Gem Enviro Management Ltd Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report

for the financial year ended on March 31, 2025.

KI> GLOBAL ECONOMY OVERVIEW

The global economy in 2025 is navigating a complex landscape marked by persistent trade tensions, elevated policy uncertainties and subdued growth prospects. According to International Monetary Fund (IMF), the advanced economies are expected to grow at 1.4%, constrained by tight monetary policy and ageing demographics while Emerging markets and developing economies are projected to grow at 4.2%, supported by domestic consumption, technology adoption, and capital investments.

The year 2024 marked a grim milestone in global geopolitics, with armed conflicts proliferating at an alarming rate. Wars have historically devastated national economies, but the interconnected nature of todays global economy magnifies their impact. Ukraine, locked in a protracted struggle against Russian aggression, has seen its GDP contract by 29%. Beyond the immediate devastation; these conflicts are reshaping the global economic order.

The US economy has been resilient, driven by strong growth in the services sector, a robust labour market, and high real wages. Europe, including the UK, has faced softer growth due to the war in Ukraine, high energy prices, and slowdowns in manufacturing and services. Chinas growth was weaker than expected, with a slowdown in the real estate sector and industrial activity. The Asia-Pacific region is projected to be the fastest growing.

Global inflation is generally expected to decline in the coming years, but remains above pre-pandemic levels. The COVID-19 pandemic and the war in Ukraine have significantly impacted global inflation, causing disruptions and price increases. According to IMF, the global inflation rate has followed a downward path over the past three financial years from 6.6% in 2023 to 5.7% in 2024 and 4.3% in 2025. In

many economies, inflation is still above target, driven by services inflation, wage pressures, and geopolitical disruptions impacting food and energy supply chains, necessitating cautious monetary policy approaches. Advanced economies are projected to return to their inflation targets sooner than emerging market and developing economies.

INDIAN ECONOMY OVERVIEW

India continues to demonstrate resilience amid global headwinds, achieving a real GDP growth of 6.5% in the financial year 2024-25 and maintaining its position as one of the fastest-growing major economies. The Economic Survey 2024-25 notes that agriculture growth remained steady in first half of FY25, with Q2 recording a growth rate of 3.5 per cent, marking an improvement over the previous four quarters.

The industrial sector grew by 6 per cent in first half of FY25 and is estimated to grow by 6.2 per cent in FY25. Q1 saw a strong growth of 8.3 per cent, but growth moderated in Q2 due to three key factors. First, manufacturing exports slowed significantly due to weak demand from destination countries, and aggressive trade and industrial policies in major trading nations. Second, the above average monsoon had mixed effects - while it replenished reservoirs and supported agriculture, it also disrupted sectors like mining, construction, and, to some extent, manufacturing. Third, the variation in the timing of festivities between September and October in the previous and current years led to a modest growth slowdown in Q2 FY25.The services sector continues to perform well in FY25.

Retail inflation in India, as measured by the Consumer Price Index (CPI), which reflects the cost of everyday goods and services, has followed a steady downward path over the past three financial years, falling from 6.7 percent in 2022-23 to 5.4 percent in

2023- 24, and further to 4.6 percent in

2024- 25.

This consistent moderation highlights the combined impact of the Reserve Bank of Indias calibrated monetary policy and the Government of Indias focused interventions to ease supply-side constraints and stabilise prices of essential commodities. The year-on-year food inflation based on the Consumer Food Price Index (CFPI) stood at 2.69% in March 2025, the lowest since November 2021.

The Monetary Policy Committee (MPC) maintained the repo rate at 6.50% through much of 2024-25 and further reduced by 50 basis points (bps) to 5.50 per cent in its Monetary Policy on 6^th June, 2025.Gross Foreign Direct Investment inflows recorded a revival in FY25, increasing from USD 47.2 billion in the first eight months of FY24 to USD 55.6 billion in the same period of FY25, a YoY growth of 17.9 per cent. Foreign portfolio investment (FPI) flows have been volatile in the second half of 2024, primarily on account of global geopolitical and monetary policy developments.

