Your Directors are pleased to present to you the Forty Ninth Annual Report & Audited Statement of Accounts of the Company for the year ended March 31, 2022. The Management Discussion and Analysis has also been incorporated into this report.

STANDALONE FINANCIAL RESULTS - Summary

Dividend

Based on the performance of the Company and the anticipated Investments in various Projects that have been announced, your Directors have recommended a dividend of ' 2.50 per share for the Financial Year 21-22 (previous year ' 2.20/-per share was paid). This would result in an out flow of ' 2,560 Lakhs, if approved by the shareholders at the Annual General Meeting.

MANAGEMENT’S DISCUSSION AND ANALYSISPost Covid Recovery

After almost two years of immense impact on the health care system and the people in general, the world seems to be slowly returning to normal. In spite of certain regions of the world that still have restrictions on normal activities, almost all industries and economies have returned to pre-Covid levels of activity. High vaccination levels in India and many parts of the world have helped a great deal in controlling the outbreak at manageable levels. Industrial output has grown year on year, beating market expectations. The job market in India has also seen a huge fillip, riding on the back of buoyancy of retail and industry performance.

The year started with the second wave hitting the country -and the world - very hard. The number of COVID infections increased many fold. The hospitals were inundated with patients needing critical care; unfortunately, there was a large loss of life also. Post September 2021, the world slowly got back on its feet and businesses started returning to normal. The last quarter of the year saw a significant impact in various spheres due to the Russia-Ukraine conflict and consequent internationational reactions. These geo-political issues have given rise to fluctuations in crude oil and other commodity prices, resulting in uncertainties in the market. Inflation rates have seen unprecedented increase. Your company has been able to weather through all these changes very effectively due to strong fundamentals that have been established in the past decade and the dedication and forethought of all the staff and management. There has been a tremendous push towards improving operations and bringing in best practices in all areas, including safety, environment, reliability and market focus.

Business Performance

The performance of your Company during the Financial Year 2021-22 has been excellent. The improvement in market demand witnessed in the last quarter of the previous year continued into the current financial year. The initiatives taken on energy generation and consumption

played a significant part in reducing the cost of production. The PA plant recorded the highest ever production and contributed significantly to reduce the overall energy cost at our Ranipet site.

The second wave of the pandemic took a huge toll on the country. Some of our operations, were impacted due to the second wave, during the first quarter of this financial year. Many of our employees caught the virus and were out of commission for a long time.

The various teams in your Company rose to the occasion and managed the operations through these disruptions and challenges. The efforts ensured that there were no interruptions to the operation of the plants resulting in substantially higher operating rates of all products.

The overall market resilience and optimism was reflected in the performance of your company. All the customer industry segments, viz. plasticizers, polyester resins, paints and pigments, food, pharma and personal care saw renewed demand, both in India and overseas. In India, the announcements by the Government on investments in infrastructure provided impetus to demand of our downstream products.

The summary of the quarterly performance given below reflects this growth.

This buoyant performance was largely contributed by the high margins seen in the primary product, Phthalic Anhydride. The world also saw unprecedented increases in logistics cost and huge interruptions in supply chain across the board. This made it necessary for many industries to turn completely to local producers for supply of many raw materials and other ingredients. Imports inevitably came down because of uncertain supplies. This also contributed to the increased margins and greater demand for our products.

The past two years of pandemic induced issues has impacted the way people do business. The Government’s encouragement and push to get more and more people vaccinated has helped reduce hospitalisations. This has given people, including health care workers and employers a much greater confidence in their ability to handle any further waves of the infection. Hybrid work culture and video conferencing have become the norm.

Overall Business and the Individual Units/ Products

The performance of your company has been commendable in all respects and the strategies adopted at the market place yielded good results. The team worked diligently in optimising customer mix and were nimble in dealing with the logistics issues. This has resulted in your company posting the best ever consolidated results in its history.

Phthalic Anhydride (PAN)

Our main commodity business, Phthalic Anhydride (PAN) turned in an impressive performance despite huge increase in the price of raw material Ortho xylene in the last quarter of the financial year. Price increases of other raw materials also impacted one of our key market segment of pigments. The other market segments like paints, plasticizers and unsaturated Polyester resins fared reasonably well during the year. The efforts taken by the company during the last 5 years in focussing on healthy and growing customers, providing excellent service have shown good results.

