with Rule 14 of the Companies (Audit &; Auditors) Rules, 2014, issued by the Central Government, has appointed on the recommendation of Audit Committee M/s. M.P. Turakhia & Associates, Cost Accountants, Indore as Cost Auditors to conduct audit of the cost accounts maintained by the Company in respect of Fertilizer, Sulphuric Acid and Soya products for the financial year 2025-26.

As required under Companies Act, 2013 a resolution seeking members approval for the remuneration payable to cost Auditor forms part of the notice conveying the Annual General Meeting for their ratification.

INTERNAL AUDITOR:

M/s. APAS & Co., Chartered Accountants, New Delhi is appointed as Internal Auditor of the Company to conduct the internal audit of the Company for the Financial Year 2025-26, as required under Section 138 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The scope and authority of the Internal Audit function is defined. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the Internal Control System and suggests improvements to strengthen the same. To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board. Based on the report of internal audit function, Company undertakes corrective action in their respective areas and thereby strengthens the controls. Recommendations along with corrective actions thereon are presented to the Audit Committee of the Board and accordingly implementation has been carried out by the Company.

SECRETARIAL AUDIT:

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed on the recommendation of Audit Committee and board M/s.Ritesh Gupta & Co., Partnership firm, Indore (Unique code- P2025MP106200), to undertake the Secretarial Audit of the Company for the financial year 2025-30, subject to the approval of shareholders.

The Secretarial Audit Report for the year 2024-25 does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report is self-explanatory and therefore do not call for any explanatory note and the same is annexed herewith as (Annexure - D).

SECRETARIAL STANDARDS:

The Company has complied with the Secretarial Standards issued by The Institute of Company Secretaries of India (ICSI).

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

Pursuant to Section 135 of Companies Act, 2013 and the relevant rules, the Corporate Social Responsibility Committee as on 31.03.2025 comprises of Shri Jagdish Lal Jajoo as the Chairman and Shri Utsav Khaitan, Shri Deepak Kumar Khemka, Shri Inder Jit Singh & Mrs. Payal Gupta as its members.The detailed CSR Policy has been uploaded on Company's Website, Web-link :http://kcfl.co.in/wp- content/uploads/2022/03/CSR-Policy.pdf

However, the composition of the Committee has changed due to the cessation of Mr. Jagdish lal Chunilal Jajoo, who completed his tenure as Whole-Time Director at the close of business hours on April 21, 2025. From 21.04.2025 composition of the Committee is Shri Utsav Khaitan as the chairman & Shri Deepak Kumar Khemka, Shri Inder Jit Singh & Mrs. Payal Gupta as its members.

The details on CSR activities are annexed herewith as (Annexure - E)

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Business Responsibility and Sustainability Report, as required under the Listing Regulation, is annexed as Annexure “H” to this report.

BOARD EVALUATION

Pursuant to the provisions of section 134 (3)(p) of the Companies Act, 2013 and applicable Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and Individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board & committees, experience & competencies, performance of specific duties & obligations, governance issues etc.

The evaluation of the Independent Directors was carried out by the entire Board and that of the Chairman and Non-Independent Directors were carried out by the Independent Directors.

The Directors were satisfied with the evaluation results, which reflected the overall engagement and effectiveness of the Board and its Committees with the Company.

ANNUAL RETURN:

In compliance with the provisions of Section 92 of the Companies Act, 2013, the Annual Return of the Company for the financial year ended March 31,2025 will be uploaded on the website of the Company and the web link of the same is http://kcfl.co.in/annual-return/

DIRECTORS' RESPONSIBILITY STATEMENT

In terms of Section 134(5) of the Companies Act, 2013, your Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

2. they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2025 and of the profit & loss of the Company for that period;

3. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956/2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. they have prepared the annual accounts on a going concern basis.

5. they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and were operating effectively.

6. they have devised proper systems to ensure compliance with the provisions of all applicable laws and such systems were adequate and operating effectively.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY:

As per the requirement of Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated the Policy on Materiality of Related Party Transactions. All such transactions that were entered into during the financial year were on an arm's length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee and the same has been approved by the Board. Prior omnibus approval of the Audit Committee is obtained for the transactions which are of a foreseen and repetitive nature and the same is been reviewed by the Audit Committee on quarterly basis.The company has framed Policy on Materiality of Related Party Transactions and on Dealing with Related Party Transactionsand is placed on the Company's website and the web link for the same ishttps://kcfl.co.in/wp-content/uploads/ 2022/05/Policy-on-Materiality-of-Related-Party-Transactions-and-on- Dealing-with-Related-Party-Transactions.pdf

The Company has also formed Related Party Transactions Policy and the web link for same is http://kcfl.co.in/wp- content/uploads/2022/05/Related-Partv-Transactions-Policv.pdf Pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013, and prescribed in Form AOC-2 of Companies (Accounts) Rules, 2014, are appended as Annexure-F to this report. Related Party Transactions during the year have been disclosed as a part of Financial Statements as required under Accounting Standard 18 issued by the Institute of Chartered Accountants of India.

