Electrosteel Castings Ltd Management Discussions

A. INDUSTRY STRUCTURE AND DEVELOPMENT Overview

The Company is engaged in the business of manufacturing Ductile Iron (DI) Pipes, Ductile Iron Fittings (DIF) and Cast Iron (CI) Pipes. The Company is the 3rst to set up a Ductile Iron Pipe Plant in India. Today, it is Indias leading pipeline solution provider. It has a strong brand presence around the Globe. Since 1994, the Company has maintained its edge over its competitors. Owing to the high reliability and durability of its products, the Company has always remained the distinct choice for water engineers and domain experts in Ductile Iron Pipes and Fittings.

Industry Outlook

India is witnessing an unprecedented era of economic progress and India today is competing with developed economies in the world and its growth is expected to hover around 7–8 per cent for next few years. Regarded as one of the fastest for growing major economy, India is thriving hard to achieve the ambition of becoming an $5 trillion economy. A steady growth in Gross Domestic Product has been witnessed for more than two decades, which is continuing. India, home to 16 percent of the worlds population, has only 2.5 percent of the worlds land area and 4 percent of the worlds water resources at its disposal. This is also declining in terms of quantity and quality. Drinking water was once considered safe in India, but today providing nearly 1.40 billion inhabitants with access to safe drinking water is a big challenge. The alarming rate of depleting groundwater sources and rapidly polluting surface water requires immediate and focused attention by all stake holders.

The demand for water has been increasing at a high pace in the past few decades. The sustained economic growth has triggered more industrialisation and rapid urbanization all over India. With only around 31% of Indias population currently urbanized, along with high population density, Indias urbanization trends have scope to signi3cantly accelerate and likely to be around 40% by 2030. The rural India is still remaining largely uncovered with piped water network Alongside only about one–third of the Indian homes are connected with a sewerage network. In response to this staggering problem, the Govt. of India initiated the largest ever water supply initiative anywhere in the world, the ‘Jal Jeevan Mission, with an aim to connect all the rural house hold with piped water. At the same time AMRUT mission has been initiated to augment the urban water supply and sewage disposal. To cater to this growing need, the Indian pipe and 3ttings market is growing at a fast rate for more than a decade now. Under the ‘Jal Jeevan Mission, India has undertaken a very ambitious initiative and is already geared up for major expansion in water supply and distribution infrastructure in all the states. The government is to spend Rs. 3.6 lakh crores by 2024 to provide tap water connections to every household. However so far Rs. 3.10 lakh crores have been spent and in spite of that in many states, the providing of home tap connections are still on the lower side. So, more government spending is expected under ‘Jal Jeevan Mission. For urban water supply, after Amrut 1.0, AMRUT 2.0 is initiated to cover the uncovered areas in the urban conglomeration. The main aim is to make 500 identi3ed AMRUT cities ‘water secure, i.e., providing water connection to all house hold. It will also include 4,378 statutory small towns. AMRUT 2.0 scheme, has been launched on 01 October, 2021 for a period of 5 years i.e., from the 3nancial year 2021–22 to 2025–26. The total outlay of AMRUT 2.0 is Rs. 2.99 lakh crores. Further growth in pipe demand is expected from AMRUT 2.0 in the coming years.

Demand for Pipes Sewerage

At present only about 30% of the waste water generated in India gets treated. Meanwhile with rapid urbanisation, the sewage generation in India has witnessed an increasing trend over the past few years registering a CAGR of about 4.7%. The government has been instrumental in introducing a plethora of programmes and schemes over the past four–3ve years. The main aim of these programmes is to improve the wastewater and sewerage infrastructure in the country. Currently there are more than 1200 projects envisaged under di3erent government programmes such as AMRUT 2.0, Swachh Bharat Mission, Namami Gange Programme and Smart Cities Mission. For sewerage force main DI pipe is the best choice. Even for gravity collection network, use of DI pipes with High Alumina cement lining is increasing.

