Tamil Nadu Petro Products Ltd

Dear Shareholders,

Your Directors have pleasure in presenting the Thirty Ninth Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March 2024. The Management Discussion & Analysis Report which is required to be furnished as per SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations") is also presented as part of this Report.

FINANCIAL RESULTS prepared as Thesummary of the financial per the Indian Accounting Standards (Ind AS) is given below:

( In Crore)

HIGHLIGHTS OF OPERATIONS

Linear Alkyl Benzene (LAB), the major product, continued to be the key contributor for the bottom line. despite few challenges faced during the year. The consistent low cost imports of LAB posed a real challenge for sustaining the margins more so after the expiry of anti dumping duty in April 2022. Average crude price during the year prevailed high at around USD 83/bbl leading to higher raw material costs. Additionally, the LAB Plant was under shut down for a period of 54 days during the year, towards maintenance related activities and flooding caused by Cyclone Michaung. The Chlor-alkali market faced a downtrend during the year, as the availability of the product in the domestic market had increased consequent to the reduction in exports by other domestic players, thereby contributing for the lower realisation. The chlor-alkali plant and the propylene oxide plant also suffered damages due to cyclone Michaung and the plant had to be stopped for a period of about 3 weeks.

Your Company continued its policy of prudent sourcing & inventory management, with the efforts to sustain margins, despite higher crude prices.

Your Company in its efforts to augment the capacity of LAB Plant from its existing 120 TPA to 145 TPA, had obtained requisite statutory approvals. As on 31^st March 2024, the Company had committed a sum of 164 crore towards the cost of the design

Engineering and placing of order for certain Plant and machinery. The estimated cost of revamp of

LAB facility is 240 crore and is expected to be put on stream by FY 2025-26.

Your Company in order to modernise the existing Caustic Soda plant & to enhance its capacity from 150 TPD to 250 TPD, had estimated an outlay of 165 Crore. The Company had obtained all the requisite statutory approvals and the project execution has commenced. Towards this, your

Company has incurred a sum of 70 Crore as on

31^st March 2024 and the Project is expected to be commissioned in FY 2025-26.

The Gas Engine Generators have been commissioned in the place of Oil-based Generators to meet the power requirement of LAB Plant, which has substantially reduced the emission levels making the environment cleaner. As part of decarbonisation and ESG, the Company has initiated action to develop base line of

CO2

emissions from various activities in the business. Product carbon footprint is also being developed, which will be used subsequently to prepare road map for reduction of carbon foot print, adopting various short-term and long-term strategies. This will progressively make our products greener. In July 2024, National Green Tribunal (NGT), Southern Zone, Chennai delivered a judgment regarding a Suo Motu case against the industries at Manali location (including your Company) in connection with the exceedance of emission parameters alleged to be committed during the period from April 2019 to December 2020. NGT issued certain directions/recommendations to the industries at Manali, Tamilnadu Pollution Control Board (TNPCB) and Central Pollution Control Board which included collection of environmental compensation and a recommendation to create corpus fund aimed at improving environmental standards in Manali Industrial area. In continuation of the same, your Company received a demand from TNPCB on 18^th March 2024 to pay a sum of

1.02 Crore, towards environmental compensation and the same was remitted on 25^th April 2024. Subsequently, the Hon'ble High Court of Madras had passed an Order quashing the directions of NGT with regard to the recommendation to create a corpus fund.

FINANCIAL REVIEW

Your Company achieved revenue from operations of 1,668.57 Crore as against 2,150.25 Crore in the previous year. Crude price volatility coupled with the downtime caused due to Michaung Cyclone resulted in this reduced revenue. Net Profit achieved was 42.78Croreascomparedto growth, reaching approximately 4.25 89.32 Crore in the previous year.

Exceptional item includes 18.61 Crore incurred during the year towards material damage and Plant restoration activities (Michaung cyclone – Dec'23).

Additionally 1.52 Crore was incurred towards Asset Damage which is reflected in PPE. An amount of 4.59 Crore has been received from the insurers as an adhoc amount pending assessment report from surveyor. Your Company's debt is lower as it is currently restricted to working capital borrowings and lease liabilities.

CARE Ratings Limited reaffirmed Company rating to CARE A+; Stable (Single A Plus; Outlook: Stable) for Long Term Bank facilities (term loans and fund-based working capital facilities) and CARE A+; Stable / CARE A1+ (Single A Plus; Outlook: Stable / A One Plus) ratings for Short Term Bank facilities (non-fund based working capital facilities).

DIVIDenD

PursuanttoRegulation43AoftheListingRegulations, the Company has a Dividend Distribution Policy approved by the Board, a copy of which is available on the website of the Company: https:// www.tnpetro.com/wp-content/uploads/2021/07/ Dividend-Distribution-Policy-2021.pdf.