On the manufacturing front, the modernisation and continuous upgrade of the PAN facilities at Ranipet in Tamil Nadu, resulted in better Productivity, Quality, Reliability and Safety.

With better margins and good working capital management your company could set aside its cash flows for business growth and projects; this will also help us in taking further growth decisions.

The project at Dahej, was commissioned in June 2021 after significant delays due to covid related manpower shortages and material deliveries. The various startup related problems were attended during subsequent quarters and the plant has now started producing in a stable manner since January 2022. We are now well positioned to meet customer demand effectively in our major west India market.

Fine Chemicals and Food Ingredients

The Fine Chemicals and Food Ingredients business bounced back from a sluggish 2020-21. We revamped some of the utilities and other systems to bring in efficiency and higher productivity. We are happy to report the highest ever production of Food ingredients in the year.

The business scenario was characterised by robust demand on the one hand and supply chain disruptions caused by the second and third waves of the pandemic on the other. Several employees in the plants had tested positive for Covid during the second wave. The investments made in equipment, spares and process technology helped your company to operate the plants at 20-25% higher rates in spite of the disruptions.

The combined strategy of focusing on high value European and American markets, procurement of raw materials in advance and smart pricing helped the business achieve its best operating margins since inception. The rapid increase in prices of key raw materials & freight costs were countered with suitable adjustments in pricing. Our sales to strategic markets like EU and US continued to be high, and in the process we were able to cater to a lot of new customers. The presence of our marketing and logistics subsidiary in the EU, TCL Global BV, played a key role in this.

Significant efforts went into maintaining relationships with customers and identifying new opportunities. From Q4 when supply chain started to stabilize, the business also started market seeding activity for the US. Plans for increasing the capacity for some of these products are now under management approval. Many of our customers have unveiled expansion plans and we foresee strong growth.

Human Resources and Strengthening the Organization

Continuing the organisation building that we had started in the previous financial year, there have been a lot of new inductions during the FY 2021-22. The middle management level has been strengthened with experts in each discipline. Younger professionals have also been inducted to keep the pipeline of managers, design & operation staff, and technicians healthy. This is in keeping with the company policy to induct and train a regular stream of young professionals every year. The structured training module followed by the company is known to be one of the most rigorous in the industry.

Our Group CEO, Mr. C. G. Sethuram has started working on various approaches to organizational growth, including new projects, products and strategic initiatives.

Our new CEO, Mr. Sanjay Sinha, has settled into the organisation smoothly. He has brought in best practices in business & manufacturing operations, and has been working with the teams to ensure reliability and consistency in processes.

We have also inducted a new site head in Ranipet, Mr. R. Srinivasa Raghavan as President-Manufacturing. He has had varied experience in operating petrochemical plants in western India. He is known for effectively working with teams to ensure cohesive operations. He also brings with him tremendous operating knowledge, which he has put to good use in the plants.

The various projects undertaken by the Company have necessitated hiring of engineers and managers at all levels. The process of recruitment has been very rigorous to ensure that the company is able to employ some of the best talents available. This has resulted in excellent work done in the technology and engineering areas. Many young employees have come forward with new ideas and produced efficiencies in processes.

Your company has also been working on updating the HR policies to reflect the best practices in industry.

With multiple sites and new challenges this is essential as we work in an increasingly volatile environment. We have restructured our HR department and have progressed well on the management development program of the company.

Projects

After successful commissioning and operation of the Dahej Phthalic Anhydride plant, your company has embarked on a large project in Dahej through a subsidiary, TCL Intermediates Pvt. Ltd. (TCL IPL), for manufacturing of Phthalic Anhydride, fine chemicals and derivatives. There will be two phases of capacity of about 110 KT each.

The engineering and procurement for the first phase is in progress and the commissioning of this plant is expected to be in Q3 to Q4 2023-24. The project is in the process of obtaining various regulatory approvals and is expected to start construction shortly.

US Project and US Subsidiary Activities

Our US subsidiary was able to progress significantly in the implementation of the project. Your company TCL India has now completed the 25 m$ Equity investment fully in the subsidiary. During the year, the subsidiary was able to complete ordering of almost all the equipment for the project and start on construction. Financial commitments for the project from Lenders have been finalized by the US subsidiary.

