Kronox Lab Sciences Ltd Directors Report

To

The Members,

Kronox Lab Sciences Limited, CIN: L24117GJ2008PLC055460

Your Directors have pleasure to present the 15th Annual Report together with the Audited Financial Statements and Auditors report thereon for the year ended March 31, 2024.

1. STATE OF COMPANYS AFFAIRS

(i) FINANCIAL SUMMARY/HIGHLIGHTS:

The operating results of your Company for the

However, it is heartening to note that the Company has earned net profit of Rs. 2135.13 Lakhs during the year under review as against Rs. 1640.32 Lakhs during the previous Year, which shows rise of about 30%.

(ii) LISTING OF EQUITY SHARES OF THE COMPANY

The Company made Initial Public Offer of upto 95,70,000 Equity Shares at a price of Rs. 136 per Equity Share including a premium of Rs. 126 per share by way of Offer for Sale by its promoter selling shareholders viz. Mr. Jogindersingh Gianchand Jaswal, Mr. Ketan Ramani and Mr. Pritesh Vinodchandra Ramani as detailed in its Red Herring Prospectus dated 28th May, 2024 read with its prospectus dated 6th June, 2024. The offer for Anchor Investor opened on 31st

Particulars	2023-24	2022-23
Revenue from Operations	8986.24	9557.79
Other Income	157.79	192.02
Total Income	9144.03	9749.81
Profit before Depreciation & Tax (PBDT)	2989.69	2353.77
(Less) Depreciation & amortisation expenses	(128.88)	(149.66)
Profit/(loss) for the year	2860.81	2204.11
Add/(Less)
Tax Expenses:-
Current Tax	(734.88)	(572.22)
Deferred Tax	9.20	8.43
Net Profit/(Loss) for the year	2135.13	1640.32

Financial Year ended on March 31, 2024 are as follows:

Total Income of the Company was Rs. 9144.03 lakhs during the financial year under review against Rs. 9749.81 during the previous year.

May, 2024 and for public on 3rd June, 2024. The offer closed on 5th June, 2024. Basis of allotment was finalized on 6th June, 2024.

Accordingly, 3,71,04,000 Equity Shares of Rs. 10/- each aggregating to Rs. 371040000 were listed on BSE Ltd vide their letter no.

LO/IPO/PG/TP/S8/2024-25 dated 7th June, 2024 and on National Stock Exchange of India Ltd. (NSE) vide their letter no. NSE/LIST/3474 dated 7th June, 2024 effective from June 10, 2024 with 2,75,34,000 Equity Shares (74.21%) held by promoters and 95,70,000 Equity Shares (25.79%) held by Public.

2. DIVIDEND:

Your Directors have pleasure to recommend a dividend @ 5% i.e. Rs. 0.5/- on equity share of Rs. 10/- each for the financial year ended March 31, 2024. The dividend, if approved by the members in the ensuing Annual General Meeting, would absorb Rs. 185.52 Lakhs out of the distributable profits available.

Dividend Distribution Policy of the Company is available at Companys w e b s i t e a t https://www.kronoxlabsciences.com/inve stors/corporate-policies/

3. CHANGE IN NATURE OF BUSINESS

During the year, there was no change in the nature of Companys business.

4. ANNUAL RETURN:

The Annual Return for the Financial Year 2023-24 in prescribed Form No. MGT-7, as required under Section 92(1) of the Companies Act, 2013 (‘the Act) read with Rule 11 of the Companies (Management and Administration) Rules, 2014 is placed on the Companys website. https://www.kronoxlabsciences.com/inve stors/

5. TRANSFER TO RESERVES:

The Company is not required to transfer any amount to its Reserves. Hence no amount is transferred to Reserves.

6. DETAILS OF SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES:

Neither the Company has any subsidiary, joint venture or associate company nor any company has become or ceased to be subsidiary, joint venture or associate company during the year under review.

7. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, there was no change in the constitution of the Board. However, Mr. Ketan Vinodchandra Ramani (DIN: 01510833) was reappointed as a Retiring Director at the last Annual General Meeting held on 22nd September, 2023.