Demand for Water in Irrigation

Precipitation in the form of rain and snowfall provide over 4,000 trillion liters of fresh water to India. Most of this freshwater, returns to the ocean via the large rivers 3owing across the subcontinent. A portion of this water is absorbed by the soil and is stored in underground aquifers. A much smaller percentage is stored in inland water bodies both natural (lakes and ponds) and man–made (tanks and reservoirs). Of the 1,869 trillion litres of water reserves, only an estimated 1,122 trillion litres can be exploited due to topographic constraints and distribution e3ects. With a very limited storage capacity, farming activity in India is mainly sustained by irrigation. We need more water for irrigation to feed the growing population. Traditionally, irrigation in India has been mainly canal based. However, now there is a growing acceptance of piped irrigation to minimise the transmission loss due to percolation and evaporation and to avoid the complication of land acquisition. In many states a good number of Piped Irrigation Systems are coming up and other states are following. This has opened good scope for use of pipes and 3ttings in the irrigation sector in the last few years and the same is expected to grow, as more states experience the bene3ts of Piped Irrigation System.

Demand for Water for Industries

The pace of economic development in India is largely dependent on rapid pace of Industrialisation. Industry needs water to sustain its operation and many industries like steel plants and power plants are big consumers of water. There is dictate from the Government to use more and more recycled waste water for industry. Growth is also witnessed in the real estate and service industry which in turn further add to the growing demand for Industrial water. More over the country is rapidly moving towards more renewable energy which also requires water. Generally, all solar power plants need water, approximately 20 gallons per megawatt hour (gal/ MWh), for cleaning surfaces such as mirrors, heliostats, and photovoltaic (PV) panels.

Demand Drivers for DI Pipes

The following factors will continue to drive the demand for DI Pipes:

1. Har Ghar Nal se Jal programme (Jal Jeevan Mission) and Swachh Bharat Mission/ Namami Gange – It is a declared goal of the Central Government to provide drinking water and sanitation to 100% of the population and making funds available to achieve it. The State Governments are expected to contribute in a similar manner.

2. In case of urban water supply schemes, AMRUT–2.0 initiative and Smart City projects will continue to keep up the demand for DI pipes and 3ttings.

3. A distinct push is there from the Government to adopt 24X7 water supply system in the urban conglomerates. 24x7 water supply implementation will require durable and leakage free pressure pipes like DI pipes.

4. Currently only about 36% of agricultural land in India is readily irrigated. The shift towards pipeline–based irrigation system from canal–based irrigation system is creating promising sector, which is going to add to the DI pipe demand.

5. As rapid industrialisation is taking place, keeping up with the economic development, in many cases, DI pipes and 3ttings are being preferred over other pipes for conveying bulk Industrial water as these are sturdier and more durable.

6. Waste water recycle and reuse is gradually gaining ground in India, particularly in water scarce areas.

7. Special pipeline system like restrained joint is gradually getting acceptance, as it eliminates the need for concrete thrust blocks and makes the project execution faster.

8. Unaccounted–for water (UFW) is high in India due to several reasons including old water systems, poor maintenance, illegal connections, frequent leakage and lack of proper mapping of distribution system. The Government is keen to reduce UFW and this will encourage use of more reliable pipe material like DI.

FY 2023–24 vs. FY 2022–23

The Companys Revenue from Operations was reported at Rs. 6938.01 Crore during the year under review as compared to Rs. 6916.00 Crore reported in the previous year. There was a decrease of around 17.47% in Export Sales from Rs. 1504.04 Crore in 2022–23 to Rs. 1241.20 Crore in 2023–24. The Companys pro3t in 2023–24 was Rs. 736.05 Crore as against pro3t of Rs. 334.76 Crore in 2022–23, thus recording a jump of 120%.

B. PRODUCT WISE PERFORMANCE Ductile Iron (DI) Pipes

The Ductile Iron Pipe Plant, produced 744,958 MT of DI Pipes during the year 2023–24 compared to 715,129 MT in 2022–23. During the year our Khardah Plant has taken major maintenance shutdown for augmenting pipe capacity and sustenance projects while Shrikalahasti Plant has improved capacity utilization which resulted in increase of Pipe production by 18%. The Production increased due to change in business strategies mainly in minimizing Pig Production (KW), enhanced Hot Metal production in SW on account of new MBF and higher Capacity Utilisation in the third quarter when business was impacted due to high 3uctuation of raw material prices and availability. Performance strongly improved subsequently during the remaining part of the Financial Year due to numerous strategic decisions carried out by the management and exemplary performance by all employees and workers of the organisation.

The main raw materials used in the production of DI Pipes are Iron Ore and Coke. Iron Ore for Eastern India operation is mainly procured from Odisha and Jharkhand. Coke is captively produced at Haldia for Eastern India operation and captively produced at Srikalahasthi unit for Southern India operation. Coking coals are imported mainly from Australia. The DI Pipes produced by the Company are sold in India and globally to nearly 90 countries spread over 5 continents.

