Tamil Nadu Petro Products Ltd Directors Report

Dear Shareholders,

Your Directors have pleasure in presenting the Fortieth Annual Report together with the Audited Financial Statements of the Company for the year ended 31^st March 2025. 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

The summary of the financial results prepared as per the Indian Accounting Standards (Ind AS) is given below:

Description	2024-25	2023-24
Earnings Before Interest Depreciation and Tax	84.14	100.82
Interest	6.26	7.18
Depreciation	25.26	22.62
PBT (before exceptional item)	52.63	71.02
Exceptional item	18.50	(14.02)
PBT (after exceptional item)	71.13	56.99
Tax expenses	19.70	14.21
Profit After Tax	51.42	42.78

HIGHLIGHTS OF OPERATIONS

Linear Alkyl Benzene (LAB), the major product, continued to be the key contributor for the bottom line. Despite the low-cost imports of LAB continued to pose a challenge to the pricing in domestic markets, demand for LAB improved during the last quarter with supply constraints resulting from few other plants going for turnarounds. This helped improve the net realization on overall sales.

Crude prices experienced a steady decline through the year, falling from mid 80 USD levels to ~70 USD level by March 2025. Strategic timing in benzene procurement enabled the Company to benefit from lower prices and effective inventory management, thereby controlling the cost of this key raw material.

Specific consumption of key utilities remained within the limits as we could achieve budgeted levels of production. Sourcing the essential intermediate, Normal Paraffin, remained challenging as its prices continued to be volatile despite the overall decline in crude oil prices, primarily due to a global shortage.

The decline in Caustic Soda prices observed during the first half of the year, driven by sluggish demand in certain end-use sectors, reversed during the second half, with substantial improvement in prices essentially triggered by supply issues in China market.

The domestic market for Propylene Oxide (PO) faced significant challenges due to the influx of lower-priced imported downstream Polyols. As a result, PO offtake became a major challenge since Q3 of FY2024-25. However, domestic demand for PO is anticipated to recover starting from the Q2 of 2025-26.

Your Company maintained its strategy of prudent Raw Material Sourcing, effective inventory management and procurement of Renewable Power at competitive prices, as part of its ongoing efforts to sustain margins. In its efforts to increase the capacity of the LAB plant from the current 120 KTPA to 145 KTPA, the Company has made significant progress, completing civil works and commencing the erection of major equipments. As of 31^st March 2025, an expenditure of Rs 273 Crore has been committed against the estimated LAB revamp project cost of Rs 310 Crore. The revamped plant is scheduled to be commissioned by the Q3 of 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 Rs 190 Crore. The HCD revamp project is in execution stage and as on 31^st March 2025, an expenditure of Rs 175 Crore has been committed against the estimated project cost of Rs 214 Crore. The modernized plant is also planned for commissioning by Q4 of FY 2025-26.

As a responsible corporate entity, the Company has developed a comprehensive roadmap to achieve decarbonization, outlining several short, medium, and long-term objectives. Detailed techno- commercial evaluations have already commenced for the initiatives identified to be viable. The product carbon footprint for LAB and Caustic Soda Lye has been assessed to identify key areas for improvement, with the goal of making our products more environment friendly. Additionally, renewable power consumption increased by 42% during FY 2024-25 compared to FY 2023-24, contributing to reduced carbon footprint at HCD plant.

FINANCIAL REVIEW

Despite continued macroeconomic challenges and pricing pressure due to unabated imports and rising raw material costs, your Company achieved revenue from operations of Rs 1,826.78 Crore as against Rs 1,668.57 Crore in the previous year. Net Profit achieved was Rs 51.43 Crore as compared to Rs 42.78 Crore in the previous year.

Exceptional item includes Rs 7.55 Crore incurred during the year towards material damage and Plant restoration activities (Michaung cyclone - Dec23). An amount of Rs 26.05 Crore has been received from the insurers as an adhoc amount pending assessment report from surveyor.

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 A1 + (A One Plus) ratings for Short Term Bank facilities (non-fund based working capital facilities).

DIVIDEND

Pursuant to Regulation 43A of the Listing Regulations, 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/2021/07/5.-Dividend-Distribution-Policy. pdf

In line with the parameters prescribed by the policy, your directors are pleased to recommend a dividend of 12% i.e. Rs 1.20 per equity share of face value of Rs 10/- each fully paid up, for the year 2024-25, aggregating to Rs 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 to produce 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. Demand for LAB is directly influenced by trends in the FMCG industry, which is a highly dynamic and commoditized industry.