Modular construction of over 80% of the US plant has started at TCL Technology and Engineering (SEZ) Division in India. The subsidiary aims to minimize construction activity in the US by building the project modularly largely in India; this helps in cost optimization, safety and scheduling. The US subsidiary expects to commission the plant by H1-CY 2024.

Our Subsidiary in the Netherlands TCL Global BV

Our European subsidiary (TCL Global BV) in the Netherlands completed its first full year of operations and was profitable. TCL Global BV markets the products of TCL India and of our subsidiary in Malaysia in Europe. The presence of the subsidiary within Europe enables it to regularly interact with European customers, obtain quality market information and ability to sell to many direct customers resulting in better margins overall for the group. These interactions were instrumental in greater penetration in the EU market for all the products of TCL and OOSB. With the subsidiary in place, the TCL group is able to respond very quickly and to offer real time services to EU customers including supply of products out of an EU warehouse. As we expand our manufacturing in western India and in the us, we expect the European presence to be a significant catalyst for our export growth.

Our Subsidiary in Malaysia

The Malaysian subsidiary “Optimistic Organic Sdn. Bhd.” posted an excellent performance during the year 2021-2022. This was because of many improvement programmes undertaken in the past years and during the year to ensure reliability of the plant for continued quality production. In addition, a complete reorganisation of customer mix was undertaken to maximise the sales quantity and net realisations. The geographical spread of the customers was also widened to minimise regional variations and risks arising from volatility in the markets. The company has also undertaken several initiatives during the year to strengthen behavioural safety and obtained A grade with >97% in the audit conducted by the Government of Malaysia. The company has achieved highest ever production and profits in the financial year and has built sufficient cash reserves for its growth plans.

STANDALONE FINANCIAL RESULTS OF THE SUBSIDIARY (OOSB)

Finance

Your Company’s finances have been strengthened over the last few years by ensuring better working capital management and improving cash flows through better margins. This has helped the company greatly in its growth over the past couple of years. The company has been net debt free and this has enabled us to make available funds for expansions and investments in subsidiaries. The past

few months have seen significant increases in raw material prices which have necessitated higher working capital in the business. However, due to the strength of its internal accruals, the company has been able to manage this without any additional borrowing. The finance team has also been strengthened to enable financial management of projects and additional sites.

The Prospects for the FY 2022-23

The announcements by the Indian Government during the previous FY regarding investments in infrastructure projects resulted in a definite improvement in the performance of all our customer segments. Our main product, Phthalic anhydride witnessed high price increases globally. This has been strongly aided the post Covid boom in retail and industrial activity within India.

In every user segment our customers have announced and have started implementing robust growth plans. This augurs well for our industry; our projects both in petrochemicals and in fine chemicals will help satisfy this growth over the coming years.

The period since September 2021 has been marked by high inflation in all primary products and especially so in metals, fuels, logistics, petrochemical feed stocks, and construction inputs.

The resultant reaction of governments around the world aimed at controlling inflation by increasing “Policy Rates” in lending will act as a dampener not only for inflation but also for global growth. Since early June 2022 we are already seeing the early impact of these in prices of metals and some other commodities.

India has historically been insulated from sharp volatility in global markets and economic events; however, with our greater integration in the last few years, there will be an impact.

There are warning signs on the horizon of deflationary and near recessionary conditions in the EU and in the US. Within India this will affect prices rather than volumes which we expect to be healthy. The management of your company however is very sensitive of these possibilities and is well prepared to handle these uncertainties. Our strong balance sheet gives us the confidence to execute the planned projects without any interruption. We will keep our shareholders regularly informed of developments.

People

Besides the regular development and training, we initiated and put in place a large number of programmes to address the impact of Covid. As states and districts gradually lift and reduce their shelter-at-home orders, we have encouraged our employees who have been working from home to return to office. We are working hard towards keeping our employees up to date and making sure they are safe in the workplace. We continue to provide round the clock care and assistance to our employees & families as well as to the community.

Since the availability of Vaccination to fight COVID-19, we have ensured an active vaccination campaign for all employees and their families and to the community. Here we work closely with the Tamil Nadu Government which has been very supportive.