During the year, Mr. Ketan Ramani and Mr. Aditya Patel resigned as Chief Financial Officer and Company Secretary respectively on 31st October, 2023. Mr. Samir Gadhiya and Mr. Nikhil Goswami were appointed as Chief Financial Officer and Company Secretary respectively on 1st November, 2023.

8. POLICY FOR NOMINATION AND APPOINTMENT OF DIRECTORS

The Companys Policy on Directors appointment and remuneration and other matters provided in Section 178(3) of the Act (salient features) has been briefly disclosed hereunder and in the report on Corporate Governance, pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘LODR) which is a part of this report.

Selection and procedure for nomination and appointment of Directors

The NRC is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. The Board composition analysis reflects in-depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements. The NRC conducts a gap analysis to refresh the Board on a periodic basis, including each time a directors appointment or re-appointment is required. The NRC reviews and vets the profiles of potential candidates vis-?-vis the required competencies, undertakes due diligence and meeting potential candidates, prior to making recommendations of their nomination to the Board.

Criteria for determining qualifications, positive attributes and independence of a Director

In terms of the provisions of Section 178(3) of the Act and Regulation 19 of LODR, the NRC has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

- Qualifications - The Board nomination process encourages diversity of thought, experience, knowledge, age and gender. It also ensures that the Board has an appropriate blend of functional and industry expertise.

- Positive Attributes - Apart from the duties of Directors as prescribed in the Act, the Directors are expected to demonstrate high standards of ethical behavior, communication skills and independent judgment. The Directors are also expected to abide by the respective Code of Conduct as applicable to them.

- Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Act and the Rules framed thereunder read with Regulation 16(1)(b) of LODR.

9. PARTICULARS OF LOAN(S), GUARANTEE(S) AND INVESTMENT(S) UNDER SECTION 186:

During the year 2023-24, your Company has not given any guarantees or securities within the meaning of the provisions of Section 186 of the Act.

However, the aggregate of Loans and advances granted as also investments made, are within the limits of Section 186 of the Act and have been disclosed in the Financial Statements.

10. PARTICULARS OF CONTRACT(S) OR ARRANGEMENT(S) WITH RELATED PARTIES:

In line with the requirements of the Act and LODR, the Company has formulated a Policy on Related Party Transactions (‘RPT Policy) for identifying, reviewing, approving and monitoring of Related Party Transactions which is available on the Companys website at https://www.kronoxlabsciences.com/inve stors/corporate-policies/

All related party transactions entered into during the financial year were on an arms length basis and were in the ordinary course of business details of which same are provided in notes to accounts. Details of the transactions which are material in nature pursuant to Section 134(3)(h) of the Companies Act, 2013 are provided in form AOC-2 attached as Annexure – B to the report.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3)(m) of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 are as follows:

I. Conservation of Energy:

Your Company is taking all necessary steps to conserve the natural resources and to adopt environment friendly measures including steps in the direction to promote green initiative. Your Company is well positioned to benefit from energy conservation and renewable energy promotion schemes such as Perform, Achieve and Trade (PAT) and Renewable Energy Certificates (RECs) promoted by the Government of India. Your Company continues its efforts to achieve renewable energy share in its total energy consumption based on a mix of energy conservation and renewable energy investments, despite significant enhancement in its scale of operations going forward

II. Research & Development (R&D)

The Company has incurred Rs. 45.64 Lakhs on Research & Development (R&D) during the year.

III. Technology Absorption, Adaption and Innovation:

Since the Company has neither imported technology nor obtained any indigenous technology, the Company has no information to offer in respect of Technology Absorption.

IV. Foreign exchange earnings and outgo:

Particulars	2023-24	2022-23
Foreign exchange Earnings	2168.01	2784.56
Foreign exchange Outgo	7.96	6.96

The detailed information on foreign exchange earnings & expenditure are available in the Notes to financial statements.

12. RISK MANAGEMENT POLICY:

The Company has developed a very comprehensive risk management policy and the same is reviewed by the Management at periodical intervals, about the risk assessment and minimization procedures adopted by the management. At the corporate level major risks are reviewed by the Directors and directions in this regard are issued accordingly. Key business risks and their mitigation are considered in the annual/strategic business plans and in periodic management reviews. The risk management process in our multi-business, multi-site operations, over the period of time will become embedded into the Companys business systems and processes, such that our responses to risks remain current and dynamic.

