Himadri Speciality Chemical Ltd

Dear Members,

Your Board of directors ("the Board") take pleasure of presenting the Board's Report as a part of the 36^th Annual Report of your Company ("the Company" or "Himadri"), together with the Audited Financial Statements (Standalone and Consolidated) and the Auditor's Report thereon for the financial year ended 31 March 2024.

1. Financial Highlights

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

Amount in D Lakhs

2. Performance Highlights i) Financial Performance - Standalone

The Company has achieved total revenue from operations of H 4,18,489.03 lakhs for the financial year ended 31 March 2024 as against H 4,17,184.13 lakhs for the financial year ended 31 March 2023 representing an increase of 0.31%. Sales volume increased by 18%, but revenue is almost at same level due to reduction in raw material prices which were reflected in finished product pricing. The earnings before interest, taxes, depreciation, and amortization (‘EBITDA') for the year, excluding the effect of foreign exchange fluctuation loss/ (gain) and other income was H 63,236.24 lakhs as compared to H 40,817.36 lakhs for the previous financial year.

EBITDA for the year increased by 54.92% due to the increase in volume, change in product mix and operational efficiencies. During the financial year 2023-24, the Company earned a profit after tax of H 41,099.54 lakhs as compared to H 20,780.85 lakhs in the previous financial year representing an increase of 97.78%.

ii) Financial Performance - Consolidated

On a consolidated basis, the total revenue from operations in the financial year 2023-24 increased by 0.31% to H 4,18,489.03 lakhs from H 4,17,184.13 lakhs in the previous financial year. EBITDA for the year, excluding the effect of foreign exchange fluctuation loss/ (gain) and other income, was H 63,537.59 lakhs as compared to H 41,899.31 lakhs for the previous financial year. EBITDA for the year increased by 51.64% due to an increase in volume, change in product mix and operational efficiencies. During the financial year 2023-24, the Company earned a profit after tax of H 41,068.18 lakhs as compared to H 21,585.90 lakhs in the previous financial year representing an increase of 90.25%.

3. Dividend

In terms of Dividend Distribution Policy of the Company, the Board has recommended a dividend of H 0.50 per equity share having face value of H 1 each (i.e. @ 50% per equity share of face value H 1 each) for the financial year ended 31 March 2024 (Dividend for financial year 2022-23 @ H 0.25 per equity share of H 1 each) out of its' current profits, subject to the approval of Members at the ensuing Annual General Meeting (hereinafter referred to as ‘AGM') of the Company. The Dividend payout during the financial year ended 31 March 2024 was H 1,081.95 lakhs (previous year: H 838.68 lakhs).

The Register of Members and Share Transfer Books of the Company will remain closed for ascertainment of shareholders eligible to receive dividend for the financial year ending 31 March 2024 and the AGM. Book closure date has been indicated in the Notice convening AGM.

In compliance with the requirements of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as ‘SEBI Listing Regulations'), the Board has, formulated a Dividend Distribution Policy, which is available on the website of the Company at: https://www.himadri. com/home/corporate_governance

Pursuant to the provisions of the Income-tax Act, 1961, the dividend paid or distributed by a company shall be taxable in the hands of the shareholders. Accordingly, in compliance with the said provisions, your Company shall make the payment of the dividend after the necessary deduction of tax at source at the prescribed rates, wherever applicable. For the prescribed rates for various categories, the shareholders are requested to refer to the Income Tax Act, 1961 and amendments thereof.

4. Reserves and Surplus

During the financial year 2023-24, the Company has not transferred any amount to the General Reserve.

5. Subsidiaries

The Company has five Subsidiary Companies:

During the financial year 2022-23 and 2023-24, AAT Global Limited was material subsidiary pursuant to Regulation 16 of SEBI Listing Regulations.

The Company has formulated a policy for determining material subsidiaries. The Policy is available on the website of the Company at https://www.himadri. com/home/corporate_governance

A report on the performance and financial position of each of the subsidiaries as per provisions of sub section (3) of Section 129 of the Companies Act, 2013 (hereinafter referred to as ‘Act') read with rule 5 of Companies (Accounts) Rules, 2014 in Form AOC-1 is annexed to this Report as Annexure I.

Further, pursuant to the provisions of Section 136 of the Act, the standalone and consolidated financial statements of the Company for the financial year ended 31 March 2024, along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company at www.himadri.com.

• Names of the Companies which become or ceased to be its Subsidiaries, Joint Ventures or Associates

During the financial year, Combe Projects Private Limited, Himadri Clean Energy Limited and Himadri Future Material Technology Limited have become subsidiaries of the Company.

