The Directors are pleased to present their 48^th Annual Report on the business and operations of the Company together with Standalone and Consolidated Audited Financial Statements (Ind AS based) for the Financial Year ended 31^st March, 2023 and the report of the Auditors thereon.

Financial Highlights

The financial results of the Company for the year ended 31^st March, 2023 are summarised below:-

Performance Review & State of Company's Affairs

The Chlor-Alkali Sector performed well supported by higher realizations despite high captive energy costs. During the year under review, the Company's performance was exceptionally good, particularly in the first three quarters of the year, driven by strong volume and realizations. The highlights of the Company's performance for the year ended 31^st March, 2023 are as under:

The Company has recorded an EBITDA of Rs. 218.52 crores during the Financial Year ended 31^st March, 2023 as compared to Rs. 101.82 crores in the previous financial year resulting in an increase of 115%.

The Company has produced 1,34,977 MT of Caustic Soda Lye (CSL) at a capacity utilization of 91% (on enhanced capacity of 1,48,000) during the financial year ended 31^st March, 2023. The Net Sales Turnover from operations has increased by 48.80% to Rs. 650.16 crores during the financial year ended 31^st March, 2023 as against Net Sales Turnover from operations of Rs. 436.93 crores during the previous financial year. The Company has earned Net Profit before Tax of Rs. 186.50 crores for the financial year ended 31^st March, 2023 as against Net profit before tax of Rs. 75.54 crores during the previous financial year.

The landed cost of raw material PMT of Caustic Soda Lye has increased from Rs. 5,305/- during the financial year ended 31^st March, 2022 to Rs. 6,350/- during the financial year ended 31^st March,

2023 mainly because of an increase in landed cost of Salt, Barium Carbonate, Soda Ash and Sulphuric Acid. Despite this significant increase in cost of raw materials, the Company has delivered significant growth in its operations and financial performance.

The combined average sales realization (net of GST) has increased to Rs. 50,045/- per ECU in the Financial Year under review from Rs. 39,661/- per ECU in the preceding Financial Year denoting an increase of 26%.

The performance of the Company aligns with its commitment to consistent growth through expansion plans, optimisation of resources and cost-effectiveness.

Associate Company

As on 31^st March, 2023, the Company has only one Associate Company namely Flow Tech Chemicals Private Limited (FTCPL), a Promoter Group Company. The total Revenue of FTCPL was Rs. 246.56 crores with Profit before tax of Rs. 9.43 crores as compared to the Revenue of Rs. 166.18 crores with Net Profit of Rs. 11.33 crores in the previous year. There are no Subsidiary or Joint Venture Companies within the meaning of Section 2(6) of the Companies Act, 2013 (“Act”). Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, the Statement containing salient features of the financial statements of the Associate Company in Form AOC-1 is given in Annexure - I, forming part of this Report.

Change in Capital Structure

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

Performance at the Consolidated Level

During the Financial Year ended 31^st March, 2023, the Company has increased its stake from 27.90% to 49% in the Associate Company which is primarily engaged in the manufacturing of Chlorinated Paraffin (CP) a widely used Plasticizer and Hydrochloric Acid. FTCPL is one of the major customers of Chlorine,

therefore Primo Chemicals Limited is substantially dependent on its Associate company for the disposal of Chlorine and sustainable operations.

At Consolidated Level, Profit after Tax of the Company was Rs. 137.40 crores during the Financial Year 202223 as against Rs. 59.21 crores in the previous year.

In view of the fund requirements for the expansion plan and various ongoing Projects of the Company, the Directors regret their inability to recommend any dividend for the financial year 2022-23. The Company believes that investment of the available funds in the expansion and upcoming Projects would be able to boost the investment made by the stakeholders.

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors of the Company has formulated and adopted the Dividend Distribution Policy, which is available on the website of the Company at https:// www.primochemicals.in/ page/investors.

Finance

Your Company has availed financial facilities from the Banks for meeting its fund's requirement for Working Capital/Operational Capital and/or for expansion and new Projects. The details of which form part of Notes of the Financial Statements.

Deposits

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

Material Changes and Commitments affecting the Financial Position of the Company

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

Current Operations & Outlook

Being one of major producers of Caustic Soda in Northern India, Primo Chemicals proudly boasts a substantial capacity of 500 TPD, which can be further expanded as keeping in view the demand-supply scenario. Notably, the Company has successfully commissioned its Stable Bleaching Powder (SBP) plant with an annual capacity of 33,000 MT.

Primo's ongoing expansion plans, including the 35 MW Coal and Biomass based Power Plant, Aluminium Chloride Project and Caustic Flaker unit, are developing as planned and it is anticipated that these projects will have a positive impact on the company's revenue and profitability in FY 2023-24.

To strengthen the Company's downstream portfolio, amplify product profitability, decrease energy expenses, and bolster Chlorine consumption for heightened Caustic Soda production. The Company has already acquired 49% stake in Flow Tech Chemicals Private Limited its Promoter Group Company till 30^th June, 2022. The Company plans to acquire up-to 100% equity stake in FTCPL by 31^st December, 2024. Post this acquisition, FTCPL will become wholly-owned Subsidiary of the Company.

