Dharmaj Crop Guard Ltd Management Discussions

Indian Economy

Overview

Indias economy in FY26 once again demonstrated resilience and dynamism, maintaining strong momentum despite a complex global backdrop. As per the First Advance Estimates cited in the Economic Survey 2025-26, real GDP growth for FY2025- 26 is estimated at 7.4%, making India the fastest-growing major economy for the fourth consecutive year.

Growth in the first half of the year was even stronger at 8.0%, and the Economic Survey projects real GDP growth of 6.8% to 7.2% for FY2026-27, while assessing that Indias medium- term potential growth has risen to around 7%.

The growth trajectory remains broad- based. Agriculture is estimated to have grown 3.1% in FY26 on the back of a favourable monsoon and healthy reservoir positions, with allied activities growing faster still. Industry is estimated to expand 6.2%, led by manufacturing at 70% and construction at 7.0%, while services growth accelerated to 9.1%, led by financial, real estate and professional services. On the demand side, private consumption grew 7.0%, lifting its share of GDP to 61.5%, the highest since FY12, aided by GST rate rationalisation and income tax relief, while fixed investment grew 78%, taking the investment rate to 30% of GDP.

Macro-financial stability has been a defining feature of the year. Headline retail inflation averaged just 1.7% during April to December 2025, with food prices in deflation and the October 2025 reading of 0.3% the lowest in the history of the series. This gave the Reserve Bank of India room to support growth: the policy repo rate was reduced by a cumulative 125 basis points between February and December 2025 to 5.25%, alongside a phased 100 basis point CRR reduction, and the rate has been held at 5.25% with a neutral stance through 2026 as the West Asia conflict lifted energy prices. The RBI projects FY2026-27 growth at 6.6% with inflation at 5.1%, reflecting imported cost pressures.

The financial system remains healthy, with gross NPAs at a multi-decade low of 2.2% and non-food credit growing about 11.4%.

The external sector has shown resilience despite heightened tariffs and conflict-related volatility. Merchandise exports grew 2.4% and services exports 6.5% during April to December 2025, the current account deficit was contained at 0.8% of GDP in the first half, gross FDI inflows rose 16.1%, and foreign exchange reserves covered more than eleven months of imports. The rupee depreciated about 6.5% against the US dollar over the year, although the movement remained orderly. Fiscal discipline has been maintained, with the FY26 deficit on track at 4.4% of GDP and capital expenditure rising 28% year-on-year during April to November 2025. Indias strengthening fundamentals were recognised through sovereign rating upgrades during the year, and trade agreements were concluded with the United Kingdom, Oman, New Zealand and the European Union.

Domestic fundamentals continue to strengthen beneath the headline numbers. Labour market indicators improved, with unemployment easing to 4.9% by the third quarter of FY26, rural consumption sentiment reached its strongest levels in years on the back of two good agricultural seasons, and private corporate investment announcements nearly doubled in the first half of the year. The digital economy continues to expand rapidly, reinforcing productivity across sectors.

Challenges remain, including elevated energy prices, possible supply disruptions from the West Asia conflict, and global trade frictions, all of which require watchful policy. Yet the outlook is one of steady growth amid global uncertainty. The governments continued focus on fiscal consolidation, capital spending and structural reform, together with benign underlying inflation and a supportive credit environment, positions the economy well on its path toward the long-term aspiration of a developed India by 2047. For agriculture-linked sectors, the combination of rural demand revival, record agricultural credit flows and continued policy support provides a constructive demand backdrop for FY27

Source: Economic Survey of India, RBI

Industry Overview

Indian Agriculture Sector

Indias agriculture sector has sustained its strongest growth phase in decades. The sector has grown at an average of around 4.4% annually over the last five years, and its decadal average of 4.45% (FY16 to FY25) is the highest on record and well above the global average of 2.9%. Growth of 4.6% in 2024-25 and a favourable FY26 season, supported by a good monsoon and comfortable reservoir levels, have kept momentum intact. Agriculture and allied activities contribute nearly one-fifth of national income and employ 46.1% of the workforce, underscoring the sectors centrality to the economy.

Production trends remain strong. Foodgrain production reached a record 3,577.3 lakh metric tonnes in agriculture year 2024-25, an increase of 254.3 LMT over the previous WEEM year, driven by higher output of rice, wheat and maize. Horticulture production, at about 362 millions tonnes, now exceeds food grain output and contributes roughly 33% of agricultural GVA, while allied sectors continue to outpace traditional crops, with livestock growing 7.1% and fisheries 8.8% over the decade. Agri-food exports touched USD 49.43 billion in FY25, about 11.2% of total exports.

