Jayshree Chemicals Ltd Management Discussions

a) INDUSTRY STRUCTURE AND DEVELOPMENTS

The world market is anticipated to grow at a rate of 3.3 percent in both the F.Y. 2025 and F.Y. 2026, which is well below the average historical growth rate of 3.7% .The pace of expansion is low by historical standards, owing to both near-term factors, such as still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the COVID-19 pandemic and Russias invasion of Ukraine; weak growth in productivity; and increasing geo-economic fragmentation. Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. The latest forecast for global growth five years from now has been pegged at 3.1 % which is lowest in decades. Despite these challenges, however, major economies except for Europe has managed to avoid recession and major emerging market economies did not suffer the jolts as was anticipated. However, the growth rate and market sentiments in the USA remained a major concern for economies around the world as they had felt the tremors for the same, in the middle of this environment, the Company, is operating in chemical trading and wind power segments and had a year full of challenges. Nevertheless, it anticipates improving its performance in the ongoing financial year.

b) OPPORTUNITIES AND THREATS

The Company which began its Chemical Trading Business in 2022 has expanded its range of offerings by diversifying into various chemicals. The Company has expanded its trading operations to include Crop Nutrient Chemicals thereby reducing its reliance on Formic Acid which was a major revenue contributor in the previous financial year. The Company holds a positive outlook on its wind power generation business, expecting a boost from the anticipated recovery of pending dues from power discoms. We are exploring one or two more products in the rubber industries so that we can have more focus in Kerala.

However, both business verticals of Company are subject to inherent business risks associated with them. The chemical business is susceptible to price and demand fluctuations, international currency fluctuations and cheaper imports from China. The power business may suffer delayed payments from power discoms which could impact the profitability of the Company. The suppliers are increasing in the market rapidly hence effecting the price and competitiveness of the products.

Competition from others suppliers put pressures to keep costs low. Hence upgrading infrastructure and adopting efficient processes are crucial for maintaining cost-competitiveness.

c) PRODUCTWISE PERFORMANCE

In the wind power segment and Trading Segment the Company has earned a revenue of Rs. 1688.61 Lakhs.

d) OUTLOOK

The Company is highly focused on increasing and expanding its present line of business by securing new clients and orders to increase its operational efficiency and performance.

e) RISK & CONCERNS

The primary risk for the Company is associated with the volatility in the domestic markets, any kind of uncertainty which might prevail in the markets, high competition because of new entrants in the market and cheaper imports, inability to secure new clients or any new implementation of rules or regulations which might affect the functioning of the business in long run. However, the Company is taking all possible measure to cope with all these challenges by continuous efforts at cost optimization, process improvements, diversification of products and improving efficiencies. Further, the company is also monitoring the market trends and adapting to changing conditions as needed

(f) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company maintains a robust system of internal controls to ensure that all transactions are authorized, recorded and reported correctly. Internal audits and checks are carried out regularly by Internal Auditors, an independent firm of Chartered Accounts. An Audit Committee headed by an independent and non- executive Director is in place to review the systems continuously.

(g) FINANCIAL & OPERATING PERFORMANCE

This has already has been discussed in the Directors Report.

(h) HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONTS

The Company maintained a positive and cordial relations with its employees and any issues that arise are solved across the table in a very congenial atmosphere. There were 10 employees as on 31st March 2025.

(i) 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 EXPLANATIONS

This has been discussed in the Notes to Financial Statements.

On behalf of the Board For Jayshree Chemicals Limited