J.G.Chemicals Ltd

Dear Members,

Your Directors ("the Board") take pleasure of presenting the Board's Report as a part of the 23rd Annual Report of your Company ("the Company" or "J.G. Chemicals Limited"), together with the Audited Financial Statements (Standalone and Consolidated) and the Auditor's Report thereon for the Financial Year ended 31st March, 2024.

The financial statements for the year ended 31st March, 2024 have been prepared in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Companies Act, 2013 ("the Act") read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.

(All amount in INR Millions unless otherwise stated)

Your Company is the largest manufacturer of zinc oxides in India and among the top ten manufacturers of zinc oxides globally, with an installed capacity of 59,904 MTPA for zinc oxide, 7,056 MTPA for zinc ingots and 10,080 MTPA capacity for zinc sulphate and other allied chemicals. Going forward, your Company has various growth plans with respect to entering into new products and geographies. These will help propel the next level of growth for the Company and help it to reach amongst the Top 5 zinc oxide producers globally in due course.

FY 23-24 was a challenging year for the global markets due to various macro-economic reasons. There was a significant drop in zinc metal prices which impacted the overall revenues. However, despite the various challenges and headwinds, the Company was able to increase its volumes. Profitability took a severe hit due to the significant fall in zinc prices and certain other factors affecting the prices of zinc scrap. Production capacities, process of production, grades of Zinc Oxide and variety of application segments are some of the factors through which the key players control the market. We sell over 80 grades of zinc oxide, thereby enabling us to cater to a wide variety of customers, across various end-use industries. Your company is working continuously on developing new grades of zinc oxide to cater to specific requirements of customers. We believe that our leadership position in the Indian domestic markets is a consequence of (a) consistency of our product quality, which has resulted in our Company being considered as a preferred supplier to certain marquee tyre manufacturers; (b) our established infrastructure; and (c) the strategic location of our manufacturing facilities near the demand of such products. Our leadership position offers us competitive advantages such as product pricing, economies of scale, and the ability to scale our business, increase customer loyalty and expand our client base, all of which have resulted in strong performance over the last several years.

Your Directors like to inform that: i) On a consolidated basis, the revenue for FY 2024 _ 6,676.86 Million, lower by 14.90% over the previous years' revenue of _ 7,845.76 Million. The profit after tax ("PAT") attributable to shareholders and non-controlling interests for FY 2024 and FY 2023 was _ 321.08 Million and _ 567.93 Million respectively. The PAT attributable to shareholders for FY 2024 (including total other comprehensive income) was

_ 355.74 Million registering a decline of 35.36% over the PAT of

_ 550.38 Million in FY 2023. ii) On a standalone basis, the revenue for FY 2024 was _ 2,446.49 Million, lower by 27.04% over the previous year's revenue of _ 3,352.99 Million. The PAT attributable to shareholders in FY 2024 was _ 107.87 Million registering a decline of 57.23% over the PAT of _ 252.21 Million in FY 2023.

During the year under review, the Company had received its credit ratings from CRISIL Ratings. M/s. CRISIL Limited have reaffirmed ratings as CRISIL A- (Stable) for Long term and CRISIL A2+ for Short term based on all the Bank facilities taken by the Company.

For conservation of profit for business extension, the Board of Directors had not recommended any dividend for the members of the Company for the Financial Year ended 31st March, 2024.

As of March 31, 2024, the Company has one subsidiary, M/s. BDJ Oxides Private Limited. The Company has prepared a Consolidated Financial Statement of the Company and its material subsidiary, namely, M/s. BDJ Oxides Private Limited in the form and manner as that of its own, duly audited by M/s. S. Jaykishan, the statutory auditors in compliance with the applicable accounting standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended by the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018 (hereinafter referred to as the ‘SEBI Listing Regulations.').

The Consolidated Financial Statement for the FY 2023-24 forms a part of the Annual Report and Accounts and shall be laid before the Members of the Company at the forthcoming AGM while laying its financial statements under sub-section (2) of the said section. Pursuant to the provisions of Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial statements of the Company's subsidiary in Form AOC-1 is attached to the financial statements of the Company as Annexure I.

Further pursuant to the provisions of Section 136 of the Act, the standalone financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company at www.jgchem.com under the segment ‘Investor Relations'. During the financial years 2022-23 and 2023-24, M/s. BDJ Oxides Private Limited is a material subsidiary in accordance with Regulation 16 of the 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://jgchem.com/governance. A report on the performance and financial position of each subsidiary, as required by subsection (3) of Section 129 of the Companies Act, 2013 (the "Act"), read with Rule 5 of the Companies (Accounts) Rules, 2014, is provided in Form AOC-1 and 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 31st 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. jgchem.com.

