Jindal Drilling & Industries Ltd Management Discussions

1. Overview of Business Environment

a) Global Economy

The global economy demonstrated resilience during the Calendar Year 2024, despite persistent challenges
from supply chain disruptions, geopolitical tensions and inflationary pressures carried over from CY23.
Additionally, the tariff announced by the new U.S. President added new economic and political uncertainties,
which began influencing market forecasts. Advanced Economies According to the International Monetary
Fund (IMF), advanced economies, including the United States, Euro Area and Japan, experienced moderate
growth. The IMF estimates growth in these economies at 1.8% in CY24, slightly up from 1.6% in CY23. The U.S.
economy is estimated to have grown by 2.8% in 2024, a marginal decline compared to 2.9% in the previous
year. Despite internal economic adjustments, energy concerns and trade tensions, the Euro Area is expected
to have shown growth of 0.8%, up from 0.4% in CY23. Emerging Markets and Developing Economies Emerging
markets and developing economies are estimated to have grown at a steady 4.3% in CY24, slightly down
from 4.4% in CY23. China is expected to have growth rate of 5%, a slight decline from 5.2% in CY23. Overall,
global growth for CY24 is estimated at 3.3%, aligning with the pace seen in CY23. In this backdrop India
remains a growth leader with 6.5% growth,

b) Indian Economy

The current financial ending 2025 Indias Economic Growth hit a four-year low of 6.5%, despite Q4 GDP
growth hitting one-year high.

Indias economic growth in Q4 beat estimates after accelerating to 7.4 per cent but it couldnt save the
economy from posting its slowest growth since Covid-era in FY25. The economy in 2024-25 hit a four-year
low of 6.5 per cent, slowing down sharply from the 9.2 per cent growth recorded in FY24.

The full-year growth remained within official projections, as private investment remained subdued amid
global uncertainties.

For the quarter ending March 31, 2025, Indias growth stood was fastest in the four quarters, on the back of
robust industrial activity and sustained global trade tensions grew larger by day.

The third quarter had seen growth rise to 6.2 per cent, revised upward from an earlier estimate of 5.6 per
cent, showing resilience amid global headwinds.

The fourth quarter was marred by global trade disruptions led by tariffs announced by US President and
escalation of the Russia-Ukraine war. However, the Indian economy powered through the storm on the back
of pick up rural demand and healthy government spending.

Moreover, the latest growth figures continue to keep India in the race of fastest economies in the world. The
International Monetary Fund (IMF) also expects Indias economic size to surpass Japans by the end of the
year, reaching $4.18 trillion.

Private consumer spending jumped 7.2 per cent YoY, up from 5.6 per cent in the previous financial year,
buoyed by improved rural demand due to moderating food prices and higher spending during the festival
season compared to a year earlier. Agricultural growth accelerated to 4.6 per cent YoY in FY25, a significant
rise from 2.7 per cent in the previous year. In Q4FY25, farm activity grew 5.4 per cent, up from 0.9 per cent
a year ago. The construction sector grew at 9.4% YoY, marking an increase from the 10.4% growth seen in
the prior year. Meanwhile, for the quarter ended on March 31, 2025, the said sector grew by 10.8 per cent as
against 8.7 per cent in Q4 FY24. Manufacturing growth stood at 4.5% YoY, a decline from 12.3% in the previous
year. In the fourth quarter manufacturing stood at 4.8 per cent, down from 11.3 per cent in the year ago
period.

Despite the external challenges, the Indian economy remained relatively healthy due to its limited reliance on
global goods trade, recent tax cuts, controlled inflation and a potentially softer interest rate environment.

While external uncertainties—such as supply chain disruptions and energy market volatility-pose challenges,
India continues to benefit from strong service sector performance, a stable banking system, and improving
manufacturing output under schemes like PLI rate.

In February, 2025, the RBI had initiated interest reductions as a result of drop in inflation. Retail inflation dropped
to a near six-year low of 3.16% in April, 2025. Further favourable monsoon forecast is expected to help stabilize
food prices.

Looking ahead, all this augurs well for Indian Economy as reduction in interest rate, lower inflation, increased
money in the hand of consumers consequent to reduction of taxes, would provide substantial boost to Indian
Economy.

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The fundamentals driving oil supply and demand during the current financial year were marked by extreme
volatility, with heightened geopolitical tensions in the Middle East and Russia combined with macroeconomic
weakness in Asia. Despite this volatility the price of Brent crude remained between US$ 74 and US$ 90 per
barrel, making one of the most stable years in terms of oil price in recent times. While oil price should have
provided a supportive backdrop, the market was significantly impacted by Saudi Aramcos decision to unwind
the entirety of its activity increase during last three years. This resulted in an unprecedented increase in supply
of jackups. Simultaneously, activity levels in India declined from an all-time high reached in late 2023, driven
largely by cancellation of tenders by ONGC in an unprecedented manner.

Global jack-up activity in 2024 did not expand as expected, as mentioned above one of the most significant
developments in 2024 was Saudi Aramcos reversal of their previous expansion plans, gradually suspending
and releasing at least 34 rigs over the course of the year. Although a number of these rigs have since secured
new contracts, many are being marketed globally for new opportunities. This resulted in disruption of market
for Jackup Rigs globally.

d) Indian Market

In this backdrop, the Indian market was substantially affected due to unexpected cancellation of tenders
floated by ONGC. Further in recent times the unexpected reduction in rates by some of the Indian Contractors
has brought to charter higher rates to extremely low levels. These rates are unsustainable at current levels
in view of increased cost of operations and compliances. Therefore, it is expected that the market for rigs is
likely to remain subdued during next one to two years, after which it is expected to improve. Jindal Drilling
rigs have an edge as they have been built specific to requirement of Indian Conditions and are well position
to take advantage as and when market conditions improve.