13. DEPOSITS:

The Company has neither accepted nor renewed any deposit within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the period under review.

14. DIRECTOR RESPONSIBILITY STATEMENT:

Your directors state that:

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures; b) The directors had 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 at the end of the financial year and of the profit and loss of the company for that period;

c) The directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The directors had prepared the annual accounts on a going concern basis; 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.

15. COST AUDITORS:

The Company did not fall within the purview of Section 148 of the Companies Act, 2013 and hence there was no requirement for the Company to appoint Cost Auditor for the financial year 2023-24.

16. INTERNAL AUDITORS:

The Company has appointed M/s. Mansuri

& Associates, Chartered Accountants (FRN: 147558W) as the Internal Auditors of the Company to conduct an internal audit of the functions and activities of the Company for the financial year 2023-2024.

M/s. Jaimin & Associates, Chartered Accountants (FRN: 127346W) was appointed as an internal Auditor of the Company to conduct Internal Audit for the Financial Year 2024-25

17. SECRETARIAL AUDITORS:

M/s. Devesh Pathak & Associates, Company Secretaires of Vadodara is appointed as an Secretarial Auditor for the financial year 2024-25.

18. STATUTORY AUDITORS:

M/s. Mahesh Udhwani and Associates, Chartered Accountants (FRN No.: 129738W) were appointed as Statutory Auditors from the conclusion of Annual General Meeting held on August 30, 2019 for the term of 5 years. It is proposed to reappoint M/s. Mahesh Udhwani and Associates, Chartered Accountants (FRN No.: 129738W) as statutory auditors of the Company for Second Term to hold office till the conclusion of the 20th Annual General Meeting to be held in first proviso to Section 139 of the Act.

The Company has received certificate from the Auditors to the effect they are not disqualified to be appointed as statutory auditors under the provisions of applicable laws.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The Company has formed the Corporate Social Responsibility committee pursuant to section 135 of the Act and Rules framed thereunder.

During the year under review Company has spent Rs. 36.11 lakhs on the Corporate Social Responsibility under section 135 of the Companies Act 2013.

The report on CSR Activities carried out by the company are annexed as Annexure - A

20. EXPLANATION/COMMENTS ON THE AUDITORS REPORT

Statutory Auditors have not made any qualifications, reservations, adverse remarks or disclaimers. Accordingly, no explanation/comments thereon are required to be furnished.

21. REPORTING OF FRAUDS

There has been no instance of fraud reported by the Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or the Central Government.

22. COMPLAINCE WITH APPLICABLE SECRETARIAL STANDARDS

The Company is compliant with the applicable Secretarial Standards (SS) viz. SS-1 & SS-2 on Meetings of Board of Directors and General Meetings.

23. CHANGE IN SHARE CAPITAL, IF ANY

During the year under review, there was no change in fully paid-up Equity Share Capital of the Company and accordingly, it continued to be Rs. 37,10,40,000 divided into 3,71,04,000 Equity Shares of Rs. 10/- each

24. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF REPORT

There have been no material changes and commitments affecting the financial position of the Company which has occurred between the end of the financial year ended 31st March 2024 to which the Financial Statements relates and the date of signing of this report except of Listing of Equity Share Capital of the Company at BSE and NSE as detailed in Paragraph no. 1(ii) of this Report.

25. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS IN FUTURE

No significant and material orders were passed by the regulators or courts or tribunals impacting the going concern status and Companys operations in future during the financial year.

26. DISCLOSURE REGARDING ISSUE OF EMPLOYEE STOCK OPTIONS

The Company has not issued any Employee Stock Options during the year. Hence, the details as per Rule 12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are not required to be reported.

27. DISCLOSURE REGARDING ISSUE OF EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any Equity Shares with Differential rights as to dividend or vote during the year. Hence, details as per Rule 4(4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be reported.

28. DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES

During the year, the Company has not issued Sweat Equity Shares. Hence, details as per Rule 8(13) of the Companies (Share Capital and Debentures) Rules, 2014 are not required to be reported.

