Southern Petrochemicals Industries Corporation Ltd Management Discussions

Your Directors present their 55th Annual Report together with the Audited Financial Statements of the Company for the year ended 31st March 2026.

FINANCIAL SUMMARY

Particulars	31.03.2026	31.03.2025
Revenue from Operations	2955.97	3086.33
Add: Other Income	59.13	13.92
Total Income	3015.10	3100.25
Profit before interest, depreciation and tax	358.65	295.33
Less: Depreciation & amortization expenses	43.68	37.63
Profit Before Exceptional Items	286.55	202.66
Less: Exceptional Items	--	--
Profit Before tax	286.55	202.66
Less: Tax expenses	100.39	71.82
Profit After Tax	186.16	130.84
Add: Net Comprehensive Income / (Loss)	(3.51)	(2.64)
Total Comprehensive Income	182.65	128.20

Share Capital

As of 31st March 2026, your Companys paid-up equity share capital stood at Rs.2,03,64,03,360/-. There were no alterations in share capital during the year.

Transfer to Reserves

In accordance with Sections 123 and 134(3)(j) of the Companies Act, 2013, no transfers were made to the General Reserves for the year under review.

Dividend

The Board, in alignment with the Dividend Distribution Policy and Financial Results, recommended a dividend of Rs. 2 per equity share (20% of face value of Rs. 10) aggregating to Rs. 40.73 Crore for FY 2025-26 to the Members for their approval at the ensuing 55th Annual General Meeting (AGM) to be held on Monday, the 28th September 2026 and subject to applicable tax deductions. Payment would be made to eligible shareholders as of the Record Date, fixed by the Board of Directors of your Company.

Operational Overview

Urea Production

During FY 2025-26, your Company achieved a total production of 721,169 MT of neem-coated urea, surpassing the Reassessed Production Capacity (RAC) of 620,400 MT by 100,769 MT. The Plant operations remained largely stable and efficient throughout the year under review.

The Ammonia Plant recorded an output of 408,358 MT during the year, underscoring its vital contribution to the Companys urea manufacturing operations.

About 30% of the total power requirement is met through Solar power generated from floating solar power plant in the water storage reservoirs. In addition, the Company entered into Agreement with M/s Green Infra Renewable Energy Generation Private Limited, M/s Green Infra Renewable Energy Projects Limited and M/s Green Infra Wind Energy Generation Limited (collectively referred to as "SEMBCORP" group) by investing in their equity shares to qualify as captive power user under the Electricity Rules, 2005.

During the year under review, SEMBCORP Group started supplying the renewable power under our Group Captive Power scheme and with that, renewable power share has got increased to 39%.

Your Company is executing Urea modernisation project to improve the reliability and increase through put. The project also has an additional facility for wastewater treatment to recover the valuable raw materials like Ammonia and Carbondioxide along with recycling of water. All engineering activities pertaining to the project have been completed, and all major equipments have been received and installed. Piping and other activities are in advanced stage of completion and pre commissioning activities have commenced. Subject to completion of requisite activities, the project is expected to be commissioned during FY 2026-27 subject to obtaining necessary permission/clearances from Statutory Authorities.

Gas Supply Infrastructure

The infrastructure for both the Ramnad-Tuticorin Domestic Gas Pipeline and the Ennore-Tuticorin Regasified Liquefied Natural Gas (RLNG) Pipeline remains operational and has functioned safely and reliably throughout the year. Accordingly, the procurement of natural gas continued without any significant disruption through the following sources:

Domestic Gas: Procured from the Ramnad Oil & Natural Gas Corporation fields
Imported Gas: Sourced from the IOCL LNG Terminal located in Ennore, Chennai

Public Deposits

In compliance with Chapter V of the Companies Act, 2013, the Company did not accept any public deposits during FY 2025-26, and therefore no disclosures are required under this provision.

Debentures

In September 2023, your Company raised Rs. 50 Crore through a private placement of 5,000 Unlisted, Rated,

Spic

Senior, Secured, Redeemable, Non-convertible Debentures of Rs. 1,00,000 each, issued to Vivriti Emerging Corporate Bond Fund and Vivriti Alpha Debt Fund - Enhanced. In line with the agreed terms, the Company has complied with the financial obligation and has redeemed/repaid the entire debentures during the year. Necessary filings evidencing redemption of debentures have been filed with the statutory authorities.

Consolidated Financial Statements

Your Companys Consolidated Financial Statements for the Financial Year ended 31st March, 2026 have been prepared in compliance with Indian Accounting Standards (Ind AS) and forms part of the Annual Report.

