Your Directors have pleasure in presenting this SEVENTY SEVENTH ANNUAL REPORT along with the Audited Statement of Accounts for the year ending 31^st March, 2024.

Financial Results: (Rupees in lakhs)

PERFORMANCE:

Your Directors report that for the year 2023-24, your Company made a Profit of Rs.66.40 Crores (before tax) against a Profit of Rs.233.30 Crores made last year. The Net Profit (After Tax) was Rs.53.27 Crores against Rs. 174.05 Crores made last year. The main reason for the decline in the Profitability is due to decline in the selling prices of Chloro-Alkali and Chemical Products.

DIVIDENDS:

Your Directors are glad to recommend a Dividend of Rs.1/- per Equity Share i.e., 50% (Face Value of Rs.2/-) for the year 2023-24. With this Dividend, if approved, your Company would have the distinction of rewarding its Shareholders continuously for the past 6 decades. The outflow towards Dividend payment would be Rs.13.55 Crores.

The url link of Dividend Distribution Policy is https://theandhrasugars.com/wp-content/uploads/didvidend-distribution-policy.pdf

CAPITAL & RESERVES:

Authorised and Paid-Up Capital:

As on 31.3.2024, the Authorised Capital of the Company is Rs.30.00 Crores and the Paid-up Capital is Rs. 27.11 Crores.

Reserves:

With the transfer of Rs.100 Crores during the year under report, the total Reserves as on 31.3.2024 stands at Rs.1093.30 Crores against Rs. 993.30 Crores on 31.3.2023.

REVIEW OF OPERATIONS:

SUGAR UNITS:

The Sugar Unit-II crushed in aggregate 3,12,505.220 M.T of cane during the 2023-24 season against 3,37,491.659 M.T crushed last year. The crushing operations and cane price paid to cane suppliers for the 2023-24 Season are:

The Power generated by 2.5 MW Solar Captive Power Plant put up by the Company at Kovvur during this year is 3194596 KWH. The entire Power is being used at our Chemical Plants at Kovvur.

PROJECTS:

A. Caustic Soda:

Your Company has expanded from the existing 500 Tonnes per day to 600 Tonnes per day Membrane Cell Caustic Soda facility at Chemical Complex, Saggonda during March 2023 to cater the requirements of wider customer base and also to get the saving through large scale operations. The Plant is based on the latest 6^th Generation Membrane Technology which is Energy Efficient & Environmental friendly.

B. Sulphuric Acid:

Sulphuric Acid is widely used in Pharmaceutical, Fertilizer and Water Treatment Industries causing an increase in demand for this product.

Your Company has set up a 500 TPD Sulphuric Acid Plant at Chemical Complex, Saggonda with a cost of Rs.118.00 Crores being met by internal Accruals. The Plant has commenced operations in the First Quarter 2024-25 i.e, from 27.04.2024 onwards after receipt of Consent to Operate (CTO) from Pollution Authorities. With this total capacity of Sulphuric Acid at Saggonda 800 TPD.

C. Sodium Hypochlorite:

Your Company is setting up a Project at J.N. Pharmacity, Parawada, Visakhapatnam in a non-SEZ area to manufacture 100 TPD Sodium Hypochlorite. Required statutory approval was obtained for setting up the Plant. The estimated project cost was about Rs.18.00 Crores. The required raw materials viz., Sodium Hydroxide and Chlorine gas can be supplied from our Chemicals Division, Saggonda.

We have planned to utilize the site (42.28 acres) completely in a phased manner and we have also obtained CFE from APPCB for setting up a Chlor-alkali project.

Meanwhile, APIIC had issued cancellation orders of the allotted site of 42.28 acres, stating that your Company has not fulfilled the terms and conditions of the original tri-party agreement entered between APIIC, RPCIL and ASL and the project was not implemented. Your Company has filed a writ petition in the Hon’ble High Court of Andhra Pradesh against APIIC to suspend the site cancellation orders given by APIIC. The High Court has ordered Status Quo, and the matter is reserved for Judgement.

Under the present circumstances, your Company has temporarily suspended the construction and commissioning activities.

D. Salicylic Acid Project:

As the demand for Salicylic Acid is continuously growing in the areas of Cosmetic Skin Care, Hair Care and Health Care, your company has set up a new 2640 TPA Salicylic Acid Plant with the latest Technology and Zero discharge waste system at Tanuku and started commercial operation on 27.03.2024. The total Project cost of Rs.36.31 Crores was met out of internal accrual only.

