Primo Chemicals Ltd Directors Report

Your Directors are pleased to present their 50^th Annual Report on the business and operations of the Company together with Standalone and Consolidated Audited Financial Statements (Ind AS based) for the Financial Year ended 31^st March, 2025 and the report of the Auditors thereon.

FINANCIAL HIGHLIGHTS

The financial results of the Company for the year ended 31^st March, 2025 are summarized below:

(C In Crores)

Particulars	Standalone		Consolidated
	202425	202324	202425	202324
Revenue from Operation and Other Income	576.45	416.40	576.45	416.40
Finance Costs	23.01	18.21	23.01	18.21
Depreciation	51.11	39.56	51.11	39.56
Total Expenditure excluding Finance Costs and Depreciation, etc.	487.21	390.06	487.21	390.06
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)	89.23	26.34	89.23	26.34
Profit before tax	15.11	(31.43)	15.11	(31.43)
Tax Expenses	12.76	(5.57)	12.76	(5.57)
Profit after tax	2.35	(25.86)	2.35	(25.86)
Share of Profit of Associates			1.21	0.53
Net Profit for the period after Associates	2.35	(25.86)	3.56	(25.33)
Earnings per Share (EPS) of C2/ Basic and Diluted (in C)	0.10	(1.07)	0.15	(1.05)

PERFORMANCE REVIEW & STATE OF COMPANYS AFFAIRS

During the year under review, the performance of the Company had been notably good particularly the last quarter of the year driven by higher production and sales realization of Caustic Soda Lye and Flakes. Your Directors believe that the results would have been much encouraging but for marginally increase in power consumption per ton of Caustic Soda Lye, cost of power supplied by the Punjab State Power Corporation Limited and not achieving expected power generation from the Companys 35 MW Captive Power Plant due to some operational issues. The performance would have been further accelerated but for running of Stable Bleaching Powder and Aluminum Chloride plants at lesser capacity due to sluggish demand in the market. Despite these challenges, the Company remained resilient and continued to focus on operational efficiencies and market responsiveness.

The Company has recorded an EBITDA of C89.23 Crores during the Financial Year ended 31^st March, 2025 as compared to C26.34 Crores in the previous financial year denoting an increase of 238.76%. The Capacity Utilization at 84% with production of 1,38,068 MT of Caustic Soda Lye (CSL) during the year under review was higher against 1,18,899 MT denoting 77% Capacity Utilization in the preceding year. Consequently, Net Sales Turnover has increase by 34.44% to C533.58 Crores during the financial year ended 31^st March, 2025 as against Net Sales Turnover of C396.87 Crores during the previous financial year. The combined average sales realization (net of GST) has increased from C33,959/ per ECU in the Financial Year ended 31^st March, 2024 to C38,423/ for the

financial year ended 31^st March, 2025. All these factors led the Companys Net Profit before Tax to the level of C15.12 Crores for the financial year ended 31^st March, 2025 as against Net Loss before Tax of C31.43 Crores during the previous financial year.

ASSOCIATE COMPANY

As on 31^st March, 2025, the Company has only one Associate Company namely Flow Tech Chemicals Private Limited (FTCPL), a Promoter Group Company. The total Revenue of FTCPL was C275.44 Crores with Profit before tax of C3.56 Crores as compared to the Revenue of C228.78 Crores with Net Profit before tax of C1.47 Crores in the previous year. There are no Subsidiary or Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the Statement containing salient features of the financial statements of the Associate Company in Form AOC1 is given in Annexure I, forming part of this Report.

CHANGE IN CAPITAL STRUCTURE

During the period under review, the Company did not undertake any issuance or allotment of shares. As a result, there has been no change in the paidup share capital of the company.

PERFORMANCE AT THE CONSOLIDATED LEVEL

The Companys Associate Company Flow Tech Chemicals Private Limited (FTCPL) which is primarily engaged in the manufacturing of Chlorinated Paraffin (CP) a widely used Plasticizer and Hydrochloric Acid. FTCPL is one of the major consumer of Chlorine, resulting substantial dependence of our Company on its Associate company for the disposal of Chlorine and sustainable operations.

At Consolidated Level, Profit after Tax of the Company was C3.56 Crores during the Financial Year 202425 as against Loss after tax of C25.33 Crores in the previous year.

