Beardsell Ltd Management Discussions

The Management Discussion and Analysis report contains statements that addresses expectations or projections about the future including but not limited to statements about your Companys strategy for growth, product development, market position, expenditure and financial results are forward-looking statements. Actual results, performance or achievements may differ from such expectations whether expressed or implied. The important factors, which could have an impact on the companys operations, include climatic and economic conditions affecting demand and supply, changes in government regulations and taxation, and other incidental factors over which the Company does not have control. The company assumes no responsibility to publicly amend modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Economic Overview:

Global Economic Overview:

The global economy demonstrated resilience in 2024, stabilizing at a 3.2% growth rate, aligning with 2023 figures despite prevailing macroeconomic challenges. Emerging economies faced a slowdown, with growth dipping from 4.4% in 2023 to 4.1% in 2024, largely due to prolonged monetary tightening and weakened consumer demand. While inflationary pressures have eased, geopolitical risks, trade realignments, and sectoral disruptions continue to shape the near-term outlook. With financial conditions stabilizing and supply chain resilience improving, 2025 presents a cautiously optimistic trajectory, albeit with persistent risks requiring strategic adaptability. (Source: International Monetary Fund)

Indian economy:

The resilient Indian economy continued to outperform the overall Global Economy. Robust rural consumption driven by strong agricultural performance and the services sector were key growth drivers. The real Gross Domestic Growth for FY 2024-25 is estimated to be over 6%. Private consumption as a share of GDP is the highest ever since FY 2002-03.

The above average monsoon was a boost to agricultural activity. However, this affected growth in sectors like mining and construction. The moderation in manufacturing was further tempered owing to challenges from slowing global demand and supply chain disruptions as well as restrictive trade and industrial policies from major trading nations. However, Indias growing role in the global supply chain in high value added items such as electronics was a positive indicator.

On account of conduct of the general elections, the unprecedented expansion of capital expenditure on infrastructure of the last four years remained subdued especially in H1 but picked up in the latter half of the year leading to a positive outlook for FY 2025-26.

As Indias economy continues to expand, climate change and related disruptions will remain a major concern area. The journey to transitioning to green non fossil fuels, and renewable energy is ongoing. Leveraging an AI augmented economy and reskilling of the work force will remain focus areas.

Domestic fundamentals remain robust with a strong external account, calibrated fiscal consolidation and steady private consumption ably supported by stable inflation & fiscal health. Tax revenue both direct and indirect remained buoyant. The fiscal stimuli in the budget and cut in income tax rates are likely to encourage higher consumer spends. A normal monsoon, as currently forecasted for 2025, is expected to support broader economic activity, especially in rural and semi-urban regions, which would be a tailwind for overall demand. The overall outlook for FY 2025-26 remains positive.

Industry and Company Overview:

Indias astonishing growth would drive the deployment of thermal insulation in heavy industry, oil & gas industry, and power generation industry. Rise in number of pharmaceutical industries in India is posing significant business opportunities for the thermal insulation market players to increase their respective customer base and expand their presence in the country. The India thermal insulation market is expected to reach INR 3,674.98 crore by 2028 from INR 2,189.81 crore in 2020 at a CAGR of 7.4% from 2021 to 2028 as per a study published in 2021.

The use of Expanded Polystyrene (EPS) Foam is an effective and advanced method for the thermal insulation of buildings. It offers the damage-resistant and permanent insulation for house to improve living comfort and lower heating bills of building. The EPS insulation is described by a high efficiency and short application time. The government legislation coupled with rising awareness about the advantages of thermal insulation is boosting the demand for insulation products.

Your company has registered revenue growth of around 8.50 percent on consolidated basis. The consolidated PBT was increased by 2.50 percent, and the net profit after tax during the year was increased by 19.58 percent resulting from lower tax expenses.

Insulation:

Insulation segment which comprises manufacture of Expanded Polystyrene (EPS) Products, Prefab Panels and related Contracting Activities. EPS has varied applications in insulation and packaging. The prefab building elements manufactured by your Company finds applications in cold Storages, Food Processing Plants, Pharmaceuticals and Roofing applications. SteilWallz panels finds applications in construction of low-cost housing. Consolidated insulation revenue which was 94 percent of the total revenue during the year had grown by around 11 percent to Rs.25,176 Lakhs.

