Privi Speciality Chemicals Ltd

Dear Shareholders

Warm greetings from the Privi family!

I approach you with a deep sense of gratitude for the unwavering trust all of you reposed in me.

As promised in my address last year, the challenging times are now behind us. I am excited to witness the dawn of a new era for Privi, brimming with potential and growth for both our Company and our country, India.

I am pleased to share our strong, growth-oriented, and positive financial results for the year ending March 31, 2024. Our Company achieved a turnover of ' 1,778.53 Crores, up from ' 1,629.24 Crores in the previous year. Profit after tax on a consolidated basis soared by

448.45%, reaching ' 95.43 Crores from ' 21.28 Crores in the previous year. Earnings Before Interest, Depreciation, Amortisation, and Taxes (EBIDTA) increased by 69.41%, rising from ' 207.34 Crores to ' 351.26 Crores in the previous year.

This performance must be viewed against the backdrop of the VUCA world we operate in, marked by the ongoing Ukraine-Russia war and resulting supply chain disruptions. Additionally, the slowdown in demand, particularly in Europe and the USA, and the destocking of inventories by large FMCG companies have posed significant challenges.

To further complicate matters, the recent Red Sea disruptions in the last

quarter of the financial year have significantly increased both inbound and outbound freight costs.

Amidst these volatile and unfavourable conditions that have pressured product prices, our Company's visibility has significantly improved. We gained market share in all newly launched products— Galaxmusk, Camphor, and Prionyl— and increased the volume of our existing major products, enhancing capacity utilisation. Over the past three years, we made significant investments in these projects. In the current financial year and beyond, we will consolidate our position for further growth. Operating margins improved due to reduced

operating costs, driven by process intensification, resulting in better manufacturing yields and the adoption of technologies like Vapour Absorption Machines (VAM) and enhanced heat recovery systems. These improvements are permanent and will continue to make us cost- competitive in the long-run.

With a dedicated vision for future generations and Planet Earth, I took an oath as per the UN Charter for Sustainability. I am thrilled to share that Privi is now among the select 5% of companies that has been awarded the EcoVadis GOLD rating for Sustainability. This achievement fulfils our promise and paves the way for inclusive and sustainable growth, an integral part of our strategy.

Our backward integration of the Crude Sulphated Turpentine plant, the largest single-location refinery using over 70% renewable materials, remains a strategic cornerstone. I thank all our stakeholders for their support.

I am pleased to announce our adaptation of solar power to meet part of our electricity demand. About 80% of the power requirement for Unit-10 including the supply chain center and Mahad office block, is now met by solar power. Additionally, 25% of the power requirement for Unit-2, our largest manufacturing unit, is sourced from solar power

through an open access route. We will continue increasing the substitution of conventional power with solar energy. Your Company is also working on replacing coal with biofuels as fuel. Most of our manufacturing facilities now have full-fledged effluent treatment plants to ensure complete water recycling. Thus, our financial performance has been well supported by our commitment to the environment and to Mother Earth.

Our dedication to innovation and investments in our R&D capabilities continues to drive fast commercialisation, a core competency of Privi. In the past financial year, we successfully commercialised several super specialty products, including Indomeran, Floravone, and Amber Woody Extreme, from concept to commissioning within just 12 months!

The Joint Venture with Givaudan,

- the global number one fragrance and flavour Company, wherein your Company has 51% equity, is at an advanced stage of implementation. You will hear more on this shortly.

Privi's return to its growth trajectory has fortified my determination to aim higher. Our Company is now embarking on a new era, transitioning from Specialties to Super Speciality Chemicals, with a strong emphasis on sustainability. In our own way, we are contributing to the honourable Prime

Minister's vision of Make in India and 'Atma Nirbhar Bharat'.

In conclusion, I want to leave you with a sense of optimism for our Company. As we move forward, we are committed to maintaining the momentum achieved in this financial year. We will actively pursue projects aligned with the outlined strategy and carefully evaluate both organic and inorganic strategic growth opportunities.

I extend my heartfelt gratitude to all members of the Board of Directors, my esteemed colleagues, our valued business partners, supportive bankers, and, above all, our esteemed shareholders. Your continued support and trust inspire us to strive for excellence. I am dedicated to continuing our journey, leading our Company from good to great.

Chairman and Managing Director