Equity Analysis

TO THE MEMBERS,

Your Directors have pleasure in presenting this Forty Fifth (45^th) Annual Report together with the Audited Financial Statements and Auditors' Report for the financial year ended on March 31,2023.

(Rs. In lakhs)

On a Consolidated basis, the revenue for Financial Year 2023 was Rs. 23,444.65 lakhs, higher by 9.17% over the previous year revenue of Rs. 21,474.82 lakhs. The profit after tax (PAT) attributable to shareholders was Rs. 2,983.30 lakhs in Financial Year 2023 and Rs. 3,426.22 lakhs in Financial Year 2022, thereby registering a decline of 12.92% over the last year PAT.

On Standalone basis, the revenue for Financial Year 2023 was Rs. 9,357.91 lakhs, lower by 5.76% over the previous year revenue of Rs. 9,930.29 lakhs. The profit after tax (PAT) attributable to shareholders for Financial Year 2023 was 1,510.45 lakhs registering a decline of 21.96% over the PAT of Rs. 1,935.53 lakhs for Financial Year 2022.

Based on the Company's performance, the Directors have recommended a final dividend for the Financial Year 202223 on Equity Share Capital @ 10% [Rs. 0.50 Paise per equity share (nominal face value of Rs. 5/- each)]. The Dividend payout is subject to approval of shareholders in ensuing Annual General Meeting.

During 2022-23, overall revenue for MBL increased by 22.02% to Rs. 14,086.74 lakhs from Rs. 11,544.53.

Further, MBL has issued and allotted 1,40,000 Equity Shares @ Rs. 709/- to SRL through Preferential Allotment thereby its stake reduced to 41.63% from 41.96%.

Also, the report on the performance and financial position of its associate and salient features of their Financial Statements in the prescribed Form AOC-1 is annexed to this report as Annexure "A"

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company & Consolidated financial statements along with relevant documents are available on the website of the Company i.e. www. shivalikrasayan.com

During previous year your Company has raised Rs. 104 crores through Preferential Allotment by issuing 7,10,000 equity shares & 4,20,000 Convertible Warrants at a price of Rs. 921/- per share to the persons belonging Promoter Category and Non- Promoter Category for setting up of Agro- Chemicals & Specialty Chemical Plant at GIDC Dahej III, Gujarat and other business-related requirements. Out of this Rs. 75 crores has been utilized by the Company at the end of financial year 2022-23.

The Board of Directors has decided to retain the entire amount of profits for 2022-23 in the retained earnings

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

Mr. Sanjay Bansal and Dr. Akshay Kant Chaturvedi retires by rotation and being eligible, offers themselves for reappointment. A resolution seeking shareholders' approval for their re-appointment forms part of the Notice.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). There has been no change in the circumstances affecting their status as Independent Directors of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31,2023 are: Mr. Suresh Kumar Singh, Vice- Chairman & Whole- Time Director, Dr. Vimal Kumar Shrawat, Managing Director, Mr. Vinod Kumar, Chief Financial Officer and Ms. Parul Choudhary, Company Secretary.

Six meetings of the Board were held during the year. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report.

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

a) in the preparation of the Annual Financial Statements for the year ended on March 31, 2023 the applicable accounting standards have been followed.

b) the Company have selected such accounting policies and applied them consistently and made judgment and estimates that were 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 of the Company for the year under review.

c) they have taken proper and sufficient care 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) the annual financial statements have been prepared on a on-going concern basis.

e) the proper Internal Financial Controls were in place and that the financial controls were adequate and were operating effectively.

f) the systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

The Board of Directors has carried out an annual evaluation of its own performance, board committees, and individual directors pursuant to the provisions of the Act and SEBI Listing Regulations.

The performance of the Board and individual Directors was evaluated by the Board after seeking inputs from all the Directors. The criteria for performance evaluation of the Board included aspects such as Board composition and structure, effectiveness of Board processes, contribution in the long-term strategic planning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the Committee Members. The criteria for performance evaluation are broadly based on the Guidance Note issued by SEBI on Board Evaluation.

The Chairman of the Board had one-to-one meeting with the Independent Directors ('IDs') and the Chairman of NRC had one-to-one meeting with the Executive and Non-Executive, Non-Independent Directors. These meetings were intended to obtain Directors' inputs on effectiveness of the Board / Committee processes.