Financial Statements of Associates and Joint Ventures

As per Section 129(3) of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement presenting key financial highlights of the Companys Associate and Joint Venture entities, in Form AOC-1, is appended to the Financial Statements. Your Company does not have any Subsidiary entities.

Tamilnadu Petroproducts Limited (TPL)

TPLs revenue from operations for the FY 2025-26 stood at Rs. 1466.14 Crore as compared to Rs. 1826.78 Crore in the previous year, representing a decline of 19.74%. The decrease in revenue was primarily attributable to reduced production due to planned shutdown for completion of expansion activities of Linear Alkyl Benzene and Caustic Soda plants, during Q4 of FY 2025-26.

Despite the decline in revenue, TPL demonstrated operational resilience and maintained a strong focus on cost optimization, efficiency improvements, product mix enhancement, and prudent financial management. As a result, the Company reported a net profit of Rs. 88.76 Crore for the year under review, compared to Rs. 51.43 Crore in the previous year, registering a significant growth of 72.58%.

The Board of TPL has recommended a dividend of Rs. 1.50 per equity share of Rs. 10 each fully paid-up for the FY 2025-26, subject to the approval of Members at the ensuing AGM in September 2026.

Tuticorin Alkali Chemicals and Fertilizers Limited (TFL)

Tuticorin Alkali Chemicals and Fertilizers Limited (TFL) recorded a strong performance during FY 2025-26, achieving revenue of Rs. 343 Crore, Profit Before Tax of Rs. 53 Crore and EBITDA of Rs. 68 Crore. Production levels reached new milestones, with Soda Ash production of 70,450 MT, the highest achieved since Financial Year 2011-12, along with 60,740 MT of Ammonium Chloride (ACL) and 16,338 MT of captive salt production.

The year also marked significant progress in sustainability initiatives. TFL achieved 100% biomass utilization and increased the share of green power consumption from 28% to 58%. These efforts, coupled with effective biogenic CO2 capture and reduced Scope 1 and Scope 2 emissions, enabled TFL to achieve near-zero net carbon emissions. TFL continued to strengthen its operational capabilities through the implementation of digital monitoring and safety systems.

In recognition of its commitment to sustainable and environmentally responsible operations, TFL received the "Best Green Process Award" from Federation of Indian Chambers of Commerce & Industry in January 2026 and was also awarded by Tuticorin Corporation for its environmental initiative towards the eradication of Juliflora. The ISO certification for Quality Management system and Environment Management System have been updated this year and is migrating towards ISO45001.

Greenam Energy Private Limited ("Greenam")

During the FY 2025-26, 22.0 MW AC Floating Solar Power Plant was operated seamlessly by Greenam.

Greenam reported a net profit of Rs. 1.63 Crore and revenues of Rs. 17.89 Crore for the FY 2025-26. EBITDA reached Rs. 15.79 Crore, representing approximately 88.26% of total revenue. Energy output totalled 35.80 million units. Greenam continued to supply renewable power to its captive users and SPIC is one among them.

Changes in Joint Ventures, Associates & Subsidiaries

During FY 2025-26, there were no additions to or removals from the Companys list of Joint Ventures or Associate entities. The Company does not have any Subsidiaries.

Safety, Health and Environment (SHE)

DNV successfully completed the Re-certification Audit of the Companys Management Systems, including QMS (ISO 9001:2015), EMS (ISO 14001:2015), and OHS (Occupational Health & Safety) (ISO 45001:2018).

Your Company remains committed to providing a safe, healthy, and incident-free workplace for all employees and contract workers. The Occupational Health and Safety Management System is certified under ISO 45001:2018 and encompasses hazard identification, risk assessment, operational controls, performance monitoring, legal compliance, worker participation, and continual improvement initiatives. Subsequent to periodical recertification audit the validity of ISO certification has been extended to January 2029.

Hazard Identification and Risk Assessment (HIRA) is conducted for all routine and non-routine activities, supported by Job Safety Analysis (JSA), HAZOP studies, permit-to-work systems, and hierarchy-based risk control measures. Employees and workers are encouraged to report unsafe conditions, near misses, and workplace hazards through established reporting mechanisms and plant safety committees, enabling timely corrective actions.

Your Company provides comprehensive occupational and non-occupational healthcare services through its dedicated 22-bed Occupational Health Centre, staffed by round-the-clock medical professionals and supported by specialist healthcare services, diagnostic facilities, and emergency care infrastructure.