Other than the Companies mentioned above, no other Company has become or ceased to be a subsidiary or joint venture or associate of the Company during this financial year.

6. Consolidated Financial Statements

The consolidated financial statements of the Company for the financial year ended 31 March 2024, have been prepared in accordance with the Indian Accounting Standards (IND AS) 110 - "Consolidated Financial Statements" as notified by Ministry of Corporate Affairs and as per the general instructions for preparation of consolidated financial statements given in Schedule III and other applicable provisions of the Act, and in compliance with the SEBI Listing Regulations. The financial statements of the subsidiaries and the related detailed information will be made available to the Members of the Company seeking such information.

The financial statements of the subsidiaries are available at the Website of the Company at www.himadri.com The Audited Consolidated Financial Statements along with the Auditor's Report thereon forms part of the Annual Report.

7. Preferential Issue

Pursuant to the approval of the Board at its meeting held on 14 July 2022 and approval of the Members of the Company at their Extra-Ordinary General Meeting (‘EGM') held on 08 August 2022, upon receipt of 25% of the issue price per warrant (i.e. H 17.50 per warrant) as upfront payment ("Warrant Subscription Price"), the Company, on 22 August 2022 had allotted 7,25,50,000 warrants, on preferential basis to the Promoter/ Promoter Group of the Company and certain identified non-promoter persons / entity, at a price of H 70 each payable in cash ("Warrant Issue Price").

Each warrant, so allotted, is convertible into one fully paid-up equity share of the Company having face value of H 1 (Rupee One only) each in accordance with the provisions of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, on payment of the balance consideration of H 52.50 per warrant ("Warrant Exercise Price"), being 75% of the issue price per warrant from the Allottees pursuant to exercise of conversion option against each such warrant, within 18 months from the date of allotment of warrants.

During the financial year 2022-23 the Company has allotted 1,33,00,000 fully paid-up equity shares against conversion of equal no. of warrants exercised by the warrant holder upon receipt of balance 75% of the issue price (i.e., H 52.50 per warrant).

During the financial year 2023-24 the Company has allotted 5,92,50,000 fully paid-up equity shares against conversion of equal no. of warrants exercised by the warrant holders upon receipt of balance 75% of the issue price (i.e., H 52.50 per warrant).

There are no warrants outstanding as on 31 March 2024.

The details of utilization of funds raised during the financial year 2023-24 against conversion of warrants are given hereunder:

The reisnodeviation or variation in the use of proceeds from the allotment of 5,92,50,000 fully paid-up equity shares against conversion of equal number of warrants during financial year 2023-24 from the objects as stated in the Explanatory Statement to the Notice of the EGM dated 14 July 2022.

Further the Board at its meeting held on 20 March 2024 inter-alia has approved the following:

i) Issuance of 1,08,47,000 (One Crore Eight Lakhs Forty-Seven Thousand) Warrants each convertible into, or exchangeable for, 1 (one) fully paid up equity share of the Company, having a face value of H 1/- within a period of 18 months (eighteen months) in accordance with the applicable laws ("Warrants") at a price of H 316/- (Rupees Three Hundred Sixteen only) each payable in cash ("Warrant Issue Price"), aggregating upto H 3,42,76,52,000 (Rupees

Three Hundred Forty-Two Crores Seventy Six Lakhs Fifty Two Thousand Only) to the Promoters and certain other identified persons by way of preferential issue, subject to the approval of the Members and such other regulatory or statutory approvals as may be required.

ii) Issuance of 7,96,446 (Seven Lakhs Ninety-Six Thousand Four Hundred Forty-Six) equity shares of the Company having face value of H 1/- each, at a price of H 316/- (Rupees Three Hundred Sixteen only) per equity share on a preferential basis for consideration other than cash towards payment of H 25,16,76,936 (Rupees Twenty-Five Crores Sixteen Lakhs Seventy Six Thousand Nine Hundred Thirty Six only) ("Purchase Consideration"), payable by the Company for acquisition of 2,709 (Two Thousand Seven Hundred Nine) equity shares of H 10/-(Rupees Ten only) each, representing 22.29% paid-up equity capital of Invati Creations Private Limited ("Target Company"), subject to the approval of the Members and such other regulatory or statutory approvals as may be required.

8. Share Capital

The paid-up share capital of the Company at the beginning of the financial year was H 4,327.07 lakhs consisting of 4,32,707,198 equity shares of H 1 each.

During the financial year 2023-24, the Company has allotted:

(i) 73,461 equity shares of H 1 each of the Company to the eligible employees on exercise of options pursuant to "Himadri Employee Stock Option Plan 2016" on 27 April 2023.

(ii) 62,15,000 equity shares of H 1 each of the Company on 17 June 2023 towards conversion of warrants issued on preferential basis.