In line with the parameters in the policy, your directors are pleased to recommend a dividend of 12% i.e. 1.20 per equity share of face value of 10/- each fully paid up, for the year 2023-24, aggregating to 10.80 Crore, subject to withholding of taxes.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Linear Alkyl Benzene (LAB) is an organic compound primarily used as an intermediate in the production of surfactant linear alkylbenzene sulphonate (LAS), also known as linear alkylbenzene sulphonic acid (LABSA). This compound is essential for the production of biodegradable detergents. LAB is predominantly used in the formulation of laundry detergents, light-duty dishwashing liquids, industrial and household cleaners, as well as in applications such as crop protection and enhanced crude oil recovery.

The global market for LAB has experienced significant million tonnes in 2023, with projections indicating a compound annual growth rate (CAGR) of 4.09% through 2034, potentially reaching around 6.6 million tonnes. Factors driving this demand include heightened health awareness, an aging population, and changing lifestyles that emphasize cleanliness. Asia stands out as the largest producer and consumer of LAB, with India, China, and the Middle East being the leading manufacturers.

LAB manufacturing in India commenced in 1978 with the commissioning of IPCL's facility in Vadodara. Subsequently, other manufacturing facilities were established by Reliance Industries Limited, TPL, Nirma, and IOC. Until 2002, the LAB demand and supply situation in India remained fairly balanced. However, after the commissioning of two manufacturing facilities in the Middle East and another by IOC in India, the supply situation in India significantly exceeded the demand. LAB production capacity expanded globally and before the growth rate could account for the excess supply, additional capacities emerged in the Middle East and Southeast Asia. Consequently, this led to the increase in LAB imports into India.

In recent years, the Indian domestic sector has encountered stiff competition due to globalization and legislative changes, including the Free Trade Agreement (FTA). Cheaper imports, primarily from the Middle East, Thailand, and China, have posed a significant challenge. Additionally, the expiration of anti-dumping charges against Iran, Qatar, and

China has intensified competition from low-cost imports, impacting market prices since FY 2022-23. During March 2024, TPL and Nirma had initiated antidumping duty case against imports from Iran and Qatar, the outcome of the same is awaited.

The Indian government mandated BIS certification for LAB in the Indian market from 3^rd April 2023. This regulation has temporarily alleviated concerns regarding low-cost imports from Iran, China, and

Korea, which have ceased since the certification requirement was implemented. Recently, Iran had secured BIS certification, and it is anticipated their supply would resume shortly. This development is likely to impact prices for the fiscal year 2024-25.

The UOP Technology, which is widely recognized as the best and most cost-effectivemanufacturing process available, has been applied by more than 95 percent of all LAB manufacturers, including TPL. Regardless, the cost of making LAB in India exceeds international standards, due to the high cost of essential components such as Energy and feedstock. Domestic firms with standalone units, constantly struggle to compete with offshore suppliers and domestic manufacturers integrated with refineries, production costs. Caustic soda is an inorganic bulk chemical, strongly alkaline, and odourless, having application in various fields like pulp and paper manufacturing, viscose yarn, staple fibre, aluminium, textiles, soaps &detergent, dyestuffs, drugs and pharmaceuticals, petroleum refining, etc. It is available in two forms, liquid form which is called lye & solid form which is called Flakes or pellets.

In the Indian caustic soda market, segments such as textiles, alumina, inorganics, organics, and paper collectively account for over 60% of the market share. Globally, the demand for caustic soda stands at approximately 81.5 million metric tons per year, with India contributing around 7% to this global demand. Despite the energy-intensive production process, the national capacity utilization of the aggregate capacity (approximately 5.5 million tons) comes around 80%. The CAGR for CS Lye stands at 4.2%. Over this period, new capacities have been established, leading to increased domestic production levels. The price is still witnessing a declining trend due to aforementioned factors. Chlorine, a co-product of Caustic Soda, is widely utilized in industries such as Poly Vinyl Chloride

(PVC), Chlorinated Paraffin Wax (CPW), pulp and paper, water treatment, chlorinated solvents, and so on. The demand for chlorine in India during the year was approximately 4.6 million metric tons per annum (MMTPA). It is projected to grow at a CAGR of 6.47%, reaching 9.8 MMTPA by 2035.

The demand for chlorine significantly influences chlor-alkali capacity utilization. However, the lack of integrated plants and downstream projects for chlorine utilization poses key barriers to efficient chlorine disposal, ultimately impacting caustic production.

Propylene Oxide (PO) is a highly versatile industrial chemical, primarily used in the production of polyether polyols, which serve as an essential constituent in the manufacturing of polyurethane foams, coatings, and adhesives. PO is produced through the chlorohydrin process or the more environment friendly epoxidation process, wherein propylene reacts with an oxidizing agent. This epoxide compound possesses reactivity due to its strained three-membered ring structure, making it valuable for various applications.

