Thirumalai Chemicals Ltd Directors Report

With Management Discussion & Analysis

To,

The Members,

Thirumalai Chemicals Limited

Your Directors are pleased to present to you the Fifty First Annual Report & Audited Statement of Accounts of the Company for the Financial Year ended March 31, 2024. The Management Discussion and Analysis has also been incorporated into this report.

Standalone Financial Results of Thirumalai Chemicals Ltd. – Summary

Sl. No. Particulars	Year Ended March 31, 2024	Year Ended March 31, 2023
1 Revenue from Operations	1,98,681	1,84,727
2 Other Income	3,802	4,426
3 Total Income	2,02,483	1,89,153
4 Gross Profit/(Loss) before Interest, Finance Charges and Depreciation (EBITDA)	12,616	21,996
5 Interest and Finance Charges	(4,357)	(3,362)
6 Profit/(Loss) before Depreciation and Tax	8,259	18,634
7 Depreciation	(3,418)	(3,003)
8 Profit before Tax (PBT)	4,841	15,631
9 Provision for Tax	(1,127)	(3,473)
10 Profit after Tax	3,714	12,158
11 Provision for Deferred Tax	(84)	(205)
12 Profit after Tax (PAT)	3,630	11,953

y The Net Revenue includes Export Earning (FOB) during the year was 17,824 lakhs (Previous Year: 20,706 lakhs).

Consolidated Financial Reports – FY23-24

Sl. No. Particulars	Year Ended March 31, 2024	Year Ended March 31, 2023
1 Revenue from Operations	2,08,313	2,13,224
2 Other Income	1,934	3,015
3 Total Income	2,10,247	2,16,239
4 Gross Profit before Interest, Finance Charges and Depreciation (EBITDA)	7,036	21,634
5 Interest and Finance Charges	(4,171)	(3,125)
6 Profit before Depreciation and Tax	2,865	18,509
7 Depreciation	(6,320)	(5,568)
8 Profit/(Loss) before Tax (PBT)	(3,455)	12,941
9 Provision for Tax	(1,105)	(3,790)
10 Profit/(Loss) after Tax	(4,560)	9,151
11 Provision for Deferred Tax	681	(168)
12 Profit/(Loss) after Tax (PAT)	(3,879)	8,983

The Dividend

Based on the performance of the Company and the anticipated Investments in various Projects that have been announced, your Directors have recommended a dividend of 1/- per share for the Financial Year 23-24 (previous year 1.50/-per share was paid). This would result in an out flow of 1,024 lakhs, if approved by the shareholders at the Annual General Meeting.

The company began its operations with cash and cash equivalent balance of 4,487 lakhs (Previous year 15,898 lakhs). During FY 23-24 it generated cash from operating activities to the extent of 12,904 lakhs (net) (Previous year

1,663 lakhs). The company generated a cash of 19,675 lakhs (Previous year outflow 29,973 lakhs) through investing activities. On account of financing activities there was an outflow of 21,409 lakhs against an inflow of 16,618 lakhs. The closing cash and cash equivalent balance remained at 15,975 lakhs (Previous year 4,487 lakhs).

MANAGEMENT DISCUSSION AND ANALYSIS

Global Challenges and our response

The world has faced several new and severe challenges over the past two years, including the economic slowdown in the Far East and Europe, as well as deepening geopolitical tensions. The war in Ukraine, the major conflict in the Middle East, and the consequent crisis in the Red Sea have created severe problems and risks. The tensions in the South China Sea between China, the Philippines, and Taiwan raise the risk of a major conflagration. The economic standoff between China and the US raises the temperature further, distorting trade and causing a severe crisis in shipping in recent weeks. Major downstream industries in the chemical and polymer sector are faced with sharply reduced demand due to customer destocking, demand drops, and reduced margins. Chinas economy did not bounce back as expected, affecting Far East and Rest of Asia volumes and margins in our industry. European demand is stagnating and in some areas has shrunk significantly. The global and Indian chemical industry had to react and navigate each of these challenges without prior warning.