(iii) 4,63,000 equity shares of H 1 each of the Companyon22August2023towardsconversion of warrants issued on preferential basis.

(iv) 5,63,914 equity shares of H 1 each of the Company to the eligible employees on exercise of options pursuant to "Himadri Employee Stock Option Plan 2016" on 22 September 2023.

(v) 6,72,000equitysharesofH 1eachoftheCompany on 3 November 2023 towards conversion of warrants issued on preferential basis.

(vi) 3,80,50,000 equity shares of H 1 each of the Company on 19 January 2024 towards conversion of warrants issued on preferential basis.

(vii) 1,38,50,000 equity shares of H 1 each of the Company on 2 February 2024 towards conversion of warrants issued on preferential basis.

As a result of the above allotment the paid-up capital of the Company as at the end of the financial year increased to H 4,925.94 lakhs consisting of 49,25,94,573 equity shares of H 1 each.

9. Working Capital

The Company continues to enjoy working capital facilities under multiple banking arrangements with various banks including Axis Bank Limited, Bank of Baroda, Citi Bank N.A., DBS Bank India Limited,

HDFC Bank Limited, ICICI Bank Limited, IDFC First Bank Limited, IndusInd Bank Limited, Kotak Mahindra Bank Limited, RBL Bank Limited, Standard Chartered Bank, State Bank of India, The Hongkong and Shanghai Banking Corporation Limited and Yes Bank Limited. The Company has been regular in servicing these debts.

10. Credit Rating

The Company has obtained Credit Rating of its various credit facilities and instruments from ICRA Limited. During the year the Company has also obtained rating on the Commercial paper Programme from India Ratings and Research Private Limited (Ind-Ra). The details about the ratings assigned by the above-mentioned agencies are clearly elaborated in the Corporate Governance report forming part of the Board's Report.

11. Capital Expenditure

During the financial year 2023-24, the Company incurred capital expenditure on account of addition to fixed assets aggregating to H 5,274.77 lakhs (including capital work in-progress and capital advances).

During the financial year 2023-24, the Board has approved setting up of the Manufacturing facility for the production of Lithium-ion Battery (LiB) components with total annual production capacity of 2,00,000 MTPA with an estimated project cost of H 4,800 Crores in phases over a period of 5 to 6 years. The Board at its meeting held on 25 April 2024 has approved brownfield expansion of a new speciality carbon black line of 70,000 MTPA (increasing the total speciality carbon black capacity to 1,30,000 MTPA) at an estimated capex of H 220 crores.

Changes in Board Composition and Key Managerial Personnel

During the financial year 2023-24, Mr. Santosh Kumar Agrawala (DIN: 00364962) Independent Director has resigned from the Directorship of the Company with effect from 07 August 2023. Mr. Agrawala informed the Board that his resignation was purely on account of personal reasons. He has also confirmed that there were no other material reasons attributable / connected with the Company for his resignation. The Board places on record its deep appreciation for the contributions of Mr. Agrawala during his tenure as Independent Director of the Company. Further, Mr. Sakti Kumar Banerjee (DIN: 00631772) has ceased to be an Independent Director of the Company upon completion of his second and final term as an Independent Director and consequently ceased to be a Director of the Company w.e.f. the close of business hours on 31 March 2024. The Board places on record its deep appreciation for the contributions of Mr. Banerjee during his tenure as Independent Director of the Company.

During the financial year 2023-24, the constitution of the Board complies with the requirements of the Act, and the SEBI Listing Regulations. There were no change in Key Managerial Personnel of your Company during the financial year 2023-24.

Director retiring by rotation:

Pursuant to the provisions of the Act, the Members of the Company at the 35^th AGM held on 22 June 2023, re-appointed Mr. Anurag Choudhary (DIN: 00173934) Chairman Cum Managing Director & CEO of the Company, who was liable to retire by rotation.

In accordance with the provisions of the Act, Mr. Amit Choudhary (DIN: 00152358), Executive Director retires from the Board by rotation and being eligible and offers himself for reappointment. The Board recommends the said re-appointment at the 36^th AGM.

Further, the brief resume and other details relating to the Director seeking re-appointment, as stipulated under Regulation 36 of the SEBI Listing Regulations and Secretarial Standard 2, are provided in the Notice convening the ensuing AGM.

None of the Directors of your Company is disqualified under the provisions of Section 164(2) of the Act. A certificate dated 18 April 2024 received from Mr. Rajarshi Ghosh, Company Secretary in Practice (CP No 8921) certifying that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of companies by Securities and Exchange Board of India ("SEBI")/Ministry of Corporate Affairs or any such statutory authority is annexed to the Corporate Governance Report.