The closing balance of the retained earnings of the Company (Standalone) for FY ended 31st March, 2024, after all appropriations and adjustments was _ 2,504.79 Million.

As on March 31, 2024, the total shareholding of Promoter Group of your Company stood at 70.99% (previous year 100%) in the Paid up Share Capital of the Company. Members may refer to the Extract of Annual Return (MGT-9) for details of Promoters' Group shareholding. In compliance with Regulation 31(2) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements Regulations, 2015 ("SEBI Listing Regulations, 2015"), the entire shareholding of Promoter(s) and Promoter group is in dematerialized form.

Your Company has not invited or accepted any deposits covered under Section 73 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, during the year under review.

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

In view of the Initial Public Issue the Company has increased its Authorised Share Capital from _ 370 Million to 450 Million divided into 45 Million Equity Shares of _ 10/- each as approved in the Extra Ordinary General Meeting held on 29.02.2024.

During the year under review your Company came out with initial public offer resulting Issued & Paid-up Share Capital increased to _ 391.86 Million from _ 317.20 Million in the previous year. The complete details including reconciliation thereof has been provided in Note number 18 of the Standalone Financial Statement of Accounts as on 31.03.2024.

Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return of the Company as on 31st March, 2024 is available on the website of the Company at the following link: www.jgchem.com.

The particulars as prescribed under sub-section (3) (m) of Section 134 of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are given in Annexure– II, which is annexed hereto and forms a part of the Board's Report.

There are no material changes and commitments, affecting the financial position of the Company that have occurred between the close of the financial year ended 31st March, 2024 and the date of this Board's Report.

No significant and material order has been passed by the Regulators, Courts and Tribunals impacting the going concern status and the Company's operations in future.

The details in respect of internal financial controls and their adequacy are included in the Management Discussion and Analysis Report, which forms part of this Annual Report.

Loans, Guarantees and Investments covered under Section 186 of the Companies Act,2013 ("the Act") form part of the notes to the financial statements provided in this Annual Report.

As required under the Act and the SEBI (LODR) Regulations, the Board has six (6) Statutory Committees: Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Corporate Social Responsibility Committee, Independent Directors' Committee and the Risk Management Committee. Details of all the committees such as terms of reference, composition, and meetings held during the year under review are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

The details of the CSR Committee are provided in the Corporate Governance Report, which forms part of this Annual Report. The CSR policy is available on the website of your Company at https:// jgchem.com/governance/. The Annual Report on CSR activities is annexed marked as Annexure III and forms part of this report. The Chief Financial Officer of your Company has certified that CSR spends of your Company for FY 2023-24 have been utilised for the purpose and in the manner approved by the Board of the Company.

Your Company has implemented a whistleblower policy and established a vigil mechanism in accordance with Section 177 of the Act and Regulation 22 of SEBI (LODR) Regulations. This mechanism allows directors and employees to report genuine concerns about unethical or improper activities without fear of retaliation. It includes safeguards against the victimization of whistleblowers and provides direct access to the Chairman of the Audit Committee in exceptional cases.

No person has been denied access to the Chairman of the Audit Committee. The said policy is uploaded on the Company's website and may be accessed at the following link: https://jgchem.com/wp-content/uploads/2024/06/Whistle-Blower-Policy.pdf During the financial year 31st March, 2024, the Company has not received any complaint under the vigil mechanism / whistle blower policy.

The Board has adopted a formal mechanism for evaluating its performance, as well as that of its Committees and individual Directors, including the Chairman. This structured evaluation process covers various aspects of the Board's functioning, including its composition, the experience and competencies of its members, performance of specific duties and obligations, contributions during meetings and otherwise, exercise of independent judgment, and governance issues.

The Company follows the policy to fix remuneration of its Directors, KMPs and other employees by taking into account the trend in the industry, qualification, experience, past performance and past remuneration of the respective Directors, KMPs and other employees, in the manner to strike a balance between the interest of the Company and its Stakeholders. The Nomination, Remuneration and Evaluation Policy is uploaded on the Company's website and may be accessed at the following link: https://jgchem.com/wp-content/ uploads/2023/01/06.-NREP-01-20220525.pdf

All transactions with related parties are placed before the Audit Committee for its approval. For related party transactions that are repetitive in nature, an omnibus approval is obtained from the Audit Committee.

All transactions with related parties entered into during the year under review were at arm's length basis and in the ordinary course of business and in accordance with the provisions of the Act and the rules made thereunder, the SEBI Listing Regulations and your Company's Policy on Related Party Transactions.

Currently, the Audit Committee comprises of all three Independent Directors of your Company along with Mr. Anuj Jhunjhunwala, Whole Time Director and Mr. Anirudh Jhunjhunwala, Managing director of the Company. The members of the Audit Committee abstained from discussing and voting in the transaction(s) in which they were interested.

