Asian Fertilizers Ltd

Dear Member,

Your Directors are pleased to present the 39th Annual Report and the Company's Audited financial statement for the financial year ended March 31, 2024.

1. FINANCIAL RESULTS:

The Company's financial performance, for the year ended March 31, 2024 is summarized below:

Rs. in Lacs

The turnover of the Company was Rs. 5223.88 lakhs for the year ended March 31, 2024, decrease of 35.19%, as compared to Rs. 8059.74 lakhs in the previous year. The Company's Profit from Operations for the year ended March 31, 2024, was Rs. 4.68 lakhs, a decrease of 97.10%, as compared to Rs. 161.11 lakhs in the previous year mainly due to the higher costing of SSP with low rate of Subsidy.

2. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT:

Management's Discussion and Analysis Report for the year under review, as stipulated under Regulation 34 read with Schedule V to the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is given in "Annexure I" to this Report.

3. DIVIDEND:

In order to conserve the resources of the Company the Board of directors has decided not to recommend any dividend for the financial year 2023-24.

4. AMOUNTS TRANSFERRED TO RESERVES:

The Board discussed and decided to transfer the profit of the year in reserves account.

5. ANNUAL RETURN:

Pursuant to the provisions of section 134 (3) (a) and section 92 of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, annual return of the Company as at 31st March, 2024 is uploaded on the website of the Company at www.asianfertilizers.com.

6. NUMBER OF BOARD MEETING:

Four meetings of the Board of Directors were held during the year as on 26.05.2023, 12.08.2023, 14.11.2023 and 14.02.2024.

Leave of absence was granted to the non-attending directors on their request and noted in the attendance register as well as in the minutes of the meetings.

7. ANNUAL GENERAL MEETING:

The Annual general meeting of the Company for the financial year 2022-23 was held on 30/09/2023.

8. RELATED PARTY CONTRACT AND ARRANGEMENT OF THE COMPANY:

All the related party transactions entered during the financial year 2023-24 were in the ordinary course of business of the Company and were on an arm's length basis. There were no materially significant related party transactions entered by the Company with Promoters, Directors, Key Managerial Personnel, or other persons who may have a potential conflict with the interest of the Company. All such Related Party Transactions are placed before the Audit Committee for approval, wherever applicable. Prior omnibus approval is obtained for the transactions that are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee every quarter, specifying the transactions' nature, value, and terms and conditions for approval, wherever applicable. Prior omnibus approval is obtained for the transactions that are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee every quarter, specifying the nature, value, and terms and conditions of the transactions. The policy on dealing with Related Party Transactions has been framed by the Board of Directors with the prior approval of the Audit Committee. All related party transactions entered by the Company were in the ordinary course of business and were on an arm's length basis, form AOC-2 is annexed with this report as "ANNEXURE II" to the Director's Report. The details of the transactions with the Related Party are provided in the accompanying financial statements.

9. AUDITORS & AUDITORS' REPORT:

(a) Statutory Auditors & Audit Report:

Under provisions of Section 139 of the Act and Rules made thereunder, M/s Kapoor Tandon & Associates, Chartered Accountants, Kanpur were appointed as Statutory Auditors of the Company for a term of five years, to hold office from the conclusion of the 38th Annual General Meeting of the Company held on September 30, 2023, till the conclusion of the 43rd Annual General Meeting to be held in the year 2027. They have confirmed that they are not disqualified from continuing as Auditors of the Company. M/s. Kapoor Tandon & Associates, Chartered Accountants, Kanpur submitted their report for the financial year ended March 31, 2024. The observations of the auditors are explained wherever necessary in inappropriate notes to the accounts. Also, there is no adverse comment in the Auditor's Report.

The Board, on the recommendation made by the Audit Committee, had appointed Mr. Awashesh Dixit, Practicing Company Secretary, Kanpur to conduct a Secretarial Audit for the F.Y. 2023-24. The Secretarial Audit Report for the financial year ended March 31, 2024, is annexed with this report as ANNEXURE III" to this Report. The Secretarial Audit report contains few adverse remarks or disclaimers. Replies of qualification marks in the Secretarial Audit Report are as follows.

(i) The company has provided the facility of Demat of the shares to all the shareholders. However, the process of Demat of shareholding including promoters is in progress;

The Demat of shares is in the process.

(ii) As inform by the management listing fee for the financial year 2024-2025 is pending and the matter is in discussion with Stock Exchange.