During the year under review, none of the Directors of the Company is disqualified as per the applicable provisions of the Act.

13. Meetings of the Board

The Board met 7 (Seven) times during the financial year 2023-24. The dates of meetings of the Board and its Committees and attendance of each of the Directors thereat are provided separately in the Corporate Governance Report.

The maximum gap between two Board meetings held during the year was not more than 120 days.

14. Declaration from Independent Directors

During the financial year 2023-24, all the Independent Directors of the Company have given necessary declarations regarding their Independence to the Board as stipulated in Section 149(6) & 149(7) of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014 and Regulation 16(1)(b) and 25(8) of the SEBI Listing Regulations.

In the opinion of the Board, all the Independent Directors fulfil the conditions specified in the Act with regard to integrity, expertise and experience (including the proficiency) of an Independent Director and are independent of the management.

15. Material Changes and Commitments affecting the financial position of the Company & Change in nature of business

There were no material changes and commitments that occurred after the close of the year till the date of this Report, which affected the financial position of the Company.

During the year under review, there was no change in the nature of the business of the Company.

16. Directors' Responsibility Statement

Based on internal financial controls, work performed by the Internal Auditors, Statutory Auditors, Cost Auditors and Secretarial Auditors, the reviews performed by the management, with the concurrence of the Audit Committee, pursuant to Section 134(3) (C) read with Section 134(5) of the Act and as per Schedule II Part C(A)(4)(a) of the SEBI Listing Regulations, the Board states the following for the year ended 31 March 2024:

a. In the preparation of the annual accounts for the year ended 31 March 2024, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. The Directors have selected suitable accounting policies and applied them consistently and made judgments 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. The Directors have 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 have prepared the annual accounts on a going-concern basis;

e. The Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

f. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

17. Nomination & Remuneration Policy

Pursuant to the provisions of Section 178 of the Act, and in terms of Regulation 19 read with Part D of Schedule-II of the SEBI Listing Regulations, the Company has a Nomination and Remuneration Policy for its Directors, Key Managerial Personnel and Senior Management which also provides for the diversity of the Board and provides the mechanism for performance evaluation of the Directors and the said Policy was amended from time to time and may be accessed on the Company's website at the following link: https://www.himadri.com/pdf/nomination-and-remuneration-policy-10.02.2023.pdf.

18. Loans, Investments and Guarantee

The Company has not given any loans, guarantees or securities during the year that would attract the provisions of Section 185 of the Act.

During the financial year 2023-24 the Company has made investment in Sicona Battery Technologies Pty Ltd ("Sicona"). Sicona is an innovative Australian startup specializing in high-capacity silicon anode technology for lithium-ion batteries. Sicona has developed next-generation battery materials technology used in the anodes (negative electrodes) of lithium-ion ("Li-ion") batteries that enable electric mobility and storage of renewable energy.

Further the Company as a Strategic Partner with Resolution Applicant - Dalmia Bharat Refractories Limited (DBRL) participated in the corporate insolvency resolution process of Birla Tyres Limited. The Hon'ble National Company Law Tribunal, Kolkata

Bench ("NCLT"), vide its order dated 19 October 2023 has approved the resolution plan submitted jointly by the Company and DBRL for acquisition of Birla Tyres Limited under the corporate insolvency resolution process ("CIRP") in terms of the Insolvency and Bankruptcy Code, 2016 ("IBC").

The Company has given a Corporate Guarantee to its Wholly Owned Subsidiary AAT Global Limited for its business purpose.

The Company has also given loans to its Wholly Owned Subsidiaries Combe Projects Private Limited ?nd Himadri Clean Energy Limited for business purpose.

The details of loans granted, guarantee given, and investments made during the year under review, covered under the provisions of Section 186 of the Act, are provided in the notes to the financial statements of the Company forming part of this Annual Report.

Further, subject to the approval of the Members and such other regulatory or statutory approvals as may be required, the Board at its meeting held on 20 March 2024 has inter-alia approved acquisition of 40% paid-up equity share capital of Invati Creations Private Limited ("Target Company"), for a total purchase consideration of H 45,16,12,800 (Rupees