The commercial production of LAB began in the mid-20^th century, marking a significant advancement in the detergent industry. Prior to LAB, soaps made from animal fats and vegetable oils were the primary cleaning agents. The development of LAB provided a more efficient, cost-effective, and versatile alternative, revolutionizing the cleaning products market.

The global LAB market has experienced significant growth, reaching approximately 4.41 million tonnes in 2024, with projections indicating a compound annual growth rate (CAGR) of 4.09% through 2035, potentially reaching around 6.6 million tonnes. Factors driving this demand include heightened health awareness, an ageing 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 IPCLs 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. The Directorate General of Trade Remedies (DGTR) assessed the extent of injury faced by domestic LAB manufacturers, as imports from Qatar and Iran continued to enter the market at significantly lower prices. Based on the recommendations of the DGTR, the Ministry of Finance, Government of India, has approved the case and authorized the implementation of antidumping duties (ADD) for a period of five years, effective from 2025 to 2030.

The Indian government mandated BIS certification for LAB in the Indian market effective 3^rd April 2023. Although Iran has obtained BIS certification and is permitted to export LAB to India, the recent implementation of anti-dumping duties is expected to ensure price stability in the market.

The UOP Technology, which is widely recognized as the best and most cost-effective manufacturing 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, which allow them to achieve reduced 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.

The production of caustic soda relies on the availability of raw materials, particularly sodium chloride (common salt). Fluctuations in salt production can affect the supply chain and pricing of caustic soda. There is a growing emphasis on adopting green and sustainable technologies in caustic soda production. This trend aligns with global efforts to reduce the environmental footprint of the chemical industry.

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 Kilotonnes of PO annually, primarily from Thailand, Singapore, and Saudi Arabia, at a significantly cheaper cost compared to domestic prices. Due to excess capacity of PO created globally prompting supply excess than demand, some plants are facing economic challenges in Europe and USA. Hence PO prices plummet last one year due to additional capacity and the trend is continuing.

OPPORTUNITIES AND THREATS

Global growth is projected to slow to 2.3 percent in 2025 due to reduced global trade, tighter financial conditions, and increased policy uncertainty, particularly in the realm of trade policy.

India GDP growth slowed down to 6.4%, a weaker manufacturing sector and slower corporate investments are seen dragging Indias growth to 6.4% in 2024/25, the slowest pace in the four years.

Nevertheless India is rapidly advancing to become one of the worlds major economies. The country is witnessing unprecedented social and economic development. Recently, India achieved the status of the worlds fifth-largest economy, and it aims to surpass the $5 trillion mark by 2027. By the end of this decade (2030), Indias economy is expected to touch USD 10 trillion.

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, Indias per capita FMCG consumption remains among the lowest, offering significant room for growth. Your Companys 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 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. As liquid detergent volumes continue to rise, the demand for LABSA 96% has also been increasing.

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, and responsible growth. Notably, urban markets have played a pivotal role in driving the growth of FMCG, benefiting from a return to economic normalcy after the disruptions caused by the COVID pandemic in recent years.

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, and it is predicted to rise steadily 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 Indias 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 global economy is facing substantial headwinds, emanating largely from an increase in trade tensions and heightened global policy uncertainty. Global cooperation is needed to restore a more stable global trade environment. Domestic policy action is also critical to contain inflation risks and strengthen fiscal resilience.

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. There is a steep increase in exports of Caustic Soda in FY25 approx at 25% , however imports declined by 33%. The increase in exports attributed to increase in demand and supply demand imbalance

Caustic soda prices increased in FY25 due to increase in Alumina production along with surge in exports. The ECH facilitys 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 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 countries Iran and Qatar was a concern till FY25. In addition, in September 2022, IOCL debottlenecked its Baroda facility, enabling an additional 20 kt/year of production. The Ministry of Finance, GOI, recently imposed Anti-dumping duty on LAB imported from Iran and Qatar for a period of 5 years.

At present, LAB price increased due to tight supply coupled with strong demand from FMCG sector. The ongoing geopolitical conflicts and global trade barriers paved way for the increase in LAB selling price.

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 developed 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. Though Indian manufacturers operate at capacity of 80% in Caustic Soda, this year there is surge in the prices. This is due to increase in Exports, higher requirement from Alumina producers and increase in the export price. Demand rose by only 4% during 2023-24, compared to an 8% increase in real production.

There have been new additions in domestic caustic soda production in the Southern and Western part of this Country. Your Company is also expanding the caustic plant capacity adopting the cost effective bi-polar technology and would commence operation by Q4 FY25-26. 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 in FY26, Chinas return to the export market, and Europes 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 POs full captive consumption, POs consumption decreased later in the year as a result of the PU markets weak demand. However, going forward, the demand is expected to improve in the coming months and your Company is expected to achieve full capacity utilisation.