Trading:

Your company is one among the reputed authorized dealers of Siemens Motors in South India. The company also exports industrial equipment, including medical devices, educational equipment and laboratory equipment, textile products to various countries based on opportunities and global tenders. Consolidated trading revenue during the year was 6 percent of the toral revenue; and it was decreased by around 11 percent to Rs.1,762 Lakhs due to lower demand and slowdown in textile industry as compare to previous year.

Standalone performances in past ten years are provided below:

Key financial ratios and significance changes in them are disclosed under notes to the standalone and consolidated financial statements.

Internal Control System

The Company has laid down a system of internal control, which is commensurate with the size and nature of the business. Adequate and effective checks have been put in place to ensure that the financial data is accurate and reliable. The internal control systems also ensure that the assets and the interest of the Company are well protected.

The internal audit was carried out throughout the year based on a systematic plan covering all functions and aspects of the business. The internal audit reports were reviewed by the senior management and were placed before the Audit Committee of the Board of Directors along with the actions taken. The Audit Committee undertook a detailed review of the audit observations and actions in order to ensure that the internal audit system was functioning effectively. The recommended actions by the audit team were monitored and improvements were implemented that were regularly reviewed by the senior management.

The IT framework of the Company is based on a robust ERP system, ensuring seamless connectivity of plants, sales offices and head office, and facilitating faster and more reliable processing of transactions as well as generating reports for rapid decision making. The Company also has strong control and management reporting systems, which helped ensure the business results are achieved and continuous improvement projects are undertaken.

The statutory auditors of the Company have issued a report on the internal control over financial reporting as stated under section 143 of the Companies Act, 2013.

Human Resources

Human Resources are one of the most important ingredients to fuel future growth and progress of the organization. The Company therefore strives to align human resource policy and initiatives to meet business plans, and fosters a performance oriented work culture and offers amongst the best opportunities in the industry for professional as well as personal growth of its employees. Over the years the company has built up a strong human resource structure. The company has qualified and experienced team of professionals in Production, Marketing, Finance, Legal & Secretarial, HR & Administration.

Risks and concerns

Company continuously monitors the risks associated with its business and operations including timely identification of new risks, if any, and plans to mitigate risks so as to avoid any adverse impact on the Companys operations. The company has identified following risks for regular monitoring:

Our Company is significantly reliant on the revenues earned from our insulation and pre-fabricated metal sheet and EPoS core buildings and panels. Any downturn in our ability to increase or effectively manage our sales could have an adverse impact on our Companys business, cash flows and results of operations.

Our Companys business is dependent on few customers. Any loss of such customers or a significant reduction in

purchases by such customers could adversely affect our business, results of operations and financial conditions.

We depend almost entirely on third-party suppliers in respect of availability of our raw materials. An interruption in the supply of such products and price volatility could adversely affect our business, results of operations and financial condition

Our inability to receive or renew the necessary licenses, approvals and registrations in a timely manner or at all may lead to interruption of our Companys operations. Failure to meet our production timelines may impact our reputation and could also lead to cancellation of our orders.

Some of the raw materials that we use are inflammable in nature. While we take adequate care and follow all relevant safety measures, there is a risk of fire and other accidents, at our manufacturing units and warehouses. Any accidents is likely to result in loss of property of our Company and/or disruption in the manufacturing processes which may have a material adverse effect on our results of operations, cash flows and financial condition.

If our Company is unable to protect its intellectual property, or if our Company infringes on the intellectual property rights of others, our business may be adversely affected.

We do not own certain premises used by our Company. Disruption of our rights as licensee/ lessee or termination of the agreements with our licensors/lessors would adversely impact our manufacturing operations and, consequently, our business.

Our Company requires significant amount of working capital for a continuing growth. Our inability to meet our working capital requirements may adversely affect our results of operations.

Any failure in our quality control processes may adversely affect our business, results of operations, cash flows and financial condition. We may face product liability claims and legal proceedings if the quality of our products does not meet our customers expectations.

Companys businesses are subject to a variety of laws and regulations. Non-compliance with and changes in, safety, health, labour and environmental laws and other applicable regulations, may adversely affect our business, results of operations and financial condition.

For and on behalf of the Board of Directors

Amrith Anumolu (DIN : 03044661)

Executive Director Chennai

12 th August 2025

R Gowrishanker (DIN : 00104597)

Chairman Chennai

12 th August 2025