The Directors have pleasure in presenting before you the 34^th Annual Report of the Company together with the Audited Financial Statements for the year ended 31^st March 2023.

Financial Highlights

The Company's Profit before Tax for the year ended 31^st March 2023 has increased by '913.92 lakhs to '5,520.92 lakhs as compared to '4,607.00 lakhs in the previous year. The total revenue from operations for the year ended 31^st March 2023 is '48,214.70 lakhs as against '38,152.54 lakhs in the previous year. The increase in revenue is mainly due to two factors one being increase in sales volume of Poly Iso Butylene (PIB) from 29,302.17 metric tonne to 32,554.83 metric tonne and the other factor is due to increase in sale prices resultant due to a rise in the price of raw material inputs.

Status of the Plant

Your company has successfully completed the De-Bottlenecking Project within time and Budget. Post this project, the plant production capacity stands revised to 48,000 MT per year and necessary statutory approvals were also received.The plant with enhanced capacity is ready now to meet the increased demand in the domestic and overseas market.

The raw material supply from the adjacent refinery is steady both in terms of quality and quantity throughout the year, barring a few occasions when the quality was below normal level momentarily. Continuous usage of high pure material, and more focus on domestic sales helped the Company to achieve greater operating efficiency. In addition to this, other efforts put in to save the cost of other inputs and packing materials have also resulted in a better contribution to the bottom line.

The Paddy husk which is the main fuel for the Captive Power Plant is in short supply due to many consumers using this fuel due to steep price hike of imported coal. However, in addition to retaining the existing suppliers, the company also developed additional sources for an uninterrupted supply of Husk.

Power generation from the Captive Power plant is always in synchronized mode with Govt grid to meet the marginal intermittent additional power demand. The 247-kw solar plant continues to generate power which is consumed by the main plant along with captive power plant generation. Additional solar panels are planned to be installed on the newly constructed buildings roofs in the plant area to get more renewable energy and reduce our cost of power & environmental impact.

The water supply from Metro water Board from their TTRO plant supported to handle the effluent-discharge more effectively and thus the discharge of effluent has been significantly reduced. The Effluent treatment plant was further strengthened to recover more water from its last stage of RO. Your company is also exploring the possibility of making the plant as Zero Liquid Discharge (ZLD) using Ozonation of the final reject from the Effluent treatment plant.

Your Company continues to retain ISO certification -9001:2015 for Quality Management system and 14001:2015 for Environmental Management system and also received the ISO 45000 certification for Occupational Health and Safety. We have commenced the activities for obtaining ISO 50001 certification for Energy Management System.

Pollution and Environment compliances

Your Company has created all necessary facilities as per the Pollution Control Board's direction and submitted the records conforming to the statutory requirements with respect to pollution norms. The Tamil Nadu Pollution Control Board has given their consent for the enhanced productivity of 48,000 MT per year. Your Company also applied to renew the Consent order, which expired on 31^st March 2023, for next 5 years.

Research and Development

The Company's R&D's Section has been recognised by the Department of Scientific & Industries Research (DSIR) Recognition and the recognition has been renewed for next 3 years (till 2025).

To augment the growing R & D activities, an additional space has been created for the expansion of R & D.

Around '192.85 Lakhs have been spent for R & D in the Financial Year 2022-23 for various research activities and infrastructures to improve Value Addition for the Co-products and for new applications.

Your Company also secured a Patent for a new chemical process development last year and further works on it are underway. This will help your company to diversify the product port folio in the coming years.

Conservation of Energy / Technology Absorption / Foreign exchange earning and outgo:

(a) Conservation of energy :

On account of implementation of the De-bottle Necking (DBN) Project, the Specific Energy Consumption (SEC) per Ton of PIB produced has been reduced in spite of the increased Plant productivity. We have replaced many of the old, high energy consuming equipment with the Energy efficient equipment such as Thermic Heater (TP 20) with Air Preheater, Refrigeration Screw compressors, Air screw compressor with Air cooled exchanger, Reactor Circulation pumps with VFD control during the DBN project. The overall investment cost of the above major equipment is '841.34 Lakhs which constitutes 17% of the DBN implementation cost.