Policy support remains substantial. Ground- level agricultural credit crossed T28.69 lakh crore in FY25, MSP increases were announced across mandated crops for the 2025-26 kharif and 2026-27 rabi seasons, and the PM Dhan-Dhaanya Krishi Yojana, covering 100 aspirational agricultural districts, became operational from FY26. Sustained public investment in irrigation, mechanisation and crop insurance continues to raise productivity, supporting demand for yield-enhancing inputs, including agrochemicals.

Source: Ministry of Finance, Economic Survey of India

Global Agrochemical Market

The global agrochemical market plays a critical role in modern agriculture by protecting crops from pests, diseases and weeds, and thereby improving both the quantity and quality of food production. The market reached USD 77.2 billion in CY2024, growing at a CAGR of 6.2% between CY2020 and CY2024, and is expected to reach USD 108.9 billion by CY2030, a CAGR of 5.6% over CY2025 to CY2030.

In volume terms, consumption stood at 10.8 millions tonnes in CY2024 and is projected to rise to 13.8 millions tonnes by CY2030, with realisation growth expected to outpace volumes as input costs, tighter regulatory standards and the shift toward more complex, eco-friendly formulations add to pricing.

Herbicides remain the largest segment globally at about 41% of consumption value, followed by insecticides at around 30% and fungicides at 26%. Regionally, Latin America (about 31%) and Asia Pacific (about 30%) lead consumption, ahead of Europe and North America. Global agrochemical exports stood at USD 43.0 billion in CY2024, led by China at USD 9.0 billion (21% share), with India the third-largest exporter at USD 4.2 billion (10% share).

Structural trends favour continued growth: rising food demand from a growing population, adoption of integrated pest management, expanding use of biopesticides, and precision agriculture. The off-patent opportunity is significant, with the market for off-patent molecules estimated to exceed USD 4.1 billion by 2026 and several large active ingredient patents, including chlorantraniliprole, expiring by 2030. Supply chains also continue to diversify away from China, positioning alternative manufacturing hubs such as India favourably.

Source: ICRA Analytics

Indian Agrochemical Market

The Indian agrochemical market has expanded robustly, reaching C366 billion in FY2025 and reflecting a CAGR of 12.4% between FY2020 and FY2025. The growth trend is expected to continue, with the market projected to reach C592 billion by FY2030, a CAGR of 10.4%, propelled by rising domestic consumption and increasing international demand for Indian agrochemical products.

In volume terms, consumption rose to 0.65 millions tonnes in FY2025, a CAGR of 10.8% over five years, and is projected to reach 0.92 millions tonnes by FY2030. Unlike the global market, Indias consumption is dominated by insecticides, which account for about 55% of value, followed by herbicides at around 23% and fungicides at about 19%, a mix that reflects the countrys cropping patterns and pest profile.

India is a net exporter of agrochemicals, with exports of C351.2 billion in FY2025 against imports of C124.0 billion. Herbicides led exports at C131.6 billion, followed by insecticides at C121.8 billion (up 6.4%) and fungicides at C84.4 billion (up 11.2%). Latin America is the largest destination, taking nearly half of insecticide exports, while North America absorbs about 40% of herbicide exports. India is now the worlds third-largest agrochemical exporter with a 10% global share, a position built on cost-competitive manufacturing, strong process chemistry skills and the global China-plus-one diversification of supply chains.

By business segment, formulations account for about 56% of the market by value and technicals for around 44%, and the industrys export footprint is well diversified, with Latin America contributing about 32% of export value, followed by North America at roughly 23%, Asia Pacific at 21%, Europe at 15% and the Middle East and Africa at 9%. The economic case for crop protection remains compelling, with pests, weeds and fungal diseases estimated to cause annual losses of about C1.48 lakh crore to Indian agriculture.

Structural challenges persist, particularly input dependencies. China remains the largest import source across categories, supplying 26% to 36% of Indias imports of key pesticide categories, and shortages of critical raw materials such pose supply risks, given the absence of mega production facilities of the kind China operates.