RISK MANAGEMENT POLICY AND PROCESS

Your Company has a structured methodology to effectively monitor and manage the risks by setting 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 Managing Director 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, which comprised of Ms. Sashikala Srikanth as Chairperson (until August 11, 2024), Lt. Col. (Retd.) CS Shankar as the Chairman (from August 12, 2024), Ms. Rita Chandrasekar (from August 12, 2024), Mr. S Senthil Kumar 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. 10^th May 2024, 30^th July 2024, 8^th November 2024 and 31^st January 2025. As required under Section 177 of the Act, the Audit Committee also reviews the risk management process periodically in addition to the Board.

RISKS AND CONCERNS

Unchecked imports of LAB and caustic soda poses the largest risk to TPL. In addition to the additional Middle East capacity, IOCLs 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. Though the ADD is in place starting June 2025, however the risk of low price imports is likely to continue from other manufacturing Countries.

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 kept stable and secure direct customer committed volumes. The steep increase in N-paraffin (NP) price prompted increase in LAB price during last quarter of FY25. Further, there is risk attached on NP sourcing as most companies utilising their in-house NP, for producing LAB. Added, NP availability in open market trimmed drastically along with steep increase in price. This created vacuum in NP sourcing.

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.

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 tertiary treated city sewage water (for industrial purpose). Regassified Liquefied Natural Fuel (RLNG) is being used as fuel in our process heaters, boilers and power generators. These significant changes reflect our commitment to conserving natural resources and promoting a cleaner environment.

We have already achieved Zero Liquid Discharge for our LAB and HCD plants by utilizing the treated effluent in the Propylene Oxide manufacturing process. Also, a feasibility study has been initiated to assess the implementation of a Reverse Osmosis (RO) system for the partial recovery and reuse of treated effluent in the PO plant. Furthermore, extensive green belts have been developed and are being maintained in and around Manali and Thiruvallur District

A Leak Detection and Repair (LDAR) programme is being implemented to control hydrocarbon (HC) and volatile organic compound (VOC) emissions. VOC and other key emission levels in the environment are regularly monitored. Continuous and online monitoring systems are utilized for both gaseous and liquid emissions to ensure that emission levels consistently remain well below the permissible industrial standards.

Your Company conducted off site mock drill in July 2024 to demonstrate its capability to mitigate chlorine leak. Also, the mock drill proved the effectiveness of various Government Departments in accomplishing their roles and responsibilities in case of escalated emergency.

In observance of National Safety Day on 4^th March 2025, a series of competitions were organized for employees and contract workers to reinforce our commitment to safety. The level of participation from both employees and contract workers was highly encouraging.

Health talks and awareness campaigns have been conducted to enhance health consciousness among employees. Additionally, the Contractors were also included in the Companys periodic health check-up programs.

World Environment Day is observed annually, during which tree plantation drives are conducted as part of our green initiatives to promote carbon offset through the planting of saplings.

Adequate safety standards have been established and are rigorously adhered to without compromise. All legal and statutory requirements are proactively planned for and fully complied with. Regular training sessions are conducted for workers to reinforce best practices in safety, environment, and health. Periodic safety awareness programs are organized for contractors and drivers to promote safety.

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 financials of 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.

Certus Investment and Trading (S) Private 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 TPLs overseas procurement and marketing activities. At present, there are no significant exports or imports and so the above SDS 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 2025 was 437.

BOARD OF DIRECTORS AND RELATED DISCLOSURES

As on the date of this Report, the Board comprises of 12 Directors of whom 6 are independent, including 3 Woman Directors (2 Woman Independent 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:

Ms. Latha Ramanathan (DIN: 07099052) was appointed as an Additional Director under Independent Category effective 6^th August 2024 in the place of Ms. Sashikala Srikanth (DIN: 01678374) who ceased to be the Independent Director of the Company consequent to the completion of her second term of office of five years effective close of business hours on 11^th August 2024. Ms. Latha Ramanathan was subsequently appointed as an Independent Director of the Company by the Shareholders at the meeting held on 26^th September 2024.

Mr. V Arun Roy, IAS (DIN: 01726117) who served as Chairman and Non-Executive Non-Independent

Director, Nominee of TIDCO resigned effective 7^th August 2024, and the Board placed on record its appreciation for the services rendered by him during his tenure.

Ms. Mariam Pallavi Baldev, IAS (DIN: 09281201) was appointed as an Additional Director and Chairperson of the Board, effective 22^nd October 2024 and was subsequently appointed as NonExecutive Director of the Company by the Shareholders through postal ballot, effective 26^th December 2024.

