Khaitan Chemicals & Fertilizers Ltd

To the Members,

Your Directors are pleased to present the 42^nd Annual Report of your Company alongwith Audited Financial Statement for the financial year ended 31^st March, 2024.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31^st

March, 2024 is summarized below:

(Rs. in Lacs)

REVIEW OF OPERATIONS

FERTILIZER, CHEMICALS & SPECIALITY CHEMICALS DIVISION:

The year 2023-24 was another challenging year with delayed monsoon followed by drastic reduction of subsidy which led to price resistance from farmers and poor sales. Even though the GOI linked the subsidy on SSP to the Nutrient Based Subsidy (NBS) rates the raw material prices for SSP didn't see any decline betraying the international trend in prices of fertilizers and fertilizer inputs. Thus prices of SSP had to be increased making it uncompetitive vis a vis other phosphatic fertilizers enjoying lower international prices and additional freight subsidy. This situation led to panic selling by most of the SSP suppliers trying to liquidate stocks at unreasonable prices adversely affecting the profitability of the Company.

The Company has produced 4,35,810 MT (previous year 4,92,613MT) of Single Super Phosphate (SSP) Fertilizer and 1,96,143 MT (previous year 2,06,377 MT) of Chemicals &Specialty Chemicals and sold 3,45,851 MT of SSP (previous year 4,73,194 MT) &1,07,533 MT of Chemicals (previous year 1,13,681 MT) respectively.

During the current year the turnover of your Company has decreased from Rs. 88,929.29 lacs for the year 2022-23 to Rs. 53,739.46 lacs for the year 2023-24, the operating income has decreased from Rs. 7,940.65 lacs in 2022-23 to Rs (2864.41) lacs in 2023-24, and the cash profit has decreased from to Rs. 6,009.23 Lacs to Rs. (6034.18) Lacs in the respective periods, while the net profit after tax has decreased from Rs. 3,735.78 lacs to Rs. (7,048.99) lacs.

The Company is continuously putting in efforts to increase the share of ‘value added' fortified fertilizers in its product range. The fortified fertilizers launched by the Company have been well accepted by the farmers.

The prices of DAP, Urea, MOP and Sulphur continued to decline in the international market. In response to the trend in prices, the Government of India (GOI) reduced the NBS rates and also linked SSP to the NBS rates. Consequently the SSP subsidy was reduced to Rs. 6872 perMT(earlier Rs 7513) from April 2023 to September 2023, and at Rs. 3540 per MT from October 2023 to March 2024 for the year 2023-24. This adversely affected the profitability of the SSP Industry since the Rock Phosphate prices for 30% grade (which is the major raw material for SSP) didn't see any commensurate decline in prices.

In the coming year 2024-25, the long range forecast of monsoons is a normal. An above-normal monsoon is likely to have a predominantly positive impact on the SSP fertilizer industry by increasing demand, boosting sales, and potentially leading to better financial performance for both farmers and fertilizer companies.

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-Policy-.pdf

SHARE CAPITAL

The paid up Equity Share Capital as on 31^st March, 2024 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 2023-24.

INVESTORS EDUCATION & PROTECTION FUND

Dividend which was declared by the Company for the financial year ended March 31,2017 at the Annual General Meeting held on August 22, 2017 and remained unclaimed will be transferred to the Investor Education and Protection Fund of the Central Government on October 20, 2024 pursuant to the provisions of Companies Act, 2013. Thereafter no claim shall lie on dividend for the year ended March, 31,2017 from the shareholders.

PROJECTS & FINANCE

The Company hasn't availed any Term Loan during FY 2023-24 except for one car loan of BMW M8 Coupe from ICICI bank Limited of Rs . 1,70,00,000

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. 29,124.62 lacs (Previous year Rs. 34,740.89 lacs) on import of Raw Materials, Fees & Subscription and Interest on Foreign Currency Loan.

DIRECTORS

The Board is pleased to announce the appointment of Mr. Inder Jit Singh as Additional Director (Non-Executive, Independent) DIN- 10558389 and Mr. Deepak Kumar Khemka as Additional Director (NonExecutive, Independent) DIN-01673395 of the Company, effective April 01,2024.

The Board is further pleased to announce the appointment of Mrs. Payal Gupta(DIN- 10628052)as Additional Director (Non-Executive, Women Independent Director) of the Company w.e.f. 23^rd May, 2024.

Members have approved their reappointment on 27^th June, 2024 through Extra ordinary General Meeting.

Furthermore, Mr. Balmukund Dakhera and Mr. Vijay Gupta ceased to be directors of the company after closing working hours of March 31,2024, upon the completion of their two consecutive terms of tenure spanning five years each as Non-Executive Independent Directors of the company."

Furthermore ,Upon closing working hours of 6^th August, 2024 Mrs. Veena Chadha ceased to be directors of the company upon the completion of their two consecutive terms of tenure spanning five years each as Non-Executive Independent Directors of the company. 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

(e) Mr. Ajay Salitra, Company Secretary & Compliance Officer (e) Ms. Sejal Maheshwari, Company Secretary & Compliance Officer *Ms. Sejal Maheshwari was appointed as the Company Secretary of the Company w.e.f 23^r May 2024 due to the Resignation of Shri Ajay Salitra from the post of Company Secretary & Compliance Officer w.e.f 28^th March, 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 tothis 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-Policy.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 and 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 40^th Annual General Meeting to the conclusion of 45^th Annual 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 under the 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 2024-25.

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. LLP, Chartered Accountants, New Delhi is appointed as Internal Auditor of the Company to conduct the internal audit of the Company for the Financial Year 2024-25, 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 M/s.Ritesh Gupta & Co., Practicing Company Secretaries, Indore (C.P. No. 3764), to undertake the Secretarial Audit of the Company for the financial year 2024-2025. The Secretarial Audit Report for the year 2023-24 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 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- Policv.pdf

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 31,2024 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 Directorsconfirm 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 31^st March, 2024 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 Transactions and is placed on the Company's website and the web link for the same is http://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 andthe web link for same ishttp://kcfl.co.in/wp-content/uploads/2022/05/Related-Party-Transactions-Policy.pdf

Pursuant to the provisions of Section 134 (3) (h) of the Companies Act,2013, the particulars of contracts or arrangements with related partiesreferred to in Section 188(1) of the Companies Act, 2013, andprescribed 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, 2024 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, 2024, 98.92% 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 constitute 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-Policv.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 2023-24.

No of complaints received: NIL

No of complaints disposed off: Not Applicable

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, 2014 and 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 or along 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.