kanoria chemicals industries ltd Directors report

TO THE SHARE HOLDERS

Your Directors have pleasure in presenting the Sixty Third Annual Report, along with the Audited Accounts of the Company for the financial year ended 31st March 2023.

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 Companys performance and plans.

FINANCIAL RESULTS

The financial performance of the Company for the year ended 31st March 2023 is summarised below:

(Rs. in million)

Particulars	2022-2023	2021-2022
Total Income	6,959.77	6,601.22
Profit before Depreciation & Amortisation, Finance Costs and Tax	396.20	703.56
Depreciation and Amortisation	211.94	211.18
Finance Costs	95.04	91.34
Profit/(Loss) before Tax	89.22	401.04
Tax Expenses	29.95	151.18
Profit/(Loss) for the year	59.27	249.86
Other Comprehensive Income for the year, net of Tax	1.09	0.78
Total Comprehensive Income for the year	60.36	250.64

STATE OF COMPANYS AFFAIRS

During the year under review, the Companys chemical plants at Ankleshwar, Vizag and Naidupeta continued to run efficiently. The manufacturing and sales volumes of our products was higher than in the previous year. Sluggish market conditions and dumped imports from regular exporting countries have hampered the profitability. Our R&D Center at Ankleshwar was granted recognition from Department of Scientific and Industrial Research (DSIR), Ministry of Science & Technology, Government of India.

The Company has made a long term growth plan "Vision-2030" comprising of a mix of projects in both new and existing product portfolios. We aim to grow multifold in revenue and profitability by the year 2030. As part of the phase-1 of the Vision, the Company has commissioned its Phenolic Resin plant at Ankleshwar, Gujarat and commercial production began from January 2023. With the plant at Ankleshwar, KCI became the only Phenolic Resin manufacturer in India with units on both West Coast and the East Coast. The company has also announced a new 300 TPD Formaldehyde plant at its Ankleshwar unit. The companys in-house R&D facility and New Product Development Cell is working on establishment of a commercial plant for Triacetin.

In the Solar Power segment, after the expiry of our Power Purchase Agreement (PPA) with the state Discom, the Govt. of Rajasthan has yet not renewed the PPA. In this regard we have fled a writ petition before the Honble High Court of Rajasthan, and are awaiting a resolution. The generation has since improved after rectification of inverter, tracking-system and transformer.

No material changes and commitments have occurred after the close of the financial year 2022-23 till the date of this Report, which affect the financial 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 financial year ended 31st March 2023.

The Dividend Distribution Policy as approved by the Board may be accessed on the Companys 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 financial year ended 31st March 2023.

CREDIT RATINGS

Care Ratings Limited has reaffirmed the rating for the long-term bank facilities of the Company as CARE A- and Outlook as "Stable" (Single A Minus; Outlook: Stable) and also reaffirmed rating for the short-term bank facilities as CARE A2 + (A Two Plus).

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 31st March 2023 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 financial controls with respect to financial statements. The Companys 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 financial 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 financial statements. No reportable material weakness in the design or operation was observed during the year.

DIRECTORS

During the year, Shri G. Parthasarathy (DIN: 00068510) and Shri Ravinder Nath (DIN: 00062186) ceased to be Independent Directors of the Company with effect from 4th September 2022, consequent to completion of their second terms as Independent Directors.

Except the above, there has been no change in the Board of Directors during the Financial Year ended March 31, 2023.

Smt. Madhuvanti Kanoria (DIN: 00142146) retires by rotation at the ensuing AGM under the applicable provisions of the Act and being eligible, offers herself 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 Director seeking re-appointment is given in the AGM Notice of the Company.

Further, as declared by them, none of the Directors of the Company is disqualified from being appointed as a Director, as specified in section 164(2) of the Companies Act, 2013 and rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014 or is debarred or disqualified 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 Shri A. Vellayan, Shri Amitav Kothari, Shri H. K. Khaitan, Shri Sidharth Kumar Birla and Smt. Suhana Murshed confirming 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 fulfill the conditions for appointment/ re-appointment/continuation as Independent Directors as specified in the Act and the Listing Regulations and they are also independent of the Management.