29. VOLUNTARY REVISION OF FINANCIAL STATEMENTS OR BOARDS REPORT

Since the Company has not made any voluntary revision of Financial Statements or Boards Report during the year under review, detailed reasons for the same pursuant to proviso to section 131 of the Act are not required to be reported.

30. RECEIPT OF ANY COMMISION BY MD/WTD FROM THE COMPANY OR FOR RECEIPT OF COMMISSION/REMUNERATION FROM ITS HOLDING OR SUBSIDIARY

The Managing Director is not in receipt of any Commission from the Company and the Company does not have any Subsidiary/Holding company. Hence, the details of commission pursuant to Section 197(14) of the Act are not required to be reported.

31. NO. OF BAORD MEETINGS

The meetings of the Board of Directors were held during the year. Details of meetings are available in the Corporate Governance Report.

32. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL TRANSACTIONS:

Your Company has maintained adequate internal financial control systems, commensurate with the size, scale and complexity of its operations and ensures compliance with various policies, practices and statutes in keeping with the organizations pace of growth and increasing complexity of operations. All legal and statutory compliances are ensured on a monthly basis. Non-compliance, if any, is seriously taken by the management and corrective actions are taken immediately. Any amendment is regularly updated by internal as well as external agencies in the system. Approval of all transactions is ensured through a preapproved Delegation of Authority Schedule which is reviewed periodically by the management. The Company follows a robust internal audit process. Transaction audits are conducted regularly to ensure accuracy of financial reporting, safeguard and protection of all the assets. Fixed Asset verification of assets is done on an annual basis. The audit reports for the above audits are compiled and submitted to Board of Directors for review and necessary action.

33. DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company is committed to provide a safe and conducive work environment to its employees. The Internal compliant committee regularly monitors the compliances under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

34. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has framed vigil mechanism in terms of The Companies Act, 2013 read with Regulation 22 of LODR and the same may be accessed on the Companys website. Further, every employee of the Company can directly report to the Chairman of the Audit Committee when she / he becomes aware of any actual or possible violation of the Code or an event of misconduct, act of misdemeanor or act not in the Companys interest.

35. STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SECTION 149(6) OF THE ACT

The Board of Directors hereby declares that all the independent directors duly appointed by the Company have given the declaration and they meet the criteria of independence as provided under Section 149(6) of the Act.

36. STATEMENT WITH REGARDS TO INTEGRITY, EXPERTISE AND EXPERIENCE OF INDEPENDENT DIRECTORS

Your Directors are of the opinion that the Independent Directors of the Company are of high integrity and suitable expertise as well as experience (including proficiency).

37. FORMAL ANNUAL EVALUATION

The Company has devised a policy for performance evaluation of the Board, its committees and individual Directors which include criteria for performance evaluation of executive directors and non-executive directors. The Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its committees. The Board of Directors has expressed their satisfaction with the evaluation process.

A statement indicating the manner in which a formal annual evaluation has been made by the Board of its own performance and that of its committees and individual directors has been given in the Report of Corporate Governance.

38. MANAGEMENT DISCUSSION AND ANALYSIS:

A Management Discussion and Analysis is enclosed as per Annexure.

39. PARTICULARS OF EMPLYOEES

The Statement of disclosure of remuneration under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to this report as ‘Annexure C. The information as per Rule 5(2) of the Rules forms part of this report. However, in terms of provisions of Section 136 of the Companies Act, 2013, the report and Financial Statements are being sent to the members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any member interested in obtaining a copy of the said statement may write to the Company Secretary at the registered office of the Company.

40. CODE OF CONDUCT

The Code of Conduct is applicable to the members of the Board and all designated employees in the course of day-to-day business operations of the Company. The Code laid down by the Board is known as "Code of Conduct and Fair Disclosure of Unpublished Price Sensitive Information" which forms an Appendix to the Code of Conduct of the Company which is in line with SEBI.

(Prohibition of Insider Trading) Regulation, 2018.

The Company has received affirmations from Board members as well as senior management confirming their compliance with the said Code for FY 2023-24.

The Code lays down the standard p