Forty-Five Crores Sixteen Lakhs Twelve Thousand Eight Hundred Only ("Purchase Consideration") which is to be discharged in the following manner - (i) H 19,99,35,864 (Rupees Nineteen Crores Ninety-Nine Lakhs Thirty-Five Thousand Eight Hundred Sixty-Four Only) will be paid in cash against issue of fresh 2,152 (Two Thousand One Hundred Fifty-Two) equity shares of H 10/- (Rupees Ten only), constituting 17.71% stake, of the Target Company; and (ii) H 25,16,76,936 (Rupees Twenty-Five Crores Sixteen Lakhs Seventy-Six Thousand Nine Hundred Thirty-Six only) payable for acquiring 2,709 (Two Thousand Seven Hundred Nine) equity shares of H 10/-(Rupees Ten only) each, constituting 22.29% stake, of the Target Company from the existing shareholders of the Target Company for consideration other than cash to be settled by way of issue and allotment of 7,96,446 (Seven Lakhs Ninety Six Thousand Four Hundred Forty Six) equity shares of the Company having face value of H 1/-(Rupee One Only) each, at a price of H 316/- (Rupees Three Hundred Sixteen only) per equity share (including a premium of H 315/- (Rupees Three Hundred Fifteen only) per equity share to the existing shareholders of the Target Company.

19. Annual Return

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31 March 2024 is available on the website of the Company at the link https://www.himadri.com/home/ uploads/shareholder_info/sholder_meeting_agm_ doc/1716200611_Annual_Return_in_Form_MGT_7_ for_the_FY_2023-24.pdf

The annual return uploaded on the website is a draft in nature and the final annual return shall be uploaded at the same link on the website of the Company once the same is filed with Ministry of Corporate Affairs after the AGM.

20. Particulars of Remuneration of Managerial Personnel and Employees and related disclosure

Disclosures pertaining to remuneration and other details as required under Section 197(12), read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure II enclosed hereto and forms part of this Report. In accordance with the provisions of the Section, the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid rules form part of this Report. However, in line with the provisions of Section 136(1) of the Act, the Report and Accounts as set out therein, are being sent to all Members of your Company, excluding the aforesaid information. Copies of said statement are available at the registered office of the Company during the designated working hours from 21 days before the AGM till the date of the AGM. Any Members interested in obtaining such details may write to the corporate secretarial department of the Company.

21. Risk Management (Risk Assessment and Minimization Procedure)

The Company has a policy on Risk Management (Risk Assessment and Minimization Procedure) to identify various kinds of risks in the business of the Company. The Board and the Senior Management review the Policy from time to time and take adequate steps to minimize the risk in business. There are no such risks, which, in the opinion of the Board, threaten the existence of your Company. However, some of the risks which are inherent in business and the type of industry in which it operates are elaborately described in the Management Discussion and Analysis forming part of this Report.

22. Employee Stock Option Plan (ESOP)

Your Company has adopted the Himadri Employee Stock Option Plan ("ESOP 2016") for granting options to eligible employees of your Company as approved by the Members of your Company at the 28^th AGM held on 24 September 2016.

The applicable disclosures as required under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the details of stock options as at 31 March 2024 under the ESOP 2016 are set out in the Report as Annexure III and the same forms part of this Report and is also available on the Company's website at the link https://www. himadri.com/home/shareholder_information

(i) Statutory Auditors

M/s Singhi & Co, Chartered Accountants (FRN: 302049E), the Statutory Auditors of the Company were appointed at the 34^th AGM held on 28 September 2022 for the term of 5 (Five) consecutive years from the conclusion of the 34^th AGM till the conclusion of the 39^th AGM to be held for the financial year 2026-27.

The Report given by M/s Singhi & Co, Chartered Accountants on the financial statements of the Company for the financial year 2023-24 is part of the Annual Report and there is no qualification, reservation, adverse remark, or disclaimer given by the Auditors in their Reports. The Auditors of the Company have not reported any fraud in terms of the second proviso to Section 143(12) of the Act.

(ii) Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, M/s Arun Kumar Maitra & Co, Practising Company Secretaries (ICSI Unique Code P2015WB086500), were appointed as Secretarial Auditors to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit Report, pursuant to Section 204(1) of the Act for the financial year ended 31 March 2024 is annexed to this Report as Annexure IV and forms part of this Report. There is no qualification, reservation, adverse remark, or disclaimer given by the Secretarial Auditors in their Reports.

The Company has undertaken an Annual Secretarial Compliance Audit for the financial year 2023-24 pursuant to Regulation 24A (2) of the SEBI Listing Regulations. The Annual Secretarial Compliance Report for the financial year ended 31 March 2024 has been submitted to the Stock Exchanges and the said report may be accessed on the Company's website at the link https://www.himadri.com/home/stock_ exchange_compliance

(iii) Cost Auditor

Mr. Sambhu Banerjee, Cost Accountant, the Cost Auditor of the Company submitted the Cost Audit Report for the year 2022-23 within the time limit prescribed under the Act and Rules made thereunder.