DEMATERIALISATION OF EQUITY SHARES:

As of 31^st March, 2024 Equity Shares representing 71.87 % of the Share Capital have been dematerialised. AUDITORS:

The Audit Committee and the Board at their meeting held on May 28, 2022 approved the appointment of M/s. Brahmayya & Co., Chartered Accountants as Statutory Auditors for a second term of five (5) years i.e. from conclusion of the 75th Annual General Meeting till the conclusion of 80th Annual General Meeting. The necessary resolution(s) seeking your approval for their appointment as statutory auditors are included in the notice of the ensuing Annual General Meeting.

Their remuneration for the Financial Year 2024-25 of Rs.21,00,000/- is being sought for your approval at the ensuing Annual General Meeting.

COST AUDITORS:

For the year 2023-2024 M/s Narasimha Murthy & Co., Cost Accountants, Hyderabad were the Cost Auditors of the Company for the 8 No. of Products, which are subject to Cost Audit. For the year ended 2024-25, your Board of Directors have approved the appointment of M/s. Narasimha Murthy & Co., Hyderabad as

Cost Auditors and recommend to Shareholders to ratify the remuneration of Rs.7,50,000/- as fixed by the Board on the recommendation of Audit Committee.

CORPORATE GOVERNANCE:

As per the amended provisions of the SEBI Listing Regulations from time to time, a Report on Corporate Governance along with Management Discussion and Analysis forming part of the Directors’ Report is annexed.

The Rank by Market Capitalization as per National Stock Exchange as on 31.03.2024 is 1107. However as per Regulation 3(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Business Responsibility & Sustainability Report is annexed.

COMPLIANCE CERTIFICATE OF THE AUDITORS:

The Statutory Auditors have certified that the Company has complied with the conditions of Corporate Governance as stipulated in the Listing Agreement with the Stock Exchanges and the same is annexed to the Report of Directors.

AUDIT COMMITTEE:

Audit Committee comprises of Three Non-Whole time, Independent Directors and One Wholetime Director, Sri V.S. Raju, Sri P. Venkateswara Rao, Sri G.S.V. Prasad, and Sri P. Achuta Ramayya respectively. Sri V.S. Raju is the Chairman of this Committee.

DIRECTORS AND KMP:

Directors Sri Mullapudi Thimmaraja and Sri P.S.R.V.K. Ranga Rao retire by rotation at the ensuing 77^th Annual General Meeting and, being eligible, offer themselves for re-appointment.

Statements of declaration as per Section 149(6) of the Companies Act, 2013 have been given by the Independent Directors.

Sri P. Kotaiah and Sri P.A. Chowdary, Independent Directors were retired at the Annual General Meeting on 25.09.2023.

Smt. D. Lakshmi Parthasarathy and Sri G.S.V. Prasad have been appointed as Independent Directors at the Annual General Meeting on 25.09.2023. The Board of Directors have Satisfied with the proficiency of the Independent Directors.

Sri P. Narendranath Chowdary, Chairman and Managing Director and Sri P.V.S. Viswanadha Kumar, Vice President (Finance) & Addl. Secretary have been designated as Key Managerial Personnel.

COMPLIANCE UNDER COMPANIES ACT, 2013

Pursuant to Sec.134 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, your company has complied with the compliance requirement and the details of which are enumerated hereunder.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements of Section 134(1) (c) of the Companies Act, 2013 and based on the explanation and compliance certificate given by the executives of the Company, and subject to disclosures in the Annual Accounts and on the basis of discussions with the Statutory Auditors of the Company from time to time, we state as under:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.

b) that the directors selected such accounting policies and applied them consistently and made judgments and estimates that those 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) that 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) that the Directors have prepared the annual accounts on a going concern basis.

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

BOARD MEETINGS:

The Board of Directors met 4 times during the financial year 2023-2024 on 29.05.2023, 09.08.2023, 09.11.2023 and 12.02.2024.

INDEPENDENT DIRECTORS MEETING:

A Meeting of the Independent Directors was held on 22^nd March 2024. The Independent Directors have evaluated the performance of the Non-independent Directors, the Board as a whole and Chairman of the Board. The Board was briefed by Lead Independent Director on the deliberations made at the Independent Directors Meeting.