Farmer awareness also remains a constraint, with usage decisions often dealer-driven, while registration processes are complex and counterfeit products persist in parts of the market. In response, Indian companies are investing in backward integration and off-patent molecule capabilities to reduce import dependence, supported by a policy environment that includes Make in India and the PLI framework, the PM-PRANAM initiative and the proposed Pesticide Management Bill.

Key Growth Drivers:

Agricultures Dominance:

Agriculture contributes nearly one-fifth of Indias GVA and employs 46.1% of the workforce, and sectoral growth has averaged its highest-ever decadal rate. Rising agricultural activity directly drives demand for crop protection and yield-enhancing inputs.

Government Support:

Policies and budget allocations focus on improving rural incomes and productivity. Record agricultural credit of over C28.69 lakh crore, MSP increases across mandated crops, crop insurance coverage and the new PM Dhan-Dhaanya Krishi Yojana support farm incomes and input demand, while incentives for certified biological alternatives encourage eco-friendly agrochemicals.

Rising Food Demand:

Indias food demand is projected to reach USD 1.2 trillion by FY2026, while cultivable land remains nearly constant. Higher yields are essential, and Indias average agrochemical usage of only 0.6 kg per hectare, six times lower than the Asian average and four times lower than the global average, indicates significant headroom for growth.

Growing Demand for Horticulture:

Horticulture output, at about 362 millions tonnes, now exceeds foodgrain production, and rising consumer focus on fresh produce alongside the need to reduce post-harvest losses is expected to lift fungicide usage in particular.

Bio-Pesticides Awareness:

Eco-conscious trends and the adoption of integrated pest management are promoting biopesticides, whose small existing share of the Indian market provides room for expansion and innovation.

Opportunities from Off-Patent Molecules:

Off-patent pesticides present cost-effective avenues for Indian companies to develop generics. The off-patent molecule market is estimated to exceed USD 4.1 billion by 2026, with several large molecules, including chlorantraniliprole, going off patent by 2030, presenting strong domestic and export potential.

Export Market Growth:

India is the worlds third-largest agrochemical exporter with exports of C351.2 billion in FY2025, and the industrys export engine is expected to strengthen further as global supply chains diversify and Indian capacity in technicals and intermediates expands.

Source: ICRA Analytics

Company Overview

Dharmaj Crop Guard Limited (Dharmaj, or the Company) is an integrated agrochemical company engaged in the manufacturing, distribution and marketing of active ingredients, intermediates, crop protection formulations, plant growth regulators and micronutrients. With manufacturing capabilities spanning technicals as well as formulations, the Company has established an integrated value chain that enhances supply security, improves cost competitiveness and enables faster response to changing market requirements. Through its diversified business model comprising branded formulations, domestic institutional business, export institutional business and active ingredients, Dharmaj has built a resilient platform for sustainable long-term growth across domestic and international markets.

Sales under the B2B segment are conducted in bulk based on customer orders, while the B2C business is driven by the Companys proprietary brands and distribution network of over 5,300 dealers and distributors and 19,300 retail touchpoints across 24 states. In addition, Dharmaj manufactures and markets general insect and pest control chemicals used in the public health and animal health sectors, and across verticals serves over 700 institutional customers, exporting products to more than 41 countries.

With a portfolio comprising 657 product registrations, including 123 registrations for export markets and another 150 in the pipeline, Dharmaj has established a significant presence in the agrochemical industry. The Company has also secured 44 technical registrations, with 12 additional registrations under process.

Its branded portfolio spans over 121 products and 449 SKUs. Dharmaj operates two manufacturing facilities to support its growing product demand. The formulations plant at Kerala GIDC, Ahmedabad, has an installed capacity of 25,500 TPA across all major formulations formats, supported by an NABL-accredited quality control laboratory and an in-house R&D centre. Additionally, the multipurpose facility for active ingredients and intermediates at Saykha, Gujarat, commissioned in January 2024, has a cumulative production capacity of 8,000 TPA, comprising 5,500 TPA of multipurpose technicals and 2,500 TPA of dedicated intermediates, built to export-market regulatory standards with dedicated R&D and quality control laboratories. A new dedicated herbicides facility at the Ahmedabad formulations site is under construction and is expected to be commissioned towards the end of FY27, which will further augment the Companys formulations manufacturing capabilities and capacity.

