Punjab Chemicals & Crop Protection Ltd

Mukesh D. Patel

Chairman

D E A R S H A R E H O L D E R S ,

It is my privilege to present this report, signifying and highlighting our journey and accomplishments throughout 2023-24 in this transforming world of the agrochemical industry.

OV E RV I E W

This year has showcased that our downstream markets went through the steepest and most extended correction and industry is struggling to break even, and the Balance sheets and business models of most players were impaired.

For us this year started strongly, maintaining growth momentum established by the Company in recent years. However, in last quarters, erratic demand from critical markets and price corrections resulted in lower than expected demand. There was an overall correction in the industry due to inventory and price correction resulting in muted demand for some of our products.

The Exports continue to remain impacted due to lower prices, cautious approach by industry towards inventory and adverse weather condition. Channel destocking continues across the globe. The products with aggressive pricing from China and uncertainty around future pricing is compelling companies to delay buying decisions.

CO M PA N Y P E R F O R M A N C E A N D O U TCO M E S

This year has been a testament to our relentless pursuit of excellence, evident through remarkable achievements and significant strides towards sustainability and growth. I am pleased to communicate that inspite of all the market conditions and challenges, Punjab Chemicals finished the year under review with

H933 crore revenue from operations, with EBITDA H116 crore with a 12.10% EBITDA margin. The Gross margins for 2023-24 improved from 36.8% to 38.7%, which is a testament to the joint efforts of our R&D and operations team and also by managing product mix so as to better absorb overheads.

In the course of few years, we have created a new operating platform for the Company's sustainable growth. Today's Punjab Chemicals has a larger number of products to market, with a robust product pipeline that promises better revenue visibility. We are continuously adding to our technical capabilities with research (on product and processes) and enhancing manufacturing capabilities with stronger infrastructure sustained by a progressively rising investment in new equipment and higher capacity generating superior manufacturing output and efficiencies. We are more competitive on account of timely procurement, product integration and superior working capital management and we are more process-driven on account of a robust digital platforms.

C A PA B I L I T Y A N D D I S C I P L I N E

At Punjab Chemicals, we embarked on a differentiated journey, the challenge that we encountered a few years ago: that the change within would always be larger than the change outside our company. This indicated that we always endeavor to foresee trends and position our company ahead of the curve. This change was not possible without coherent strategy, focused approach and drive and building organisational capabilities and is extending beyond the strategic direction set in the Board room; moving towards becoming a part of everyday thinking at every level, from strategic to tactical and from aggregation of some decisions to building new strategies. The Company possessed a multi-decade legacy. This legacy had defined the

Company's existence, respect and its trust. We focused on further gaining the trust of all our stakeholders - customers, suppliers, employees and communities.

We have engaged all our stakeholders to think differently, to result in new innovations, ideas and looking at the industry with a freshness and come out stronger form current market

We recruited a new generation of professionals who brought with new perspectives a new way of doing things that we appraised and integrated into our corporate culture; the result is that we became a rejuvenating melting pot of concepts and ideas.

challenges. We have recognised that a creative approach would need to be complemented by an operating discipline that made it possible for the Company to create a plan to ensure market competitiveness.

We will sharpen our focus behind key priority segments and use innovative technologies to become a "partner of choice", focusing on specialties and intermediates.

For long term competitiveness, we are working on changes in process and product mix and we are also strengthening our existing systems by investing in new infrastructure and building a team of professionals. During the year under review, we have invested in a new ERP software (SAP S4 Hana) that enhanced process checks and controls, automation to enhance productivity and safety. All these initiatives are adding value to our corporate culture and resulting in a rejuvenating melting pot of concepts and ideas; rewiring industry best practices within company for superior outcomes and investment in a formal structure to address competence gaps and enhanced training initiatives.

G R E E N S H O OT S

Our objective was to deepen our cost leadership to a point when we would remain liquid and profitable even during the most challenging market cycles. I am pleased to communicate that the green shoots of our long-term transformation agenda became visible during the challenging realities of the last financial year.

The Company reported profits during every quarter of the last financial year.

The Company's market share was protected across most major products and margins were largely protected at a time when these eroded for most peer companies.

The Company's manufacturing yields (input-output ratio) improved following process and product improvements and overheads moderated protecting our competitiveness.

O U T LO O K

At Punjab Chemicals, our objective is to scale our business each year in line with our desired goal. We seek to build a holistically sustainable company, marked by responsible – safety coupled with a lower carbon footprint – practices across every area of our working.

We seek to increase our revenues, our profitability, our margins and to create a momentum that generates growth and become a company that enhances stakeholder value in an attractive and sustainable way.

Further I would extend heartfelt appreciation to our dedicated teams, esteemed customers, and steadfast shareholders. Your contribution, trust and unwavering support have been the cornerstones of our success and accomplishments and we eagerly anticipate the unfolding chapters of this shared narrative.

I ensure you that we seek to emerge as a respected corporate with a wider recall that ‘If it is Punjab Chemicals, then it must be world-class.'