Chennai Ferrous Industries Ltd Management Discussions

Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and

analysis are given below:

Industry Structure & Development

Coal remains at the forefront of Indias energy sector, accounting for nearly half of the nations total installed generation capacity in 2025, and playing a decisive role in supporting Indias industrial growth and energy security. In the financial year 2024-25, India achieved a historic milestone by surpassing one billion tonnes of coal production, driven by expanded domestic output, regulatory reforms, and record coal supplies at thermal plants. The Government of Indias continued policy innovation including the launch of a coal trading exchange, expansion of coal gasification incentives, and the revised SHAKTI policy has enhanced transparency, accessibility, and competitiveness, positioning the sector for sustained growth and resilience.

At the same time, the country faces a complex energy transition, balancing growing electricity demand with rapid expansion of renewable energy sources, which now contribute over 32% of installed capacity. While coal remains an indispensable pillar in Indias energy mix, supporting base-load and industrial requirements, policy focus is increasingly shifting towards achieving cleaner, more efficient energy production, preparing the sector to bridge Indias path towards carbon neutrality by 2070.

This dual approach ensures coals continued relevance for decades, even as the sector evolves through technology, market reforms, and sustainable practices to meet Indias growing power needs responsibly.

Opportunities and Threats, Risks and Concerns

Government of Indias focus on "Athma Nirbar" is encouraging domestic coal and the Government has introduced schemes such as "Shakti Scheme" to increase domestic coal production along with imports. The revised SHAKTI policy has enhanced transparency, accessibility, and competitiveness, positioning the sector for sustained growth and resilience The Company continues to focus on trading of coal as the demand for coal is expected to rise in future with economic and Industrial growth as also increase in domestic consumption.

SWOT ANALYSIS

Product wise performance

The Company was earlier engaged in the manufacture of Sponge Iron. However, in view of sluggish market demand, volatility in raw material prices, and regional demand supply imbalances, the Company strategically diversified into coal trading, where demand is expected to remain strong in the foreseeable future.

During the year under review, the Companys revenue was primarily derived from coal trading activities, supplemented by lease rental income from its Sponge Iron Plant, which has been leased out.

Outlook

The International Energy Agency (IEA), in its World Energy Outlook has said that India is likely to see the worlds biggest rise in energy demand this decade, with demand climbing 3 per cent annually due to urbanisation and industrialisation. While the push for renewable energy will see it meeting as much as 60 per cent of the growth in demand for power, coal will continue to meet a third of overall energy demand by 2030 and another quarter will be met by oil.

In India, coal is expected to meet a third of growth with demand rising above 770 million tonnes of coal equivalent (Mtce) by 2030, and continuing thereafter before peaking in the early 2030s.

Internal Control Systems and their Adequacy

The internal control systems continued to function effectively, ensuring proper maintenance of accounting records, reliable financial reporting, and safeguarding of assets against unauthorized use or disposition. They also ensure that all transactions are properly authorized, recorded, and reported accurately. The top management, Board of Directors, and Committees periodically review these systems to ensure timely compliance with regulations and adequate monitoring of their effectiveness.

Details of significant changes in Key Financial Ratios

The Companys review from operations for the year under review is Rs.2,22,42,73,232 as compared to Rs.1,40,72,99,210 in the previous year. The Profit After Tax is at Rs.4,01,06,868 as compared to Rs.2,79,15,663 in the previous year. The net profit generated during the year has been transferred to Retained Earnings under Reserves & Surplus.

The Company has identified the following as Key Financial Ratios:-

Human Resource Development

The total number of employees as on March 31, 2025 are 9. The Company places high value on its human resources, recognizing them as a key asset in achieving business objectives. It is committed to fostering a productive and positive work environment. To enhance efficiency and performance, the Company undertakes regular skill development initiatives. These include periodic training programs aimed at upgrading knowledge and capabilities of its workforce.