Various steps were taken last year to recover waste heat from the process, recovery of Hydrocarbons started paying back the investments. Avenues for further conservation of energy are being explored. Cooling water treatment using chemicals was discontinued and a new technology of treatment with ULF (Ultra Low Frequency) was implemented in March'23. This has shown good results and significant cost savings and is under observation.

(b) Technology absorption: Nil

(c) Foreign exchange earnings and Outgo:

Dividend

The Board of Directors met on 26^th May 2023 to review the full year performance, various growth opportunities, and also took note of the interim dividend of '0.50 paise per equity share of '10/- each declared during the year and the same was paid to the shareholders within the stipulated time. After reviewing this, the Board of Directors has decided to recommend a Final dividend at the rate of 7.5% i.e.,'0.75 paise per equity share of '10/- each for the financial year ended 31^st March 2023. If the dividend is approved by the Members at the ensuing Annual General Meeting to be held on 09^th August, 2023, it will be paid on or before 06^th September, 2023 to those Members whose names appear in the Company's Register of Members as at the close of business hours on Wednesday, 02^nd August, 2023. This together with interim dividend of ' 0.50 paise per share (5%) already paid, would aggregate to a total dividend of 12.5 % i.e., ' 1.25 paise (Rupees one and twenty five paise only) per equity share for the year 2022 - 23.

Board Meetings

During the year 04 Board Meetings and 04 Audit Committee Meetings were held, the details of which are given in the Corporate Governance Report. The intervening gap between any two meetings was within the period as prescribed under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and MCA Circulars thereon.

Share Capital

The paid-up equity share capital as on March 31, 2023 was '5,884.64 Lakhs. The Company has not issued any shares with differential voting rights nor granted stock options or sweat equity.

Directors and Key managerial personnel

Mr. Arjun B Kothari, (DIN: 07117816) Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

Mr. Arjun B. Kothari, Managing Director, Mr. M. Rajavel, Whole Time Director, Mr. S. Sivamahesh, Chief Financial Officer and Mrs. K. Priya, Company Secretary are the Key Managerial Personnel of the Company as per section 203 , of the Companies Act, 2013.

Mr. S Sundarraman (DIN: 01032768) was re-appointed as the Independent Director of the Company for a second term of five consecutive years with effect from 22^nd November 2022 as approved by the shareholders at the 33^rd AGM held on 02^nd Aug, 2022. The Board is of the opinion that Mr. S Sundarraman is a person of integrity and possess relevant expertise and experience (including the proficiency) of the Independent Director who was appointed during the year.

Declaration from Independent Directors

The Company has received necessary declaration from each Independent Director of the Company under Section 149(7) of the Companies Act, 2013 and Regulation 16 of the SEBI (LODR) Regulations, 2015 that the Independent Directors of the Company continues to meet the criteria of their Independence laid down in Section 149(6) including the confirmations that their names have been included in the Data Bank maintained by the Indian Institute of Corporate Affairs and Mr. S. Sundarraman has cleared the online proficiency self-assessment test and all other Independent Directors were exempted from undergoing this test for the Independent Directors pursuant to Rule 6(4) of Companies (Appointment and Qualification of Directors) Rules, 2014. During the year under review, the Independent Directors met on 06^th February 2023 without the presence of Non -Independent Directors and members of the Management.

Composition of Audit Committee

The details of composition of Audit Committee is provided in Corporate Governance Report of this Annual Report. The Board has not rejected any proposal / recommendations of Audit Committee during the year.