Blast Furnace

The Blast Furnace has produced liquid metal of 728,338 MT during the FY 2023–24 compared to 7,73,965 MT. in the FY 2022–23.

Cast Iron (CI) Pipes

The Cast Iron Pipe Plant, with a total capacity of 90,000 TPA produced 33,769 MT of CI Pipe during the Financial Year 2023–24 compared to 26,588 MT in the Financial Year 2022–23. Improved performance is due to favorable order book and market situation. The capacity utilisation was higher compared to previous year because of demand for Cast Iron Pipes. The main raw material used in the production of CI Pipe is Pig Iron, which is obtained from domestic sources. The CI Pipe produced by the Company is sold mainly to the states in Southern India.

DI Fittings & Accessories

The Company produced 18,919 MT of DI Fittings in the Financial Year 2023–24 as against 20,343 MT in the Financial Year 2022–23. Shortfall is due to Major Maintenance Shutdown at Khardah Plant whereas HW Plant has shown 3% improvement.

The production, productivity and overall performance was almost at par with last year because the Companys operation and marketing teams have focussed on forward looking e3orts and taken initiatives for higher productivity and utilisation of capacity at its Haldia and Khardah Works and worked towards improving the performance of these divisions.

Power Plant

The Companys newly installed 5 MW capacity Turbo generator at its Haldia Works using the potentials of generation of steam from the waste gases of Coke Oven Plant is functioning well and providing cheaper power support to enhance performance of Ferro Alloy Products at Haldia Works and is establishing overall environment & energy conservation improvement. In 2023–24, the new power plant has generated 19.16 million units.

With old 12 MW power plant & new 5 MW Power Plant together, Haldia has generated 110.68 million units of power, out of which 18.01 million units were transmitted to SEB grid in 2023–24 as against 120.78 million units generation and transmission of 17.51 million units in 2022–23. Lower generation of power is due to less steam availability from Coke oven where production was toned down keeping in view shutdown at Khardah plant. During the year under review, at Srikalahasthi Unit, the power generation from both 12.0 MW and 7.5 MW CPPs put together was 144.25 million units as against 124.64 million units in the FY 2022–23.

Captive Coke Oven Plant

The Coke Oven Plant, with a total capacity of 2,25,000 TPA at Haldia, produced 148,158 MT of Metallurgical Coke in 2023–24 against 151,685 MT in 2022–23, mainly for captive consumption in Blast Furnace at Khardah Works. The production was lower compared to previous year mainly because of restricted production keeping in view shutdown at Khardah plant. The Coke Oven Plant at Srikalahasthi unit, has produced 211,998 MT of Metallurgical Coke in 2023–24 against 206,799 MT in 2022–23, mainly for captive consumption in Blast Furnace.

Ferro Alloy Plant

The Companys Ferro Alloy Plant at Haldia Works has produced Prime Si Mn. 13,847 MT in 2023–24 against 16,431 MT in 2022–23. The production decreased mainly due to power availability.

Ferro Alloy Plant at Srikalahasthi Unit has produced Prime Ferro Silicon of 15,791 MT in 2023–24 against 15,353 MT in 2022–23.

Cement Plant

Cement Plant has produced Portland Slag Cement of 56,620 MT in 2023–24 compared to 55,671 MT in 2022–23. Due to sluggish market conditions particularly for Slag Cement and consequent lower contribution, cement production has been lowered down during the year under review and instead Ground Granulated Blast Furnace Slag (GGBS) has been produced by e3ectively utilising the cement mills, which has better contribution when compared to Slag Cement. GGBS Production in 2023 –24 is 56,620 MT against 55,671 MT in 2022–23.

Raw Materials Management

The Companys manufacturing facilities are spread across 3ve locations in India. Presently, the business model consists of integrated production facilities which include Sinter Plants, Coke Oven Plants, Blast Furnaces, Pig Iron Plants, Sponge Iron Plants, Fittings Plants, Ferro Silicon Plants and Captive Power Plants. The integrated manufacturing facility helps the Company to minimise the production cost as the Company strongly believes that cost competitiveness is a key component of success. The Company continuously endeavors to improve the cost competitiveness by adopting various innovative and cost saving measures in the operations.

