Chemplast Sanmar Ltd

The Directors have pleasure in presenting the Fortieth Annual Report along with the Audited Financial Statements for the financial year ended March 31,2024.

' Crores

Financial Performance - Standalone

On a standalone basis, the revenue from operations and other income decreased to ' 1,697 Crores for FY 2023-24 from ' 2,222 Crores in FY 2022-23. Loss before Tax for FY 2023-24 was ' 156 Crores against profit of ' 167 Crores in FY 2022-23. The drop in revenue and profits at a standalone level was mainly due to a steep drop in prices across all products.

Financial Performance - Consolidated

On a consolidated basis, the revenue from operations and other income stood at ' 4,003 Crores for FY 2023-24 against ' 5,021 Crores in FY 2022-23. Loss Before Tax for FY 2023-24 was ' 226 Crores against profit of ' 172 Crores in FY 2022-23. The drop in revenue and profits at a consolidated level was mainly due to a steep drop in prices across all products.

Dividend and Transfer to Reserves

Considering the loss incurred for the FY 2023-24, the Directors have decided not to recommend any dividend for the FY 2023-24. The Directors also do not recommend any transfer to reserves.

Share Capital

The Company's paid-up equity share capital stood at ' 79.06 Crores as on March 31, 2024, consisting of 15,81,09,574 equity shares of ' 5/- each. There is no change in the share capital of the Company

Borrowings

The total borrowings, including interest accrued, on a consolidated basis stood at ' 1,542.28 Crores as on March 31,2024 as against ' 1,007.97 Crores as on March 31,2023.

Capacity Expansion

During the year, the Company has commissioned Phase 1 multipurpose facility for Custom Manufactured Chemicals at Berigai and 41kt p.a Speciality Paste PVC at Cuddalore.

Statement of Company's Affairs

Chemplast Sanmar Ltd (CSL) is a leading Speciality chemicals manufacturer in India with focus on Speciality Paste PVC resin and custom manufacturing of starting materials and intermediates for pharmaceutical, agro- chemical and fine chemicals sectors. CSL is the largest manufacturer of Speciality Paste PVC resin in India. In addition, CSL is also the fourth largest manufacturer of Caustic Soda and the largest manufacturer of Hydrogen Peroxide in South India and the oldest manufacturer of Chloromethanes in India.

I. Speciality Chemicals PVC Paste Resin

(FY = Financial Year and Q=Quarter)

The domestic demand for Speciality Paste PVC Resin in FY 2023-24 remained largely stable compared to the last year. Demand was at 161 kt in FY 2023-24 as against 163 kt in FY 2022-23.

The demand in US and Europe was weak due to high inflationary pressures and rising interest rates while Chinese demand was also lower than usual due to the country's economic downturn. The Glove industry which was a major user industry has shown a very sharp decline in demand post Covid and therefore resulted in large unused capacities.

Inspite of these global pressures, Indian demand remained largely stable at the previous year levels with the automotive sector showing some growth. Exports of leather cloth to the European Union registered a drop, which impacted demand for Paste PVC to some extent.

The global weakness in prices led to surpluses in geographies like Europe, China and SE Asia, being dumped into India at very low prices. The weighted average prices of imports came down by 16% compared to the previous year.

During the year, the Company focused on expanding its reach. The expansion project adding 41kta of Speciality Paste PVC at Cuddalore was successfully completed and the first supplies rolled out of our facility in February 2024.

The Company recorded the highest ever production and sale of Speciality Paste PVC Resin at Mettur during FY 2023-24.

The Company is confident of selling the expanded quantity of Speciality Paste PVC in the years ahead. The issue has been the dumping of large volumes of product into the Indian market at very low prices. The Company is working with the regulatory authorities to address this serious problem for Indian manufacturers, and is confident that this issue will be addressed in FY 2024-25.

Custom Manufactured Chemicals

The Custom Manufactured chemicals business manufactures advanced intermediates for global innovators and originators in Pharmaceutical and Agrochemical markets. The Company markets unique chemistry and process capabilities to its customers based on which customers approach the Company with projects for products that they wish to outsource. Therefore, unlike other chemical companies, the Company does not have a catalogue of products to sell. The Company is well renowned in the industry for its ability to handle various chemistries and chemicals. The Company offers a world-class research and development capability combined with a broad range of chemical technologies at production scale.