Most industries, including ours, have encountered sharp volatility in commodity prices since 2021. Fluctuating commodity prices have been a major concern, as stability in raw materials, product, and energy prices are essential for planning business operations, production, stocking, costs and margins, and working capital requirements. Equally important is the stability in supply chain, which has been experiencing numerous shocks since the beginning of the pandemic. Falling demand coupled with sharp inflation of input costs creates additional pressure on margins. Operational efficiency, cost management in plants, and production planning are severely impaired. Most industries, especially the chemical industry, were not able to pass the increases in logistics and input costs on to customers, as they face their own crises. The chemical industry was particularly unable to pass on the logistics cost increase resulting from the Middle East conflicts to customers.

TCL and its subsidiaries have responded to these multiple challenges and volatility with excellent speed and adaptability. Our initiatives over the last five years—robust planning systems, continuous investment in technologies and plant improvement, tightening of working capital, intense training and development of staff, and significantly reduced operating and breakeven costs—have greatly helped us navigate this turbulence. This was possible only because of our mature and experienced management team, supported by well-trained middle management in all departments: Manufacturing, Marketing, Commercial, Technology, Finance, and Risk Management.

TCL and its subsidiaries quickly moved to alternate suppliers and markets to address weaknesses in these areas.

Business performance – FY24

The fiscal year 2023-24 witnessed a dynamic journey for our business, marked by fluctuations in performance amidst evolving market conditions. The year kicked off on a strong note, showcasing our robust operational efficiency, high-capacity manufacturing, and higher levels of production, sales, and collections. This performance was driven by solid domestic market demand for our products. The second quarter began the slide that would lead to severe hits in the second half of the financial year for us, and the entire chemical industry. Q2 and Q3 were extremely difficult, given dull demand and margin compression. Amid the volatility and uncertainty among our customers, along with aggressive destocking, we used this period to work on improving efficiencies and implementing severe cost reductions.

Sl. No.	Quarter	Total Income in lakhs	EBITDA in lakhs	PBT in lakhs
1	Q1 FY23-24	47,586	4,864	2,716
2	Q2 FY23-24	56,983	3,788	1,625
3	Q3 FY23-24	47,620	1,622	(114)
4	Q4 FY23-24	50,294	2,342	614

The decline in Q3 was primarily due to the economic downturns and supply chain disruptions. Logistics costs increased across the globe. Our investments in new plants and technologies from 2016 to 2019 helped us prioritise efficiency, cost control, and capacity utilisation. Despite the problems, quick changes in our marketing approach helped us sell the entire volume during this period.

We started several initiatives in FY 21-22, including process safety management, equipment reliability programs, and quality improvements. These initiatives reached maturity during the year and improved our productivity, product quality, safety, and capacity utilisation while significantly reducing costs. This was crucial as margins had become one of the lowest in the last 30 years.

Phthalic Anhydride:

While domestic product demand remains excellent, margins have been one of the worst ever. For some months, there have been negative spreads between raw materials and finished products. In India, growth and demand have occurred mainly in plastics, paints and coatings, and composite resins, driven principally by the automotive, construction, and public infrastructure sectors.

The Indian government has been supportive of the growth of the chemical industry, promoting initiatives such as AATMANIRBHAR BHARAT to boost domestic manufacturing. During this financial year, two new plants were commissioned in India. TCL will also be starting up a new plant in its 100% subsidiary at Dahej in Q2-Q3 FY25. These expansions will not only cater to Indian demand but also help our export efforts, which is vital for earning foreign exchange. This will help hedge our plants to increase imports of raw materials. We expect the Phthalic Anhydride industry to grow robustly between 5% and 6.5%, which will lead to the absorption of all new capacities within the next two years. Volatility in the price of the raw material, ortho-xylene, due to global supply contractions, fluctuating crude oil prices, and competing demand for higher-priced gasolines, will be the feedstock challenges that we will face. However, we are well prepared to handle these challenges as our import terminals and infrastructure in Chennai and Gujarat give us added flexibility.