FAMILIARISATION PROGRAMME:

Your Company through a Policy has in place a familiarisation programme to all the Directors with a view to update them on the Company’s Policies and Procedures. Independent Directors make periodical visits to plants to keep themselves abreast of the plant operations. Respective Plant Heads interact with the Independent Directors and explain to them about the various processes and operations.

FORMAL ANNUAL EVALUATION OF THE BOARD

Pursuant to the Provisions of Section 134 of the Companies Act, 2013, the Board evaluated its own performance and that of its Committees and Directors in terms of:

Measured and appropriate contribution by the Directors to the discussions on the Agenda Items:

Each Director exercising the responsibilities in a bonafide manner. Understanding of the Company’s business, strategic plans and other key issues.

Special Skills and expertise of each Director contributing to the Board’s overall effectiveness

Respecting the confidentiality of the Company’s business information and Board’s deliberations.

Satisfactory attendance and active participation of each Director at the meetings of the Board and Committee.

The Board members were of the opinion that the Board as a whole and the Directors have performed effectively as per the terms of the above parameters. The respective Committees performed as per their terms of reference.

VIGIL MECHANISM / WHISTLE BLOWER POLICY:

As required Under Section 177 of the Companies Act, 2013 As a part of Vigil Mechanism, a Whistle Blower Policy has been established and approved by the Board. This Policy envisages reporting of wrong doing or unethical activities observed by Employees at any level directly to the Chairman of the Audit Committee or to the Chairman & Managing Director. The matter whenever reported is investigated and if the wrong doer is found guilty, disciplinary action will be initiated depending upon the materiality of the unethical doings. During the year under report there have been no instances which required reporting.

NOMINATION AND REMUNERATION COMMITTEE:

As required by the Provisions of the Section 134 of Companies Act, 2013 and Listing Agreement, a Nomination and Remuneration Committee comprising of Independent Directors Sri V.S. Raju (Chairman), Dr. D. Manjulata and Smt. D. Lakshmi Parthasarathy was constituted by the Board.

This Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy which has been approved by the Board. This Nomination & Remuneration Policy has laid down criteria and terms and conditions about identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration based on the Company’s size and financial position and trends and practices on remuneration prevailing in the industry. Appointment of Managing Director / Whole-time Directors / KMP and Functional Heads are placed before Nomination and Remuneration Committee for its consideration and recommendation to the Board.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

As required by the Provisions of the Companies Act, 2013, a Corporate Social Responsibility (CSR) Committee has been constituted by the Board of the Company. Sri P. Narendranath Chowdary, Chairman and Managing Director is the Chairman of The Committee. Sri Mullapudi Thimmaraja, Joint Managing Director and Sri V.S. Raju, Independent Director are Members of the Committee. This Committee has formulated a CSR Policy pursuant to Section 134(3)(o) which has been approved by the Board. This Policy envisages CSR Activities to be taken up, the amount of expenditure to be incurred and monitoring of CSR Activities from time to time.

This Policy aims to achieve the CSR objectives by undertaking one or more of the activities to be in alignment with Schedule VII of the Companies Act, 2013 either on its own or through any Trust / Society or any other recognized Implementing Agency.

As per the provisions of Section 135(5) of the Companies Act, 2013, the company should spend in every Financial Year at least 2% of the average net profits of the company made during the three immediately preceding Financial Years. In pursuance of its Corporate Social Responsibility Policy, the company gives preference to the local area and areas around it, where it operates or any other permissible location for spending the amount earmarked for Corporate Social Responsibility activities.

Accordingly, for achieving its CSR objectives through the implementation of meaningful and sustainable CSR programmes, your Company allocates at least 2% of its average Net Profits calculated as per Section 198 of the Companies Act, 2013, as its Annual CSR Budget in each Financial Year.

From the Annual CSR Budget allocation, a provision is made towards the expenditure to be incurred on identified areas, for undertaking CSR activities on a year-to-year basis.

Allocation of the Annual Budget for CSR activities in any given year would be as per the provisions of the Companies Act, 2013 and rules made thereunder as amended from time to time. Any unspent/unutilised CSR allocation of a particular year will be carried forward to the next year, i.e., the CSR budget will be non-lapsable in nature.

As required by Rule 8 of the Companies (CSR Policy) Rules, 2013, a Report on CSR Activities and the amount of expenditure incurred are annexed to this Report as Annexure-VI.

RISK MANAGEMENT COMMITTEE:

As required by the Provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the Board constituted Risk Management Committee on 29.04.2023 and 18.10.2023.