In addition, the Company is also well known for its Environmental and Safety stewardship. In fact, customers use this as the first criterion for screening before they decide to work with a supplier. The Company is also unique in having, within the Chemplast system, access to many basic starting materials important for this business - such as Caustic, Chlorine, Hydrogen & Chloromethanes as also the ability to handle gases like Ethylene.

The Company has long standing partnerships and relationships with global innovator companies in the agro chemical and pharmaceutical space. The Company focusses on engaging with its customers at an early stage of the life cycle of a product to ensure this. Global innovator companies are increasing their outsourcing pie constantly. This together with China+1 strategy of the innovators, is resulting in increased enquires for Indian players including Chemplast Sanmar.

Due to its efforts over the years in building relationships and partnerships, the Company has a strong pipeline of products under various stages of development. Many of these will require the Company to make investments in new capacity in the coming months and years. The Company has already committed to invest to set up a world class facility to accommodate the new product pipelines. Phase 1 of the new production block was successfully commissioned during the year and the balance Phase 2 will get completed in Q1 of the next year. Apart from this, the Company had commissioned a new R & D block and other infrastructure related to the new production block. This year, the Company had signed multiple letters of intents with a global agrochemical innovator for the manufacture of advanced intermediates and active ingredients.

During the year, due to ongoing weak global demand and inventory rationalisation in speciality chemicals, demand for some of the products was affected. However, the Company sees strong ongoing demand for the new molecules which were commercialised during this year.

II. Value-added Chemicals Chloromethanes

FY 2023-24 began on a sombre note for the Chloromethane industry as the expanded capacities that had come up in India towards the later part of FY 2022-23 started stabilising.

Estimated demand for Methylene dichloride during the year is 400kt, up from 365kt during the previous

year, indicating a growth of 9.5% driven mainly by the Pharma sector which remains the single largest consumption sector. Though end product demand for Methylene dichloride from the key pharma sector was steady, the excess supply scenario forced domestic prices to head south. Further expansion within the country is likely to keep domestic prices subdued in the near term.

Chloroform too witnessed headwinds following excess availability of material in the domestic market, despite near normal demand from key sectors like Pharma, Footwear and Adhesives. Estimated demand for Chloroform during the year is 195kt, down marginally from 200kt in the last year, implying a drop of 2.5%. Prices continued to remain low following intense competition from domestic players for the available market besides regular import arrivals in bulk. Going forward, reduced HCFC-22 production quota from January 2025 would further dampen demand for Chloroform.

Estimated demand for Carbon tetrachloride during the year is 27kt, down marginally from 28kt last year, indicating a 3.5% drop. Poor demand from Synthetic Pyrethroids segment continued to haunt the industry for a large part of this year. Inventory build-up forced producers to drop prices drastically and liquidate stocks. Some improvement in buying was seen from Q4 2024 onwards, resulting in price stability. Start-up of a new plant for Cypermethrin coupled with improved operating rate of Cypermethrin producers could support prices in FY 2024-25.

Caustic Soda

Being a very basic alkali with a strong correlation between economic activity and consumption, Caustic Soda witnessed a steady demand during the year, driven largely by the Alumina and Paper & Pulp sectors. Prices by and large remained soft given the excess domestic capacity, with a brief spike towards Q3 driven by higher exports and positive global cues. Offtake from Textile sector continued to remain weak reflecting the weak global economic activity.

Going forward, commissioning of additional 400tpd capacity by a competitor during FY 2024-25 will further add to the excess supply situation in South India, our major market. Prices of Caustic Soda in Asia have gone up from a low of around $325/dmt FOB NEA to around $400/dmt FOB NEA. Further increase depends on a recovery in demand, especially in China.

Hydrogen Peroxide

During the year under review, the Company enhanced the production of Hydrogen Peroxide consequent on the availability of Hydrogen from Caustic Soda plant at Mettur. Higher offtake from Paper & Pulp segment customers coupled with a higher reach through our dealer network mitigated the slowdown in offtake from Textile sector that continued to face headwinds due to higher yarn prices. While cheaper imports from Bangladesh continue unabated, our strong presence in the South helped us in moving volumes across market segments to ensure consistent flow of orders and ensure steady sales on regular basis.

Performance of Subsidiary:

Chemplast Cuddalore Vinyls Limited (CCVL)

The Company's wholly owned subsidiary CCVL incurred a Loss before tax of ' 69 Crores for the year ended March 31,2024 as compared to profit before tax of ' 5 Crores for FY 2022-23. The Loss after tax for FY 2023-24 was ' 54 Crores, as against a profit after tax of ' 7 Crores in FY 2022-23.