Our expansion at Dahej, which includes significant capacity additions in PA and fine chemicals by-product recovery, will address our long-standing need to be closer to raw material supplies and positioned within the center of 80% of our market. We are leveraging the most advanced technology at this plant, drawing on our experience of replacing two older plants with a state-of-the-art facility in South India about four years ago. This investment brings world-class capacity with exceptional reliability, energy and yield efficiency, low-cost operations, and a high degree of automation and safety. In addition to providing the lowest energy footprint globally, the fine chemicals recovery from wastewater generates a valuable revenue stream for both domestic and export markets. The investment is designed to allow for quick and cost-effective capacity doubling.

Upon stabilisation, TCL will be the largest producer of this particular raw material globally. Despite the difficult situation in the market, we are confident that robust market growth, our cost leadership, and our logistics position will yield excellent results in the next few years.

Fine Chemicals and Food Ingredients:

The year was characterised by a combination of external factors that affected the performance of the Food Ingredients business of your company.

In the beginning of the year, there was the after effect of poor demand in Europe in various user segments with the Ukraine war and energy crisis affecting all industrial sectors and consumption. Many consumers in the Industrial, Food and Animal feed segments had carried over inventory from previous years resulting in lower demand for ingredients and additives. In the meantime, poor local demand in China resulted in large exportable surplus of food ingredients in the second quarter of the year resulting in low priced Chinese products flooding the European and Asian markets.

In the latter part of the year, your companys exports to US and Europe were severely impacted by high freight costs and some specific input costs due to the Red Sea Crisis, which could not be passed on to the consumers.

This combination of poor demand in EU and surplus crisis from China resulted in temporary supply excess affecting finished product prices and sales volume.

Therefore, the Food Ingredients performance was characterised by lower margins for the fiscal year 2023-24. However, excellent customer relationships, steady operating performance, ensured that the business still made profits under such testing market conditions.

Demand for the other fine chemical products by your company remained robust though margins were impacted because of low prices. Despite the challenges, your company has navigated a dynamic landscape characterised by evolving market demands and regulatory shifts. The companys robust supply chain and operational efficiencies ensured resilience amid the fluctuations.

Human Resource and Strengthening the Organisation:

Our company faced significant challenges in human capital development. As we grow succession planning and integration in key roles became pivotal in our HR agenda. To address this, we brought in senior professionals and internally promoted young managers into these roles. Your company is well known for 45 years for its efficient training and development programmes. These continue to be improved and modernised. We embarked on a journey to benchmark the best HR practices and realign our policies and procedures to meet evolving industry standards. Additionally, numerous engagement activities were organised to nurture a sense of belonging among employees. We observed significant stability in employee turnover. This improvement is a testament to our focused efforts in human capital management.

New investments & Projects Dahej Project

Our project in Dahej through our subsidiary TCL Intermediates Private Limited saw the start-up of Fumaric Acid production in January 2024. The rest of the plant is expected to be completed soon. The team is working very hard to drive the project to completion.

US Project and US Subsidiary Activities

Work on the project in the US is in the final stages of civil construction. About 80% of the plant is being assembled and constructed modularly at our TCL Technology and Engineering (TCL TE) Division in India. All other equipments purchased from Japan, Europe, and North America has already arrived at the site. We expect all the modules to be shipped out soon. The COVID-19 crisis, followed by the Ukraine war and the Red Sea shipping crisis, delayed engineering, equipment manufacturing, and shipping. However, we have managed to make up part of the lost time. This modular design is unique and offers significant advantages in construction safety, supervision, inspection, testing quality, and post-construction performance. This will not only be the largest manufacturing plant for these food ingredients but also one of the most modern and efficient. The subsidiary will manufacture petrochemicals and fine chemicals/food ingredients for the North American, European, and Latin American markets. This strategic location will address the largest markets for these products and offer significant advantages in raw material sourcing and logistics.