During FY 2025-26, your Company maintained an excellent safety performance record with zero lost-time injuries, zero recordable work-related injuries, and zero fatalities among employees and workers.

To strengthen workplace safety, your Company implemented a structured annual safety plan covering safety inspections, audits, work permit compliance, incident investigations, safety training, equipment certification, condition monitoring of critical assets, fire and safety system maintenance, workplace hazard monitoring, and periodic safety walkarounds. Internal and external audits were conducted regularly to assess compliance and drive continual improvement.

No complaints relating to health, safety, or working conditions were reported during the year. Health and safety practices and working conditions were independently assessed through external safety audits, ISO surveillance audits, and inspections by statutory authorities. All identified observations were addressed through timely corrective and preventive actions in accordance with the requirements of ISO 45001:2018.

Your Companys strong safety culture, proactive risk management practices, and continuous focus on employee well-being contributed to maintaining a safe and healthy work environment throughout the year.

Periodic medical examinations for employees were also reviewed and found to meet requisite standards. Your Company maintained its commitment to environmental stewardship through the planting of approximately 726 tree saplings.

Permission to commence modernization of the Urea plant has been granted by TNPGB till January 2027, targeting a capacity of 912,500 MTPA of neem-coated urea, alongside sustainable technologies such as CO2 capture, utilization and a Zero Liquid Discharge system.

As at the end of the reporting period, your Company had achieved an impressive safety record without any lost-time due to accidents, representing 4.09 million man-hours of safe operation. The Health, Safety & Environment (HSE) policy has been updated to reflect ongoing modernization efforts.

Human Resources and Industrial Relations

Your Company continues its steadfast commitment to fostering a supportive, inclusive, and growth-oriented work environment. During the year, the people agenda has continued to evolve with renewed strategic focus, further strengthening existing HR practices while staying deeply anchored to the values and cultural ethos of the organization. A wide spectrum of training programs, upskilling initiatives, and career development opportunities continues to be deployed to ensure employees are equipped with capabilities aligned to the Companys long-term strategic vision. This people-first philosophy remains central to empowering individuals and driving sustainable organizational success.

Industrial relations during the year under review remained stable and constructive, underpinned by mutual respect, transparency, and open communication between management and employees. Your Company continues to nurture a culture of engagement and inclusivity, reinforcing a positive and cohesive workplace environment across all levels.

As of 31st March 2026, the total number of employees on the rolls of your Company stood at 647. The campus recruitment program remains a key pillar of the Companys talent strategy, enabling the identification and development of high-potential individuals who will contribute to the organizations future leadership pipeline.

In line with its commitment to employee well-being, your Company remains fully committed to upholding its Maternity Policy in strict compliance with applicable laws, including the Maternity Benefit Act, 1961.

Annual Return

In compliance with Section 92 of the Companies Act, 2013, the Annual Return in Form MGT-7 for FY 2024-25 has been uploaded on the Companys website. The Annual Return for FY 2025-26 will be duly filed with the Registrar of Companies within the statutory timeline, following the conclusion of the 55th Annual General Meeting, scheduled on 28th September 2026. Once filed, it will be accessible at: https://www.spic.in/investors/annual-return.

Change in Business Nature

There has been no changes in the nature of the Companys business operations during FY 2025-26.

Directors and Key Managerial Personnel

The Boards composition is in compliance to the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including criteria related to Independent Directors, Woman Director and directorship limits across listed entities.

1. The Board of Directors at their Meeting held on 8th May 2025 had appointed Ms. D Sneha, IAS, representing TIDCO as an Additional Director on the Companys Board subject to approval of Members. Pursuant to Regulation 17(1C)(a) of the SEBI (LODR) Regulations, 2015, the said appointment was taken