Due to delay in grant of forest, environment and other clearances from various authorities, execution of Mining Lease remained pending over an area of 192.50 hectare by the State Government of Jharkhand for Iron and Manganese Ores at Dirsumburu in Kodolibad Reserve Forest, Saranda of West Singhbhum, Jharkhand.

According to amended MMDR Act, 2015, the Validity Period of Letter of Intent granted by the State Government of Jharkhand for execution of Mining Lease in this respect expired on 11.01.2017. The Company had 3led a Writ Petition before the High Court of Jharkhand on 10.01.2017 praying for exemption on the above Sunset Date and obtained interim stay on 19.01.2017. The above order has not been modi3ed, vacated or altered till date.

The Forest Advisory Committee (FAC – an apex body of Ministry of Environment Forest and Climate Change (MoEFCC)) in their meeting on 17.08.2017 deferred their decision on Forest Clearance of Dirsumburu Mines of the Company till outcome of Judgement from Ranchi High Court. FAC has not rejected the Companys case on issue of Validity Period of Letter of Intent for Mining Lease.

In a similar Case like ECL a major hurdle has been mitigated by Ministry of Mines/MOEFCC – Government of India by accepting the interim judgment of Delhi High Court in the case of Arcelor Mittal India Ltd. MoEFCC gave Stage I & Stage II Forest Clearance to Arcelor Mittal. However, the Courts will have to restore the Letter of Intent (LOI) validity beyond 11.01.2017 in all recommended cases of allocated Mines in Saranda of Jharkhand. We are keeping a track of the Courts decision as and when it happens, in the case of Arcelor Mittal. This action of the Ministry of Mines and revalidation by the courts will become a favourable precedence for us.

Latest Position

ECL has been following up on its Writ Petition 3led at Jharkhand High Court. The High Court has asked Government of India and Government of Jharkhand to 3le its response which is still awaited. No new date has been 3xed as yet for hearing at Jharkhand High Court.

The Delhi High Court has cancelled the Letter of Allotment of Arcelor Mittal India Limited by its Judgment dated 24.02.2024 which is a setback for ECL and all other Mining Lease Holders whose Mining Leases were protected by di3erent High Courts all over India.

Recently Arcelor Mittal has 3led an SLP against the order of the High Court.

Exports

In the FY 2023–24, the demand of the Companys products has been robust mainly backed by the Government of Indias schemes like ‘Jal Jeevan Mission and Amrut–2. The Export markets were a little subdued in the second half due to high ocean freight rates caused by the Red Sea disturbances. The Company and its brand enjoys a strong reputation due to which there is high repeat sales to existing customers and addition of new customers.

Quality and Approvals

The Company is committed to provide world class quality products and services throughout and is striving forward to maintain the same in years to come. We are focused towards achieving ‘Quality Right the First Time. The Companys products have been certi3ed by globally renowned and respected certifying bodies, like, BSI (UK), DVGW (Germany), UL (USA), FM (USA), BV (Italy), OVGW (Austria), IGH (Croatia), SASO (Saudi Arabia), etc.

Respected auditors from di3erent certifying bodies have been visiting the Companys manufacturing facilities every year, since decades, to verify the system in place and ensure the products are at par with its commitment, as a part of their surveillance audit. The audits are now being performed on–site contrary to the online audits during pandemic. Recently, auditors from BSI (UK), UL (USA), FM (USA) and MPA NRW (Germany) and OFI (Austria) have audited our plants and we are glad to share that the Company has sailed through all the audits successfully.

The Company is committed to ensure long term sustainability of the global system including environmental, social, economic and qualitative aspects over the entire life cycle of its products and services. Over the years, the Company has been maintaining its quality management system in accordance with ISO 9001, Environmental Management System as per ISO 14001, Energy Management System as per ISO 50001, Occupational Health and Safety as per ISO 45001 and complies Social Accountability requirements as per SA 8000, which is also acknowledged by various renowned auditing organizations across the globe.

OPPORTUNITIES AND THREATS Opportunities

The Government has continued focus and emphasis on water supply and sanitation schemes across rural India, specially under the Jal Jeevan mission. The Government of India is continuing considerable investments in Smart City and AMRUT projects for urban water supply which is pushing the demand for pipe upwards. Urban sewerage system is being revamped in most cities which will require more pipes. As India is water stressed country, a vast stretch of agricultural land is still not covered by irrigation network. The export division of Electrosteel is continuously exploring for new markets to increase our overseas footprint and we continue to be the largest exporter of DI pipes and 3ttings from India. As a provider of reliable pipe system, the company has always remained the distinct choice for water service providers, engineers and consultants.

