Foundry Fuel Products Ltd Management Discussions

The Companys performance during the year ended 31⁵¹ March, 2025 and the Managements views on future outlook are discussed below:

Cautionary Statement

Statements in the Management Discussion & Analysis covers the Companys expectations, projections, predictions, estimates and so on about the future of the Company are forward looking statements. The Companys actual results, performance or achievements could thus differ from those projected in any forward-looking statements. Since these are based on certain assumptions and expectations of future activities or events, the Company cannot guarantee the accuracy or realization of the same. The Company assumes no responsibility to publicly revise, change or adjust any such statements on the basis of subsequent developments, information or events. The Company disclaims any obligation to update these forward-looking statements, except as may be required by law.

The global GDP trend is downward viz. GDP growth rate was 3.5 % in the year 2023, while 3.3 % was estimated for the year 2024 and 2.8 % is forecasted for the year 2025. Geopolitical risks remain significant with continuing conflicts between Russia and Ukraine, and in the Middle East. Amid the heightened uncertainty, the IMF projected world GDP growth to slow substantially to 2.8% in 2025 and 3% in 2026, lower-than-trend growth but still above the mark typically associated with recessionary conditions. IMF forecasts were released before some of the tariff dilution by the US.

Similarly, India continues to be one of the fastest growing major economies. The Indian economy is estimated to have recorded a solid growth of 6.5% in FY 2024-25, on top of a strong 9.2% growth in the previous year. Private consumption expenditure accelerated during the year, whereas gross fixed capital formation decelerated. Indias growth outlook for FY 2025-26 is likely to be supported by resilient domestic drivers, even though the overhang of global headwinds remains. Consumption will be lifted by personal income tax cuts, easing food inflation, positive monsoon outlook and the RBIs rate cuts. The Union Budget announced cuts in personal income tax amounting to ¹ 1 trillion.

Retail inflation eased from 5.4% in FY 2023-24 to 4.6% in FY 2024-25. Inflation fell below the 4%-mark in the last quarter of the fiscal, as food inflation declined substantially. This opened the space for policy rate cuts by the RBI: policy rate was cut by a combined 50 basis points in February and April 2025 meetings. Liquidity conditions that had tightened in early 2025 have eased with a slew of liquidity measures by the RBI. Indias macroeconomic situation continues to be resilient with fiscal consolidation on track, a healthy level of foreign exchange reserves and current account deficit well within prudent levels. Merchandise exports stagnated in FY 2024-25 while services exports remained buoyant.

The Indian Meteorological Department (IMD) has forecast monsoon rainfall to be above normal in 2025, which bodes well for continued rural recovery. Consumer confidence has shown an uptrend, and the RBIs policy easing and liquidity support will aid consumption demand. Lower international oil prices are expected to bolster Indias macroeconomic fundamentals, along with the continued fiscal consolidation and adequate forex reserves. The RBI has projected Indias consumer inflation to soften further to 4% in FY 2025-26.

The metallurgical coke market is estimated to increase from US$ 221.7 Bn in 2024 to US$ 285.9 Bn by 2031. The market is projected to record a CAGR of 3.7% during the forecast period from 2024 to 2031. Booming iron and steel industry as well as rapid industrialization is anticipated to create fresh growth prospects worldwide.

The rapid growth of the steel industry has increased the demand for metallurgical coke; thereby, fueling the market growth. Asia-Pacific dominates the metallurgical coke materials market, owing to the various government initiatives in the sector such as the introduction of Steel Scrap Recycling

Policy aimed at Imports and the imposition of a 30% cut in the export duty on iron ore to ensure supply for the domestic steel industry.

Wind power is the fastest-growing energy technology in the world today, according to the National Renewable Energy Laboratory (NREL). Steel is the primary material used for making onshore and off-shore wind turbines. Thus, the increasing wind power sector will further boost the metallurgical coke market during the forecast period.

Moreover, there is an increasing demand for steel for construction applications such as offshore oil rigs, bridges, thermal & hydroelectric plants, civil engineering machines, rail carriages, pressure vessels, nuclear, and interior ducting, which will drive the market growth.

The Company has exposure to variety of financial risks, i.e. credit risk, liquidity risk and market risk. The Company process and tracks and evaluates the levels of risk. As well as monitoring the risk itself, the discipline and tracks and evaluates the effectiveness of risk management strategies. The Company also strives for risk mitigation strategy and prepare for and lessen the effects of threats faced by a business. Comparable to risk reduction, risk mitigation takes steps to reduce the negative effects of threats and disasters on business continuity.

Your Companys businesses are subject to a variety of risks and uncertainties. Among those are price risk, production risk, risk from natural calamities, political risks etc. Your Company is not free while competing with the indigenous industries as well as with imported coal. Although the coke market is not doing well but your Companys working are below expectation due to shutdown of operation of factory since the year 2010, working capital shortage & carry forward losses of the previous years. In between these limiting factors your Company makes losses. Your Company presently is in a very critical position to revive & the same is continued since a decade. Your Company is looking for a turnaround so that the operations of the Company may be resumed.

The Companys internal control systems are commensurate with the nature, size and complexities of its business and ensure proper safeguarding of assets, maintaining proper accounting records and providing reliable financial statements.

Your Companys loss during the period under review stood at Rs.24.69 Lakhs against loss of Rs. 25.05 Lakhs comparing with the previous year. Your promoters are taking positive steps for restarting of the operations.

Your Company is planning to initiate the process of searching another project. The Company is also evaluating the option to sell or lease or transfer the entire business assets or undertaking comprising of all movable and immovable properties for which members have duly accorded their approval to the board. Further, in the opinion of the management, fixed assets are sufficiently and substantially depreciated ! amortized and hence no adjustment would be required to its carrying value. For the purpose of payment to the trade liabilities, Company will be able to get sufficient funds from holding Company. Considering the same, accounts are prepared on going concern basis.