In a separate meeting of the IDs, the performance of the NonIndependent Directors, the Board as a whole and Chairman of the Company were evaluated taking into account the views of Executive Directors and other Non-Executive Directors.

The Nomination and Remuneration Committee reviewed the performance of the individual directors and the Board as a whole.

The Company follows a practice of addressing each of the observations and suggestions by drawing up an action plan and monitoring its implementation through the Action Taken Report which is reviewed by the Board of Directors from time to time.

The Company's policy on appointment of Directors is available on the Company's website at www.shivalikrasayan. com. The policy on remuneration and other matters provided in Section 178(3) of the Act has been disclosed in the Corporate Governance Report, which is a part of this report and is also available on the Company's website at www.shivalikrasayan.com.

The Company's internal financial control framework is commensurate with the size and operations of the business and is in line with requirements of the Companies Act, 2013. These have been designed to provide reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with Corporate Policies.

SRL has a well-defined delegation of power with authority limits for approving contracts as well as expenditure. Processes for formulating and reviewing annual and longterm business plans have been laid down.

The Audit Committee deliberated with the members of the Management, considered the systems as laid down and met the internal audit team and statutory auditors to ascertain their views on the internal financial control systems. The Audit Committee satisfied itself as to the adequacy and effectiveness of the internal financial control systems as laid down and kept the Board of Directors informed.

However, the Company recognizes that no matter how the internal control framework is, it has inherent limitations and accordingly, periodic audits and reviews ensure that such systems are updated on regular intervals.

a. Statutory Auditors- At the Fortieth (40) Annual General Meeting held on September 28, 2018, the Members approved the appointment of M/s Rai Qimat & Associates, Chartered Accountants as Statutory Auditors of the Company to hold office for a period of five years from the conclusion of that AGM till the conclusion of the Forty Fifth (45) AGM, since the tenure of M/s Rai Qimat & Associates, Chartered Accountants has been completed therefore, Board in its Meeting held on August 08, 2023 appointed M/s Rahul Chaudhary & Associates, Chartered Accountants (Registration Number 033971N) as Statutory Auditors of the Company from this AGM till the conclusion of Fiftieth (50) AGM.

Appointment of M/s Rahul Chaudhary & Associates, Chartered Accountants for five year is being sought from the Members of the Company at the forthcoming Annual General Meeting.

As per the provisions of Section 139(1) of the Companies Act, 2013, the Company has received a written consent M/s Rahul Chaudhary & Associates, Chartered Accountants, for its appointment and a certificate, to the effect that its appointment, would be in accordance with the Companies Act, 2013 and the rules framed there under and that they satisfy the criteria provided in section 141 of the Companies Act, 2013.

The report of the Statutory Auditor forms part of the Integrated Report and Annual Accounts for 2022-23. The said report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Statutory Auditors did not report 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.

b. Secretarial Auditor-The Board of Directors of your Company has re-appointed M/s AMJ & Associates, Company Secretaries, Delhi as Secretarial Auditor pursuant to the provisions of Section 204 of the Companies Act, 2013 for the financial year 2022-23. The Report of the Secretarial Auditor is annexed to the Report as per Annexure "B".

c. Internal Auditor- The Board of Directors of your Company has appointed M/s, Puneet Gupta & Co., Chartered Accountants New Delhi as Internal Auditors pursuant to the provisions of Section 138 of the Companies Act, 2013 for the financial year 2022-23.

d. Cost Auditors- The Board of Directors of the Company has, on the recommendation of the Audit Committee, approved the appointment of M/s Cheena & Associates as the Cost Auditors of the Company for the Financial Year 2022-23.

In accordance with the provisions of Section 148(3) of the Act read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, as amended, the remuneration of Rs. 75,000/- plus applicable taxes and reimbursement of out-of-pocket expenses payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the Members of the Company. Accordingly, a resolution to this effect forms part of the Notice convening the AGM.

A report on Corporate Governance together with Auditors' certificate confirming compliance with Corporate Governance norms, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms a part of this report along with Report on Management Discussion and Analysis as Annexure "C".

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2024 is available on https://shivalikrasayan.com/annual-reports/

SRL operates in a dynamic and uncertain business landscape. Hence the Company has developed and deployed its Enterprise Risk Management ('ERM') framework to create long-term value and become a risk intelligent organization that drives informed decision making to proactively prepare for unforeseen scenarios.