India imports between 35 to 40 Kilotons of PO annually, primarily from Thailand, Singapore, and Saudi Arabia, at a significantly cheaper cost compared to domestic prices. Despite the growing global demand of approximately 10 million MMTPA for PO, which is expanding at CAGR of 5.76%, India's market share in PO remains relatively small on the global scale.

OPPORTUNITIES AND THREATS

The global GDP is currently growing at a modest pace of 3.1%, influenced by high borrowing costs and moderating demand. A marginal pickup in global GDP is anticipated to reach 3.2% by 2025. However, India remains a frontrunner, with its GDP projected to grow at an impressive rate of 6.6%. With 77 years of independence, India is rapidly advancing to become one of the world's major economies. The country is witnessing unprecedented social and economic development. Recently, India achieved the status of the world's fifth-largest economy, and it aims to surpass the $5 trillion mark by 2027. By the end of this decade (2030), India's economy is expected to touch USD 10 trillion. and responsible Your company plays an indirect role in the Fast-Moving Consumer Goods (FMCG) industry, which holds immense long-term sustainable business potential in our country. Despite being one of the fastest-growing FMCG markets globally, India's per capita FMCG consumption remains among the lowest, offering significant

Company's operations span two critical FMCG categories—detergents and dishwashing and command over 85% of the South Indian market and turnover.

A solid talent pool, a diverse client base that spans the price-benefit spectrum, unrivalled distribution that covers nearly all households, and an agile supply chain all contribute to our enormous competitive advantage in South. Consumer preferences and purchasing paths are fast changing because of changing demographics such as rising prosperity, a big youthful working population, developing nuclear-family structures, urbanisation, and increased usage and it is predicted to rise steadily of technology. Consumers are becoming more discerning, seeking superior products, making informed decisions, and demanding brands with a purpose and a point of view. As businesses, we recognize the shifting customer needs and believe that those who contribute positively to people and the environment will thrive in the future. In the LAB market, there is a notable shift from powdered detergents to liquid variants. The preference for liquid detergents arises from their ease of application. These liquid detergents are manufactured using LABSA 96%. LABSA content in liquid detergents is lower than in powders. On average, 5 - 6% of LABSA is used in liquid detergents, compared to 12% in powdered detergents. As liquid detergent volumes continue to rise, the demand for LABSA 96% has also been increasing.

As a Company, we are continually looking ahead, adapting, and changing to stay ahead. Consumers, government agencies, and investors looking for enterprises to invest in are increasingly accepting of the commercial case for sustainability.

In India, there is a concerted effort to protect both people and the environment through various activities. The country is committed to sustainable and inclusive growth, emphasizing responsible business conduct. Our objective is to achieve consistent, competitive, profitable, growth. Notably, urban markets have played a pivotal role in driving the growth of FMCG, benefitingfrom a return to economic normalcy after the disruptions caused by the COVID pandemic in recent years.

During the post-COVID period, our unwavering focus remained on meeting our customers' growing demands while safeguarding our business model. As economic activities gradually resumed, consumers exhibited a preference for essential necessities over discretionary spending, especially in the context of high inflation.

Growing demand for bio-based surfactants, as well as increased hygiene awareness, are expected to raise demand for detergents and cleansers, boosting the Linear Alkyl Benzene market for surfactant application. Rapid industrialization and urbanisation because of population increase are also predicted to contribute to market expansion. The global market for Linear Alkyl Benzene is profitable, because of key players' expansion, collaboration, and partnership initiatives. Detergent makers have found it simpler to reach out to rural locations with the use of video marketing. Furthermore, customers have the option of selecting from a large choice of items, thus businesses are continually upgrading their products and attempting to increase their market share through inventive advertising strategies. The LAB business has a lot of room to develop because these companies cater to the bottom of the pyramid consumer. However,

India being a desirable market in the Asia pacific region considering its population and consumption, it is being pursued by global LAB companies, resulting in higher imports to India. The addition of capacities in the Middle East poses a significant threat to India's LAB industry, as a large portion of output is projected to migrate into the country.

