KCP Sugar & Industries Corporation Ltd

Your Directors have pleasure in presenting the 29th Annual Report containing the Audited Financial Statements of the Company for the Financial Year ended 31st March, 2024.

1. FINANCIAL RESULTS:

2. PERFORMANCE:

During the Financial Year under review your Company has recorded a Turnover of Rs. 29.254.45 Lakhs (Previous Year Rs. 22.192.53 Lakhs). The Profit / (Loss) before Finance Cost and Depreciation is Rs. 8,221.30 Lakhs. Profit / (Loss) before Tax is Rs.6.643.53 Lakhs. The Profit / (Loss) after Tax is Rs. 5626.48 Lakhs.

3. DIVIDEND:

The Board of Directors recommends a dividend of Re.0.20 per Equity Share of Face Value of Re.1/- each in the Paid-up Share Capital of the Company for the year ended 31/03/2024 same as the previous year. The dividend recommended, if approved by the Shareholders at the ensuing Annual General Meeting will be paid by the Company within the stipulated time.

4. SHARE CAPITAL AND RESERVES:

The Share Capital of the Company is Rs. 1,133.85 Lakhs. During the year under review, your Company has not issued any type of Shares. Hence, there is no change in the share capital of the Company.

The total Reserves and Surplus stood at Rs. 35,854.33 Lakhs as on 31/03/2024 as against Rs. 30420.05 Lakhs as on 31/03/2023.

5. SUBSIDIARY COMPANIES:

Your Company has two Wholly-Owned Subsidiaries, viz. The Eimco - K.C.P. Limited and KCP Sugars Agricultural Research Farms Limited. Both the Wholly-Owned Subsidiaries are Unlisted Companies. The Eimco - K.C.P. Limited is a Material Subsidiary of the Company, in terms of Regulation 16 (1) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There has been no material change in the nature of business of the Subsidiaries.

A Statement containing Salient Features of the Financial Statements of the Subsidiary Companies in Form - AOC - 1 is annexed hereto 3s 'Schedule -1\

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A comprehensive discussion and analysis of the outlook of Industry and the financial and operational performance of the Company is contained in the Management Discussion and Analysis Report, annexed hereto as ‘Schedule - II'.

7. CORPORATE GOVERNANCE REPORT:

Pursuant to Regulation 34 (3) read with Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations. 2015. Report on Corporate Governance along with the Compliance Certificate confirming the compliance of conditions of Corporate Governance given by the Statutory Auditor of the Company is annexed hereto as ‘Schedule - III'.

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

Information relating to Conservation of Energy, Technology Absorption. Foreign Exchange Earnings and Outgo, as required under Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed hereto as 'Schedule - IV'.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR):

The details of CSR Policy of the Company and the measures / activities taken by the Company on CSR during the Financial Year under review, as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014, is annexed hereto as 'Schedule - V.

10. DISCLOSURE ON REMUNERATION OF DIRECTORS AND EMPLOYEES:

Disclosure as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules. 2014 relating to details of remuneration of directors and certain employees, is annexed hereto as ‘Schedule - VI*. The remuneration paid to the Directors and Key Managerial Personnel Is as per the Nomination and Remuneration Policy of the Company.

11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During the financial year, all the related party transactions entered by the Company were normal business transactions in the ordinary course of business and on arm's length basis and there were no transactions requiring approval of the Shareholders. However, prior approval of the Audit Committee was sought for entering into the Related Party Transactions as required under Companies Act. 2013 read with rules made thereunder and Regulation 23 (2) of SEBI Listing Regulations, 2015. Further, the details of Related Party Transactions entered into by the Company pursuant to each of the omnibus approvals given are also placed before the Audit Committee for its review on a quarterly basis. During Financial Year 2023 - 2024, there were no material related party transactions in terms of Regulation 23 of the SEBI Listing Regulations, 2015.

Pursuant to Section 134 (3) (h) of the Companies Act. 2013 and Rule 8 (2) of the Companies (Accounts) Rules. 2014, Disclosure of Particulars of Contracts / Arrangements entered into by the Company with the related parties in terms of Section 188 (1) of tin? Companies Act, 2013 in Form AOC - 2, is annexed hereto as ‘Schedule - VII'.

12. SECRETARIAL AUDIT:

The Board of Directors of the Company in its Meeting held on 29/05/2023, appointed Ms. Rajashree Santhanam, Practising Company Secretary as Secretarial Auditor for the Financial Year 2023 - 2024.

In pursuance of Section 204 of the Companies Act, 2013, the Secretarial Audit Report of the Company, is annexed hereto as ‘Schedule VIII*.

The Secretarial Audit Report for the Financial Year 2023 - 2024 does not contain any adverse remark, qualification or reservation or disclaimer which requires any explanation / comments by the Board The Secretarial Audit Report is forming part of this Annual Report.