The Listng Fee is due to the reason that the company has not received any invoice from the stock exchange for the payment made earlier and also payments not showing in the GSTR-2B as we already shared the proof of payments with the BSE. For this Company communicates with BSE via mail or telephone regularly and will pay the listing fee after resolving the matter of invoices as due to this Company unable to claim ITC for previous years.

(iii) Compliance strictly needs to adhere in terms of provision of regulation 3(5) and 3(6) of SEBI (Prohibition of Insider Trading) Regulation 2015 regarding the Structured Digital Data Base.

Company is in the process of arranging software for Reg 3(5) and 3(6) of SEBI (Prohibition of Insider Trading) Regulation 2015 regarding the Structured Digital Database and till then Company maintain in-house data.

(c) Cost Auditor:

M/s K. S. Bhatnagar and Associates, Cost Accountants were appointed as the Cost Auditor of the Company for the financial year ended March 31, 2024, to conduct the audit of Cost records of the Company. They have been reappointed as the Cost Auditor of the Company for the financial year ending on March 31, 2025. Pursuant to provisions of section 148(3) of the Act read with Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration payable to Cost Auditors has to be ratified by the Members of the Company. Accordingly, the Board seeks ratification at the ensuing Annual General Meeting of the remuneration payable to the Cost Auditor for the financial year ending on March 31, 2025.

10. PARTICULARS OF LOANS, GUARANTEES & INVESTMENTS UNDER SECTION 186: The Particulars of loans, Guarantees & Investments U/S 186, for the financial year 2023-2024 have been mentioned in the balance sheet attached with the report.

The Company would like to inform you that no material changes and commitments affecting the financial position of the Company have occurred during the period from the end of the financial year till the date of this report.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

a)Conservation of Energy Since the operations of the Company are not energy-intensive, therefore it does not call for any steps to be taken. Therefore clauses (i), (ii) & (iii) of Rule 8 are not applicable.

b)Technology Absorption The Company has not imported any specific technology for its operations which are not updated in India.

13. RISK MANAGEMENT POLICY AND IDENTIFICATION OF KEY RISKS: The Company would like to inform you that the risks which threaten the existence of the Company have been identified and accordingly a risk management framework has been created and adopted by the Company. Further, the internal auditor of the Company has been cast with the responsibility of monitoring this framework and reporting to the management the key risks affecting the business.

Mr. Amod Agrawal, Independent Director was appointed w.e.f.26/05/2023 as an additional Director. Mr. Dinesh Agarwal, Independent Director was appointed w.e.f. 26/05/2023 as an additional Director. Mr. G. N. Gupta, Independent Director of the Company resigned/retired during the financial year 2023-24 Mr. Anurag Tulsyan, Independent Director of the Company resigned/ retired during the financial year 2023-24.

Mrs. Usha Matanhelia, (Women Director), is liable to retire by rotation and being eligible offer herself for re-appointment in the ensuing AGM. The brief resume of Mrs. Usha Matanhelia, (Women Director) of the Company, retiring by rotation but seeking re-appointment at the ensuing Annual General Meeting is the part of Annual Report. (Please see notes of AGM Notice)

The existing internal financial control system is adequate and commensurate with the nature and size of the business of the Company. The internal auditors of the Company keep a follow up on the internal financial reporting and information dissemination of the Company between the departments. The Audit committee of the Company interacts from time to time with the internal auditors of the Company regarding the adequacy of the internal financial control system placed in the Company.

16. DECLARATION BY INDEPENDENT DIRECTOR:

All Independent Directors have given a declaration under Section 149(7) of the Companies Act 2013 that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013.

17. CSR ACTIVITIES:

Since the Company does not meet the criteria as defined under section 135 of the Companies Act, 2013 read with schedule. Therefore, the provisions relating to CSR Activities do not apply to the Company.

18. FORMAL ANNUAL EVALUATION OF THE BOARD OF DIRECTORS AND ITS COMMITTEES AND INDIVIDUAL DIRECTORS: a. Performance evaluation of the Board of Directors of the Company:

As per the evaluation criteria formulated by the Nomination and Remuneration Committee of the Board, the Board of the Company has evaluated its performance in the context of the Company's performance, status of compliance carried out, efforts made towards risk management, internal control, code of conduct followed and maintained by them, ethical standards met. Below are some of the criteria based on which Board has made its evaluation at specific intervals:

1) Size and composition of the Board of Directors of the Company as per Companies Act, 2013.

2) Diversity of thought, experience, knowledge, perspective and gender in the Board of Directors of the Company.

3) Maintaining transparency in the entire Board processes.