The Board of Directors of the Company has formed a Risk Management Committee (RMC) to frame, implement and monitor the risk management plan for the Company. The

Committee is responsible for monitoring and reviewing the risk management plan and ensuring its effectiveness.

The risk appetite of the organization is approved by the RMC and the Board and is aligned to the Vision of the Organization. It is an important metric for governing all business actions and strategic decisions. The Risk appetite is driven by the following:

• Health and safety of our employees and the communities in which we operate are our prime concern and our operating strategy is focused on the above objective;

• Management actions are focused on continuous improvement;

• Environment and Climate Change impacts are assessed on a continuous basis and business decisions support systems including capital allocation, considers climate impact through the internal carbon pricing framework;

• The long-term strategy of the Company is focused on generating profitable growth and sustainable cash flows that creates long term stakeholder value

The Audit Committee has additional oversight in the area of financial risks and controls. The major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The details pertaining to the composition of the Audit Committee are included in the Corporate Governance Report, which is a part of this report.

Your Company believes in the conduct of the affairs of its constituents in a fair and transparent manner by adopting the highest standards of professionalism, honesty, integrity and ethical behavior.

Pursuant to Section 177(9) of the Act, a vigil mechanism was established for directors and employees to report to the management instances of unethical behaviour, actual or suspected, fraud or violation of the Company's code of conduct or ethics policy. The Vigil Mechanism provides a mechanism for employees of the Company to approach the Chairman of the Audit Committee of Directors of the Company for redressal. No person has been denied access to the Chairman of the Audit Committee of Directors.

The Company has a Whistle Blower Policy and has established the necessary vigil mechanism for Directors and Employees in confirmation with Section 177(9) of the Act and Regulation 22 of Listing Regulations, to report concerns about unethical behavior. The details of the policy have been disclosed in the

Corporate Governance Report, which is a part of this report and is also available on https://shivalikrasayan.com/srl- policies/

As per SEBI Listing Regulations, the Corporate Governance Report and the integrated Management Discussion and Analysis, the Business Responsibility and Sustainability Report ("BRSR") form part of the Director's Report as Annexure "D".

The Company has provided BRSR, in lieu of the Business Responsibility Report which indicates the Company's performance against the principles of the 'National Guidelines on Responsible Business Conduct'. This would enable the Members to have an insight into environmental, social and governance initiatives of the Company.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided as per Annexure "E".

In terms of the provisions of Section 197(12) of the Act, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits as set out in the said Rules forms part of this report.

There are no significant, material orders passed by the Regulators or Courts, which would impact the going concern status of the Company and its future operations.

During the year under review, all transactions entered into with related parties were approved by the Audit Committee of Directors. Certain transactions, which were repetitive in nature, were approved through omnibus route. As per the Listing Regulations, if any related party transaction exceeds Rs. 1,000 crore or 10% of the annual consolidated turnover as per the last audited financial statement whichever is lower, would be considered as material and require Members approval. However, there is no such transaction which exceeds the above mentioned limits; therefore Members approval is not required.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Annexure "F" in Form No. AOC-2 and the same forms part of this report.

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

The brief outline of the Corporate Social Responsibility (CSR) policy of the Company and the initiatives undertaken by the Company on CSR activities during the year under review are set out in Annexure "G" of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which is a part of this report. The CSR policy is available on https:// shivalikrasayan.com/srl-policies/

There have been no material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

There were no incidences of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The information regarding Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with the Rule, 8 of the Companies (Accounts) Rules, 2014.

We remain committed to reducing our environmental footprint. Prevention of the wasteful use of natural resources, consumption of water and energy, and the management of waste and hazardous materials have been the key enablers in our journey of environmental sustainability. We have embarked on a critical review of all our approaches towards energy and environmental conservation that will help us identify goals and action plans for the longer term

Expenditure incurred on R&D are as below:

The Directors appreciate the hard work, dedication, and commitment of all its employees including workmen at the manufacturing plants towards the success of the Company. The Directors would also like to thank the financial institutions, banks, government authorities, customers, vendors and other stakeholders for their continued support and co-operation.

For and on behalf of the Board Shivalik Rasayan Limited