CCVL is the second largest manufacturer in India of Suspension PVC resin. The domestic demand of Suspension PVC resin in FY 2023-24, at 4 Million mt, was healthy, registering a year-on-year growth of close to 7%. However, the year witnessed a challenging situation on the price front as the demand in the rest of the world did not recover for a variety of reasons. This had a major impact on PVC demand in China, leading to significant exports of PVC to India, at very low prices. Imports into India, from the USA and China, have grown significantly over the last couple of years. This flood of low-priced imports led to a situation where market sentiments in India tended towards maintaining low inventory in the anticipation of further price decreases.

This situation led to the average price of PVC for FY 2023-24 dropping by 25% compared to FY 2022-23.

Management Discussion and Analysis Report

Pursuant to Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations 2015 ("Listing Regulations"), the Management Discussion and Analysis Report for the year under review, is presented in a separate section as Exhibit A, forming part of the Annual Report.

Corporate Governance Report

The report on corporate governance along with a certificate from the Practising Company Secretary as required under the Listing Regulations is annexed to this Report as Exhibit B.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations which is annexed to the report on corporate governance.

The Board and senior management personnel have affirmed that they have complied with the Code of Conduct of the Company. A declaration from Mr Ramkumar Shankar, Managing Director, as required under Regulation 34(3) and Schedule V (D) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 to this effect is annexed to the report on corporate governance.

Business Responsibility and Sustainability Report

In terms of Regulation 34 (2) (f) of the Listing Regulations, a Business Responsibility and

Sustainability Report is presented in a separate section, forming part of this Report as Exhibit C.

Safety and Environment

The Company continues to place great importance on protecting the environment and managing natural resources responsibly. These principles have been incorporated in all its operational systems, with stringent solid and hazardous waste management processes followed at all plants.

1. Process Safety Management & Behavioural

Based Safety

Chemplast Sanmar Ltd and its subsidiary,

Chemplast Cuddalore Vinyls Limited, have,

over the years, worked on establishing a 'ZERO Harm Culture' through a systematic approach to Occupational Health, Safety and Environment (OHS&E). The Company's efforts in this regard have been recognised with Five-Star ratings for most of its plants by the British Safety Council, as also the top Sword of Honour awards for a few of its plants. The Company has also embarked on a Process Safety Management and Behaviour- based Safety programme, to further strengthen the organisational emphasis on safe operations.

2. Process Safety Studies

During the year, the Company completed the following process safety studies and the recommendations are being implemented as part of continual risk reduction process.

1. Hazard and Operability (HAZOP) Revalidation study conducted for Plants 1, 3 and 4 at Mettur and our Karaikkal plant.

2. Safety Integrity Level - Layer of Protection Analysis (SIL - LOPA) conducted for Chemplast Sanmar Limited (CSL) Mettur Plant 2, CSL Karaikkal Plant and Cuddalore CSL PVC Paste project.

3. Custom Manufactured Chemicals (CMC) plant, Berigai has conducted Hazardous area classification (HAC), Quantitative Risk Analysis (QRA) and Lightening Protection Study (LPS) for MPB3 plant.

3. IS 14489 - Statutory Audit

IS 14489 statutory audit was conducted at Mettur, Plant 1, Plant 2 & Plant 3 and all recommendations implemented.

IS 14489 statutory audit was conducted at Karaikkal CSL plant & Berigai CMC Plant and the recommendations are under implementation.

4. Awards and Rewards

A. The following awards have been received from The Indian Chemical Council (ICC)

i. Chemplast Sanmar Limited, Mettur received "ICC - VINATI ORGANICS" AWARD FOR EXCELLENCE IN MANAGEMENT OF HEALTH & SAFETY.

ii. ICC-Nicer Globe Award for the Best Three drivers in India - Two drivers are from CSL service provider.

1) Shanmugam R - Murugan Oil Corporation (Operating for Chemplast Sanmar)

2) Kanagarajan K - Murugan Oil Corporation (Operating for Chemplast Sanmar)

B. The following awards were received from The National Safety Council Tamil Nadu Chapter for "Occupational Health, Safety & Environment Award 2023".

i. CMCD Berigai has received the highest "AWARD OF HONOUR"

ii. CSL Mettur Plant 2 and Plant 3 have received "STAR AWARD"

C. The following plants have received "SWORD OF HONOUR" for Occupational Health & Safety Performance from British Safety Council

i. CSL Mettur Plant 1 and Plant 4

ii. CSL Karaikkal Plant

Finance

The Company has established a good track record with the Bankers and Financial institutions, thereby enjoying their full confidence.