Remuneration policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management and their remuneration. The salient features of the Remuneration Policy details are stated in the Corporate Governance Report. The Remuneration Policy approved by the Board of Directors is posted on the website of the Company www.kotharipetrochemicals.com

Vigil mechanism / Whistle Blower policy

The Company has a vigil mechanism named “Whistle Blower Policy” to deal withany genuine concerns raised by the Directors / Employees. The details of the Vigil Mechanism / Whistle Blower Policy is explained in the Corporate Governance Report and also posted on the Company's website www.kotharipetrochemicals.com

Particulars of Loans, Guarantees or Investments

The Company has not given any Loans or Guarantees covered under the provisions of section 186 of the Companies Act, 2013. The details of investments made by the company are given in the notes to the financial statements.

Related Party Transactions

All related party transactions entered into during the financial year were on an arm's length basis and were in the ordinary course of business and there were no 'material' contracts or arrangement or transactions not at arm's length basis and thus disclosure in form AOC-2 is not required.

All related party transactions are placed before the Audit Committee and the Board for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are foreseen and repetitive in nature. For all the transactions entered pursuant to the omnibus approval so granted, a statement giving details of all such transactions is placed before the Audit Committee for their review on a quarterly basis.

The policy on Related Party Transactions as approved by the Board is posted on the Company's website www.kotharipetrochemicals.com

prevention of Insider trading

The Company has adopted a Code of Prevention of Insider Trading with a view to regulate trading in securities by the Promoters, Directors and Designated Persons of the Company. The Code requires pre-clearance for dealing in the Company's shares and prohibits the purchase or sale of Company's shares by the Promoters, Directors and the designated persons while in possession of unpublished price sensitive information in relation to the Company and during the period when the Trading Window is closed.

Directors' responsibility Statement

In terms of Section 134(5) of the Companies Act, 2013, the Directors would like to state that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

(b) 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 and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis; and

(e) 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) 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.

Material changes and commitments

There is no change in the nature of business of the company during the year. There is no material change or commitment affecting the financial position of the company that has occurred since 31^st March 2023 to the date of this report.

Annual return

As required under Section 92(3), copy of Annual Return is placed on the Company's website.

The web link to access the annual return is https://www.kotharipetrochemicals.com/investors/annual-reports/

auditors

a) Statutory Auditor

The Statutory Auditor of the Company M/s. P. Chandrasekar LLP, Chartered Accountants (Registration No.: 000580S/S200066) was reappointed for the second term by the Shareholders at the 33^rd AGM held on 02^nd August 2022 to hold office till the conclusion of the 38^th Annual General Meeting of the Company.

As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Auditors have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India. There are no qualifications or observations or any adverse remarks made by the Auditors in their Report on the Financial Statements for the year 2022-23 and no fraud was reported by auditors under Section 143(12) of the Companies Act, 2013.

b) Cost Auditor

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Amendment Rules, 2014, the Cost Audit Records are maintained by the Company in respect of its Poly Iso Butylene (PIB) unit which are required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed M/s. P. RajuIyer, M. Pandurangan & Associates, Cost Accountants in practice for conducting the audit of cost records of the

Company and the remuneration payable to the Cost Auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a Resolution seeking Member's ratification for the remuneration payable to M/s. P. RajuIyer, M. Pandurangan & Associates, Cost Accountant is included at Item No. 4 of the Notice convening this 34^th Annual General Meeting.

c) Secretarial Auditor

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mrs. Vasumathy Vasudevan, V. Vasumathy & Associates, Company Secretary in Practice, Chennai as Secretarial Auditor of the Company. The Secretarial Audit Report is forming part of this Annual Report and does not contain any qualifications or observations.

Deposits

The Company has not accepted deposits either from members or public falling within the ambit of Chapter V of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014 during the year. There were no outstanding deposits during and end of the financial year 2022 - 2023.

Significant & Material orders passed by the regulators

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

Internal Control Systems and their Adequacy

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Internal Audit function is carried out by independent firm of Chartered Accountants. The scope and authority of the Internal Audit is defined by the Audit Committee. The Internal Audit Reports are placed before the Audit Committee on quarterly basis for its review and the Internal Auditor attends the Audit Committee meetings.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures of the Company based on the report of internal auditor, the Company undertakes corrective action in their respective areas and thereby strengthens the controls.

