India Pesticides Ltd Management Discussions

Economic overview Global economy¹

The global economy demonstrated significant resilience in Calendar Year (CY) 2024, maintaining a 3.3% growth rate, despite ongoing geopolitical conflicts, trade-related uncertainties and changes in monetary policies.

The global inflation declined from an annual average of 6.7% in 2023 to 5.7 in CY 2024. This reduction can be mainly attributed to a stringent monetary policy adopted by Central Banks and an increase in energy supply, both of which played a key role in stabilising prices and advance economic growth. The ability to sustain growth amid these challenges highlights the remarkable strength of economies worldwide.

Emerging markets and developing economies surpassed advanced economies in terms of growth in CY 2024. These economies achieved

a growth rate of 4.2%, well ahead of the 1.7% growth seen in advanced economies. This strong performance was driven by robust domestic demand, higher foreign investments and continued growth in sectors like manufacturing and technology.

Outlook

The global economic growth is forecasted to reach 2.8% in CY 2025 and 3.0% in CY 2026, driven by strengthening consumer demand, rising capital expenditure in Asia and improved fiscal measures. Advanced economies are expected to see modest expansion, with the United States growing at a slower pace of 1.8% and the Euro area likely to experience further deceleration. Emerging markets, leveraging abundant natural resources, will play an increasingly important role in supporting global output. The steady decline in global inflation projected to fall to 4.2% in CY 2025 and 3.5% in CY 2026 has prompted central banks to adopt more expansionary policies, creating conditions supportive of long-term growth.

Indian economy²

Indias economy continues to be a key driver of global growth, with GDP growth of 6.5% in FY 2024-25.³ This growth is fuelled by strong macroeconomic fundamentals, increasing foreign investments and supportive policies undertaken by the Government of India to boost consumption and investment.

The growth of Indias agricultural sector remained steady during the fiscal year (FY2024-25). This performance can be attributed to healthy Kharif production season, above-average monsoons and adequate water levels in reservoirs. These factors have supported agricultural output, particularly in key crops such as rice, maize and oilseeds, which will help ease the food inflation pressure.

On the other hand, the manufacturing sector, supported by Production Linked Incentive (PLI) schemes, is making a commendable contribution to employment creation and industrial output. Additionally, rapid urbanisation and the growing middle-class population are driving consumption, while investments in green energy are supporting sustainable development goals. With a stable economic growth trajectory, India is committed to further strengthen its standing in the global economy.

At the same time, rural demand demonstrated impressive resilience during the reporting year (FY2024-25), driven by a strong agricultural sector and effective government welfare programmes. The services sector also continued to be a driving force of economic growth, supported by improvements in financial inclusion and rapid digital transformation.

Outlook

India is set to achieve a strong growth rate exceeding 6.5% in FY 2025-2026, driven by strong domestic fundamentals and supportive policy measures. The governments continued investments in both rural and urban infrastructure are expected to generate employment and stimulate economic activity across multiple sectors. Initiatives aimed at strengthening farm incomes and boosting consumption through both Budgetary allocations and non-Budgetary programs are further reinforcing demand.

Also, initaitives such as the income tax exemption for salaried individuals earning up to Rs12.75 lakhs and the Reserve Bank of Indias 50 basis point reduction in the policy repo rate to 5.50%, are anticipated to enhance disposable incomes, spur spending and accelerate credit growth.⁴ While Indias emergence as the worlds fourth-largest economy highlights its growing global influence, near-term risks persist from potential tariffs and uncertainties in international trade policy, which could temporarily impact growth momentum. India continues to outperform its global peers and stands out as a resilient and dynamic economy, well-positioned for continued progress

Industry overview Global agrochemical industry

The global agrochemicals market size was calculated at USD 235.86 billion in 2024 and is predicted to reach around USD 313.89 billion by 2034.⁵ This growth is driven by the increasing global population, which necessitates higher agricultural output from existing land.

Agrochemicals, such as fertilisers and pesticides, are essential for improving crop yield and quality, helping farmers meet the growing food demand. The Asia-Pacific region dominates the market, while North America is anticipated to experience the fastest growth due to shrinking agricultural land and rising demand.

Agrochemical market size in USD Billion

Indian agrochemical industry⁶

The Indian agrochemical industry continues to demonstrate robust growth, with the market valued at approximately USD 15.5 billion, fuelled by strong demand across fertilisers, pesticides and plant growth regulators. This momentum is driven by the modernisation of agricultural practices, including the adoption of precision farming and advanced formulations that enhance productivity and yield. The pesticides segment has grown substantially and is projected to almost double in value over the next several years, reaching a significantly higher level by the end of the forecast period.

Import Substitution and Backward Integration

There is a growing emphasis on import substitution within the agrochemical sector. The Indian governments restrictions on unregistered pesticide imports are designed to foster encourage domestic production under the "Make in India" initiative. This strategic move not only aims to reduce dependency on foreign suppliers but also encourages the establishment of new manufacturing facilities within India. As companies invest in backward integration, they will be better positioned to meet domestic demand while enhancing their competitiveness globally.

Looking ahead, the overall agrochemical market is projected to expand at a CAGR of 4.28%, reaching approximately USD 23.3 billion by 2033. Through sustained government support, rising awareness around crop protection and increasing adoption of innovative and sustainable solutions such as bio-pesticides and precision application technologies. These factors collectively position the industry for steady, long-term expansion as it plays a pivotal role in securing Indias food security and supporting higher farm incomes.

Export Opportunities Driven by Global Supply Chain Diversification

The ongoing global trend of diversifying supply chains—often referred to as the "China+1" strategy presents significant export opportunities for Indian agrochemical firms. As countries seek alternatives to Chinese suppliers, Indias low-cost manufacturing capabilities and established agricultural sector make it an attractive option.

Indian API sector⁸

Robust Domestic Demand and Favourable Weather Conditions

The agrochemical industry is expected to benefit from a rebound in domestic demand, particularly due to predictions of an above-normal monsoon season in FY25. This improvement in weather conditions is anticipated to enhance soil moisture and crop yields, thereby increasing the need for agrochemicals. The Indian Meteorological Departments forecasts suggest a significant recovery from the adverse effects experienced in FY24, which will likely stimulate demand for crop protection products.

The Active Pharmaceutical Ingredients (API) sector is poised for significant growth in the coming years. The market size was USD 16.86 billion in 2024 and is projected to reach $38.13 billion by 2034, exhibiting a compound annual growth rate (CAGR) of approximately 8.5% during the forecast period. This expansion is driven by the increasing prevalence of chronic diseases and a growing emphasis on generic medications. The Indian governments initiatives, such as the Production Linked Incentive (PLI) scheme and the establishment of bulk drug parks, aim to bolster domestic API production and reduce dependency on imports.

India is a major player in the global API market, ranking among the top three producers worldwide and manufacturing a vast range of APIS. However, the sector faces various challenges, such as the storage and transportation of temperature-sensitive drugs and competition from international suppliers. To support the industry, the government has introduced various initiatives to promote domestic production and attract investment. These efforts are expected to enhance Indias selfreliance in pharmaceutical production and strengthen its position in the global market.

Government Initiatives and Support

The Indian government has introduced various initiatives, including the Production Linked Incentive (PLI) scheme aimed at boosting domestic manufacturing and reducing reliance on imports. This policy offers incentives ranging from 10% to 20% for production, thereby encouraging companies to enhance their manufacturing capacities and innovate.

Government initiatives

The Indian government is encouraging domestic API production through initiatives aimed at improving self-reliance and affordability. Programmes such as the Production Linked Incentive (PLI) Scheme, Bulk Drug Parks and Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP) enhance local manufacturing capabilities, reduce dependence on imports and ensure cost-effective access to essential medicines.

Indian API market

India takes pride in being the third largest market for API and its share in the global API industry is 8.3%.⁹ In FY 2024-25, the Active Pharmaceutical Ingredients (API) market in India has grown by 9%. This industry growth can be attributed to factors such as cost-effective labour, advanced research facilities, robust testing abilities and favourable regulatory audits. Furthermore, the manufacturing cost of APIs in India is 30-35% lower than that of the United States (US)¹⁰.

Additionally, growing geriatric population and increasing chronic ailment cases are expected to aid in scaling the API industry in India. The market is projected to grow at a CAGR of 8.3% between 2023 and 2028¹¹. This is expected to happen owing to the PLI schemes introduced by the Government of India to reduce reliance on China for importing API.

Government initiatives

National Policy on Research and Development and Innovation in Pharma-MedTech Sector

In FY2024, the Government of India launched the National Policy on Research and Development and Innovation in the Pharma-MedTech Sector and the Scheme for the promotion of Research and Innovation in the Pharma-MedTech Sector (PRIP). The National Policy on Research and Development and Innovation is responsible for fostering international cooperation and coordinating and promoting research in pharmaceutical areas.

Company overview

IPL serves both domestic and international clients, with a network of more than 26 branches across the country. The Companys strategically located manufacturing units streamline operations and reduce transportation costs. India Pesticides Limited (IPL), established in 1984, is as one of Indias fastest-growing chemical manufacturers, specialising in agrochemical technicals, formulations and active pharmaceutical ingredients (APIs). The company has adopted backward integration, sourcing raw materials locally to enhance production efficiency and reduce costs. Its robust R&D team, composed of experienced professionals, focuses on developing cost-effective and environmentally sustainable solutions, ensuring that innovation and quality remain at the forefront of IPLs operations.

The Company has been in the forefront of innovation and has developed a diversified product portfolio that has sustained IPLs growth over the years. Along with innovative products, IPL also ensures that the products quality is not compromised under any circumstance. In FY

2024-25, India Pesticide Limited has received Technical Equivalence certification in the European Union for its newly commissioned herbicide technical product.

The Company serves both domestic and international markets, operating through a network of more than 26 branches across India and exporting to over 35 countries. Its strategically located manufacturing units streamline operations and minimise transportation costs. The companys business development teams in Europe and the United States are actively working to expand IPLs distribution network in global markets, further strengthening its international footprint.

I. Shalvis Specialities Limited (“SSL”)

SSL is a wholly owned subsidiary Company of IPL and incorporated on 18^th January, 2021 as a public company limited by shares under the Companies Act, 2013 having CIN: U24290UP2021PLC140490 and registered Office at 35-A, Civil Lines, Bareilly 243001 and its Corporate Office at Water Works Road, Swarup Cold Storage, Aishbagh, Lucknow.

Formulation Plant of SSL is operational and Erection of Multiple Purpose Technical Plant is in progress. SSL has received 11 Registrations under 9(4) & 18 Registrations under 9(3) Category from CIB (Central Insecticides Board) for Technical Products. Commercial Production of Technical plants will be started in Q2 FY 2025-26.

II. Amona Specialities Private Limited (“ASPL”)

ASPL was incorporated on January 04, 2024 as a Private Limited Company, Limited by shares under the Companies Act, 2013. Its CIN is U20210UP2024PTC195286. It has its Registered Office situated at 7-Way Lane, Corporation no. 27/12 Hazratganj,

Gokhley Marg, Luc know,226001 and its Corporate Office at Water Works Road, Swarup Cold Storage, Aishbagh, Lucknow, 226004. However, the Company has decided to dispose off/ disinvestment in the Amona Specialities Private Limited.

The Company has no Joint Venture or Associate Company.

Credit Rating

The Company has reaffirmed Long Term / Short Term Bank Facilities CARE A+ and Short-Term Bank Facilities CARE A1+ from Care ratings. This rating can be attributed to the Companys efficient operations, diversified product offerings in technical business, strong financial risk profile and robust capex plan.

Operational overview

The Company reported revenue of Rs 829 crores in FY 2025.

Technical & API

In FY 2025, the combined revenue from Technical Products and Active Pharmaceutical Ingredients (APLs) accounted for 66% of the Companys total revenue, generating a total of 549 crores.

Key Agrochemical Technical produced by IPL include

Key Technicals	Category	Application
Prosulfocarb		Used for wheat and potatoes
Pretilachlor		Widely used for protecting rice crop
Flufenacet		Widely used for protecting maize, wheat, potatoes & soyabeans
Cymoxanil		Controls downy mildew disease in grapes, potatoes, vegetables and several other crops
Captan		Used for fruits, vegetables and ornamental plants
Folpet		Controls fungal growth at vineyards, cereals, crops and biocide in paints
Ziram		Used to protect apples, almonds, peaches, pears etc
Dodine		Apples & Pears
Thiophanate methyl	?	Apples, Pears, Stone Fruits & Vegetables
Diafenthiuron	111	Used on Cotton plants
Pyriproxyfen	111	Used in field crops
Etridiazole	?	Green House
PEDA		Used For Pretilachlor

APIs are the elements used to provide the desired effect in a finished pharmaceutical product. The Companys API products are used for manufacturing final drugs to treat dermatological ailments.

Formulation Business

The Formulation business of the Company generated revenue of Rs 280 cr. in FY 2024-25.

Few Branded Formulations	Category
Grip, Pendizet, Trisol, Clogold, Midash, Safer, Elimminator, Penda, Aatish
Dollar, Vardhan, Vecto, Trim, Sodhit, Captax-50, Natraj, Sanjeevani, Talwar
Carbo, Amida, Frem, Byprten, Immidiator, Tridev, Difen, Frame, Soldier, Crotax	111
Star, Talvar, Contanol, Guru, Shakti, Chakra, Namaskar
Carlos 23, Carlos 40, Contanal EC, Contanal EW, Chakra, Guru, Guru SP

The Company manufacture and supply a wide range of formulations, including insecticides, Fungicides, Herbicide, growth regulators and acaricides. Through their distribution partners, they also offer a ready to use product range that delivers branded solutions to customers.

International Business

IPL is one of the fastest-growing Indian chemical manufacturers. The Company has successfully fortified its position in the market by tailoring its offerings and ensuring uncompromised quality.

Financial overview

Standalone performance for the year ended 31^st March, 2025

Particulars	FY 2024-25 (Rs in Crore)	FY 2023-24 (Rs in Crore)	Change (%)
Revenue from operations (Net)	829	681	21.73
Other income	15	15	-
Cost of materials consumed	474	378	25.40
Power and fuel	35	30	16.67
Freight, handling and packing	20	13	53.85
Employee benefits expenses	53	42	26.19
Depreciation and amortisation expenses	18	15	20
Finance cost	4	4	-
EBITDA	134	102	31.37
Profit after tax	84	61	37.70

Income

The total income of the Company was Rs 696.07 crores in FY2023- 24 and Rs 844.02 crores in FY 2024-25. This comprises revenue from operations and other income. Revenue from operations is Rs 680.62 crores in FY 2023-24 and Rs 829.02 crores in FY 2024- 25.

Expenses

The Companys total expenses increased by 19% from Rs 612 crores in FY 2023-24 to Rs 731 crores in FY 2024-25. Major expense items comprise the cost of material consumed, change in inventories, power & fuel, employee benefits, finance costs, depreciation, and amortization expenses. The cost of material consumed (including stock adjustments and purchases) increased by 25% from Rs 378 crores in FY 2023-24 to Rs 474 crores in FY 2024-25, due to higher sales of the technical & formulation business. Power and fuel expenses increased by 17% from

30 crores in FY 2023-24 to Rs 35 crores in FY 2024-25, mainly due to the higher production. Employee benefit expenses increased 26% from Rs 42 crores in FY 2023-24 to Rs 53 crores in FY 2024-25. This increase was on account of regular increments and increase in number of employees to support future growth. Depreciation and amortization expenses increased by 20% from H15 crores in FY 2023-24 to Rs 18 crores in FY 2024-25. This is on account of the commercialization of projects in line with the capacity expansion strategy.

Profitability

EBITDA margins increased from 14.6% in FY 2023-24 to 15.9% in the current year under review. The increase in EBITDA margin was due to higher operating leverage. Profit After Tax (PAT) increased from Rs 61 crores in FY 2023-24 to Rs 84 crores in FY 2024-25. PAT was reflective of the EBITDA trend.

Analysis of the Standalone Balance Sheet

Non-Current Assets

Particulars	FY 2024-25 (Rs in Crore)	FY 2023-24 (Rs in Crore)	Change (%)
Property, plant and equipment	297	261	13.79
Right-of-use assets	15	6	150
Capital work-in-progress	36	41	(12.19)
Other intangible assets	0.15	0.20	(25.00)
Financial assets:
I. Investments	59	41	43.90
II. Loans	0	5	(100)
III. Other Financial Assets	9	33	(72.73)
Other non-current assets	2	8	(75)
Total non-current assets	418	395	5.82

Note: Figures are rounded off to the nearest crore

Working Capital

Particulars	FY 2024-25 (Rs in Crore)	FY 2023-24 (Rs in Crore)	Change (%)
Current assets
Inventories	242	208	16.35
Financial assets
I. Trade receivables	345	239	44.35
II. Cash and cash equivalent	32	7	357.14
III. Other balances with banks	68	102	(33.33)
IV. Other financial assets	1	4	(75)
Other current assets	35	37	(5.41)
Current tax assets (Net)	0	4	(100)
Total Current assets	723	601	20.30
Current liabilities
Financial liabilities
I. Borrowings	49	16	206.25
II. Lease liabilities	2	1	100
III. Trade payables	119	93	27.96
IV. Other financial liabilities	24	23	4.35
Other current liabilities	14	10	40
Provisions	6	6	-
Current tax liabilities	1	0	-
Total current liabilities	215	149	44.30
Working Capital (Net Current Assets)	508	452	12.39

Note: Figures are rounded off to the nearest crore

Inventory: Inventory increased by 16.35% from Rs 208 crores as on March 31, 2024 to Rs 242 crores as on March 31, 2025. The inventory turnover ratio was at 3.69 vis-a-vis 3.15 in the previous year. Higher inventory level was an account of the build-up of some raw-materials and finished goods to meet the next seasons demand as a part of the strategic procurement decision.

Trade receivables: Increased by 44.35% compared to the previous year. An increase in debtors was mainly on account of higher turnover and increase in B2C Sales & domestic Sales. Credit period in domestic market is higher as compared to Export market.

Trade payables: Creditors increased from by 27.96% during the year owing to higher level of purchase.

Net cash flows: Net Cash flow from operating activities were Rs 5.97 crores against Rs 119 crores for the mentioned period, respectively due to high inventory and increased levels of receivables.

Capital Employed

Particulars	FY 2024-25 (Rs in Crore)	FY 2023-24 (Rs in Crore)	Change (%)
Equity
Equity share capital	11.52	11.52	-
Other equity	891.92	816.26	9.27
Total equity (A)	903.44	827.78	9.14
Financial liabilities
I. Non-current Borrowings	2.33	2.02	15.35
II. Non-Current Lease Liabilities	2.13	0.80	166.25
III. Current Borrowings	49.29	16.38	200.92
Total Debt (B)	53.75	19.20	179.95
Deferred Tax Liabilities (Net) (C)	16.72	15.11	10.66
Total Capital Employed (A+B+C)	973.91	862.09	12.97

Key Ratios

As per the SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations 2018 states that the Company is required to provide details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanation therefore.

Key financial ratios of the Company are as below:

Particulars	FY 2024-25	FY 2023-24	%Variance	Reason for Variance greater than 25%
Current Ratio	3.36	4.05	(16.99%)	NA
Debt - Equity Ratio	0.06	0.02	259%	Variance due to increased availment of working capital limit.
Debt Service Coverage Ratio	21.79	13.64	59.75%	Variance on account of higher net profit
Return on Equity (ROE)	9.75	7.63%	27.68%	Variance on account of higher net profit
Inventory Turnover Ratio	3.69	3.15	17.18%	NA
Trade receivables turnover ratio	2.84	2.72	4.53%	NA
Trade payables turnover ratio	4.66	4.06	14.77%	NA
Net profit ratio	10.18	8.99	13.18%	NA
Net capital turnover ratio (in times)	1.63	1.50	8.61%	NA
Return on capital employed (%)	12.14%	10.17%	19.41%	NA
Return on investment (ROI)	9.34%	7.39%	26.31%	Variance on account of higher net profit

Human Resources

IPL recognises that its growth and success are driven by the passion and expertise of its people. As a result, the Company takes various steps to attract and retain talented individuals and create an environment where they can thrive. It supports continuous learning and career advancement, offering diverse opportunities for employees to develop their skills, innovate and reach their full potential.The Company places strong emphasis on developing its human capital to support growth. it focused on employee well-being, digital technology, process optimisation and promoting a “Zero Incident Culture.” The Company remains focused on attracting, developing and retaining talent through skill development programs, comprehensive training and a supportive work environment. These efforts ensure that employees are equipped to drive product innovation, maintain high standards of quality and compliance and contribute meaningfully to the Companys longterm objectives.

Risk management

The Company faces various potential risks that could disrupt its operations. IPL implements strong risk management practices to mitigate these risks and ensure smooth functioning. Their extensive risk management framework is designed to identify, evaluate, mitigate, and monitor both internal and external threats. After recognizing the risk factors, the Company conducts a detailed Probability & Impact Analysis to ensure that mitigation strategies are applied promptly to address the risks it encounters.The companys Risk Management policy is designed to ensure a strong and effective approach to identifying, assessing, mitigating and monitoring risks across all levels of the organisation. By adopting a comprehensive framework at both the Committee of Directors and Executive levels, the Company systematically evaluates the adequacy of its risk management systems to maintain overall efficiency and functionality. This proactive approach helps prevent the oversight of potential or emerging risks, mitigates the dangers of incomplete assessments or outdated risk registers and ensures compliance with regulatory requirements and industry best practices. Through continuous monitoring and regular reviews, the framework aims to safeguard the organisation against unexpected threats and disruptions, supporting informed decisionmaking and sustained operational resilience.

External risk factors	IPL comprehends	Mitigating measures
Economic Environment and Market conditions f5D	Risk from the economic environment includes abrupt shifts in market conditions or a general economic decline, potentially resulting in unforeseen revenue losses.	The Company engage with their customers, suppliers and agents to coordinate risk response efforts, gather their feedback and assess it internally. Based on the evaluation, implement necessary adjustments to the product range, inventory and working capital. Additionally, explore alternative product options and ensure optimal resource utilisation.
Political Environment &fit ?aaa	Political risks refer to the potential liabilities arising from financial or personnel losses due to poor political decisions or conflicts. In addition to market-driven factors, businesses are significantly impacted by government policies and political actions.	Personnel in the relevant departments stay informed about political developments, both in India and in countries involved in IPL deals. Any operational requirements arising from these changes are promptly updated within the process.

External risk factors IPL comprehends Mitigating measures

Competition	The Company faces the risk of reduced revenue and shrinking margins due to competitive actions in pricing, product offerings, promotions or distribution strategies.	Diversifying the product portfolio to avoid reliance on a single product, with selections made based on clearly defined internal criteria by IPLs Business Strategy Team. Deliberately seeking product registrations in regulated markets and improving process efficiency to stay competitive.
Revenue Concentration and liquidity aspects fioDD	If a large customer represents more than 10% of revenues, the business is exposed to customer concentration risk. The two key elements of liquidity risk are short-term cash flow risk and long-term funding risk.	The Company focuses on maintaining purchase agreements with customers contributing over 10% of revenue. Internal strategies are developed to guide decisions on new products and customers, while diversifying the customer portfolio helps reduce the impact on overall revenue if high-margin customers are lost.
	If a large customer represents more than 10% of revenues, the business is exposed to customer concentration risk. The two key elements of liquidity risk are short-term cash flow risk and long-term funding risk
Inflation and Cost structure ?@ @	The impact of inflation and the tendency for costs to rise. The inherent long duration of projects exposes the business to significant risks of cost escalations.	A defined cost structure is included in the agreement, with annual and half-yearly reviews to account for inflation. Projects are structured in phases to manage cost impacts effectively. Timely commissioning of plants is prioritised and a financial expert is involved in project meetings to monitor financial factors, ensuring adjustments are made for inflation and cost changes.
	Influence of inflation and tendency of costs going higher.
	The in-built nature of longer timeframe in projects exposes the business to high risks of resultant increase in costs
Technology Obsolescence	The Company risks reduced profitability and competitiveness if its processes or technologies become outdated.	India Pesticides Limited regularly conducts internal and customer discussions to evaluate market trends. both internally and with customers in the market. It makes necessary investments in key areas to stay aligned with the latest technological developments.
Legal	The Company faces the risk of legal action due to potential deviations or negligence in adhering to applicable laws and regulations.	Regulatory risks, Intellectual Property Rights (Patents), Compliance risk, Contractual risk, non-contractual obligation, Dispute risk, Reputational risk are taken into account during every decision-making discussion.
Fluctuations in Foreign Exchange -V	Fluctuations in exchange rates pose a risk to the Companys profitability as it conducts business in international markets.	India Pesticides Limited relies on natural hedge to a reasonable extent. However, any risk beyond this is assessed through the net open position. The company also conducts quarterly monitoring to ensure compliance with its Foreign Exchange Policy.

All identified Internal Business Risk Factors are studied and reviewed quarterly/half yearly and annually by the Risk Management Committee of Executives. Measures a evolved are shared with Risk Management Committee for approval and implementation.

Way forward

The Company will focus on expanding its manufacturing capacity, advancing product development through strong in-house R&D and strengthening its presence in both domestic and global markets. Planned investments and capacity upgrades at key sites will enable the launch of new products and enhance backward integration, reducing reliance on imports. By emphasising innovation, sustainability and customer-focused solutions, the Company is well positioned to seize new growth opportunities and deliver lasting value to its stakeholders in the evolving agrochemical sector.

Internal financial controls and their adequacy

The Company maintains Internal Financial Control Systems that are appropriate for the nature of its business, scale and complexity of

operations. Internal controls are sufficient for preparing and presenting financial statements.

To ensure thoroughness and objectivity, the Internal Audit is carried out by an external independent agency. This firm provides the Audit Committee with findings and reports regularly. Internal audits provide the Board with assurance on the effectiveness and quality of financial control procedures. The internal audit department continuously monitors and tests operations to achieve this.

Disclaimer

The Management Discussion and Analysis (MD&A) section may include forward-looking statements related to the Companys objectives, plans, estimates and expectations, as per securities laws and regulations. It should be noted that the actual results may significantly vary from those suggested or inferred in these claims. Economic conditions, price fluctuations in domestic and international markets, competitive pressures, government regulations, tax laws, and other incidental factors can all have an impact on the Companys outcomes.