4) Any deviations, if any, from the set goals of the Board and steps taken to control such deviations.

5) Efficiency and effectiveness of the Board of Directors of the Company in carrying out its functions.

6) Timely flow of information among the Board of Directors.

7) Updation of knowledge of governing laws, rules and regulations.

8) Independent judgement of each matter placed before the Board of Directors. After evaluating its own performance, Board is of the view that the performance of the Board of Directors as a whole was satisfactory during the financial year 2023-24.

The Board of Directors of the Company evaluated the performance of each of its committees based on various criteria such as the composition of the committee, quantum, and quality of information received by the committee members, time spent discussing the matter and reaching out to the final decision, efficiency and effectiveness of the decision making of the committee members, level of active participation of committee members, number of meetings attended by the members, presence of the Chairman of the committee. Based on the above criteria and the working procedure established by the Board of Directors of the Company, the Board is of unanimous consent that all the committees of the Company are working satisfactorily.

As per the criteria formulated by the Nomination and Remuneration Committee for the performance evaluation of Independent directors, the performance of each Independent director was evaluated by the entire Board of Directors but excluding the director being evaluated. While evaluating the following things were taken into consideration:

1) Application of Independent judgment while deciding part of the Board of Directors of the Company.

2) Exercise of the responsibility in a bona fide manner in the interest of the Company.

3) Attendance in the meetings of the Board of Directors and meetings of committees where an independent director is a member.

4) Active participation in the familiarization program conducted for the Independent Director.

Further, the Board evaluated during the year, the performance of each Director taking each of them as a separate individual, to judge the contribution and efforts made by them individually and the initiatives taken by them during the year. This helped the Board of Directors in deciding whether to extend the tenure of the director being evaluated.

19. COMMITTEES TO THE BOARD:

The Company has several Committees that have been established in Compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has the following Committees of the Board: A.Audit Committee B.Nomination & Remuneration Committee C.Stakeholders Relationship Committee

The details for the composition of the committees, No. and dates of the meeting of the committees and No. of meetings attended by each director of the relevant Committee are given in detail below.

In compliance and as per the requirements of Section 177 of the Companies Act, 2013, an Audit Committee has been constituted to monitor and supervise the Company's financial reporting process to provide accurate, timely, and proper disclosures and financial reporting. The Audit Committee consists of three directors out of which two are Independent Directors. Four meetings of the Audit Committee were held during the year on 26.05.2023, 12.08.2023, 14.11.2023, and 14.02.2024. During the year, all the recommendations made by the Audit Committee were accepted by the Board.

Composition and attendance in Committee meetings during the year:

*The Chairman of the Committee was present at the last Annual General Meeting held on 30th September, 2023. *The Chairman of the Committee retired/resigned from the Company at the AGM and then Mr. Amod Agrawal held the position of Chairman in the Audit Committee.

**Mr. Anurag Tulsyan, Independent Director retired/resigned from the Company at AGM. Mr. Amod Agarwal and Mr. Dinesh Agarwal, Independent Director become members of the Company w.e.f. 14.11.2023.

a. ESTABLISHMENT OF VIGIL / WHISTLE BLOWER MECHANISM:-

The Company has established a vigil mechanism for directors and employees in compliance with the provisions of Subsection 9 of Section 177 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 to report genuine concerns. Vigil mechanism shall provide for adequate safeguards against victimization of persons who use such a mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. The Company promotes ethical behavior in all its business activities and in line with the best practices for corporate governance. It has established a system through which directors & employees may report breaches of code of conduct or suspected fraud, unethical business practices, illegality, fraud, and corruption, etc. at the workplace without fear of reprisal. The Board designated and authorized Mr. Somil Matanhelia, Whole time Director of the Company as Vigilance and Ethics Officer and Chairman of the Audit Committee to oversee the vigil mechanism.

The functioning of the Vigil mechanism is reviewed by the Audit Committee from time to time. It may be noted that if any of the members of the Committee do have a conflict of interest in any given case, he/she to recuse themselves, and the others on the Committee would deal with the matter at hand.

The Vigil mechanism shall provide for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism and also provide for direct access to the Chairman of the Audit Committee in case of repeated frivolous complaints being filed by a Director or an employee, the Chairman of the Audit Committee may take suitable action against the concerned Director or employee including reprimand. During the Financial Year 2023-2024 there was no complaint reported by any Director or employee of the Company under this mechanism.