During FY 2023-24, your Company has not entered into any transactions with related parties which could be considered material in terms of Section 188 of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3) (h) of the Act, in Form AOC 2, is not applicable.

Your Company did not enter into any related party transactions during the year under review, which could be prejudicial to the interest of minority shareholders.

The Policy on Related Party Transactions is available on your Company's website and can be accessed using the link https://jgchem.com/wp-content/uploads/2024/02/JGCL-RPT-Policy-20.11.23.pdf .

Pursuant to the provisions of Regulation 23 of the SEBI Listing Regulations, your Company has filed half yearly reports to the stock exchanges, for the related party transactions.

The Company has established a structured Risk Management Framework to identify, assess, and mitigate risks effectively. The Board has formed a Risk Management Committee (RMC) to develop, implement, and monitor the Company's risk management plan.

The RMC is responsible for reviewing the risk Corporate Governance Report, as stipulated by SEBI (LODR) Regulations, forms part of this Annual Report along with the required certificate from a Practising Company Secretary, regarding compliance of the conditions of corporate governance, as stipulated.

In compliance with corporate governance requirements as per the SEBI (LODR) Regulations, your Company has formulated and implemented a Code of Conduct for all Board members and senior management personnel of your Company ("Code of Conduct"), who have affirmed the compliance thereto. The Code of Conduct is available on the website of your Company at https://jgchem.com/ wp-content/uploads/2023/01/18.-Code-BOD-01-20222025.pdf.

During the FY 2023-24, the Board met 10 (Ten) times. The intervening gap between two consecutive board meetings did not exceed 120 days, as prescribed under the Act and SEBI (LODR) Regulations. The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Section, which forms part of this Annual Report. Your Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and General Meeting.

The Independent Directors met on 28th February, 2024, without the attendance of Non-Independent Directors and members of the management. The Independent Directors reviewed the performance of Non-Independent Directors, the Committees, and the Board as a whole, including the performance of the Chairman. This review considered the views of Executive and Non-Executive Directors and assessed the quality, quantity, and timeliness of information flow between management and the Board, ensuring that the Board can effectively and reasonably perform its duties.

With a view to familiarize the Independent Directors with the Organization Functions and set up and their roles, rights and responsibilities in the company and nature of industry in which the company operates etc.

Additionally, the Board is regularly updated on changes in statutory provisions relevant to the Company, as well as on the Company's operations, key trends, and risk universe. These updates help the Directors stay informed about the Company on a regular basis. Additionally, the Independent Directors have declared compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, ensuring their names appear in the Independent Directors data bank maintained by the Indian Institute of Corporate Affairs.

The information required under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to percentage increase in remuneration, ratio of remuneration of each Director and Key Managerial Personnel (KMP) to the median of employees' remuneration are provided in Annexure-IV of this report.

During the year, there was no change in the Key Managerial Personnel of the Company.

During the year under review, the Company had listed its Equity shares on the National Stock Exchange (NSE) and BSE Limited (BSE). The Company has paid the requisite listing fees to all the Stock Exchanges for FY 2024-25.

Your Company is committed to maintain highest standards of corporate governance practices. The Corporate Governance Report, as stipulated by SEBI Listing Regulations, forms part of this Annual Report along with the required certificate from M/s. K.Arun & Co, Company Secretaries confirming compliance, is annexed herewith and marked as Annexure V forming part of this Report.

In compliance with corporate governance requirements as per the SEBI Listing Regulations, your Company has formulated and implemented a Code of Conduct for all Board members and senior management personnel of your Company ("Code of Conduct"), who have affirmed the compliance thereto.

Pursuant to Section 134(5) of the Act, the Board, to the best of their knowledge and based on the information and explanations received from the management of your Company, confirm that: A. in the preparation of the Annual Financial Statements, the applicable accounting standards have been followed and there are no material departures.

B. they have selected such accounting policies and applied them consistently and judgements 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 of the Company for that period; C. proper and sufficient care has been taken 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 annual financial statements have been prepared on a going concern basis; E. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively; F. proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

Your Company has received declarations from all the Independent Directors of your Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1) (b) of the SEBI Listing Regulations and there has been no change in the circumstances which may affect their status as an Independent Director. The Independent Directors have also given declaration of compliance with Rules 6(1) and 6(2) of the Companies (Appointment and Qualification of Directors) Rules, 2014, with respect to their name appearing in the data bank of Independent Directors maintained by the Indian Institute of Corporate Affairs.

