Alkali Metals Ltd Management Discussions

The Management Discussion and Analysis Report sets out developments in the business, environment and companys performance since our last report. The analysis supplements the Directors Report and Audited Financial Statements which together form part of this Annual Report.

As per studies, Indian Chemical Industry was anticipating a big leap by estimating a reach of $300 billions by 2024-25. However, for the past year it has been struggling with several headwinds, including uncertain demand, weak exports and intense competition. During the lockdown the world was looking towards India as an alternate supplier and this prompted many Indian Companies to stock up inventories to meet the opportunistic demand and also the fear of supply chain disruption was a contributor to this decision of over stocking. The result was a temporary boost in sales. However, once markets opened post pandemic, the global supply chain was restored and this led to intense competition in the global markets. Thereafter, the Eurozone and other markets had been under geopolitical stress contribution more problems and reduction in demand. The Indian Companies were facing an Over-Capacity scenario on the operational front due to the build-up in the inventory and sluggish demand. The Companies were also banking on shift from China and were also expecting an increased capex but due to the slowdown the capex plans have been put on hold or pushed to later years.

Despite the challenges, there is a sense of anticipated improvement in the global markets and Indian Chemical Industry holds promise and it is expected to be key contributor for the coming years. With the continuous R&D the product profile of the Indian Market is expected to improve and with-stand the global market demand. With the proposed infrastructure improvements, the Governments efforts to improve current FTA with ASEAN countries and introduction of PLI schemes it is an indication that the Indian Chemical Industry is on the way of improvement and the measure are being deployed to fine-tune it in the coming years in the global race.

• Lack of strategic initiatives to cover the Infrastructure deficit

• Lack of initiatives for diversification

• Regulatory complexities

• Higher tariffs compared to other countries in the same region

• Unfavourable Policy Support

• Sluggish demand due to Geo political situation across the European and other Countries

• Over capacity scenario

• Weak domestic demand

• Difficulty in maintaining margin

All the products have performed in similar manner as compared to the previous year. The Company has sold 982 MT of finished products during 2023-24 and realized a turnover Rs.82.85 crores. The Company sold sodium derivatives, pyridine derivatives and fine chemicals. The Company plans to continue its effort in developing new products.

The Company has in place effective systems of internal control commensurate to its size and nature of business which provides for:

• Efficient use and safeguarding resources

• Accurate recording and custody of assets

• Compliance with prevalent statutes, policies, procedures, listing requirements, management guidelines and circulars.

• Transactions being accurately recorded ,cross verified and promptly reported

• Adherence to applicable accounting standards and policies.

• IT systems which include controls for facilitating the above.

The internal control system provides for well documented policies, guidelines, authorizations and approval procedures. Also, the internal audit reports are laid before Audit Committee and discussions were held periodically by the Audit Committee at its meetings. The observations / findings made in internal audit reports, along with the status of action thereon are reviewed by the Audit committee of the Board of directors on a regular basis. The company has an exhaustive budgetary control system and the management regularly reviews actual performance

• The Company made a comprehensive profit of Rs.51.51 lakhs

• The Company made a profit before tax and exceptional items of 195.97 lakhs

• The book value per share stands at Rs.50.43/- as on 31.03.2024 (51.16 previous year).

• The exports contributed to 54% of the total turnover

• Net foreign exchange earnings of 3,459.69 Lakhs HUMAN RESOURCE DEVELOPMENT

The management believes that competent and committed human resources are important to attain success in the organisation. The Company believes in creating a pool of talent within its people whose skills, expertise and experience provide the impetus towards market leadership. The Companys human resource practices are widely accepted by the management, staff and workers. During the year under review, the Industrial relations with Employees/ workers at all the Companys locations continued to be harmonious and positive.

Statements in the Management Discussion and Analysis Report which describe the Companys objectives, projections, estimates, expectations or predictions may be considered to be “forward - looking statements” within the meaning of applicable Securities Laws and Regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however materially differ from those expressed or implied. Important factors that could make a difference to the Companys Operations include global and Indian political scenario, economic & demand-supply conditions, finished goods prices, raw materials cost & availability, cyclical demand and pricing in the companys principal markets, changes in Government regulations, Policies, tax regimes, economic developments within India besides other factors such as litigation and industrial relations as well as the ability to implement the strategies.

For and on behalf of Board of Directors For Alkali Metals Limited