2. Effective 14th August, 2025, the Board appointed Thiru. V Dakshinamoorthy, IAS, representing TIDCO as an Additional Director and his appointment was subsequently approved by the shareholders of the Company at the 54th Annual General Meeting held on 23rd September 2025.
3. The Board of Directors at their Meeting held on 13th November 2025 had appointed Ms. Sweta Suman, IAS, representing TIDCO as an Additional Director on the Companys Board subject to approval of Members. Pursuant to Regulation 17(1c)(a) of the SEBI (LODR) Regulations, 2015, the said appointment was approved by the Shareholders through Postal Ballot process on 30th January 2026.
4. Effective 13th February 2026, the Board appointed Mr. Manikkan Sangameswaran as an Additional Director in the capacity of Independent Director for a period of 5 years. Members approval for his appointment was obtained by passing a special resolution through Postal Ballot on 8th May 2026.
5. At its meeting held on 13th February 2026, the Board elevated and appointed Mr. K R Anandan as an Additional Director in the capacity of Whole-Time Director (Finance) in addition to his position as Chief Financial Officer for a period of 3 years w.e.f. 13th February 2026, subject to the approval of Members. Subsequently, the Board of Directors at its Meeting held on 23rd March 2026 re-designated Mr. K R Anandan as Whole-Time Director in addition to his position as Chief Financial Officer. The Members have approved the said appointment through Postal Ballot process on 8th May 2026.
6. The Board of Directors, recorded the untimely demise of Mr. E Balu, Whole-Time Director of the Company on 28th February 2026. The Board places on record its appreciation for the invaluable contribution and services by Mr. E Balu during his association as Whole-Time Director of the Company. Pursuant to the shareholders approval vide resolution dated 8th May 2026, the Company has paid the special incentive pay for FY 2024-25 amounting to Rs. 15 Lakh along with retiral benefits/other benefits payable to Mr. E Balu as per the service rules of the Company, to his legal heirs.
7. At its Meeting held on 22nd May 2026, the Board of Directors appointed Mr. Narasimhan Raghunathan as Chief Financial Officer of the Company w.e.f. 23rd May 2026, relieving Mr. K R Anandan from the position of Chief Financial Officer.
8. Mr. Sandeep Nanduri, IAS, Nominee Director of TIDCO ceased to be a Director of the Company w.e.f. 13th July 2026 pursuant to withdrawal of nomination by TIDCO.
9. Thiru. V Dakshinamoorthy, IAS, Nominee Director of TIDCO ceased to be a Director of the Company w.e.f. 27th July 2026 pursuant to withdrawal of nomination by TIDCO.
10. Tmt. Sweta Suman, IAS, Nominee Director of TIDCO ceased to be a Director of the Company w.e.f. 10th August 2026 pursuant to withdrawal of nomination by TIDCO.
11. Effective 14th August 2026, the Board appointed Thiru. P Sankar, IAS and Thiru. Sanket Balvantrao Waghe, IAS representing TIDCO as Additional Directors on the Board of the Company. The said appointment is subject to the approval of Shareholders at the ensuing 55th Annual General Meeting scheduled to be held on 28th September 2026.

Ms. Devaki Muthiah Chardon, Non-Executive Director of the Company is liable to retire by rotation at the forthcoming Annual General Meeting and being eligible has offered herself for re-appointment.

All current Independent Directors have submitted the requisite disclosures affirming their eligibility under Section 149(6) of the Companies Act, 2013 and in accordance with the applicable SEBI Regulations.

Transfer of Unclaimed Shares to IEPF Authority In line with Section 124(6) of the Companies Act, 2013 and the IEPF Rules, the Company had transferred 1,66,454 equity shares to the Investor Education and Protection Fund (IEPF) covering 1,008 shareholders. As at 31st March 2026, 1,63,654 shares remain unclaimed by 999 shareholders.

Escrow Account A separate suspense escrow demand account has been opened for moving the shares, if any, required to be transferred beyond 120 days from issuing the Letter of Confirmation (LOC) by the Company as stipulated under SEBI Circular dated 30th December, 2022. As of 31st March, 2026, no shares have been transferred to the said account. However, during June 2026, the Company had transferred 400 shares to the suspense escrow demand account of the Company, on account of shares not dematerialised within 120 days from issuance of LOC.

Independent Directors Familiarization Programme Independent Directors are regularly updated through structured familiarization initiatives that cover their roles, responsibilities, business model, market dynamics,

Nomination and Remuneration Policy

Pursuant to Section 178(3) of the Companies Act and the Listing Regulations, the Nomination and Remuneration Policy is detailed in Annexure I of this Report.

Remuneration of Directors, KMP & Employees

A comprehensive statement of remuneration for Directors, Key Managerial Personnel (KMP), and other employees has been enclosed in Annexure II, in accordance with Section 197(12) of the Companies Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Statutory Auditors

M/s. MSKA & Associates LLP, Chartered Accountants, Chennai (Firm Registration No.: 105047W/W101187) were appointed as Statutory Auditors for a five-year term commencing from FY 2022-23, holding office from the 51st to the 56th AGM. Their annual remuneration is Rs. 24 Lakh plus applicable taxes and out-of-pocket expenses, with authority granted to the Board for revisions during the tenure.