The Nomination and remuneration committee consists of three Non-Executive Directors, and all are independent. During period 1 meetings of the Nomination and remuneration committee were held on 26.05.2023.

b. NOMINATION AND REMUNERATION POLICY OF THE COMPANY:

In compliance with the provisions of Section 178 of the Companies Act, 2013 the Nomination and Remuneration Committee of the Board of Directors has formulated a policy comprising the criteria for determining qualifications, positive attributes and independence of a director and remuneration for the directors, key managerial personnel and other employees, which have been approved and adopted by the Board. The criteria

II. Criteria for appointment of Key Managerial Personnel and Senior Management Employees:

The Remuneration policy of the Company has been framed by the Nomination and Remuneration Committee in such a manner that it can attract and motivate the directors, key managerial personnel, and employees of the company to work in the interest of the Company and to retain them.

1) The company has a policy to pay remuneration in such a manner that the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

2) It has been ensured while formulating the policy that remuneration to directors key managerial personnel, and senior management should involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company.

3) Remuneration to be paid to the Managing Director/Whole-time Director shall be within the limits specified under the Companies Act, 2013.

4) Increments to the existing remuneration may be recommended by the committee to the Board of Directors.

In compliance with the provisions of the Companies Act, 2013, the Stakeholders Relationship Committee has been constituted by the Board for a speedy disposal of grievances/complaints relating to shareholders/investors. Four meetings of the Committee were held during the year on 14.02.2024.

Mrs. Kunika Meghani, Company Secretary of the Company was designated as the Compliance Officer for complying with the requirements of the Securities Law and the Listing Regulation with the Stock Exchanges in India from 22.07.2021.

The Committee specifically looks into the shareholder redressal and investor complaints on matters relating to refund orders, transfer of shares, sub-division, consolidation of share certificates, issue of duplicate share certificates, non-receipt of annual reports, non-receipt of declared dividends, etc. The company has registered with SCROES and designated an email id for investor@asianfertilizers.com. In addition, the Committee advises on matters which can facilitate better investor services and relations.

The Company follows a strict code on the prohibition of Insider Trading and the same has been detailed to all the directors, senior management, and employees of the Company and is available on the Company website www.asianfetilizers.com, and stock exchange website www.bseindia.com. To ensure the same, the Company has formulated & adopted a code of practice & procedure for fair disclosure of Unpublished Price Sensitive Information as per SEBI (Prohibition of Insider Trading) Regulation, 2015, and available on the Company website www.asianfetilizers.com & stock exchange website www.bseindia.com.

The Provisions relating to Corporate Governance as enumerated in Regulation 27 of SEBI (Listing obligation & disclosure requirements) Regulation, 2015 do not apply to the Company. Thus, the report on Corporate Governance needs not to be filed with the Stock Exchange.

1. The ratio of the remuneration of each director to the median employee(s) remuneration and other details in terms of sub-section 12 of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are open for inspection at the Administrative Office of the Company in terms of the first proviso of Section 136 (1) of the Companies Act 2013 during the business hours. Members who are interested in obtaining such particulars may write to the Company and the same will be furnished on request.

2. The provisions of Section 197 (12) and section 197(14) of the Companies Act, 2013, read with Rule 5 (2) and (3) of the Companies (Appointment and Remuneration) Rules, 2014 as amended, do not apply to the Company.

The Company would like to inform you that a legal compliance tool has been installed vertically within the organization for monitoring and complying with all laws applicable to the Company. This tool is being overseen and supervised by the office of the Company Secretary. Further, the Company secretary has also been cast with the responsibility of providing a compliance certificate at the Board meetings held at the end of the quarters including the key non-compliances during the quarter.

During the financial year under review, the Company has complied with the applicable SS-1 (Secretarial Standard on Meetings of the Board of Directors), and SS-2 (Secretarial Standard on General Meetings) as issued by the Institute of Company Secretaries of India.

Under the requirements of Section 134(5) of the Companies Act, 2013, it is hereby confirmed that:-

a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures; the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

b) the directors had taken proper and sufficient care for the maintenance of adequate accounting records under the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

c) the directors had prepared the annual accounts on a going concern basis;

d) the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and

e) The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

The Directors would like to express their sincere appreciation for the cooperation and assistance received from the Authorities, Readers, Bankers, Credit Rating Agencies, Depositories, Stock Exchanges, Registrar and Share Transfer Agents, Associates as well as our Shareholders at large during the year under review. The Directors also wish to place on record their deep sense of appreciation for the commitment, abilities, and hard work of all executives, officers, and staff who enabled the Company to consistently deliver satisfactory and rewarding performance even in challenging economic conditions.