Pursuant to the requirement of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has laid down the procedures to inform Board Members about the risk assessment and minimization procedures. Accordingly, the Company periodically submits the Risk Management Report to the Board for their review and suggestions.

Corporate Social responsibility policy

Pursuant to the provisions of Section 135 and schedule VII of the Companies Act, 2013, Corporate Social Responsibility Committee (CSR) was formed to recommend (a) the policy on Corporate Social Responsibility (CSR) and (b) implementation of the CSR Projects or Programs to be undertaken by the Company as per CSR Policy for consideration and approval by the Board of Directors. The policy on Corporate Social Responsibility as approved by the Board is posted on the Company's website www.kotharipetrochemicals.com. A detailed report on CSR activities in the prescribed format is forming part of this Annual Report.

annual performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out the Annual Performance Evaluation of the Board, its committees and of the individual Directors in the questionnaire format prescribed by the Nomination and Remuneration Committee of the Company.

The structured questionnaire covers various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance etc.The performance evaluation of the Directors (without participation of the relevant Director) was carried out by the entire Board. The Directors expressed their satisfaction with the evaluation process.

Separate meeting of Independent Directors

The Independent Directors of the Company had met during the year on 06^th Feburary 2023 to review the performance of Non-Independent Directors and the Board as a whole, reviewed the performance of the Chairperson of the Company and also assessed the quality, quantity and time liness of flow of information between the company management and the Board without the presence of the Non-Independent Directors and members of the Management.

Listing with Stock Exchanges

The Company is listed in The National Stock Exchange of India Limited (NSE) and the Stock Code is KOTHARIPET and ISIN: INE720A01015. The Company confirms that it has paid the Annual Listing Fees for the year 2023 - 2024 to NSE where the Company's shares are listed.

Corporate Governance and Shareholders Information

Your Company has taken adequate steps to adhere to all the stipulations laid down in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A report on Corporate Governance forms part of this Annual Report. Certificate from the Practising Company Secretary confirming the compliance with the conditions of Corporate Governance as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report.

Management Discussion and Analysis Report

A detailed discussion on the industry structure as well as on the financial and operational performance is contained in the 'Management Discussion and Analysis Report' that forms an integral part of this Report.

Disclosure under the Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013

The Human Resources Department created an “Internal Complaints Committee” for the prevention and redressal of sexual harassment of women at workplace as per the requirement of Sexual harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act 2013. There were no incidents of sexual harassment reported during the year under review, in terms of the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Company (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided elsewhere in the Annual Report.

Particulars pursuant to Section 197(12) and the relevant Rules

(a) The ratio of the remuneration of each director to the median employee's remuneration for the financial year and such other details: Except Mr.Arjun B.Kothari Managing Director and Mr.M.Rajavel, Whole Time Director of the Company, no director was in receipt of remuneration except sitting fees.

(c) 7.21% increase was reported in the median remuneration of employees in the financial year 2022- 2023.

(d) The number of permanent employees on the rolls of company as on 31^st Mar 2023: 117

(e) Increase of remuneration for employees varies between 8% to 23% and for KMP, the increase was in the varying range of 10% to 12% for the year.

(f) We affirm that the remuneration paid during the period under review, is as per the Remuneration Policy of the company.

Compliance with Secretarial Standards

The Company complies with all applicable secretarial standards issued by the Institute of Company Secretaries of India.

Statements in this Report, particularly those which relate to Management Discussion and Analysis as describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statements' within the meaning of applicable laws and regulations. Actual results might differ from those either expressed or implied in the statement depending on the circumstances.

Acknowledgement

Your Directors thank the Banks, Customers, Financial Institutions, Government Authorities, Suppliers and Shareholders for their continued support. Your directors also place on record their appreciation for the services by the employees of the Company.