The Board of Directors at their Meeting held on 22nd May 2026, approved an increase of 10% in the remuneration payable to the Statutory Auditors for FY 2026-27.

For FY 2025-26, the Auditors Report on the Standalone and Consolidated Financial Statements contains no qualifications, reservations, adverse remarks, or disclosures.

Cost Auditors

M/s. B Y & Associates, Cost Accountants (Firm Registration No. 003498), were appointed to conduct the cost audit of the Company for FY 2025-26. The Company has duly maintained its cost records in compliance with Section 148(1) of the Companies Act, 2013, as prescribed by the Central Government. The Cost Audit Report for the previous fiscal year ended 31st March 2025 was filed within the stipulated timeframe as required under the Act.

In continuation of regulatory compliance, cost accounts and records for FY 2025-26 have also been maintained. Based on the Audit Committees recommendation, the Board at its meeting held on 22nd May 2026 re-appointed M/s. B Y & Associates as Cost Auditors for FY 2026-27, at a remuneration of Rs. 1,75,000/- plus actual out-of-pocket expenses. The payment of remuneration is subject to Members approval/ratification at the forthcoming 55th Annual General Meeting.

Secretarial Auditors

As per Section 204 of the Companies Act, 2013 and Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. B Chandra & Associates, Chennai, were appointed as Secretarial Auditors for a five-year term commencing from FY 2025-26 to FY 2029-30. The remuneration for FY 2025-26 is Rs. 3 Lakhs plus applicable taxes and out-of-pocket expenses incurred by them in connection with the audit, with authority granted to the Board for fixing the remuneration for the remaining tenure of appointment as mutually agreed upon with the Secretarial Auditors.

The Company complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.

The Secretarial Audit Report for FY 2025-26 is annexed as Annexure III and contains no qualifications, reservations, adverse remarks or disclaimers.

Directors Responsibility Statement

In line with Section 134(3) of the Companies Act, 2013, your Directors affirm that to the best of their knowledge and belief, and based on information provided by Management:

a) The annual financial statements for FY ended 31st March 2026 were prepared in accordance with Ind AS, with relevant disclosures on material deviations, if any.
b) Accounting policies were applied consistently and judicious estimates made to reflect a true and fair view of the Companys financial position and performance.
c) Sufficient measures were taken to maintain proper records, safeguard assets, and prevent fraud and irregularities.
d) Financial statements were prepared on a going concern basis.
e) Appropriate internal financial controls were established and found to be adequate and effective.
f) Systems for legal compliance were implemented and operated effectively.

Reporting of Frauds by Auditors

During FY 2025-26, there were no instances of frauds reported by the Statutory Auditors, Cost Auditors and Secretarial Auditors under Section 143(12) of the Companies Act, 2013.

Loans, Guarantees or Investments

No loans or guarantees under Section 186 of the Act were extended by the Company during the year under review.

Pursuant to the Share Subscription cum Shareholders Agreement dated 24th September 2024 entered into by your Company with M/s Green Infra Renewable Energy Generation Private Limited (GIREGPL), M/s Green Infra

Renewable Energy Projects Limited (GIREPL) and M/s Green Infra Wind Energy Generation Limited (GIWEGL) ("SEMBCORP Group"), during the year, your Company made investments and the status as on 31st March 2026 are as follows:

Name of the Company	Total No. of Shares	Amount (in Rs.)	% of holding by SPIC
GIREGPL	29,96,894	2,99,68,940/-	8.48
GIREPL	33,71,506	3,37,15,060/-	8.41
GIWEGL	48,03,200	4,80,32,000/-	4.56

Credit Rating

Credit Rating details are available under the heading "General Shareholders Information" in the Corporate Governance Report forming part of this Annual Report.

Corporate Social Responsibility (CSR)

A CSR Committee has been constituted, and the Company has a CSR Policy aligned with the Companies Act. Although there is no mandatory spending obligation due to profit criteria under Section 198, the Company has voluntarily undertaken initiatives for societal development. These are detailed in Annexure IV. The policy is available at: https://www.spic.in/wp-content/uploads/2021/02/Corporate-Social-Responsibility-Policy.pdf

Related Party Transactions

All Related Party Transactions for FY 2025-26 were undertaken in the ordinary course of business and at arms length. There are no contracts or arrangements requiring disclosure under Sections 188(1) and 134(h) of the Companies Act, 2013 in Form AOC-2, which is attached as Annexure V.