Our Subsidiary in the Netherlands TCL Global B.V.

The European subsidiary, TCL Global B.V., has completed its third year of operations and continues to grow its marketing and distribution network, serving customers from the UK to Turkey. Despite facing serious headwinds in Europe, TCL Global currently distributes our products from India and

Malaysia. With the start-up of our Dahej subsidiary and our US subsidiary, our export volume is set to increase many fold. Having a local presence is essential as it allows direct access to customers, better service and compliance, and improved margin capture. In a volatile market, it also provides the flexibility for quick repositioning.

Our Subsidiary in Malaysia

During the year FY 23-24, like most of other chemicals, Maleic Anhydride business was also adversely impacted due to drop in global Maleic Anhydride demand and low prices in the Far East, Asian and European regions. In spite of overall pressure of Maleic Anhydride demand, during this year, the company has sold all its production.

Scheduled re-catalyzation in two oxidation reactor trains were undertaken. Even after shutdown of these trains, production in FY 2024 was at the similar levels of FY 2023. The Company continued to implement several improvement programmes to improve efficiencies and reliability. As part of the company policy to increase its downstream portfolio to improve performance, OOSB has developed a few new products in FY24 for specialty applications and for industrial feedstock; and received approvals and bulk orders from customers. Work on more new products is ongoing. Going forward, increased use of bio-degradable plastics will significantly increase the demand of Maleic Anhydride, as these are fast catching on.

STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)

Sl. No. Particulars	Year Ended March 31, 2024	Year Ended March 31, 2023
1 Revenue from Operations	34.75	50.68
2 Other Income	0.67	0.86
3 Total Revenue	35.42	51.54
4 Gross Profit/(Loss) before Interest, Finance Charges and Depreciation (EBITDA)	(1.75)	3.03
5 Interest and Finance Charges	(0.18)	(0.2)
6 Profit/(Loss) before Depreciation and Tax	(1.93)	2.83
7 Depreciation	(3.01)	(3.06)
8 Loss before Tax	(4.94)	(0.23)
9 Provision for Tax	0.99	(0.16)
10 Profit/(Loss) after Tax	(3.95)	(0.4)
11 Loss after Tax	(3.95)	(0.4)

Finance and Accounts:

Despite various challenges faced by your company due to the external environment, it has been able to generate adequate funds during the year to meet its operating cash flow requirements and also deploy additional funds as equity to its domestic subsidiary in Dahej. This is after meeting the initial equity requirements of the U.S. subsidiary out of the accumulated surplus funds generated over the previous few years. Your company was able to efficiently manage the working capital cycle and focus on its operational needs. Your company will continue to strive to focus on generating cash flows from operations and building more reserves for meeting its inorganic growth opportunities.

Your company continues to emphasise process-driven initiatives in all areas of operations, starting from the manufacturing plants to various billing locations. Various subcommittees of the Board periodically monitor the progress in each area of operation and review the mitigation measures implemented by the company in reducing various types of risks. They also review the internal controls (both manual and systemic) built-in to address the processes being followed. The continuing inflationary trend in the United States and the absence of anticipated interest rate reduction by the U.S. Fed has adversely impacted the interest rates of foreign currency loans in both India and abroad. Your company is constantly engaging with banks and forex experts to explore avenues of reduction in interest costs and is also negotiating hard to bring down each and every aspect of finance costs. Your company has been taking steps to mitigate risks that arise due to foreign currency fluctuations by using various derivative products available.