1. Sri Mullapudi Narendranath - Member (Executive Director)

2. Sri P. Achuta Ramayya - Member (Executive Director)

3. Sri P. Venkateswara Rao - Chairman (Non-Executive and Independent Director)

4. Sri P.S.R.V.K. Ranga Rao - Member (Executive Director)

RISK MANAGEMENT POLICY:

This Risk Management Committee has formulated a Risk Management Policy pursuant to Section 134(3)(n) which has been approved by the Board, which envisages the following:

Identification of areas of Risk.

Assessing the impact of Risks.

Steps taken to mitigate the Risk.

The Major Segments of operations of the Company are Sugar and Chlor Alkali.The major aspects of concern for the Sugar Sector are:

1) Lack of Harvesting Labour

2) Power to operate the irrigation requirements

3) Proper Cane Varieties that give good Cane and Sugar yield that are suitable for mechanical harvesting.

To get around the 1^st aspect, the Company has embarked upon locating the right Cane Harvester suited to our Grower Farm sizes. The 2^nd aspect is being taken care of by setting up a Solar Powered Pumping System at our R & D Farm so that our Growers could ultimately be provided the right guidance in this aspect. The 3^rd aspect is being met by the Cane Breeding Programme undertaken by the Company.

The Chlor Alkali segment is power intensive where Power constitutes a major input cost. Restricted power supply and increased power costs have become a cause of concern. To mitigate this impact, a Solar Power Plant has been commissioned at Kovvur. At Saggonda a 33 MW Coal Based Captive Power Plant has been commissioned. This improves the power availability to the Chemical Plants at Saggonda. Increasing imports and volatile market conditions constitute a major risk factor for the segment.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has duly complied with the provisions of Section 186 of the Companies Act, 2013 and there are no Loans, Guarantees given and Investments made and as such there are no disclosures required under Section 134 (3)(g).

CREDIT RATING:

ICRA has rated the Credit Limits of the Company and re-affirmed rating as stated below:

The rating assigned above shows safety regarding timely servicing of financial obligations and low credit risk. INDUSTRIAL RELATIONS:

Relations with employees continue to be cordial and harmonious during the year under report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE POLICY:

The Company has in place a Prevention of Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (Act.), the Internal Compliance Committee (ICC) has been set up to redress the complaints received regarding sexual harassment. All employees are covered under this Policy. As of the date of this report, there were no complaints received by the ICC.

SAFETY, HEALTH, AND ENVIRONMENT:

Safety, Occupational Health, and Environment Protection continue to be accorded high priority.

ANNUAL RETURN:

As required by Section 92 of the Companies Act, 2013 and relevant rules, an Extract of Annual Return in MGT-7 is placed on the Company’s website. You can find the same on www.theandhrasugars.com. RELATED PARTY TRANSACTIONS:

There is no transaction with Related Party which requires disclosure under Section 134(3) (h) of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014. Form AOC-2 is annexed as Annexure - V.

SECRETARIAL AUDIT REPORT:

As required by Provisions of Companies Act, 2013, Secretarial Audit Report as provided by Nekkanti S R V V Satyanarayana & Co., Hyderabad, Company Secretaries in practice is annexed to this Report. There are no qualifications, reservations or adverse remarks in the Audit Report issued by them for the Financial Year ended 31^st March, 2024.

PARTICULARS OF EMPLOYEES:

Information in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, regarding employees is annexed as Annexure-I forming part of this Report.

RATIO OF REMUNERATION OF EACH DIRECTOR:

Information in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, details of ratio of Remuneration of each Director to the median employee’s remuneration is Annexed as Annexure - II.

Significant and Material Orders Passed by the Regulators or Courts or Tribunals impacting the Going Concern status of the Company.

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company.

No application has been made under the Insolvency and bankruptcy Code. The requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.

The requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks of Financial Institutions along with the reasons thereof, is not applicable.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

Information pursuant to Section 134(3)(m) of the Companies Act, 2013 read with relevant rules is given in Annexure-III forming part of this Report.

FIXED DEPOSITS:

As required by the Companies Act, 2013 the details of Fixed Deposits as on 31.3.2024 are given hereunder.

TRANSFERS TO I.E.P.F:

During the year 23,185 no. of shares of 20 Shareholders have been transferred to I.E.P.F Authority. Unclaimed dividend amounting to Rs 15,00,430/- of 1,272 Shareholders for the year 2015-16 has been transferred to M.E.P.F Account.