Details of transactions with any persons or entities belonging in the Promoter/Promoter Group holding 10% or more equity stake in the Company are disclosed in Note No. 35 of the Notes to Accounts in accordance with Ind AS.

Material Changes and Commitments

No material changes or commitments impacting the Companys financial position occurred between the close of FY 2025-26 (i.e., 31st March 2026) and the date of this Report.

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

Your Company has instituted a dedicated internal audit team to drive initiatives focused on reducing energy consumption, enhancing operational reliability, and strengthening process safety.

Key accomplishments include:

• Ongoing steam audits with prompt replacement of faulty steam traps
• Deployment of real-time energy monitoring across critical process parameters
• Implementation of preventive maintenance strategies to mitigate risks of major equipment failures
• Regular inspections to detect and rectify leakages and inefficiencies
• Periodic tuning of fired heaters and furnaces to maintain optimal air-fuel ratios
• Gradual rollout of energy-efficient LED lighting systems across operational zones
• Optimizing the usage of electricity on the needed areas

Technology Absorption

Nil

Foreign Exchange Earnings and Expenditure

During FY 2025-26, your Company recorded foreign exchange transactions as detailed below:

(Rs. in lakhs)

Particulars	FY 2025–26	FY 2024–25
Foreign Exchange Earnings	166.39	145.20
Foreign Exchange Expenditure	185.40	432.55

Internal Financial Controls and Risk Management

Your Company has in place, a comprehensive framework of internal financial controls designed to oversee operational workflows, ensure precision in financial reporting and maintain compliance with applicable Regulations. These controls undergo regular evaluations by both Internal and Statutory Auditors, with their findings reviewed by the Audit Committee. Any identified gaps are promptly addressed through structured corrective actions and defined timelines. The Committee also assesses the Internal Auditors reports covering key issues, significant processes and accounting policies.

Risk management remains a core component of the Companys governance structure. Your Company pursuant to the Companies Act, 2013 and SEBI Listing Regulations, has a dedicated Risk Management Committee and a detailed Risk Management Policy has been adopted. This policy facilitates systematic identification of business risks and prescribes appropriate mitigation strategies. The Board reviews the Risk Management Report at periodic intervals to monitor emerging risks and the effectiveness of ongoing mitigation efforts.

Significant Legal Orders

No significant or material orders were passed by any regulatory authority, court or tribunal that could adversely impact the Companys going concern status or its future operations.

Insolvency and Bankruptcy Proceedings

As of 31st March 2026 and through the date of this report, there have been no applications filed or proceedings initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

One-Time Settlement and Loan Valuation Disclosure

No one-time settlements or loan valuations differing in amount were undertaken during the year. Hence, no disclosures are required under this clause.

Corporate Governance

The Corporate Governance Report for FY 2025-26, along with a Compliance Certificate issued by M/s. B Chandra & Associates, Practicing Company Secretaries, certifying adherence to SEBIs corporate governance norms, forms an integral part of this Annual Report.

Business Responsibility & Sustainability Report

In accordance with Regulation 34 of the SEBI (LODR) Regulations, 2015, the Business Responsibility & Sustainability Report for the Financial year ended 31st March 2026 forms an integral part of this Annual Report.

Board, Committees & Director Performance Evaluation

The Company follows a structured mechanism for evaluating the effectiveness of its Board, Committees, individual Directors, and the Chairperson.

Independent Directors Meeting (30th January 2026, 31st March 2026): Evaluation of Non-Independent Directors, the Board as a whole and the Chairperson, including an assessment of the quality and timeliness of information shared with the Board.

Board Meeting (22nd May 2026): Comprehensive review of Independent Directors and performance of the entire Board and its Committees. Evaluation criteria included active involvement, strategic input, understanding of business dynamics, and effectiveness in Committee roles.

Meetings of the Board, Audit Committee and other Committees

Details regarding the number of meetings held, along with composition of the Board, Audit Committee and other Committees, are provided within the Corporate Governance Report.

Policy Framework

Material Subsidiary Policy

The Policy on Material Subsidiary, approved by the Board in accordance with SEBI Listing Regulations, is accessible at: https://www.spic.in/wp-content/uploads/2021/02/Determining-Material-Subsidiary-Policy.pdf

Related Party Transactions Policy

In compliance with the Companies Act, 2013 and SEBI Listing Regulations, your Company has adopted a Policy on Related Party Transactions. This policy ensures transparency and governance in dealings with related parties. The complete document is accessible at: https://www.spic.in/wp-content/uploads/2025/04/Policy-on-Related-Party-Transactions-3.pdf.

