Directors Report of Punjab Chemicals and Crop Protection Ltd.

Mar 31, 2025

Your Directors are pleased to present the 49th Annual Report on the business and operations of the Company, together with the Audited Financial Statements (Standalone and Consolidated) for the financial year ended March 31, 2025. The performance of the Subsidiary has also been referred to wherever required.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2025 is as below:				(H in Lakh)
Particulars	Consolidated		Standalone
	2024-25	2023-24	2024-25	2023-24
Revenue from Operations and Other Income	90195	93693	89959	93332
Earnings before Interest, Depreciation & Tax & Exceptional item (EBIDTA)	10062	11608	10046	11506
Depreciation / Amortisation	2504	2216	2480	2216
Finance Cost	1783	2084	1783	1920
Profit / (Loss) before Tax & Exceptional item	5775	7308	5783	7370
Exceptional Items	418	-	418	-
Profit / (Loss) before Tax (PBT)	5357	7308	5365	7370
Income Tax Expenses:
Current Tax	1439	1680	1363	1655
Deferred Tax	25	270	25	270
Total Income Tax Expenses	1464	1950	1388	1925
Profit / (Loss) after Tax (PAT)	3893	5358	3977	5445
Other Comprehensive income / (expense) for the year (net of tax)	(70)	(36)	(24)	(29)
Total comprehensive income for the year	3823	5322	3953	5416
Earnings per share (EPS)
Basic and diluted (in H)	31.75	43.70	32.44	44.41
Reserves (excluding Revaluation reserve)	35245	31790	37208	33623

2. OPERATIONAL PERFORMANCE

Your Directors are pleased to report that, for the financial year under review, the Company achieved a standalone income of H900 crore and a Profit Before Tax (PBT) of H54 crore. These results demonstrate robustness of the business, reflecting a slight deviation from the previous year, which recorded a standalone income of H933 crore and a PBT of H74 crore. Despite the challenging business environment, the Company has maintained a solid financial footing.

The financial year 2024-25 began on a strong note, continuing the growth momentum the company has built over in the past few years. However, as the year progressed, the chemical sector experienced a market-wide correction driven by inventory adjustments and a decline in product pricing. This led to a temporary softening in demand for certain product segments, impacting overall performance in the later quarters.

The Company''s sales performance was predominantly driven by the Agro Chemicals Division, which achieved a net revenue of H607 crore, representing approximately 67% of total revenue, compared to H664 crore in the previous

year. The Specialty Chemicals & Pharmaceuticals Division contributed H172 crore, reflecting a slight increase from H151 crore in the prior year. Additionally, the Industrial Chemical Division reported a revenue of H121 crore, marginally higher than H118 crore in the preceding year.

In the financial year 2024-25, the Company recorded export revenues of H346 crore, as against H484 crore in the previous year. The decline in export market was to a large extent, was made up by increase in domestic market sales. The export turnover reflects ongoing challenges in the global chemical markets, with inventory correction and soft prices.

However, the channel inventory destocking across international market is towards end of the cycle and hence, demand picked is likely to happen in coming quarter

The Company remains committed to addressing these challenges through a strategic approach that encompasses new product introduction, market diversification, cost optimization, and sustained engagement with key international stakeholders. The Company registered healthy growth in revenue from new products.

3. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

The Company has one wholly-owned overseas subsidiary namely, SD Agchem (Europe) NV, based in Belgium. Additionally, the Company does not have any material subsidiary.

During the year, the Board of Directors conducted a comprehensive review of the subsidiary''s operations. In compliance with Section 129(3) of the Companies Act, 2013, the Company has prepared its Consolidated Financial Statements, which are included in this Annual Report. Furthermore, a statement outlining the key financial highlights of the subsidiary, in the prescribed format AOC-1, has been annexed to the Board''s Report.

SD Agchem (Europe) NV, a 100% Wholly Owned Subsidiary entered into a settlement agreement dated December 11, 2023 with ex-shareholders of Sintesis Quimica S.A.I.C, Argentina (erstwhile shareholders'') (erstwhile step down subsidiary till September 2017). Under the terms of settlement, a total consideration of H1,483 Lakhs was to be paid by SD Agchem (Europe) NV to the ex- shareholders. Consequential to the same, the Board of Directors had on December 14, 2023 provided guarantee on behalf of SD Agchem (Europe) NV, a 100% Wholly Owned Subsidiary to secure the payment obligations of SD Agchem (Europe) NV upto an amount not exceeding H1500 Lakhs in relation to the settlement agreement. SD Agchem (Europe) NV had paid a sum of H1,148 Lakhs till March 31, 2024 and during the current year the SD Agchem has paid remaining balance of H335 Lakhs and payment of guarantee has been fulfilled.

The Company does not have any associate companies or joint ventures within the meaning of Section 2(6) of the Companies Act, 2013.

4. CONSOLIDATED FINANCIAL STATEMENT

Pursuant to Section 136 of the Companies Act, 2013, the audited standalone and consolidated financial statements of the Company, along with the relevant information and the audited financial statements of its subsidiary, are available on the Company''s website at www.punjabchemicals.com.

These documents are also available for inspection during business hours at the Company''s Registered Office.

The Policy for Determining Material Subsidiaries, as approved by the Board of Directors in accordance with Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is available on the Company''s website and can be accessed at: https://www.punjabchemicals.com/ wp-content/uploads/2018/07/Policy-for-determining-Material-Subsidiary.pdf.

The consolidated financial statements of the Company for the year ended on March 31, 2025 comprises the standalone financial statements of the Company and its subsidiary (together referred to as "the Group").

The consolidated revenue of the Company during the year under review stood at H902 crore with a profit before tax of H54 crore against H937 crore and profit before tax of H73 crore in the previous year.

5. DIVIDEND

The Board of Directors are pleased to recommend a dividend of H3/- per equity share (30%) for the financial year under review against a dividend of H3/- per equity shares (30%) in the previous year.

The total dividend amount to be paid for the financial year 2024-25 shall be H3.68 crore.

The proposed dividend on equity shares is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company. Upon approval, the dividend will be disbursed to those shareholders whose names appear in the Register of Members as on the record date determined for this purpose. The record date will be Friday, July 18, 2025 for the purpose of payment of dividend for the financial year 2024-25.

The dividend recommended is in line with the dividend distribution policy of the Company and the policy is available on the website of the Company at https://www.punjabchemicals.com/wp-content/ uploads/2021/05/Dividend-Distribution-Policy.pdf

6. OUTLOOK

The Company operates in the Performance Chemicals segment, encompassing Agrochemicals, Specialty Chemicals & Pharmaceuticals, and Industrial Chemicals. This sector has demonstrated consistent and promising growth in recent years, driven by the introduction of new chemical products and the ongoing rebalancing of global supply chains. Furthermore, supportive policy measures from the Government of India are expected to catalyze innovation and foster strategic collaborations between MNCs and Indian chemical manufacturers.

The Company is actively investing in R&D and technical capabilities, positioning itself as a preferred Contract Research and Manufacturing Services (CRAMS) partner for both domestic and international agrochemical firms. With a long-standing and successful track record in the manufacture and export of a broad portfolio of Performance Chemicals, the Company is well-equipped to capitalize on the expanding market opportunities.

Strategic initiatives are underway to develop new products, enhance production volumes, and broaden the product portfolio-either through CRAMS arrangements or direct sales. Ongoing discussions with multiple stakeholders to onboard new products and expand existing business relationships are progressing positively.

Backed by decades of industry experience and a strong track record of delivering high-quality products to both Indian and global clients, the Company is focused on

strengthening partnerships through continuous innovation and the adoption of advanced manufacturing technologies.

Barring any unforeseen circumstances, the management is optimistic about the Company''s growth prospects, supported by its diversified product range and commitment to technological excellence.

7. FINANCE

a. SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2025 stood at H12.26 crore consisting of 1,22,62,185 equity shares of H10/- each. During the year under review, the Company did not issue any type of shares or convertible securities or shares with differential voting rights. The Company also did not allot /grant any stock options or sweat equity or warrants to the employees. As on March 31, 2025, the Company has not issued or outstanding any instrument convertible into Equity Shares of the Company during the Financial year. Your Company has not resorted to any buy back its Equity Shares during the year under review.

b. PUBLIC DEPOSITS

The Company does not have any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

c. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS PURSUANT TO SECTION 186 OF THE COMPANIES ACT, 2013

Details of loans, guarantees, and investments as covered under Section 186 of the Companies Act, 2013 are disclosed in Note Nos. 49 and 48 of the Standalone and Consolidated Financial Statements, respectively, forming part of this Annual Report.

d. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account and not to transfer any amount to the general reserve.

e. CREDIT RATING

During the year under review, there has been no change in the credit rating of the Company from any of the credit rating agencies. However, the Company has received reaffirmation of its ratings, with LongTerm Debt being rated at CARE BBB with a Stable outlook, and Short-Term Debt rated at CARE A2.

8. ENVIRONMENT, SUSTAINABILITY, HEALTH AND SAFETY

At Punjab Chemicals, we are dedicated to the highest standards in Environment, Health, and Safety (EHS), ensuring a safe workplace, sustainable practices, and the well-being of our people. Our EHS policy goes beyond compliance- it''s part of our core values. By maintaining

strict standards, we reduce workplace incidents, improve efficiency, and keep operations running smoothly with fewer disruptions. We prioritize employee health and safety, which strengthens our safety culture and boosts satisfaction and retention. Proactive EHS practices also help us cut costs by preventing accidents, optimizing resources, and minimizing waste. Strong EHS performance enhances our reputation, meets stakeholder expectations, and builds trust. For us, EHS is key to long-term successdriving excellence, reducing risks, and supporting a sustainable future.

Our health initiatives:

At Punjab Chemicals, we prioritize the health and safety of our employees, ensuring they return home safely each day. To support this, we conduct biannual medical checkups for employees and annual check-ups for managers, with quarterly checks for those in hazardous processes. The Company also organized health awareness programs on heart health, blood pressure, and sugar levels. Our occupational health centre offers preventive medical camps, and we have deployed an ambulance at our manufacturing units. Additionally, a cooperative society provides loans for housing, education, and personal needs, while the subsidized, FSSAI-certified canteens ensure nutritious meals. We also promote health education on diseases like hypertension and encourage yoga and healthy eating habits.

Our safety initiatives:

At Punjab Chemicals, we prioritize a safe, compliant, and resilient work environment through proactive safety measures and a strong culture of accountability. Key initiatives include automated batch charging and agitated nutsche filter dryers to reduce emissions, along with a robust Process Safety Management (PSM) program covering safety information, process validation, and regular assessments. We conduct routine HAZOP studies, risk assessments, and safety audits to ensure operational integrity. A structured incident reporting system enables timely corrective actions, while safety protocols are reinforced through regular reviews, training, and drills. Our employees undergo monthly safety training and biannual mock drills, reflecting our ongoing commitment to continuous improvement and regulatory compliance.

The Company''s sites are certified to various internationally recognized management systems, demonstrating a commitment to quality, environmental responsibility, and occupational health and safety. These certifications include ISO 9001:2015 for Quality Management, ISO 14001:2015 for Environmental Management, and ISO 45001:2018 for Occupational Health and Safety.

9. RESEARCH & DEVELOPMENT AND QUALITY CONTROL

The Research & Development (R&D) function continues to play a critical role in driving innovation, operational efficiency, and sustainability within the organization. During the period under review, R&D efforts were primarily

focused on the optimization of existing product processes, reduction of effluent load to support environmental compliance objectives, and the development of new products and value-added by-products. These initiatives are aligned with the Company''s long-term strategic goals of enhancing product performance, reducing environmental footprint, and expanding market offerings.

Quality Control (QC) remains a core strength and a fundamental pillar of our operational excellence. The Company maintains stringent quality assurance protocols across all stages of production-from raw material procurement through to final product release. Each material and product undergoes comprehensive quality testing to ensure adherence to rigorous internal standards as well as relevant regulatory and industry specifications. This robust QC framework underpins our commitment to delivering consistent, high-quality products to our customers.

10. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

In accordance with the provisions of Section 134(3) (m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014, the relevant information pertaining to energy conservation, technology absorption, and foreign exchange earnings and outgo forms an integral part of this Report.

11. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY

In accordance with the provisions of Section 135 of the Companies Act, 2013, read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company undertook various initiatives as part of its commitment to Corporate Social Responsibility (CSR). During the financial year 2024-25, the Company was required to spend H181 lakh towards CSR activities and has spent H182 Lakh. The amount was utilized for the promotion of education through the upgradation of school infrastructure and establishment of computer laboratories; healthcare initiatives including the organization of preventive medical camps, blood donation drives, and eye check-up camps in nearby areas; and rural development activities aimed at uplifting neighbouring communities. Additionally, the Company extended support to the underprivileged and differently-abled through donations. The CSR Policy of the Company is available on its website at https://www. punjabchemicals.com/wp-content/uploads/2023/03/ CSR-Policy.pdf.

The detailed Annual Report on CSR activities, as mandated under the Companies Act, forms part of this Report. Further information on the CSR Committee is provided in the Corporate Governance Report, which also forms part of the Annual Report.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Pursuant to Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Subsections (9) and (10) of Section 177 of the Companies Act, 2013, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, every listed company is mandated to establish a vigil mechanism for directors and employees to report genuine concerns. In compliance with these provisions, the Company has formulated and adopted a Whistle Blower Policy as part of its vigil mechanism.

The objective of this Policy is to provide a framework through which directors, employees, and other stakeholders can raise concerns regarding unethical behavior, suspected or actual fraud, or any violation of the Company''s Code of Conduct, ethics policy, or applicable laws and regulations. This mechanism reinforces the Company''s commitment to maintaining the highest standards of integrity, transparency, and accountability.

The Policy includes the contact details of the Chairperson of the Audit Committee, enabling direct and confidential access for complainants. Employees and stakeholders are encouraged to report concerns directly to the Chairperson, as outlined in the Policy. The Audit Committee is responsible for reviewing the concerns raised and ensuring appropriate corrective actions are taken, where necessary.

During the financial year, the Company did not receive any complaint under the Vigil Mechanism / Whistle Blower Policy.

The detailed Vigil Mechanism and Whistle Blower Policy is available on the Company''s website at the following link:https://www.punjabchemicals.com/wp-content/ uploads/2024/08/Whistle-Blower-Policy-PCCPL.pdf.

13. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has implemented robust Internal Financial Controls in relation to the preparation of financial statements. These controls were thoroughly tested during the year, and no material weaknesses, either in design or operation, were identified. Further details regarding the internal control systems are outlined in the Management Discussion & Analysis section, which forms an integral part of this Annual Report.

14. DEVELOPMENT AND IMPLEMENTATION RISK MANAGEMENT POLICY

In compliance with Schedule V of the Listing Regulations, the Company has constituted a Risk Management Committee responsible for overseeing the identification, evaluation, and mitigation of risks, as well as for developing strategies to address emerging risks. The details of the Committee,

including its composition and terms of reference, are outlined in the Corporate Governance Report, which forms an integral part of the Board''s Report.

The Company has established a robust risk management framework and has implemented a comprehensive Risk Management Policy, which is available on the Company''s official website at https://www.punjabchemicals.com/ wp-content/uploads/2018/07/Risk-Management.pdf. This policy provides for the creation and maintenance of a risk register, facilitates the identification of risks, and ensures the formulation and execution of mitigation strategies. Identified risks, both current and potential, are systematically addressed through targeted mitigation actions. The risk register is regularly reviewed and updated to ensure its continued relevance, and mitigation measures are adapted as necessary to ensure the Company''s risk profile remains within defined tolerance levels. Furthermore, the Board is kept fully informed of any actual or emerging risks that could impact the Company''s longterm strategic objectives and operations.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All related party transactions undertaken during the financial year were executed on an arm''s length basis and in the ordinary course of business. The Company has not entered into any materially significant related party transactions that could potentially conflict with the interests of the Company at large. As such, the disclosure of related party transactions in Form AOC-2 is not applicable.

Prior omnibus approval from the Audit Committee is obtained for repetitive related party transactions. Transactions executed under this omnibus approval are reviewed quarterly by the Audit Committee. Additionally the shareholders'' approval has been duly obtained, wherever applicable, for all related party transactions.

Comprehensive disclosures regarding related party transactions, in accordance with Ind AS-24, including the names of related parties and the specifics of transactions with them, are provided under the Notes to the Financial Statements.

Disclosures on related party transactions are also submitted to the stock exchanges on a half-yearly basis. The Company has also revised its Related Party Transactions Policy in accordance with the recent amendments to the Listing Regulations. The revised Company''s policy on related party transactions, as approved by the Board, is available on the Company''s website at https://www.punjabchemicals.com/ wp-content/uploads/2025/03/RPT-Policy.pdf.

16. INSURANCE

The Company confirms that all of its assets, properties, and operational activities are adequately insured in accordance with applicable laws, regulatory requirements, and prevailing industry practices. Furthermore, the

Company has obtained Directors and Officers Liability Insurance to provide appropriate coverage and protection for its directors and officers against liabilities arising from the performance of their official duties.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders have been passed by the Regulators, Courts or Tribunals that impact the going concern status and future operations of the Company.

18. AUDITORS'' REPORTS AND AUDITORS

a. Statutory Auditors:

In accordance with the provisions of Section 139(2) of the Companies Act, 2013, read with the applicable rules made thereunder, it is mandatory to rotate the statutory auditors of a company upon the completion of two terms of five consecutive years each, with each term being subject to the approval of the shareholders.

In compliance with these requirements, M/s B S R & Co. LLP, Chartered Accountants (Firm Registration No. 101248W/W-100022), were appointed as the Statutory Auditors of the Company at the 46th Annual General Meeting ("AGM") held on August 10, 2022. They were appointed to hold office from the conclusion of the said AGM until the conclusion of the 51st AGM, to be convened in the year 2027.

It is further noted that, pursuant to the Companies (Amendment) Act, 2017, notified on May 7, 2018, the requirement for annual ratification of the auditors'' appointment by the shareholders at each AGM has been dispensed with.

During the financial year under review, the Statutory Auditors have provided a confirmation to the effect that they continue to meet the independence criteria as prescribed under the Companies Act, 2013 and the Code of Ethics issued by the Institute of Chartered Accountants of India. They have also confirmed that they are not disqualified from continuing as statutory auditors of the Company.

The Statutory Auditors'' Report for the financial year ended March 31, 2025, does not contain any qualification, reservation, or adverse remark. Accordingly, no further explanation or comment by the Board is required. The Auditors'' Report forms part of the financial statements annexed to this Annual Report.

b. Secretarial Auditors:

M/s P.S. Dua & Associates, Company Secretaries (CP No. 3934), were appointed as the Secretarial Auditors of the Company for the financial year 2024-25, in accordance with the provisions of Section 204 of

the Companies Act, 2013, and the rules framed thereunder. The Secretarial Audit Report for the financial year under review is annexed to this Report. The Report does not contain any qualifications, reservations, or adverse remarks, and therefore does not necessitate any further comments by the Board.

Pursuant to the amended provisions of Regulation 24A of the SEBI (LODR) Regulations and Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Audit Committee and the Board of Directors have approved and recommended the appointment of M/s P.S. Dua & Associates, Peer Reviewed Firm of Company Secretaries in Practice (C.P. No. 3934), as Secretarial Auditors of the Company for a term of upto 5(Five) consecutive years, commencing on April 1, 2025, until March 31, 2030. Brief resume and other details of M/s P.S. Dua & Associates, Company Secretaries in Practice, are separately disclosed in the Notice of ensuing AGM.

M/s P.S. Dua & Associates have given their consent to act as Secretarial Auditors of the Company and confirmed that their aforesaid appointment (if made) would be within the prescribed limits under the Act & Rules made thereunder and SEBI (LODR) Regulations. They have also confirmed that they are not disqualified to be appointed as Secretarial Auditors in terms of provisions of the Act & Rules made thereunder and SEBI (LODR) Regulations.

Annual Secretarial Compliance Report:

Pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has undertaken a Secretarial Compliance Audit for the financial year 2024-25. The audit was conducted by a qualified Practising Company Secretary to verify compliance with the applicable provisions of SEBI Regulations, circulars, and guidelines issued thereunder.

The Annual Secretarial Compliance Report, in the prescribed format, has been duly filed with the stock exchanges within the stipulated timeframe.

c. Cost Auditors:

M/s Khushwinder Kumar & Co., Cost Accountants, were appointed as the Cost Auditors of the Company for the financial year 2024-25 in accordance with the provisions of Section 148 of the Companies Act, 2013. The Company has duly maintained proper cost accounting records as prescribed by the Central Government under sub-section (1) of Section 148 of the said Act for its business operations during the year.

Based on the recommendation of the Audit Committee, the Board of Directors has re-appointed M/s Khushwinder Kumar & Co., Cost Accountants, Jalandhar (Firm Registration No. 100123), as the Cost Auditors of the Company to carry out the audit

of cost records for all business divisions for the financial year 2025-26. The firm has submitted a certificate confirming their eligibility for the said re-appointment.

Pursuant to the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is required to be ratified by the shareholders. Accordingly, a resolution seeking such ratification has been included in the Notice convening the forthcoming Annual General Meeting.

The Cost Audit Report for the financial year 202324 was duly filed with the Ministry of Corporate Affairs, and the Cost Audit Report for the financial year 2024-25 will be filed within the prescribed statutory timeline.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a. Independent Directors:

As of March 31, 2025, the Company''s Board of Directors comprises three Independent Directors, including two women Independent Directors. The Independent Directors on the Board are Mrs. Aruna Rajendra Bhinge (DIN: 07474950), Mrs. Tara Subramaniam (DIN: 07654007), and Mr. Sheo Prasad Singh (DIN: 06493455).

b. Cessation:

Mr. Sheo Prasad Singh (DIN: 06493455) tendered his resignation, and consequently ceased to be an Independent Director of the Company effective April 30, 2025. The Board placed on record its deepest appreciation for Mr. Sheo Prasad Singh in the success achieved by the Company during his tenure as an Independent Director of the Company.

c. Re-appointment:

Mrs. Aruna Rajendra Bhinge was re-appointed as an Independent Director for a second term of five consecutive years, effective from April 1, 2025. The re-appointment was approved by the shareholders through postal ballot notice dated January 28, 2025.

d. Appointments:

The Board of Directors of the Company, at its meeting held on April 30, 2025, based on the recommendation of the Nomination and Remuneration Committee, has appointed Mr. Kapil Kumar Mehan (DIN: 01215092) and Mr. Suresh Arora (DIN: 10641466) as an Additional Directors in the capacity of Non-Executive Independent Directors, with effect from April 30, 2025 for a period of five consecutive years.

Pursuant to Regulation 17(1C)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the appointment of an Additional Director is required to be approved by the

shareholders at the next general meeting or within a period of three months from the date of appointment, whichever is earlier. Accordingly, the Company proposes to seek the approval of the shareholders at the forthcoming 49th Annual General Meeting for the regularization of Mr. Kapil Kumar Mehan and Mr. Suresh Arora as Independent Directors, not liable to retire by rotation, for a first term of five consecutive years commencing from April 30, 2025.

The Company has received declarations from all its Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations. Furthermore, all Independent Directors have duly registered themselves with the Independent Directors'' Databank maintained by the Indian Institute of Corporate Affairs (IICA).

In the opinion of the Board, all Independent Directors of the Company possess the requisite qualifications, integrity, expertise, and experience, including the necessary competencies, to effectively discharge their responsibilities.

e. Retirement by Rotation:

Pursuant to the provisions of the Companies Act, 2013, Capt. Surjit Singh Chopra (Retd.) (DIN: 00146490) and Mr. Avtar Singh (DIN: 00063569), Non-Executive and Non-Independent Directors, are liable to retire by rotation at the forthcoming 49th Annual General Meeting (AGM). Being eligible, both Directors have offered themselves for reappointment.

Based on the outcome of the performance evaluation and the recommendation of the Nomination and Remuneration Committee, the Board of Directors recommends their reappointment. The Notice convening the 49th AGM, scheduled to be held on Tuesday, July 29, 2025, includes detailed information in this regard.

f. Relationship / Transaction with Company:

The Directors of the Company had no pecuniary relationship or transactions with the Company, except as disclosed in Note No. 43 of the Standalone and Consolidated Financial Statements.

Details and brief resumes of the Directors seeking appointment or reappointment, as required under the prevailing regulations and rules, are provided in the Notice convening the 49th Annual General Meeting, which forms part of this Annual Report.

Further details regarding all Directors are included in the Corporate Governance Report, which is annexed to this Report.

g. Board Diversity:

The Company recognizes and values the critical role that board diversity plays in driving sustainable success. We believe that a truly diverse board-encompassing a wide range of perspectives, experiences, and backgrounds-enhances decisionmaking and fosters innovation.

Our approach to diversity includes, but is not limited to, considerations of professional skills and industry experience, cultural and geographical backgrounds, age, ethnicity, race, and gender. By leveraging these diverse attributes, we aim to strengthen the board''s collective capabilities and maintain our competitive edge in a dynamic business environment.