At the AGM of the Shareholders of the Company held on 29th September, 2023, M/s. S. Jaykishan, Chartered Accountants, having Firm Registration No. 309005E, have been re-appointed as the Statutory Auditors of the Company to hold office for a term of four consecutive years from the conclusion of the Annual General Meeting till the conclusion of the Annual General Meeting to be held for the Financial year ended 31st March, 2027 at a remuneration as may be decided by the Board of Directors in consultation with the Audit Committee and Statutory Auditors of the Company.

The Report given by M/s. S. Jaykishan, Chartered Accountants on the financial statement of the Company for the FY 2023-24 is part of this Annual Report. The Notes on financial statement referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

The Auditors' Report does not contain any qualification, reservation, adverse remark, or disclaimer. During the year under review, the Auditors had 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.

As per Section 148 of the Companies Act, 2013, the Company is required to have the audit of its cost records conducted by a Cost Accountant. The Board of Directors of the Company has, on the recommendation of the Audit Committee, approved the appointment of M/s Debobrata Banerjee and Associates a firm of Cost Accountants in Practice (Registration No 003850) as the Cost Auditor of the Company to conduct cost audits for relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 for the year ending March 31, 2024. The said Cost Audit Report does not contain any qualifications, reservations, adverse remarks and disclaimer.

The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. The Cost Auditors have confirmed that they are not disqualified to be appointed as the Cost Auditors of the Company for the financial year ending 31 March, 2025. The Company submits its Cost Audit Report with the Ministry of Corporate Affairs within the stipulated time period.

The Secretarial Audit was carried out by M/s. K. Arun & Co., Company Secretaries (Membership No. FCS 3829) for the financial year ended on 31st March, 2024. The Report given by the Secretarial Auditors is marked as ‘Annexure - VI' and forms a part of the Board's Report. The Secretarial Audit Report is self-explanatory and do not call for any further comments. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer. During the year under review, the Secretarial Auditors had 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.

As per the requirements of SEBI Listing Regulations, the Practicing Company Secretary appointed by material unlisted Indian subsidiary of the Company undertook secretarial audit for FY 2023-24.

Secretarial audit report confirms that the material subsidiary has complied with the provisions of the Act, rules, regulations and guidelines and that there were no deviations or non- compliances.

In accordance with the provisions of Section 152 of the Act, read with rules made thereunder and Articles of Association of your Company, Mr. Anuj Jhunjhunwala (DIN: 00234926 ) is liable to retire by rotation at the ensuing AGM and being eligible, offers himself for re-appointment.

The Board recommends the re-appointment of Mr. Anuj Jhunjhunwala (DIN: 00234926) as Director for your approval. Brief details as required under Secretarial Standard-2 and Regulation 36 of SEBI Listing Regulations, are provided in the Notice of AGM.

Pursuant to Section 178(3) of the Act, the Company has framed a policy on Directors' appointment and remuneration and other matters ("Remuneration Policy") which is available on the website of your Company. The Remuneration Policy for selection of Directors and determining Directors' independence sets out the guiding principles for the Nomination & Remuneration Committee for identifying the persons who are qualified to become the Directors. Your Company's Remuneration Policy is directed towards rewarding performance based on review of achievements.

Your Company recognises and embraces the importance of a diverse board in its success. The Board has adopted the Board Diversity Policy which sets out the approach to the diversity of the Board of Directors. The said Policy is available on your Company's website and may be accessed at the link https://jgchem.com/wp-content/ uploads/2024/06/Board-Diversity-Policy.pdf

Your Company has adopted a Code of Conduct ("Code") to regulate, monitor and report trading in Company's shares by Company's designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code, inter alia, lays down the procedures to be followed by designated persons while trading/ dealing in Company's shares and sharing Unpublished Price Sensitive Information ("UPSI"). The Code covers Company's obligation to maintain a digital database, mechanism for prevention of insider trading and handling of UPSI, and the process to familiarise with the sensitivity of UPSI. Further, it also includes code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company's website and link for the same may be accessed at https://jgchem.com/wp-content/ uploads/2023/01/19.-Code-I-TRD-01-20222025.pdf The employees are required to undergo a mandatory training on this Code to sensitise themselves and strengthen their awareness.

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

Issue of equity shares with differential rights as to dividend, voting or otherwise.

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

• No fraud has been reported by the Auditors to the Audit Committee or the Board.

There has been no change in the nature of business of the Company.

During the year under review, there were no cases filed or reported pursuant to the sexual harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

There are no proceedings initiated/ pending against the Company under the Insolvency and Bankruptcy Code, 2016

During the financial year under review, there were no instances of one-time settlement with any bank or financial institution.

The Directors wish to convey their appreciation to all of the Company's employees for their contribution towards the Company's performance. The Directors would also like to thank the members, employee unions, customers, dealers, suppliers, bankers, governments and all other business associates for their continuous support to the Company and their confidence in its management.