Looking ahead, India projected to sustain GDP growth at 6.5% with risks balanced and Inflation expected at 4.0%, with easing supply pressures but upward risks from global uncertainties. The central government aims to reduce the fiscal deficit to 4.4% of GDP in 2025-26 and target a declining public debt-to-GDP ratio reaching 50% by 2031.

INDUSTRY STRUCTURE AND DEVELOPMENT

Waste is anything we throw away thats unwanted or unusable. It can be solid, liquid, or gaseous, and comes from our homes, industries, and businesses. India generates a massive amount of waste each year, but only a fraction is collected and treated properly.

The waste management sector in India has witnessed significant growth in recent years due to the governments push towards cleanliness and sanitation. Increasing population and rapid urbanization have resulted in a substantial increase in the amount of waste generated, leading to the need for efficient and sustainable waste management practices.

U.S. companies offering innovative technologies, equipment, and cost-efficient waste handling systems and solutions - especially for waste sorting; recycling of plastic, tire, e-waste, and batteries; construction waste management, landfill design and technologies; and solutions generating energy from waste - will find multiple opportunities in India.

The India waste plastic recycling market is experiencing continuous growth on account of the increasing use of recycled plastic in the food and beverage industry. Currently, a large fraction of plastic waste in India goes to landfill or leaks into the environment.

India is experiencing a surge in e-waste generation with increasing digitalization, which poses severe environmental and health risks due to toxic components like lead, mercury, and cadmium.

With the advent of electric vehicles and widespread use of portable devices, battery waste has become an emerging issue. Batteries contain toxic materials such as lead, cadmium and lithium, which, when improperly disposed of, can lead to soil and groundwater contamination.

There has been a corresponding increase in the use of tyres with a rising demand for vehicles, leading to more waste tyres. Scrap tyre comes under the category of hazardous waste owing to its potential to cause fires and resultant toxic emissions in air and water.

Indias rising plastic, e-waste, battery, and tyre waste is fueling demand for sustainable solutions and technology partnerships.

SUSTAINABLE PRACTICES ADOPTED BY CORPORATES GLOBALLY

Corporates are increasingly adopting sustainable waste management practices, focusing on reducing, reusing, and recycling waste, and investing in advanced recycling technologies. Corporates are redesigning products and packaging to be more easily recyclable, reusable, or compostable.

In Germany, Producers, Importers, Brand Owners ("PIBOs") have long embraced mono-material packaging and lightweight designs, supported by a robust Deposit Return Scheme ("DRS") that promotes high return rates for beverage container. In the United Kingdom, clear labelling under the "Recycle Now" initiative helps PIBOs provide recycling information directly on packaging and similarly Japan introduces QR codes on products to guide consumers on how to dispose of packaging correctly. These globally adopted practices show how PIBOs are aligning with both regulatory requirements and voluntary sustainability goals.

To combat e-waste, especially from electronics and appliances, PIBOs in countries like Japan, Germany, and South Korea are required to participate in formal collection schemes and meet specific recovery targets under EPR frameworks. Companies are improving product designs for longer life, reparability, and modularity to reduce the generation of e-waste.

Some global brands also offer buy-back programs, extended warranties, and device trade-in schemes, especially in Europe and North America, to promote reuse and responsible disposal.

PIBOs in the tyre industry fund the collection and recycling of used tyres through Producer Responsibility Organizations (PROs). These tyres are often repurposed into road material, flooring, or energy recovery in cement kilns. Some countries made EPR mandatory for waste tyres.

On the other hand, Battery waste particularly from consumer electronics and electric vehicles, presents a unique challenge due to its hazardous components. Companies are investing in battery recycling technologies that recover valuable metals such as lithium, cobalt, and nickel. In China and the EU, regulations now compel manufacturers of electric vehicles and battery-powered equipment to ensure end-of-life collection and recycling.

Collectively, these practices reflect a growing global shift toward circular economy principles, where PIBOs are no longer just responsible for production and sales, but also for minimizing the environmental impacts of their products throughout their entire lifecycle.