Pricing and margins may continue to be influenced by this. This is a challenging macroeconomic climate typified by geopolitical uncertainty, high commodity prices, and lacklustre market growth. We live in a complicated and volatile world. Our plan of action is continually evolving to respond to the trends and forces driving our industry and affecting our stakeholders. The operational environment remained tough this year. Food, energy, and commodity prices remains high due to due to geopolitical tensions in Middle East & on account of continuing Russia-Ukraine conflict Europe leading to high supply chain costs. Global central banks' aggressive monetary tightening efforts put further strain on emerging economies. With prices of various commodities ballooning to decadal highs, widespread inflation caused significant FMCG industry. This had a huge influence on FMCG consumption as consumers attempted to manage their household budgets by modifying volume and prioritising necessities over discretionary categories. The decline had a greater impact in rural areas. Caustic soda is a key industrial intermediate with numerous applications. The market for Caustic Soda is expected to grow further as demand for Alumina, textiles and apparel increases due to urbanization and increased expenditure on personal care products. The import volume of Caustic decreased during the fiscal year under review since prices in all international sectors are high for suppliers. The situation has been changing recently resulting in free flow of imports coupled with an overstock position in India affecting the prices of caustic lye.

Caustic soda demand is expected to exceed worldwide supply throughout the second part of this decade because of production constraints and rising electricity prices. Although the capacity of caustic soda now in use is probably 2025, shortages and price increases will affect the industry in the absence of further capacity. The ECH facility's conversion to a PO manufacturing facility has been advantageous in several ways, including the efficient use of an outdated facility and the creation of a new channel for the beneficial use of chlorine, which has made it possible for the Chlor Alkali Division to operate at close to installed capacity.

OUTLOOK LAB

Soap and detergent demand have risen in recent years because of improved hygiene awareness and a greater emphasis on cleanliness. A shift in lifestyle is transferring a large portion of the population from semi-urban to metropolitan areas, and detergent usage is keeping up, causing demand to climb continuously. Due to heightened awareness of safety and cleanliness during the pandemic, as well as population expansion, demand from the rural market is increasing, which is contributing to the growth of LAB.

Despite fierce competition from overseas vendors,

TPL remains the market leader in the domestic LAB business in South India. Over the previous three decades, TPL has established a reputation as a trusted LAB supplier to MNCs and others.

The increase in low price imports from Middle East

& South East Asia is concerning. In addition, in September 2022, IOCL debottlenecked its Baroda facility, enabling for an additional 20 kt/year of production.

During the pandemic, the use of LABSA skyrocketed abnormally, leading to a significant increase in LAB prices as well. This surge in prices had a direct impact on the costs incurred by FMCG companies. As a result, users began to explore for alternatives, and Sodium Lauryl Ether Sulfate (SLES) was discovered to be less expensive than LAB, and replacement occurred faster due to its ease of use in liquid detergent, which is the most common form in the international market. However, SLES is only expected to partially replace LABSA, considering the drawbacks of SLES in terms of product sufficient until performance in heavy duty detergent applications & compatibility issues with other ingredients in formulation.

Your company is focused on LAB application in other fields, such as crop protection, EOR Polymer, and others, outside from the detergent sector. For selling the new applications, we are developing a new sales channel.

CAUSTIC SODA /CHLOR ALKALI

The viability of the caustic soda industry are subject to the potential for chlorine consumption. India does not currently impose anti-dumping duties on the import of caustic soda. This year, the market's excess inventory caused the prices of caustic to drop, even though the price saw a sharp surge during 22-23 due to west shipments to Europe as a result of high energy costs in Europe and limited supply by China. Demand rose by only 4% last year, compared to an 8% increase in real production. As a result, Caustic is overstocked with unsold inventory, which drives down the selling price. There have been new additions in domestic caustic soda production, like the Grasim plant in Balabhadrapuram, AP in South, and GNalco in West increasing availability of this inorganic chemical. Your Company is also expanding the caustic plant capacity adopting the cost effective bi-polar technology and would commence operation by June'25. Despite a drop in demand in the textile industry, businesses such as alumina, paper, vinyl, and color intermediates are thriving, making caustic sales simpler than ever. However, greater supply than demand, China's return to the export market, and Europe's production normalization will have a significant impact on Caustic Lye prices, with margin erosion projected for Caustic margin-dependent enterprises like us.

PROPYLENE OxIDE

In 2018-19, the company converted its ECH (Epichlorohydrin) facility to produce Propylene Oxide (PO). This conversion provided an additional option to dispose of chlorine, enabling higher caustic production through the new PO plant. Although the conversion was intended to achieve PO's full captive consumption, PO's consumption decreased later in the year as a result of the PU market's weak demand. As a result, your business began selling PO to customers in West India. The sales percentage to other market is approximately 15%.

RISK MANAGEMENT POLICY AND PROCESS

Your Company has a structured methodology to effectively up two-employee level Committee and one Board level Committee to identify the risks, suggest mitigation actions and monitor implementation. The employee-level sub-committee has senior personnel from each function and the Apex Committee is headed by the WTD(Operations) with functional heads as other Members. The subcommittee meets on quarterly basis and discuss on various issues that could be perceived as risks and submit its findings to the Apex Committee. The Apex Committee then reviews these issues, identifies the associated risks, and suggests appropriate mitigation actions. As part of the risk mitigation process, the Board has constituted a Risk Management Committee of Directors,whichcomprisesofMs.SashikalaSrikanth as the Chairperson, Lt. Col. (retd.) CS Shankar, Ms. R Bhuvaneswari (until October 9, 2023), Mr. S Senthil Kumar (from November 2, 2023) and Mr. D Senthi Kumar as its Members. Risk Management Committee of the Board meets periodically to review the risks and the status of implementation of recommended mitigation measures. During the year, the Committee met four times viz. 18^th May 2023, 7^th August 2023, 2^nd November 2023 and 7^th February 2024. As required under Section 177 of the Act, the Audit Committee also reviews the risk management process periodically.

RISKS AnD ConCeRnS

Imports of LAB and caustic soda poses the largest risk to TPL. In addition to the additional middle east capacity, IOCL's capacity expansion has increased the competitiveness in the market. Your Company is looking at more contracts with significant LAB buyers to reduce this risk. As large-scale imports would have an influence on product pricing, addressing the possibility of lower margins would be an important issue to handle in the year to come. To address these concerns, your organization is focusing on boosting production and productivity to control per-unit costs while providing product price flexibility. Furthermore, reliance on spot markets is being gradually reduced to expand and secure direct customer committed volumes. Also antidumping duty case has been initiated and in progress with trade remedies to tackle the low-cost imports. Your company is trying to prevent low cost imports by all means. Towards mitigating operational risks, your Company continues to conduct risk assessments and corresponding mitigations for the hazardous chemicals used in the Plants with the assistance of technical experts. Adequate measures are being taken to address this risk, as instructed.

As was previously reported, caustic soda is operating at 80% capacity utilization and there is spare capacity available for domestic. Even though demand for caustic is increasing steadily, this is causing prices to decline. By 2025, it appears that demand will surpass supply globally and there will be opportunities for accessing export market.

SAFETY, HEALTH & ENVIRONMENT

TPL plants are accredited with International

Organization for Standardization (ISO) certificate for Occupational Health & Safety Management System (ISO 45001-2018) and Environmental Management System (ISO 14001-2015) and Quality Management System (ISO 9001-2015). Your Company continues to utilize treated city sewage water after Tertiary Treatment Reverse

Osmosis (TTRO) for industrial purpose. Regassified Liquefied Natural Fuel (RLNG) is being used as fuel in our process heaters, boilers and power generators. These two major changes have come up as a natural resource conservation measure and efforts towards cleaner environment.

We have already achieved Zero Liquid Discharge for our LAB and HCD plants by using the treated effluent in the PropyleneOxide manufacturing process. Significant level of green belts developed and maintained in and around Manali and at Thiruvallur District since 2021.

Leak Detection and Repair (LDAR) programme is being implemented to control HC/VOC emissions. Frequent monitoring of VOC and other critical levels of emission in the environment is being done. Continuous and Online monitoring is also done with instruments to maintain emission levels far below the acceptable industrial standards.

Gas engine generators were commissioned in the place of oil fired generators to produce power achieve substantial reduction in emission levels. exports or imports and so the above SDS

As part of National Safety Day (4^th March 2024), various competitions were conducted for employees and other contract workers to reiterate our commitment towards safety. Participation by employees and contract workers were encouraging.

World Environment day is also celebrated every year and tree plantation programs are organized for planting saplings towards green initiative to promotecarbonoffset.

Adequate safety standards have been prescribed and are being followed without any compromise. Utmost importance is given to protection of the employees, assets and environment always. All legal and statutory requirements are complied, by planning well in advance without any deviation. Regular training is arranged for workers as a refreshment on safety, environment & health.

SUBSIDIARIES

As at the year end, your Company had one Wholly-Owned Subsidiary (WOS) and one Step down Subsidiary (SDS) which were incorporated outside

India. The financialsof these subsidiaries have been consolidated and the salient features of financial and other information have been furnished in the Consolidated Financial Statement (CFS) attached to this Report.

Certus Investment and Trading Ltd

Certus Investment and Trading Ltd. (CITL), Mauritius was promoted as a Special Purpose Vehicle (SPV) to set up LAB and NP projects in the Middle East and South East Asia. However, due to changed business environment, the projects could not be taken up. At present, the WOS is not carrying on any major activity. Since your Company has enhanced the NP capacity to meet the entire requirement in-house, there may not be scope for taking up NP project.

Limited

In the past TPL was exporting large quantity of LAB and importing various materials, such as NP, Benzene, etc. Therefore, CITL, Mauritius had set up CITL, Singapore as a WOS in order to function as a coordinator for TPL's overseas procurement and marketing activities. At present, there are no significant is not engaged in any activities.

As explained above, the subsidiaries were floated several years ago for specific purposes. Due to change in circumstances and also opportunities opening up in India, it is being examined if other opportunities would be available for the subsidiaries. A decision on the usefulness of these subsidiaries would be taken in due course, after judiciously reviewing the situation.

HUMAN RESOURCES

Your company firmly believes that its strength is directly linked to the capabilities of its employees, encompassing knowledge, experience, and decision-making skills. To enhance these attributes and retain talent, various HR initiatives have been implemented, including recognition, empowerment, personality development, decentralization, and delegation of powers. These initiatives aim to create a supportive environment where employees feel valued and motivated. Additionally, a balanced staffing system has been adopted, integrating competent fresh talent alongside experienced personnel, fostering a dynamic workforce that is well-equipped to meet the challenges of the industry. By focusing on employee development and empowerment, your company is committed to building a culture that promotes growth, innovation, and overall organizational success.

The training needs of employees have been identified at regular intervals through performance appraisal systems and necessary training is being imparted through in-house and external programs. The manpower strength as on 31^st March 2024 was 417.

BOARD OF DIRECTORS AND RELATED DISCLOSURES

As on the date of this Report, the Board comprises of 13 Directors of whom 7 are independent, including 2 Woman Directors.

The Board met five times during the year and the relevant details are furnished as part of Corporate Governance Report.

The following changes took place in the composition of the Board since the date of last Annual General Meeting until the date of this report: Mr. S Krishnan, IAS (DIN: 03439632), Ms. R Bhuvaneswari (DIN: 06360681) and Ms. Jayashree Muralidharan, IAS (DIN:03048710), who served as Non-Executive Non-Independent Directors, Nominees of TIDCO have resigned effective ^th5 October 2023, 9^th October 2023 and 26^th October 2023, respectively and the Board placed on record its appreciation for the services rendered by them during their tenure. Mr. S Senthil Kumar (DIN: 00131558) and

Mr. Sandeep Nanduri, IAS (DIN: 07511216) were appointed as Additional Directors effective 2^nd November 2023 and Mr. V Arun Roy, IAS (DIN: 01726117) was appointed as an Additional

Director and Chairman of the Board, effective 17^th November 2023. They were subsequently appointed as Non-Executive Directors of the Company by the Shareholders through postal ballot, effective 28^th December 2023. Mr. D Senthi Kumar, Whole-time Director (Operations) was re-appointed for a term of 3 years effective 18^th February 2024 by the Board and the same was approved by the shareholders through postal ballot. Mr. G D Sharma and Lt. Col (Retd.) C S Shankar were re-appointed as Independent Directors for a second term of

5 consecutive years effective 1 ^st April 2024 and

Mr. Debendranath Sarangi, IAS (Retd.) was re-appointed as an Independent Director for a second term of 5 consecutive years effective 21^st May 2024.

Ms. Rita Chandrasekar (DIN : 03013549) was appointed as an Additional Director effective

14^th May 2024, in the place of Mr. Dhananjay N Mungale (DIN: 00007563) who ceased to be the Independent Director of the Company consequent to the completion of his second term of office effective close of business hours on 26^th May 2024. Ms. Rita Chandrasekar was subsequently appointed as an Independent Director of the Company by the Shareholders through postal ballot, effective 14^th May 2024 for a term of

5 consecutive years.

Ms. Latha Ramanathan (DIN: 07099052) has been appointed as an Additional Director under

Independent Category effective 6^th August 2024 for a period of five years subject to approval of members at the ensuing AGM.

Mr. KT Vijayagopal, Whole-time Director (Finance) (DIN: 02341353) & CFO retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment and is recommended for approval of the Shareholders.

Ms. Sashikala Srikanth (DIN: 01678374) will be retiring from the office of Independent Director effective close of business hours on 11^th August 2024 consequent to completion of her second term of five years.

Declaration from Independent Directors:

All the Independent Directors (IDs) have submitted necessary declarations under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations. As per the said declarations, they meet the criteria of independence as per Section 149(6) of the Act and the Listing Regulations. In the opinion of the

Board, the IDs fulfil the conditions specified in the

Act and the rules made thereunder for appointment as IDs including the integrity, expertise and experience and confirm that they are independent of the management. All the IDs have confirmed their registration with the Indian Institute of Corporate

Affairs under Rule 6 of the Companies (Appointment and amended and all of them have been exempted from or passed the proficiency test.

As required under Section 178(3) of the Act, your Company has a Board approved policy on remuneration which is available on the website of the Company : https://www.tnpetro.com/investors/ policies/.

KEY MANAGERIAL PERSONNEL

As on 31^st March 2024, Mr. D Senthi Kumar and Mr. KT Vijayagopal, Whole-time Directors and Ms. Sangeetha Sekar, Company Secretary were the Key Managerial Personnel of the Company. During the year, there was no change in the Key Managerial Personnel of the Company.