Insider Trading Policy

Your Company has implemented a Code of Conduct to prevent Insider Trading, governing the trading of securities by Directors and designated employees. This policy is in line with the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended. Details are available at: https://www.spic.in/wp-content/uploads/2021/02/Code-of-Practices-and-Procedures-for-Fair-Disclosure-of-UPSI1.pdf

Policy on Prevention of Sexual Harassment (POSH)

Your Company maintains zero tolerance for any form of sexual harassment in the workplace. In line with the POSH Act, 2013, a dedicated Internal Complaints Committee oversees the enforcement of this policy and ensures compliance with relevant rules and procedures.

Status of POSH complaints for FY 2025-26:

Complaints received: Nil
Cases pending over 90 days: Nil

Vigil Mechanism

As per Section 177 of the Companies Act, 2013 and SEBI Listing Regulations, your Company has instituted a Vigil Mechanism and Whistle Blower Policy. This framework enables Directors and employees to report genuine concerns, including unauthorized disclosures of Unpublished Price Sensitive Information (UPSI). Full details are available at: https://www.spic.in/wp-content/uploads/2021/02/Whistle-Blower-Policy-SPIC-Final.pdf

Dividend Distribution Policy

The Company has framed its Dividend Distribution Policy in accordance with the SEBI (LODR) Regulations, 2015 (Second Amendment dated 5th May 2021). It outlines the principles for declaring dividends, maintaining consistency and transparency. The policy is available at: https://www.spic.in/wp-content/uploads/2021/08/Dividend-Distribution-Policy.pdf

Other General Disclosures:

1. Your Company has not issued shares with differential voting rights and sweat equity shares during the year under review.
2. WTD and CFO of the Company have issued the necessary certificate pursuant to the provisions of Regulation 17(8) of the Listing Regulations, for the financial year 2025-26.

Management Discussion and Analysis- Industry Overview Based on the 2025 monsoon report, the country saw an "above-normal" season, finishing at 108% of the Long Period Average (LPA), with significant disparities as East

1. Direct Benefit Transfer (DBT) in Fertilizers: As the Lead Fertilizer Supplier (LFS) for Tamil Nadu, Puducherry and Andaman & Nicobar Islands, the Company drove the successful implementation of Direct Benefit Transfer (DBT) by ensuring high usage of ePOS devices at retail outlets.

Educating farmers on the DBT process through dedicated campaigns. Conducting capacity-building workshops for retailers in collaboration with the Agricultural Department and NIC.

2. Pradhan Mantri Kisan Samridhi Kendra (PMKSK): Through 2,566 PMKSK centres across Tamil Nadu, Puducherry, Kerala, Karnataka, Andhra Pradesh, Telangana and Maharashtra, the Company provided: Soil and irrigation water testing facilities Training on soil-based nutrient management and integrated pest control Information on welfare schemes of the Government of India and respective State Governments.
3. Soil Testing Lab Services: Comprehensive soil testing services across Tamil Nadu, Karnataka, Kerala and Andhra Pradesh, using both static and mobile labs the company promoted: Agronomic practices based on soil health reports Emphasis on organic inputs to preserve soil fertility and enhanced crop yield.
4. Farmer Training Programs: Conducted in-house sessions at the Tuticorin Training Centre alongside outreach programs across Tamil Nadu, focused on: Upskilling progressive farmers Demonstrating sustainable farming techniques.
5. Model Integrated Agriculture Farm: A fully functional integrated demonstration farm at Tuticorin showcases:

28 Annual Report 2025-26

High-value crops Medicinal plants Mushroom cultivation Livestock management

This initiative illustrates the benefits of integrated farming for maximizing agricultural returns.

6. Pannai Cheythi Malar - Bimonthly Tamil Magazine: Features relevant articles on sustainable farming, new agricultural technologies and farmer success stories across the state. It serves as a valuable knowledge-sharing platform to improve farm productivity.

Outlook for FY 2026-27

Monsoon & Urea Demand Forecast

The 2026 Southwest Monsoon is projected to be below normal, with rainfall at 92% of the Long Period Average (LPA) between June and September. This sub-par forecast suggests delayed Kharif sowing and an initial slump in fertilizer demand.