Government have introduced legal frameworks to ensure proper handling, segregation, transportation, and disposal of waste. These laws define roles, penalties, and responsibilities for municipalities, industries, and citizens. These rules address the environmentally sound management of various waste streams which includes Solid Waste Management Rules, 2016, Plastic Waste Management Rules, 2016,Hazardous and Other Wastes (Management and Tran boundary Movement) Rules, 2016, E-waste (Management) Rules, 2022, Battery Waste Management Rules, 2022, etc. as amended from time to time.

The government has also incorporated the concept of Extended Producer Responsibility (EPR) which holds the Producers, Importers and Brand owners (PIBOs) responsible for environmentally sound management of products until their end-of-life phase. These guidelines aim to promote a more circular economy and encourage mindful consumption.

GOVERNMENTS INITIATIVES TO

TRANSFORM WASTE FROM BURDEN TO VALUABLE RESOURCE /

With a rapidly growing population and increasing urbanization, waste

management has become a critical challenge for India. Improper waste disposal leads to environmental pollution, health hazards, and an overburdened landfill system. To tackle this issue, the Indian government has launched several initiatives to promote sustainable waste disposal, recycling, and efficient use of waste management machines. Programs like the Swachh Bharat Mission, Solid Waste Management Rules, and Waste-to- Energy projects are making a significant impact by reducing landfill dependency and promoting waste recycling solutions.

GLOBAL POSITIONING OF EXTENDED PRODUCER RESPONSIBILITY (EPR)

EPR is an environmental policy approach that holds PIBOs responsible for the entire lifecycle of their products and packaging, particularly for their end-of-life disposal. More than 80% of the EU countries utilize an EPR system for packaging waste. However, the EPR systems and management practices differ between countries influencing business practices in each region.

Australias packaging EPR framework is evolving, but the Australian Packaging Covenant Organization (APCO) currently manages voluntary and co-regulatory schemes. APCOs "2030 Strategy" introduces eco-modulated fees, meaning packaging that is difficult to recycle will attract higher compliance costs, while more sustainable materials will be incentivized.

Germany has long been a world leader in environmental regulation, introducing one of the first ever Extended Producer Responsibility regulations in 1991. Nowadays, in addition to its robust EPR regulations for packaging, waste electronics and batteries. Germany is renowned for its very successful implementation of a DRS for beverage containers.

New Zealand has mandated EPR for plastic packaging, making participation compulsory, unlike voluntary or coregulatory systems in some regions. Additionally, its government planned to phase out all difficult-to-recycle plastic containers and packaging by 2025. However, this deadline has been postponed due to implementation challenges.

EPR MECHANISM IN INDIA

India is among the fastest-growing economies in the world, but this growth comes at a significant environmental cost. In India, EPR is particularly relevant due to the enormous waste volumes generated by growing urbanization, consumerism, and the rapid pace of industrialization.

The Indian government has recognized the importance of EPR and included it in the Plastic Waste Management Rules (2016), E-Waste Management Rules (2016), Battery Waste Management Rules (2022), etc. to encourage the producers to assume accountability for the retrieval and recycling of their products. By holding producers accountable for the lifecycle of their products, EPR has the potential to reduce waste, promote sustainable design, and boost recycling rates.

The EPR credit system works through partnerships with recycling facilities or plastic waste processing units, where PIBOs purchase credits based on the amount of waste (plastic, battery, e-waste, etc.) they need to offset. Each credit signifies a certain volume of waste that has been responsibly recycled or managed.

However, the success of EPR will depend on overcoming challenges such as inadequate infrastructure, informal sector involvement, and enforcement.

CHALLENGES IN IMPLEMENTING EPR IN INDIA

Inadequate Waste Management Infrastructure: Much of India lacks the necessary infrastructure for effective waste collection, segregation, and recycling — especially in rural and semi-urban areas. Without reliable logistical systems, it becomes difficult to operationalize EPR programs on a

Limited Integration of the Informal Sector:

The informal sector plays a vital role in Indias recycling ecosystem, with millions of waste pickers contributing to the collection and sorting of recyclable materials. However, these workers often operate outside formal regulatory frameworks and lack access to fair wages, safety standards, and social security.