CoMMITTeeS AnD DIReCToRS

The performance of the Board was evaluated taking the following aspects into account viz., Structure, Meetings, Functions, Risk Evaluation Process adopted, Grievance Redressal Mechanism, Stakeholder Value and Responsibility, Corporate Culture and Ethics and other matters. Board also took into account facilitation to the Independent Directors to function independently and perform their roles as another important parameter for evaluation.

The performance of each of the Committees was evaluated taking into account the composition, mandate, working procedures, effectiveness, independence and contribution to the Board in the decision making process.

The evaluation of the two Executive Directors was done based on their assigned roles and responsibilities. As regards the other Directors, including the Independent Directors, the evaluation was carried out taking into account the following parameters, viz., qualification, experience, competency, adequacy of knowledge about the Company and its sector of operation, understanding about the strategic direction, ethical behavior, participation in the risk evaluation process, resolving conflict of interests, attendance and preparation for the meetings, ability to work as a team player and voluntary sharing of information for the larger benefit of the Company and the like.

In compliance with the requirements of Schedule IV of the Act and the Listing Regulations, a separate meeting of the Independent Directors was held on 29^th March 2024 at which the Directors evaluated the performance of the Non-Independent Directors and also the adequacy of flow of information to the

Board and Committees.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirement of sub-section 3(c) and 5 of Section 134 of the Companies Act, 2013, it is hereby confirmed that a) in the preparation of the annual accounts for the financial year ended 31^st March 2024, the applicable Accounting Standards had been followed along with proper explanation relating to material departures, if any; b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that were 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 profits of the Company for the year; c) the Directors had taken proper and care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors had prepared the accounts for the financial year ended 31^st March, 2024 on a "going concern" basis; 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; and 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.

CORPORATE GOVERNANCE

Your Company has complied with the requirements of Corporate Governance stipulated under Regulation 27 of the Listing Regulations. A Report on Corporate Governance forms part of this Report and a Certificate regarding compliance with the requirements of Corporate Governance is given in Annexure I of this report.

AUDITORS

M/s. RGN Price & Co., Chartered Accountants, Chennai having Firm Registration No. 002785S was appointed as the Statutory Auditors of the Company. As per the extant provisions of the Act, they will hold office for a period of five years till conclusion of 42^nd AGM. The report of Auditors on the financial statements is attached and forms of this report and does not contain any qualification, reservation or adverse remarks.

SECRETARIAL AUDIT REPORT

As required under Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report issued by Ms. B Chandra (CP No.7859), Company Secretary in Practice, Chennai is given in Annexure II to this report. The Secretarial Audit Report is attached and forms part of this report. The report carries a remarks about the company's views on transfer of shares to IEPF authority under Section 124 of the Act. The shares are to be transferred to IEPF authority, if the dividend remaining unpaid/unclaimed in terms of Section 124(6) for a consecutive period of 7 years or more. For which, there should be a declaration of dividend, in the first instance and also there should be 7 such instances of non-payment/ non-claiming of dividend by the respective shareholder. In case of your Company, there has been no declaration / payment of dividend for consecutive period of

7 years and hence it was viewed that the requirement under Section 124(6) of the Act was not applicable to your Company. The legal opinion has however pointed out that the Circulars issued by

Ministry of Corporate Affairs (Ministry) have created ambiguity in the matter. Though the Circulars have to be read in a manner that sub-serves the statutory provision and cannot override or dilute the same, your Company was advised to seek clarification from Ministry and take further action based on its Directions. Accordingly, your Company sought clarification from the Ministry in this regard, but there was no reply received from the Ministry till the date of this report.

Your Company has complied with the requirements of all the applicable Secretarial Standards.

MAINTENANCE OF COST RECORDS & COST AUDIT

Your Company is obligated to maintain cost records as specified by the Central Government under

Section 148(1) of the Act and the same has been duly complied with. Your Company is also subject to Cost Audit of the said records. For the year ended 31^st March 2024, the Cost Audit was conducted by M/s. M Krishnaswamy and Associates, Cost Accountants, Chennai.

Based on the recommendations of Audit Committee, M/s. B Y & Associates, Cost Accountants, Chennai were appointed by the Board as the Cost Auditors of the Company for conducting the audit of cost records for the financial year 2024-25 on a remuneration of 1.75 lakh, plus applicable taxes and reimbursement of actual out-of-pocket expenses incurred by them in this connection. As required under Section 148 of the Act, read with the relevant Rules, ratification of the remuneration to the Cost Auditor for the year 2024-25 will be considered by the Members at the ensuing AGM of the Company.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has established adequate internal financial control systems that undergo periodic reviews. These controls are supported by an ERP system, internal audits, and management reviews, all guided by documented policies and procedures.

To ensure the system operates effectively, the

Internal Auditors conduct regular reviews, and their findings are discussed with the Audit Committee and the Auditors. Additionally, the Company's

Auditors have provided certificates regarding these controls, which are included with their reports.

CONSERVATION OF ENERGY AND OTHER DISCLOSURES

As required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, information on conservation of energy, technology absorption, foreign exchange earnings and outgo, to the extent applicable are given in Annexure - III and form part of this Report.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

During the year under review, debt-equity ratios (in times) (77)%, Debt service coverage (in times)

(38)%, Return on equity (in %) (55)%, Net profit (in%)

(38)%, Return on capital employed (in%) (47)% ratios significantly altered as earnings compared to the previous financial year substantially reduced on account of increased raw material costs and reduced margins on account of cheaper imports impacted spot price and Contract adders. The accounting ratios are given under Note: 42 of the Standalone Financial Statements.

I n VeSTMenTS

Information on loans, guarantees and investments covered under Section 186 of the Companies Act, 2013, forms part of the Notes to Financial Statements.

RELATED PARTY TRANSACTIONS

All transactions with related parties entered into by the Company during the year were on arms' length basis and were approved by the Audit Committee at the beginning of the financial year. There were no contracts or arrangements entered into with the related parties covered under section 188(1) of the Act that is required to be disclosed in Form AOC-2. The policy on materiality of transactions with related party as approved by the Board is available in the website of the Company : https://www.tnpetro.com/ investors/policies/. As required under Regulation 23(2) of the Listing Regulations, prior approval of the Members was obtained at the 38^th AGM held on September 26, 2023, for transactions with Manali Petrochemicals

Limited (MPL) upto 425 Crore plus taxes for the period 1^st October 2023 to 30^th September 2024, and approval of Members for the proposed transactions with MPL during the period 1^st October 2024 to 30^th September 2025 is being sought at the 39^th AGM.

AUDIT COMMITTEE

The Composition of the Committee and particulars of its meetings are disclosed under the Corporate Governance Report annexed to this Report. During the year, the Board had accepted all the recommendations made by the Committee.

VIGIL MECHANISM

As required under Section 177 of the Act and Regulation 22 of the SEBI (Listing Obligations

& Disclosure Requirements) Regulations 2015, your Company has established a vigil mechanism for its directors and employees to report genuine concerns through the Whistle Blower Policy of the Company as published in the website of the Company. As prescribed under the Act and the Listing Regulations, provision has been made for direct access to the Chairperson of the Audit Committee in appropriate / exceptional cases.

ANNUAL RETURN

Pursuant to Section 92(3) of the Act, the Annual Return in Form MGT-7 is available in the website of the Company: https://www.tnpetro.com/investors/ annual-return/.

DISCLOSURE UNDER THE SExUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH)

The Company has complied with the provisions relating to framing of policy and constitution of Internal Complaints Committee (ICC) under the POSH Act. There were no referrals received by ICC during the year.

PARTICULARS OF EMPLOYEES AND OTHER DISCLOSURES

The disclosures prescribed under Section 197(12) of the Companies Act, 2013, read with Rule 5(1) and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 are given in Annexure -IV to this Report.

It is hereby affirmed that the remuneration to the employees is as per the remuneration policy of the Company.

CSR POLICY AND RELATED DISCLOSURES

The brief outline of CSR policy of your Company and such other details and disclosures as per the prescribed format are furnished in Annexure V to this report.

BUSINESS RESPONSIBILTY AND SUSTAINABILITY REPORT

The report on Business Responsibility and Sustainability in compliance Regulation 34 of the SEBI Listing Regulations is given as Annexure VI of this report. other Disclosures:

- There was no fraud reported by the Auditors of the Company as per Section 143(12) of the Act read with Companies (Audit and Auditors) Rules, 2014;

- There were no significant passed by any of the regulators / courts / tribunals impacting the going concern status and company's operations;

- Your Company has not accepted any deposits from the public during the year.

Acknowledgement

Your Directors are grateful to the Government of India, the Government of Tamilnadu, financial institutions, banks, other lending institutions, promoters, technical collaborators, suppliers, customers, joint venture partners and marketing agents for their assistance, co-operation and support. The Directors thank the shareholders for their continued support.

The Directors also place on record their high appreciation for the contributions by all cadres of employees of the Company

Disclaimer

The Management Discussion and Analysis contained herein is based on the information available to the Company and assumptions based on experience in regard to domestic and global economy, on which the Company's performance is dependent. It may be materially influenced by changes in economy, government policies, environment and the like, on which the Company may not have any control, which could impact the views perceived or expressed herein.