KEY MANAGERIAL PERSONNEL

Shri N.K. Sethia retired as the Company Secretary and Compliance Officer of the Company with effect from 30th September, 2022.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors, through a Circular Resolution passed on 26th September, 2022, appointed Smt. Neha Saraf (ACS: 27024) as the Compliance Officer of the Company with effect from 1st October, 2022. Smt. Neha Saraf was appointed as the Company Secretary of the Company at Board Meeting dated 11th November, 2022.

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 confirmed their compliance with Rules 6 (1) and 6 (2) of the Companies (Appointment and Qualification 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 benefit 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 Director 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 Boards 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 Director 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 years observations and also no action is required to be taken on this years observations.

FAMILIARISATION PROGRAMMES

The Board Members are provided with necessary documents, reports and internal policies to enable them to familiarise with the Companys 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/a5a3a67de8/familiarisation-programme.pdf

NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the Financial Year 2022-23, the Company held 4 (four) 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 2022-23, the Company held 4 (four) 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. Shri Sidharth Kumar Birla and Shri A Vellayan were inducted in the Committee with effect from 4th September, 2022 on account of cessation of second term of Independent Directorships of Shri G. Parthasarathy and Shri Ravinder Nath and consequently also their Committee memberships.

The Committee met four times 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 Companys 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 of 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 acts as a good Corporate Citizen, and 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 Companys 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.

• Contribution to the Prime Ministers National Relief Fund [or Prime Ministers Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)] or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled 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 fit by the CSR Committee and approved by the Board.

During the year, the Company has spent an amount of Rs. 1.85 million on the CSR activities as against the Budget of Rs. 1.82 million.

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 Companys 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 of Shri R.V. Kanoria, Managing Director, Shri S.V. Kanoria, Wholetime Director, Shri H.K. Khaitan, Independent Director, Shri N.K. Nolkha - Group Chief Financial Officer and Shri Ranjeet Singh, Chief Executive - Chemicals Business. Shri R.V. Kanoria is the Chairman of the Committee. The Committee met twice during the financial year 2022-23, 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 Companys 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 significant risks that might impact the achievement of the Companys objectives and develops risk management strategies to mitigate/minimise identified risks and designs appropriate risk management procedures. The Board does not foresee any risk which may threaten the existence of the Company.

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. APAG CoSyst Elektronik 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. This has helped in reducing inventory and freeing up some liquidity. 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 ability to produce over 250 finished products and the companys brand equity has resulted in consistently healthy sales. Demand remains reasonably strong and the company is on track for a healthy short to medium-term forecast.

In Canada, the shortage of semiconductors has resulted in the cancellation of various car model variants, with 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 fiscal 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 an even stronger player in the industry.

Your Company (KCIL) continued to hold 328 shares in APAG consisting about 80% in APAG during the year under review. However, at the Board Meeting held on ir April, 2023, KCILs Board 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).

B) KAT

Kanoria Africa Textiles Plc, Ethiopia ("KAT") is a wholly owned subsidiary of the Company. The Companys integrated denim manufacturing unit in Ethiopia, Africa operates through its wholly owned subsidiary, Kanoria Africa Textiles plc ("KAT") incorporated in Ethiopia.

The continuing political crises in the Country, to certain extent, has been mitigated with a peace agreement. The governments initiative towards the peace agreement and maintaining law and order across the country will have positive impact in the long term with respect to the business in Ethiopia.

Last year, despite challenges, the Company could sustain and perform better. With positive changes in the political scenario of country, KATs results are expected to improve in the current financial year. The forex crises which Ethiopia is currently facing, remains a matter of serious concern.

In last financial year due to political challenges resulting in higher manpower turnover KAT could retain the operational efficiencies but could not improve as expected. There have been certain areas which have been identified for the improvement in current financial year which should translate into better financial results. The team is committed and dedicated towards the goals of the organisation. The export market is picking up. Domestic market though uncertain seems to be better after the peace agreement.

A report on the financial 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 Companys website at the following link: https://a.storyblok.com/f/209886/x/234f08894e/policy-for-determining-material-subsidiaries.pdf

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 financial year with related parties were in the ordinary course of business and on arms 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 conflict with the Companys 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 2022-23 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 Companys 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 2022-23 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 Companys 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 Officer and, in exceptional cases, may also be reported to the Chairman of the Audit Committee. The confidentiality 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 Companys 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 financial 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 Certificate from the Auditors of the Company confirming 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.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report (BRSR) of your Company for the year ended March 31, 2023 forms part of this Annual Report as required under Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on 31st March 2023 may be accessed on the Companys 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 62nd Annual General Meeting, to hold office as such, for a term of 5 years till the conclusion of the 67th Annual General Meeting. M/s. Singhi & Co. continues to be the Statutory Auditor of the Company for the financial year 2023-24.