During the first week of January 2024, CRISIL Ratings reaffirmed Chemplast Sanmar Limited's and its wholly owned subsidiary Chemplast Cuddalore Vinyl Limited's credit ratings at AA- (long term), with outlook revised from "Stable" to "Negative". CRISIL has also reaffirmed short term rating of A1+, which is the highest rating possible.

Dividend Distribution Policy

Pursuant to the provisions of Regulation 43A of the Listing Regulations, 2015, as amended, the Board of Directors has approved the Dividend Distribution Policy and the said Policy is available at the following link https://www.chemplastsanmar.com/downloads/ investor-relations/csl-policies/dividend-distribution- policy.pdf

Change in the Nature of Business:

There was no change in the nature of business of the Company during the financial year.

Risk Assessment and Management

The Company has a well-defined Risk Management System. The Board of Directors had constituted a Risk Management Committee to monitor and oversee the Risk Management System. The Composition of the Risk Management Committee, terms of reference and number of committee meetings held during the year under review are given in the Corporate Governance Report.

The Risk Management Policy of the Company as recommended by the Risk Management Committee and approved by the Board of Directors of the Company can be accessed in the Company's website using the link https://www.chemplastsanmar.com/downloads/ investor-relations/csl-policies/risk-management- policy.pdf. The Risk Management System of the Company ensures that all risks that the organisation faces including strategic, financial, credit, operational,

market, liquidity, security, property, legal, regulatory, IT, reputational and other risks are identified and the impact assessed. Mitigation plans are then drawn up and these plans are effectively reviewed and implemented.

Internal Control Systems

Adequate internal controls, systems, and checks are in place, commensurate with the nature of the Company's business and size. The management exercises financial control on the operations through a well-defined budget monitoring process and other standard operating procedures.

Internal audit for the year 2023-24 was carried out by RGN Price & Co, Chartered Accountants covering all significant areas of operations. All significant observations of the Internal Auditors are placed before the Audit Committee together with corrective actions.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control in the Company, and compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the reports of Internal Auditors, the management undertakes appropriate corrective action in their respective areas.

Internal Financial Control over Financial Reporting

The Company has in place adequate internal financial controls with reference to the Financial Statements. Such controls have been assessed during the year taking into consideration the essential components of internal controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by The Institute of Chartered Accountants of India. Based on the results of such assessment carried out by management with the help of the internal auditors, no reportable material weakness or significant deficiencies in the design or operation of internal financial controls were observed.

Deposits

During the year under review, the Company has not accepted any public deposit within the meaning of the provisions of Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014 and as on March 31, 2024, the Company did not have any outstanding public deposit.

Particulars of loans, guarantees or investments under Section 186 of the Companies Act, 2013

Particulars of investments and guarantees under Section 186 of the Companies Act, 2013 are given in

the Notes forming part of the Financial Statements for the year ended March 31,2024.

The Company has not given any loans under the provisions of Section 186 of the Companies Act, 2013.

Consolidated Financial Statements

Consolidated Financial Statements are prepared by the Company in accordance with the applicable Indian Accounting Standards (Ind AS) issued by the Ministry of Corporate Affairs and the same together with Auditors' Report thereon form part of the Annual Report. The financial statements have been prepared as per Division II of Schedule III issued by the Ministry of Corporate Affairs vide its Notification dated April 06, 2016 as amended from time to time.

Subsidiary

Chemplast Cuddalore Vinyls Limited continues to be the wholly-owned subsidiary of the Company. The details on operations / performance of the said subsidiary during the year under review are given hereinabove.

Pursuant to the requirements of Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the details of investments made in the subsidiary and the details of guarantees issued by the Company to the lenders of the wholly-owned subsidiary have been furnished in the Notes forming part of the Accounts.

A statement containing the salient features of the financial statements of the Company's wholly-owned subsidiary under the provisions of Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies (Accounts) Rules 2014 has been annexed in prescribed Form AOC 1 as Annexure 6.