Low awareness among PIBOs: Many PIBOs are either unaware of EPR obligations or unclear about how to fulfill them. Also, Implementing EPR may involve significant costs for PIBOs, including reverse logistics, recycling partnerships, and data reporting.

Limited Recycling and Processing Capacity: Even when waste is collected, the country often lacks adequate recycling facilities, especially for complex or hazardous materials such as e-waste, multilayer plastics, and batteries. This creates bottlenecks in closing the loop on product lifecycles.

HOW GEM IS SUPPORTING EPR

GEM assists companies in fulfilling these EPR obligations by offering end-to-end solutions for generating, procuring and managing EPR credits for major dry waste categories such as Plastic waste, E-Waste and Battery waste, ensuring environmentally responsible disposal and full regulatory compliance under applicable ePr guidelines.

GEM provides efficient waste collection and recycling services through its extensive network of authorized recyclers and waste processors. This integrated approach enables PIBOs to ensure the responsible disposal of waste, maximizing recycling rates and minimizing landfill contributions, generation and utilization of verifiable EPR credits in line with CPCB and SPCB norms.

Through these services, GEM not only simplifies EPR compliance but also contributes to building a circular economy and promoting a cleaner, greener environment.

INDIAS PLASTIC PACKAGING INDUSTRY

In India, the plastic packaging industry is heavily influenced by the concept of EPR, where PIBOs are legally obligated to manage the end of life of their plastic packaging. Plastic is one of the most prominent packaging materials. Its versatile usage is becoming the foundation for many industries for product packaging. Compared to other packaging types, plastic packaging containers provide unique benefits, such as high impact strength, stiffness, and barrier properties, which have expanded the market for plastic packaging in recent years.

PIBOs are responsible for ensuring the environmentally sound disposal of plastic packaging waste. PIBOs can fulfill their EPR obligations by either directly recycling the waste, or by purchasing credits who recycle the waste on their behalf. They must register on a centralized portal and fulfill their EPR targets through an action plan

The India Plastic Packaging Market size is expected to reach USD 22.44 billion in 2025 and grow at a CAGR of 3.09% to reach USD 26.13 billion by 2030.

In addition, the growing awareness among people about the harmful effects of plastic on the environment is catalyzing the demand for plastic waste recycling in the country. The India plastic waste recycling market size reached 10.9 Million Tons in 2024, which is expected to reach 25.4 Million Tons by 2033, exhibiting a growth rate (CAGR) of 9.37% during 2025-2033.

INDIAS ELECTRONIC WASTE (E-WASTE) INDUSTRY

India is the third largest electronic waste producer in the world after China and United States, approximately 2 million tons of e-waste is generated annually and an undisclosed amount of e-waste is imported from other countries around the world.

The India e-waste management market size reached USD 2.96 Billion in 2024, which is expected to reach USD 8.92 Billion by 2033, exhibiting a growth rate (CAGR) of 12.07% during 2025-2033.

E- Waste EPR Market rising from 0.28 million MT in 2023 to 0.34 MT in 2024, representing the YOY growth of 25%.

Historically, Indias e-waste sector has been dominated by unregulated players operating under substandard conditions, causing severe environmental and health risks. However, the landscape is changing. The government has introduced E-Waste Management Rules 2022, as amended with a motive to formalise the e-waste recycling industry and promoting sustainable practices among producers, ensuring that hazardous components are treated correctly.

INDIAS BATTERY WASTE INDUSTRY

India battery recycling market size reached USD 554.4 Million in 2024, which is expected to reach USD 1,304.1 Million by 2033, exhibiting a growth rate (CAGR) of 8.93% during 2025-2033.

The Indian government is framing effective policies to recycle batteries as it helps mitigate pollution efficiently, promotes a circular economy by closing the loop on valuable resources, and reduces energy consumption, accelerating the India battery recycling market growth in the forecast period.

SiANXiS

INDIAS TYRE WASTE INDUSTRY

In 2022, Indias Ministry of Environment, Forests and Climate Change (MoEFCC) introduced EPR for waste tyres, which means the producer or importer is responsible for the safe disposal of the end of life of tyres. The producer or importers can buy their EPR certificates from recyclers who are then responsible for converting waste tyres into environmentally safe products.