Further details on our approach to board diversity are outlined in the Corporate Governance Report, which forms part of this Annual Report.

h. Number of meetings of the Board of Directors:

During the financial year 2024-25, the Board of Directors convened six meetings, all held within the prescribed time intervals in accordance with the provisions of the Companies Act, 2013. The scheduling of these meetings was carried out in advance, in consultation with the Directors, to ensure their effective participation. Detailed information regarding the dates and attendance of these meetings is provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

i. Annual Evaluation of Board and its Committees and of Individual Directors:

Pursuant to provisions of the Companies Act, 2013 and SEBI Listing Regulations, the Board has adopted a formal framework for the annual evaluation of its own performance, that of its Committees, individual Directors, and the Chairman. The evaluation was carried out through a structured process covering key aspects such as Board composition, effectiveness, participation, decision-making, governance, and discharge of duties. Executive Directors were assessed based on leadership, expertise, and their contributions to organizational goals, while Independent Directors were evaluated on their participation, objectivity, and oversight functions. Committees were evaluated as per their terms of reference and functional effectiveness.

A separate meeting of Independent Directors was held on March 26, 2025, to review the performance of the Board, Non-Independent Directors, and the Chairman, as well as the quality and timeliness of information shared by the management. The Board''s Performance Evaluation Policy is available on the Company''s website at https://www.punjabchemicals. com/wp-content/uploads/2018/07/Nomination-and-Remuneration-Policy.pdf

j. Details of Familiarisation Programme:

The details of the familiarization programs provided to the Directors of the Company are outlined in the Report on Corporate Governance and can be accessed on the Company''s website at the following link: https://www.punjabchemicals.com/ wp-content/uploads/2025/03/Familarisation-Programme-2024-25.pdf.

k. Committees of the Board:

In accordance with the provisions of the Companies Act and the Listing Regulations, the Board of Directors has duly constituted the following committees to ensure effective governance and oversight:

• Audit Committee

• Stakeholders Relationship Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility (CSR) Committee

• Risk Management Committee

Comprehensive details regarding the composition of each committee, the number of meetings held during the year, and the attendance of the respective committee members are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

l. Key Managerial Personnel (''KMP''):

During the financial year, Mr. Ashish R. Nayak resigned from the position of Chief Financial Officer (CFO) with effect from January 31, 2025. Subsequently, Mr. Vikash Khanna was appointed as the Chief Financial Officer of the Company with effect from March 26, 2025.

As on March 31, 2025, the following individuals were designated as Key Managerial Personnel of the Company in accordance with Section 2(51) of the Companies Act, 2013:

• Mr. Shalil Shashikumar Shroff -Managing Director

• Mr. Vinod Kumar Gupta - Chief Executive Officer

• Mr. Vikash Khanna - Chief Financial Officer

• Ms. Rishu Chatley - Company Secretary and Compliance Officer

20. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

As of March 31, 2025, the Board of Directors of the Company is duly constituted, comprising a balanced mix of Executive and Independent Directors, in line with applicable statutory requirements. The Board consists of nine (9) members: one (1) Executive Director, five (5) Non-Executive Non-Independent Directors, and three (3) Independent Directors.

The composition of the Board is periodically reviewed to ensure it remains aligned with the strategic needs of the Company and regulatory expectations.

The Nomination and Remuneration Committee has formulated a comprehensive Nomination and Remuneration Policy pursuant to Section 178(3) of the Companies Act, 2013. This policy outlines the criteria for determining the qualifications, positive attributes, and independence of Directors. It also provides guidance on the structure and levels of remuneration for Directors, Key Managerial Personnel (KMP), and senior management, including the appointment of individuals at one level below the KMP.

The full policy is available on the Company''s website and can be accessed at the following link: https://www. punjabchemicals.com/wp-content/uploads/2018/07/ Nomination-and-Remuneration-Policy.pdf.

21. EMPLOYEES AND INDUSTRIAL RELATIONS

The Board of Directors and the Management express their sincere gratitude to all employees for their unwavering commitment, competence, and dedication to the Company''s operations. The relationship between the management and employees continues to remain transparent, positive, and harmonious.

The Company places a strong emphasis on employee welfare and continues to implement various initiatives, including preventive health check-ups and medical facilities within the factory premises. These welfare schemes are well-utilized across all employee categories. Additionally, sports events are regularly organized to promote a healthy work environment and to foster a spirit of teamwork and sportsmanship.

The Board places on record its deep appreciation for the sincere efforts, loyalty, and dedication demonstrated by all employees. The management took proactive measures to safeguard employee well-being and kept them informed and protected throughout the crisis.

22. PARTICULARS OF EMPLOYEES

The disclosure in terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and the name and details of employees in terms of remuneration drawn and every persons employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other details of the concerned employees forms an integral part of this report.

23. PREVENTION OF SEXUAL HARASSMENT (POSH) OF WOMEN AT THE WORKPLACE

The Company is committed to fostering a secure and supportive work environment for all employees. Our goal

is to provide a workplace that is free from harassment, exploitation, and intimidation, ensuring a respectful and inclusive atmosphere for all business associates. In line with this commitment, the Company has implemented a comprehensive Policy for the Prevention and Redress of Sexual Harassment, which can be accessed on our website at https://www.punjabchemicals.com/wp-content/ uploads/2025/02/POSH-Policy.pdf. To effectively address and prevent instances of sexual harassment, the Company has constituted an Internal Complaints Committee (ICC) to handle and resolve complaints in accordance with legal guidelines. The ICC is established under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition, and Redressal) Act, 2013. The Committee includes external members with relevant experience or from recognized NGOs, and is chaired by a senior female employee. Furthermore, over 50% of the ICC members are women, ensuring diverse perspectives and a gender-sensitive approach to complaints.

The ICC empowers employees to report any instances of sexual harassment at the workplace. The Committee is responsible for conducting thorough investigations into all complaints, ensuring a fair, transparent, and timely inquiry process. In addition to addressing complaints, the ICC also plays a key role in the prevention and prohibition of sexual harassment within the organization. For detailed information on the number of sexual harassment complaints filed, resolved, and pending during the financial year, please refer to the Business Responsibility and Sustainability Report section of this Annual Report.

24. COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961. Necessary facilities and benefits, as mandated under the Act, have been extended to the eligible employees.

25. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in preparation of the annual accounts for the year ended March 31, 2025, the applicable accounting standards have been followed along with proper explanation/ disclosure relating to material departures, if any;

b) the Directors have selected such accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2025 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis;

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

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

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

i. MANAGEMENT DISCUSSION AND ANALYSIS

In accordance with Regulation 34(2) of the Listing Regulations, the Management Discussion and Analysis Report is an integral part of this report. This section provides a comprehensive overview of the company''s business performance, highlighting key financial and operational developments. The report delves into the current state of affairs, offering insights into the strategic direction, challenges, and opportunities faced by the company during the reporting period.

ii. CORPORATE GOVERNANCE REPORT

The Company has adhered to the Corporate Governance Code as prescribed under the Listing Regulations. The Corporate Governance Report, in accordance with Rule 34(3) read with Paragraph C of Schedule V of the Listing Regulations, is an integral part of this Report.

Additionally, the required certificate from the Practicing Company Secretary, confirming the Company''s compliance with the corporate governance requirements, is attached hereto.

iii. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

In accordance with Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the "Business Responsibility & Sustainability Report" (BRSR) is included as an integral part of this Report.

27. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors hereby affirms that the Company has adhered to the relevant provisions of the Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI), with respect to the conduct of Board Meetings and General Meetings.

28. ANNUAL RETURN

In accordance with Section 92(3) of the Companies Act, 2013, and Rule 12 of the Companies (Management and Administration) Rules, 2014, read with Section 134(3)(a) of the Companies Act, 2013, the Annual Return in Form MGT-7 as of March 31, 2025, is available for viewing at the following link: https://www.punjabchemicals.com/wp-content/uploads/2025/06/MGT-7.pdf.

29. EVENTS AFTER BALANCE SHEET DATE

There have been no material changes or commitments affecting the financial position of the Company that have occurred between the end of the financial year to which the balance sheet pertains and the date of this Report.

30. OTHER DISCLOSURES

1. There has been no change in the nature of business of the Company during the financial year, in accordance with sub-rule 5(ii) of Rule 8 of the Companies (Accounts) Rules, 2014.

2. During the financial year 2024-25, no application was made, nor was any proceeding pending, under the Insolvency and Bankruptcy Code, 2016.

3. The Company did not enter into any one-time settlement with any bank or financial institution during the year under review.

4. During the year, neither the Statutory Auditors nor the Secretarial Auditor reported any instance of fraud committed against the Company by its officers or employees under Section 143(12) of the Companies Act, 2013, that would require disclosure in the Board''s Report.

5. The equity shares of the Company continue to be listed on BSE Limited and the National Stock Exchange of India Limited.

31. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year under review, no unclaimed dividend was due for transfer to the Investor Education and Protection Fund (IEPF) established by the IEPF Authority.

32. STATE OF AFFAIRS OF THE COMPANY

The state of affairs of the Company is detailed in a separate section of the Management Discussion and Analysis Report, which forms an integral part of this Annual Report. This disclosure is in compliance with the requirements stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

ACKNOWLEDGEMENT

The Board of Directors places on record its sincere appreciation for the dedicated efforts and commitment demonstrated by all employees of the Company throughout the year. The Board also extends its heartfelt gratitude to the financial institutions, banks, government authorities, customers, vendors, and shareholders for their continued support, cooperation, and trust during the year under review.

CAUTIONARY STATEMENT

Certain statements in the Board''s Report and the Management Discussion and Analysis regarding the Company''s objectives, expectations, or forecasts may be forward-looking as defined by applicable securities laws. Actual results may differ materially due to factors such as global and domestic market conditions, availability and cost of key materials, changes in government policies and tax laws, economic developments, and other factors relevant to the Company''s operations.

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Mar 31, 2024

The Board of Directors hereby submits the 48^th Annual Report of the business and operations of the Company along with the Audited (Standalone and Consolidated) Financial Statements, for the financial year ended March 31, 2024. The performance of the Subsidiary has also been referred to wherever required.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2024 is as below:

(J in Lakhs)

Particulars	Consolidated		Standalone
	2023-24	2022-23	2023-24	2022-23
Revenue from Operations and Other Income	93693	100956	93332	100770
Earnings before Interest, Depreciation & Tax & Exceptional item (EBIDTA)	11608	12592	11506	12553
Depreciation / Amortisation	2216	1901	2216	1901
Finance Cost	2084	1803	1920	1780
Profit / (Loss) before Tax & Exceptional item	7308	8888	7370	8872
Profit / (Loss) before Tax (PBT)	7308	8888	7370	8872
Income Tax Expenses:
Current Tax	1680	2626	1655	2626
Deferred Tax	270	152	270	152
Total Income Tax Expenses	1950	2778	1925	2778
Profit / (Loss) after Tax (PAT)	5358	6110	5445	6094
Other Comprehensive income / (expenses) for the year (net of tax)	(36)	(242)	(29)	(92)
Total comprehensive income for the year	5322	5868	5416	6002
Earnings per share (EPS)
Basic and diluted (in H)	43.70	49.84	44.41	49.71
Reserves (excluding Revaluation reserve)	31790	26836	33623	28575

2. OPERATIONAL PERFORMANCE

Your Directors are pleased to state that the year under review, income of the Company on standalone basis stood at H933 crore with a Profit before Tax (PBT) of H74 crore against the income of H1008 crore and Profit before Tax of H89 crore in the previous year.

The year began with a strong start, maintaining growth momentum established by the company in recent years. However, in last quarters, there was an overall correction in the industry due to inventory and price correction resulting in muted demand for some of our products.

The sales of the Company was from Agro Chemicals Division, Derabassi with net revenue of H664 crore

against H739 crore of previous year which is 71% of the total revenue. The revenue of Specialty and Other Chemicals Division, Lalru was H151 crore against H153 crore of previous year. Industrial Chemical Division Pune recorded a revenue of H118 crore against H116 crore of previous year.

The Export of the Company was H484 crore against H581 crore of the last year. The Exports continue to remain impacted due to lower prices and muted demand as channel destocking continues across the globe. The inundation of inexpensive products from China is compelling companies to uphold elevated levels of inventory within their distribution channels.

3. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

The Company has only one wholly owned overseas subsidiary namely SD AgChem (Europe) NV, Belgium. Further, the Company does not have any material subsidiary.

During the year, the Board of Directors reviewed the affairs of the subsidiary. In accordance with Section 129(3) of the Companies Act, 2013, we have prepared the Consolidated Financial Statements of the Company, which form part of this Annual Report. Further, a statement containing the salient features of the financial statements of our subsidiary in the prescribed format AOC-1 is appended to the Board''s report.

During the current year, the Board of Directors on December 14,2023 have approved an investment of upto H1500 lakhs into SD Agchem (Europe) NV and have also provided guarantee on behalf of SD Agchem (Europe) NV, a 100% Wholly Owned Subsidiary to secure the payment obligations of SD Agchem (Europe) NV upto an amount not exceeding H1500 lakhs in relation to a settlement agreement dated December 11, 2023 with ex-shareholders of Sintesis Quimica S.A.I.C, Argentina (erstwhile shareholders'') (erstwhile step down subsidiary till September 2017). Under the terms of settlement, a total consideration of H1,483 lakhs is to be paid by SD Agchem (Europe) NV to the ex- shareholders.

Accordingly, SD Agchem (Europe) NV has recorded an incremental liability of H198 lakhs in the third quarter of current financial year and has also paid a sum of H1,148 lakhs till March 31, 2024. The remaining balance of H335 has also been paid subsequent to the year end.

There are no associates or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

4. CONSOLIDATED FINANCIAL STATEMENT

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the Consolidated Financial Statements and related information of the Company and audited accounts of its subsidiary, are available on our website, at www. punjabchemicals.com.

These documents will also be available for inspection during business hours at the Registered Office of the Company.

The Policy for determining material subsidiaries, adopted by the Board of Directors, pursuant to Regulation 16 of the SEBI (LODR) Regulations, 2015 (hereinafter called as "Listing Regulations") can be accessed on the Company''s website at https://www.punjabchemicals.com/wp-content/uploads/2018/07/Policy-for-determining-Material-Subsidiary.pdf. The consolidated financial statements of the Company for the year ended on March 31, 2024 comprises the standalone financial statements

of the Company and its subsidiary (together referred to as "the Group").

The consolidated revenue of the Company during the year under review stood at H937 crore with a profit before tax of H73 crore against H1010 crore and profit before tax of H89 crore in the previous year.

5. DIVIDEND

The Board of Directors are pleased to recommend a dividend of H3/- per equity share (30%) for the financial year under review against a dividend of H3/- per equity shares (30%) in the previous year.

The total dividend amount to be paid for the financial year 2023-24 shall be H3.68 crore.

The dividend on equity shares is subject to the approval of the shareholders at the ensuing Annual General Meeting of the Company. The dividend once approved by the Shareholders will be payable to those members whose name appear in the Register of members as on the record date.

The Register of Members and Share Transfer Books of the Company will remain closed from Friday, the July 26, 2024 to Friday, the August 2, 2024 (Both days inclusive) and the record date will be Thursday July 25, 2024 for the purpose of payment of dividend for the financial year 2023-24.

The dividend recommended is in line with the dividend distribution policy of the Company and the policy is available on the website of the Company at https://www. punjabchemicals.com/wp-content/uploads/2021/05/ Dividend-Distribution-Policy.pdf.

6. OUTLOOK

The Company is in the business of Performance Chemicals including Agrochemicals, Specialty and other Chemicals and industrial Chemicals. This sector has been showing promising growth over the last few years as new chemicals get introduced in the market, rebalancing of supply chain takes place. The government of India is taking steps to support the industry and this will accelerate innovation and MNCs to partner with Indian companies for future growth.

The Company is investing in R&D and technical capabilities and in emerging as preferred CRAMS provide for both domestic & international agrochemical companies, thus positioned to gain further advantages as the industry expands. The Company already has a long and proven history for manufacturing and exporting various Performance Chemicals (Agro and Specialty). The Company is also working on developing new products & capabilities and working to increase the volume and add new products either under CRAM or for outright sale.

Ongoing discussions with several companies to add new products & to increase business is moving in a healthy direction. The Company has proven track record and has long experience in delivering products to many Indian

and other MNCs. The Company is working to strengthen this relationship with new products and technological innovation.

Barring unforeseen circumstances the management has a positive outlook and is confident of growth with a wide range of products and new manufacturing techniques.

7. FINANCE

a. SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2024 stood at H12.26 crore consisting of 1,22,62,185 equity shares of H10/- each. During the year under review, the Company did not issue any type of shares or convertible securities or shares with differential voting rights. The Company also did not allot /grant any stock options or sweat equity or warrants to the employees. As on March 31, 2024, the Company has not issued or outstanding any instrument convertible into Equity Shares of the Company during the Financial year. Your Company has not resorted to any buy back of its Equity Shares during the year under review.

b. PUBLIC DEPOSITS

The Company does not have any deposit from the public falling within the ambit of Section 73 of the Companies Act, 2013 and The Companies (Acceptance of Deposits) Rules, 2014.

c. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS PURSUANT TO SECTION 186 OF THE COMPANIES ACT, 2013

Loans, guarantees and investments covered under Section 186 of the Companies Act, 2013 are provided at Note No 47 & 48 to the Standalone and Consolidated financial statements provided in this Annual Report.

d. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account and not to transfer any amount to the general reserve.

e. CREDIT RATING

During the year under review, there has been no change in the credit rating of the Company from any of the credit rating agencies, however your Company has received reaffirmation on its rating for Long Term Debt: BBB /Stable and for Short Term Debt: A2 from rating agencies.

8. ENVIRONMENT, SUSTAINABILITY, HEALTH AND SAFETY

Punjab Chemicals implemented a holistic approach towards the highest standards of Environment, Health and Safety. This approach is defined in the Company''s policy, covering the provision of a safe workplace, clean environment and stakeholder health.

We believe that the highest standard of EHS reinforces our position as a responsible corporate citizen. This responsible EHS approach strengthens our performance: lower work interruptions, strengthening timely project completion; protects workforce interests, enhancing employee and knowledge retention; helps moderate direct and indirect costs; growing correlation between corporate respect and clean EHS performance, translating into a stronger credit-rating.

Our health commitment

At Punjab Chemicals, we are committed to send our employees home with complete safety each day. This priority translated into the following initiatives:

Q Conducted a biannual medical check for employees and annual check for managers. Employees involved in hazardous processes undergo quarterly checks. The Company conducted periodic health awareness programmes (heart, blood pressure and sugar).

Q Sustained an occupational health centre with a dedicated pharmacist; sustained a tie-up with an ESI hospital and conducted preventive medical camps through hospitals.

Q Deployed an ambulance in its manufacturing units.

Q Formulated a policy under which a cooperative society was formed to provide loans to employees (house building, children''s education and personal loan among others).

Q Operated a canteen in both units where subsidized food is provided, validated with an FSSAI license.

Q Conducted health education addressing diseases like cardio, blood pressure and hyper-tension; organised yoga and food habit awareness.

Our safety commitment

Safety initiatives

Q Automated batch charging and installed agitated nutsche filter dryers to reduce chemical and vapour emission.

Q Undertook programs on process safety management (including mandatory process safety information, interpretation and validation of process controls).

Q Conducted hazard and operability study, hazards identification and risk assessment across processes in addition to audits, training, mock drills, mechanical and reaction integrity (differential scanning calorimetry or accelerating rate calorimetry).

Q Documented near-miss, incident and accident reporting system with corrective and preventive actions.

Q Implemented a standard operating protocol to address safety violations, monitored in general meetings, processes representative meetings and safety committee meetings with warnings & other action modes.

Q Followed a safety training calendar around eight hours of training each month per employee with biannual mock drills.

Q Focusing on process safety management (PSM) principles.

The Company''s sites are certified to various management systems as follows:

Q ISO 9001:2015 Quality Management System Q ISO 14001:2015 Environmental Management System Q ISO 45001:2018 Occupational Health and Safety

9. RESEARCH & DEVELOPMENT AND QUALITY CONTROL

The activities of R&D consists of improvement in the processes of existing products, decrease of effluent load and to develop new products and by- products.

Quality Control is the strength of the Company. All raw materials and finished products and material at various stages of processing pass through stringent quality checks for ensuring quality and product meeting stringent specifications.

10. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3) (m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 forms part of this Report.

11. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY

Company''s Corporate Social Responsibility (CSR) Policy has been posted on the website at https://www. punjabchemicals.com/wp-content/uploads/2023/03/ CSR-Policy.pdf. During the year under review, the Company was required to spend H178 lakh on CSR activities. The Company has spent H181 lakh in the financial year 2023-24.

The amounts have been spent for promotion of education by upgrading school infrastructure, building computer labs, health care initiatives by organizing various preventive health care medical camps, blood donation camps, eye camps in nearby areas and upliftment of nearby rural areas and helping the needy by donations.

The detailed annual report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 forms part of this Report.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Regulation 22 of the Listing Regulations & Subsection (9 & 10) of Section 177 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, interalia, provides, for all listed companies to establish a vigil mechanism called "Whistle Blower Policy" for Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy.

In accordance with the same the Company has adopted a Whistle Blower Policy as a part of its vigil mechanism. The purpose of this Policy is to enable any person including the directors, employees, other stakeholders, etc. to raise concerns regarding unacceptable or improper practices and / or any unethical practices, fraud or violation of any law, rule or regulation.

The contact details of the Chairperson of Audit Committee have been mentioned in the Policy for easy access. Furthermore, employees are free to communicate their complaints directly to the Chairperson of the Audit Committee as stated in the Policy. The Audit Committee reviews reports made under this Policy and implements corrective actions wherever necessary.

Further, during the year, the Company has not received any complaint under Vigil Mechanism / Whistle Blower Policy.

Details of the Vigil Mechanism and Whistleblower Policy are made available on the Company''s website at following link https://www.punjabchemicals.com/ wp-content/uploads/2018/07/Whistle-Blower-Policy-PCCPL.pdf.

13. ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has in place, adequate Internal Financial Controls with reference to financial statements. During the year, such controls were tested, and no reportable material weaknesses in the design or operation were observed. Further details of the internal control systems are provided in the Management Discussion & Analysis which forms part of this Annual Report.

14. DEVELOPMENT AND IMPLEMENTATION RISK MANAGEMENT POLICY

Pursuant to Schedule V of Listing Regulations, the Company has set up a Risk Management Committee, to monitor the risks and their mitigation actions as well as formulating strategies towards identifying new and emergent risks. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board''s Report.

The Company has implemented a mechanism for risk management and formulated a Risk Management Policy which is posted on the website of the Company at https://www.punjabchemicals.com/wp-content/

uploads/2018/07/Risk-Management.pdf. The said policy provides for creation of a risk register, identification of risks and formulating mitigation plans. Major risks identified by the business and functions are systematically addressed through mitigation actions on a continuing basis. The risk register is refreshed periodically to ensure that the risks remain relevant at all times and corresponding mitigation measures are timely and effective so that the risk profile is within identified tolerance levels. Further, the Board is apprised of any actual / emergent risk that may threaten the long term plans of the Company.

15. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES

All related party transactions entered into during the year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large. Accordingly, the disclosure of related party transactions in Form AOC-2 is not applicable.

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

Detailed disclosure on related party transactions as per Ind AS-24 containing name of the related party and details of the transactions entered with such related party have been provided under Notes to financial statements.

Disclosure on related party transactions on half year basis is also submitted to the stock exchanges. The policy on related party transactions as approved by the Board is available on the website of the Company at following link https://www.punjabchemicals.com/wp-content/uploads/2022/04/Related-Party-Policy-2022. pdf.

16. INSURANCE

All the properties and operations of the Company, to its best judgment have been adequately insured.

The Company has also taken Directors and Officers Liability insurance policy.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant or material orders have been passed by the Regulators, Courts or Tribunals that impact the going concern status and future operations of the Company.

18. AUDITORS¹ REPORTS AND AUDITORS

a. STATUTORY AUDITORS

Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years and each such term would require approval of the shareholders. In line with the requirements of the Companies Act, 2013, Statutory Auditor M/s B S R & Co. LLP Chartered Accountants, (Firm Registration No. 101248W/W-100022), were appointed as Statutory Auditor of the Company at the 46^th AGM held on August 10, 2022 to hold office from the conclusion of the said meeting till the conclusion of the 51^st AGM to be held in the year 2027. The requirement of annual ratification of auditors'' appointment at the AGM has been omitted pursuant to Companies (Amendment) Act, 2017, notified on May 7, 2018.

During the year, the Statutory auditors have confirmed that they satisfy the independence criteria required under Companies Act, 2013, the code of Ethics issued by Institute of Chartered Accountants of India and have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Auditors'' Report for the financial year 2023-24 does not contain any qualification, reservation or adverse remark, hence no comments required. The report is enclosed with the financial statements in this Annual Report.

However, the Statutory Auditors have "Observations" under Clause 2B(f) of Report on the Other Legal & Regulatory Requirements in the Standalone and Consolidated Auditors Report.

The Board after consideration has given the following explanations and comments on the "Observations" of Statutory Auditors in the Auditors Report:

The Company was using accounting software as on the beginning of the year till November 30, 2023 for maintaining its books of account and having audit trail feature. Thereafter effective from December 1, 2023, the Company migrated to another accounting software for maintaining its books of account having feature of recording audit trail and which has been activated for all transactions recorded in the software and that there has been no instance of the audit trail feature being tampered.

However it was observed by the Auditors that audit trail (edit log) was not enabled, appropriately at the database level and for certain tables at application level, for the newly migrated software.

The Company has assured that they are further strengthening the newly migrated accounting software to enable audit trail and the process will be completed in the financial year 2024-2025.