Credit Rating

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

Particulars of Loans, Guarantees or Investments

Pursuant to Section 186 of the Act read with the Companies (Meetings of the Board and its Powers) Rules, 2014, disclosures relating to loans, guarantees and investments as on 31^st March 2023 are given in the Notes to the Financial Statements.

Environment and Energy Conservation

The Company accords high priority to carry out its operations in an environment-friendly fashion and has been taking appropriate steps for pollution control,

safety measures and good house-keeping across all its Plants. The Company has in place the Online Monitoring System at Works connected with Central Pollution Control Board server showing Real Time data of all parameters specified by them. A Safety Audit of the Plant was conducted during the financial year 2022-23 by the National Safety Council and its recommendations are being implemented.

The improvement in energy efficiency is vital for the sustainable growth of the Company. The Company continues to place a great emphasis on energy efficiency. Energy Audit is conducted on a regular basis through various agencies, active in the field. Various activities & modifications in the plant process are being implemented which are directed towards achieving the Targeted Specific energy Consumption

i.e., Energy Consumption Per Metric Tonne of Caustic Production, as set by Bureau of Energy Efficiency.

The information relating to the Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo as required to be disclosed pursuant to the provisions of Section 134 (3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies (Accounts) Rules, 2014, is given in Annexure-II forming a part of this report.

Listing

The Equity Shares of the Company are listed on the BSE Limited. The Annual listing fee for the year 202324 has been paid to BSE Limited.

Corporate Social Responsibility

During the year under review, the Company had to spend Rs. 67.60 lacs based on the average net profit of the last three years on CSR Activities. Accordingly, the amount was spent on various CSR Activities as per the Policy. The detailed report as per Section 135 of the Companies Act, 2013 read with the Companies (CSR Policy) Rules, 2014 has been attached as Annexure III.

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

Human Resources

The relationship with the workmen and staff remained cordial and harmonious during the year and management received full cooperation from employees. The process of development and upgradation of human resources continued.

The Particulars of Employees and Managerial Remuneration under Section 197(12) of the Companies Act, 2013 read with Rule 5(1), (2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure - IV forming a part of this Report.

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

Policy on Prevention of Sexual Harassment at the Workplace

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

Internal Complaints Committee has been setup to redress complaints regarding sexual harassment. During the year under review, the Company has not received any complaint under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Management Discussion and Analysis & Corporate Governance Report, Business Responsibility & Sustainability Report

i) Management Discussion and Analysis

As per SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report for the financial year 2022-23 is annexed as Annexure - V forming part of this report.

ii) Corporate Governance Report

The Company has complied with the Corporate Governance Code as stipulated under the Listing Regulations. The Corporate Governance Report for the financial year 2022-23 and Auditors' Certificate regarding compliance of conditions of Corporate Governance are also annexed as Annexure - VI forming part of this report.

iii) Business Responsibility & Sustainability Report

The Business Responsibility and Sustainability Report (BRSR) for the year ended 31^st March, 2023 as stipulated under Regulation 34(2) (f) of SEBI Listing Regulations is annexed as Annexure VII which forms part of this Annual Report.

Compliance with Secretarial Standards

During the year under review, your Company is in compliance with the applicable Secretarial Standards specified by the Institute of Company Secretaries of India relating to the meetings of the Board and General Meetings.

Directors & Key Managerial Personnel

As on 31^st March, 2023, the total Board strength comprises of 8 Directors out of which 2 Directors are Executive Directors, 2 are Non-Executive Non-

Independent Directors and 4 are Non-Executive Independent Directors.

Declaration of Independent Directors

As on 31^st March, 2023, the Company has four Independent Directors on its Board including a woman Independent Director. All the Independent Directors have met the requirements specified under Section 149 (6) of the Act, 2013 regarding holding the position of ‘Independent Director' and the necessary Declaration from each Independent Director under Section 149(7) of the Act has been received.

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

Meeting of Board of Directors

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

Board Evaluation

Pursuant to the provisions of the Companies Act, 2013 and under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an Annual Performance Evaluation of its own performance, its Committees and all the Directors individually.

The performance of the Independent Directors was evaluated by the entire Board except the person being evaluated.

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

Retirement by Rotation

In accordance with the provisions of the Articles of Association of the Company, read with Section 152 of the Companies Act, 2013, Shri Naveen Chopra, Managing Director of the company, retires by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Re-appointment of Managing Director & Executive Director

Approval of the Members is being sought in the ensuing Annual General Meeting (AGM) for the reappointment of (i) Shri Naveen Chopra, Managing Director of the Company for the period of five consecutive years effective from 29^th October, 2023 in the ensuing Annual General Meeting whose tenure is going to end on 28^th October, 2023 and (ii) Shri Jatin Dahiya, Executive Director of the Company for the period of five consecutive years effective from 1^st April, 2024 in the ensuing Annual General Meeting whose tenure is going to end on 31^st March, 2024 as recommended by Nomination & Remuneration Committee and Board of Directors.