Looking forward to FY24-25:

In navigating the volatile landscape of the chemical industry, your company remains steadfast in its commitment to ride out downward cycle in the market. Notably, the demand for our flagship product, Phthalic Anhydride, remains robust, serving as a cornerstone of stability amidst fluctuating market conditions. Furthermore, the increasing capacities within key customer segments such as paints and plasticizers signify promising growth opportunities. By continuously optimising our cost structure, we position ourselves as a reliable and significant producer, ensuring sustained profitability and market relevance.

Additionally, our forward-thinking approach extends to exploring new avenues for growth and differentiation. With a focus on servicing higher priced segments within the food ingredients market, we aim to capitalise on premium opportunities, aligning with evolving consumer preferences and market dynamics. However, amidst our pursuit of growth, challenges such as the influx of low-priced imports from China persist, necessitating proactive measures and strategic responses. Through the implementation of trade remedies and vigilant market monitoring, we safeguard our interests and preserving fair market practices. Moreover, the imminent completion and commissioning of the second phase of Dahej project underscore our commitment to continue being a reliable partner to all our customers and other stakeholders. This further bolster our competitive edge and position us for sustained success in the global chemical domain.

New Business:

In the last fiscal year, we formed a team to identify new product lines in various chemistry and look at feasibility, market demand and other relevant details for establishing new business segments. With manufacturing bases in India and Asia, and recent investment in the resource-rich North American market, we see exciting prospects to expand our product range across various market segments.

People:

At your company, we implement comprehensive technical training programs tailored specifically for new graduates. Our commitment to continuous learning ensures that all employees have access to ongoing training opportunities, allowing them to stay at the forefront of industry advancements. Recently, we have introduced innovative programs focused on safety leadership, underscoring our dedication to creating a secure and productive work environment. These initiatives not only enhance technical competencies but also cultivate essential leadership skills, preparing our workforce to handle complex challenges safely and effectively. We believe that by investing in our employees growth, we are building a stronger, more resilient organisation.

Public Initiatives:

Your company believes that social responsibility is an integral part of doing business. In line with this thought we continue to be actively involved in social initiatives in the fields of health care, education and community development. We support local services and as part of this, have provided new chairs and tables to the collectors office to improve their work environment. Additionally, we have equipped the local police department with CCTV cameras and laptops to enhance security and efficiency.

Your company plays an active role in industry associations like the Indian Chemical Council (ICC), Confederation of Indian Industry (CII) and Chemical Industries Association. Through these associations the company also participates in Industry initiatives and government interactions to represent various issues of the industry to relevant authorities. Improvement in trade policy, international trade negotiations and tariff concession for the industry wre some of the key areas of engagement during the year.

Overall, your company remains dedicated to fostering positive change through various initiatives, partnerships, and contributions aimed at improving public welfare, healthcare, education and industry development.

OUR ASSOCIATES

None of our successes would be possible without the interest and participation of our stakeholders, including customers, bankers, suppliers, distributors, consultants, government agencies, and local communities. We look forward to the ongoing involvement of all stakeholders in the companys activities and to sharing in its future achievements.

BOARD AND MANAGEMENT

The Board of your Company consists of

The Chairman & Managing Director - Mr. R. Parthasarathy

Managing Director & Chief Financial Officer – Mrs. Ramya

Bharathram

Seven Independent Non-Executive Directors:

- Mr. R. Ravi Shankar

- Mr. Raj Kataria

- Mr. Dhruv Moondhra

- Mr. Arun Ramanathan

- Mr. Rajeev M Pandia

- Mrs. Bhama Krishnamurthy

- Mr. Arun Alagappan

Two Non-Executive Director:

- Mr. R. Sampath – Chairman - Ultramarine and Pigments Ltd.