The Audited financial statements of the wholly-owned subsidiary Company are placed on the Company's website www.chemplastsanmar.com

The Company does not have any joint venture or Associate Company during the year or at any time after the closure of the year and till the date of the report.

Related Party Transactions

There are no contracts / arrangements / transactions which are not at arm's length basis and there are no material contracts / arrangements / transactions. Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188 (1) along with the justification for entering into such contract or arrangement in Form AOC-2 does not form part of the report.

The Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website and is available in the following link https://www. chemplastsanmar.com/downloads/investor- relations/csl-policies/related-party-transaction- policy.pdf

Significant and Material Orders passed by the Regulators or Courts or Tribunals impacting the going concern status of the Company

There were no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and Company's operations in future.

Material Changes and Commitment affecting the financial position of the Company that occurred after March 31, 2024

There were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year to which the Financial Statements relate to and the date of this report.

Directors and Key Managerial Personnel

Mr Chandran Ratnaswami, Non-Executive Non- Independent Director retired from the Board with effect from May 10, 2024. The Board of Directors place on record its deep appreciation of the valuable services rendered by him during his tenure as Director of the Company.

The Board of Directors, at its meeting held on May 20, 2024, on the recommendation of Nomination and Remuneration Committee, approved the appointment of Mr Sumit Maheshwari, (DIN:06920646) as Non-Executive Non-Independent Director of the Company in the casual vacancy caused by the retirement of Mr Chandran Ratnaswami, Non-Executive Non-Independent Director, subject to the approval of shareholders of the Company.

The Company has received notice from a member under Section 160 of the Companies Act, 2013 proposing the appointment of Mr Sumit Maheshwari as Non-Executive Non-Independent Director of the Company liable to retire by rotation. Pursuant to the provisions of Section 152, 160, 161 and other applicable provisions of the Companies Act, 2013 approval of shareholders of the Company is required for the appointment Mr Sumit Maheshwari as Non- Executive Non-Independent Director, liable to retire by rotation.

Mr Vijay Sankar, Chairman and Non-Executive Director, is liable to retire by rotation pursuant to Section 152 (6) of the Companies Act, 2013. Being eligible he offers himself for re-appointment. As recommended by the Nomination and Remuneration Committee of Directors, the Board of Directors at its meeting held on May 20, 2024 approved his re-appointment and recommended to the shareholders for their approval at the ensuing 40^th Annual General Meeting.

The Independent Directors have submitted declarations stating that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013. Based on the declarations received from all the Independent Directors and in the opinion of the Board, all the Independent Directors possess integrity, expertise, experience and proficiency and are independent of the management.

Pursuant to the provisions of Section 203 of the Companies Act, 2013 read with the rules thereunder, the Key Managerial Personnel (KMP) of the Company are Mr Ramkumar Shankar, Managing Director, Mr N Muralidharan, Chief Financial Officer and Mr M Raman, Company Secretary. They are also the KMPs of the Company's wholly-owned subsidiary, Chemplast Cuddalore Vinyls Limited.

Directors' Responsibility Statement

To the best of our knowledge and belief and according to the information and explanations obtained by us, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

(a) In the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed by the Company.

(b) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the loss of the Company for the year ended on that date.

(c) The Directors 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 Directors have prepared the annual accounts of the Company on a going concern basis.

(e) The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

(f) The Directors have laid down internal financial controls to be followed and confirm that such internal financial controls were adequate and operating effectively.

Number of Board Meetings

During the year, the Board of Directors met five (5) times as per details furnished in the Corporate Governance Report.

Audit Committee

Composition of Audit Committee

The composition of the Audit Committee is as under and is in compliance with the provisions of Section 177 of the Companies Act, 2013 read with the rules thereunder and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"):

The terms of reference of the Audit Committee is set out in the Corporate Governance Report.

During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

The Members of the Audit Committee met Six (6) times during the financial year under review.

Nomination and Remuneration Committee

The Members of the Nomination and Remuneration Committee met five times during the financial year under review. The details of the constitution of the Nomination and Remuneration Committee, terms of reference and the meetings held during the financial year have been stated in the Corporate Governance Report.

The Policy on formal Annual Evaluation by the Board can be accessed through the following link https:// www.chemplastsanmar.com/downloads/investor- relations/csl-policies/2024/Nomination and Remuneration Policy and Board Evaluation Policy. pdf

Stakeholders Relationship Committee

The Members of the Stakeholders Relationship Committee met once during the financial year under review. The details of the constitution of the Stakeholders Relationship Committee, and the terms of reference have been stated in the Corporate Governance Report.