13. SECRETARIAL STANDARDS:

Pursuant to Section 118 (10) of the Companies Act, 2013, the Company observes Secretarial Standards with respect to General and Board Meetings, prescribed by the Institute of Company Secretaries of India.

14. ACCOUNTING STANDARDS:

The Company adheres to the Accounting Standards as applicable to ft and there are no deviations, in this respect.

15. UNCLAIMED SUSPENSE ACCOUNT: *

*The voting rights on these shares (mentioned above) remain frozen till the rightful owner of such shares claims the shares.

16. DIVIDEND DISTRIBUTION POLICY:

The objective of the Dividend Distribution Policy is to ensure right balance between the quantum of dividend paid and amount of profits to be retained In the business for various purposes. Towards this objective, the following key parameters are considered for declaration of dividend:

i) Internal Factors (Financial Parameters):

• Net Operating Profit after Tax;

• Working Capital Requirements;

• Capital Expenditure Requirements;

• Cash required to meet contingencies;

• Outstanding Borrowings; and

• Past Dividend Trends.

(ii) External factors:

• Statutory requirements under applicable law for the time being in force; and

• Dividend Payout Ratios of companies in the same Industry.

17. PARTICULARS OF LOANS. GUARANTEES OR INVESTMENTS AS REQUIRED UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

No loan / guarantee / investment is given / made by the Company, in terms of Section 186 of the Companies Act, 2013 during the Financial Year 2023 - 2024.

18. CASH FLOW STATEMENT:

In compliance with the provisions of Section 134 of Companies Act, 2013 and Regulation 34 (2) (c) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Cash Flow Statement for the financial year ended 3141 March, 2024 forms part of this Annual Report.

19. MATERIAL CHANGES AND COMMITMENT:

There is no change in the nature of business of the Company during the Financial Year under review. There are no material changes or commitments affecting the financial position of the Company occurred between the end of the financial year (31/03/2024) and the date of Directors' Report.

20. BOARD MEETINGS:

The Board of Directors met 4 (four) times during the financial year ended 31a March, 2024 i.e.. 29/05/2023, 19/07/2023, 08/11/2023 and 09/02'2024.

The gap between the Board meetings was within the maximum period prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as amended and notified from time to time.

Detailed statement of attendance of directors at the Board Meetings and other meeting of all Committees held during the financial year ended 31st March. 2024 are given in the Corporate Governance report which is forming part of this Annual Report.

21. ANNUAL RETURN

As per Section 92(3) of the Companies act, 2013, Annual return of the Company is disclosed on Company's website under the web-link: https://www.kcpsuqar.com/

22. CHANGE IN DIRECTORS AND KEY MANAGERIAL PERSONNEL:

i. Retirement by Rotation and Re-appointments

Pursuant to Section 152 (6) (c) of Companies Act, 2013, Ms. Kiran Velagapudl, Director of the Company who retires by rotation and being eligible for re- appointment, offers herself for re- appointment as a Director of the company and the same Is being placed before the 29"' Annual General Meeting for approval of shareholders of the Company.

23. AUDIT COMMITTEE:

Pursuant to Section 177 (8) of Companies Act 2013, the Company has constituted an Audit Committee. The particulars of composition of the Audit Committee, meetings held during the year and other particulars have been detailed in the Corporate Governance Report forming part of this Annual Report.

24. DETAILS OF RECOMMENDATIONS OF AUDIT COMMITTEE WHICH WERE NOT ACCEPTED BY THE BOARD ALONG WITH REASONS:

The Audit Committee generally makes certain recommendations to the Board of Directors of the Company during their meetings held to consider any financial results (Unaudited and Audited) and such other matters placed before the Audit Committee as per the provisions of Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from time to time. During the year the Board of Directors has considered all the recommendations made by the

Audit Committee and has accepted and carried on the recommendations suggested by the Committee to its satisfaction. Hence, there are no recommendations which were unaccepted by the Board of Directors of the Company during the year under review.

25. STATUTORY AUDITOR:

M/s. B.Purushottam & Co., Chartered Accountants. Chennai (FRN: 002808S) is the Statutory Auditor of the Company for the Financial Year under review and holds office upto the conclusion of 32PO Annual General Meeting of the Company.

The Statutory Auditor was originally appointed at the 27th Annual General Meeting of the Company held on 28/09/2022 for a period of five years from the conclusion of 27"' Annual General Meeting upto the conclusion of 32™ Annual General Meeting.

The Report of the Statutory Auditor on the Financial Statements of the Company is annexed to this Annual Report. There are no qualifications or reservations or observations or adverse remarks or disclaimers In the said Statutory Auditor's Report at such remuneration in addition to applicable taxes.

26. COST AUDIT:

The Company is required to maintain Cost Records, in terms of Section 148 (1) of the Companies Act, 2013 and the Company maintains such Cost Records, in terms of applicable law. The Cost Auditor, M/s. SRR & Associates for the Financial Year 2023 - 2024, had conducted Cost Audit of Products of the Company such as Sugar, Electricity, Industrial Alcohol, Bio-Fertilisers, Calcium Lactate, Carbon dioxide at Vuyyuru. Krishna District, Andhra Pradesh. The Cost Audit Reports are duly filed with the Ministry of Corporate Affairs.