- Mr. P. Mohana Chandran Nair – Managing Director - TCL intermediates Private Limited

They are supported closely by

Mr. C.G. Sethuram – Group Chief Executive Officer

Mr. Sanjay Sinha – Chief Executive Officer

Mr. T. Rajagopalan – Company Secretary

And the Business and Functional Heads

Mr. S. Venkatraghavan - President – Food Ingredients

Mr. R. Srinivasaraghavan - President – Factory Operations

Ms. J. Radha - Executive Vice President, Finance

Mr. B. Krishnamurthy - Executive Vice President, Accounts & Systems

The term of appointment of the Managing Director of the Company, Mrs. Ramya Bharathram will be expiring on May 25, 2024, and the Board recommends her re-appointment as the Managing Director of the Company for a further period of three years from May 26, 2024. Mr. Rajeev Pandias tenure as Independent Director of the Company expires on July 24, 2024. Hence it is proposed to reappoint him as Independent Director of the Company for a further period of three (3) years at the ensuing Annual General Meeting.

The 2^nd term of the following Independent Directors of the Company will end on August 5, 2024: Mr. R. Ravi Shankar Mr. Raj Kataria Mr. Dhruv Moondhra

At this time, the management would like to acknowledge the significant contributions of these Directors. Their support and valuable advice over the past decade have been instrumental in the companys growth, particularly in strategic planning and efficiency improvements, paving the way for our continued success.

Our Directors play a highly active role in the company, bringing expertise in Business Strategy and Management, Technology, Finance and Accounting, Governance, Project Appraisal and Management, and Government Relations.

Their frequent and intense interactions with the management team occur through board and committee meetings, reviews, suggestions, criticisms, and advice over the past decade. The executive management team has been transparent in presenting and discussing initiatives, plans, failures, issues, and responses. This healthy and open interaction has been of immense value to the governance, health and growth of the company. The Committees in the Board, especially the Risk Management Committee, Business Review Committee and the Audit Committee met often and participated in depth by setting goals, reviewing performance, correcting slippages and monitoring execution. The Nomination & Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been active in their respective roles.

Further details of these are given in the Corporate Governance Report.

Pursuant to the provisions of Section 149 of the Act, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

SOCIAL RESPONSIBILITY:

Your Company continues to play an active and important role in the welfare of the local communities. The Founders of your Company, Mr. N.S. Iyengar and Mr. N.R. Swamy had set up the Thirumalai Charity Trust (TCT) in 1970, and The Akshaya Vidya Trust (AVT) in 1994.

Thirumalai Chemicals supports TCT financially and through management reviews and in their infrastructure planning & development process.

The TCT works in Ranipet District where our main Indian manufacturing site is located, since 1983, providing services in Community Healthcare, Womens Empowerment, Disability, De-addiction, and Village development.

The TCT founded and operates the Thirumalai Mission Hospital, which provides health coverage to 315 village with 36,500 households and 150K population and over 100 medical camps/year with experienced consulting physicians. TCT is embarking on an ambitious expansion project to augment the existing 50-bedded to 100 bedded hospital.

This addresses a critical need of the community.

School Community Development coverage is 6 Villages, primary aim of these visits was to engage with the local communities and raise awareness on key social and environmental issues while showcasing our schools activities.

Industrial Relations:

Industrial Relations during the year under review continued to be very cordial.

Finance:

All taxes and statutory dues have been paid on time. Payment of interest and instalments to the Financial Institutions and Banks are being made as per schedule. Your Company has not collected any Fixed Deposits during the Financial Year.

Exports:

Calculated on FOB basis, Exports amounted to 17824 lakhs (previous year 20,706 lakhs)

Related Party Transactions

All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the Financial Year were in the ordinary course of business and on an Arms length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interests of the Company. Suitable disclosure as required by the Indian Accounting Standards (Ind AS24) has been made in the notes to the Financial Statements.

The Board has approved of a policy for Related Party Transactions which has been uploaded on the Companys website.