Mr. D Senthi Kumar, Whole-time Director (Operations) (DIN: 00202578) was re-designated and elevated as Managing Director effective 4^th February 2025 by the Board and the same was approved by the shareholders through postal ballot effective 26^th April 2025.

Mr. KT Vijayagopal (DIN: 02341353) ceased to be the Whole-time Director (Finance) of the Company upon completion of his tenure effective close of business hours on 11^th February 2025. He also resigned from the position of Chief Financial Officer (CFO) and was relieved of his duties effective the said date.

Mr. Manish Nagpal (DIN: 03169160) was appointed as an Additional Director of the Board, effective 12^th February 2025 and was subsequently appointed as Non-Executive Director of the Company by the Shareholders through postal ballot, effective 26^th April 2025.

Mr. Ashwin C Muthiah (DIN: 00255679), Vice Chairman and Director, retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment and is recommended for approval of the Shareholders.

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 Qualifications of Directors) Rules, 2014, as 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 2025, Mr. D Senthi Kumar, Managing Director, Mr. C Parthiban, Chief Financial Officer and Ms. Sangeetha Sekar, Company Secretary were the Key Managerial Personnel of the Company.

During the year, Mr. D Senthi Kumar was promoted and elevated as Managing Director effective 4^th February 2025 from the position of Whole-time Director (Operations). Mr. C Parthiban was appointed as Chief Financial Officer of the Company effective 12^th February 2025 in the place of Mr. KT Vijayagopal who ceased to be the Whole-time Director (Finance) & Chief Financial Officer effective close of business hours of 11^th February 2025 on completion of his tenure of appointment.

ANNUAL EVALUATION OF THE BOARD, 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 Managing Director was done based on his 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 behaviour, 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 26^th March 2025 at which the Directors evaluated the performance of the Non-Independent Directors, performance of the Board 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 2025, 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 sufficient 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, 2025 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 from the Secretarial Auditors 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 the conclusion of 42^nd AGM. The report of Auditors on the financial statements is attached and forms part 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. Your Company has complied with the requirements of all the applicable Secretarial Standards.

In compliance with Regulation 24A of the SEBI Listing Regulations, based on the recommendations of the Audit Committee, the Board of Directors at the meeting held on 12^th August 2025 appointed M/s. B Chandra & Associates, Practicing Company Secretaries (Firm Registration No. P2017TN065700 and Peer Reviewed Certificate No. 1711/2022) as Secretarial Auditors of the Company for a period of 5 consecutive years from FY 2025-26 to FY 2029-30, subject to the approval of members. Necessary resolution is included as part of Notice of the ensuing AGM of the Company, for approval of Members.

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.

M/s. B Y & Associates, Cost Accountants, Chennai have been appointed as the Cost Auditors of the Company for conducting the audit of cost records for the financial year 2024-25 on a remuneration of Rs 1.75 lakh, plus applicable taxes and reimbursement of actual out-of-pocket expenses incurred by them in this connection.

In accordance with Section 148 of the Act, read with the applicable Rules, the Board has re-appointed them for FY 2025-26 based on the recommendations of Audit Committee and the ratification of the remuneration payable to them 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 that the system operates effectively, the Internal Auditors conduct regular reviews, and their findings are discussed with the Audit Committee and the Auditors. Additionally, the Companys 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, Current ratio (in times) (53)%, Debt-Equity ratio (in times) 700%, Debt service coverage ratio (in times) 67%, Inventory turnover ratio (in times) 41%, Trade receivables turnover ratio (in times) 40%, Trade payables turnover ratio (in times) 26%, Net capital turnover ratio (in times) 53%, ratios significantly altered as earnings compared to the previous financial year marginally decreased 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: 40 of the Standalone Financial Statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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 39^th AGM held on September 26,

2024, for transactions with Manali Petrochemicals Limited (MPL) up to Rs 425 Crore plus taxes for the period 1^st October 2024 to 30^th September

2025, and approval of Members for the proposed transactions with MPL for the period 1^st October 2025 to 30^th September 2026 is being sought at the 40^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.

The Company has also complied with the provisions of the Maternity Benefits Act, 1961.

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

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 and material orders passed by any of the regulators / courts / tribunals impacting the going concern status and Companys operations;

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

- The Board had considered all recommendations of the Committees of the Board.

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 Companys 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.

	For and on behalf of the Board of Directors
	G D Sharma	D Senthi Kumar
12th August 2025	DIN:08060285	DIN:00202578
Chennai - 600 068	Independent Director	Managing Director