CONSOLIDATED ACCOUNTS:

In accordance with the accounting standards, consolidated financial statements of the Company and its Subsidiaries form part of the Report and Accounts. These consolidated statements have been prepared based on Audited Results received from the Subsidiary Companies as approved by their respective Boards.

The Accounts of the Subsidiary Companies for the year 2023-24 have not been attached to the Company’s Accounts. However, Shareholders desirous of obtaining the Annual Accounts of the Subsidiaries may obtain them upon request. The Annual Report and the Accounts of the Subsidiary Companies will be kept for inspection at the Company’s Registered Office as well as at the offices of our Subsidiary Companies.

The details of Pursuant to Section 129 of the Companies Act, and Rule 5 of Companies (Accounts) Rules, 2014 in Form No. AOC-I are Annexed as Annexure-IV.

SUBSIDIARIES AND ASSOCIATE:

JOCIL LIMITED:

For the Financial Year ending 31.3.2024 your subsidiary Company, JOCIL Ltd., posted a profit of Rs.264.65 lakhs (before taxation) against Rs. 1274.28 lakhs (before taxation) last year. The Board of Directors of this Company has recommended a Dividend of Rs. 1.50 per Share to Shareholders for the Financial Year 2023-24.

THE ANDHRA FARM CHEMICALS CORPORATION LIMITED:

The Company incurred a Loss of Rs.86,291/- as against the Loss of Rs.1,44,266/- during last year. HINDUSTAN ALLIED CHEMICALS LIMITED:

Directors are on the look out for the suitable projects to be taken up. This Company during the year has earned a profit of Rs.70.13 lakhs (Before Tax) against a profit of Rs.70.33 Lakhs (Before Tax) last year.

THE ANDHRA PETROCHEMICALS LIMITED:

The Company achieved sales of Rs. 78867.35 lakhs against Rs. 68298.16 lakhs last year and earned profit (before Tax) of Rs. 8607.97 lakhs against Rs. 2927.41 lakhs last year. The Board of Directors of this Company has recommended a Dividend of Rs.2/- per Share to Shareholders for the Financial Year 2023-24.

INTERNAL CONTROL SYSTEM:

Your Company conducts a periodical review of the financial and operating controls of the various Units. The Internal Control System of your Company is commensurate with its size and nature of business. The Board has also laid down a policy on Internal Financial Control as required by the provisions of the Companies Act, 2013. The same has been posted on Company’s Website www.theandhrasugars.com

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

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

LISTING ON STOCK EXCHANGE:

Company’s Equity Shares are listed on the National Stock Exchange and Annual Listing Fee for the Financial Year 2024-25 has been paid.

ACKNOWLEDGEMENT:

Your Directors wish to place on record their appreciation for the co-operation extended by the State & Central Government authorities, Banks, Farmers and all the concerned associated with the Company in its Business process. They also express their appreciation to the employees at all levels for the successful working of the Company.

TANUKU For and on behalf of the Board

³°.°⁵.²⁰²⁴ _R narendranath CHOWDARY

Chairman and Managing Director

1

Includes Transport Subsidy.

Ý Operations of Sugar Unit-I and Sugar Unit-III were suspended for the Crushing Season 2023-24.

Ý To encourage farmers to plant cane, your Company opted to pay a cane price higher than the Fair Remunerative Price fixed by the Government.

POWER GENERATION:

During the year under report the Co-generation Unit at Taduvai generated 11737228 Units of Power. PERFORMANCE OF CHEMICAL DIVISION:

During the year under report the performance of Caustic Soda Division at Saggonda was reasonable. Turnover of Rs.662.54 Crores was achieved Profit after depreciation achieved this year was Rs. 55.41 Crores against Rs.233.70 Crores in the last year.

Sulphuric Acid division at Kovvur and Saggonda performed impressively by posting a Profit of Rs.25.46 Crores as against Rs.24.22 Crores in the last year.

POWER UNITS:

The Net Power generated at Ramagiri Wind Mills during this year is 1232844 Units KWH.

The Net Power generation at the Tamil Nadu Wind Mills during the year under report is 21575279 Units. This Power is being fed into the Tamil Nadu State Electricity Board grid.

The Power generated by 33 MW Coal Based Captive Power Plant put up by the Company at Saggonda during this year is 194687000 KWH. The entire Power is being used at our Chemical Plants at Saggonda.