The Board of Directors of the Company based on the recommendation of Audit Committee, has appointed M/s. SRR & Associates, Cost Accountants, Chennai (FRN 000992) as Cost Auditor of the Company for conducting Cost Audit for the Financial Year ending 31/03/2024.

In terms of Section 148 read with Section 141 of the Companies Act, 2013, M/s.SRR & Associates has confirmed that the Firm satisfies the eligibility conditions, prescribed therein and not disqualified in any way for appointment as Cost Auditor of the Company. The said Firm has also given a Certificate on its independence and arms length relationship with the Company.

27. INTERNAL AUDIT:

Pursuant to Section 138 (1) of the Companies Act, 2013, the Company had appointed G. Natesan & Co., Chartered Accountants (FRN: 002424S) as Internal Auditor of the Company to conduct internal audit for the Financial Year 2023 - 2024. The Internal Auditor has submitted his reports to the Audit Committee and Board of Directors of the Company, periodically.

28. CREDIT RATINGS:

• CARE Ratings Limited has given the Credit Ratings of your Company as CARE A-: Stable' (Single A Minus; Outlook: Stable) for Long Term Bank Facilities, CARE A2+' (A Two Plus) for Short Term Bank Facilities and CARE A-; Stable' (Single A Minus; Outlook: Stable) for Fixed Deposit Programme. •

• ICRA Ratings Limited has given the Credit Ratings of your Company as ICR A BBB+; Stable' for Long Term Bank Facilities, 'ICRA A2+' (A Two Plus) for Short Term Bank Facilities and Fixed Deposit Programme.

29. ISO CERTIFICATION:

Your Company continued to be certified with ISO 14001:2015, ISO 9001:2015 and OHSAS 45001:2018 for manufacture of sugar and derivatives thereof, distillery products, calcium lactate, bio-fertilizers, solid and liquid carbon dioxide.mycorrhiza, cogeneration of electricity and associated activities by Lloyd's Register Quality Assurance Limited.

30. FIXED DEPOSITS :

As on 31/03/2024, the amount of Deposits held by the Company stands at Rs.6,282.42 Lakhs (including Unclaimed Deposits) as against Rs.7,113.69 Lakhs as on 31/03/2023. Deposits accepted during the Financial Year under review is Rs.376.36 Lakhs. As at 31/03/2024, the Matured and Unclaimed Deposits stands at Rs. 174.45 Lakhs in respect of 106 Deposits.

31. TRANSFERS TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to Section 124 of the Companies Act, 2013 ("the Act") read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("The Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the Investor Education and Protection Fund (IEPF) established by the Central Government, after completion of seven consecutive years from the date of transfer of such amount to unpaid dividend account. Further, according to the Rules, the shares in respect of which dividend has not been paid or claimed for seven consecutive years or more shall also be transferred to the demat account of IEPF Authority.

During this year 119,793 shares in respect of unclaimed dividend and dividend amount of Rs.37,90.304.60 pertaining to the year 2016 -17 were liable to be transferred to the IEPF authority and your Company has duly complied with the requirements.

As regards unpaid deposits, an amount towards interest of Rs.2,31.349 was transferred to the IEPF authority during the year under review.

Further, Members / claimants whose shares, and / or unclaimed dividend which have been transferred pertaining to the earlier financial years to the IEPF Demat Account or the Fund, as the case may be, may claim the shares or apply for refund of dividend by making an application to the IEPF Authority in Form IEPF-5 (available on https://www.mca.gov.in/) along with requisite fee as prescribed by the IEPF Authority from time to time.

32. DIRECTORS* RESPONSIBILITY STATEMENT :

Pursuant to Section 134 (3) (c) read with Section 134 (5) of the Companies Act, 2013, the Directors of your Company state as follows:

(a) that in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed and that there were no material departures there-from;

(b) that the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year, 31/03/2024 and of the Profit of the Company for that period;

(c) that the Directors had 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) that the Directors had prepared the Annual Accounts on a going concern basis;

(e) that the Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

33 Consolidated Financial Statements

In accordance with Indian Accounting Standard (Ind AS) 110 or Institute of Chartered Accountants of India and Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015, the consolidated financial statements are prepared by the Company. The audited consolidated financial statements together with auditors' report for the financial year ended 31s1 March 2024 are attached with this annual report.

34. ACKNOWLEDGEMENT :

Your Directors would like to take this opportunity to express their deep sense of gratitude to the Shareholders. Cane Growers. Sugar Dealers, Business Associates. Depositors. Bankers, Institutions, Central and State Governments and also other Regulatory Authorities for their continued support and cooperation.

Your Directors place on record their sincere appreciation for the commitment, dedication and hard work of all the employees of the Company.