Threats

The ‘Jal Jeevan Mission, AMRUT–2.0 initiative and the ‘Swachha Bharat Mission have already brought in considerable growth in the water and waste–water sector. However, consistent funding is required to be made by the Government in these sectors in the coming years to get the full bene3t of these initiatives. Addition of new capacity in the domestic market may disturb the demand supply scenario. Some challenges being faced in the export market are, the imposition of Anti–dumping/Anti–subsidy duties on Indian DI Pipes by European Commission in European Union countries. Regulatory mechanism related to carbon emission like CBAM may have an adverse e3ect on the operating margin. Intrusion of low–cost plastic pipes in low pressure gravity distribution network may eat into DI pipe demand in that sector

C. RISKS AND CONCERNS

This has been dealt with separately in the section on "Risk Management".

D. FINANCIAL PERFORMANCE

The highlights of the operations for the year ended 31 March, 2024 and 31 March, 2023 are as under: a) Financials

Particulars	Year ended 31 March, 2024	Year ended 31 March, 2023
Gross Sales & Income from Operations	6938.01	6916.00
Pro3t before Interest, Depreciation & Exceptional Items	1245.87	819.04
– Finance Expenses	201.86	272.24
– Depreciation	114.32	114.02
Pro3t before Tax	929.69	432.78
Tax Expenses	193.64	98.02
Pro3t after Tax	736.05	334.76

b) Companys Sales mix

Particulars	Year ended 31 March, 2024	Year ended 31 March, 2023
Revenue from sale of Product
D.I. Spun Pipes	5631.56	5245.09
Ferro Products	203.47	279.27
D.I. Fittings	278.64	318.32
C.I. Spun Pipes	212.03	188.14
Cement	1.92	4.41
Others	580.02	851.72

Other Financial Matters

During the year:

1. Net Worth of the Company increased to Rs. 4930.08 Crore as at 31 March, 2024 from Rs. 4210.99 Crore as at 31 March, 2023.

2. Gross Fixed Assets including Work in Progress & Capital Advances as at 31 March, 2024 increased to Rs. 4056.72 Crore from Rs. 3973.44 Crore as at 31 March, 2023.

E. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of operations. It ensures the e3ciency of the operations, 3nancial reporting and statutory compliances. These systems are reviewed through risk control matrix, various MIS wherever considered necessary. Apart from the internal control system, an Independent Internal Auditor also reviews all activities in a systematic and structured manner. The Audit Committee regularly reviews scope, observations and suggestions of the Internal Auditors and takes the necessary corrective actions.

F. HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company strongly believes that to achieve continual success, a dedicated and devoted workforce is very much required to get high performance and improved productivity. This has been endlessly encouraged by evolving human resource management systems and processes of the Company. The Company has left no stones unturned for enhancing the capabilities of employees across all levels of the Organisation through engagement and continuous learning and development programs. Further, the Company is strongly focused towards utilization of its manpower to the optimum level. The positive approach and cordial relationship between the Management and Unions has resulted in smooth industrial relations during the year under review. The relationship has developed over the years and has played a signi3cant role in smooth running of the Company. Any issues/grievances are peacefully addressed and amicably settled through di3erent processes, like, discussion across the table, counseling, workers participation and collective bargaining on mutually acceptable terms. The Company sincerely strives to enhance and value knowledge capital by improving the competence of its employee and their prospective and optimum usage. The Company has been accredited with Social Accountability 8000 certi3cation from British Standard Institute (BSI). The SA 8000:2014 3rst surveillance audit was conducted successfully by BSI during the Financial Year 2023–2024 and recommended for continuation of the Certi3cate. The Company is taking initiatives to maintain TPM excellence on a continuous basis.

The total number of employees as on 31 March, 2024 are 2901.

Safety & Health

Occupational Health and Safety (OH&S) Management System is prime focus in our Company keeping up with the same pace of production. This existing management system provides safe and healthy workplace, eliminate hazards and minimizes OH&S risk towards the objective of zero accident & zero health impairment. This existing management system is also focused towards improvement in the system with regular review and analysis. It is also upgraded with the advancement of the process and technology. All the statutory requirements are also ful3lled through the OH&S management system and monitored for compliance through MIS on regular basis.