Your Company would like to thank all its employees for their active support to the business and the community during the pandemic. We see our employees - our people - as the main foundation on which our company is built. Our performance would not have been possible without them.

Public Initiatives

We continue to engage in many activities both with the local administrations and the government agencies as public Initiatives. Since last year we set up multiple oxygen plants and provided oxygen concentrators to Hospitals and Tertiary care centres at places such as CMC Vellore and Government hospital Chennai. These will now directly help Hospitals and save lives. As these Plants have a long life of more than 3 decades, they become a permanent asset for the Hospitals and reduce the cost of Oxygen dramatically. During Q3 we also donated generously to the Tamil Nadu ‘Chief Minister’s public relief fund.

We have also contributed towards the development of the public wellbeing of the SIPCOT panchayat through sanitation for government schools, artificial limbs for amputees, Paediatric cardiac surgeries, education for tribal and underprivileged children in the Local area.

Your company was actively involved in the interactions with various stakeholders. Our employees are office bearers in various Industrial associations like Confederation of Indian Industries, Indian Chemical Council, Chemical Industries Association. These associations are in constant engagement with the Government at the centre and in the States. Your company is seen as a keen participant in all Industry initiatives, like simplification of procedures, changes and postulation of regulatory framework, feedback to statutory authorities, skilling for the industry, labour laws, trade and tariff related measures & trade negotiations.

The company is also directly interacting with the local communities and participates in several projects in the community. As Our shareholders know we strongly support the Thirumalai Charity Trust, the Thirumalai Mission Hospital and the Akshaya Vidya Trust both with financial support as also management guidance for their various programs & projects. More information about these is given elsewhere in this report. We are also in constant engagement with the district authorities and statutory authorities at a local level through periodic meetings.

Our Associates

None of this would be possible without the interest and participation of our stakeholders - Customers, Bankers, Suppliers, Distributors, Consultants, and Government agencies, and the local Communities.

We hope to have the continued involvement of all shareholders in the affairs of the company and to share in the achievements of the company in the years to come.

BOARD AND MANAGEMENT

The Board of your Company consists of

? The Chairman & Managing Director -Mr. R. Parthasarathy

? Managing Director & Chief Financial Officer -Mrs. Ramya Bharathram

? Executive Director - Mr. P. Mohana Chandran Nair

? Six Independent Non-Executive Directors:

? Mr. R. Ravi Shankar

? Mr. Raj Kataria

? Mr. Dhruv Moondhra

? Mr. Arun Ramanathan

? Mr. Rajeev M Pandia

? Mrs. Bhama Krishnamurthy

? A Non-Executive Director:

? Mr. R. Sampath - Chairman - Ultramarine and Pigments Ltd.

They are supported closely by

? Mr. C.G. Sethuram - Group Chief Executive Officer

? Mr. Sanjay Sinha - Chief Executive Officer

? Mr. T. Rajagopalan - Company Secretary

And the Business and Functional Heads

? Mr. S. Venkatraghavan - President - Food Ingredients

? Mr. R. Srinivasaraghavan - President - Factory Operations

? Ms. J. Radha - Executive Vice President, Finance

? Mr. B. Krishnamurthy - Executive Vice President, Accounts & Systems

During the year under review, Mrs. Ramya Bharathram was appointed as Managing Director at the 48^th Annual General Meeting of the Company held on July 21, 2021 and Mr. N. Subramanian, Independent Director of the Company, has retired on August 5, 2021.

Mr. R. Parthasarathy's tenure as Chairman and Managing Director will expire on July 31, 2022, and the Board recommends that he be re-appointed as Chairman and Managing Director of the Company for a further period of three years beginning August 1, 2022.

Mr. Arun Ramanathan's tenure as Independent Director of the Company expires on July 21, 2022. Hence it is proposed to reappoint him at the ensuing Annual General Meeting for a period of Three (3) years.

Your Directors play a very active role in the Company. They bring in expertise in Business Strategy and Management, Technology, Finance & Accounting, Governance, Project Appraisal & Management, Government Relations.

Their interaction with the Management team is frequent and intense, at the Board and Committees, through reviews, suggestions, criticisms & advices to the Management team over the last 8 years.