Around 2 million MT of tyres are discarded as scrap each year due to wear and tear. According to data released by the Ministry of Commerce, the import of waste or scrap tyres, which was 2.64 lakh metric tonnes (MT) in FY21 has risen to 13.98 lakh MT in FY24.

The India Tyre Recycling Market was valued at USD 2.25 billion in 2024 and is expected to reach USD 3.05 billion by 2033, at a CAGR of 3.51% during the forecast period 2024 - 2033.

The India tyre recycling market collects, processes, and converts end-of-life tires into useful resources, including crumb rubber, pyrolysis oil and carbon black, using recycling methods such as shredding, pyrolysis, and refurbishment.

WASTEWATER: FROM ENVIRONMENTAL THREAT TO VALUABLE RESOURCE

Wastewater is a growing health and environmental threat, accounting for almost as many planet warming emissions as the aviation industry. Traditionally discharged untreated into rivers, lakes, or oceans, wastewater contributes to pollution, ecosystem degradation, and public health risks. However, with growing water scarcity, rapid urbanization, and stricter environmental regulations, countries are rethinking their approach to wastewater management.

Countries like Germany, Singapore and Israel have made significant progress in recycling and reusing wastewater, while many developing nations are expanding infrastructure under global support programs.

Effective wastewater management ensures that polluted water is collected, transported, treated, and either safely discharged or reused, preventing environmental degradation and protecting public health. Wastewater treatment plants are the operational backbone of this process, where contaminants are removed through physical, biological and chemical treatments.

GEM intends to develop ESG-compliant infrastructure and offering innovative wastewater management solutions for industries. From designing and implementing wastewater treatment plants and water recycling technologies, GEM also intent to help its clients reduce pollution, optimize water use and comply with national and international regulations.

OUTLOOK

The outlook for Indias recycled plastic waste management market is driven by a combination of factors that collectively indicate strong growth potential and long-term sustainability in the sector. With increasing awareness about environmental conservation and a growing commitment to sustainable practices, the demand for EPR services in recycled plastic waste management is poised to witness a substantial uptick. Government initiatives and stringent regulations mandating responsible disposal of plastic waste have not only spurred the adoption of EPR services but have also created a conducive environment for market expansion.

Additionally, the rising consumer consciousness towards eco-friendly products and packaging amplifies the demand for recycled plastics, incentivizing companies to invest in EPR services. The untapped potential of the market, coupled with the commitment of stakeholders towards a greener future, positions the recycled plastic waste management industry as a key player in Indias sustainable development narrative, promising investors an opportunity to participate in a sector that aligns with both environmental responsibility and economic growth.

GROWTH DRIVERS FOR PLASTIC WASTE MANAGEMENT INDUSTRY:

2 Plastic packaging industry is growing steadily at a CAGR of 6.12%, driven by demand across FMCG, e-commerce and retail sectors.

2 Plastic EPR targets have jumped 14.68% YoY (FY 2023-24 to 2024-25), reflecting regulatory momentum and rising compliance pressure.

2^ The faster growth in EPR obligations compared to packaging signals a rapidly expanding market for plastic credits and verified recycling.

2^ This regulatory-commercial gap presents a high-growth opportunity in the Plastic EPR market.

The current market growth rate for Plastic EPR stands at approx. 15%.

GROWTH DRIVERS FOR E WASTE MANAGEMENT INDUSTRY

2 E-waste generation grows at a CAGR of 19.12%, driven by rising electronic consumption and shorter product lifecycles.

2 E-waste EPR targets increased 25% YoY, reflecting stricter regulatory enforcement and higher compliance requirements.

2^ Faster growth in EPR obligations compared to e-waste generation signals a rapidly expanding compliance market.

2^ GEM is well-positioned to capitalize on this opportunity with its end-to-end EPR expertise.

l" STRENGTH

Regulatory Expertise:

GEM possesses a strong understanding of the Extended Producer Responsibility (EPR) regulatory framework, enabling it to navigate compliance requirements effectively across sectors. GEM has built in processes and workforce to quickly learn and adapt to the EPR requirements of other sectors.