The Company:

has established and maintained process for identi3cation of accidental hazards (HIRA) on ongoing and proactive basis for routine and non–routine activities and related SOPs (Safe Operating Procedures), Kaizen, OPL & Poka–Yoke are prepared to eliminate the risk or to reduce the existing risk level.

has established a process to identify & eliminate work related hazard at their workplace through departmental / contractor safety risk register and this is being discussed in department wise safety committee meeting by consultation and participation of employees at all applicable levels and function to initiate, resolve and mitigate high level risk on fast track basis. has system of monitoring all the key factors of OH&S performance indicators as per schedule. Outcome of the monitoring results are evaluated and necessary actions are taken in consultation with concern department as and when required.

has formulated on–site emergency plan and conduct mock–drill as per schedule for evaluating the combat system during real emergency situations & corrective action is taken against identi3ed deviation to improve e3ectiveness of emergency team.

has arranged health check–up facilities like pre–employment, periodical & follow–up action by specialized doctor for all level of employees at regular intervals as per statutory requirement to prevent health impairment. Health checkup camps are also organized in collaboration with renowned Hospital / Diagnostic Centre for ECL Family and local communities as a part of CSR activities.

has full proof system to impart various trainings (induction/shop 3oor/In–house/external etc.) to workmen and sta3 for improving safety skills and increasing awareness. We also provide emphasis on On–Site Emergency Plan Training. These trainings e3cacy is reviewed through proper feedback system. Special training is organized by hired external faculty to exchange knowledge about the latest technology or methodology adoption including Arti3cial Intelligence (AI). has various systems of Plant Safety Inspection (daily inspection / Electrical Safety inspection, Fire safety inspection, PPE inspection, Top management Safety walk down as per schedule on monthly basis) by OH&S team along with senior o3cials to identify workplace potential hazard in respect of electrical appliances, 3re system and any deviation from the existing system. Outcomes of the inspection report is communicated to the respective departments for mitigation and also reviewed in monthly review meeting on regular basis in corporate MIS.

has started cross functional inter unit Audit system for identi3cation and mitigation of Hazards also implementation of horizontal replication among our all unit.

has conducted safety audit through external competent authority for assessing our ongoing safety management system and has implemented suggestions for further improvement. has introduced new system for checking of sca3olding as per IS standard by approved third party of factory directorate before starting any height job.

has introduced new system for checking traceability of gases inside the con3ned space by approved third party of factory directorate before entering the con3ned spaces. has been introduced new system for taking safety oath before training / meeting to improve safety mind of employees. has implemented TPM activities (5S audit) to improve health & hygiene in canteen & OHC.

Celebrates National Safety Day / Week / Month in every year through various activities like Safety Campaign, Safety drama competition, Safety quiz contest, Mock Drill Contest, Safety Poster, Safety Suggestion, Safety slogan competition & Inter Unit Best Safety Practices Competition to enhance safety awareness and preparedness among all level of employees.

Being an ISO 45001:2018 and SA 8000:2014 certi3ed company, the Company is always maintaining good practices of OH&S system and always trying to improve to it in every spheres.

Environment

The Company has maintained well established Environmental Management System (EMS) by which the whole environmental activities are organized in a structured manner. The major Environmental management system (EMS) activities typically includes: z Establishing a clear environmental policy that outlines the organizations commitment to environmental protection and compliance. z Setting environmental objectives and targets, identifying legal and other requirements, and developing action plans to achieve environmental goals. z Putting the environmental management plan into action for implementation and operation, which involves assigning responsibilities, providing training, and ensuring resources are available. z Regularly assessing environmental performance through monitoring, measurement, and evaluation of key indicators by concerned stake holders. z Ensuring compliance with relevant environmental laws, regulations, and standards through regular audits and inspections. z Developing procedures for emergency preparedness and response to respond e3ectively to environmental emergencies such as spills, leaks, or other incidents. z Continuously reviewing and improving the EMS through management reviews, corrective actions, and learning from experience for continuous improvement.

These activities are part of a structured framework such as the ISO 14001:2015 standard for environmental management systems. The company has taken following initiatives as a part of Environmental Management System (EMS).