During the Period under review, pursuant to Section 148 of the Act read with the Rules framed thereunder, the Board has re-appointed Mr. Sambhu Banerjee, Cost Accountants, to conduct an audit of the cost records of the Company for the financial year 2023-24.

Pursuant to Section 148 of the Act, read with the rules framed thereunder, the Board at its meeting held on 25 April 2024, upon the recommendation of the Audit Committee, re-appointed Mr. Sambhu Banerjee as the Cost Auditor of the Company to conduct the audit of the cost records of the Company for the financial year 2024-25. The Company has received the necessary consent from Mr. Sambhu Banerjee to act as the Cost Auditor of the Company for the financial year 2024-25 along with the certificate confirming that his appointment would be within the applicable limits.

Further, pursuant to Section 148 of the Act, read with the rules framed thereunder, the remuneration payable to Cost Auditor for the financial year 2024-25 is required to be ratified by the Members of the Company at the ensuing AGM. Accordingly, an ordinary resolution seeking approval of Members for ratification of payment of remuneration payable to the Cost Auditor is included in the Notice convening the ensuing AGM of the Company.

24. Maintenance of Cost Records

The Company is duly maintaining the cost accounts and records as specified by the Central Government in compliance with Section 148 of the Act.

25. Vigil Mechanism / Whistle Blower Policy

The Company has formulated a Vigil Mechanism / Whistle Blower Policy in terms of Section 177 of the Act and Regulation 22 of the SEBI Listing Regulations for the employees to report their grievances / concerns about instances of unethical behavior, actual or suspected fraud or violation of Company's Code of Conduct by means of protected disclosure to the Vigilance Officer or the Chairman of the Audit Committee. The Vigil Mechanism / Whistle Blower Policy may be accessed on the Company's website at https://www.himadri.com/ home/corporate_governance

26. Conservation of energy, technology absorption and foreign exchange earnings and outgo

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo for the financial year ended 31 March 2024, as required to be given pursuant to Section 134(3)(m) of the Act read with the Rule 8(3) of the Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure V.

27. Details in respect of adequacy of Internal Financial Controls with reference to the financial statements

The Company has laid down adequate internal financial controls and checks which are effective and operational. The Internal Audit of the Company for financial year 2023-24 was carried out by M/s Ernst & Young LLP ("EY"), Chartered Accountants, Internal Auditor for all divisions and units of the Company. The Audit Committee regularly interacts with the Internal Auditors, the Statutory Auditors and Senior Executives of the Company responsible for financial management and other affairs. The Audit Committee evaluates the internal control systems and checks & balances for continuous updation and improvements therein. The Audit Committee also regularly reviews and monitors the budgetary control system of the Company as well as the system for cost control, financial controls, accounting controls, physical verification, etc. The Audit Committee regularly observes that proper internal financial controls are in place including with reference to financial statements. During the year, such controls were reviewed, and no reportable material weakness was observed.

28. Related Party Transactions

Your Company has Policy on materiality of related party transactions and on dealing with related party transactions policy. The Audit Committee reviews this policy periodically and also reviews and approves all related party transactions, to ensure that the same are in line with the provisions of applicable law and the Related Party Transactions Policy.

The Audit Committee approves the related party transactions and wherever it is not possible to estimate the value, approves limit for the financial year, based on best estimates.

The related party transactions that were entered into by the Company during the financial year 2023-24, were on an arm's length basis. Further, no material related party transactions were entered into by the Company during the financial year 2023-24. The disclosure under Section 134(3)(h) read with Section 188 (2) of the Act in form AOC-2 is given in Annexure VI forming part of this Report.

The details of the transaction with related parties during financial year 2023-24 are provided in the accompanying financial statements.

The Policy on materiality of related party transactions and on dealing with related party transactions as approved by the Board in terms of Regulation 23 of the SEBI Listing Regulations is posted on the website of the Company and can be accessed through the following link: https://www.himadri.com/home/ corporate_governance

29. Corporate Social Responsibility (CSR)

Your Company believes that it has a responsibility to bring enduring positive value to the communities it works with. In line with Company's core theme to keep India moving, it has and will continue to build enduring and engaging relationships with key stakeholders.

The Board, in compliance with the provisions of Section 135(1) of the Act and Rules made thereunder has formulated the CSR Committee and CSR Policy. Further, the CSR policy has been placed on the website of the Company and can be accessed through the following link: https://www.himadri. com/home/corporate_governance

The Company's key objective is to make a difference to the lives of the underprivileged and help them to bring a self-sustaining level. There is a deep commitment to CSR engagement. The Company has following ongoing CSR projects:

(i) Rural development project for constructing Pucca houses in place of Kutcha houses for Economically Weaker Sections (EWS) of the society in village area surrounding or adjoining to Company's plant at Mahistikry as well as surrounding villages, setting up of rural electrification facility, setting up of drainage system, setting up of water supply tanks including pipeline connectivity to the villages involving a large amount of outlay and same are under process.