Strong Market Positioning:

As an established player in the plastic EPR domain, GEM has strong brand recall.

Robust Stakeholder Network:

GEM has developed strong relationships with key stakeholders across the EPR value chain, including recyclers, waste aggregators and enhancing its operational efficiency and reach.

WEAKNESS

Limited Availability of Trained Talent:

The waste management industry is still developing in India, leading to a limited pool of trained professionals. Consequently, GEM must invest significantly in training and retaining its executive workforce to maintain operational effectiveness.

High Market Concentration Risk:

GEMs business is heavily concentrated in the domestic Indian EPR sector. This over-reliance on a single geographic and regulatory market increases exposure to policy changes, market volatility, and local economic disruptions

UI< OPPORTUNITIES

Rapidly Expanding EPR Market: The EPR market is witnessing significant growth, providing GEM with a large and expanding opportunity to scale its operations and capture market share. The EPR market is also expanding in various sectors like cans, oils, etc.

Sectoral Expansion: Emerging EPR mandates in battery waste, e-waste, and multi-layer packaging present avenues for GEM to diversify its services and revenue streams.

Emerging WasteTech & EnviroTech Industry: As a

nascent but rapidly evolving industry, the waste management sector presents high-growth potential driven by the integration of advanced technologies. GEM has the opportunity to lead innovation and digital transformation within this space.

h THREATS

Intensifying Competition: The EPR segment is

becoming increasingly competitive due to minimal capital and licensing requirements, making it easier for new players to enter the market and may put pressure on pricing and margins.

Regulatory Volatility: The frequent updates and changes in compliance norms by the Central Pollution Control Board (CPCB) can impact operational stability and increase the cost of compliance. Additionally, the CPCBs proposed introduction of an exchange-traded platform for EPR certificates may disrupt current business models and workflows within the EPR ecosystem.

Rising Bargaining Power of Recyclers: As the EPR

market matures, recyclers are gaining greater leverage in negotiations, which may lead to pricing pressure and margin compression for service providers like GEM.

Dependency on Credit Markets: Any disruption or saturation in the plastic credit market could significantly impact revenue flows and cash cycles.

ESG Audits: The possibility of SEBI introducing licensing requirements for conducting ESG audits may alter the compliance landscape and restrict GEMs ability to operate freely in the ESG services domain without additional certifications.

RISK & CONCERNS

The Company is aware of the risks associated with the business of the Company. It regularly analyses and takes corrective actions for managing/mitigating the same.

The Company has framed a formal Risk Management Policy for risk assessment and risk minimization which is periodically reviewed to ensure smooth operation and effective management control. In the opinion of the Board, there are no risks that can threaten the existence of the Company.

The Audit Committee also reviews the adequacy of the risk management framework of the Company, the key risks associated with the business and measure and steps in place to minimize the same. Timely and effective risk management is of prime importance to our continued success.

One of the significant emerging risks to the business of the Company is the proposed implementation of an Exchange-Traded Platform (ETP) by the CPCB for the trading of EPR certificates. While the introduction of ETP aims at enhancing transparency, traceability and real-time monitoring of certificate transactions, it also introduces several transitional and structural risks.

Among the primary concerns are the anticipated reduction in negotiation flexibility with recyclers, which may constrain the Companys ability to optimize procurement terms effectively. Furthermore, the shift to a market-driven trading environment could lead to lower margins for the Company, influenced by supply-demand dynamics and broader market forces.

It can also result in a potential decline in business volumes as market participants adjust to the new system, subsequently further exerting downward pressure on profit margins. These regulatory changes have the potential to disrupt established business operations and could adversely impact the Companys performance, particularly in the short term.

Although the ETP has the potential to bring long-term efficiencies and standardization to the EPR regime, the transition phase is likely to be complex and could impact business continuity, cost structures, and regulatory risk exposure in the short to medium term.

Despite these anticipated headwinds, the Company is proactively preparing to navigate this transition while reinforcing its long-term strategic vision. We are actively evaluating and redesigning our internal processes to remain agile and compliant under the proposed ETP framework. At the same time, we are committed to minimize disruption to our Brand owners, recyclers and other stakeholders through robust planning and operational readiness.