In addition, in relation to controls at service organization for accounting software used for

maintaining books of account relating to payroll which are operated by a third-party software service provider the Company has raised the matter with the service provider to report in detail the controls at the database layer and expects full reporting in the financial year 2024-2025.

b. SECRETARIAL AUDITORS

M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934) were appointed to conduct the Secretarial Audit of the Company for the financial year 2023-24 as required under Section 204 of the Companies Act, 2013 and Rules made there under. The Secretarial Audit Report is annexed to this report. The Secretarial Auditors'' Report for the year under review does not contain any qualification, reservation or adverse remark, hence no comments required.

Further, the Board upon recommendation of the Audit Committee has reappointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934), as the Secretarial Auditor to undertake the Secretarial Audit of the Company for the financial year 202425, in terms of Section 204 of the Companies Act, 2013 and Rules there under.

ANNUAL SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the financial year 2023-24 for all applicable compliances as per SEBI Regulations and Circulars/ Guidelines issued there under. The Annual Secretarial Compliance Report has been submitted to the stock exchanges within the prescribed time.

c. COST AUDITORS

M/s Khushwinder Kumar & Co., Cost Accountants were appointed as Cost Auditors of your Company for auditing the cost accounts records for the financial year 2023-24 under provisions of Section 148 of the Companies Act, 2013. Further the Company has made and maintained proper cost records as specified by the central government under subsection (1) of section 148 of the Companies Act, 2013 for its business activities carried out during the year.

Furthermore, the Board of Directors upon recommendation of the Audit Committee appointed M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar (Firm Registration No. 100123) as the Cost Auditor of the Company to conduct audit of the cost accounts of all the Divisions of the Company for the financial year 2024-25. They have submitted a certificate of eligibility for the re-appointment.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, the required resolution for ratification of the remuneration to be paid to

the Cost Auditor has been proposed at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2022-23 was filed with the Ministry of Corporate Affairs and the Cost Audit Report for the financial year 2023-24 will be filed before the due date.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a. Independent Directors

As on March 31, 2024, the Company has five Independent Directors on its Board, including two Woman Independent Director. Mr. Mukesh Dahyabhai Patel (DIN: 00009605), Mr. Vijay Dilbagh Rai (DIN: 00075837), Mr. Sheo Prasad Singh (DIN: 06493455), Ms. Aruna Rajendra Bhinge (DIN: 07474950) and Ms. Tara Subramaniam (DIN: 07654007).

The Board at its meeting held on August 3, 2023 based on the recommendation of Nomination and Remuneration Committee appointed Ms. Tara Subramaniam (DIN: 07654007) as Additional Director (under the category of Non-Executive Independent Director) of the Company with effect from August 3, 2023 for a first term of five years and was further regularized as Independent Director by obtaining shareholders approval through Postal Ballot on September 26, 2023.

The Company has received declarations from all Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Act and the Listing Regulations and they have registered themselves with the Independent Director''s Database maintained by the IICA (The Indian Institute of Corporate Affairs). In the opinion of the Board, all the Independent Directors of the Company possess the requisite qualifications, integrity, expertise and experience, including competence.

b. Retirement by Rotation

As per the provisions of the Companies Act, 2013, Mr. Shivshankar Shripal Tiwari (DIN: 00019058), the Non-Executive and Non-Independent Director, whose office is liable to retire at the ensuing AGM, being eligible, seeks reappointment. Based on performance evaluation and the recommendation of the nomination and remuneration committee, the Board recommends his reappointment. The notice convening the 48^th AGM, to be held on Friday, August 2, 2024, sets out the details.

c. Re-designation Independent Directors and continuation of their directorships beyond the age of 75 years in terms of Regulation 17(1A) of SEBI Listing Regulations, 2015

The members of the Company in the 43^rd Annual General Meeting held on August 13, 2019 have appointed Mr. Mukesh Dahyabhai Patel (DIN:

00009605) and Mr. Vijay Dilbagh Rai, (DIN: 00075837) as an Independent Directors of the Company for second term of five (5) years up to the conclusion of 48^th Annual General Meeting. Therefore, their second term of five year is expiring at this Annual General Meeting.

Pursuant to the provisions of Section 149 of the Companies Act, 2013, a person cannot continue as an Independent Director in a company for more than two consecutive terms of five years and can be eligible to be re-appointed as an Independent Director in the company only after the expiry of the cooling period of three years.

Hence, they are not eligible to continue as an Independent Director in the Company.

In the opinion of the Board, the services of Mr. Mukesh Dahyabhai Patel (DIN: 00009605) and Mr. Vijay Dilbagh Rai, (DIN: 00075837) as an Independent Directors are highly commendable and their continued association would be of immense benefit to the Company. The Company desirous to make them as part of the Board in future also. Therefore, in view of their rich experience and long association with the Company, the Board decided that they may be appointed as a Non-Executive Non-Independent Director and their services can be availed as Non-Executive Non-Independent Director of the Company, liable to retire by rotation.

In this effect the Company has received their consent in writing to act as Non-Executive NonIndependent Director instead of Independent Director in Form DIR-2 pursuant to Rule 8 of the Companies (Appointment & Qualification of Directors) Rules, 2014 and intimation in Form DIR-8 pursuant to terms of the Companies (Appointment & Qualification of Directors) Rules, 2014, to the effect that they are not disqualified as per Section 164(2) of the Companies Act, 2013; and declaration that they are not debarred from holding the office of Director by virtue of any SEBI order or any other such authority.

Therefore, keeping in view of above and based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company, in its meeting held on May 6, 2024, approved the change in designation of Mr. Mukesh Dahyabhai Patel (DIN: 00009605) and Mr. Vijay Dilbagh Rai, (DIN: 00075837) from Non-Executive Independent Director to Non-Executive NonIndependent Director of the Company, liable to retire by rotation with effect from August 2, 2024, subject to the approval of the Members of the Company at the ensuing Annual General Meeting.

Further, the Company has also proposed Special Resolutions for continuation of their directorship beyond 75 years of age in the ensuing Annual General Meeting in accordance with the provisions

of Regulation 17 (1A) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended vide SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2018.

d. Relationship / Transaction with Company

The Directors of the Company had no pecuniary relationship or transactions with the Company except as mentioned in Note no. 43 of the Standalone and Consolidated Financial Statements.

Details and brief resume of the Director seeking reappointment required by prevailing regulations and rules are furnished in the Notice convening the Annual General Meeting forming part of the Annual Report.

Other details of all the Directors have been given in the Corporate Governance Report attached to this Report.

e. Board Diversity

The Company recognizes and embraces the importance of diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, and knowledge. Skill and industry experience, cultural and geographical backgrounds, age, ethnicity, race and gender, that will help us retain our competitive advantage.

Additional details on Board diversity are available in the Corporate Governance Report that form part of this Annual Report.

f. Number of meetings of the Board of Directors

The Board meetings are planned normally in advance in consultation with the Directors. During the Financial Year 2023-24, the Board met 6 times within the prescribed intervening time gap as provided in the Companies Act, 2013. The details of the Board meetings are given in the Corporate Governance Report that forms part of this Annual Report.

g. Annual Evaluation of Board and its Committees and of Individual Directors

As per Companies Act, 2013 and Listing Regulations, the Board has adopted a formal mechanism for evaluating its performance and as well as that of its committees, individual Directors, including the Chairman of the Board. The exercise was carried out through a structured evaluation process covering various aspects of the Boards functioning such as composition of the Board, its committee & members, their experience & competencies, performance of specific duties & obligations, governance. Broadly the performance of Non-Independent/Executive/ Whole Time Director(s) was evaluated on the basis of their own performance, expertise, intelligence,

their qualitative & quantitative contribution towards operational achievements, organizational performance etc. The performance of NonExecutive Independent Directors were evaluated on the basis of their constructive participation in Board/Committee/ General meetings, their informed & balanced decision making, ability to monitor financial controls, systems & certain allied parameters. The annual performance evaluation of various Board Committees constituted under Companies Act & Listing Regulations was made on the basis of their respective terms of reference, discharge of functions, governance etc.

The separate Meeting of Independent Directors was held on March 22, 2024 to review the performance of Non-Independent directors including the Chairman and the Board as a whole as per Code of Independent Directors under Companies Act, 2013 and Listing Regulations. The Independent Directors also reviewed the quality, content and timeliness of follow of information between Management and the Board. The Performance Evaluation Policy of the Board of Directors is uploaded on the Company''s website at following link https://www.punjabchemicals. com/wp-content/uploads/2018/07/Nomination-and-Remuneration-Policy.pdf.

h. Details of Familiarisation Programme

The Independent Directors are regularly informed during meetings of the Board and Committees on the business strategy, business activities, manufacturing operations, updates on the chemicals industry and regulatory updates. The Directors when they are appointed are given a detailed orientation on the Company, Chemicals industry, Company''s Global strategy, policies and Code of Conduct, regulatory matters, business, financial matters, human resource matters and corporate social responsibility initiatives of the Company. The details of familiarization programs provided to the Directors of the Company are mentioned in the Report on Corporate Governance and on the Company''s website at https://www.punjabchemicals.com/wp-content/ uploads/2024/04/Familarisation-Programme-for-Independent-Directors-FY-2023-24.pdf.

i. Committees of the Board

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

a. Audit Committee

b. Stakeholders Relationship Committee

c. Nomination & Remuneration Committee

d. Corporate Social Responsibility (CSR) Committee

e. Risk Management Committee

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

j. Key Managerial Personnel [’KMP'']

There was no change in Key Managerial Personnel during the year under review.

As on March 31, 2024, the Company has the following Key Managerial Personnel as per section 2(51) of the Act:

Q Mr. Shalil Shashikumar Shroff, Managing Director Q Mr. Vinod Kumar Gupta, Chief Executive Officer Q Mr. Ashish Ramdas Nayak, Chief Financial Officer Q Ms. Rishu Chatley, Company Secretary and Compliance Officer

20. POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s Board is fully balanced with required numbers of Executive and Independent Directors. As on March 31, 2024 the Board consists of 9 Members, 1 (one) of whom is Executive Director, 3 (three) Non Executive Non Independent Directors and 5 (five) Independent Directors including two women directors. The requirement of reconstitution of the Board is evaluated from time to time. Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel.

The same can be viewed on our site at following link https://www.punjabchemicals.com/wp-content/ uploads/2018/07/Nomination-and-Remuneration-Policy.pdf.

21. EMPLOYEES AND INDUSTRIAL RELATIONS

The Board of Directors and the Management are extremely thankful to all the employees for their commitment, competence and dedication in the affairs of the Company. The relation between the management and employees is transparent, healthy and cordial.

The Welfare Schemes viz. preventive health checkup, medical facilities in the factory premises, are used extensively by all categories of the employees. The Company organises Sports events for the employees for a healthy environment and developing the quality of sportsmanship among them.

The Board of Directors are pleased and place on record its appreciation for all categories of employees for their

sincere efforts and the sense of belongingness and commitment towards the Company. The management took all required efforts to keep them safe and educated.

22. PARTICULARS OF EMPLOYEES

The disclosure in terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and the name and details of employees in terms of remuneration drawn and every persons employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other details of the concerned employees forms an integral part of this report.

23. PREVENTION OF SEXUAL HARASSMENT (POSH) OF WOMEN AT THE WORKPLACE

The Company has created and maintained a secured work environment for the employees. The endeavour of the Company is to give a free and cordial atmosphere without harassment, exploitation and intimidation to all business associates of the Company. To empower women and protect women against sexual harassment, a policy for Prevention and Redress of Sexual Harassment is in place which is posted on the Company''s website at following link https://www.punjabchemicals.com/wp-content/ uploads/2024/01/POSH-Policy.pdf. The Company has also constituted an Internal Complaints Committee (ICC) across its all locations to consider and resolve all sexual harassment complaints reported as per legal guidelines.

The ICC has been constituted as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee includes external members from NGO or with relevant experience and a senior woman employee is the presiding officer. More than half of the total members of the ICC are women. Employees can approach / report sexual harassment instance, if any, at the workplace to ICC to look into the same and facilitate free and fair inquiry process with clear time lines. ICC is not only restricted to mere redressal of complaints but also encompasses prevention and prohibition of sexual harassment. The details of sexual harassment complaints that were filed, disposed of and pending during the financial year are provided in the Business Responsibility and Sustainability Report of this Annual Report.

24. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed along with proper explanation / disclosure relating to material departures, if any;

b) the Directors have selected such accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2024 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis;

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

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

25. MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT, & SUSTAINABILITY REPORT

i. MANAGEMENT DISCUSSION AND ANALYSIS

As required by Regulation 34(2) of the Listing Regulations, a Management Discussion and Analysis Report forms part of this Report. The state of the affairs of the business along with the financial and operational developments have been discussed in detail in the Management Discussion and Analysis Report.

ii. REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Report on Corporate Governance in accordance with Rules 34(3) read with para C of Schedule V of Listing Regulations forms an integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance.

iii. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 "Business Responsibility & Sustainability Report" (BRSR) forms part of this Report.

26. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Companies Secretaries of India ["ICSI''] relating to the meetings of the Board and General Meetings.

27. ANNUAL RETURN

Pursuant to Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014 read with Section 134(3)(a) of the Act, the Annual Return in Form MGT-7 as on March 31, 2024 is available at https://www.punjabchemicals.com/wp-content/ uploads/2024/06/Annual-Return-MGT-7.pdf

28. EVENTS AFTER BALANCE SHEET DATE

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the balance sheet relates and the date of this Report.

29. OTHER DISCLOSURES

1. There was no change in the nature of business of the Company as stipulated under sub-rule 5(ii) of Rule 8 of Companies (Accounts) Rules, 2014.

2. There is no application made or proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the financial year 2023-24.

3. There was no instance of one-time settlement with any Bank or Financial Institution.

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

5. The Company''s shares are listed on BSE Limited and the National Stock Exchange of India Limited.

30. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

During the year, no unclaimed dividend was required to transfer in the Investor Education and Protection Fund of IEPF Authority.

31. STATE OF AFFAIRS OF THE COMPANY

The State of Affairs of the Company is presented as part of the Management Discussion and Analysis Report in a separate section forming part of this Report, as required under the SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015.

ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The Board of Directors would also like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, banks, Government authorities, customers, vendors and members during the year under review.

CAUTIONARY STATEMENT

Statements in the Board''s Report and the Management Discussion and Analysis describing the Company''s objectives, expectations or predictions, 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, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country, and other factors which are material to the business operations of the Company.

For and on behalf of the Board of Directors

Mukesh Dahyabhai Patel

Place: Mumbai Chairman

Date: May 6, 2024 DIN: 00009605

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Mar 31, 2022

Your Directors have pleasure in presenting the 46^th Annual Report of the business and operations of the Company along with the Audited Standalone and Consolidated Financial Statements for the financial year ended on March 31, 2022.

1. FINANCIAL RESULTS

The financial performance of the Company for the year ended March 31, 2022 is summarised below:

('' In lakh)
Particulars	Consolidated*		Standalone
	2021-2022	2020-2021	2021-2022	2020-2021
Revenue from Operations and Other Income	93439	68001	93129	67736
Earnings before Interest, Depreciation & Tax & Exceptional item (EBIDTA)	14062	9733	13908	9529
Depreciation / Amortisation	1667	1486	1667	1486
Finance Cost	1234	1346	1199	1232
Profit / (Loss) before Tax & Exceptional item	11161	6901	11042	6811
Profit / (Loss) before Tax (PBT)	11161	6901	11042	6811
Income Tax Expenses:
Current Tax	2695	1551	2840	1315
Deferred Tax	120	442	120	442
Total Income Tax Expenses	2815	1993	2960	1757
Profit / (Loss) after Tax (PAT)	8346	4908	8082	5054
Other Comprehensive income / (expense) for the year (net of tax)	8	(46)	(47)	57
Total comprehensive income for the year	8354	4862	8035	5111
Earnings per share (EPS) Basic and diluted (in H)	68.07	40.03	65.92	41.22
Reserves (excluding Revaluation reserve)	21336	13227	22941	15151

2. OPERATIONAL PERFORMANCE:

Your Directors are pleased to state that the year under review ended with the total income of the Company on standalone basis at H 931 crore with a highest ever Profit before Tax (PBT) of H 110 crore against the income of H 677 crore and Profit before Tax of H 68 crore in the previous year.

Your Company has been successful in increasing profitability by optimizing the product mix and improving production efficiency. This has resulted in an increase of PBT by 62%. As in the past, the maximum sales was from AgroChemicals Division, Derabassi with net revenue of H 664 crore against H 501 crore of previous year which is 71% of the total revenue. The revenue of Specialty and Other Chemicals Division, Lalru was at H 156 crore against H 124 crore of previous year. Industrial Chemical Division Pune recorded a revenue of H 111 crore against H 52 crore of previous year. The Company is planning to increase market share in Agrochemicals and also plans to manufacture Agrochemicals at the Lalru unit. Process of approval for bifurcating

the site to accommodate agrochemicals has been initiated. This will make full use of the available infrastructure there.

The Export of the Company was H 487 crore against H 421 crore of the last year, which is up by 16%. It is a matter of satisfaction that the Company continues to meet the requirement of all the customers as per their satisfaction.

3. SUBSIDIARY COMPANIES / ASSOCIATE COMPANIES

As on March 31, 2022, the Company has only one wholly owned overseas subsidiary namely SD AgChem (Europe) NV, Belgium. The total income of SD Agchem (Europe) NV was H 12.58 crore with profit before tax of H 1.45 crore as compared to the Income of H 11.36 crore with net profit of H 0.81 crore in the previous year.

In compliance with Section 129 of the Act, a statement containing requisite details including financial highlights of the operation of the subsidiary in Form AOC-1 forms part of this Report.

4. CONSOLIDATED FINANCIAL STATEMENT

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements for the year ended March 31, 2022 include the consolidated financial statements and related information of the Company. The audited statement of accounts of the subsidiary Company alongwith above information are available on the website of the Company i.e. www.punjabchemicals.com.

These documents will also be available for inspection during business hours at the Registered Office of the Company.

The Policy for determining material subsidiaries, adopted by the Board of Directors, pursuant to Regulation 16 of the SEBI (LODR) Regulations, 2015 (hereinafter called as "Listing Regulations”) can be accessed on the Company''s website at http://www.punjabchemicals.com/wp-content/ uploads/2018/07/Policy-for-determining-Material-Subsidiary.pdf.

The consolidated financial statements of the Company for the year ended on March 31, 2022 comprises the standalone financial statements of Company and its subsidiary (together referred to as "the Group”).

The consolidated revenue of the Company during the year under review was H 934 crore with a profit before tax of H 112 crore against H 680 crore and profit before tax of H 69 crore in the previous year.

5. DIVIDEND

The Board of Directors are pleased to recommend a dividend of H 3 per equity share (30%) for the financial year under review against a dividend of H 2 per equity shares (20%) in the previous year.

The total dividend amount to be paid for the financial year 2021-2022 shall be H 367.87 Lakh.

The dividend on equity shares is subject to the approval of the Shareholders at the ensuing Annual General Meeting of the Company. The dividend once approved by the Shareholders will be payable to those members whose name appear in the Register of members as on the record date.

The Register of Members and Share Transfer Books of the Company will remain closed from Wednesday, the 3^rd August, 2022 to Wednesday, the 10^th August, 2022 (both days inclusive) and the record date will be 3^rd August, 2022 for the purpose of payment of dividend for the financial year 2021- 2022.

The dividend recommended is in line with the dividend distribution policy of the Company and the

policy is available on the website of the Company at https://www.puniabchemicals.com/wp-content/ uploads/2021/05/Dividend-Distribution-Policy. pdf.

6. OUTLOOK

The Chemical sector, including Performance Chemicals, Agrochemicals and Speciality Chemicals, is poised for exponential growth over next few years. Demand is growing and new applications are emerging. This coupled with rebalancing of global supply chain offers a unique opportunity for India as a country and several global MNCs are looking to expand their presence in India.

As your Company has a long and proven history for manufacturing and exporting various Performance Chemicals (Agro and Speciality), -it stands the chance to increase the volume and add new products under CRAMS or for outright sale. Your company has started discussions with several big companies to explore such options and are also working to strengthen R&D technical capabilities to cater to these new business opportunities. The Company has long association with several leading global players and is working to strengthen this relationship with new products and increased business.

The Company is in constructive efforts with a wide range of companies, products and new manufacturing techniques. The management has a positive outlook, is putting together processes and systems in place for future growth and building new team with a high level of confidence.

7. FINANCE

a. Share Capital

The paid up Equity Share Capital as at March 31, 2022 stood at H 12.26 crore consisting of 1,22,62,185 equity shares of H 10 each. During the year under review, the Company did not issue any type of shares or convertible securities or shares with differential voting rights. The Company also did not allot /grant any stock options or sweat equity or warrants to the employees. As on March 31, 2022. The Company has not issued or outstanding any instrument convertible into Equity Shares of the Company during the Financial year.

b. Public Deposits

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013 and

The Companies (Acceptance of Deposits) Rules, 2014.

c. Particulars of Loans, Guarantees or Investments Pursuant to Section 186 of the Companies Act, 2013

Particulars relating to loans and guarantees or investments under section 186 of the Companies Act, 2013 are provided at Note no. 47 and 46 to the Standalone and Consolidated Financial Statements respectively.

d. Transfer to Reserves

The Board of Directors has decided to retain the entire amount of profits in the profit and loss account and not to transfer any amount to the general reserve.

e. Credit Rating

As on March 31, 2022, your Company has received CARE BBB (Triple B Plus; Outlook: Stable) for Long Term Bank Facilities and A2 for Short Term Bank Facilities.

8. ENVIRONMENT, SUSTAINABILITY, HEALTH AND SAFETY

A clean environment and safe operations has always been top priority of the management. Safety of all employees, compliances of environmental regulations and preservation of natural resources are regularly monitored.

The effluent and emissions from the plants are regularly monitored and treated. The Company has an approved Effluent Treatment Plant with an incinerator to treat the waste materials in Derabassi and Lalru units. In addition to this, for the solid waste, the Company has tied up with Common Effluent Treatment Plants set up in the nearby area of the manufacturing sites. Derabassi and Lalru units of the Company have been declared as Zero Liquid Discharge (ZLD) facilities.

9. RESEARCH & DEVELOPMENT AND QUALITY CONTROL

The activities of R&D consists of improvement in the processes of existing products, reduction of effluent load and to develop new products and by- products.

Quality Control is the strength of the Company. All raw materials and finished products as well as

the materials at various stages of processing pass through stringent quality checks for ensuring quality and product meeting stringent specifications.

10. PARTICULARS REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 forms part of this Report.

11. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY

i) Welfare Activities

The Company through SDS Memorial Trust has taken up various social works for the betterment of the society.

The Company continues to organise a ''Blood Donation Camp'' in the memory of Late Mr. S.D. Shroff on 18^th December every year. 118 employees donated blood this year.

ii) Corporate Social Responsibility

Company undertakes various CSR activities in and around the Derabassi and Lalru area as well as other cities. Company''s Corporate Social Responsibility (CSR) Policy has been posted on the website at http://www.pu njabchemicals. com/wp- content/uploads/2019/04/CSR-Policy.pdf in compliance with the disclosure about CSR Policy Rules, 2014.

During the year under review, the Company was required to spend H 75.67 lakh on CSR activities. The Company has spent H 75.94 lakh in the financial year 2021-2022. The amounts have been spent on upgradation of infrastructure of schools and on public utilities.

The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 forms part of this Report.

For other details regarding the CSR Committee, please refer to the Corporate Governance Report, which forms part of this Report.

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY

Regulation 22 of the Listing Regulations & Subsection (9 & 10) of Section 177 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, interalia, provides, for all listed companies to establish a vigil mechanism called "Whistle Blower Policy” for Directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy.

As a conscious and vigilant organisation, the Company believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In its endeavour to provide its employees a secure and fearless working environment, the Company has established the "Whistle Blower Policy”. The same can be viewed at http://www.punjabchemicals. com/wp-content/uploads/2018/07/Whistle-Blower- Policy-PCCPL.pdf

The Whistle Blower Policy and establishment of Vigil Mechanism have been appropriately communicated within the Company. The Whistle Blower Policy is also posted on the website of the Company. The purpose of the policy is to create a fearless environment for the Directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or Ethics Policy. It protects Directors and employees wishing to raise a concern about serious irregularities within the Company.

During the year, the Company has not received any complaint under Vigil Mechanism / Whistle Blower Policy and no person was denied access to the Audit Committee.

13. INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

The internal financial controls of the Company are constantly assessed and strengthened with proper standard operating procedures (SOP). They are reviewed in routine and required modifications in the SOP are carried out as per the requirement. The

controls in the system are commensurate with size, scale and complexities of the business operations.

Audit plays a key role in providing assurance to the Board of Directors. Significant audit observations and corrective actions taken by the management are presented to the Audit Committee of the Board. To maintain its objectivity and independence, the Internal Auditor has access to the Chairman of the Audit Committee.

The Audit Committee actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same. The Management Information System of the Company is an integral part of the control mechanism.

The Audit Committee, Board of Directors, Statutory Auditors and the Business Heads are periodically apprised of the internal audit findings and the corrective actions taken.

14. RISK MANAGEMENT

Pursuant to Schedule V of SEBI (LODR) Regulation, 2015, the Company has constituted a Risk Management Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board''s Report.

The Company has formulated Risk Management Policy which is posted on the website of the Company at www.punjabchemicals.com. The Audit Committee also oversees the area of financial risks and controls.

The Management is fully aware of its responsibility and review various risks viz. Business, Environmental, manpower, financial and take corrective or appropriate actions as and when required for smooth functioning.