FY26 Performance Review

FY26 marked another year of strong operational and financial progress for Dharmaj despite a challenging operating environment characterised by uneven seasonal demand, continued pricing pressure in technical products during the first half of the year and geopolitical uncertainties affecting global supply chains. The Company delivered its highest-ever Revenue from Operations of 11,380 millions, registering growth of 20% over the previous year, supported by broad-based contributions across its diversified business portfolio.

Growth was primarily driven by robust performance in the Domestic Institutional business, continued recovery in Export Institutional sales and increasing contribution from the Active Ingredients business as the Saykha manufacturing facility continued its operational ramp-up. Although branded formulations witnessed modest growth owing to irregular rainfall distribution and softer rabi demand, the Companys diversified business model effectively balanced market volatility and supported consistent earnings growth.

Profitability improved significantly during the year as a result of improved product mix, higher capacity utilisation at the Technicals facility, increasing backward integration, improved operating leverage and better contribution from higher-margin businesses. EBITDA increased by 34% to 1,005 millions, while Profit After Tax grew by 57% to 547 millions. Gross margins improved to 23%, demonstrating the Companys ability to effectively manage raw material volatility through operational efficiencies and strategic sourcing initiatives.

Profit & Loss Statement

(In millions)

Particulars	FY25	FY26	YoY Change
Revenue from Operations	9,510	11,380	20%
Total Income	9,532	11,464	20%
Gross Profit	2,067	2,574	25%
Gross Profit Margin (%)	22%	23%	89 BPS
Operating Expenses	1,319	1,569	19%
EBITDA (Excluding OI & EI)	748	1,005	34%
EBITDA Margin (%)	8%	9%	97 BPS
Finance Cost	129	172	33%
Depreciation & Amortisation	183	191	5%
Profit Before Taxes (and EI)	458	725	58%
Profit After Taxes	348	547	57%
Profit After Taxes Margin (%)	3.7%	4.8%	112 BPS
Earnings Per Share (Rs)	10.31	16.19	57%

Key Financial Ratios& Loss Statement

Particulars	FY26	FY25	YoY Change	Reason for variance more than 25%
Current Ratio	1.55	1.53	1.23%	NA
Debt-Equity Ratio	0.29	0.29	0.25%	NA
Debt Service Coverage Ratio	4.15	2.91	42.91%	The improvement in the Debt Service Coverage Ratio (DSCR) during the year is primarily attributable to improved operating profitability and higher cash generation from business operations.
Return on Equity Ratio	0.13	0.09	40.32%	The improvement in ROE during the year is primarily attributable to improved operating profitability and higher cash generation from business operations.
Inventory Turnover Ratio	5.09	6.42	(20.70%)	NA
Trade Receivables Turnover Ratio	4.30	5.18	(17.00%)	NA
Trade Payables Turnover Ratio	5.12	6.67	(23.22%)	NA
Net Capital Turnover Ratio	7.01	7.28	(3.69%)	NA
Net Profit Ratio	0.05	0.04	31.24%	The improvement in the Net Profit Ratio during the year is primarily attributable to improved operating profitability and higher cash generation from business operations.

Outlook & Growth Drivers

The Company enters FY27 with cautious optimism supported by improving industry fundamentals, gradual recovery in global agrochemical demand and favourable domestic agricultural conditions. A normal monsoon forecast, healthy reservoir levels, improving rural liquidity and sustained Government support towards agriculture are expected to support domestic demand for crop protection products during the year.

The Companys strategic priorities remain focused on accelerating utilisation of the Saykha Active Ingredients facility, increasing captive consumption of technicals within the formulations business, expanding export registrations across regulated and semi-regulated markets, strengthening the branded formulations franchise through new product introductions and geographic expansion, and commissioning the dedicated herbicides manufacturing facility. With 150 export registrations in the pipeline against 123 already secured, the Company expects its addressable export markets to widen progressively as approvals come through, supporting sustained growth in the Export Institutional business. As utilisation at the Saykha facility rises and captive consumption of technicals increases, fixed costs are expected to be absorbed over higher volumes, while reduced dependence on externally sourced technicals is expected to lower input costs for the formulations business.

These initiatives are expected to improve operating leverage, enhance supply-chain integration and support sustainable margin expansion over the medium term.

While geopolitical developments, raw material price volatility, currency fluctuations and evolving regulatory requirements continue to remain near-term challenges, Dharmajs integrated manufacturing platform, diversified revenue streams, strong balance sheet and expanding product portfolio position the Company favourably to capitalise on emerging opportunities arising from global supply chain diversification and increasing demand for high- quality crop protection solutions.