As part of our long-term strategy and sustainability focus, the Company is also making consistent progress in entering the ESG infrastructure space, which is closely aligned with our sustainability goals and reflects our commitment to contributing actively in the evolving circular economy.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has established and maintains adequate Internal Financial Controls (IFC) that operates effectively throughout the year. Internal Financial Controls refer to the policies and procedures adopted by the Company to ensure orderly and efficient conduct of its business operations, including adherence to Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial statements.

Your Company follows a structured assessment process to ensure the presence of adequate controls. The IFC framework involves comprehensive scoping and planning to identify significant accounts and processes based on materiality thresholds. Risks associated with these processes are then mapped, and appropriate controls are designed or updated accordingly. In cases where gaps are identified, remedial actions are promptly implemented.

All key controls are subject to regular testing to evaluate their effectiveness. Additionally, the Companys auditors independently test these controls and report on whether the Company has adequate IFC system in place and such controls are operating effectively.

Your Companys Internal Control System is robust and well established. These include codified rules and guidelines for all business activities, which are periodically reviewed and updated in response to evolving business needs and regulatory requirements.

The controls are periodically monitored through procedures/ processes set by the management, covering critical and important areas. This proactive approach ensures the IFC framework remains responsive and aligned with both internal operational changes and the external business environment.

GEM GROWTH STRATEGY

Despite facing regulatory complexities, supply chain disruptions and increased competition, GEM successfully expanded its market share in the Plastic EPR segment. This growth was driven by the companys strong network of authorized recyclers and waste processors and strategic association with FMCG companies. By enhancing operational efficiency and compliance capabilities, GEM positioned itself as a preferred partner for brands looking to meet their plastic waste obligations.

In parallel, GEM has also expanded its business into adjacent

sustainability sectors i.e., Battery, E-waste and ESG Infrastructure. Initiatives in these areas have not only diversified GEMs portfolio but also laid a solid foundation for sustainable long-term growth and profitability.

This dual focus—maintaining market leadership in Plastic EPR Segment while building capabilities in emerging sustainability verticals— positions GEM as a resilient and forward-looking player in the circular economy ecosystem, well prepared to navigate near-term challenges while capitalizing on future opportunities.

ACCOUNTING

POLICIES

The accounting policies have been consistently applied by the Company and are consistent with those applied in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis.

The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.

DISCLOSURE OF ACCOUNTING TREATMENT IN PREPARATION OF FINANCIAL STATEMENT

The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

In accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of significant changes i.e., change of 25% of more as compared to the immediately previous financial year in key financial ratios and any change in the Return on Net worth of the Company including explanations thereof are given below:

Sr. No.	Ratios	As on March 31, 2024	As on March 31, 2025	Change	Reason for change
1	Debtors Turnover Ratio	1.46	2.22	52%	The ratio has improved this year on account of higher sales and efficient collection practices.
2	Current Ratio	5.45	5.89	8%	NA
3	Inventory Turnover Ratio	361.38	17.72	-95%	The movement in inventory turnover ratio is on account of increased sales alongwith inventory maintained at year end.
4	Debt Equity Ratio	0	0	NA	NA
5	EBITDA Margin (%)	45%	14%	-70%	The movement in ratio is primarily due to an increase in procurement costs and decline in profit.
6	Net Profit Margin (%)	33%	10%	-69%	The movement in ratio is primarily due to an increase in procurement costs.
7	Return on Net worth	0.45	0.17	-63%	The movement in ratio is mainly on account decrease in EBITDA and increase in capital employed due to fresh issue of shares.

CAUTIONERY

STATEMENT

The statement in this report on Management Discussion and Analysis describes the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties, and other unknown factors could cause actual developments and results to differ materially from our expectations.

For and on behalf of the Board of Directors
GEM Enviro Management Limited
Sd/-	Sd/-
Dinesh Pareekh	Sachin Sharma
DIN:00629464	DIN: 05281526
Chairman and Director	Managing Director
Date: August 26, 2025
Place: Delhi