Based on early 2026 reports and projections, Indias urea market in 2026 is experiencing high demand and significant domestic production but remains heavily dependent on imports to bridge a supply-demand gap, partly due to disruptions in natural gas supply. Assessed urea demand for FY27 is estimated at around 41 million tonnes (Mt).

Nano Urea - Adoption & Research

As urea constitutes approximately 82% of nitrogenous fertilizer consumption in India, the Government is encouraging fertilizer producers to transition towards Nano Urea. Accordingly, National Fertilizers Limited (NFL) and Rashtriya Chemicals and Fertilizers Limited (RCF) have entered NDAs and MoUs with IFCO to adopt Nano Urea manufacturing technologies.

Your Company has partnered with Tamil Nadu Agricultural University to conduct field trials comparing the efficacy and phytotoxicity of Nano Urea versus SPIC Prilled Urea, specifically in paddy cultivation. These studies will also evaluate economic viability and inform strategies for deploying Nano Technology in nutrient delivery systems.

All-India Urea Production, Imports, Supplies and Sales

A comparative analysis of urea production, imports, distribution and sales across India for the current and previous financial year reflects the evolving dynamics in fertilizer demand and supply. The data underscores industry efforts to improve self-reliance through increased domestic production and better inventory management.

Operational Challenges - Sale of Urea Outside ePOS Potential Risks:

All India Urea Stats (Mn. t)

Category	2024-25	2025-26	% increase / Decrease
Production	30.64	29.32	-4%
Import	5.65	10.38	84%
Sales	38.77	39.64	2%

Tissue Culture Business

Your Company continues to expand its tissue culture operations in Coimbatore by cultivating and supplying seven premier banana sapling varieties to farmers in Tamil Nadu, Karnataka and Andhra Pradesh using advanced plant tissue culture techniques.

Highlights include:

Modernized tissue culture operations for enhanced efficiency and higher profits Accreditation from the Department of Biotechnology with NCS-TCP certification Ongoing research into cost-effective propagation protocols for high-value crops, including medicinal and ornamental plant species.

Key Financial Ratios - Year-on-Year Comparison

Significant changes (25% or more) in key financial ratios for FY 2025-26 as compared to the previous year are outlined below:

Delays in concession bill submissions Possibility of stock diversion for non-agricultural usage Elevated closing balances in ePOS systems that restrict market supply

Mitigation Measures:

Deployment of field-level personnel to monitor product movement up to retail counters Implemented a comprehensive GPS vehicle location system to track primary transportation from the factory in real-time. Initiated a GSM/SIM-based monitoring system for trucks to track stock movement across the distribution network - institutions, distributors & dealers using driver mobile network data. Adoption of the SUBSIDEX software platform to enable stock correction, streamline supply flow, and drive timely liquidation through promotional initiatives Removal of habitual defaulters from the Companys dealership network

These measures have significantly optimized the subsidy cycle and ensured more accurate market forecasting.

For Southern Petrochemical Industries Corporation Limited

Place : Singapore

Date : 14th August 2026

Ashwin C Muthiah

Chairman

 

Ratios*	2025-26	2024-25	Reasons for change
Debt Service Coverage Ratio	1.71	2.51	Since both Net income for debt servicing and debt obligations have gone up over last year, the DSCR is now declined.
Net Profit Ratio	6.33%	4.26%	Due to higher profits in current year, Net profit ratio is improved.
Net Capital turnover ratio	-104.07	-149.23	Due to decrease in revenue and net current liability (mainly due to subsidy receivables decline and Capital Creditors rise) as on year end, the Net Capital Turnover Ratio has varied.

*The Accounting Ratio are given under Note 49 of the Standalone Financial Statement.

Acknowledgement

The Company extends its sincere gratitude to the following for their continued guidance and support:

Department of Fertilizers Ministries of Chemicals and Fertilizers, Petroleum and Natural Gas, Agriculture, Shipping, and Corporate Affairs State Governments including Tamil Nadu Tamil Nadu Industrial Development Corporation Limited Tamil Nadu Generation and Distribution Corporation Ltd. Indian Oil Corporation Limited Oil and Natural Gas Corporation Limited Financial institutions and partner banks

The Directors thank the Shareholders for their continued support.

The Board also acknowledges and deeply appreciates the dedication and commitment of every employee of the Company.

Cautionary Statement:

This Report is based on internal information, available data, and reasonable assumptions derived from operational experience in the context of prevailing economic conditions and government policies. Future performance may be influenced by macroeconomic factors beyond the Companys control, which could impact the statements and projections presented herein.