(ii) Heath Care Project for Setting up of Nursing Home at Dist. Hooghly by construction of building - facilities of Kidney dialysis, eye testing, spectacles distribution, medicine distribution, Ayurvedic, naturopathic and homeopathy treatment for the betterment of local people surrounding the plant at Mahistikry as well as surrounding villages.

During the financial year 2023-24, the Company was required to spend H 316.39 lakhs, the minimum amount to be spent on CSR activity.

The Company has spent H 562.03 lakhs during the financial year 2023-24. There was no amount unspent for the year ended 31 March 2024. The Company has spent an excess amount H 245.64 lakhs in CSR which is eligible for set off in three succeeding financial years.

The Annual Report on CSR activities in terms of Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed herewith and marked as Annexure VII forming part of this Report.

30. Performance Evaluation

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Independent Directors at their meeting have evaluated the performance of executive directors after considering the views of the Executive and Non-Executive Directors, Board as a whole and assessed the quality, quantity, and timeliness of flow of information between the Company's Management and the Board.

The evaluation process focused on various aspects of the Board and Committees' functioning such as composition of the Board and its Committees, experience and competencies, performance of specific duties, obligations and governance issues. A separate exercise was carried out to evaluate the performance of individual Directors on parameters such as attendance, contribution and exercise of independent judgement.

Further, the Board, upon recommendation of the Nomination and Remuneration Committee and as per the criteria and manner provided for the annual evaluation of each member of the Board and its Committees, has evaluated the performance of the entire Board, its Committees, and individual directors. During the financial year 2023-24, all the members of the Board and its Committees met the criteria of performance evaluation as set out by the Nomination and Remuneration Committee.

31. Public Deposit

During the financial year 2023-24, the Company has not accepted any deposits from public within the meaning of Section 73 and Section 74 of the Act, therefore the disclosure pursuant to Rule 8 (5)(v) & (vi) of Companies (Accounts) Rules, 2014, is not applicable to the Company.

32. Significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operation in future

There are no significant/ material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations. During the year under review, no Corporate Insolvency Resolution application was made, or proceeding was initiated, by/against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended). Further, no application / proceeding by / against the Company under the provisions of the Insolvency and Bankruptcy Code, 2016 (as amended) is pending as on 31 March 2024.

33. Transfer of Unclaimed Dividend and Unclaimed Shares to Investor Education & Protection Fund (IEPF)

Pursuant to applicable provisions of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund ("IEPF" or "Fund") established by the Central Government, after completion of seven years from the date the dividend is transferred to unpaid/ unclaimed account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of the IEPF Authority.

The Company had sent individual notices and advertised in the newspapers seeking action from the shareholders who have not claimed their dividends for seven consecutive years or more. Thereafter, the Company transferred such unpaid or unclaimed dividends and corresponding shares to IEPF.

During the financial year 2023-24, pursuant to provision of Section 124 of the Act, the Company has transferred a sum of H 3,16,140.00 to the IEPF, the amount of dividend which was unclaimed/ unpaid for a period of seven years declared for the financial year 2015-16.

During the financial year 2023-24, the Company has transferred 2,48,787 shares in respect of which dividend has not been paid or claimed for seven consecutive years or more pursuant to Section 124 of the Act to the IEPF.

Shareholders/claimants whose shares or unclaimed dividend, have been transferred to the IEPF may claim those dividends and shares from the IEPF Authority by complying with prescribed procedure and filing the e-Form- IEPF-5 online with MCA portal.

The dividend declared for the financial year ended 31 March 2017 and which is remain unpaid/ unclaimed is due to be transferred to IEPF within statutory timelines, upon expiry of the period of seven years. The due dates for transfer of unclaimed dividend to IEPF are provided in the report on Corporate Governance.

Further the shares in respect of which dividend has not been paid or claimed for seven consecutive years will also be transferred to IEPF.

Shareholders are requested to ensure that they claim the unpaid dividends referred to above before the dividend and shares are transferred to the IEPF pursuant to the provision of Section 124 of the Act.

34. Corporate Governance

In terms of the provisions of Regulation 34(3) of the SEBI Listing Regulations, the Corporate Governance Report together with a certificate from a firm of Practising Company Secretaries confirming compliance, is annexed herewith and marked as Annexure VIII forming part of this Report.

35. Management Discussion and Analysis

The Management Discussion and Analysis as required under Schedule V of the SEBI Listing Regulations forms an integral part of the Annual Report.