Risk Management Committee

The Members of the Risk Management Committee met two times during the financial year under review. The details of the constitution of the Risk Management Committee, and the terms of reference have been stated in the Corporate Governance Report.

Corporate Social Responsibility Committee

The Members of the Corporate Social Responsibility Committee met once during the financial year under review. The details of the constitution of the CSR Committee have been stated in the Corporate Governance Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out evaluation of its own performance, the Directors individually and evaluation of working of the committees of the Board during the financial year 2023-24 as per the criteria laid down by Nomination and Remuneration Committee. The evaluation process contained various aspects of the functioning of the Board and its committees and their roles, frequency of meetings, level of participation, and independence of judgement, performance of duties and obligations.

The Board expressed its satisfaction on the performance of all the Directors, Board and its committees which reflected the overall engagement of the Directors, the Board and its committees of the Company.

Familiarisation Programme for the Independent Directors:

The details with respect to familiarisation programme for the Independent Directors are furnished in the Corporate Governance Report.

Personnel

Industrial relations with employees remained cordial during the year. Human Resource Development activities continued to receive considerable attention. The emphasis was on imparting training and developing the skill set of employees to enable them

face the challenges in an increasingly complex work environment.

Particulars of employees

Disclosure 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 is annexed to this Report as Annexure 3.

Statement containing particulars of employees drawing remuneration in excess of limits prescribed under Section 197 (12) of the Act read with Rule 5 (2) and 5 (3) of the Companies (Appointment and Remuneration of Managerial Personnel), Rules, 2014 is provided in the Annexure forming part of this report. In terms of proviso to Section 136 (1) of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. The said Statement is open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with the provisions of Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, in regard to constitution of an internal Committee as prescribed. During the year, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Vigil Mechanism / Whistle Blower Policy

The Company has a Vigil Mechanism Policy to deal with an instance of fraud or mismanagement, if any. The Directors are pleased to report that during the year under review, no untoward or fraud case was reported.

The Company has adopted an ethical code of conduct for the highest degree of transparency, integrity, accountability and corporate social responsibility. Any actual or potential violation of the Code would be a matter of serious concern for the Company.

This policy has been formulated with a view:

• To provide a mechanism for employees of the Company and other persons dealing with the Company to report to a person nominated by the Audit Committee, any instance of unethical behaviour, actual or suspected fraud or violation of the Company's Ethics Policy.

• To safeguard the confidentiality and interest of such employees / other persons dealing with the Company against victimisation, who notice and report any unethical or improper practices and

• To appropriately communicate the existence of such mechanism, within the organisation and to outsiders and

• To ensure that no personnel is denied access to the Chairman of the Audit Committee in respect of reporting any of above instances.

Corporate Social Responsibility

The Company has all along attached utmost importance to sustainable development.

As mandated by the Companies Act, 2013 and the rules framed thereunder, the Company has formulated a Policy on CSR and has constituted a CSR Committee to recommend and monitor expenditure on CSR.

Details of CSR Expenditure, in the prescribed format, forms part of this Report and are enclosed as Annexure 2.

Statutory Auditors

BSR & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022) were appointed as the Statutory Auditors of the Company for a period of 5 years, from the conclusion of 38^th Annual General Meeting to 43^rd Annual General Meeting of the Company, that is, for the Financial Years 2022-23 to 2026-27.

Internal Auditors

RGN Price & Co. LLP Chartered Accountants (Firm Registration No.002785S) are the Internal Auditors of the Company.

Cost Records, Audit and Auditor

Pursuant to Section 148(1) of the Companies Act, 2013 and rules thereunder, the Company is required to maintain cost records/ accounts as specified therein in respect of its products and the Company maintains cost records/ accounts in the prescribed format.

As per provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules 2014, the cost audit records maintained by the Company in respect of the products of the Company are required to be audited. The Company had appointed N. Sivashankaran & Co, Cost & Management Accountants, Chennai (Firm Registration No. 100662) as cost auditors to audit the cost accounts of the Company for the financial year 2023- 24.

As recommended by the Audit committee, the Board of Directors at its meeting held on May 20, 2024 has approved the appointment of N. Sivashankaran & Co, Cost & Management Accountants, Chennai (Firm Registration No. 100662) as cost auditors to audit the cost accounts of the Company for the financial year

2024- 25.