All the activities are assessed via aspect–impact analysis method and appropriate mitigation plan is adopted for those activities where environmental impact is more. Environmental friendly technology is implemented wherever applicable to reduce the pollution level and to minimize the consumption of natural resources. Increase usage of Blast Furnace Gas (a process byproduct) to reduce fossil fuel use. Continuous Ambient Air Quality Monitoring stations have been installed in the factory premises to monitor air quality inside the factory. Manual checking of ambient air quality is also done inside the factory side by side.

Stack monitoring is done to keep the dust emission level and concentration of combustion products in the 3ue gas discharge from chimney within permissible limits. Revamping of Pollution Control Devices have been done to reduce emission level further.

Other key characteristics of environmental parameter like ambient noise is monitored as per monitoring control mapping and results are evaluated to improve the environmental performance of the said operation and to comply with the statutory requirements.

Regular Plant inspection is carried out to see compliance of existing OCP (Operational Control Procedures) in respect of storage and handling of hazardous & non–hazardous waste and handling of chemicals.

Plantation of saplings are carried out throughout the year. Di3erent types of saplings are planted in and around the factory premises to increase the foliage area and to provide greener environment.

The organization shares its commitment to preserve and conserve fresh water. It has implemented various improvement actions in line with the environmental policy to continually increase treatment and recycling of waste water. 94% of treated water now recycled inside the plant. Our ultimate objective is to achieve Zero Liquid Discharge (ZLD ) from the plant premises.

Di3erent types of trainings are imparted throughout the year as determined by the training needs identi3cation matrix associated with environmental aspects and its environmental management system and determine the necessary competence of the persons that a3ects environmental performance and its ability to ful3l its compliance obligations.

World environment day is celebrated every year and di3erent awareness programs are organized like sit and draw competition, quiz competition, plantation of saplings, distribution of saplings and also distribution of jute bag among all workmen and also for local communities to increase the awareness of usage of jute bags in place of plastic bags.

Enhancement of environmental friendly practices through TPM activities like good housekeeping practices including 5S & Audits, kaizens, etc. Environmental awareness initiatives are also displayed through environmental information display board.

With the objective to reduce consumption of fossil fuel & resulting greenhouse gas emission, the organization has adopted a strong & e3ective Energy Management System as per ISO 50001:2018 standard. The greenhouse gas emission is closely monitored and controlled considering its importance to the global climate change in context with the UN SDG 2030 commitments and Indias national commitment.

Waste Minimisation

The Companys well established waste handling procedure is capable to handle and store waste in environmental safe manner. Environment Management cell is taking all initiatives for storing, handling and safe disposal of waste via PCB approved vendors as per statutory requirement. Some of the important initiatives are: 4R methodology (recycle, reuse, reprocess, reduction) is being adopted for waste management system towards sustainable usage of natural resources. In this waste handling reduction is highest priority Packaging wastes are utilized for di3erent purposes as a part of the process of reusing / recycling waste. Some of the process wastes are recycled or re–utilized in another process to reduce the consumption of raw materials. Technological up–gradation is also a continuous focus to increase re–use / recycling of waste.

Awareness poster in di3erent locations for banning of plastic carry bags of less than 120 microns and also refrain from use of all type of Single Use Plastic.

Being ISO 14001 certi3ed, the Company leads a systematic approach with the aim of contributing to the environmental pillar of sustainability to protect environment and respond to changing environmental conditions in balance with socio economic needs.

Corporate Social Responsibility (‘CSR)

In recent times, companies are expected to engage in responsible business conducts. CSR activity, for Electrosteel, is a setup of planned activities, taking into consideration the capabilities of the Company with a target on the signi3cant impact to inspire its local community and near vicinities. The initiative of the Company is to strengthen its operating foundation and being engaged in ongoing e3orts to contribute to the society by enhancing corporate values.

The Company takes into account issues of concern related to external stakeholders and also various range of programs that aim at Social & Environmental topics. The Companys code of conduct anchors its Ethics & Compliance a3airs. It also creates and implements community–based initiatives to solve issues in areas like education for children, environmental conservation and external cooperation keeping in mind the local culture & society.

Electrosteel Initiatives

Setting up of Drinking water kiosks in local area during the summer season.

Providing assistance to promote local culture and festivals.

Carrying out development work in local Schools & Sports Clubs to promote education & sports activities.

Providing medical help through the Charitable Medical Centers.

Motivating local poor but bright students and distribution of educational kits amongst school children.