Necessary Resolutions for the appointment/re-appointment of aforesaid Directors, wherever applicable, have been incorporated in the Notice convening the ensuing AGM. As required under the listing regulations and Secretarial Standards on General Meetings issued by ICSI, the relevant details of Directors retiring by rotation and/or seeking appointment/re-appointment at the ensuing AGM are furnished as ‘Annexure A' to the Notice of AGM.

Committees of the Board

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

a) Audit Committee

b) Stakeholders Relationship cum Share Transfer Committee

c) Nomination & Remuneration Committee

d) Corporate Social Responsibility (CSR) Committee

e) Risk Management Committee

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

Key Managerial Personnel (‘KMP’)

There has been no change in Key Managerial Personnel of the Company during the year.

As on 31^st March, 2023, the Company has the following Key Managerial Personnel as per Section 2(51) of the Companies Act, 2013:

1. Shri Naveen Chopra, Managing Director

2. Shri Jatin Dahiya, Executive Director

3. Shri Arun Kumar Kaushal, Chief Financial Officer

4. CS Sugandha Kukreja, Company Secretary and Compliance Officer.

Internal Financial Control with Respect to Financial Statements

The Company has in place adequate Internal Financial Controls with respect to financial statements. No material weakness in the design or operation of such controls was observed during the financial year 2022-23.

Directors' Responsibility Statement

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

i) In the preparation of the annual accounts for the financial year ended 31^st March, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures;

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

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

iv) The Directors have prepared the annual accounts for the financial year ended 31^st March, 2023 on a ‘going concern' basis;

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

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

Related Party Transactions

Consequent upon acquisition of the PACL by new management in October 2020, the Companies with which PACL was already dealing with and had already entered into Agreements have become related parties. The transactions entered into by the Company with Related Parties were in the ordinary course of business and were at arm's length price. All the contracts /arrangements /transactions with Related Parties during the year were in the ordinary course of business and/or the same were at arm's length, the Company has also entered into material related party transactions during the year under review. Information on material transactions with related party pursuant to section 134(3)(h) of the Act read with rule 8(2) of the Companies (Accounts) Rules, 2014 are also annexed in Form AOC-2 and the same forms part of this report.

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

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

In terms of Regulation 23 of the SEBI Listing Regulations, the Company submits details of related party transactions on consolidated basis half-yearly as per the specified format to BSE Limited.

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

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

Vigil Mechanism and Whistle-Blower Policy

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

Auditors & Reports Thereon

Statutory Auditors

M/s. S. Tandon & Associates, Chartered Accountants (Regn. No. 006388N), Statutory Auditors of the company, have been appointed by the shareholders in the Annual General Meeting held on 15^th September, 2022 for a period of five years i.e. from the conclusion of 47^th Annual General Meeting until the conclusion of the Annual General Meeting to be held in the year 2027, at such remuneration as may be fixed by the Board of Directors.

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

Cost Auditors

The Board of Directors of the Company at its Meeting held on 26^th May, 2023 has appointed M/s. Kabra & Associates, Cost Accountant in practice, as Cost Auditors for the Financial Year 2023-24 as per the

provisions of the Companies Act, 2013 to conduct the audit of Cost Records maintained by the Company at a remuneration of Rs. 70,000/- plus applicable GST besides the reimbursement of out of Pocket Expenses. As per the provisions of the Companies Act, 2013, your Directors propose the Resolution in the Notice in respect of remuneration payable to the Cost Auditors for the Financial Year 2023-24 for your ratification and approval. The Company maintains necessary cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014.

Secretarial Auditor

M/s. A. Arora & Co., Practising Company Secretaries, were appointed as Secretarial Auditors of the Company for the Financial Year 2022-23. Their Secretarial Audit Report of the Company for the financial year ended 31^st March, 2023 is annexed as Annexure-VIII to this Report. The Report does not contain any qualification. M/s. A. Arora & Co., Practising Company Secretaries have been reappointed as Secretarial Auditors of the Company for the financial year 2023-24.

Annual Secretarial Compliance Report

The Company has obtained an Annual Secretarial Compliance Report for the financial year ended March 31,2023 from M/s. A. Arora & Co., Practising Company Secretaries in compliance with the Regulation 24A of the SEBI Listing Regulations and the SEBI circular CIR/CFD/CMD1/27/2019 dated February 8, 2019. The said Report for the financial year ended March 31,2023 has been submitted to the BSE Limited within the prescribed statutory timelines.

Annual Return

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

Other Disclosures

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

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

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

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

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

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

Acknowledgements

The Board of Directors place on record its deep sense of appreciation for the committed services rendered by the employees of the Company at all levels.

The Board of Directors would also like to express its deep sense of gratitude or the cooperation and support received from Governments Authorities, Company's Bankers, financial institutions, stakeholders, business associates, customers, vendors and members and look forward to their continued support in future.