Risk Management

Risk management is an integral part of strategic planning and operational execution at the Company. Dharmaj adopts a proactive approach to identifying, assessing, monitoring, and mitigating potential risks that could impact its business performance. By implementing structured risk management practices, Dharmaj aims to ensure long-term sustainability and resilience across its operations. The following are key business risks identified by the Company, along with its mitigation strategies:

Demand Risk:

A subdued macroeconomic environment or irregular monsoon patterns may reduce demand for agrochemical products, as witnessed in FY26 when uneven rainfall and low pest incidence muted demand. To mitigate this risk, Dharmaj continuously monitors industry trends, climate patterns, and customer demand. The Company engages proactively with clients & farmers and leverages its diversified presence across product categories, customer segments, business verticals and geographies to minimise dependence on any single revenue stream. This diversification strategy, now strengthened by the Active Ingredients vertical, serves as a natural hedge against demand fluctuations.

Quality Risk:

Inconsistent quality standards could lead to the loss of customer trust, damage to brand reputation, and regulatory penalties. To safeguard against such outcomes, Dharmaj places strong emphasis on quality throughout the value chain. Its manufacturing units are equipped with NABL-accredited quality control laboratories featuring advanced testing equipment, and quality checks are rigorously performed at every stage, from raw material procurement to final product dispatch. Dharmajs operations are certified under ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ISO 50001:2018 standards, reinforcing its commitment to consistent quality.

Supply Chain and Input Cost Risk:

The agrochemical industry continues to remain exposed to volatility in raw material availability, freight costs and geopolitical developments, particularly due to dependence on imports of certain intermediates from China. The recent conflict in West Asia has further highlighted supply chain vulnerabilities and increased energy-related input costs. Dharmaj mitigates these risks through backward integration at its Saykha facility, diversified sourcing strategies, strategic inventory planning, long-term supplier relationships and continuous monitoring of global procurement markets. Increasing in-house production of active ingredients

is expected to further reduce dependence on external suppliers and improve margin stability over time.

Competition Risk:

Competition within the domestic and international agrochemical markets continues to intensify owing to pricing pressure, increasing genericisation following patent expiries and entry of new manufacturers. Dharmaj mitigates these challenges through continuous product innovation, strong customer relationships, expansion of export registrations, investment in manufacturing capabilities, backward integration and an expanding branded formulations portfolio supported by extensive distribution reach. The Companys integrated business model and diversified revenue streams provide additional resilience against competitive pressures .

Inventory Management Risk:

Maintaining optimal inventory levels is critical to meet fluctuating demand while avoiding excess stock, dead inventory, or write-offs. Dharmaj adopts a lean inventory approach, maintaining minimal finished goods stock and using just-in-time procurement for volatile and high-value raw materials, while buffer stocks for stable materials are managed on demand projections. Strategic exceptions, such as the FY26 year- end inventory build, are made deliberately to protect production continuity, with the working capital impact expected to normalise as inventory is consumed.

Employee Risk:

The agrochemical sector demands skilled talent to manage operations and maintain strong relationships within the distribution network. Inability to attract, develop, or retain key employees could lead to operational disruptions and growth bottlenecks. Dharmaj mitigates this risk by fostering a positive and inclusive work culture, offering competitive and fair remuneration, and providing career development opportunities through regular training and skill enhancement programs, supported by a stable and experienced managerial team.

Safety, Health and Environment

At Dharmaj, the safety of individuals, communities, and the environment remains a top priority, reflected in the comprehensive measures implemented across all manufacturing facilities.

The Company adheres to stringent health and safety protocols, including the mandatory use of protective equipment, workplace cleanliness, and rigorous accident reporting systems, and conducts regular fire safety training and drills to ensure a high level of preparedness. Its facilities are certified under ISO 14001:2015 for environmental management, ISO 45001:2018 for occupational health and safety, and ISO 50001:2018 for energy management.

Handling agrochemicals demands rigorous process discipline, and the Company maintains detailed standard operating procedures for the storage, handling and movement of raw materials and finished products, supported by periodic safety audits and mock drills across both sites. Employees receive structured training on safe handling practices, emergency response and first aid as part of their induction and ongoing development.