The executive management team in turn has been very transparent in presenting and discussing initiatives & plans and failures, issues & responses.

This healthy and open interaction has been of immense value to the governance, health and growth of the Company.

The Committees in the Board, especially the Risk Management Committee, Business Review Committee and the Audit Committee met often and participated in depth by setting goals, reviewing performance, correcting slippages and monitoring execution.

The Nomination & Remuneration Committee, Stakeholders Relationship Committee and the Corporate Social Responsibility Committee have been active in their respective roles.

Further details of these are given in the Corporate Governance Report.

SOCIAL RESPONSIBILITY

Your Company continues to play an active and important role in the welfare of the local communities.

The Founders of your Company, Mr. N.S. Iyengar and Mr. N.R. Swamy had set up the Thirumalai Charity Trust (TCT) in 1970, and The Akshaya Vidya Trust (AVT) in 1994.

Thirumalai Chemicals supports TCT financially and through management reviews and in their infrastructure planning & development process.

The TCT works in Ranipet District where our main Indian manufacturing site is located, since 1983, providing services in Community Healthcare, Women’s Empowerment, Disability, De-addiction, and Village development.

The TCT founded and operates the Thirumalai Mission Hospital, which provides primary healthcare in 315 villages, covering over 160,000 people. The Hospital provides both out-patient and in-patient services through departments of General Medicine, Emergency services, Intensive Medical Care, General Surgery, Paediatrics, Obstetrics, Gynaecology, Orthopaedics, ENT, Dentistry, Physiotherapy, De-addiction & Rehabilitation.

With TCLs support, the Thirumalai Mission Hospital has set up a separate centre for Non-Communicable Diseases

such as Diabetes, Thyroid disorders, Endocrinology, Obesity, Osteoporosis, etc. The dialysis service started at TMH last year is expanding to serve more people.

This addresses a critical need of the community.

The Vedavalli Vidyalaya Schools (with 3 schools at 2 campuses), managed by The Akshaya Vidya Trust, have around 2,600 students, out of whom 70% are from rural families.

Industrial Relations:

Industrial Relations during the year under review continued to be very cordial.

Finance

All taxes and statutory dues have been paid on time. Payment of interest and instalments to the Financial Institutions and Banks are being made as per schedule. Your Company has not collected any Fixed Deposits during the Financial Year.

Contribution to the Exchequer:

The amounts paid to the Central and State Exchequer by way of GST, Customs duties (incl. paid to supplier), Income Tax and other taxes, is about ' 31,316 Lakhs on Gross Sales of about ' 1,42,368 Lakhs (Previous Year ' 20,740 Lakhs on Gross Sales of about ' 84,134 Lakhs).

Contribution to the Exchequer is about 20% of your Company’s Sales.

Exports:

Calculated on FOB basis, Exports amounted to ' 15,791 Lakhs (previous year ' 6,630 Lakhs)

Particulars of loans, guarantees or investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

Related Party Transactions

All transactions entered into with Related Parties (as defined under the Companies Act, 2013) during the Financial Year were in the ordinary course of business and on an Arm’s length pricing basis, and do not attract the provisions of Section 188 of the Companies Act, 2013 and were within the ambit of Reg. 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. There were no materially significant transactions with related parties during the Financial Year which were in conflict with the interests of the Company. Suitable disclosure as required by the Indian Accounting Standards (Ind AS24) has been made in the notes to the Financial Statements.

The Board has approved of a policy for Related Party Transactions which has been uploaded on the Company’s website.

Directors' Responsibility Statement:

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

In preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures.

We have selected such Accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the Financial Year and of the Profit or Loss of the Company for that period.

We have taken proper and sufficient care to maintain 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.

We have prepared the Annual Accounts on a going concern basis.

Proper Internal Financial Controls were in place and that the Financial controls were adequate and were operating effectively.

Systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Business Risk Management

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks. The Company has re-constituted the Business Risk Management Committee on 26.05.2021 and the details of the Committee are as given below:

Vigil Mechanism / Whistle Blower Mechanism

The Company has a vigil mechanism to deal with instances of fraud and mismanagement, if any. The details of the Policy are explained in the Corporate Governance Report and also posted on the website of the Company.