36. Business Responsibility and Sustainability Reporting (BRSR)

The Business Responsibility and Sustainability Reporting (BRSR) of the Company for the financial year ended 31 March 2024 as required pursuant to the Regulation 34(2)(f) of the SEBI Listing Regulations is annexed herewith and marked as Annexure IX forming part of this Report and the same is also available on the Company's website at www.himadri.com.

37. Listing on Stock Exchanges

There were 49,25,94,573 equity shares of the Company as on 31 March 2024. However, out of 49,25,94,573 equity shares of the Company, 47,87,44,573 equity shares were listed with BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE). The difference in the issued and listed capital is because of 1,38,50,000 number of equity shares which were allotted on 2 February 2024 and subsequently listed on 1 April 2024.

The Company has paid the annual listing fees to these stock exchanges.

38. Dematerialisation of Shares

There were 49,25,94,573 equity shares of the Company as on 31 March 2024, out of the 49,25,94,573 equity shares of the Company 49,04,00,411 shares were held in electronic form representing 99.55% to the total paid up share capital, whereas balance of 21,94,162 shares were held in physical form representing 0.45% to the total paid up share capital of the Company. The Company's equity shares are compulsorily required to be traded in dematerialised form, therefore, Members are advised to speed up converting the physical shareholding into dematerialised form through their DP(s).

39. E-voting facility at AGM

In terms of Regulation 44 of SEBI Listing Regulations and in compliance with the provisions of Section 108 of the Act read with Rule 20 and other applicable provisions of the Companies (Management and Administration) Rules, 2014 (as amended), the items of business specified in the Notice convening the 36^th AGM of the Company shall be transacted through electronic voting system only and for this purpose the Company is providing e-Voting facility to its' Members whose names will appear in the register of members as on the cut-off date (fixed for the purpose), for exercising their right to vote by electronic means through the e-voting platform to be provided by National Securities Depository Ltd ("NSDL"). The detailed process and guidelines for e-Voting have been provided in the notice convening the meeting.

40. Prevention of Sexual Harassment at Workplace

Your Company firmly believes in providing a safe, supportive, and friendly workplace environment – a workplace where its values come to life through supporting behaviors. A positive workplace environment and great employee experience are integral parts of its culture. Your Company continues to take various measures to ensure a workplace free from discrimination and harassment based on gender.

Your Company educates its employees as to what may constitute sexual harassment and in the event of any occurrence of an incident constituting sexual harassment. Your Company has created the framework for individuals to seek recourse and redressal to instances of sexual harassment.

Your Company has a Sexual Harassment Prevention and Grievance Handling at the Workplace Policy in place to provide clarity around the process to raise such a grievance and how the grievance will be investigated and resolved. An Internal Committee has been constituted in line with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. There are regular sessions offered to all employees to increase awareness of the topic and the Committee and other senior members have undergone training sessions.

During the financial year 2023-24, the Committee submitted its Annual Report as prescribed in the said Act and there was no complaint as regards sexual harassment received by the Committee during the year.

During the financial year 2023-24, initiatives were taken to demonstrate the Company's zero tolerance philosophy against discrimination and sexual harassment, which included easy to understand training and communication material which was made easily accessible. The Company has also conducted online training for the employees to cover various aspects of this matter.

41. Compliance of Secretarial Standards

The Company has followed the applicable Secretarial Standards, with respect to Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) issued by the Institute of Company Secretaries of India.

42. Green Initiatives & Acknowledgement

As a responsible corporate citizen, the Company supports the ‘Green Initiative' undertaken by the Ministry of Corporate Affairs, Government of India, enabling electronic delivery of documents including the Annual Report etc. to Members at their e-mail address registered with the Depository Participants ("DPs") and RTAs. To support the ‘Green Initiative', Members who have not registered their email addresses are requested to register the same with the Company's Registrar and Share Transfer Agent ("RTAs")/Depositories for receiving all communications, including Annual Report, Notices, Circulars, etc., from the Company electronically.

Pursuant to the MCA Circular No. 09/2023 dated 25 September 2023 and SEBI Circular dated 07 October 2023, the Annual Report of the Company for the financial year ended 31 March 2024 including therein the Audited Financial Statements for the financial year 2023-24, will be sent only by email to the Members.

The Board of the Company wish to place on record their sincere appreciation of the dedication and commitment of all employees in continuing their achievements and excellence in all areas of the business. The Board thanks the shareholders, customers, suppliers, bankers, other stakeholders and various departments of the State Government and the Central Government for their continuous support to the Company.

Your Board appreciate and value the contribution made by every member of the Himadri family.

For and on behalf of the Board