LISTING OF SHARES

Shares of the Company are listed on BSE Limited (BSE) and National Stock Exchange of India Limited (NSE),which provides a wider access to the investors nationwide.

The Company has made all the compliances of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including payment of Annual Listing fees up to March 31, 2025 to the Stock Exchanges.

DEMATERIALISATION OF SHARES

The shares of your Company are being traded in electronic form and the Company has established connectivity with both the depositories i.e. National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited(CDSL). In view of the numerous advantages offered by the Depository system, Members are requested to avail the facility of dematerialization of shares with either of the Depositories as aforesaid. As on March 31, 2025, 99.05% of the share capital stands dematerialized.

RISK MANAGEMENT

1. Risk Management Committee:

Pursuant to Regulation 21 (5) of the SEBI (Listing Obligation and Disclosures Requirement) Regulation, 2015, the Board has constituted the Risk Management committee. At present Risk Management committee constitutes Mr.Utsav Khaitan, Chairman and Mrs. Payal Gupta and Mr. Deepak Kumar Khemka as its members, to frame, implement and monitor risk management plan of the Company.

2. Risk Management Policy:

The Company has in place Risk Management Policy as per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 134(3)(n) of the Companies Act, 2013, which requires the Company to lay down procedure for risk assessment and risk minimization.The Board of Directors, Audit committee and the Senior Management of the Company should periodically review the policy and monitor its implementation to ensure the optimization of business performance, to promote confidence amongst stake holders in the business processes, plan and meet strategic objectives and evaluate, tackle and resolve various risks associated with the Company. The business of the Company is exposed to various risks, arising out of internal and external factors i.e.Industry, Competition, Input, Geography, Financial, Regulatory, Other Operational,Information Technology related other risks.

The details of Risk Management Policy as per requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 134(3)(n) of the Companies Act, 2013 has been uploaded on Company's Website in policies section at http://kcfl.co.in/wp- content/uploads/2022/05/Risk-Management-Policy.pdf Implementation of the Scheme:

The functional managers at all locations will be responsible for identifying and assessing the risks within their areas of responsibilities and actions agreed beforehand to resolve such risks. They will report for any new risk or changes in the existing risk to the President/Managing Director. The Board and the senior executives of the Company will oversee the implementation of the policy and review the same periodically; the Board will be updated on key risks faced by the Company and the mitigating actions taken to resolve them.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. The following is a summary of sexual harassment complaints received and disposed off during the year 2024-25.

No of complaints received: NIL

No of complaints disposed off: Not Applicable

Pending : Not Applicable

Compliance under the Maternity Benefit Act, 1961

The Company has duly complied with the provisions of the Maternity Benefit Act, 1961, and has extended all applicable benefits to eligible women employees, as prescribed under the said Act.

Number of employees as on the closure of financial year

MATERIAL CHANGES AFFECTING FINANCIAL POSITIONS OF THECOMPANY

No material changes have occurred and commitments made, affecting the financial position of the Company, between the end of the financial year of the Company and the date of this report. There is no order passed by any regulator or court or tribunal against the company, impacting the going concern concept or future operations of the Company. PARTICULARS OF EMPLOYEES

In terms of provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the rules there under as amended from time to time, forms part of this report(Annexure-G). There are no instances of employees who was in receipt of remuneration in excess of the limit prescribed in provisions of 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) Rules, 2014and the rules made there under.

In accordance with the provisions of Section 136 of the Act, the Annual Report and Accounts are being sent to all the Members of the Company excluding the aforesaid information and the said particulars will be made available on request and also made available for inspection at the Registered Office of the Company. Any Member interested in obtaining such particulars may write to the Company Secretary of the Company. None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself oralong with his spouse and dependent children) more than two percent of the equity shares of the Company.

APPRECIATION:

The Board of Directors wish to place on record its sincere appreciation for the support and co-operation received from all its stakeholders including customers, promoters, shareholders, bankers, suppliers, auditors, various departments/ agencies of Central/State Government and other business associates of the Company.

Your Board recognizes and appreciates the contributions made by all employees at all level that ensure sustained performance in a challenging environment.