Due to prevailing cash flow scenario, the Directors regret their inability to recommend any dividend for the financial year ended 31^st March, 2025 for payment to the equity shareholders of the Company.

DIVIDEND DISTRIBUTION POLICY

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company

has formulated and adopted the Dividend Distribution Policy, which is available on the website of the Company at https://www.primochemicals.in/ page/investors.

FINANCE

During the year, your Company has availed a Term Loan from HDFC Bank to meet the fund requirements related to renovation /construction work of the Companys Corporate and Registered Office Building. The details of the said finance, forms part of Notes of the Financial Statements.

DEPOSITS

During the year under review, the Company has not accepted any deposit from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY

There had been no material changes and commitments during the period from end of Financial Year under review till the date of this Report which may be affecting the financial position of the Company.

CURRENT OPERATIONS & OUTLOOK

The performance of the Company showed improvement, largely attributable to favorable market conditions and increased demand of its products. Your Company has done well in the first quarter ended 30^th June, 2025 of the financial year 202526, reflecting a positive start of the year. The average capacity utilization of Caustic Soda Plant during the said period was 83% as compared to 81% in the corresponding period of the preceding financial year. The combined average sales realization in this period increased to C41121 per ECU an increase of C5044 per ECU over the combined sales average realization of C36077 per ECU during the corresponding period in the financial year 202425. The Net Profit (before tax) has been C7.09 Crores on a Sales Turnover of C141.94 Crores against a Net Profit (before tax) of C3.04 Crores on a Sales Turnover of C121.93 Crores in the corresponding period of the preceding financial year.

The Company has secured longterm coal linkages with an Annual Contracted Quantity of 1,25,000 MT for a period of 10 years or the life of the mine, whichever is earlier, by

entering into Fuel Supply Agreements dated 1^st July, 2024 with Northern Coalfields limited, a subsidiary of Coal India Limited, Government of India Undertaking. This arrangement will ensure a sustainable and reliable supply of coal to the Companys Captive Power Plant. The Company is also actively addressing operational issues at the Captive Power Plant to enhance efficiency and ensure optimal performance.

Business Outlook forms a part of Management Discussion and Analysis section.

CREDIT RATING

The details of Credit Rating are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Pursuant to Section 186 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, disclosures relating to loans, guarantees and investments as on 31^st March, 2025 are given in the Notes to the Financial Statements.

ENVIRONMENT AND ENERGY CONSERVATION

As a responsible chemical manufacturer, the Company consistently strives to operate in an environmentally sustainable manner, with a strong emphasis on safety, compliance, and good housekeeping practices.

The Company accords high priority to maintaining clean air and a healthy living environment for communities in and around its manufacturing facility. The Company has in place adequate pollution control equipment and all the equipments are in operation. During the financial year 202425, a comprehensive Safety Audit of the plant was conducted by the National Safety Council. The Company is actively implementing the recommendations arising from the audit to further strengthen its safety systems and practices.

The Company remains committed to enhancing energy efficiency across its operations. Regular energy audits are conducted to identify opportunities for energy conservation and process optimization. During the financial year 202425, an Energy Audit was carried out by NITCON Limited. The recommendations provided are currently under various stages of implementation to improve overall energy performance.

The information relating to the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions

of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in AnnexureII forming a part of this report.

LISTING

The Equity Shares of the Company continue to be listed on BSE Limited. In response to the Companys application for direct listing on the National Stock Exchange of India Limited (NSE), NSE, vide its letter dated 17^th April, 2025, granted listing and trading approval for the Companys Equity Shares on its Main Board with effect from 22^nd April, 2025. Accordingly, the Equity Shares of the Company are now listed and actively traded on both BSE and NSE.

The Annual listing fees for the year 202526 have been duly paid to both BSE Limited and National Stock Exchange of India Limited.

CORPORATE SOCIAL RESPONSIBILITY

During the year under review, the Company didnt fall within the ambit of Section 135(1) of the Companies Act, 2013. However, in line with its commitment to social responsibility and in accordance with its CSR Policy, the Company voluntarily spent C34.41 lacs on routine CSR activities. The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 has been attached as Annexure III.