The Auditors Report for the financial year ended 31st March 2023 does not contain any qualification, 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 financial year

ended on 31st March 2023, 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 financial year 2022-23. The Secretarial Audit Report for the financial year 2022-23 is provided as an Annexure to this Report. The Report does not contain any qualification, reservation or adverse remark.

SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year ended March 31, 2023 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, 2023.

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 Officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013, details of which needs to be mentioned in this Report.

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 is committed to sustainable development and a safe & healthy workplace. Its approach to environment management is guided by the principle of provision of a safe working environment through continuous upgradation of technologies, prevention of pollution, conservation of resources and recycling of waste. Safety is a core value for us, and we are committed to achieve the goal of zero injuries.

As a result of its sustained compliance to Environment, Health, Safety and Quality standards, the Companys Alco Chemical Divisions at Ankleshwar, Vizag and Naidupeta are ISO 9001:2015 (Quality Management Systems), ISO 14001:2015 (Environment Management Systems and practices) and ISO 45001:2018 (Occupational Health and Safety Management Systems) certified. All the Divisions are also RC 14001:2015 certified for implementation of Responsible Care management systems, recognizing and responding to community concerns related to its products and its operations. The Company also maintains the Responsible Care Logo (RC Logo) at its Ankleshwar unit, which is in recognition of our performance on overall safety, environment management, community concerns and sustainability.

The Company has a documented Environment Health & Safety Policy that is communicated within the Company and also made available to the 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 are regularly reviewed by a centralized EHS team. Hazards are identified using techniques such as Hazard and Operability Study (HAZOP), Hazard Identification and Risk Analysis (HIRA) etc. to ensure maximum safe man-hours at our manufacturing units during operations. The Company does regular Safety Talks where employees share their knowledge on best safety practices in the industry and also share regular safety observation with compliance status.

On the sustainability front, the Company strives for sustainable development by setting ambitious goals and achieves them through strong EHS management programs.

The Company also lays thrust on renewable energy sources. The company is also purchasing and consuming hybrid (Wind/Solar) power at their manufacturing locations.

HUMAN RESOURCES DEVELOPMENT AND INDUSTRIAL RELATIONS

The Companys human resource development is founded on a strong set of values. The policies seek to instill spirit of trust, transparency and dignity among all employees.

The company, in its efforts to become a strength based organization has developed a comprehensive system to track and reward individual employee contribution towards companys Vision and Mission. Keeping in view our Vision-2030, company continues to provide ongoing internal and external training to its employees at different levels.

Industrial relations with the employees and workers across all locations of the Company continued to be cordial during the year.

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 financial statements for the year ended 31st March 2023, 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 31st March 2023 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities:

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial 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, if any and rules made thereunder, unclaimed dividend amount of Rs. 5,69,928 for the Financial Year ended March 31, 2015 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, 7,109 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 a Complaints Redressal Committee to consider and resolve sexual harassment complaints reported by women. During the year under review, no complaint was filed 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:

Sl. No. Particulars	Status of the No. of complaints received and disposed off
1 Number of complaints on Sexual harassment received	NIL
2 Number of Complaints disposed off during the year	Not Applicable
3 Number of cases pending for more than ninety days	NIL
4 Number of workshops or awareness programme against sexual harassment carried out	The Company regularly conducts necessary awareness programmes for its employees
5 Nature of action taken by the employer or district officer	Not Applicable

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 Officer under the said Regulations. The said Code has been complied during the year under review.

RECONCILIATION OF SHARE CAPITAL AUDIT

The Practicing Company Secretarys quarterly Certificate 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 significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

GENERAL

i. No material changes and commitments affecting the financial position of the Company have occurred from the close of the financial year ended 31st March, 2023 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 financial 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 financial 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.

Registered Office	For and on behalf of the Board
‘KCI Plaza
23-C, Ashutosh Chowdhury Avenue	R. V. Kanoria
Kolkata 700 019	Chairman & Managing Director
Date: 26th May, 2023	DIN:00003792