Environmental stewardship is embedded in operations. The formulations facility houses a bio reactor for the treatment of waste and sewage water, a sewage treatment plant of 7,800 KL capacity, and a solar power plant with an annual generation capacity of over 85,000 KW, reducing the Companys environmental footprint. The Saykha active ingredients facility has been designed to meet the regulatory standards of export markets, with effluent management and process safety systems built into the plant design. Dharmaj remains committed to responsible chemistry, continuous reduction in resource intensity, and the wellbeing of the communities around its operations.

Human Resources

Dharmaj recognises its employees as one of its most valuable assets and is deeply committed to their growth, development, and wellbeing. The Companys team strength now exceeds 800 members, including an on-ground sales force of over 290 professionals that has grown steadily with its geographic expansion into southern India and new markets. Dharmaj places strong emphasis on building a capable and engaged workforce through continuous learning and development initiatives, including technical training for plant personnel, soft skills development for engineers and operational staff, regular fire and safety drills, and leadership development programs across employee categories.

The Company follows a performance- oriented culture that aligns employee rewards with business performance while promoting continuous learning, leadership development and career progression. Dharmaj continues to invest in employee capability enhancement through structured technical, behavioural and safety training programmes. The Companys experienced management team, stable industrial relations and strong organisational culture remain key strengths supporting its long-term growth strategy.

Competitive

Strengths

Dharmajs competitive position is built on the following key strengths:

Integrated

Manufacturing Platform:

Manufacturing capabilities spanning intermediates, active ingredients, and formulations give Dharmaj control over a large part of its value chain, supporting supply security, cost competitiveness and consistent product quality.

Diversified Business Model:

Operations across Branded Formulations, Domestic Institutional Formulations, Export Institutional and Active Ingredients reduce dependence on any single revenue stream and provide resilience against seasonal and geographic demand fluctuations.

Extensive Registration Portfolio:

A portfolio of 657 product registrations, including 123 for export markets and another 150 in the pipeline, together with 44 technical registrations and 12 more under process, provides a strong platform for continued growth in domestic and export markets.

Wide Distribution Reach:

A network of over 5,300 dealers and distributors and 19,300 retail touchpoints across 24 states, supported by a growing on-ground sales force, enables consistent market access and brand building.

Experienced Management Team:

A stable and experienced leadership team, supported by promoters and key managers with an average of over 25 years of industry expertise, has guided the Companys growth and diversification strategy.

Information

Technology

Dharmaj has strategically embraced digitisation and advanced technology to drive operational excellence and strengthen its dealer network. The Company has made significant investments in a robust ERP (Enterprise Resource Planning) system, designed to streamline and integrate key business functions such as sales, finance, human resources, manufacturing, supply chain, and order management. This integrated system offers realtime visibility across departments, enabling data-driven decisionmaking, improving process efficiency, and enhancing organisational transparency and accountability. The ERP platform also automates key transactional controls, improving the accuracy and reliability of financial and operational reporting, and supports the increased complexity that has come with the addition of the active ingredients vertical.

The Company continues to strengthen its digital capabilities through the deployment of advanced analytics, business intelligence tools and automation initiatives aimed at improving demand forecasting, inventory optimisation, dealer management and supply chain visibility. Dharmaj also continues to enhance its cybersecurity framework through periodic vulnerability assessments, data backup protocols, access control mechanisms and employee awareness programmes to safeguard critical business information and ensure operational continuity.

Internal Control Systems and Adequacy

Dharmaj has established a robust internal financial control framework that aligns with regulatory

requirements as well as the requirements of the agrochemical industry and is appropriate for the size and complexity of its operations. As part of its commitment to continuous improvement, the Company continues to formalise, document and implement well-defined processes, systems, and policies aimed at safeguarding assets, preventing and detecting errors, ensuring the accuracy and completeness of accounting records, and ensuring long-term business continuity. The integrated ERP system automates key transactional controls, improving accuracy, reliability, and efficiency across business functions.

The Internal Audit function plays a critical role in evaluating the adequacy and effectiveness of internal controls on an ongoing basis. Audit findings and recommendations are presented to the Audit Committee for review and appropriate action, ensuring a structured and accountable approach to governance and risk mitigation, and no material weaknesses in the design or operation of controls were observed.

Cautionary

Statement

Statements in the Management Discussion & Analysis describing the Companys objectives, projections, estimates and expectations may be forward-looking statements within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, climatic conditions, economic conditions affecting demand, supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws and other statutes, and other incidental factors.