Directors Responsibility Statement:

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

i) In preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

ii) We have selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period.

iii) We have taken proper and sufficient care to maintain 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.

iv) We have prepared the Annual Accounts on a going concern basis.

v) Proper Internal Financial Controls were in place and that the Financial controls were adequate and were operating effectively.

vi) Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Business Risk Management

Business Risk Evaluation and Management is an ongoing process within the Organisation. The Company has a robust risk management framework to identify, monitor and minimise risks. The composition of the Committee is given below:

Sl. No. Name of member	Category
1 Mr. Rajeev M. Pandia	Independent Director & Chairman
2 Mr. Dhruv Moondhra	Independent Director
3 Mrs. Ramya Bharathram	Managing Director
4 Mr. Sanjay Sinha	Chief Executive Officer
5 Mr. B. Krishnamurthy	Executive Vice President Accounts & Systems

Vigil Mechanism / Whistle Blower Mechanism

The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

Corporate Social Responsibility (CSR) Committee:

The Committee recommended continuing support for the Thirumalai Charity Trusts Health and Rural Development Projects and for the Akshaya Vidya Trusts Educational Programmes.

The composition of the Corporate Social Responsibility Committee is given below:

Sl. No. Name of member	Category
1 Mr. Arun Ramanathan	Independent Director & Chairman
2 Mrs. Bhama Krishnamurthy	Independent Director
3 Mr. R. Sampath	Director (Promoter)

A detailed note is given in the Corporate Governance report.

Total Expenditure on Corporate Social Responsibility (CSR) as percentage of profit after tax (%):

The Companys total spending on CSR is 2% of the average profit after taxes in the previous three Financial Years towards Health and Sanitation Programmes The CSR report is set out in the Annexure B to the Directors report.

Statement pursuant to Listing Regulations:

Your Companys shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.

Business Responsibility and Sustainability Report:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the Annual Report of the top 1000 listed entities based on market capitalisation (calculated as on 31^st March of every Financial Year), shall include a Business Responsibility and Sustainability Report (BRSR Report). Your Company is in the top 1000 listed entities as on March 31, 2024. The Company, has presented its BRSR Report for FY 23-24, which is part of this Annual Report.

Report on Corporate Governance

The Report on Corporate governance is annexed herewith.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and under obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, Execution and Performance of specific duties, obligations and governance.

A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders, etc. The performance evaluation of the Independent Directors is carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.

The Directors expressed their satisfaction with the evaluation process.

Appraisal of Boards performance:

It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board.

Board evaluation contributes significantly to improved performance and aims at,

a. Improving the performance of Board in line with the corporate goals and objectives.

b. Assessing the balance of skills, knowledge and experience on the Board.

c. Identifying the areas of concern and issues to be focused on for improvement.

d. Identifying and creating awareness about the role of Directors individually and collectively as Board.

e. Fostering Team work among the members of the Board. f. Effective Coordination between the Board and Management.

g. Overall growth of the organisation Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by the Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.

Statutory Auditors

M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. No. 001076N / N500013) were appointed as the Statutory Auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 21, 2021, to hold office from the conclusion of the Forty Eighth AGM till the conclusion of the Fifty Third AGM to be held in the year 2026.

Internal Auditors

The Internal Auditors M/s. M.S. Krishnaswamy & Co, Chartered Accountants, have played an important role in strengthening the internal controls within the Company. The Internal Auditors M/s CNK & Associates LLP also contributed significantly.

Cost Auditors

M/s GSVK & Co., Cost Accountants, were appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during FY 23-24. The Cost Audit Report was filed with the MCA, Government of India, by the Company on August 3, 2023, well before September 30, 2023, the due date of filing for FY 22-23.

Secretarial Audit

The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for FY 23-24. The Secretarial Audit Report for the Financial Year ended March 31, 2024 is attached to this Report. The Secretarial Audit Report does not contain any qualifications, or reservations.

Web link of Annual Return

Pursuant to the provisions of section 92(3) and Section 134 (3) (a) of the Companies Act, 2013 a copy of the Annual Return of the Company for the year ended March 31, 2024 will be placed on the website of the company at http://www. thirumalaichemicals.com.