The Cost Auditors have given a Certificate to the effect that the appointment is within the prescribed limits specified under Section 141 of the Companies Act, 2013.

As required under the Companies Act, 2013, the remuneration payable to the Cost Auditor for FY 2024-25 is placed before the Members for their ratification.

Secretarial Audit

The Board of Directors had appointed B Ravi & Associates, Company Secretaries in Practice, Chennai to carry out the Secretarial Audit of the Company for the financial year 2023-24. The Report of the Secretarial Auditor is annexed herewith as Annexure 4 and forms part of this Report.

Pursuant to Regulation 24A of the Listing Regulations, the Secretarial Audit Report issued by B Ravi & Associates, Company Secretaries in Practice, Chennai to the Company's material unlisted subsidiary Chemplast Cuddalore Vinyls Limited is also annexed herewith as Annexure 5.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules

2014, the Board of Directors have appointed B Ravi & Associates, Company Secretaries in Practice, Chennai to carry out the Secretarial Audit of the Company for the financial year 2024-25.

Explanations or comments on the qualification, reservation, adverse remark or disclaimer made by the Statutory Auditors or by the Company Secretary in Practice in their report (Secretarial Auditor)

For the year under review, there is no qualification, reservation or adverse remark or disclaimer made by the Statutory Auditor or Secretarial Auditor of the Company. The report of the Statutory Auditors forms part of the financial statement. The Report of the Secretarial Auditor is annexed herewith as Annexure 4 and forms part of this Report.

During the year under review, there were no material or serious instances of fraud falling within the purview of Section 143(12) of the Companies Act, 2013 and rules made there under by officers or employees reported by the Statutory Auditors of the Company during the course of the audit conducted.

The Managing Director and the Chief Financial Officer have submitted a certificate to the Board regarding the financial statements and other matters as required under Regulation 17(8) read with Schedule II of Part B of the Listing Regulations.

Secretarial Standards

The Board confirms compliance with the Secretarial Standards notified by the Institute of Company Secretaries of India, New Delhi and applicable to the Company.

Annual Return

Draft Annual return in Form MGT 7 as on March 31, 2024 is available in the Company's website https:// www.chemplastsanmar.com/downloads/annual- report/csl-annual-return-2024.pdf

Green initiative

Your Directors would like to draw your attention to Section 20 of the Companies Act, 2013 read with the Companies (Management and Administration) Rules 2014, as may be amended from time to time, which permits paperless compliances and also service of notice/documents (including annual report) through electronic mode to its members. To support this green initiative of the Central Government in full measure, the Company appeals to all those members who have not registered their e-mail addresses so far, to register their e-mail address in respect of electronic holdings with their concerned Depository Participants and / or with the Company.

Further, the Company will also send the Annual Report for the Financial Year 2023-24 to all the shareholders only through electronic means as per the relaxations provided by MCA Circular dated May 05, 2020, January 13, 2021, December 14, 2021 May 05, 2022 , December 28, 2022 and September 25, 2023 and SEBI Circular dated May 12, 2020, January 15, 2021, May 13, 2022, January 05, 2023 and October 7, 2023 which enhances the Green initiative measures taken by the Company.

Other disclosures

During the year under review, there were no:

a) Issues of Equity Shares with differential voting rights, dividend or otherwise as per Section 43(a)

(ii) of the Companies Act 2013;

b) Issues of shares including Sweat Equity Shares to the employees of the Company under any scheme as per provisions of Section 54 (1) (d) of the Companies Act, 2013;

c) Instances of non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67 (3) of the Companies Act, 2013 and

d) Revisions to the financial statements.

Other Particulars

Additional information on conservation on energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of section 134(3)(m) of the Companies Act, 2013, read with Rule 9 of the Companies (Accounts) Rules 2014 is set out in Annexure 1 and forms part of this Report.

Acknowledgements

The Board of Directors thanks the customers, vendors, bankers, regulatory and Government authorities, stock exchanges, business associates and all other stakeholders for their assistance, support and cooperation extended. The Directors also thank the Shareholders for reposing faith on the Company's performance. The Board of Directors places on record its appreciation of the committed service of all the employees of the Company.

Cautionary Statement

Statements made in the report, including those stated under the caption "Management Discussion and Analysis" describing the Company's plans, and expectations may constitute, "forward looking statements" within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied.