Goa Carbon Ltd Management Discussions

Global Economy

After enduring several years of negative shocks, the global economy is beginning to stabilise. Global growth is projected to remain steady at 2.6% this year, despite geopolitical tensions and high interest rates, and is expected to increase slightly to 2.7% in 2025-26, supported by modest expansions in trade and investment. Global inflation is expected to decrease more slowly than previously expected, averaging 3.5% this year. Central banks in both advanced economies and emerging market and developing economies (EMDEs) are likely to adopt a cautious approach to easing monetary policies.

More than four years after the upheavals of the COVID-19 pandemic and subsequent global shocks, it is evident that the world-particularly developing economies-has yet to discover a reliable path to prosperity. Global growth is stabilising at an average rate of 2.7% per year through 2026, which is insufficient for progress on key development goals and falls short of the 3.1% average growth rate in the decade before the pandemic.

Without better policies, it would take a stroke of luck for this outlook to improve. Average global interest rates are expected to reach 4% through 2026, double the average of the previous two decades. Progress towards prosperity is achieved when governments implement policies that foster productivity, entrepreneurship, and innovation, particularly within a framework of international cooperation. This model flourished after the fall of the Berlin Wall, facilitating the flow of goods, capital, and ideas across bordeRs. It ushered in an extraordinary era of global prosperity, spanning about 25 years, during which the incomes of the poorest nations, on average, began to catch up with those of the wealthiest, and the world came within striking distance of ending extreme poverty.

Trade policy uncertainty has reached its highest level this century with major elections, when countries that collectively account for at least 30% of GDP went to the polls. Trade measures designed to restrict cross-border commercial flows are proliferating at a historic pace. Between 2013 and 2023, investment growth in developing economies more than halved, on average, compared to the pace of the 2000s.

Against this backdrop, nearly half of the developing economies will see their per capita income gap relative to advanced economies widen over the first half of 2020s-the highest share since the 1990s. Per capita income growth in developing economies is expected to average just 3% through 2026, well below the average of 3.8% in the decade before COVID-19. Many developing economies are expected to see no relative catch-up with advanced economies in the near term.

There are notable bright spots in the global economy, with the U.S. economy showing impressive resilience. Growth has remained robust despite the most aggressive monetary policy tightening in four decades. This dynamism in the U.S. is one reason the global economy has some upside potential over the next two yeaRs.

India and Indonesia have additionally showcased robust performance. Indias economy has been buoyed by strong domestic demand, with a surge in investment and robust services activity. It is projected to grow by an average of 6.7% per fiscal year from 2024 through 2026, making South Asia the worlds fastest-growing region. Indonesia is expected to benefit from a growing middle class and prudent economic policies, expanding by an average of 5.1% over the next two yeaRs.

Indian Economy

In India, growth is estimated to have increased to 8.2% in the FY2023-24 (April 2023 to March 2024), which is 1.9 percentage points higher than previous estimates in January. Stronger- than-expected industrial activity, including manufacturing and construction, alongside resilient services, helped offset a slowdown in agricultural production partly due to monsoons. Growth of domestic demand remained robust, with a surge in investment, particularly in infrastructure, compensating for the moderation in consumption growth as post pandemic pent-up demand eased.

In India, inflation has been kept within the Reserve Banks target range of 2% to 6% since September 2023. India will remain the fastest-growing of the worlds largest economies, although its pace of expansion is expected to moderate. After a high growth rate in FY2023-24, steady growth of 6.7% per year, on average, is projected for the three fiscal years starting in FY2024-25. This moderation is mainly due to a slowdown in investment from a high base. Nevertheless , investment growth is still expected to be stronger than previously expected and remain robust throughout the forecast period, with strong public investment accompanied by private investment. Private consumption growth is likely to benefit from a recovery in agricultural production and declining inflation. Government consumption is projected to grow only slowly, in line with the governments aim of reducing current expenditure relative to GDP.

Industry Overview

Calcined Petroleum Coke (CPC) is a vital raw material in the production of aluminum and steel, with approximately 85% of the global supply dedicated to the aluminum industry. The remaining CPC is used in steelmaking and other allied industries.

Raw Petroleum Coke (RPC), a by-product of oil refining, serves as the precursor to CPC. The process of calcining removes moisture and volatile matter from RPC at high temperatures, producing CPC. This product is essential for manufacturing anodes, which are critical in aluminum smelting. Without CPC, aluminum smelters cannot produce this recyclable, lightweight, and versatile metal.

There are currently no commercially viable substitutes for CPC in aluminum smelting. In the absence of calcination, larger volumes of RPC would likely be burned as a highly polluting fuel for power generation. Beyond aluminum production, CPC also plays a crucial role in producing titanium dioxide, a base pigment for construction and automotive paints, plastics, coatings, cosmetics, toothpaste, and sunscreen. Additionally, CPC is used in manufacturing high-strength steel for infrastructure projects, including bridges and skyscrapeRs.

CPC is produced in two primary grades: anode-grade CPC, which is indispensable for aluminum smelting, and industrial- grade CPC, used in manufacturing titanium dioxide and other industrial applications. Anode-grade CPC accounts for more than 75% of global production, while industrial-grade CPC makes up the remainder. Approximately 0.4 tonnes of CPC are required to produce one tonne of primary aluminum.

China and North America are the leading producers of CPC, contributing over 75% of global production. China, in particular, maintains a significant share, expected to remain around 5560% in the near term. Due to a production-demand gap in the

Middle East, Asian calciners are increasingly focusing on the region to capitalise on surplus capacity.

The aluminum industry is increasingly focused on sustainability, aiming to adopt low-carbon aluminum and develop new technologies and alloys to position itself as the most eco-friendly metal. Aluminum produced using renewable energy sources is anticipated to gain prominence in the coming yeaRs.

It is expected that Indias Aluminium consumption will rise from presently at 4 Million tons to 8 Million tons by FY 2032.

Should be the third largest market in the world due to higher urbanisation and new infra projects announced by the government.

Transport

Focus on lightweighting and increasing share of EVs.

Strong growth anticipated in Pharma, Food & Beverage and other household packaging items.

Includes electricals, consumer durables, machinery equipment, ship building, etc.

Company Overview

Goa Carbon Limited (GCL) is the manufacturing flagship Company of the Dempo Group. Since its establishment in 1967, GCL has been a leading player in the processing and manufacturing of Calcined Petroleum Coke (CPC) in India. The core of its manufacturing process involves converting Green Petroleum Coke (GPC), a by-product of oil refining, into high- value carbon-based CPC by removing moisture and volatile matter at extremely high temperatures. This critical product serves as a vital raw material for various industries, including aluminium, graphite, titanium dioxide, and refractories.

With three state-of-the-art plants located in strategic regions across India - Goa, Paradeep, and Bilaspur-GCL ensures a robust manufacturing and delivery network. All the plants are proud holders of ISO 9001 and ISO 14001 certifications by Bureau Veritas, reflecting the Companys commitment to quality and environmental standards. The Goa Unit has a licensed capacity to manufacture 100,000 MT of CPC, while the Paradeep and Bilaspur Units have capacities of 168,000 MT and 40,000 MT, respectively.

Due to the ongoing restrictions on the import of Raw/Green Petroleum Coke (G/RPC) by calciners and Calcined Petroleum Coke (CPC) by aluminum smelters, as capped by the Honble Supreme Court of India, any additional requirements for both calciners and smelters will need to be met through domestic supplies within India.

On 15th February 2024, in response to the Supreme Courts directions issued on 10th October 2023, the Commission for Air Quality Management (CAQM) in New Delhi issued an order increasing the import quota for pet coke in India. CAQM has reviewed the total domestic demand for Raw Petroleum Coke (RPC) and Calcined Petroleum Coke (CPC) and has raised the import limit for RPC by the Indian calcination industry to 1.9 Million tons per annum starting from the financial year 2024-25, up from the current annual limit of 1.4 Million tons per annum. The import limit for CPC by aluminum smelters remains unchanged at 0.5 Million tons per annum for the financial year 2024-25 but it is set to increase to 0.8 Million tons per annum from the financial year 2025-26 onwards.

GCL has earned an excellent reputation in the domestic market, supplying to prominent companies such as Hindalco Industries, National Aluminium Co. Ltd., Bharat Aluminium Co. Ltd., Vedanta Aluminium, Kerala Minerals and Metals Ltd., Steel Authority of India Ltd., and several steel plants in the SouthWestern region and Odisha. The Companys commitment to quality, reliability, and timely deliveries has also garnered the trust of international clients, including Aluminium Pechiney - France, Aluminium of Greece (AOG), SABIC - Saudi Arabia, Dubai Aluminum (DUBAL), Sohar Aluminium Co. - Sultanate of Oman, and ALUCAM - Cameroon.

With a clear focus on quality, sustainability, and meeting customer demands, GCL continues to pave the way as a leading force in the Calcined Petroleum Coke industry, both domestically and internationally. Their strategic plant locations near ports in Goa and Paradeep further enhance their operational efficiency and reinforce their position in the market.

GCL is committed to process improvement and the development of new, higher-margin products that meet customer needs. We emphasise performance enhancement, sustainability, and the utilisation of alternative raw materials. The Company aims to maximise efficiencies and minimise costs by integrating purchasing, trading, plant operations, logistics management, and finance functions through the execution of cost-reduction initiatives.

During the year under review, the Company launched its first branded product, gcarb+, designed to revolutionise the recarburiser and carbon additive markets. The new brand, gcarb+, underscores the Companys commitment to quality, sustainability, and industry leadership, with the goal of providing Total Carbon Solutions.

gcarb+ stands out for its superior quality, derived from the finest raw materials sourced globally. The product offers guaranteed specifications, including low sulphur content, which significantly reduces emissions and supports environmental sustainability. As a high-performance carbon raiser and additive, gcarb+ meets the specific needs of primary and secondary steel manufacturers as well as the foundry industry. The management is also exploring opportunities to offer need-based value-added services in addition to supplying CPC.

Financial and Operational Review

The following operating and financial review are intended to convey the managements perspective on the operating and financial performance of the Company for the financial year 2023-24. This should be read in conjunction with the financial statements, the schedules and notes thereto and the other information included elsewhere in the Annual Report. The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013, the guidelines issued by the Securities and Exchange Board of India ( SEBI ), in accordance with Indian Accounting Standards (Ind AS) and the other accounting principles generally accepted in India.

Some of the Key Financial Ratios are given below, except for earning per share & Net Profit Margin :

Details of Key Financial Ratios

S.no.	Particulars	As at 31st March 2024	As at 31st March 2023
1	Debtors Turnover Ratio	9.80	14.89
2	Inventory Turnover Ratio	3.07	4.77
3	Current Ratio	1.58	1.26
4	Debt Equity Ratio	1.35	2.27
5	Earning per share (Amount in Rs.)	93.43	88.24
6	Return on Capital Employed	0.24	0.25
7	Net Profit Margin (%)	10.94	7.93

The net cash flow of the Company during the year ended 31.03.2024 is as follows :

Rs. in lacs

S.no.	Particulars	As at 31st March 2024	As at 31st March 2023
(a)	Net cash generated from/(used in) operations	19,608.31	(11,562.48)
(b)	Net cash generated from/(used in) investing activities	9,947.12	(1,971.37)
(c)	Net cash (used in)/generated from financing activities	(13,750.80)	12,665.36
(d)	Net Increase/(Decrease) In Cash And Cash Equivalents ( a + b + c )	15,804.63	(868.49)
(e)	Cash And Cash Equivalents At The Beginning Of The Year	255.17	1,123.66
(f)	Cash And Cash Equivalents At The End Of The Year (d+e)	16,059.80	255.17

The Companys operational performance and financial results are subject to fluctuations from period to period due to several factors (please refer below para on Business Challenges). One significant factor is the delivery schedule of customers, which varies over time and impacts the Companys revenue streams. Additionally, the Company faces challenges in consistently raising selling prices in line with the changing costs of imported raw materials. The FOB/CFR price of these materials also experiences substantial variations, adding further complexity to the Companys pricing strategy. Despite these challenges, the Company remains well-positioned in the market, leveraging its more than 50 years of proven experience to manage sustainable operations effectively.

Outlook

Global growth is projected to decelerate for the third consecutive year, falling from 2.6% last year to 2.4% in 2024. This rate is nearly three-quarters of a percentage point below the average growth rate of the 2010s. Developing economies are projected to grow just 3.9%, more than one percentage point below the average growth rate of the previous decade. After a disappointing performance last year, low-income countries are expected to grow at 5.5%, weaker than previously expected. By the end of 2024, people in about one out of every four developing countries and around 40% of low-income countries will still be poorer than they were on the eve of the COVID pandemic in 2019. In advanced economies , growth is anticipated to slow to 1.2% this year, down from 1.5% in 2023.

GCL is committed to leverage their ability to anticipate and swiftly adapt to market changes. The focus remains on producing high-quality products at the lowest possible cost, continuously innovating production processes, and identifying new applications. The Company will continue optimising its processes to ensure the efficient conversion of raw materials into finished products. Expanding sources of raw materials through research and development, along with logistical innovations, is a key priority. The Company remains dedicated to supplying the materials needed for emerging applications in the new energy economy.

Business Challenges

GCL ensures to work towards addressing the potential threats and challenges and thereby minimising the losses. In addition to the points discussed above, the Company has identified some of the critical business challenges and its mitigation plans that include:

Aluminium & Calcination Industry

The demand for Calcined Petroleum Coke (CPC) is directly linked to the demand of the aluminium and steel industries. Approximately 85% of the global CPC supply is dedicated to the aluminium sector, while the remaining caters to steel and other allied industries. As the aluminium industry shifts towards sustainable alternatives like low carbon aluminium and invests in innovative technologies and alloys, the importance of aluminium produced through renewable energy sources is expected to grow significantly in the near future.

Aluminium, the second most widely used metal globally after steel, has seen remarkable growth, outpacing other metals in its expansion. Its unique properties-such as being lightweight, recyclable, conductive, non-corrosive, and durable-makes it the metal of choice for various applications across multiple manufacturing sectoRs. Often dubbed the metal of the future, aluminiums lightweight nature enhances fuel efficiency, making it ideal for the automotive, defence , and aviation industries. In the construction sector, its durability and resistance to corrosion makes aluminium alloys popular for exterior siding and structural components.

Demand for CPC may fluctuate with changes in the aluminium and steel markets. As aluminium production costs rise in Western regions, there is a noticeable shift towards production in the East. This shift is expected to drive increased demand for CPC, presenting growth opportunities for the Company.

In the highly competitive carbon industry, companies constantly strive to enhance efficiency and product quality to maintain their competitive edge. To sustain profitability and remain competitive, cost optimisation is crucial. By focusing on cost efficiency, the Company can invest in growth while offering competitive pricing to the customeRs.

The Companys prospects are promising, supported by the steady growth of the aluminium industry and its increasing emphasis on sustainability. As a key supplier of CPC to the aluminium and steel sectors, the Company is strategically positioned to capitalise on evolving market dynamics and drive continued business growth.

Supply of Raw materials

It is essential for the Company to source the appropriate raw material at the right price and at the right time, without which the production and quality of the material could be impacted. Off late, the customers have been very particular about the quality parameters of the CPC due to changes in their product portfolio. This puts extra pressure on the procurement side, as refineries sometimes do not provide consistent quality assurances for all parameteRs. Quality assurance can vary significantly depending on the type of crude oil or other inputs used in the refining process. Further, a slight change in the material parameters has a huge impact on the pricing of the RPC. At the same time, the availability of high-quality raw materials continues to be a challenge, especially low sulphur anode-grade RPC for our calcination business. The RPC quality and availability in the Domestic refineries has been deteriorating which has resulted in heavy dependence on imported RPC. This also gives an edge to the import based calciners like us to cater to the specific needs of the aluminium smelteRs.

Raw material price volatility is a significant challenge for the carbon industry. Fluctuations in raw material prices, driven by market dynamics, trade policies, and geopolitical factors, can impact the industrys cost structure. The Company has put forward a team of professionals to evaluate the procurement strategies, monitor production planning and inventory control systems, which improves control over raw materials planning. GCL continues working closely with its suppliers and the aluminium smelters as well to find long-term and sustainable solutions to the above-mentioned issues. Since the Company has been in the industry for more than five decades and has long-term relationships with refineries/suppliers and major smelters, all efforts are being made to procure the quality raw materials from different sources at competitive prices.

Enhance supply chain security

GCL is committed to building a flexible, reliable, and secure supply chain to navigate the complexities of a dynamic global environment. This involves strengthening the capacity to meet customer demands, diversifying our raw material sources, and effectively managing unforeseen disruptions.

Foreign Exchange and Interest Rate

The Company faces potential risks related to foreign exchange and interest rates. A sharp tightening of global financing conditions or a rapid appreciation of the U.S. Dollar against the Indian Rupee could exert significant downward pressure on the Company. To mitigate these risks, the Company has implemented currency hedging strategies to protect against adverse exchange rate movements. Additionally, regular scenario planning and building reserves have enhanced the Companys financial resilience in addressing these challenges.

Environment & Regulations

Aluminium is the second most used metal in the world, after steel. Approximately 0.4 tonnes of CPC is required in the production of every tonne of aluminium. Any regulations that impact either import or production of CPC will directly impact the aluminium industry in India. Thus, it is a critical and strategic part of the economic growth of India and occupies a due position in the global economy.

The Environmental Protection Agency (EPA) does not classify RPC as hazardous. EPA has surveyed the potential human health and environmental impacts of RPC through its High Production Volume (HPV) challenge programme and found the material to be highly stable and non-reactive at ambient environmental conditions. Most toxicity analyses of coke indicate that it has a low potential to cause adverse effects on aquatic or terrestrial environments, as well as a low health hazard potential for humans. No carcinogenic, reproductive, or developmental effects have been observed.

Use of Pet Coke & Regulations

The Pet Coke industry is increasingly driven by stringent environmental regulations related to emissions and pollution control, which require technological advancements and investments in cleaner production methods.

In light of environmental concerns, the Honble Supreme Court of India had initially banned the import of Raw Petroleum Coke (RPC) in July 2018. However, this ban was later lifted, allowing Indian calciners to import up to 1.4 Million tons per year, since it is used as a feedstock rather than as fuel.

In 2024, following a Supreme Court directive, the Commission for Air Quality Management (CAQM) in New Delhi increased the import quota for pet coke. The limit for RPC imports was raised to 1.9 Million tons per annum for the financial year 2024-25, up from 1.4 Million tons. The import limit for Calcined Petroleum Coke (CPC) remains at 0.5 Million tons per annum for 2024-25 but will increase to 0.8 Million tons per annum starting in 2025-26.

Additionally, the Honble Supreme Court, responding to industry representation, ruled that Flue Gas Desulfurization (FGD) is not a mandatory requirement and directed the Central Pollution Control Board (CPCB) and the Ministry of Environment, Forest and Climate Change (MOEF) to finalis e SO2 standards for the calcination industry. Consequently, the MOEF has issued a notification establishing emission norms for Particulate Matter (PM) and SO2, that will be effective from June 2025.

In response to these regulatory changes, the Company has proactively initiated measures to ensure full compliance with the newly established emission standards within the stipulated two-year timeframe. By doing so, the Company aims to meet environmental requirements and uphold its commitment to sustainable practices in the production of Calcined Petroleum Coke.

Sustainability and carbon footprint

Rising global concerns about climate change and sustainability have intensified the focus on reducing carbon footprints. The calcination industry is also required to develop environmentally friendly products and processes.

In light of recent regulatory developments in India, we believe that the Company is well-positioned to leverage its environmentally best-in-class production facilities to drive cost efficiencies while setting new standards for sustainable CPC production. We remain committed to prioritising cost efficiency and operational excellence in all aspects of the business.

Strengthen ESG commitment

Integrating sustainability into business operations is not only a responsible approach but also an increasingly important expectation from the customers, shareholders, and the broader community.

Goa Carbon Ltd (GCL) has been proactive in its commitment to Environmental, Social, and Governance (ESG) principles, as demonstrated by its partnership with BITS Pilani, K K Birla Goa Campus. In December 2021, GCL initiated a third-party study to measure its carbon footprint and monitor the emission patterns of Suspended Particulate Matter (SPM) from its Goa plant, ensuring compliance with prescribed environmental norms. The collaboration has since evolved into a formal memorandum of agreement, focusing on long-term research and development initiatives. BITS Pilani, leveraging its expertise, is developing a computational fluid dynamics (CFD) model to optimize plant operations, ensuring efficiency and adherence to environmental standards. This strategic partnership highlights GCLs dedication to operational excellence and sustainable practices.

Trade Wars

Escalating trade tensions pose a significant risk to the global economic outlook. If all proposed tariffs are implemented, a substantial portion of global trade flows could be disrupted, potentially hampering economic growth in the affected economies and causing negative ripple effects worldwide. While some countries might see short-term benefits from trade diversion, a rise in trade protectionism could have detrimental long-term consequences.

Increasing trade barriers would discourage international investments, disrupt global value chains, and lead to higher prices and reduced productivity across industries. The interdependent nature of the global economy amplifies the adverse impacts of trade wars, threatening the stability and prosperity of nations around the world.

To mitigate these risks, cooperation and dialogue among nations are essential. Pursuing more open and inclusive trade policies, fostering multilateral agreements, and resolving disputes through diplomatic means are critical steps to preserving the efficiency and sustainability of global trade, thereby promoting economic growth and stability for all.

Working Capital Requirements

The Company primarily relies on non-fund-based credit facilities such as Letters of Credit (sight and usance) for procurement of its raw material from overseas markets . In case of sight letter of credit, once the shipment is completed, the Letter of Credit gets converted into Buyers Credit Facility from overseas banks at a competitive interest rate against the Trade Credit Bank Guarantee (TCBG) or Standby Letter of Credit (SBLC) issued by Indian Banks. During the year, for meeting working capital requirements, the Company has tied up additional working capital limits and also availed short term loans.

The Company actively explored alternative financing channels to meet its working capital requirements. Efforts have been made to negotiate commercial contracts in a way that minimises the impact of finance costs. Additionally, the Company also imported raw material based on the clean credits provided by its supplieRs.

By seeking newer financing avenues and optimising contractual terms, the Company strives to reduce its financing cost and improve overall working capital management. This proactive approach demonstrates the Companys commitment to financial prudence and securing the best possible funding arrangements to support its operations effectively.

Human Resources

Workforce Well-Being and Development

At the heart of GCLs journey towards a sustainable future is its dedicated workforce. The Companys peoples policies prioritise a safe and supportive work environment, fostering employee growth and aligning with the goals of becoming greener, stronger, and smarter. The HR Management Framework supports this through strategic focus on organisational design, productivity, talent management, and career growth. We emphasise culture, communication, and engagement, encouraging employees to raise concerns without fear of retaliation.

We invest in continuous skill development to ensure that employees stay updated with technical advancements, which leads to optimal capacity utilisation and cost-effectiveness. As of 31st March 2024, GCLs workforce includes 182 permanent employees, blending experienced professionals and skilled workmen who are essential to growth and success.

GCLs commitment to employee well-being and development drives it towards greater achievement and sustainability, guided by the shared vision of a brighter future.

Health and safety

The Companys safety culture emphasises a top-down decision-making approach, with employee feedback and involvement playing a crucial role. The Company ensures increased management engagement through proactive inspections, improved communication before and after incidents or injuries, and enhanced tracking of Safety, Health, and Environmental (SHE) statistics. Additionally, the company focuses on heightened preventative maintenance and strictly avoids situations where employees perform non-routine or unfamiliar tasks. A strong emphasis is placed on employee health and safety, prioritising their well-being in all aspects of operations.

Training and development

At Goa Carbon, the commitment to employee growth goes beyond the basics. Training initiatives are designed to cultivate a well-rounded workforce, emphasising safety and essential skills such as communication, team building, presentation, and negotiation. The Company is dedicated to providing a holistic development experience that prepares employees for success in every aspect of their professional journey.

In todays digital landscape, GCL recognises the critical importance of cybersecurity. To address this, the Company offers comprehensive training to all employees, ensuring they are well-equipped to navigate the ever-evolving cybersecurity challenges.

Leadership and technical skill enhancement

The Company invests in developing its employees leadership and technical skills through tailored programmes , mentorship, and specialised training. This approach empowers the team to drive innovation and contribute significantly to the companys ongoing success.

Employee engagement and satisfaction

GCL is committed to creating a work environment that values and supports the team, ensuring that employees feel appreciated, motivated, and fulfilled. Initiatives are designed to enhance employee engagement and satisfaction, fostering a positive and productive workplace.

Diversity and inclusion

Goa Carbon is dedicated to cultivating a diverse and inclusive workplace where every individual, regardless of background, is valued, respected, and given equal opportunities. We believe that embracing diversity and inclusion enriches the organisation, driving innovation, collaboration, and sustainable growth.

Internal Control System

The Company upholds a robust internal control system designed to match the scale of its business operations and the specific demands of its industry. Internal auditors are integral to ensuring compliance, efficiency, and accuracy through regular assessments and adherence to applicable laws and policies.

The Company conducts regular internal audits to comprehensively evaluate its operations, with detailed reports submitted promptly to the Audit Committee during quarterly meetings. This commitment to rigorous internal controls and audits underscores the Companys dedication to transparency, operational efficiency, and maintaining high compliance standards throughout the organisation.

Statutory Compliance

During the quarterly Board meetings, the Executive Director presents a comprehensive declaration to the Board regarding the Companys compliance with all relevant statutes, enactments, and guidelines. This declaration is prepared after receiving confirmation from all operating plants and department heads, ensuring that the Companys operations align with legal and regulatory requirements.

Additionally, the Company Secretary, who also serves as the Compliance Officer, reports to the Board on compliance with the Companies Act, 2013, and SEBI (Securities and Exchange Board of India) Regulations. The Company Secretary plays a key role in overseeing and reporting adherence to these legal frameworks.

These declarations and the work done behind it affirm the Companys commitment to compliance, integrity, and ethical business practices. By emphasising these efforts in each quarterly meeting, the Company reaffirms its dedication to responsible corporate conduct and adherence to applicable laws and regulations.

Cyber Security

The Company has implemented adequate technologies, processes, protocols and practices to safeguard networks, computers, programmes, and data from external attacks, damage, and unauthorised access. Regular training programmes are conducted to educate employees on the secure use of the Companys networks, digital devices, and data, thereby reducing the risk of data breaches and unauthorised access. The Information Technology Department continually gathers feedback from employees to update and enhance cybersecurity protocols. Additionally, the Audit Committee and the Board of Directors periodically review cybersecurity risks and mitigation measures to ensure ongoing protection.

Cautionary Statement

Some of the statements given in the above management discussion and analysis about the Companys projections, objectives, estimates, expectations and predictions may be forward looking statements within the meaning of applicable securities laws and regulations. The actual results may differ materially from those expressed or implied statements. Important factors that could make a difference to the companys operations include inter alia domestic and global economic conditions affecting demand and supply and price conditions in the industry, changes in Government laws, tax regime and other statutory changes, environmental laws and labour relations. The Company undertakes no obligation to periodically revise any such forward looking statement to reflect future events or circumstances.