The key features include building an organisationwide awareness of risks across businesses and corporate functions; developing formal reporting and monitoring processes; developing risk management plans to keep the information updated and refreshed; and deploying an ERM framework in key business areas and corporate functions.

15. RELATED PARTY TRANSACTIONS

All related party transactions entered into during the year were on arm''s length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company which may have a potential conflict with the interest of the Company at large. Accordingly,

the disclosure of related party transactions in Form AOC-2 is not applicable.

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

Detailed disclosure on related party transactions as per Ind AS-24 containing name of the related party and details of the transactions entered with such related party have been provided under Notes to financial statements.

Disclosure on related party transactions on half year basis is also submitted to the stock exchanges. The policy on related party transactions as approved by the Board is available on the website of the Company at http://www.punjabchemicals.com/ wp-content/uploads/2019/08/Related-Party-policy.pdf.

16. INSURANCE

All the properties and operations of the Company, to its best judgment have been adequately insured.

The Company has also taken Directors and Officers Liability insurance policy.

17. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators or Courts which impacts the Company''s ability to continue as a going concern.

18. AUDIT REPORTS AND AUDITORS

a. STATUTORY AUDITORS

Under Section 139(2) of the Companies Act, 2013 and the Rules made thereunder, it is mandatory to rotate the statutory auditors on completion of two terms of five consecutive years and each such term would require approval of the shareholders. In line with the requirements of the Companies Act, 2013, M/s. B S R & Co. LLP Chartered Accountants, (Firm Registration No. 101248W/W- 100022), were appointed as the Statutory Auditors of the Company at the 41^st AGM held on 14^th September, 2017 to hold office from the conclusion of the said meeting till the conclusion of the 46^th AGM to be held in the year 2022. The term of office of M/s. B S R & Co. LLP Chartered Accountants, (Firm Registration No. 101248W/W- 100022), as

the Statutory Auditors of the Company will conclude from the close of the forthcoming AGM of the Company.

The Board of Directors of the Company, based on the recommendation of the audit committee, at its meeting held on May 5, 2022, have recommended the reappointed M/s B S R & Co. LLP Chartered Accountants, (Firm Registration No. 101248W/W- 100022), as the Statutory Auditors of the Company to hold office for a second term of five consecutive years from the conclusion of the 46^th AGM till the conclusion of the 51^st AGM and will be placed for the approval of the shareholders at the ensuing AGM. The Statutory Auditors have confirmed that they satisfy the independence criteria required under the Companies Act, 2013.

The Board recommends their reappointment to the shareholders. The notice convening the 46^th AGM to be held on August 10, 2022 sets out the details.

There are no instances of any fraud reported by the statutory auditor to the Audit Committee or the Board pursuant to section 143(12) of the Act. The Auditor''s Report on standalone and consolidated financial statements forms part of the Annual Report and contains an Unmodified Opinion without any qualification, reservation or adverse remark.

b. SECRETARIAL AUDITORS

Pursuant to section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934), to conduct secretarial audit for the financial year 2021-22. The report of the Secretarial Auditor for the financial year 2021-22 is unmodified and does not contain any qualification, reservation or adverse remark. The Secretarial Audit Report for the financial year 2021-2022 forms part of this Report.

c. COST AUDITORS

As per the requirements of Section 148 of the Companies Act,2013 (the Act) read with the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time, the Company is required to maintain cost records and accordingly, the same have been maintained.

The Board of Directors upon recommendation of the Audit Committee appointed M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar (Firm Registration No.100123) as the Cost Auditor of the Company to conduct audit of the cost accounts of all the Divisions of the Company for the financial year 2021-2022. They have submitted a certificate of eligibility for the re-appointment.

I n accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, the required resolution for ratification of the remuneration to be paid to the Cost Auditor has been proposed at the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2020-2021 was filed with the Ministry of Corporate Affairs and the Cost Audit Report for the financial year 2021-2022 will be filed before the due date.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Independent Directors

As on March 31, 2022, the Company has four Independent Directors on its Board, including a Woman Independent Director. Mr. Mukesh D Patel (DIN:00009605), Mr. Vijay D Rai (DIN:00075837), Mr. Sheo Prasad Singh (DIN:06493455) and Ms. Aruna R Bhinge (DIN:07474950), The Independent Directors have given the required undertaking for meeting the criteria of independence as laid down in Section 149(7) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulations, 2015. They have also given declaration for compliance with the Code for Independent Directors prescribed in Schedule IV to the Act. During the year there is no change in the Independent Directors.

b) Retirement by Rotation

As per the provisions of the Companies Act, 2013, Mr. Avtar Singh (DIN No. 00063569), the Non-Executive and Non-Independent Director, whose office is liable to retire at the ensuing AGM, being eligible, seeks reappointment. Based on performance evaluation and the recommendation of the Nomination and Remuneration Committee, the Board recommends his reappointment. The notice

convening the 46^th AGM, to be held on August 10, 2022, sets out the details.

c) Relationship / Transaction with Company

The Directors of the Company had no pecuniary relationship or transactions with the Company except as mentioned in Note no. 42 of the Standalone and Consolidated Financial Statements.

Details and brief resume of the Director seeking reappointment required by prevailing regulations and rules are furnished in the Notice convening the Annual General Meeting forming part of the Annual Report.

Other details of all the Directors have been given in the Corporate Governance Report attached to this Report.

d) Number of meetings of the Board of Directors

The Board meetings are planned normally in advance in consultation with the Directors. During the Financial Year 2021-2022, the Board met 5 times within the prescribed intervening time gap as provided in the Companies Act, 2013. The details of the Board meetings are given in the Corporate Governance Report that forms part of this Annual Report.

e) Board Evaluation

Pursuant to the provisions of Companies Act, 2013 and the SEBI (LODR) Regulations, 2015, the evaluation process for performance of the Board, its various committees, individual directors and the Chairman of the Board was carried out during the year.

Each director was provided a questionnaire to be filled up providing feedback on the overall functioning of the Board, its Committees and contribution of individual directors. The questionnaire covered various parameters such as structure of the Board/Committees, board meeting practices, overall board effectiveness, attendance/ participation of directors in the meetings, etc. The directors were also asked to provide their suggestions for areas of improvement to ensure higher degree of engagement with the management.

The Independent Directors during the year, completed evaluation of Non-independent/ Non-promoter Directors and the entire Board including the Chairman. The Independent Directors expressed satisfaction on overall functioning of the Board, various committees

as well as the directors of the Company. They appreciated the knowledge and expertise of the Chairman and his exemplary leadership qualities which demonstrate positive attributes in following the highest standards of corporate values and culture of the Company.

The Board also discussed the report of performance evaluation and its outcome.

f) Details of Familiarisation Programme

The details of the programmes for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model and related matters are posted on the website of the Company at https://www.punjabchemicals. com/wp-content/uploads/2022/03/ Familiarization-Programme-2021-2022.pdf

g) Committees of the Board

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

a. Audit Committee

b. Stakeholders Relationship Committee

c. Nomination & Remuneration Committee

d. Corporate Social Responsibility (CSR) Committee

e. Risk Management Committee

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

h) Key Managerial Personnel (‘KMP’)

During the year, Mr. Punit K Abrol, superannuated from his position of Company Secretary & Compliance Officer with effect from December 31, 2021. Mr. V Srinivas was appointed as Company Secretary & Compliance Officer of the Company with effect from January 27, 2022.

As on March 31, 2022, the Company has the following Key Managerial Personnel as per section 2(51) of the Act:

• Mr. Shalil S Shroff, Managing Director

• Mr. Vinod K Gupta, Chief Executive Officer

• Dr. Sriram Swaminathan, Chief Financial Officer

• Mr. V Srinivas, Company Secretary and Compliance Officer

• Mr. Jain Parkash, Sr. V.P. (Works)

20. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Company''s Board is fully balanced with required numbers of Executive and Independent Directors. As on March 31 2022, the Board consists of 8 Members, 1 of whom is Executive Director,

3 Non Executive Non Independent Directors,

4 Independent Directors. The requirement of reconstitution of the Board is evaluated from time to time. The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel.

The same can be viewed on our site http:// www.punjabchemicals.com/wp-content/ uploads/2018/07/Nomination-and-Remuneration-Policy.pdf.

21. EMPLOYEES AND INDUSTRIAL RELATIONS

The Board of Directors and the Management are extremely thankful to all the employees for their commitment, competence and dedication in the affairs of the Company. The relation between the management and employees is transparent, healthy and cordial.

The Welfare Schemes viz. preventive health check up, medical facilities in the factory premises, are used extensively by all categories of the employees. The Company organises sports events for the employees for a healthy environment and developing the quality of sportsmanship among them.

The Board of Directors are pleased and place on record its appreciation for all categories of employees for their sincere efforts and the sense of belongingness and commitment towards the Company. Their support and sacrifices during COVID-19 had helped the Company to continue its operations. The management took all required efforts to keep them safe and educated.

The disclosure in terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3)

of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, and the name and details of employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and other details of the concerned employees forms part of this report.

22. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORK PLACE

The Company has created and maintaining a secured work environment for the employees. The endeavour of the Company is to give a free and cordial atmosphere without harassment, exploitation and intimidation to all business associates of the Company. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment is in place and Internal Complaint Committee as per legal guidelines had been set up. This policy allows employees to report sexual harassment instances if any at the workplace to the Committee. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair inquiry process with clear time lines. The Policy on Prevention of Sexual Harassment is also posted on the website http://www.punjabchemicals.com/wp-content/uploads/2018/07/Prevention-of-Sexual-Harrasment.pdf.

During the year ended March 31 2022, no complaints pertaining to sexual harassment was received by the Company.

23. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) i n preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed along with proper explanation / disclosure relating to material departures, if any;

b) the Directors have selected such accounting policies, applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at

March 31, 2022 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis;

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

f) t he Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

24. MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT, BUSINESS RESPONSIBILITY REPORT

(i) Management Discussion and Analysis

i n terms of Regulation 34 (2) (e) of the SEBI (LODR) Regulations, 2015 read with other applicable provisions, the detailed review of the operations, performance and future outlook of the Company and its business is given in the Management''s Discussion and Analysis Report which forms part of this Annual Report.

(ii) Corporate Governance Report

The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Report on Corporate Governance in accordance with Rules 34(3) read with para C of Schedule V of SEBI (LODR) Regulations, 2015 forms an integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance.

(iii) BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI (LODR) Regulations, 2015, "Business Responsibility Report” (BRR) forms part of this Report.

25. COMPLIANCE WITH SECRETARIAL STANDARDS

The Board of Directors affirms that the Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India relating to the meetings of the Board and General Meetings.

26. ANNUAL RETURN

Pursuant to section 92(3) of the Companies Act, 2013, a copy of the draft Annual Return as on March 31, 2022 has been placed on the website of the Company and the web link of such Annual Return is https://www.punjabchemicals.com/wp-content/ uploads/2022/06/AnnualReturnPCCPL2022.pdf.

27. EVENTS AFTER BALANCE SHEET DATE

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the balance sheet relates and the date of this Report.

28. OTHER DISCLOSURES

1. There was no change in the nature of business of the Company as stipulated under sub-rule 5(ii) of Rule 8 of Companies (Accounts) Rules, 2014.

2. There is no application made or proceedings pending under the Insolvency and Bankruptcy Code, 2016 during the financial year 2021-22.

3. There was no instance of one-time settlement with any Bank or Financial Institution.

4. There was no instance of fraud during the year under review, which required the Statutory Auditors to report to the Audit Committee and /

or Board under Section 143(12) of Act and Rules framed thereunder.

29. STATE OF AFFAIRS OF THE COMPANY

The State of Affairs of the Company is presented as part of the Management Discussion and Analysis Report in a separate section forming part of this Report, as required under the SEBI (LODR) Regulations, 2015.

30. ACKNOWLEDGEMENT

The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and cooperation received from the financial institutions, Banks, Government authorities, customers, vendors and members during the year under review.

31. CAUTIONARY STATEMENT

Statements in the Board''s Report and the Management Discussion and Analysis describing the Company''s objectives, expectations or predictions, 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, availability of critical materials and their cost, changes in government policies and tax laws, economic development of the country, and other factors which are material to the business operations of the Company.

For and on behalf of the Board of Directors

Mukesh D Patel

Date: 5^th May, 2022 Chairman

Place: Mumbai DIN: 00009605

---

Mar 31, 2018

TO THE MEMBERS,

1. The Directors are pleased to present the 42^nd Annual Report of the business and operations alongwith the Audited Standalone and Consolidated Financial Statements of the Company for the financial year ended on March 31, 2018.

2. FINANCIAL RESULTS:

The financial performance of the Company for the year ended March 31, 2018 is summarized below:

(Rs. In lac)

Particulars	Consolidated*		Standalone
	2017-18	2016-17	2017-18	2016-17
Revenue from Operations and Other Income	50692	54858	50219	45215
Earnings before Interest, Depreciation & Tax & Exceptional item (EBIDTA)	5262	2754	4567	3468
Depreciation/Amortisation	1394	1606	1394	1431
Finance Cost	1768	3068	1751	2174
Profit / (Loss) before Tax & Exceptional item	2100	(1920)	1422	(137)
Exceptional (Expenses) / Income	326	-	326	-
Profit / (Loss) before Tax (PBT)	2426	(1920)	1748	(137)
Income Tax Expenses:
Current Tax	297	-	297	-
Adjustment of tax pertaining to earlier periods	(51)	-	(51)	-
Deferred Tax	462	73	462	73
Total Income Tax Expenses	708	73	708	73
Profit / (Loss) after Tax (PAT)	1718	(1993)	1040	(210)
Other Comprehensive income / expense not to be reclassified to	(336)	373	(14)	13
profit or loss in subsequent period
Total comprehensive income for the period	1382	(1620)	1026	(197)
Earning per share (EPS)
Basic and diluted (in Rs.) (not annualized)	14.01	(16.25)	8.48	(1.71)

Notes:

a) *Consolidated accounts consist of standalone and overseas subsidiary Companies.

b) Figures for the previous period have been regrouped to the extent necessary.

3. ADOPTION OF IND-AS:

The Company adopted Indian Accounting Standards (Ind-AS) from 01 April, 2017 with the transition date of 01 April 2016 and accordingly these financial results have been prepared in accordance with the recognition and measurement principles laid down in the Indian Accounting Standard (Ind-AS) 34-Interim Financial Reporting and other accounting principles generally accepted in India. Consequently, erstwhile Indian Generally Accepted Accounting Principles (IGAAP) results for the year ended 31 March 2017 has been restated to make them comparable. Reconciliation of net profit and equity as reported under erstwhile IGAAP and as restated now under Ind-AS is as under:

Standalone: (Rs. in lac)

Particulars	Equity	Net Profit
	As at	Quarter ended	Year ended
	31-Mar	31-Mar	31-Mar
	(Audited)	(Audited)	(Audited)
	2017	2017	2017
Net profit / (loss) as reported under erstwhile IGAAP	5,665	(402)	213
a) Actuarial gain on defined benefit plans reclassified to Other Comprehensive Income	-	13	(8)
b) Finance cost adjustment on account of Fair valuation of borrowings	532	(89)	(367)
c) Fair value of investments	(136)	-	-
d) Others	169	25	25
e) Tax*	957	150	(73)
Net Profit / (loss) now reported under Ind-AS	7,187	(303)	(210)

* Includes tax effect of above mentioned items and adjustment for reassessment of probability of realization of unrecognized deferred tax asset

Consolidated: (Rs. in lac)

Particulars	Equity	Net Profit
	As at	Year ended
	31-Mar	31-Mar
	(Audited)	(Audited)
	2017	2017
Net profit / (loss) as reported under erstwhile IGAAP	4,178	(1570)
a) Actuarial gain on defined benefit plans reclassified to Other Comprehensive Income	-	(8)
b) Finance cost adjustment on account of Fair valuation of borrowings	532	(367)
c) Fair value of investments	107	-
d) Others	65	25
e) Tax*	957	(73)
Net Profit / (loss) now reported under Ind-AS	5,839	(1993)

* Includes tax effect of above mentioned items and adjustment for reassessment of probability of realization of unrecognized deferred tax asset

4. STANDALONE RESULTS:

The Directors are happy to share that the revival steps taken by the Company’s Management have yielded results. It is satisfying that accumulated losses of the earlier years have been recouped in the year under review. The performance of all the divisions have improved and accordingly, on standalone basis, the Revenue from Operations increased to Rs. 502 crore and Profit before Tax increased to Rs. 17.48 crore against the revenue of Rs. 452 crore and loss of Rs. 1.37 crore in the previous year as per Ind AS.

The Agrochemicals Division Derabassi, which contributes almost 75% of the revenue, continues to strengthen its activities by adding new products and taking cost effective measures, wherever possible. Its revenue has increased by 22% from the revenue of previous year. The operations of the Specialty and Other Chemicals Division, Lalru and Industrial Chemical Division, Pune have also shown improved results compared to the previous year. There has been a substantial increase in the job work income, contributing to better results.

5. OVERSEAS SUBSIDIARY COMPANY RESULTS:

The Company adopted the strategy to divest its nonperforming assets and non-profitable businesses. The results of Sintesis Quimica were affecting the consolidated results of the Company, therefore, as approved by the members, the entire shareholding in the Company was sold by the overseas wholly owned subsidiaries of the Company vide Agreement dated 28th September 2017 to an unrelated party. Sintesis Quimica is therefore no longer a step-down subsidiary of the Company. The Financial Results up to the date of agreement were not available due to administrative reasons, therefore, the same could not be consolidated with the accounts of the year under review. However, the losses of investment and other related expenses have been taken into the books of account.

On 31st March, 2018, the Company had two overseas subsidiaries namely - SD AgChem (Europe) NV and STS Chemicals (UK) Ltd. During the year under review, the operational results were as follows:

(i) SD Agchem (Europe) NV:

The total income was Rs. 16.14 crore with net profit of Rs. 3.70 crore, compared to the Income of Rs. 5.66 crore and Profit of Rs. 1.29 crore in the previous year.

(ii) STS Chemicals (UK) Limited (STS):

There was no commercial activity in the Company. Therefore, there was a loss of Rs. 1 lac against loss of Rs. 24 lac during the previous year. The Company has taken steps to dissolve this Company because there was no business activity and also no further plans for doing business in this Company. The required approval of dissolution from the concerned authorities has been received.

In compliance with Section 129 of the Act, a statement containing requisite details including financial highlights of the operation of all the subsidiaries in Form AOC-1 is annexed to the report as Annexure 1.

In accordance with Section 136 of the Companies Act, 2013, the audited financial statements including the consolidated financial statements and related information of the Company and audited accounts of the subsidiaries are available on the website of the Company www.punjabchemicals.com. These documents will also be available for inspection during business hours at the Registered Office of the Company.

The Policy for determining material subsidiaries, adopted by the Board of Directors, pursuant to Regulation 16 of the SEBI (LODR) Regulations, 2015 (hereinafter called as “Listing Regulations”) can be accessed on the Company’s website www.punjabchemicals.com.

6. CONSOLIDATED RESULTS:

Your Company has prepared the Consolidated Financial Statements in accordance with Section 133 of the Companies Act 2013 read with Indian Accounting Standard IND AS 27 (Consolidated and Separate Financial Statements), IND AS 28 -(Accounting for Investments in Associates in Consolidated Financial Statements) and IND AS 31 (Financial Reporting of Interest in Joint Ventures) notified by the Companies (Accounts) Rules, 2014 and Companies (Accounting Standard) Amendment Rules 2016 except Sintesis Quimica, Argentina which was sold on 28^th September, 2017 and the results upto the said period were not available as not shared by the buyer.

The audited consolidated financial statements of other subsidiary Companies together with Auditors’ Report form part of the Annual Report.

The consolidated accounts during the period under review show that the total revenue of Rs. 507 crore with a net profit before tax of Rs. 24 crore against the total income of Rs. 549 crore and net loss of Rs. 19.20 crore (including Sintesis Quimica) in the previous year.

7. RESERVES:

Your Directors do not propose to transfer any amount to the general reserve and entire amount of profit for the year forms part of the ‘Retained Earnings’.

8. DIVIDEND:

Your Directors after due consideration regret their inability to recommend any dividend for the financial year under review in view of the commitment towards Banks for alignment of debts.

9. KEY DEVELOPMENTS:

Prepayment of outstanding debts of the lenders:

As informed in the last Annual Report, the Company had entered into One Time Settlement with the Central Bank of India for the outstanding dues. The necessary adjustments in the books of account have been carried out after the payment of entire OTS amount in the accounts of the financial year under review. Union Bank of India, EXIM Bank and Allahabad Bank have accepted the proposal for prepayment of debts of the Company. The Company is in the process of completing all formalities in this regard.

Change of the Registered office:

As approved by the Members of the Company and other Regulatory Authorities, Registered Office of the Company was shifted from the Union Territory of Chandigarh to the State of Punjab at Milestone 18, Ambala Kalka Road, Village & P.O Bhankharpur, Derabassi, Distt. SAS Nagar, Mohali (Punjab)- 140201, India. The required information has been placed on the website of the Company, National Stock Exchange of India Limited and BSE Limited.

Re-Classification of Excel Industries Limited from Promoter Group to Public Category:

The shareholders of the Company, on February 2, 2018 by means of special resolution passed through Postal Ballot, have given their approval for reclassification of Excel Industries Limited from Promoter Group to Public Category, as they were neither involved in the management nor holding any controlling stake in the Company. BSE and NSE have given approval for the re-classification of Promoter under Regulation 31A of SEBI (LODR) Regulations, 2015.

Presently, Shri Shalil Shashikumar Shroff along with his family and relatives collectively as “Shalil Shroff group” are the only Promoters of the Company.

10. STATE OF AFFAIRS OF THE COMPANY:

The State of Affairs of the Company is presented as part of Management Discussion and Analysis Report forming part of this Report.

11. OUTLOOK:

The main business of your Company is manufacturing Performance chemicals which includes Agro Chemicals and other specialty chemicals. We are present in both domestic and export markets. The Company has also an arrangement with few multinational Companies for contract manufacturing and sale of its products.

In view of the scenario described in the management discussions your Company is expected to grow with wide range of products and manufacturing expertise barring unforeseen circumstances.

12. FINANCE:

As stated in the Annual Report of last year, the Management has taken various steps to improve the liquidity position of the Company. The steps viz. sale of non performing assets and non profitable business, taking up toll manufacturing in a large scale and tie up with major customers to minimise the credit period have helped in running the business.

During the year the Company has not raised any additional borrowings except a few Inter Corporate Deposits for meeting part of the working capital requirements and taken few assets on lease.

13. PUBLIC DEPOSITS:

Your Company had not accepted any Public Deposits under Chapter V of the Companies Act, 2013.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Changes in the composition of the Board of Directors:

Smt. Sindhu Seth (DIN: 00109298), a Non-Executive Non Independent Director resigned from the Board due to personal reasons and the same was accepted by the Board of Directors in their meeting held on 29^th May, 2018. The Board has expressed its gratitude and placed on record its appreciation for her contribution as a Director.

The Nomination and Remuneration Committee in its meeting held on 29th May, 2018 assessed the profile of Smt. Aruna R. Bhinge, Company Director, Consultant and Coach and recommended her appointment as Non Executive Non Independent Woman Director, liable to retire by rotation, to the Board of Directors of the Company. Pursuant to Section 161(1) read with section 149 of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Aruna R. Bhinge (DIN: 07474950) was appointed as an Additional Director designated as Woman Director w.e.f. 29th May, 2018 by the Board of the Company, who shall hold office up to the date of the ensuing Annual General Meeting. In terms of Section 160 of the Act, the Company has received a notice in writing from a Member signifying her intention to propose the candidature of Smt. Aruna R. Bhinge for the office of a Director.

b) Independent Directors:

As required under the Companies Act, 2013, the Company has three Independent Directors on the Board of the Company namely Shri Mukesh Dahyabhai Patel (DIN:00009605), Shri Vijay Dilbagh Rai (DIN:00075837) and Shri Sheo Prasad Singh (DIN: 06493455).

The Independent Directors have given the required undertaking for compliance of the criteria of independence laid down in Section 149 (7) of the Companies Act, 2013. The same has been received and placed before the Board in its meeting held on 29^th May, 2018.

c) Retirement by rotation:

In terms of Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company, Shri Shivshankar Shripal Tiwari (DIN: 00019058), Director of the Company retires by rotation at the forthcoming Annual General Meeting. He being eligible, has offered himself for re-appointment. The Board of Directors has recommended his reappointment as Director of the Company, liable to retire by rotation.

d) Re-appointment of Managing Director and Whole Time Director:

The shareholders of the Company, on February 2, 2018 by means of special resolution passed through Postal Ballot, have given their approval for:

1. Re-appointment of Shri Avtar Singh (DIN: 00063569) as the Whole Time Director of the Company for a period of three (3) years from 14.11.2017 to 13.11.2020 on the terms and conditions including remuneration for the mentioned period.

2. Re-appointment of Shri Shalil Shashikumar Shroff (DIN: 00015621) as the Managing Director of the Company for a period of three (3) years from 15.01.2018 to 14.01.2021 on the terms and conditions including remuneration for the mentioned period.

e) The Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them to attend meetings of the Company.

Details and brief resume of the Directors seeking re-appointment/appointmentas required by Regulation 26 (4) and 36 (3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘Listing Regulations’) and as required under Secretarial Standards - 2 on General Meetings issued by The Institute of Company Secretaries of India are, are furnished in the Notice convening the Annual General Meeting forming part of the Annual Report.

Other details of the Directors have been given in the Corporate Governance Report attached to this Report.

f) Committees of the Board:

The Company’s Board has constituted the required Committees prescribed under the Companies Act and the Listing Regulations.

The details of Composition of the Committees and Attendance of the Committee Members in the meetings is given in the Corporate Governance Report forming part of this Annual Report.

g) Key Managerial Personnel (‘KMP’)

In terms of the provisions of Section 2(51) and Section 203 of the Act, the Board of Directors has nominated following as KMP of the Company:

- Mr. Shalil Shashikumar Shroff, Managing Director

- Mr. Avtar Singh, Executive Director

- Mr. Vipul Joshi, Chief Financial Officer

- Mr. Punit K Abrol, Sr. V.P. (Finance) & Company Secretary

- Mr. Jain Parkash, Sr. V.P. (Works)

15. LISTING WITH STOCK EXCHANGES:

The Company’s shares continue to be listed at the National Stock Exchange of India Limited and BSE Limited. The Annual Listing fee for the fiscal year 2017-18 has been paid to these Exchanges.

16. ENVIRONMENT AND POLLUTION CONTROL:

The effluent and emissions generated from the plants are regularly monitored and treated. The Company has an Effluent Treatment Plant with incinerator to treat the waste materials. In addition to this, the Company has also tied up with Common Effluent Treatment Plants set up in the nearby areas of the manufacturing sites. The Company commits for the clean and healthy environment in and around of its manufacturing sites.

17. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY:

i) Welfare Activities:

The Company through SDS Memorial Trust has taken up various social works for the betterment of the society.

The Company continues to organize a ‘Blood Donation Camp’ in the memory of Late Shri S.D. Shroff on 18^th December every year. Around 92 employees donated blood this year.

ii) Corporate Social Responsibility:

Company’s Corporate Social Responsibility (CSR) Policy has been posted on the website at www.punjabchemicals.com in compliance with the disclosure about CSR Policy Rules, 2014.

During the year under review, the Company was to spend Rs. 38.06 lac based on the average net profit of the last three years on various activities for social welfare. Accordingly, the amount was spent on activities like upgradation of infrastructure of schools, preventive healthcare by way of medical camps in villages including eye operations, providing sanitation and drinking water facilities to neighboring institutions.

The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 has been attached as Annexure 2.

For other details regarding the CSR Committee, please refer to Corporate Governance Report, which forms part of this Report.

18. RESEARCH & DEVELOPMENT AND QUALITY CONTROL:

The activities of R&D consists of improvement in the processes of existing products, decrease of effluent load and to develop new products and by-products.

The Quality Control is the strength of the Company. All raw materials and finished products pass through stringent quality checks for better results.

19. INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

The Company has also taken Directors and Officers Liability insurance policy.

20. EMPLOYEES AND INDUSTRIAL RELATIONS:

The relation between the management and employees are healthy and cordial. There is a transparency in the dealings. The Welfare Schemes viz. preventive health check up, medical facilities in the campus, Co-operative stores, etc.are used extensively by the employees. Sports activities keep the employees fit and healthy.

The Board of Directors placed on record their appreciation for the sincere efforts and commitment of the employees. Their faith and confidence in the working are largely responsible for bringing turnaround in the Company. Their sense of belongingness is noteworthy and appreciated.

21. REGISTRAR AND SHARE TRANSFER AGENT:

M/s Alankit Assignments Ltd., Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

22. EXTRACT OF THE ANNUAL RETURN:

The information required under Section 134 (3) (a) of the Companies Act, 2013 (the Act) read together with Section 92 (3) of the Act regarding extract of the Annual Return is appended hereto as Annexure 3 and forms part of this Report.

23. NUMBER OF MEETINGS OF THE BOARD:

The Board met five (5) times during the Financial Year 2017-18, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

24. POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The current policy is to have an appropriate mix of Executive and Independent directors to maintain the independence of the Board and separate its function of governance and management. As on March 31, 2018, the Board consists of 8 Members, 2 of whom are Executive Directors, 2 Non Executive Non Independent Directors, 3 Independent Directors and 1 Woman Director. The Board periodically evaluates the need for change in its composition and size.

The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel. The same is appended as Annexure 4 and can be assessed at www.punjabchemicals.com.

25. AUDITORS’ REPORTS:

a. Statutory Auditor Report:

The Auditors Report on Standalone Financial Statements does not contain any qualification, reservation or adverse remarks.

However, the Statutory Auditors have “Disclaimer of Opinion” in the Auditor’s Report of Consolidated Financial Statements as follows:

“We draw attention to note 4 of the annual consolidated financial statements which explains that after completion of necessary legal formalities in India and Argentina, the Holding company has during the current year sold its entire stake in a overseas step down subsidiary to a unrelated third party on 28^th September, 2017. The Holding Company is unable to obtain the relevant financial information relating to the period till the date of disposal from Sintesis Quimica and consequently, it is not in a position to consolidate in accordance with Indian Accounting Standard “Consolidated Financial Statement.”

In addition, as explained in note (i), the group has transitioned to Ind AS in the current year. It has except for the Ind AS adjustments as may be related to the aforesaid subsidiary, adjusted the comparative financial information for the differences in the accounting principles adopted by the Group on transition to the Ind AS, which have been audited by us.

On the basis of above, we were unable to determine whether any adjustments are necessary, in relation to the aforesaid subsidiary in the annual consolidated financial results for the year ended 31 March 2018, comparative period ended 31 March 2017 and as on the transition date of 1 April 2016.

Consequentially other relevant assertions in the Audit Report on the Consolidated Financial Statements and report on adequacy of the internal financial controls with reference to those consolidated financial statements have been also modified.”

The Board after consideration has given the following explanations and comment on the ‘Disclaimer of Opinion’:

“Since Sintesis Quimica (SQ) has been sold, we have not been able to get financial information for the period upto the date of disposal. Hence, we have not been able to consolidate SQ for the partial period in accordance with Indian Accounting Standard 110-”Consolidated Financial Statements.” It may be noted that the modification has no impact on consolidated net profit and other comprehensive income for the year ended 31^st March, 2018.”

b. Secretarial Audit Report:

The Secretarial Audit Report for the financial year 2017-18 is annexed to this Report as Annexure 5 and forms part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

26. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Particulars relating to loans and guarantees or investments under section 186 of the Companies Act, 2013 are provided in the Note 6 to the standalone financial statement.

27. RELATED PARTY TRANSACTIONS:

There are no material related party transactions made by the Company with Promoters, Directors, Key Managerial Personnelor other designated persons which may have a potential conflict with the interest of the Company at large. All related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business. A statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors on a quarterly basis. Prior omnibus approval of the Audit Committee is obtained on yearly basis for the transactions which are of repetitive nature. The transactions entered into pursuant to the omnibus and specific approval are reviewed periodically by the Audit Committee. As required under SEBI (LODR), detailed related party disclosures as per Accounting Standards, please refer Note 43 of the Standalone and Consolidated Financial statements.

The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website at www.punjabchemicals.com.

None of the Directors has any material pecuniary relationships or transactions vis-a-vis the Company.

Form AOC-2 pursuant to clause (h) of sub-section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure 6 and forms part of this Report.

28. MATERIAL CHANGES AND COMMITMENTS, IF ANY:

No material changes and commitments have occurred between the end of the financial year and the date of the Report which has effect on the Financial Statements.

29. PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 7 and forms part of this Report.

30. RISK MANAGEMENT:

Pursuant to Schedule V of SEBI (LODR) Regulation, 2015, the Company has voluntarily constituted a Risk Assessment Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board’s Report.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has formulated Risk Management Policy which is posted at the website of the Company at www.punjabchemicals.com.

The Audit Committee also oversee the area of financial risks and controls.

31. BOARD EVALUATION:

The Board has carried out an annual performance evaluation of the directors individually, of the Chairman and of the Board as a whole, pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015,. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

32. DETAILS OF FAMILIARIZATION PROGRAMME:

The details of programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are posted on the website of the Company at www.punjabchemicals.com.

33. PARTICULARS OF EMPLOYEES:

The employees of the Company contributed significantly in achieving the results. In terms of the provisions of Section 197(12) of the Act read with Rules 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the disclosures pertaining to remuneration and other details of the concerned employees is annexed as Annexure 8.

34. WHISTLE BLOWER POLICY:

Regulation 22 of the Listing Regulations & Sub-section (9 & 10) of Section 177 read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, interalia, provides, for all listed companies to establish a vigil mechanism called “Whistle Blower Policy” for directors and employees to report genuine concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or ethics policy.

As a conscious and vigilant organization, the Company believes in the conduct of the affairs of its constituents in a fair and transparent manner, by adopting the highest standards of professionalism, honesty, integrity and ethical behaviour. In its endeavour to provide its employee a secure and a fearless working environment, the Company has established the “Whistle Blower Policy”.

The Whistle Blower policy and establishment of Vigil Mechanism have been appropriately communicated within the Company. The Whistle Blower Policy is also posted on the website of the Company. The purpose of the policy is to create a fearless environment for the directors and employees to report any instance of unethical behaviour, actual or suspected fraud or violation of the Company’s code of conduct or Ethics Policy. It protects directors and employees wishing to raise a concern about serious irregularities within the Company.

During the year, the Company has not received any complaint under Vigil Mechanism / Whistle Blower Policy.

35. INTERNAL FINANCIAL CONTROLS

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records, and timely preparation of reliable financial disclosures.

The Company has appointed Internal Auditor to periodically audit and report of any deviation in depicting in the implementation of control. The management takes immediate corrective actions, if required.

36. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

Your Company is committed in creating and maintaining a secure work environment where its employees, agents, vendors and partners can work and pursue business together in anatmosphere free of harassment, exploitation and intimidation. To empower women and protect women against sexual harassment, a policy for prevention of sexual harassment had been rolled out and Internal Complaints Committee as per legal guidelines had been set up. This policy allows employees to report sexual harassment at the workplace. The Internal Committee is empowered to look into all complaints of sexual harassment and facilitate free and fair inquiry process with clear time lines. The Policy on Prevention of Sexual Harassment is also posted on the website of the Company.

During the year ended 31st March, 2018, no complaints pertaining to sexual harassment was received by the Company.

37. CEO/CFO CERTIFICATION:

In terms of the Listing Regulations., the Certificate duly signed by Shri Shalil Shashikumar Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on March 31, 2018, at its meeting held on May 29, 2018. The said Certificate is also annexed to the Corporate Governance Report.

38. AUDITORS:

a) STATUTORY AUDITORS:

M/s. B S R & Co. LLP, Chartered Accountants, Mumbai (Firm Registration No. 101248W/W-100022), Statutory Auditors of the Company were appointed as Auditors of the Company, for a term of 5 (five) consecutive years, at the Annual General Meeting held on September 14, 2017. They have confirmed that they are not disqualified from continuing as Auditors of the Company The requirement to place the matter relating to appointment of Auditors for ratification by members at every Annual General Meeting has been done away with vide notification dated May 7, 2018 issued by the Ministry of Corporate Affairs, New Delhi. Accordingly, no resolution is proposed for ratification of appointment of Auditors, who were appointed in the Annual General Meeting held on September 14, 2017.

b) SECRETARIAL AUDITORS:

The Board upon recommendation of the Audit Committee has reappointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934), as the Secretarial Auditor of the Company for the financial year 2018-19, in terms of Section 204 of the Companies Act, 2013 and Rules thereunder.

c) COST AUDITORS:

The Board of Directors upon recommendation of the Audit Committee appointed M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar (Firm Registration No.100123) as the Cost Auditor of the Company to conduct audit of the cost accounts of all the Divisions of the Company for the financial year 2018-19. They have submitted a certificate of eligibility for the appointment.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought in the ensuing Annual General Meeting.

The Cost Audit Report for the financial year 2016-17 has been filed and the report for the year under review will be filed before the due date.

39. TRANSFER OF EQUITY SHARES TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, as amended (‘IEPF Rules’), all the shares on which dividends remain unpaid /unclaimed for a period of 7 (seven) consecutive years or more has to be transferred to the demat account of the IEPF Authority as notified by the Ministry of Corporate Affairs. Accordingly, the Company has transferred 1,09,179 Ordinary Shares of the face value of Rs. 10 per share to the demat account of the IEPF Authority during the financial year 2017-18.

The Company had sent individual notice to all the shareholders whose shares were due to be transferred to the IEPF Authority and has also published newspaper advertisement in this regard. The details of such dividends/ shares transferred to IEPF are uploaded on the website of the Company at www.punjabchemicals.com.

The members/claimants whose shares and unclaimed dividend have been transferred to the IEPF Authority can claim the same by making an application to the IEPF Authority in Form IEPF- 5 along with requisite documents (available on www.iepf.gov.in) and sending duly signed physical copy of the same to the Company along with requisite documents prescribed in Form IEPF-5. Member/ claimant can file only one consolidated claim in a financial year as per the IEPF Rules. No claims shall lie against the Company in respect of the dividend/shares so transferred.

40. MANAGEMENT DISCUSSION AND ANALYSIS & CORPORATE GOVERNANCE REPORT:

(i) MANAGEMENT DISCUSSION AND ANALYSIS:

The Management Discussion and Analysis Report on Company’s performance, industry trend and other material changes with respect to the Company and subsidiaries have been given separately in the Annual Report as required under para B of Schedule V of SEBI (LODR) Regulations, 2015.

(ii) CORPORATE GOVERNANCE REPORT:

The Company strives to maintain the required standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Report on Corporate Governance in accordance with para C of Schedule V of SEBI (LODR) Regulations, 2015 forms integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance

41. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

There are no significant material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company its future operations.

42. CHANGE IN THE NATURE OF BUSINESS:

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

43. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2018 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a ‘going concern’ basis;

e) the Directors has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

44. ACKNOWLEDGEMENT:

The Directors express their gratitude to Banks, and various other agencies for the co-operation extended to the Company. The Directors also take this opportunity to thank the shareholders, customers, suppliers, lenders, distributors and other stakeholders for the confidence reposed by them in the Company.

For and on behalf of the Board of Directors

MUKESH DAHYABHAI PATEL

Place: Mumbai CHAIRMAN

Date: May 29, 2018 DIN:00009605

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Mar 31, 2015

Dear Members,

1. The Directors have pleasure in presenting the Thirty Ninth (39th) Annual Report, on the business and operations of the Company. The Annual Report includes Audited standalone and consolidated financial statements for the financial year ended on March 31,2015.

2. FINANCIAL HIGHLIGHTS :

The summarized financial statement for the year under review is given below:

(Rupees in Lacs)

Consolidated* Particulars 2014-15 2013-14

Sale of Products & Other Income (Net) 58804 53232

Profit / (Loss) before Interest, Depreciation & Tax & Exceptional item 7053 5851

Less: Depreciation/ Amortisation 1917 1616

Less: Finance Cost 3472 3465

Profit / (Loss) before Tax & Exceptional item 1664 770

Less : Exceptional item 217 338

Profit / (Loss) before Tax 1447 432

Less: Provision for Taxation

Current tax 63 -

Deferred Tax - -

Profit / (Loss) after Tax 1384 432

Share of profits in associate for current year 36 110

Share of losses of associate for earlier years - (446)

Net Profit / (Loss) 1420 96

Carried Forward to next year 1420 96

Standalone Particulars 2014-15 2013-14

Sale of Products & Other Income (Net) 42028 43314

Profit / (Loss) before Interest, Depreciation & Tax & Exceptional item 5501 5188

Less: Depreciation/ Amortisation 1758 1484

Less: Finance Cost 3170 3248

Profit / (Loss) before Tax & Exceptional item 573 456

Less : Exceptional item 217 338

Profit / (Loss) before Tax 356 118

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 356 118

Share of profits in associate for current year - -

Share of losses of associate for earlier years - -

Net Profit / (Loss) 356 118

Carried Forward to next year 356 118

* Consolidated accounts consist of standalone and overseas subsidiary Companies.

Notes:

a) Previous year figures under different heads have been regrouped to the extent necessary.

3. DIVIDEND:

In view of accumulated losses, the Directors regret their inability to recommend any dividend.

4. TRANSFER TO RESERVES:

The profit in the standalone results have been carried over to next year in view of accumulated losses of the earlier years. Therefore, no amount could be transferred to General Reserve Account.

5. STANDALONE OPERATIONS:

The operational results for the year under review have improved. The efforts of the company to correct the situation, proved meaningful but because of the losses which have to be absorbed due to the correction, the difference was marginal.

The disposal of non-profitable businesses and non-core assets reduced the operational and fixed expenses, reduced the debt burden and made the working capital more relevant to the remaining businesses. The Company is now focused on its core business of manufacturing technical agrochemicals.

Better operations due to improved raw material efficiencies, implementation of cost saving measures and better working capital management in the Agro Chemicals Division have nurtured the Company back to a positive cash flow situation.

The outcome of the efforts of the Management is evident from the results of the financial year 2014-15. The total income on standalone basis during period under review increased to Rs. 420.28 crores against the total income of Rs. 391.89crores (excluding income of sold out business and leased unit) in the previous year. The net profit has risen to Rs. 3.56 crores from a marginal profit of Rs. 1.18 crores in the previous year.

It may be noted that to restructure the manpower in the Agrochemicals unit at Derabassi, the company offered "Voluntary Retirement Scheme" (VRS) to the employees. 36 employees voluntarily opted for retirement and this reduced the operation costs. The expense on this account has been booked under exceptional item and the result of this onetime cost will be evident in the savings in the years to come.

6. OPERATIONS OF OVERSEAS SUBSIDIARIES:

Your Company has three overseas subsidiaries namely-SD AgChem (Europe) NV, Sintesis Quimica, S.A.I.C, Argentina, and STS Chemicals (UK) Ltd. During the year under review, the operations of the overseas subsidiaries were as follows:

(i) The performance of SD Agchem (Europe) NV has improved due to the improved business environment. The total income of this subsidiary was Rs. 25.93 crores with net profit of Rs. 6.52 crores, in the period under review.

SD Agchem (Europe) NV, the wholly owned subsidiary of the Company in Belgium disposed off its 20% shareholding in Source Dynamics, LLC to Yongnong Biosciences Co. Ltd., China to reduce part of its long term liability.

(ii) Sintesis Quimica, S.A.I.C, Argentina (SQ) have shown slightly improved performance due to initiation of the job work of various multinational companies. This arrangement has reduced working capital requirement. The matters of concern in this subsidiary Company is old debt and challenge to meet the requirement of funds to pay installment under the debt restructuring arrangement of Chapter XI.

In the period under review, the total revenue of this subsidiary stands at Rs. 148.02 crores with a net profit of Rs. 1.73 crores.

(iii) STS Chemicals (UK) Limited does not have any operations, hence not considered for the purpose of preparation of the Consolidated Financial Statements. The non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the group.

The salient features of financial statements of subsidiaries/ associates/ joint ventures as per Section 129 of the Companies Act, 2013 forms part of the Annual Report.

The Company will make available separate audited financial statements of the subsidiaries to any Member upon request. These financials are however, posted on the website of the Company and will also be available for inspection by any Member at the Registered Office.

The Company has also formulated a policy for determining material subsidiaries as approved by the Board of Directors and may be accessed on the Company's weblink http:// punjabchemicals.com/companypolicy.html

7. CONSOLIDATED RESULTS:

The consolidated accounts during the period under review show that the total income has increased to Rs. 588.04 crores with a net profit of Rs. 14.20 crores as against the total income of Rs. 532.32 crores and net profit of Rs. 0.96 crores in the previous period.

In accordance with the Companies Act, 2013 ("the Act") and Accounting Standard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accounting for Investments in Associates and AS - 27 on Financial Reporting of Interests in Joint Ventures, the audited consolidated financial statement is provided in the Annual Report.

8. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

The Management Discussion and Analysis Report on Company's performance, industry trend and other material changes with respect to the Company and subsidiaries have been given separately in the Annual Report.

9. STATE OF AFFAIRS OF THE COMPANY:

The State of Affairs of the Company is presented as part of Management Discussion and Analysis Report forming part of this Annual Report.

10. OUTLOOK:

The global economic environment in recent years has been challenging with uncertainty. It is believed that the growth engine for the global economy would be shifted from west to China and India, the emerging manufacturing and consumption hubs. However, any significant change will be a long drawn process.

Therefore, in the given scenario, barring the uncertainties that loom over the industry, the Company expects a good business performance in the agrochemicals sector in the next year. The steps being taken by the government to give more impetus to agriculture sector and promoting the manufacturing sector through "Make in India" programme should further help the Company.

The new opportunities of toll manufacturing of Pharma intermediates and other specialized and general chemicals are being explored for both the divisions in Punjab.

The Management of the Company is optimistic about the current business prospects and will take requisite steps as and when required.

11. FINANCE:

As explained earlier, the Company has taken several measures to prune the overall debt burden by entering into Corporate Debt Restructuring Scheme, disposing off the non-profitable business and non-core assets and putting back the cash from the inflows into making the operations of the Company more viable.

The Company, during the period under review has paid the installments and interest which was due to the Banks, except Working Capital Demand Loan, which is partially paid from the sale of few non-core assets. The Company has not raised any additional borrowing during the year.

The Company's proposal for One Time Settlement (OTS) with State Bank of India (SBI) has been accepted by the bank. As per the terms of OTS, the Company has to pay Rs. 4,550 lacs and sale proceeds from 1,50,000 shares of the Company, pledged exclusively with SBI by one of the promoters against total outstanding dues of Rs. 9,485 lacs (including interest). Out of the said amount, Rs. 1,138 lacs has been paid by the Company before March 31, 2015. The said OTS is subject to fulfilment of conditions. The necessary adjustment in the books of account will be carried out after compliance of all conditions as specified in said OTS.

12. PUBLIC DEPOSITS:

The Company has not accepted or renewed any fixed deposits from the public since the last two financial years.

As per the provisions of the new Companies Act, 2013, the Company has repaid all the public deposits in time. Accordingly, there are no outstanding deposits as on March 31,2015.

The management would like to sincerely thank all the depositors of the Company for their faith and confidence in the Company for many years.

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL

a) Changes in the composition of the Board of Directors and other Key Managerial Personnel:

i) During the year, Export Import Bank of India withdrew the nomination of Shri Sheo Prasad Singh (DIN: 06493455) as a Director from the Board of Directors of the Company and accordingly, he ceased to be the Nominee Director of Export-Import Bank of India on the Board of the Company w.e.f. December 1, 2014. The Board of Directors while taking note of this withdrawal placed on record its deep sense of appreciation for the services rendered by him during his tenure in the Company.

ii) Shri Ghattu Ramanna Narayan (DIN: 00020575) stepped down as the Chairman during the meeting and as Director after the conclusion of the Board Meeting held on May 28, 2015 due to his age and to spend time to serve the people and society. The Board respected his decision. The Board of Directors placed on record its deep sense of gratitude for his vision, leadership and guidance during the long association of around 18 years with the Company. The Board acknowledged that his professional guidance and insight on critical corporate strategies to manage the Company was very valuable. The Board also appreciated his contribution in the growth of the Company with his versatile experience, knowledge, management leadership, advising the Board and the Managing Director during the difficult time in the Company.

The Board of Directors took note of the recommendation of the Nomination and Remuneration

Committee to seek his expert advice on a regular basis and appointed him as "Chairman Emeritus".

All the Directors appreciated this recommendation and felt that he will be an excellent guide to the PCCPL Family. Accordingly, the Directors unanimously approved the said proposal.

iii) Acknowledging the contribution of Shri Mukesh Dahyabhai Patel (DIN:00009605), Independent Director, in the working of the Board, Committees and in the Company, his suggestions on various strategic matters and active participation, the Board of Directors, at its Meeting held on February 11, 2015 appointed him as the Vice Chairman of the Company. The Board unanimously appointed Shri Mukesh Dahyabhai Patel as the Chairman of the Board in its meeting held on May 28, 2015 after Shri Ghattu Ramanna Narayan stepped down as the Chairman of the Board. All the Directors assured him full cooperation and congratulated him on this elevation and wished him all the success during his tenure as the Chairman in the Company. He thanked the Board Members for this recognition and assured to fulfill his duties and discharge responsibilities sincerely as the Chairman of the Company.

iv) Shri Shivshankar Shripal Tiwari (DIN: 00019058) resigned as a Whole Time Director w.e.f. April 6, 2015 upon completing the term for which his remuneration was approved by the Central Government and resigned as a Director of the Company w.e.f. May 28, 2015 due to personal engagements. The Board after consideration accepted his resignation in its meeting held on May 28, 2015. The Board placed on record its deep sense of appreciation and gratitude for the services and contribution rendered by him during his tenure as a Whole Time Director and Director since 2006 in the Company. The Board appreciated his extraordinary contribution for the expansion of various businesses in the Company during his long association with the Company.

v) The Nomination and Remuneration Committee keeping in view the versatile experience and expertise in the banking matters, recommended to the Board to appoint Shri Sheo Prasad Singh as an Additional Director w.e.f. February 11, 2015. The Directors unanimously resolved to appoint him as an additional Director on the Board of the Company. Pursuant to Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, he shall hold office up to the date of the ensuing Annual General Meeting. The Nomination and Remuneration Committee and the Board of Directors also decided to recommend him as Independent Director in place of Shri Ghattu Ramanna Narayan, who resigned in the said meeting. Shri Sheo Prasad Singh fulfills the criteria of Independence as prescribed in the Companies Act, 2013 and the Listing Agreement. A requisite notice in writing alongwith deposit from a member proposing him as a Non-Executive Independent Director has been received and his appointment is being placed before the Members in the ensuing Annual General Meeting. Your Board of Directors feel that his specialized knowledge and experience will add value to the Company. Therefore, recommended his appointment as an Independent Director for a period (5) consecutive years upto the conclusion of the 44th Annual General Meeting of the Company to be held in the calendar year 2020.

vi) The Nomination and Remuneration Committee recommended to the Board to appoint Shri Shiv Shankar Shripal Tiwari as an Additional Director w.e.f. May 28, 2015. The Board appreciated his services in the Company and unanimously resolved to appoint him as an Additional Director in the Company. Pursuant to Section 161(1) of the Companies Act, 2013 and the Articles of Association of the Company, he shall hold office up to the date of the ensuing Annual General Meeting. A requisite notice in writing alongwith deposit from a member proposing him to appoint as a Non-Executive Director has been received and his appointment is being placed before the Members in the ensuing Annual General Meeting. Your Board of Directors feels that his experience and versatile knowledge in the business of the Company will be helpful to the Company, therefore, recommends his appointment as Director liable to retire by rotation.

There was no other appointment or cessation of Key Managerial Personnel during the financial year.

b) Independent Directors:

The Companies Act, 2013, provides for the appointment of Independent Directors. Sub Section (10) of Section 149 provides that Independent Directors shall hold office for a term of upto five (5) consecutive years on the Board of a Company; and shall be eligible for re-appointment on passing a special resolution by the shareholders of the Company. Accordingly, three Independent Directors namely Shri Ghattu Ramanna Narayan, Shri Mukesh Dahyabhai Patel and Shri Vijay Dilbagh Rai were appointed by the shareholders in the last Annual General Meeting. Further, Shri Ghattu Ramanna Narayan has resigned as the Chairman and Director of the Company. Therefore, the Board of Directors have decided to recommend at the Annual General Meeting to appoint Shri Sheo Prasad Singh who meets with the criteria of Independent Director to be appointed as the Independent Director of the Company for a period of five years.

None of the Independent Directors will retire at the ensuing Annual General Meeting.

c) Retirement by rotation:

In terms of Section 152 of the Companies Act, 2013 and the provisions of the Articles of Association of the Company, Shri Avtar Singh (DIN: 00063569), Whole Time Director would retire by rotation at the forthcoming Annual General Meeting. Shri Avtar Singh, being eligible, has offered himself for re-appointment.

It may be noted that as per clause 173 (b) of the Articles of Association of the Company, a Whole Time Director immediately on retirement by rotation, shall continue to hold his office of Whole Time Director and such reappointment as such Director shall not be deemed to constitute a break in his appointment as Whole Time Director, therefore, the Board recommends his appointment.

The Board of Directors recommends the appointment/ reappointment of above mentioned Directors.

The brief resume and other details relating to the directors, who are to be appointed/re-appointed, as stipulated under Clause 49 (VIII) (E) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report.

Other details of all the Directors have been given in the Corporate Governance Report attached to this Report.

d) Re-appointments / Approvals for Managing Director and Whole Time Directors:

i) The Central Government vide its letter dated May 14, 2015 has approved the re-appointment of Shri Shalil Shashi Kumar Shroff (DIN: 00015621) as the Managing Director for a period of three (3) years w.e.f January 15, 2015 at a remuneration as approved by the shareholders of the Company in their meeting held on September 23, 2014.

ii) The shareholders of the Company, on April 8, 2015 by means of special resolution passed through Postal Ballot, have given their approval for (a) increase in remuneration of Shri Avtar Singh, Whole Time Director w.e.f. April 1,2015 to November 13, 2015 and (b) to fix remuneration for the remaining period of his reappointment i.e. from November 14, 2015 to November 13, 2017. The Company is in the process of making an application to the Central government for its approval in this regard.

e) Committees of the Board:

The Company's Board has constituted the required Committees prescribed under the Companies Act and the Listing Agreement.

The composition of the Audit and Corporate Social Responsibility Committees and Attendance in the meetings (wherever required) have been provided in the Corporate Governance Report forming part of this Annual Report.

14. LISTING WITH STOCK EXCHANGES:

The Company's shares continue to be listed at the National Stock Exchange of India Limited and BSE Limited.

The Annual Listing fee for the financial year 2015-16 has been paid to these Exchanges.

15. ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

In pursuit of ensuring "No Pollution", the pollution control measures remain the top priority in all units of the Company. The requisite measures to adopt environmentally clean and for safe operations are taken.

The local management of the factories continuously monitor operational efficiencies, minimize consumption of natural resources and reduce consumption of water. The initiatives to reduce waste and emissions remain the main focus of the Production team. The employees are made to aware about the need to sustain the environment on continuous basis. Environment, Health and Safety (EHS) measures, as always, have been given special emphasis.

16. WELFARE ACTIVITIES AND CORPORATE SOCIAL RESPONSIBILITY :

i) Welfare Activities :

The Company through SDS Memorial Trust has helped needy students and donated to several charitable Institutions. These activities will be increased with the improvement in the financial position of the Company.

The Company continues to organize a 'Blood Donation Camp' in the memory of Late Shri S.D. Shroff on 18th December every year. Around 51 employees donated blood this year.

ii) Corporate Social Responsibility :

The Board of Directors of the Company has on May 28, 2015 formulated and approved a policy on "Corporate Social Responsibility" in compliance with the provisions of Section 135 of the Companies Act , 2013 and Schedule VII thereunder. The same is posted on the website of the Company under weblink http://punjabchemicals.com/ companypolicy.html. This policy broadly defines the activities to be undertaken by the Company to contribute to harmonious and suitable development of the local areas near manufacturing sites and society at large. The Committee comprises of Shri Shalil ShashiKumar Shroff, Shri Mukesh Dahyabhai Patel, Capt. Surjit Singh Chopra (Retd.) and Smt. Sindhu Seth. During the year under review, the Company has undertaken certain activities as per the local requirement. As per one of the interpretation on Rule 2 (f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the amount calculated to spend on CSR activities amounts to Rs. 66,000/-. The Company will spend the said amount in the current fiscal year as per the CSR Policy of the Company.

17. RESEARCH & DEVELOPMENT / QUALITY CONTROL:

Despite the shortage of funds, your Company continues to make need based investment in R&D and quality control, to ensure its competitive advantage.

The regular R&D activities continue in the laboratories of Agro Chemicals and Pharma Division. The activities are undertaken to improve upon the existing processes, decrease effluent load and to develop new products and by-products.

18. INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

19. EMPLOYEES AND INDUSTRIAL RELATIONS:

The Directors wish to place on record their appreciation for the sincere and devoted efforts of the employees and the Management staff during the difficult period in the Company. The Company maintained healthy, cordial and harmonious industrial relations at all levels through out the year.

20. DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., Alankit Heights, 1E/13, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

21. INFORMATION PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013.

i) Extract of the Annual Return:

The information required under Section 134 (3) (a) of the Companies Act, 2013 (the Act) read together with Section 92 (3) of the Act regarding extract of the Annual Return is appended hereto as Annexure 1 and forms part of this Report.

ii) Number of Meetings of the Board:

The Board met five (5) times during the Financial Year 201415, the details of which are given in the Corporate Governance Report that forms part of this Annual Report. The intervening gap between any two meetings was within the period prescribed by the Companies Act, 2013.

iii) Directors' responsibility statement:

Pursuant to the requirement under sub section 3 (c) of Section 134 of the Companies Act, 2013, with respect to Directors' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31, 2015, the applicable accounting standards have been followed alongwith proper explanation relating to material departures, if any;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit and loss of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts of the Company on a 'going concern' basis;

e) the Directors has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

iv) Declaration from Independent Directors:

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. The same has been received upon by the Company and placed before the Board in its meeting held on May 28, 2015.

v) Policy on Directors' Appointment and Remuneration:

The current policy is to have an appropriate mix of executive and independent directors to maintain the independence of the Board and separate its function of governance and management. As on March 31,2015, the Board consists of 9 Members, 3 of whom are Executive Directors and 3 are Independent Directors. The Board periodically evaluated the need for change in its composition and size.

The Nomination and Remuneration Committee has formulated a Nomination and Remuneration Policy under Section 178 (3) of the Companies Act, 2013 which lays down criteria for determining qualifications, positive attributes and independence of a Director and remuneration for the Directors, Key Managerial Personnel and senior management level including the appointment of personnel one level below the Key Managerial Personnel. The same is appended as Annexure2 and can be assessed at the weblink http://punjabchemicals.com/ companypolicy.html.

vi) Auditors' Remarks:

a. Statutory Auditors:

The Company's Auditors have made the following qualifications in their report on Consolidated

Financial Statements for the Financial Year ended March 31,2015;

- STS Chemicals (UK) Limited, 100% subsidiary of the Company has not been considered for the purpose of preparation of the Consolidated Financial Statements.

The Board of Directors are of the opinion that the aforesaid subsidiary does not have any operations. Accordingly, the non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the Group.

There are few remarks given in the Annexure to the Auditors' Report which are self-explanatory. Necessary actions are being taken on those remarks and points wherever required.

b. Secretarial Auditor:

The Secretarial Audit Report for the financial year 2014-15 is annexed to this Report as Annexure 3. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

vii) Particulars of loans, guarantees or investments under section 186:

Particulars relating to loans and guarantees or investments under section 186 of the Companies Act, 2013 is provided in the Note 34 to the standalone financial statement.

viii) Related Party Transactions:

All related party transactions that were entered into during the financial year were on an arm's length basis and were in the ordinary course of business. During the year, the Company had not entered into any contract / arrangement / transaction with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

The Policy on materiality of related party transactions and dealing with related party transactions as approved by the Board may be accessed on the Company's website at weblink http://punjabchemicals.com/companypolicy. html.

Your Directors draw attention of the Members to Note no. 32 to the standalone financial statements which sets out related party disclosure.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

Form AOC-2 pursuant to clause (h) of sub-section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014 is enclosed as Annexure 4.

ix) Material changes and commitments, if any:

No event occurred between the end of the financial year and the date of the Report which has the affect on the Financial Statements. However, One Time Settlement (OTS) with State Bank of India (SBI) may affect the Financial Statements upon fulfillment of conditions. Necessary adjustment in the books of account will be carried out after compliance of all conditions as specified in OTS.

x) Particulars regarding conservation of energy, etc.:

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 5 and forms part of this Report.

xi) Risk Management:

Pursuant to Clause 49 of the Listing Agreement, the Company has constituted a Risk Assessment Committee. The details of the Committee and its terms of reference are set out in the Corporate Governance Report, forming part of the Board's Report.

The Company manages, monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives. The Company has formulated Risk Management Policy which is posted at the website of the Company under weblink http:// punjabchemicals.com/companypolicy.html.

xii) Board Evaluation:

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of the directors individually, of the Chairman and of the Board as a whole. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

22. PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, there is no employee of the Company who draws remuneration in excess of the limits set out in the said rules.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure 6.

23. WHISTLE BLOWER POLICY:

The Company has a Whistle Blower Policy to report genuine concerns or grievances. The Whistle Blower Policy has been posted on the website of the Company and can be assessed at weblink http://punjabchemicals.com/companypolicy.html. No such case has been reported during the year under review.

24. INTERNAL FINANCIAL CONTROLS

The Company has built a mechanism to prevent frauds and a robust internal controls with reference to the financial statements. These controls were got tested from an Independent Agency in addition to the Internal Auditor and no material weakness in the design of the system or operations were observed. As a practice, the robust Internal Financial Control environment will be maintained in the Company.

25. POLICY ON PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has set in place an Anti harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 named as Policy on 'Prevention of Sexual Harassment at Workplace. Under this policy, an appropriate complaint mechanism in the form of "Complaint Redressal Committee" has been created in the Company for time-bound redressal of the sexual harassment complaint made by the victim.

26. CEO/CFOCERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shashikumar Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on March 31,2015, at its meeting held on May 28, 2015. The said Certificate is also annexed to the Corporate Governance Report.

27. AUDITORS:

At the Annual General Meeting (AGM) held on September 23, 2014, M/s S R B C & Co. LLP., Chartered Accountants, Mumbai, (Membership No.: 49365) were appointed as the Statutory Auditor of the Company to hold office till the conclusion of the AGM to be held in the calendar year 2017. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the auditors shall be placed for ratification at the AGM of coming year. Accordingly, the appointment of M/s S R B C & Co. LLP., Chartered Accountants, Mumbai, (Membership No.: 49365), as Statutory Auditors of the Company, is placed for ratification by the Shareholders. In this regard, the Company has received a certificate from the auditors to the effect that if they are re-appointed, it would be in accordance with the provisions of Section 141 of the Companies Act, 2013.

Members are requested to consider their appointment on a remuneration to be decided by the Board for the ensuing Financial Year i.e. 2015-16.

28. SECRETARIAL AUDITORS:

On the recommendation of the Audit Committee, the Board of Directors of the Company had appointed M/s. P.S. Dua & Associates, Company Secretaries (CP No. 3934) as the Secretarial Auditor of the Company for the financial year 2014-2015, in terms of Section 204 of the Companies Act, 2013 and Rules thereunder.

The Board upon recommendation of the Audit Committee has reappointed M/s. P.S. Dua& Associates, Company Secretaries (CP No. 3934), as the Secretarial Auditor of the Company for the financial year 2015-16.

29. COST AUDITORS:

The Board of Directors upon recommendation of the Audit Committee appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for the financial year 2015-16. They have submitted a certificate of eligibility for the appointment.

The Audit Committee has nominated Mrs. Pushpa Khanna, Cost Accountant, Chandigarh as the Lead Auditor of the Company.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought in the ensuing Annual General Meeting.

For the year 2014-15, the due date for filing the Cost Audit Report is September 27, 2015 and the same will be filed in due course. The Cost Audit Report for the year 2013-14 was filed on September 24, 2014.

30. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 125 of the Companies Act, 2013, relevant amount which remained unclaimed and unpaid for a period of seven years from the date it became due for payment, has to be transferred to the Investor Education and Protection Fund (IEPF) by the Company. No claim shall lie against the IEPF or the Company for the amount so transferred prior to March 31, 2014, nor shall any payment to be made in respect of such claims.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amount lying with the Company as on September 23, 2014 (date of last Annual General Meeting) on the Company's website of the Company at weblink http:// punjabchemicals.com/ unclaimedunpaidamount.html, as also on the Ministry of Corporate Affairs' website.

31. CORPORATE GOVERNANCE:

The Company strives to maintain the required standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has complied with the corporate governance code as stipulated under the Listing Agreement with the stock exchanges. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms integral part of this Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance is attached to the Report on Corporate Governance

32. GENERAL:

Your Directors state that:

a) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

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

33. ACKNOWLEDGEMENT:

The Directors wish to place on record their appreciation for the efficient and loyal services rendered by each and every employee of the Company. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, and all other business associates for their faith reposed in the Company even at the difficult times.

For and on behalf of the Board of Directors

MUKESH D PATEL SHALIL S SHROFF Place: Mumbai Vice Chairman Managing Director Date: May 28, 2015 DIN : 00009605 DIN : 00015621

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Mar 31, 2014

Dear Members,

The Directors are pleased to present to you, the Thirty Eighth (38th) Annual Report, on the business and operations of the Company along with the Audited standalone and the consolidated financial statements for the financial year ended on 31st March, 2014.

FINANCIAL HIGHLIGHTS:

The performance of the Company for the financial year under review is summarized below:

(Rupees in Lacs)

Consolidated*

Particulars 2013-14 2012-13

Sale of Products & Other Income (Net) 53232 24915

Profit / (Loss)before Interest, Depreciation & Tax & Exceptional item 5851 733

Less: Depreciation/Amortisation 1616 804

Less: Finance Cost 3465 1929

Profit / (Loss) before Tax & Exceptional item 770 (2000)

Less: Exceptional income/ (expense) (338) 737

Profit / (Loss) before Tax 432 (1263)

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 432 (1263)

Share of profits in associate for current year 110 -

Share of losses of associate for earlier years (446) -

Net Profit / (Loss) 96 (1263)

Carried forward to next year 96 (1263)

(Rupees in Lacs)

Standalone

Particulars 2013-14 2012-13

Sale of Products & Other Income (Net) 43314 20441

Profit / (Loss)before Interest, Depreciation & Tax & Exceptional item 5188 1509

Less: Depreciation/Amortisation 1484 717

Less: Finance Cost 3248 1736

Profit / (Loss) before Tax & Exceptional item 456 (944)

Less: Exceptional income/ (expense) (338) 737

Profit / (Loss) before Tax 118 (207)

Less: Provision for Taxation

Current tax - -

Deferred Tax - -

Profit / (Loss) after Tax 118 (207)

Share of profits in associate for current year - -

Share of losses of associate for earlier years - -

Net Profit / (Loss) 118 (207)

Carried forward to next year 118 (207)

* Consolidated financial statements for the financial year ended 31st March, 2014 form part of the Annual Report and Accounts of its Subsidiary Companies.

Notes:

a) Current period figures are not comparable with the previous year, as the current period is for 12 months as against the previous period of 6 months.

b) Previous period figures under different heads have been regrouped to the extent necessary.

OPERATIONS:

The year under review was very eventful for the Company. The Management took several steps to stop the losses and nurture back the operations to a positive cash flow situation. This was achieved largely by selling of losing businesses. The focus during the year was on the Agro Chemicals Division at Derabassi. The new strategic alliances with elite customers and successful commissioning of fungicide plant has boosted the morale of the Company and vastly improved the added value. Further, the results were possible by better efficiencies, cost saving measures taken, improved supply chain and working capital management in the Agro Chemicals Division. The allocation of working capital to Pharma and Industrial Chemicals Division was limited, which had an impact on the overall performance of the Company.

The Corporate Debt Restructuring (CDR) scheme approved by the Corporate Debt Restructuring Empowered Group has been implemented and security/charge has been created over all the assets, immovable as well as movable, of the Company in the interest of the Lenders in accordance with the CDR scheme. Also as informed earlier, the Management was reviewing its entire business portfolio and exploring to dispose off non-core assets or less performing assets and businesses to focus on the core business of manufacturing of agrochemicals technical and channelize the funds for producing profitable products. These steps will increase the viability of the Company in the long term and help to retire part of its debt obligations under the CDR Mechanism.

In this endeavor, during the year, the Company sold its Agro Formulation Division alongwith all its assets situated at Ratnagiri and Baroda, which was facing challenges of limited expansion opportunities and growth prospects due to severe competition and shortage of working capital. The Company leased out its Tarapur Unit of Industrial Chemicals Division which was operating below breakeven level due to working capital shortage and slack in demand for its finished products. The Management has also accelerated negotiations with Potential Buyers of Pune Unit of Industrial Chemicals Division and Office building situated at Mumbai. The approvals of the shareholders and CDR Cell have already been obtained for these transactions.

In view of the above scenario, the total income of the Indian Operations during period under review was at Rs. 433.14 crores with a meagre net profit of Rs. 1.18 crores as against the total income of Rs. 204.41crores and a net loss of Rs. 2.07 crores in the corresponding previous year of six months. The Management of the Company expects that the disinvestment of non-profitable businesses and non-core assets will help the Company to reduce its operational fixed expenses, prune its debt burden and plough back the additional cash flow into the main operations of the Company. The impact of the same should be visible in the current financial year.

The Company has offered Voluntary Retirement Scheme (VRS) to the employees of its Tarapur Unit, which has been given on lease to UPL Limited. All the employees have voluntary opted to seek the retirement. The total expense of compensation of Rs. 388 Lacs has been provided in the accounts as an exceptional item.

OVERSEAS BUSINESS AND CONSOLIDATED RESULTS:

The working of the overseas subsidiaries of the Company did not improve as envisaged by the Management. Sintesis Quimica, Argentina (SQ) continued to make losses in the period under review due to shortage of working capital and local environment. As informed earlier that this Company filed an application of Reorganization of Debt with the Argentinean authority. We are now informed that the Argentinean Court has approved the scheme of reorganization of debt. The Management feels that SQ will now work smoothly after these orders subject to the availability of the required Working capital.

In the period under review, the total revenue of this subsidiary stood at Rs. 92.25 crores with a net loss of Rs. 7.63 crores.

During the period under review, SD Agchem (Europe) NV also approached its local Banks for approval of the Debt Restructuring Scheme. The Company has remitted Rs. 39 lacs to SD Agchem (Europe) as Promoters'' contribution for debt restructuring as per the requirement of local Banks. The total income of this subsidiary stood at Rs. 15.86 crores with net loss of Rs. 0.48 crores.

The Management of the Company is exploring ways to reduce losses in these subsidiaries and preparing a strategy for their revival.

The total income of the Company in the consolidated accounts during the period under review was Rs. 532.32 crores with net profit of Rs. 0.96 crores as against the income of Rs. 249.15 crores and net loss of Rs. 12.63 crores in the previous period of 6 months.

DIVIDEND:

In view of accumulated losses of the previous years, the Directors regret their inability to recommend any dividend.

OUTLOOK:

Your Company has a specialized product portfolio of agrochemicals which are covered by strategic alliances with a few elite customers. Barring the uncertainties that loom over the Agrochemical industry, the Company expects strong business performance in this sector.

In addition, new opportunities in Pharma, Industrial Chemicals and specialized bio-products businesses will improve the prospects of the Company.

The Management is optimistic about the business prospects and taking requisite steps as and when the situation arises.

SUBSIDIARY COMPANIES:

As on 31st March, 2014, your Company has only three subsidiaries namely- STS Chemicals (UK) Ltd.; Sintesis Quimica, Argentina, S.A.I.C and SD AgChem (Europe) NV.

The consolidated financial results of the Company include the financial results of the Subsidiary Companies as mentioned in the Notes to Accounts of the Consolidated Financial Statements.

Pursuant to the provision of Section 212 (8) of the Companies Act, 1956, the Ministry of Corporate Affairs vide its General Circular No. 2/2011 dated 8th February, 2011, has granted general exemption from attaching the Balance Sheet, Statement of Profit and Loss and other documents of the subsidiary companies with the Balance Sheet of the Company. The Board of Directors in its meeting held on 29th May, 2014 has given its consent for not attaching the Annual Accounts of its subsidiaries with the accounts of the Company. The statement containing brief financial details of the Company''s subsidiaries for the financial year ended 31st March, 2014 is included in the Annual Report. The Company will provide a copy of separate annual accounts in respect of each of its subsidiary to any shareholder of the Company who asks for it and the said annual accounts will also be kept open for inspection at the Registered Office of the Company and that of the respective Subsidiary Companies during business hours.

The consolidated Financial Statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report includes the financial information of the Subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is also included in this Annual Report.

FINANCE:

Inadequacy of working capital continued to be a great concern for the Management of the Company. The Management has taken various steps, as detailed in the foregoing paragraphs and also in the Management Analysis Report to improve the liquidity position of the Company by way of disposing of non-core assets and non profitable businesses.

As informed in the last year Annual Report that the Company had restructured its secured term loans and working capital loans under the scheme of CDR. However, no additional funds were sanctioned to the Company for operational purposes or to fund the working capital required to run the operations. Therefore, during the period under review, the Company continued to plough back its cash inflows generated from the operations into the working of the Company.

The payment of interest & instalments under the CDR scheme has also been started from June, 2013. This has posed additional stress on the financials of the Company. The Management expects that this situation should improve in the next financial year.

FIXED DEPOSITS:

The Company has not accepted or renewed any fixed deposits from the public since the last financial year. The Company has repaid all the fixed deposits matured and due during the period in time. The total outstanding deposits as on 31st March, 2014 amounts to Rs. 27.95 lacs.

As on 31st March, 2014, the deposits amounting to Rs. 1.00 lacs remained unclaimed by 2 depositors (previous year Rs. 3.16 lacs by 4 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

The management would like to thank all the depositors for their faith and confidence reposed in the Company.

LISTING WITH STOCK EXCHANGES:

The Company''s shares continue to be listed at the National Stock Exchange of India Limited and Bombay Stock Exchange Limited.

The Annual Listing fee for the financial year 2014-15 has been paid to these Exchanges.

INSURANCE:

The Company has taken adequate insurance policies for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

The environment management and pollution control are the foremost priority in all the units of the Company. Due importance is also given on adopting environmentally clean and safe operations.

The Management of the Company is very conscious and takes adequate steps to reduce waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES AND INDUSTRIAL RELATIONS:

Directors wish to place on record their appreciation for the sincere and devoted efforts of the employees and the Management staff at all levels.

The industrial relations at all sites of the Company remained cordial throughout the year.

CORPORATE SOCIAL RESPONSIBILITY:

The Company continues to organize a ''Blood Donation Camp'' in the memory of Late Shri S.D. Shroff on 18th December every year. Around 62 employees donated blood this year. SDS Memorial Trust has also helped few of the needy students, gave donations for religious places and other Charitable Institutes. These activities will be increased upon improvement in the financial position of the Company.

RESEARCH & DEVELOPMENT/QUALITY CONTROL:

Inspite of shortage of funds, your Company continues to make need base investment in R&D considering it as a source of competitive advantage.

The regular R&D activities are carried out in the laboratories of Agro Chemicals Division and Pharma Division. The activities are taken to improve upon the existing processes, decrease effluent load and to develop new products and by-products. Environment, Health and Safety (EHS) considerations have been given special emphasis in the process improvement activities.

DIRECTORS:

Section 161(1) read with section 149 of the Companies Act, 2013 and the Articles of Association of the Company, Smt. Sindhu Seth was appointed as an Additional Director designated as a Woman Director w.e.f. 29th May, 2014 and she shall hold office up to the date of the ensuing Annual General Meeting. The Company has received requisite notice in writing from a member proposing Smt. Sindhu Seth for appointment as a Woman Director, liable to retire by rotation, at the ensuing Annual General Meeting of the Company.

In terms of the Articles of Association of the Company, Capt. S.S Chopra (Retd.) Director will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-appointment.

The Board of Directors recommends the appointment/re- appointment of above mentioned Directors.

Further, in compliance with the provisions of Clause 49 of the Listing Agreement entered into with the Stock Exchanges and the Companies Act, 1956, Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai were designated as Independent Directors of the Company. Now, pursuant to the new provisions of Section 149 of the Companies Act, 2013, which came into effect from 1st April, 2014, every listed public Company is required to have atleast one-third of the total number of Directors as Independent Directors, who are not liable to retire by rotation and shall hold office for a term upto five (5) consecutive years on the Board of a Company and shall be eligible for re-appointment for another term of upto five (5) consecutive years on passing of a special resolution by the Company. Therefore in view of the new provisions, the Board recommends the appointment of Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai as Independent Directors of the Company at the ensuing Annual General Meeting for a term of five (5) consecutive years effective from the date of the ensuing Annual General Meeting till 43rd Annual General Meeting to be held in the calender year 2019. The Company has received notices from members in writing pursuant to Section 160 of the Companies Act, 2013 signifying their intention to propose the candidature of Shri G. Narayana, Shri M.D Patel and Shri Vijay Rai.

The Company has received declarations from these Directors confirming that they meet with the criteria of independence as prescribed both under sub-section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement with the Stock Exchanges. In the opinion of the Board, each of these Directors fulfil the conditions specified in the Act and the Rules framed thereunder for appointment as Independent Director.

The brief resume and other details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report.

DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to energy conservation is appended hereto and forms part of this Report.

ii) PARTICULARS OF EMPLOYEES

The information under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 is not required to be attached with this report, as none of the employees is covered under these rules.

iii) RESPONSIBILITY STATEMENT

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors'' Responsibility Statement, it is hereby confirmed that:

a) in the preparation of the annual accounts for the year ended March 31, 2014, the applicable accounting standards read with requirements set out under Schedule VI to the Companies Act, 1956, have been followed and there are no material departures from the same;

b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis

iv) CEO/CFO CERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer (CFO) of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2014, at its meeting held on 29th May, 2014. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT:

The Board of Directors upon recommendation of the Audit Committee appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co., Cost Accountant, Jalandhar as Cost Auditors of the Company for conducting audit of the cost accounts maintained by the Company for the financial year 2014-15. They have submitted a certificate of eligibility for the appointment.

The Audit Committee has nominated Mrs. Pushpa Khanna, Cost Accountant, Chandigarh as the Lead Auditor of the Company.

In accordance with the provisions of Section 148 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors has to be ratified by the shareholders of the Company. Accordingly, consent of the members is sought for passing an Ordinary Resolution as set out at in the Notice for ratification of the remuneration payable to the Cost Auditors for the financial year ending March 31, 2015.

For the year 2013-14, the due date for filing the Cost Audit Report is 30th September, 2014 and the same will be filed in due course. The Cost Audit Report for the year 2012-13 was filed on 28th September, 2013.

AUDITORS'' REPORT:

The Company''s Auditors have made the following qualifications in their report on Consolidated Financial Statements for the Financial Year ended March 31, 2014;

i) STS Chemicals (UK) Limited, 100% subsidiary of the Company, has not been considered for the purpose of preparation of the Consolidated Financial Statements.

ii) Effect of investment in associate company on the financial position and operating results of the group, as required by Accounting Standard (AS) 23, ''Accounting for Investment in Associates in Consolidated Financial Statements'' has been considered in the Consolidated Financial Statements based on the unaudited management certified financial statements.

The Board of Directors are of the opinion that the aforesaid subsidiary does not have any significant operations. Accordingly, the non- inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and on the operating results of the Group. The management believes that there would not be any material impact on the consolidated financial statements based on management certified accounts of the associate concern.

The Auditors have also given ''emphasis of matter'', and not qualification, in their report in Standalone and Consolidated financial statements. The Company is taking required steps in this regard.

There are few remarks given in the Annexure to the Auditors'' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required.

AUDITORS:

The term of M/s S.R. Batliboi & Company LLP, Chartered Accountants, as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company. However, due to certain internal restructuring in their LLP, M/s S.R. Batliboi & Company LLP, Chartered Accountants have given a notice in writing of their un-willingness to continue as the Statutory Auditors upon the conclusion of the ensuing Annual General Meeting.

Therefore, upon recommendation from the Audit Committee, the Board has proposed the appointment of S R B C & Co. LLP as Statutory Auditors of the Company for a period of three (3) years. Accordingly, the appointment of Statutory Auditors is proposed to the Members in the Notice of the forthcoming AGM for a period of three (3) years commencing from the conclusion of the forthcoming AGM till the conclusion of 41st AGM, subject to ratification of their appointment at every AGM by the Members.

The Company has received letter from S R B C & Co. LLP, Chartered Accountants, confirming their eligibility to be appointed as Auditors under the relevant provisions of Chapter X of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014. Further the proposed appointment will be within the limits under Section 141(3)(g) of the Companies Act, 2013 and that they are not disqualified for appointment.

Members are requested to consider their appointment on a remuneration to be decided by the Board for the ensuing Financial Year i.e. 2014-15.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the Company, from to time to time on due dates, to the Investor Education and Protection Fund (IEPF). No claim shall lie against the IEPF or the Company for the amounts so transferred prior to 31st March, 2014, nor shall any payment to be made in respect of such claims.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amount lying with the Company as on 4th September, 2013 (date of last Annual General Meeting) on the Company''s website (www.punjabchemicals.com).

CORPORATE GOVERNANCE:

The Company strives to maintain the required standards of corporate governance and adhere to the corporate governance requirements set out by SEBI. The Company has complied with the Corporate Governance code as stipulated under the Listing Agreement with the stock exchanges. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from the Practicing Company Secretary confirming compliance with the conditions of corporate governance as stipulated under the aforesaid Clause 49, is attached to the Report on corporate governance The Management Discussion and Analysis Report as required under the Listing agreements with the Stock Exchange is annexed and forms an integral part of the Director''s Report.

ACKNOWLEDGEMENT:

The Directors wish to convey their appreciation to all of the Company''s employees for their enormous personal efforts as well as their collective contribution to the Company''s performance. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, and all the other business associates for their continuous support given to the Company and their confidence in its management.

For and on behalf of the Bord of Directors

G.NARAYANA Chairman

Place:Mumbai Date:May 29,2014

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Mar 31, 2013

Dear Members,

The Board of Directors hereby presents the 37th Annual Report on the business and operations of your Company along with the standalone and consolidated financial statements for the financial year ended on 31st March, 2013 (comprising of 6 months period from 1st October, 2012 to 31st March, 2013).

FINANCIAL HIGHLIGHTS :

The performance of the Company for the financial year under review is summarized below:

(Rupees in Lacs) Consolidated* Standalone Particulars 2012-13 2011-12 2012-13 2011-12

Sale of Products & Other Income (Net) 24915 101524 20441 54894

Profit / (Loss) before Depreciation & Tax & Exceptional item (1196) 460 (227) (4618)

Depreciation / Amortisation 804 8460 717 1991

Profit / (Loss) before Tax & Exceptional item (2000) (8000) (944) (6609)

Exceptional income/ (expense) 737 (1956) 737 (2362)

Profit / (Loss) before Tax (1263) (9956) (207) (8971)

Less: Provision for Taxation

Current tax 757

Deferred Tax

Profit / (Loss) after Tax (1263) (10713) (207) (8971)

Adjustment of tax relating to earlier years (1) 16

Net Profit / (Loss) (1263) (10712) (207) (8987)

Profit available for Appropriation (1263) (10712) (207) (8987)

Carried forward to next year (1263) (10712) (207) (8987)

* Consolidated financial statements for the financial year ended 31st March, 2013 form part of the Annual Report and Accounts of its subsidiary Companies.

Notes:

a) Current period figures are not comparable with the previous year, as the current period is for 6 months as against the previous year of 18 months.

b) Previous period figures under different heads have been regrouped to the extent necessary.

OPERATIONS:

It may be noted that various initiatives taken by the management, detailed in the previous Annual Report, have produced results. The Company during the year continued to focus on better efficiencies, cost saving measures, improved supply chain and working capital management. The management also brought the focus back on Agro-chemicals technical manufacture, the backbone of the Company''s business. The Company was able to increase revenues by new strategic alliances with elite customers and optimum utilization of the production capacity of Agro Chemicals Division. However, the working capital constraints still continued to cast its shadow in the year under review.

Amid various constraints, the Company has successfully commissioned another ''Fungicide plant'' in Agro Chemicals Division of the Company with the technical support and buy back arrangement from one of the renowned Multinational Company in the month of March, 2013. The first lot of the finished product from this plant has been dispatched in May, 2013. The Company has projected a business of around Rs. 180 crores from this contract in the next three years. The successful implementation of this plant is a major morale booster for the Company.

The total income of the Indian Operations in the six months period under review was at Rs. 204.41crores with a net loss of Rs. 2.07 crores as against the total income of Rs. 548.94 crores and a net loss of Rs. 89.87 crores in the previous year of eighteen months (this is after booking exceptional expenses and other provisions). The management of the Company has been endeavouring to run all the plants situated at different locations with more focus on Agro Chemicals Division. The new fungicide and other profitable existing products in this division are expected to strengthen the working of the Company and will add more value to its business.

The Management is also looking for an opportunity to dispose off some of the non-core assets or less performing assets or businesses in order to reduce the debt of the Company. This will strengthen the revival of the Company. l The Members will recall that in view of the poor financial results of the previous year, the Company had filed a report with the Board for Industrial and

Financial Restructuring (BIFR) under Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985 informing about the erosion of net worth and potential sickness of the Company. The Company has also filed with BIFR a statement of causes of erosion of net worth and remedial measures taken / to be taken for revival after seeking the approval of the Members in the Extra-Ordinary General Meeting held on 29th December, 2012. As already mentioned, the Management of the Company with all its diligence and resources is trying to streamline the working of the Company.

OVERSEAS BUSINESS AND CONSOLIDATED RESULTS :

The operations of the overseas subsidiary companies were adversely affected during the period. This was mainly due to financial constraints and the geographical environment of the countries of operations.

As the members were briefed in the last Annual Report that the operations of Sintesis Quimica, Argentina (SQ), one of the overseas subsidiary Company, had been seriously affected by unfavourable government policies. The scenario has not changed in the six months under review. In this period, the total revenue of this subsidiary stood at Rs. 49.07 crores with a net loss of Rs. 9.77 crores.

During the period under review, the total revenue of SD Agchem (Europe) NV stood at Rs. 2.07 crores with net loss of Rs. 1.18 crores.

The Company is weighing some of the strategic proposals to streamline the working in these subsidiary Companies.

The total income of the Company in the consolidated accounts during the period under review was Rs. 249.15 crores with net loss of Rs. 12.63 crores as against the income of Rs. 1015.24 crores and net loss of Rs. 107.12 crores in the previous 18 months period.

DIVIDEND :

In view of loss during the period under review and accumulated losses of previous years, the Directors regret their inability to recommend a dividend.

OUTLOOK :

The Company has the facilities of manufacturing technical and branded formulations of agro chemicals business. In addition, Pharma, Industrial

Chemicals and specialized bio-products add to its business prospects. Further, the Company has a comprehensive portfolio with strong brand and a wide distribution network.

As per one of the reports of ASSOCHAM, the agrochemicals sector in India is likely to grow at 15 percent annually and cross Rs 25,000 crores mark by 2015. Therefore, India''s Agro-chemical industry has huge potential and immense growth opportunities. Hence, we expect improved performance in the local market in the coming year.

However, due to the subdued European market, exchange rate fluctuation in Rupee vis-à-vis Euro and USD, increased prices of major raw materials, adverse operating and financial position (shortage of working capital) full recovery continues to be a matter of concern for the Company. The Management however, is optimistic about the business prospects and taking steps to capitalize the available opportunities.

CHANGE IN THE REGISTERED OFFICE :

The Registered Office of the Company has been shifted to S.C.O : 183, First Floor, Sector - 26 (East), Madhya Marg, Chandigarh 160 019 we.f 1st April, 2013, as approved by the Board of Directors of the Company in their meeting held on 11th February, 2013.

SUBSIDIARY COMPANIES :

The Company has only three subsidiaries as on 31st March, 2013 namely- STS Chemicals (UK) Ltd.; Sintesis Quimica, Argentina, S.A.I.C and SD

AgChem (Europe) NV.

The consolidated financial results of the Company include the financial results of the Subsidiary Companies as mentioned in the Notes to Accounts of the

Consolidated Financial Statements.

Pursuant to the General Circular No. 2/2011 dated 8th February, 2011 issued by the Ministry of Corporate Affairs, general exemption has been granted to the Companies for not attaching the Balance sheet, Profit & Loss Account and other documents of subsidiary Companies, with the Company''s accounts.

The Board of Directors in its meeting held on 29th May, 2013 has given its consent for not attaching the Annual Accounts of its subsidiaries with the accounts of the Company. Accordingly, Members of the Company who are interested in obtaining annual accounts of the subsidiary companies may write to the Company Secretary at the Registered Office of the Company. This document will also be available for inspection by the Members of the Company at the Company''s Registered Office and also at the Registered Offices of the concerned subsidiary Companies during business hours. The Consolidated Financial Statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report includes the financial information of the subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary Companies is also included in this Annual Report.

FINANCE:

The debt recast of Secured Term Loans amounting to Rs. 123.33 crores and Working Capital loans amounting to Rs. 201.30 crores, under the Corporate Debt Restructuring route during the last year, saved interest and gave some relief to cashflow due to the extended repayment obligations on Term Loans along with two years moratorium on interest. However, non availability of the required additional working capital restricted Company''s operational activities.

The execution of the legal documents with respect to the revised limits under the Corporate Debt Restructuring mechanism is at an advance stage.

FIXED DEPOSITS :

The Company has not accepted or renewed any fixed deposits from the public during the period under review. However, the Company has repaid all the fixed deposits matured and due during the period, and hence, the amount of Fixed Deposits as on 31st March, 2013 was reduced to Rs. 144.52 lacs (previous year Rs. 275 lacs). The Company will continue to repay the matured deposits on timely basis to all the depositors. The deposits amounting to Rs. 3.16 lacs remained unclaimed by 4 depositors as on 31st March, 2013 (previous year Rs. 17.28 lacs by 25 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment. The management would like to thank all the depositors for their faith and confidence reposed in the Company.

LISTING WITH STOCK EXCHANGES :

The Company''s shares continue to be listed at the National Stock Exchange of India Limited and Bombay Stock Exchange Limited. The Annual Listing fee for the financial year 2013-14 has been paid to these Exchanges.

INSURANCE:

The Company continues to carry adequate insurance cover for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENTAL MANAGEMENT AND POLLUTION CONTROL:

Your Company is conscious of the importance of environmentally clean and safe operations. The environment management and pollution control are the foremost priority in all the units of the Company. Accordingly, the efforts are made for the reduction of the waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES AND INDUSTRIAL RELATIONS:

Your Company would like to acknowledge the contributions of each and every employee in helping the Company to attain its business goals. The industrial relations at all sites of the Company remained cordial throughout the year.

CORPORATE SOCIAL RESPONSIBILITY:

The Company continues to organize a ''Blood Donation Camp'' in the memory of Late Shri S.D. Shroff on 18th December every year. This year around 61 people donated blood. SDS Memorial Trust has also helped few of the needy students. The management and employees of the Company always give due importance to Corporate Social Responsibility activities. These activities will be increased upon improvement in the financial position of the Company.

RESEARCH & DEVELOPMENT / QUALITY CONTROL:

Inspite of shortage of funds, your Company continues to make need based investment in R&D considering it as a source of competitive advantage. The regular R&D activities are carried out in the laboratories of Agro Chemicals Division and Pharma Division. The activities are taken to improve upon the existing processes, decrease effluent load and to develop new products and by-products. Environment, Health and Safety (EHS) considerations have been given special emphasis in the process improvement activities.

DIRECTORS:

Shri Jagdish R Naik, Non Executive Director has resigned from the Board we.f 30.04.2013 owing to his other pressing professional engagements. The Board of Directors acknowledged his outstanding services and placed on record his contribution in advancement of the Company, guidance on critical financial and corporate matters and role played in formulating financial restructuring strategies.

During the year under review, the Export- Import Bank of India withdrew the nomination of Shri R.W. Khanna and nominated Shri S.P. Singh, Advisor, EXIM Bank in his place on the Board of the Company we.f 11.02.2013. The Board of Directors expressed their deep sense of appreciation and gratitude for the services rendered by Shri R. W. Khanna during his tenure as a Nominee Director in the Company.

In accordance with Article 146 of the Articles of Association of the Company, read with Section 255 and 256 of the Companies Act, 1956, Shri Vijay Rai and Shri M.D. Patel will retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer themselves for re-appointment. The Board of Directors recommends their re-appointment.

The brief resume and other details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the Corporate Governance Report forming part of the Annual Report. l The applications for approval to the re-appointment and payment of remuneration to Shri Avtar Singh, Director (Operations & Business Development) under Section 269 of the Companies Act, 1956 has already been filed with the Central Government. The same is pending for approval with the Central Government.

DEPOSITORY SYSTEM:

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956. i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

The information required under Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 with respect to energy conservation is appended hereto and forms part of this Report.

ii) PARTICULARS OF EMPLOYEES

The information under Section 217 (2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011 is not required to be attached with this report, as none of the employees is covered under these rules.

iii) RESPONSIBILITY STATEMENT

In terms of Section 217 (2AA) of the Companies (Amendment) Act, 2000, your Directors state that:

a) In the preparation of the Annual Accounts for the year ended 31st March, 2013, the Company has followed the applicable Accounting Standards along with proper explanations relating to material departures, if any;

b) Appropriate Accounting Policies have been selected and applied consistently and judgments and estimates are made prudently and reasonably so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2013 and of the losses of the Company for that year;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the applicable provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Annual Accounts have been prepared on a going concern basis.

iv) CEO / CFO CERTIFICATION:

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2013, at its meeting held on 29th May, 2013. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT:

The Cost Audit Report and Compliance Report for the Financial year 2011-12 duly certified by the Lead Cost Auditor, Mrs. Pushpa Khanna, Cost Accountant, Chandigarh, have been submitted to the Central Government on 29th March, 2013, which was due to be filed on 29th March, 2013.

Further, the Company has re-appointed Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors for the Financial Year 2013-14, subject to the approval of the Central Government. It may be noted that Mrs. Pushpa Khanna, Cost Accountant, Chandigarh has been nominated as the Lead Cost Auditor of the Company.

AUDITORS'' REPORT:

In the Audit Report on the Consolidated Financial Statements for the Financial Year ended 31st March, 2013, the Auditors'' have qualified as under:

i) STS Chemicals (UK) Limited, 100% subsidiary of the Company, has not been considered for the purpose of preparation of the Consolidated

Financial Statements. ii) Effect of investment in associate company viz Source Dynamic LLC, on the financial position and the operating results of the group, as required by

Accounting Standard (AS) 23, ''Accounting for Investment in Associates in Consolidated Financial Statements'' have not been considered in the

Consolidated Financial Statements. The Board of Directors are of the opinion that the aforesaid subsidiary and the associate company do not have any significant operations. Accordingly, the non-inclusion of the same in the Consolidated Financial Statements has no significant impact on the financial position and operating results of the Company.

There are few remarks given in the Annexure to the Auditors'' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation of the Fixed Assets register.

AUDITORS:

L M/s S.R. Batliboi & Company LLP Chartered Accountants (formerly known as S.R Batliboi & Co., Chartered Accountants), whose term of office as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given a notice in writing to the Company expressing their willingness for re-appointment. S.R Batliboi & Co. have intimated the Company vide letter dated 1st April, 2013 about the change in the name of the firm to ‘S.R. Batliboi & Co. LLP'' pursuant to its conversion as a Limited Liability Partnership firm. The change in the name of the auditor firm would not have any effect on the letters, agreements, instruments, deeds, documents and writings executed by and between the Company and the audit firm and the same would continue to be in full force and effect in accordance with their terms, as if S.R Batliboi & Co. LLP were a party to it instead of S.R Batliboi & Co.

They have also given a letter to the Company certifying that their proposed appointment as Auditors would be within the limits prescribed under section 224(1B) of the Companies Act, 1956. The Directors of the Company have recommended their appointment.

CORPORATE GOVERNANCE:

The Company strives to maintain high standards of corporate governance in interactions with all the stakeholders. The Company has complied with the Corporate Governance code as stipulated under the listing agreement with the stock exchanges. A separate section on corporate governance along with a certificate from the Practicing Company Secretary confirming the level of compliance is attached and forms a part of this report. The Management Discussion and Analysis Report as required under the Listing agreements with the Stock Exchange is annexed and forms an integral part of the Directors'' Report.

ACKNOWLEDGEMENT:

The Directors also take this opportunity to thank all the financial institutions, banks, customers, vendors and members for their support and co- operation during the financial year.

For and on behalf of the Board of Directors

G. NARAYANA

Place: Mumbai Chairman

Date : May 29, 2013

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Mar 31, 2011

TO THE MEMBERS,

The Directors are pleased to present the 35th Annual Report of the Company, together with the Audited Statement of Accounts for the year ended 31st March, 2011.

FINANCIAL RESULTS

The performance of the Company during the year as compared to the previous year is summarized below:

(Rs. in Lacs)

Consolidated* Standalone

2010-11 2009-10 2010-11 2009-10

Sale of Products & Other Income (Net) 68054 58302 36856 32473

Profit / (Loss)before Depreci -ation & Tax & Exceptional item 2202 (4015) (1279) (4441)

Less: Depreciation/Amortisation 3159 3419 694 1059

Profit/(Loss) before Tax & Exceptional item (957) (7434) (1973) (5500)

Less: Exceptional item 619 619 - -

Profit / (Loss) before Tax (338) (7434) (1354) (5500)

Less: Provision for Taxation

Current year 435 175 - -

Deferred Tax Asset/ (Liability) (141) (1813) - (1457)

Profit/(Loss) after Tax (632) (5796) (1354) (4043)

Minority Interest - 1 - -

(632) (5795) (1354) (4043)

Add/(Less):

Excess/(Short) Provision for Taxes of earlier years. 1 (84) 1 (69)

Net Profit/(Loss) (631) (5879) (1353) (4112)

Post Merger loss of Parul Chemicals Limited for the year ended 31st March, 2011 - - (28) -

Profit brought forward from previous year - 216 - 1226

Profit/ (Loss) available for Appropriation (631) (5663) (1381) (2886)

Carried forward to next year (631) (5663) (1381) (2886)

* Consolidated financial statements for the year ended 31st March, 2011 form part of the Annual Report and Accounts of its Subsidiary Companies. Figures for the previous year have been regrouped, wherever necessary to make them comparable with figures of the current year.

DIVIDEND

Your Directors have not recommended any dividend for the year 2010-11 keeping in view the loss in the working of the Company.

SCHEME OF ARRANGEMENT

The amalgamation of the erstwhile Parul Chemicals Limited (PCL), Vadodara with the Company (PCCPL), has been sanctioned by the Hon'ble High Court of Punjab & Haryana at Chandigarh and by the Hon'ble High Court of Gujarat at Ahmedabad vide their orders dated 11th March, 2011 and 23rd March, 2011 respectively. Consequent upon the aforesaid approvals, the assets and liabilities of PCL have been transferred to and vested in the Company with retrospective effect from 1st April, 2009 ('the Appointed Date'). In view of this, the financial results of the Company for the year 2010-11 have been prepared after taking effect of the approved scheme. The Authorized Capital of the Company has accordingly been increased to Rs. 18 crores from Rs. 15 crores as shown in Schedule 'A of the Balance Sheet, with effect from 26th March, 2011 (the 'Effective Date'). Further, the Board of Directors of the Company in their meeting held on 11th May, 2011, have allotted 69,293 Equity shares of Rs. 10/- each fully paid-up to the shareholders of the erstwhile PCL without payment being received in cash and in the exchange ratio approved by the Hon'ble High Courts. The Company has also initiated the process of listing of these shares on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited, where the Company's shares are already listed.

Further, in accordance to the aforesaid sanctioned scheme of arrangement, the fixed assets of the Company have been reinstated at their respective fair value on the basis of the report of a competent Valuer appointed by the Company. The re-instatement adjustment was accordingly credited to Business Reconstruction Reserve (BRR) account. The Company has utilized the BRR by adjusting certain expenses as detailed in the Notes to Accounts.

The Board of Directors feel that the amalgamation of PCL with the Company will provide benefit to the Company by way of business integration and further strengthen its presence in the domestic and export markets.

OPERATIONS

The total income of the Indian operations of the Company increased to Rs. 368 crores with a net loss of Rs. 13 crores in the year under review against the total income of Rs. 325 crores and a net loss of Rs. 41 crores in the previous year. The exports increased by 36% and were recorded at Rs. 146 crores against Rs. 107 crores in the previous year. It may be observed that operations of the Company had improved marginally in the year but not upto the level it should have been. The after effects of the global meltdown, disruption of operations in the Agro Chemicals Division due to fire and gestation period after repair of the plant caused shortage of working capital. The high interest cost of the existing debts further affected the working. There could be no infusion of capital from the market as envisaged due to various reasons.

The operations of the overseas subsidiary companies have improved and accordingly, the consolidated income of the Company during the year was at Rs. 680 crores against Rs. 583 crores in the previous year with 17% increase. Accordingly, the overall loss of the Company on consolidated basis reduced to Rs. 6 crores against loss of Rs. 59 crores in the previous year.

The working of Agrichem B.V., a subsidiary Company, has improved with new product mix resulting to a higher gross margin. The Company added new customers for its products and obtained few new registrations in the European countries. The Company is now able to compete in the Crop Protection industry with its efforts, knowledge of clients and leading products. During the year, the sales of this subsidiary Company was Rs. 178 crores against Rs. 145 crores and PAT of Rs. 6 crores against the loss of Rs. 13 crores in the previous year, after providing amortization of Registration expenses.

In Sintesis Quimica, Argentina, another subsidiary Company, the income has increased to Rs. 169 crores from Rs. 121 crores in the year under review with a PAT of Rs. 3.18 crores against Rs. 3.73 crores in the previous year. However, the profit did not increase in proportion to increase in sales due to enormous increase in the cost of labour and high inflation in that country.

OUTLOOK

The Company has the facilities of manufacturing technicals and branded formulations of agro chemicals business. In addition, Pharma, Industrial Chemicals and specialized bio-products add to the business prospects.

Your Company has the potentials, zeal to grow, employees' dedication and market of the products. The only constraint is high debt and less capacity utilization due to working capital shortage. The efforts are continued for infusion of Capital in the system to reduce pressure of the debts. The synergy of utilization of product registrations in India and Overseas, mixed product portfolio and efficiency in the manufacturing processes are the key factors to bring turnaround in the Company. The integration of products manufacturing in Indian units with the overseas registrations will add value, once the production capacity is fully utilized.

Therefore, the outlook of the Company in the medium to long term is growth oriented barring unforeseen circumstances.

SUBSIDIARY COMPANIES

The consolidated result of the Company includes the results of the subsidiary companies as mentioned in the Notes to Accounts of the Consolidated Financial Statements.

Your Board of Directors of the Company have resolved for not attaching the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies with this Annual Report, in view of the general exemption granted by the Ministry of Corporate Affairs, Government of India under section 212(8) of the Companies Act, 1956 vide General Circular No. 2/2011 dated 8th February, 2011. It is also stated that the Annual Accounts of the Subsidiary Companies and the related detailed information shall be made available to the shareholders of the Company and its Subsidiaries, upon receipt of request from them and shall be available for inspection at the registered office of the Company and also at the registered office of the concerned Subsidiary Companies. The Consolidated Financial Statement prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report include the financial information of the subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the Subsidiary Companies is also included in this Annual Report.

FINANCE

During the year under review, the Company tried to infuse equity into the Company by way of issuing Preferential Convertible Warrants to one of the Promoter of the Company, but the proposal could not get matured, due to the inability of the Company to comply with the new proviso to sub-regulation (2) of Regulation 72 of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

Further, the Company had requested the banks to restructure all the credit facilities for harmonization of the terms and conditions as per the available cash flow. The Banks have agreed to the proposal and the Company is in the process of executing documents. The harmonization of terms will help the Company to have more moratorium, longer period of repayment with reduced interest.

FIXED DEPOSITS

The amount of Fixed Deposits as on 31st March, 2011 was Rs. 590 lacs (previous year Rs. 481 lacs). The deposit amounting to Rs. 0.52 lacs were unclaimed by 2 depositors as on 31st March, 2011 (previous year Rs. 0.52 lacs by 2 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

In terms of the provisions of the Investor Education and Protection Fund (Awareness and Protection of Investors) Rules, 2001, Rs. 44,425 of Unclaimed Deposits pertaining to the financial year 2004-05 was transferred to the Investor Education and Protection Fund on the due date.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company remains listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited having nation wide terminals. The requisite annual listing fees to these Stock Exchanges have been paid.

INSURANCE

The Company has taken the required insurance coverage for its assets against the possible risks like fire, flood, public liability, marine, etc.

The Company has received Rs. 13.67 crores (including Rs. 6.19 crores for 'Loss of Profit') from the Insurance Company against the claim filed for loss due to fire in one of the plants in Punjab in April, 2009.

ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

The environment management and pollution control are the foremost priorities in all the units of the Company. Accordingly, all efforts are made for the reduction of the waste generation and re-processing of the waste material, wherever possible. Multi effect evaporators have been installed in both the units in Punjab.

EMPLOYEES & INDUSTRIAL RELATIONS

Your Board of Directors sincerely appreciate the working and contribution of all categories of employees in this difficult time. Their suggestions to improve the productivity are seriously considered.

SOCIAL RESPONSIBILITY

In the Corporate Social Responsibility endeavour, medical camps and scholarships to the needy students are arranged by the company, as per the local requirement. The medical and other required facilities are also provided to the surrounding villages. The trust created in the memory of Late Shri S.D. Shroff, organizes the Blood Donation camp every year.

RESEARCH & DEVELOPMENT / QUALITY CONTROL

The regular R&D activities are carried out in the laboratories of Agro and Pharma manufacturing units to improve upon the existing processes, decrease effluent load and to develop new products and by-products.

DIRECTORS

Shri A.G. Shroff, Non-Executive Director of the Company, has resigned from the Board of Directors w.e.f 11th February, 2011. The Board of Directors expressed their deep sense of appreciation and gratitude for his outstanding services and contribution during his tenure as a Director of the Company since 1986.

Further, in accordance with Article 146 of the Articles of Association of the Company, read with Section 255 and 256 of the Companies Act, 1956,the office of Shri Jai Prakash Bhambhani is liable to retire by rotation at this Annual General Meeting but he has not offered himself for re-appointment. Accordingly, Shri Ajit R Sanghvi and Shri M.D. Patel , Directors of the Company, are liable to retire by rotation at this ensuing Annual General Meeting of the Company and being eligible, offer themselves for reappointment.

The Board recommends their re-appointment for the approval of the members.

The brief details relating to the directors, who are to be re-appointed, as stipulated under Clause 49 (IV) (G) of the Listing Agreement, are furnished in the

Corporate Governance Report forming part of the Annual Report.

The Export-Import Bank of India (EXIM), banker of the Company, has appointed Shri R.W Khanna, Chief General Manager of EXIM Bank, as its Nominee Director on the Board of the Company. The Board of Directors welcome him on the Board of the Company and are confident that knowledge, expertise and vision of Shri R.W Khanna will be an invaluable contribution to the organization.

DEPOSITORY SYSTEM

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar and Share Transfer Agent of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

(i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

Particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, are given in the Annexure to this Report.

(ii) PARTICULARS OF EMPLOYEES

The information under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Amendment Rules, 2011, is not required to be attached with this report, as none of the employee is covered under these Rules.

(iii) RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies (Amendment) Act, 2000, your Directors state that:

(a) in the preparation of the Annual Accounts for the year ended 31st March, 2011, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

(b) they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year at 31st March, 2011 and of the loss of the Company for the year ended on that date;

(c) they have taken proper and sufficient care for the maintenance of adequate Accounting Records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) they have prepared the Annual Accounts on a going concern basis.

(iv) CEO/CFO CERTIFICATION

In terms of Clause 49 (V) of the Listing Agreement, the Certificate duly signed by Shri Shalil Shroff, Managing Director (CEO) and Shri Vipul Joshi, Chief Financial Officer of the Company was placed before the Board of Directors along with the annual financial statements for the year ended on 31st March, 2011, at its meeting held on 30th May, 2011. The said Certificate is also annexed to the Corporate Governance Report.

COST AUDIT

The audit reports from Mrs. Pushpa Khanna, Cost Accountant and M/s Khushwinder Kumar & Co., Cost Accountant, in respect of the audit of cost accounts relating to "Insecticides" and "Bulk Drugs" respectively, for the Financial year 2009-2010 have been submitted to the Central Government directly on 25th September, 2010 and 20th September, 2010 respectively, which was due to be filed on September 27, 2010.

Further, the Company has received the approval of the Central Government for the appointment of Mrs. Pushpa Khanna, Cost Accountant, Chandigarh and M/s Khushwinder Kumar & Co. Cost Accountant, Jalandhar as Cost Auditors for the Financial Year 2011-12.

AUDITORS' REMARKS

In the Audit Report on the Consolidated financial statements for the Financial Year ended 31st March, 2011, the Auditors' have qualified as under:

i) 100 % subsidiaries viz Agrichem Polska, N.V Agricultural Chemicals and Agrichem Helvetia GmbH, have not been considered for the purpose of preparation of the Consolidated Financial Statements.

ii) Effect of investment in associate companies on the financial position and operating results of the Group, as required by Accounting Standard (AS)- 23, 'Accounting for investment in Associates in Consolidated Financial Statement' have not been considered in the Consolidated Financial Statements.

The Board of Directors are of the opinion and record that the aforesaid subsidiaries and the associate companies do not have any significant operations, therefore, the non-inclusion of the same in the Consolidated Financial Statements have no significant impact on the financial position and operating results.

There are few remarks given in the Annexure to the Auditors' Report which are self explanatory. Necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation of the Fixed Assets Register.

AUDITORS

M/s S.R. Batliboi & Company, Chartered Accountants, whose term of office as the Statutory Auditors of the Company will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given to the Company a notice in writing of their willingness for re-appointment. They have also given a letter to the Company certifying that their proposed appointment as Auditors would be in accordance within the limits prescribed under section 224(1B) of the Companies Act, 1956. The Directors of the Company have recommended their appointment.

CORPORATE GOVERNANCE

Your Company continues to practice the principles of 'Good Corporate Governance' during the year and the Board of Directors lay strong emphasis on accountability, integrity and responsibilities in dealings with employees, shareholders, consumers and community at large.

Report on Management Discussion and Analysis and Corporate Governance Report along with a Certificate from S.K Sharma & Associates, Practising Company Secretary, confirming compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreements with the Stock Exchanges, form part of the Annual Report.

ACKNOWLEDGEMENT

The Board of Directors appreciate the continued commitment and dedication of employees at all levels. The support of various Banks and other lenders to the Company is appreciated and acknowledged.

For and on behalf of the Board of Directors

G. NARAYANA Chairman Place : Mumbai Date : May 30, 2011

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Mar 31, 2010

The Directors are pleased to present the 34th Annual Report and the Audited Statement of Accounts of the Company for the year ended 31 st March,2010.

WORKING RESULTS (Rs. in Lacs)

Consolidated* Standalone

2009-10 2008-09 2009-10 2008-09

Sale of Products & Other Income (Net) 58302 74339 32473 49693

Profit / (Loss) before Depreciation & Tax (4015) 3929 (4441) 2081 Less: Depreciation/Amortisation 3419 3121 1069 919

Profit/(Loss) before Tax (7434) 808 (5500) 1162

Provision for Taxation

Current year including FBT (175) (603) - (418)

Deferred Tax Asset/(Liability) 1813 63 1457 (68)

Profit/(Loss) after Tax (5798) 268 (4043) 676

Minority Interest 1 3 - -

(5795) 271 (4843) 676

Add/(Less):

Prior Period Adjustments - (238) - (27)

Excess/(Short): Provision for Taxes of earlier years. (84) (125) (89) (126)

Net Profit/(Loss) (5879) (92) (4112) 523

Profit brought forward from previous year 216 624 1226 1019

Profit available for Appropriation (5663) 532 (2886) 1542

Out of this, the Directors have made the following appropriations :

Proposed Dividend - 99 - 99 Tax on Dividend - 17 - 17

Transfer to General Reserve - 200 - - 200

Carried forward to next year (5663) 216 (2886) 1226

* Consolidated financial statements for the year ended 31 st March, 2010 form part of the Annual Report and Accounts of its Subsidiary Companies. Figures forthe previous year have been regrouped, wherever necessary to make them comparable with figures of the current year.

DIVIDEND

Your Directors have not recommended any dividend forthe year 2009-10 keeping in view the loss in the working of the Company.

OPERATIONS

During the year, the total income on standalone basis of the Indian operations was Rs. 325 crores against Rs. 497crores in the previous year, down by 35%. The decrease in turnover and contribution posted a net loss of Rs. 41.12 crores against the net profit of Rs 5.23 crores in the previous year. The export sales were less at Rs. 107 crores against Rs. 148 crores of last year, also less by 28%.

The year under review was a difficult one. The recession, sluggish export recovery and a slowdown in the financial flow into the economy in the year 2008-09 following the financial crisis remained in the first half of the year under review.

Inspite of the beginning of recovery trend in the second half of 2009-10, the Company could not take advantage of the same because of the major fire in one of the agro chemicals plant at Derabassi in April, 2009 (as reported in the last Annual Report). The products affected in the fire were the key products. Rehabilitation work of the said plant could only be completed in December, 2009. The delay in disbursement of claim from the insurance company and non operation of the plant for large part of the year resulted into the liquidity crisis in the Company. The procurement of raw materials and other inputs to achieve full production was not possible in the circumstances. The service of the debts taken for overseas and Indian acquisition put further pressure on the cash flow. Moreover, the Companys efforts to raise equity could not materialize in the year under review. The short term borrowings, therefore, remained the only source to run the day to day business, which further increased the interest burden. The adverse foreign exchange fluctuation added to the loss and serious impact on the working results.

The formulated agro chemicals business has spread its wings and have the potential to grow in wide area. The operations have been expanded in the cotton belt of Maharashtra and Chattisgarh states for the insecticides, herbicides and fungicides business. This Division is maturing and expected to give fillip to the revenue and profitability of the Company in future. However, in the year under review, late rains created uncertainty in the initial sowing period and then flood in the Southern States affected the sales.

As stated in the last Annual Report, the Company has acquired Parul Chemicals Limited, Baroda (Parul) as 70% subsidiary Company to strengthen the formulation business. The Board of Directors of the Company have now.decided to amalgamate this Company to integrate Paruls manufacturing capability and other business with the Companys formulation business. The application for approval of amalgamation of Parul with the Company had been filed with the Honble High Court of Gujarat at Ahmedabad and Punjab & Haryana at Chandigarh.

Pharma unit in Punjab has started the production of new API and obtained additional job work.

In Industrial Chemicals Division at Tarapur, the production of new product was commenced to partially utilize the surplus capacity of the plant. Accordingly, the said plant should add to the revenue in near future. Pune unit could not meet its target because of unavailability of raw material including erratic supply of Phosphorous and reduced demand of the products in the domestic market. However, the current year projection looks better in view of improvement in the domestic demand.

The operations of the Trading Division was severely affected duetothe working capital deterioration.

The operations of the overseas subsidiary companies have grown. The better results are envisaged in the coming years after proper utilization of the available registrations, products and extensive market. Sintesis Quimica SAIC (SO.) has increased its presence in the local and international Biological Market and have introduced new insecticides in Soyabean cultivation. In part of the year due to international crisis, the export of inoculants to US was significantly less. The drought in Argentina reduced the cultivated area of wheat, corn and sunflower, thereby affecting the sales. However, partially it was compensated with larger sales in formulations. The Company has come up with profit due to international alliances and involvement of other marketing companies to reach new customers and capture value.

Agrichem B.V., another subsidiary Company has a wide spread product range in insecticides, herbicides and fungicides with number of registrations in various countries and is expected to perform better in the coming years. However, in the year under review, sluggish European market had an impact on the performance and amortization of product registration expenses put pressure on the margins of this overseas subsidiary.

The consolidated results of the Company includes the results of the subsidiary companies namely (i) STS Chemicals (UK) Ltd., (ii) SD AgChem (Europe) NV, (iii) Sintesis Quimica, S.A.I.C., Argentina (iv)Agrichem B.V., Netherlands, (v)N.V. Agricultural Chemicals, (vi) Agrichem Helvetia GmbH, (vii) PG Crop Protection Ltd., (viii) SD Agchem Netherlands 1 B.V. and ix) Parul Chemicals Limited, Vadodara.

The Consolidated income of the Company during the year 2009-10 was Rs. 583 crores against Rs. 743 crores of previous year down by 22%. This resulted into a loss of Rs. 59 crores againstthe loss of Rs. 92 lacs in 2008-09.

OUTLOOK

The Board of Directors of your Company are confident that situation should normalize in the current year., The Company has the full export orders of its key products, therefore, utilization of full capacity, particularly in the Agro Division will remain the prime focus. The long term borrowings, equity generation and expected release of Insurance Claims in the near future should bring turnaround in the Company. Moreover, the strategy adopted in the past few years, viz. obtaining product registrations in India and overseas, mixed product portfolio and efficiency in the manufacturing processes should help the Company to recover fast. The product registrations in one of the subsidiary company in European Unions have been fully integrated in line with the products manufacturing in Indian units. The Consolidation of these activities should enable the Company to face market turbulence more effectively.

The Company is therefore, with facilities of manufacturing technicals, branded formulations possesses the entire value chain of agro chemicals business. In addition, Pharma, Industrial Chemicals and specialized bio-products adds to the business prospects.

Therefore, the outlook of the Company in the medium to long term is growth oriented barring unforeseen circumstances.

SUBSIDIARY COMPANIES

In terms of the approval granted by the Central Government under section 212(8) of the Companies Act, 1956, the audited accounts of the subsidiary Companies are not attached to this Annual Report. However, the consolidated financial statements prepared in accordance with Accounting Standard 21 of the Institute of Chartered Accountants of India presented in this Annual Report include the financial information of the subsidiary Companies. The Accounts of the subsidiary Companies will be made available to the members upon receipt of request from them and shall be available for inspection at the registered office of the Company and also at the registered office of the concerned subsidiary Companies. The statement pursuant to Section 212 of the Companies Act, 1956 relating to the subsidiary Companies is included in this Annual Report.

FINANCE

During the year under review, 6,00,000 Preferential Convertible Warrants (PCW), were converted into Equity shares on 11th August, 2009, at a price of Rs. 136/-per share having face value of Rs. 10/-each. Ten percent amount received from the remaining subscribers of 9,10,000 PCW were forfeited as per the SEBI guidelines as they did not opt for conversion. The Paid Up Share Capital, thereafter, increased to Rs. 7,19,28,920 consisting of 71,92,892 equity shares of Rs. 10/- each. These shares have been listed on the Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

As stated earlier, the Company was facing huge liquidity problem and in absence of infusion of sufficient equity through various means, the Company had to resort to the additional borrowings to meet its day to day working capital requirement and fund the interest cost. This has increased the cost of borrowing and affected the bottom line of the Company. During the year under review, Company had taken additional borrowings from Central Bank of India (Rs. 25 crores), Union Bank of India (Rs. 25 crores), Allahabad Bank (Rs. 50 crores) and Bank of Baroda (Rs. 50 crores).

The Company had repaid part of the term loan to AXIS Bank (Rs. 666 lacs), EXIM Bank (Rs. 500 lacs), Bank of Rajasthan (Rs. 500 lacs) and Cash Credit limit of Rs. 1800 lacs to AXIS Bank, Rs. 1300 lacs to EXIM Bank. However, the overall borrowings have increased due to the operational reasons as stated above.

FIXED DEPOSITS

The amount of Fixed Deposits as on 31 st March, 2010 was Rs. 481 lacs (previous year Rs. 431 lacs). The deposit amounting to Rs. 0.52 lacs were unclaimed by 2 depositors as on 31 st March, 2010 (previous year Rs.0.72 lacs by 4 depositors). The Company has sent reminders to these depositors to complete the procedural formalities for repayment.

LISTING WITH STOCK EXCHANGES

The equity shares of the Company remains listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited having nation wide terminals. The requisite annual listing fees to these Stock Exchanges have been paid.

INSURANCE

The Company has taken the required insurance coverage for its assets against the possible risks like fire, flood, public liability, marine, etc.

ENVIRONMENT MANAGEMENT AND POLLUTION CONTROL

The Company is conscious of its environment management and pollution control. In all the units efforts are taken for reduction of the waste generation and re- processing of the waste material, wherever possible. Multi effect evaporators installed in both units in Punjab are helping in managing the environment.

EMPLOYEES & INDUSTRIAL RELATIONS

The relations of the management and all categories of employees are cordial. The patience and belongingness of the Companys employees are enormous. Their suggestions to improve the productivity are seriously considered.

SOCIAL RESPONSIBILITY

The Company continues to meet its social responsibility by arranging medical camps, donation of medicine and giving scholarships to the needy students. The trust created in the memory of late Shri S.D. Shroff, organizes the Blood Donation camp every year and serve the nearby villages with required medical help.

RESEARCH & DEVELOPMENT/QUALITY CONTROL

The R&D laboratories of Agro Chemicals and Pharma Division are recognized and approved by the Department of Scientific & Industrial Research, Government of India, New Delhi. The regular R&D activities are carried out in these laboratories to improve upon the existing processes and to develop new products and by-products. All the incoming Raw Materials and Finished Goods are regularly checked as per the ISO 9001 and IS014001 guidelines to keep the strict quality control of the Raw Materials, Finished Goods and new products. It helps in maintaining and improving the Raw Material efficiency of the existing products.

DIRECTORS

In accordance with Article 146 of the Articles of Association of the Company and with the provisions of the Companies Act, 1956, Shri Jagdish R Naik, Shri Vijay Rai and Shri Atul G Shroff, Directors of the Company retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, offerthemselves for reappointment.

Your Board recommends theirre-appointmentforthe approval of the members.

DEPOSITORY SYSTEM

M/s Alankit Assignments Ltd., 2E/21, Anarkali Market, Jhandewalan Extension, New Delhi, are the Registrar of the Company for the Physical as well as Demat shares. The members are requested to contact the Registrar directly for any of their requirements.

INFORMATION PURSUANT TO SECTION 217 OF THE COMPANIES ACT, 1956.

(i) PARTICULARS REGARDING CONSERVATION OF ENERGY, ETC.

Particulars regarding conservation of energy, technology absorption, foreign exchange earnings and outgo as required under section 217(1)(e) of the Companies Act, 1956, are given in the Annexure to this Report.

(ii) PARTICULARS OF EMPLOYEES

The information as required under section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, is v attached with this report.

(iii) RESPONSIBILITY STATEMENT

In terms of Section 217(2AA) of the Companies (Amendment) Act, 2000, your Directors state:

(a) that in the preparation of the Annual Accounts for the year ended 31st March,2010, the applicable Accounting Standards have been followed alongwith proper explanation relating to material departures, if any;

(b) that they have selected such Accounting Policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year at 31 st March, 2010 and of the loss of the Company for the year ended on that date;

(c) that proper and sufficient care has been taken for the maintenance of adequate Accounting Records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the Annual Accounts have been prepared on agoing concern basis.

(iv) CEO/CFO CERTIFICATION

The CEO (Managing Director) and the CFO of the Company have certified to the Board in the manner required under Corporate Governance Code, concerning the annual financial statement.

COST AUDIT

The reports of Mrs. Pushpa Khanna, Cost Accountant in respect of the audit of cost accounts of the "Insecticides" and of M/s Khushwinder Kumar & Co., Cost Accountant in respect of the audit of cost accounts of the "Bulk Drugs" for the year 2008-09 have been submitted by them directly to the Central Government.

AUDITORSREMARKS

The Companys Auditors have made qualifications in the Auditors Report on the Standalone and Consolidated financial statements for the Financial Year ended 31st March, 2010, which have been replied/explained as given below:-

i) that the Company has not made a provision for diminution other than temporary in the value of long term investment amounting to Rs.98 lacs.

The Board is of the opinion that the diminution in the value of long term investment is not of a permanent nature and accordingly no provision is considered necessary.

ii) PG Crop Protection Limited, N.V. Agricultural Chemicals and Agrichem Helvetia GmbH, 100% subsidiaries of the Company have not been considered forthe purpose of preparation of the consolidated financial statements.

iii) Effect of investment in associate companies on the financial position and operating results of the Group, as required by Accounting Standard (AS) 23, Accounting for Investment in Associates in Consolidated Financial Statements have not been considered in the consolidated financial statements.

The Board of Directors are of the opinion that the aforesaid subsidiaries and the associate Companies do not have any significant operations, therefore, the non-inclusion of the same in the Consolidated Financial Statements have no significant impact on the financial position and operating results.

There are few remarks given in the Annexure to the Auditors Report which are self explanatory. However, necessary actions are being taken on those remarks and points wherever required including tagging of fixed assets and updation in the Fixed Assets Register.

AUDITORS

M/s S.R. Batliboi & Company, Chartered Accountants, whose term of office as the Statutory Auditors will expire at the conclusion of the ensuing Annual General Meeting of the Company, have given to the Company a notice in writing of their willingness for reappointment. They have also given a letter to the Company certifying that their proposed appointment as Auditors would be in accordance within the limits prescribed under section 224(1 B) of the Companies Act, 1956. The Directors of the Company recommend their appointment.

CORPORATE GOVERNANCE

As per the Listing Agreement, a separate statement on Management Discussion and Analysis, Corporate Governance Report and a Certificate from the Practising Company Secretary regarding compliance form part of this Annual Report.

ACKNOWLEDGEMENT

The Board of Directors deeply acknowledge the contribution of all the stakeholders of the Company and value their support and suggestions. The support of various Banks and other lenders to the Company at the difficult time is worth praising and deserve heartfelt thanks. We, assure all the stakeholders that the team PCCPL is fully dedicated and assure that with the continuous support, we will overcome the turbulence in this year.

For and on behalf of the Board of Directors G.NARAYANA Place:Mumbai Chairman Date:June 18,2010