The particulars of the Corporate Social Responsibility Committee constituted by the Company pursuant to the provisions of Section 135 of the Companies Act, 2013 and the rules made thereunder are included in the Corporate Governance Report annexed and forming part of this Report.

HUMAN RESOURCES

At Primo Chemicals Limited, it has been our continuous endeavor to foster safe, healthy, and environmentally friendly work practices, supported by strong leadership and management commitment, to ensure sustainable business growth.

The Company continued to focus on the development and upgradation of its human resources through regular training and skill enhancement programs. Industrial relations remained cordial throughout the financial year under review, contributing to a stable and productive work environment.

The Particulars of Employees and Managerial Remuneration under Section 197(12) of the Companies Act, 2013 read

with Rule5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure IV forming a part of this Report.

As per the requirement of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company which will be available for inspection at the Registered Office of the Company during working hours. Members interested in obtaining the said information will be furnished the same upon receipt of the request.

POLICY ON PREVENTION OF SEXUAL HARASSMENTAT THE WORKPLACE

The Company has zero tolerance for Sexual Harassment at Workplace and has in place a "Policy on Sexual Harassment at Workplace" pursuant to Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder. The Policy aims to provide protection to employees at the Workplace and prevent and redress complaints of sexual harassment. The Policy has been framed with the objective of providing a safe working environment, where employees feel secure. This policy is being enforced in a positive manner.

Internal Complaints Committee has been setup to redress complaints regarding sexual harassment. During the calendar year ending 31^st December, 2024, the details of the complaints under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 are detailed as under:

1. No. of Complaints of sexual harassment received during the period: Nil

2. No. of Complaints disposed during the period: Nil

3. No. of cases pending for more than ninety days: Nil

MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT, BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

(i) Management Discussion and Analysis

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the financial year 202425 is annexed as Annexure V forming part of this report.

(ii) Corporate Governance Report

The Company has complied with the Corporate

Governance Code as stipulated under the Listing Regulations. The Corporate Governance Report for the financial year 202425 and Auditors Certificate regarding compliance of conditions of Corporate Governance are also annexed as Annexure VI forming part of this report.

(iii) Business Responsibility & Sustainability Report

The Business Responsibility and Sustainability Report (BRSR) for the year ended 31^st March, 2025 as stipulated under Regulation 34(2)(f) of SEBI Listing Regulations is annexed as Annexure VII which forms part of this Annual Report.

COMPLIANCE WITH SECRETARIAL STANDARDS

During the year under review, the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India, particularly those relating to the conduct of Board Meetings and General Meetings.

DIRECTORS & KEY MANAGERIAL PERSONNEL

As on 31^st March, 2025, the Board of Directors of the Company comprised 8 (Eight) Directors, including 2 (Two) Executive Directors, 2 (Two) NonExecutive NonIndependent Directors, and 4 (Four) NonExecutive Independent Directors, one of whom is a Woman Independent Director.

Shri Tilak Raj Bajalia (DIN: 02291892), Shri Ashok Goyal (DIN: 08930828) and Shri Kuldip Singh Suhag (DIN: 08925842) will complete their first term of 5 (Five) years as Independent Directors of the Company on 30^th November, 2025. Based on the recommendation of the Nomination & Remuneration Committee and the Board of Directors, the proposal for the reappointment of Shri Tilak Raj Bajalia, Shri Ashok Goyal and Shri Kuldip Singh Suhag as Independent Directors of the Company for a second term of 5 (Five) consecutive years commencing from 1^st December, 2025 to 30^th November, 2030 (both days inclusive), is being placed before the shareholders for approval at the ensuing 50^th Annual General Meeting. Accordingly, resolutions seeking Members approval for their reappointment forms part of the Notice convening the 50^th AGM.

Declaration of Independent Directors

As on 31^st March, 2025, the Company has four Independent Directors on its Board including a woman Independent Director. All the Independent Directors have met the requirements specified under Section 149 (6) of the Act, 2013

regarding holding the position of Independent Director and the necessary Declaration from each Independent Director under Section 149(7) of the Act has been received.

In the opinion of the Board, there has been no change in the circumstances which may affect their status as Independent Directors of the Company and the Board is satisfied of the integrity, expertise, and experience (including proficiency in terms of Section 150(1) of the Act and applicable rules thereunder) of all Independent Directors reappointed / proposed to be reappointed and already on the Board. In terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company are registered on the Independent Director Databank maintained by the Indian Institute of Corporate Affairs (IICA).