Corporate Social Responsibility (CSR) Committee

The Committee recommended continuing support for the Thirumalai Charity Trust’s Health and Rural Development

Projects and for the Akshaya Vidya Trust’s Educational Programmes.

The composition of the Corporate Social Responsibility Committee is given below:

# Retired on 5th August, 2021

A detailed note is given in the Corporate Governance report.

Total Expenditure on Corporate Social Responsibility (CSR) as percent of average net profit of the Company as per section 135(5 )

The Company’s total spending on CSR is 2% percent of average net profit of the Company as per section 135(5) towards Health and Sanitation Programmes

Statement pursuant to Listing Agreement:

Your Company's shares are listed with the National Stock Exchange of India Ltd. and the BSE Ltd. We have paid the annual listing fees and there are no arrears.

Business Responsibility Report:

Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the Annual Report of the top 1000 listed entities based on market capitalization (calculated as on 31^st March of every Financial Year), shall include a Business Responsibility Report (BR Report).

Your Company is in the top 1000 listed entities as on 31^st March, 2022. The Company, has presented its BR Report for the Financial Year 2021-22, which is part of this Annual Report.

Report on Corporate Governance

The Report on Corporate governance is annexed herewith.

Performance Evaluation

Pursuant to the provisions of the Companies Act, 2013 and under obligations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board carries out the annual performance evaluation of its own performance, of the Directors individually as well as the evaluation of working of its various Committees. A structured questionnaire is prepared after taking into consideration the inputs received from the Directors, covering various aspects of the Board’s functioning such as adequacy of the composition of the Board and its Committees, Board culture, Execution and Performance of specific duties, obligations and governance.

A separate exercise is carried out to evaluate the performance of individual Directors including the Chairman of the Board, who are evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interests of the Company and of its minority shareholders, etc.

The performance evaluation of the Independent Directors is carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors is carried out by the Independent Directors who also review the performance of the Secretarial Department.

The Directors expressed their satisfaction with the evaluation process.

Appraisal of Board’s performance

It includes setting individual and collective roles and responsibilities of its Directors, creating awareness among Directors about their expected level of performance and thereby improving the effectiveness of the Board.

Board evaluation contributes significantly to improved performance and aims at,

• Improving the performance of Board in line with the corporate goals and objectives.

• Assessing the balance of skills, knowledge and experience on the Board.

• Identifying the areas of concern and issues to be focused on for improvement.

• Identifying and creating awareness about the role of Directors individually and collectively as Board.

• Fostering Team work among the members of the Board.

• Effective Coordination between the Board and Management.

• Overall growth of the organization

Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up by the Company to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

Since the number of complaints filed during the year was Nil, the Committee prepared a Nil complaints report.

Statutory Auditors

M/s. Walker Chandiok & Co LLP, Chartered Accountants (Firm Registration No. AAC-2085) were appointed as

the Statutory Auditors of the Company for a period of five years at the Annual General Meeting (AGM) of the Company held on July 21, 2021, to hold office from the conclusion of the Forty Eighth AGM till the conclusion of the Fifty Third AGM to be held in the year 2026.

Internal Auditors

The Internal Auditors M/s. M.S. Krishnaswamy & Co, Chartered Accountants, have played an important role in strengthening the internal controls within the Company.

Cost Auditors

M/s GSVK & Co., Cost Accountants, were appointed as Cost Auditor to conduct cost audit of the cost records maintained by our Company in respect of products manufactured during the Financial Year 2021-22. The Cost Audit Report was filed with the MCA, Government of India, by the Company on August 07, 2021, well before September 30, 2021, the due date of filing for the Financial Year 2020-21.

Secretarial Audit

The Board appointed M/s. R.M. Mimani & Associates LLP, Company Secretaries, to conduct Secretarial Audit for the Financial Year 2021-22. The Secretarial Audit Report for the Financial Year ended March 31, 2022 is attached to this Report. The Secretarial Audit Report does not contain any qualifications, or reservations or adverse remarks.

Web link of Annual Return

Pursuant to the provisions of section 92(3) and Section 134 (3) (a) of the Companies Act, 2013 a copy of the Annual Return of the Company for the year ended March 31,2022 will be placed on the website of the Company at http://www.thirumalaichemicals.com.

Personnel

In terms of the provisions of section 197(12) of the of the Companies Act, 2013 read with the Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the names and other particulars of employees are set out in the Annexure B to the Directors' report.

PARTICULARS PURSUANT TO SECTION 197(12) AND THE RELEVANT RULES OF THE COMPANIES ACT, 2013:

a) The ratio of the remuneration of each Director to the median employee’s remuneration for the Financial Year and such other details as prescribed is as given below:

Name of Director Ratio

1. Mr. R. Parthasarathy (Managing Director) 159: 1

2. Mrs. Ramya Bharathram (Managing Director and CFO*) 104: 1

3. Mr. P. Mohana Chandran Nair (Whole-time Director) 17: 1

For this purpose, sitting fees paid to the Directors have not been considered as remuneration.

b) The percentage increase in remuneration of Managing Director, Chief Financial Officer, Company Secretary or Manager, if any, in the financial year:

Mr. R. Parthasarathy - (Managing Director): 29%

Mr. T. Rajagopalan - (Company Secretary): 18%

*Mrs. Ramya Bharathram - Managing Director, was appointed as the Chief Financial Officer of the Company on July 24, 2018. No additional remuneration was paid to her for functioning as the CFO.

c) The percentage increase in the median remuneration of employees in the Financial Year: NIL %

The number of permanent employees on the rolls of the Company: 523

d) The explanation on the relationship between average increase in remuneration and Company performance:

e) The Company’s PAT has increased from ' 11,762 Lakhs to ' 15,231 Lakhs, an increase of 29% against which the average increase in remuneration is 40%;

f) Comparison of the remuneration of the Key Managerial Personnel against the performance of the Company:

* It consists of Salary/Allowances & Benefits.

The remuneration of the Managing Director Mr. R. Parthasarathy includes the commission of ' 374 Lakhs, which works out to approximately 2.46% to the net profit for the Financial Year ended March 31,2022.

As per the Compensation Policy, the compensation of the key managerial personnel is based on various parameters including Internal Benchmarks, External Benchmarks, and the Financial Performance of the Company.

g) Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current Financial Year and the previous Financial Year and percentage increase or decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer:

h) Average percentile increase already made in the salaries of Employees other than the Managerial Personnel in the last Financial Year and its comparison with the percentile increase in the Managerial remuneration and justification thereof and any exceptional circumstances for increase in the managerial remuneration:

Average increase in remuneration is 27% for Employees other than Managerial Personnel & 16% for Managerial Personnel (KMP and Senior Management)

i) The key parameters for any variable component of remuneration availed by the Directors:

Except Mr. R. Parthasarathy (Managing Director), Mrs. Ramya Bharathram (Managing Director) and Mr. P. Mohana Chandran Nair, (Whole-time Director), no Directors have been paid any remuneration, as only sitting fees have been paid to them. The said Directors have not been paid any variable remuneration. The Directors are eligible for a commission on Net Profits as per the provision of sec.197 of the Companies Act, 2013.

j) The ratio of the remuneration of the highest paid Director to that of the employees who are not Directors but receive remuneration in excess of the highest paid Director during the year: Not Applicable

k) If remuneration is as per the remuneration policy of the Company: Yes

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

The particulars required to be included in terms of Section 134(3)(m) of The Companies Act, 2013 read with Rule 8(3) of The Companies (Accounts) Rules, 2014 with regard to conservation of energy, technology absorption, foreign exchange earnings and outgo are given in Annexure C.

Cautionary Statement

Company’s objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company’s operations include global and domestic demand and supply conditions affecting selling prices of finished goods, input availability

and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation, plant breakdowns, industrial relations, etc.

Acknowledgements

The Directors would like to place on record our sincere appreciation for the continued support given by the Banks, Statutory Auditors, Cost Auditors, Internal Auditors, Government Authorities, Customers, Vendors, Shareholders and Depositors during the period under review.

The Directors also appreciate and value the contributions made by the employees of our Company at all levels.

For and on behalf of the Board of Directors

R. Parthasarathy R. Ravi Shankar

Managing Director Director

(DIN:00092172) (DIN:01224361)

Place: Ranipet Place: Chennai

Date: 26th May, 2022 Date: 26th May, 2022