Arranging regular Blood Donation and Medical Camps through agencies and helping local people with Blood Cards as and when required.

Distribution of Clothes / Blankets amongst poor people of local area.

Providing 3nancial help to needy people against their appeals.

Engaging Employees through various Competitions, Sports Activities and Cultural programs.

The Company conducts its CSR activities based on the feedback from its employees, stakeholders, customers and the local community.

Information Technology

The Company has further improved its security mechanisms to mitigate information security risks by implementing Dark and Deep Web Monitoring. The company can now monitor its con3dential data, credentials, compromised passwords, and other sensitive information if shared on the dark web.

The Company has successfully delivered few cutting–edge IIoT–based plant monitoring systems, a key project that marks a signi3cant stride towards Industry 4.0. The systems, developed entirely in–house, epitomizes the integration of Operational Technology (OT)—technology that directly controls or monitors physical devices and processes—with Information Technology (IT) through the use of the Internet of Things (IoT) The Company has undertaken its 3rst step towards adopting Arti3cial Intelligence to improve processes such as workplace safety, among others. The company plans to complete this journey within the next few years to establish a smart factory.

G. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Debt Equity ratio has improved from 0.57 times in FY 2022–23 to 0.40 times in FY 2023–24, i.e., an improvement of 30% due to prepayment of debt and improvement in pro3tability and on reduction of cost of the Company. Interest Coverage ratio has improved from 2.80 times in FY 2022–23 to 6.15 times in FY 2023–24, i.e., an improvement of 120% due to improvement in pro3tability and reduction in interest cost of the Company.

Operating pro3t margin has improved from 10.24% in FY 2022–23 to 16.38% in FY 2023–24 i.e., an improvement of 60% due to improvement in pro3tability and reduction in cost of the Company.

Net Pro3t Margin (%) witnessed an increase from around 4.86% in the FY 2022–23 to around 10.66 % in the FY 2023–24 i.e., an increase of 119% on account of Improvement in pro3tability and reduction of cost.

Return on Net Worth (%) witnessed a increase from around 8.11% in FY 2022–23 to around 15.89% in FY 2023–24 i.e., an increase of 96% on account of improvement in pro3tability and reduction in 3nance cost and other costs. No signi3cant changes were noted in the other key 3nancial ratios during the year.

	FY 2023–24	FY 2022–23	Variation
Debtors Turnover	4.81	5.86	–18%
Inventory Turnover	4.03	3,90	3%
Current Ratio	1.63	1.48	10%

H. OUTLOOK

In response to this staggering problem, the Govt. of India initiated the largest ever water supply initiative anywhere in the world, the Jal Jeevan mission, with an aim to connect all the rural house holds with piped water. At the same time AMRUT mission has been initiated to augment the urban water supply and sewage disposal. To cater this growing need, the Indian pipe and 3ttings market is growing at the rate of 10%-12% every year for more than a decade now. Under the ‘Jal Jeevan Mission, India has undertaken a very ambitious initiative and is already geared up for major expansion in water supply and distribution infrastructure in all the states. The government is to spend Rs. 3.60 lakh crores by 2024 to provide tap water connections to every household. However so far Rs. 3.10 lakh crores have been spent and in spite of that in many states, the providing of home tap connections are still on the lower side. So, more government spending is expected under ‘Jal Jeevan Mission. For urban water supply, after Amrut 1.0, AMRUT 2.0 is initiated to cover the uncovered areas in the urban conglomeration. The main aim is to make 500 identi3ed AMRUT cities ‘water secure, i.e., providing water connection to all house holds. It will also include 4,378 statutory small towns. AMRUT 2.0 scheme, has been launched on 01 October, 2021 for a period of 5 years, i.e., from the 3nancial year 2021-22 to 2025-26. The total outlay of AMRUT 2.0 is Rs. 2.99 lakh crores. Further growth in pipe demand is expected from AMRUT 2.0 in the coming years.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report describing the Companys estimates, predictions and expectations may be "forward-looking" within the meaning of applicable securities laws and regulations. Actual results may di3er materially from those expressed or implied in the statement. Important factors that could in3uence the Companys operations include global and domestic demand and supply conditions a3ecting selling prices of 3nished goods in which the Company operates, input availability and prices, changes in government regulations, tax laws and other statutes, economic developments within the country and the countries within which the Company conducts business and other factors such as litigation and industrial relations. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events.