Meeting of Board of Directors

Five meetings of the Board were held during the year under review. For details, please refer to the Corporate Governance Report, which is a part of this Report.

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance, its Committees and all the Directors individually. The performance of the Independent Directors was evaluated by the entire Board except the person being evaluated. The exercise of performance evaluation was carried out electronically through a secure application.

The evaluation of NonIndependent Directors, Chairman and the Board as a whole was done at a separate meeting by the Independent Directors.

The Nomination and Remuneration Committee also reviewed the performance of all Directors of the Company. The same was discussed in the Board Meeting that followed the meeting of the Independent Directors and the Nomination and Remuneration Committee. The criteria for evaluation of the performance of the Directors (including Independent Directors) is placed on the Companys website at https://www.primochemicals.in/ page/investors.

Retirement by Rotation

In accordance with the provisions of the Articles of Association

of the Company, read with Section 152 of the Companies Act, 2013, Shri Jagbir Singh Ahlawat, Director of the company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for reappointment.

Necessary Resolutions for the reappointment of aforesaid Director, wherever applicable, have been incorporated in the Notice convening the ensuing 50^th Annual General Meeting. As required under the Listing Regulations and Secretarial Standards on General Meetings issued by ICSI, the relevant details of Director retiring by rotation at the ensuing AGM is furnished as Annexure A to the Notice of AGM.

Committees of the Board

Pursuant to the requirements under the Companies Act, 2013 and the Listing Regulations, the Board has constituted the following committees:

a. Audit Committee

b. Stakeholders Relationship cum Share Transfer Committee

c. Nomination & Remuneration Committee

d. Corporate Social Responsibility (CSR) Committee

e. Risk Management Committee

The details of the Committees viz. Composition, number of meetings held and attendance of the Committee Members in the meetings are given in the Corporate Governance Report forming part of this Annual Report.

The Company has formulated a Risk Management Policy as per the requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which can be accessed on the Companys website at https://www.primochemicals.in/page/ investors. The said Policy includes identification, assessment, response and monitoring system for mitigation of various risks.

Key Managerial Personnel (KMP)

The Board of Directors of the Company has appointed CA Sunil Parsad in place of Shri Arun Kumar Kaushal as Chief Financial Officer of the Company with effect from 1^st July, 2024 upon recommendation of Nomination and Remuneration Committee of the Company.

As on 31^st March, 2025, the Company has the following Key Managerial Personnel as per Section 2(51) of the Companies Act, 2013:

1. Shri Naveen Chopra, Managing Director

2. Shri Jatin Dahiya, Executive Director

3. CA Sunil Parsad, Chief Financial Officer

4. CS Sugandha Kukreja, Company Secretary and Chief HR Officer.

INTERNAL FINANCIAL CONTROL WITH RESPECT TO FINANCIAL STATEMENTS

The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the financial year 202425.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors confirm that:

(i) In the preparation of the annual accounts for the financial year ended 31^st March, 2025, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) The Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the period under review;

(iii) The Directors have taken proper and sufficient care for the maintenance of 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) The Directors have prepared the annual accounts for the financial year ended 31^st March, 2025 on a going concern basis;

(v) The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

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

RELATED PARTY TRANSACTIONS

Consequent upon acquisition of the Company by new management in October 2020, the Companies with which the Company had already been dealing with and had already entered into Agreements, have become related parties. All the contracts /arrangements/transactions with Related Parties during the year were in the ordinary course of business and/ or the same were at arms length. Also, there were no material related party contracts entered into by the Company during the year under review. Accordingly, the disclosure of related party transactions as required is not applicable under Section 134(3) (h) of the Act in Form AOC2 for the financial year 202425.

During the year, all related party transactions were placed before the Audit Committee and Board of Directors for approval.

Prior Omnibus approval of the Audit Committee has been obtained for related party transactions, which are repetitive in nature. The transactions entered into pursuant to Omnibus approval so granted are reviewed on a quarterly basis by the Audit Committee.

In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of related party transactions on consolidated basis halfyearly as per the specified format to the stock exchange(s).

In line with the requirements of the Companies Act, 2013 and the SEBI Regulations, the Company has formulated a Policy on Related Party Transactions which can be accessed on the Companys website at https://www.primochemicals.in/page/ investors.

Detailed Disclosure on Related Party transactions have been provided under the Notes on Financial Statements.

VIGIL MECHANISM AND WHISTLE BLOWER POLICY

The Board of Directors of the Company has in place the Policy on Vigil Mechanism and Whistle Blower. The same has also been placed on the Companys Website at https://www. primochemicals.in/page/investors.

AUDITORS & REPORTS THEREON

Statutory Auditors

M/s. S. Tandon & Associates LLP, Chartered Accountants (Regn. No.006388N), Statutory Auditors of the company, had been

appointed by the shareholders in the Annual General Meeting held on 15^th September, 2022 for a period of five years i.e. from the conclusion of 47^th Annual General Meeting until the conclusion of the Annual General Meeting to be held in the year 2027, at such remuneration as may be fixed by the Board of Directors.

The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Cost Auditors

The Board of Directors of the Company at its Meeting held on 30^th May, 2025 has appointed M/s. Kabra & Associates, Cost Accountant in practice, as Cost Auditors for the Financial Year 202526 as per the provisions of the Companies Act, 2013 to conduct the audit of Cost Records maintained by the Company at a remuneration of C80,000/ plus applicable GST besides the reimbursement of out of Pocket Expenses.

As per the provisions of the Companies Act, 2013, your Directors propose the Resolution in the Notice for the ensuing Annual General Meeting, in respect of remuneration payable to the Cost Auditors for the Financial Year 202526 for your ratification and approval.

The Company maintains necessary cost records as specified by the Central Government under subsection(1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

Secretarial Auditor

M/s. A. Arora & Co., Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial Year 202425. Their Secretarial Audit Report of the Company for the financial year ended 31^st March, 2025 is annexed as AnnexureVIII to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practising Company Secretaries have been reappointed as Secretarial Auditors of the Company for the financial year 202526.

In accordance with the provisions of Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors, based on the recommendation of the Audit Committee, has approved the appointment of M/s. A. Arora & Co., Practising Company Secretaries, as the Secretarial

Auditors of the Company. The proposed appointment is for a term of five (5) consecutive financial years commencing from FY 202526 and ending with FY 202930, subject to the approval of the Members at the ensuing 50^th Annual General Meeting (AGM). Accordingly, a resolution seeking Members approval for the said appointment forms part of the Notice convening the 50^th AGM.

Annual Secretarial Compliance Report

The Company has obtained an Annual Secretarial Compliance Report for the financial year ended 31^st March, 2025 from M/s. A. Arora & Co., Practising Company Secretaries in compliance with the Regulation 24A of the SEBI Listing Regulations. The said Report for the financial year ended 31^st March, 2025 has been submitted to the Stock Exchanges within the prescribed statutory timelines.

ANNUAL RETURN

Pursuant to Section 92(1) of the Companies Act, 2013 read with Rule 11 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is placed on the Companys Website and can be accessed at web link: https://www.primochemicals.in.com/page/investors.

OTHER DISCLOSURES

i) There is no change in the nature of business of the Company.

ii) There is no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year.

iii) There was no instances of one time settlement with Banks or Financial Institutions during the year.

iv) During the year under review, neither the statutory auditors nor the secretarial auditor has reported to the audit committee, under Section 143 (12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Boards report.

v) During the year, no unclaimed dividend was required to be transferred in the Investor Education & Protection Fund of IEPF Authority.

vi) There are no significant and material orders passed by the Regulators or Courts or tribunals impacting the going concern status and the Companys operations in future.

vii) The Company has complied with the provisions related to the Maternity Benefit Act, 1961.

ACKNOWLEDGEMENTS

The Board of Directors places on record its sincere appreciation for the continued support and confidence extended by the Companys investors, participating banks, Central and State Government authorities, customers, and suppliers.

The Board also expresses its deep appreciation to all employees for their dedicated service, hard work, and commitment, which have enabled the Company to overcome challenges and achieve its objectives during the year.

For and on behalf of the Board Sd/

(SUKHBIR SINGH DAHIYA)

Place: Chandigarh Chairman

Date:14^th August, 2025 DIN: 00169921