Personnel

In terms of the provisions of section 197(12) of the of the Companies Act, 2013 read with the Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the Annexure C to the Directors report.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013: a) The ratio of the remuneration of each Director to the median employees remuneration for the Financial Year and such other details as prescribed is as given below:

Sl. No. Name of Director	Ratio
1 Mr. R. Parthasarathy (Managing Director)	71: 1
2 Mrs. Ramya Bharathram (Managing Director and CFO*)	30:1

For this purpose, sitting fees paid to the Directors have not been considered as remuneration. b) The percentage increase in remuneration including commission, of Managing Director, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year: Mr. R. Parthasarathy – (Managing Director): Nil Mrs. Ramya Bharathram (Managing Director and CFO*): NIL

Mr. T. Rajagopalan – (Company Secretary): 3%

*Mrs. Ramya Bharathram – Managing Director, was appointed as the Chief Financial Officer of the Company on July 24, 2018. No additional remuneration was paid to her for functioning as the CFO. c) The percentage increase in the median remuneration of employees in the Financial Year: 6% d) The number of permanent employees on the rolls of the Company: 541 e) The explanation on the relationship between average increase in remuneration and Company performance: The Companys PAT has decreased from 11,953 lakhs to 3,630 lakhs, a decrease of 70% against which the average increase in remuneration is (NA); f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

Name	Designation	Remuneration Rs. in Lakhs*	% Increase in Remuneration	PAT Rs. in Lakhs*	% decrease in PAT
Mr. R. Parthasarathy	Managing Director	332	NIL	3,630	70%
Mrs. Ramya Bharathram	Managing Director and CFO	141	NIL
Mr. T.Rajagopalan	Company Secretary	48	3%

* It consists of Salary/Allowances & Benefits.

The remuneration of the Chairman and Managing Director, Mr. R. Parthasarathy includes the commission of NIL lakhs, which works out to approximately NIL% to the net profit for the Financial Year ended March 31, 2024.

As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and the Financial Performance of the Company.

g) Variations in the market capitalisation of the Company, price earnings ratio as at the closing date of the current Financial Year and the previous Financial Year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

Date	Issued Capital (No. of Shares)	Closing Market Price per share	EPS in	PE Ratio	Market Capitalisation (Rs. in Lakhs)
31.03.2023	10,23,88,120	171.85	11.67	14.72	1,75,954
31.03.2024	10,23,88,120	234.10	3.55	66.02	2,39,691
Increase /(Decrease)	NA	62	(8)	51	63,737
% of Increase/(Decrease)	NA	36.22	(70)	349	36
Issue Price of the share at the last		1.0
Public Offer (IPO)
Increase in market price as on		233.1
31.03.2024 as compared to Issue
Price of IPO		23,310
Increase in %

h) Average percentile increase already made in the salaries of Employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in the Managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration: Average increase in remuneration is 15% for Employees other than Managerial Personnel & NIL for Managerial Personnel (KMP and Senior Management) i) The key parameters for any variable component of remuneration availed by the Directors: Except Mr. R. Parthasarathy (Managing Director) and Mrs. Ramya Bharathram (Managing Director), no Directors have been paid any remuneration, as only sitting fees have been paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits as per the provision of sec.197 of the Companies Act, 2013. j) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year: Not Applicable k) If remuneration is as per the remuneration policy of the Company: Yes

Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

The particulars required to be included in terms of Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure D.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor.

The details form part of Note No. 36 of Notes to standalone financial statements.

Cautionary Statement

Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation, plant breakdowns, industrial relations, etc.

Acknowledgements

The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review. The Directors also appreciate and value the contributions made by the employees of our Company at all levels.

For and on behalf of the Board of Directors
R. Parthasarathy	R. Ravi Shankar
Managing Director	Director
(DIN :00092172)	(DIN:01224361)
Place: Ranipet	Place: Chennai
Date: May 15, 2024	Date: May 15, 2024