2. Review of Operations

The operations continued under high safety standard during the year. During the year all Jindal Drilling rigs showed
exemplary performance as no Lost Time Incident (LTI) was recorded.

Training is inherent part of Corporate Culture. Regular on the job training is carried out for people involved in their
respective functions. On the job training campaign includes Trailing hand Technique, Work at height, Permit To
Work, Hand & Finger Injury Prevention etc. Further safety training is carried out by external agency on Safety in
Drilling Operations, MEMIR (Major Emergency Management Initial Response) for OIM, etc, Scaffolding Awareness,
Working at Height, Rigging, Slinging & Banksman, Confined Space Entry.

All operations and activities are carried out keeping in view the environmental requirements. The company is
certified by DNV for ISO 9001, ISO 14001, ISO 45001. It is a testimony to companys commitment to comply with
International standards and to reduce risks associated with rig operations. The objective is to minimize Operational
Risks while delivering Optimum Working Conditions by meeting Legal, Industry and Customer Requirements.

Green Initiative taken by rig include Waste Segregation, Plastic reuse, using Trash Compactor for compressing
plastic wastes, periodic maintenance of equipment to check engine exhausts and green plantations are few to
mention.

The rig continued to operate at high efficiency levels. The overall efficiency was 98.8%. The financial performance
for the year reflects the significant efforts made by the team to reduce costs and implement innovative solutions
to maximize revenue and reduced cost. The company therefore achieved an all time high EBIDTA of Rs. 293.80
crores and net profit of Rs. 140.84 crores.

3. SWOT ANALYSIS:

a) Strength

1) The Company has an advantage of having latest state-of-art rigs with modern technologies. Further Rigs
equipment maintenance are done regularly and are certified periodically by OEMs. This is supported by
Strong Vendor relationships, thereby, supporting operations with timely delivery.

High degree of Safety standards help in mitigating risk associated with operations. Fewer rig moves
reduces risks associated with the movement of rig. Highly dedicated and committed staff with low
employee turnover provides stability to operations.

The companys rigs are suitable for Indian conditions, and have been specifically designed and maintained
for Indian conditions. The operations of company have been appreciated by the customers who have
stated that the companys performance to be exemplary.

b) Weakness

The challenges by way of increase costs of maintenance and OEM suppliers, increase compliances, logistic
disruptions provide limited scope for reduction in operational costs.

c) Opportunities

The opportunities would continue to be strong due to the gap in demand and local production. Thus, the
demand for rigs is expected to improve going forward. New recent discoveries in Andaman region have
potential to create large opportunities for the company. The company has established its leadership and
is well positioned to capitalize these opportunities. The high safety standard, operational efficiency, strong
commitment towards ESG requirements and operations bench-marked to Global standards provide huge
opportunity to the company.

d) Threat

The recent reduction in charter higher rates has led to short term disruption in the market. However,
consequent to the fact that Jindal Drilling Rigs are suitable for Indian conditions provide huge opportunity to
the Company. Further the company has positioned itself well to overcome this threat consequent to strong
financial position, high efficiency as also placing strong systems for controlling costs.

Key Financial Ratios

Ratios	Explanation	FY 2024-25	FY 2023-24	% Change
Debtors Turnover	Net Sales/Avg Debtors	4.21	3.58	0.63
Inventory Turnover	Net Sales/Avg Stock	15.90	16.87	(0.97)
Interest Coverage Ratio	EBIT/Interest Expenses	12.58	12.84	(0.26)
Current Ratio	Current Asset/Current Liability	0.99	1.65	(0.66)
Debt Equity Ratio#	Long-term Debt / Equity	0.05	0.11	(0.06)
Operating Profit Mar gin (%)		32.34	37.46	(5.11)
Net Profit Margin (%)		22.76	24.58	(1.82)

5. ESG (Environmental, Social & Governance)

Our strategic ambition is to drive sustainable growth to become the jack-up drilling contractor of choice in our
core operating regions for our customers, employees and shareholders. Our track record of safety and operational
excellence ensures we maintain long-term relationships with our customers and suppliers, and our focus on
sustainability supports our long-term success, safeguarding the business against volatility.

Our strategic priorities are Focused on Jack-up operations with reliability, safety and operational performance at
the forefront of everything we do, Jindal Drilling strives to create an environment where no one gets hurt. Our goal
is to develop long term and mutually beneficial relationships with customers and suppliers. We aim to provide
development for our people to support their long term career goals.

We recognize the complex energy dilemma facing the world today: ensuring energy security; providing equitable
access to energy, especially in emerging economies; and achieving environmental sustainability. Our focus on
ensuring the health and safety of employees and of all people onboard our rigs is central to the success of our
operations and to our long-term strategy. Providing a safe workplace is not only our primary responsibility to our
employees but also a key driver of our long-term sustainability. As a drilling contractor, our activities can have
a substantial impact on the environment and people. Our operations are energy-intensive and have impacts
on climate change, pollution, biodiversity and ecosystems. We also recognize that drilling operations can pose
inherent risks related to health, safety and human rights, and it is vital we maintain high standards of business
conduct. We remain committed to minimizing our impact on people and the environment by fostering safe and
responsible operations. We strive to reduce emissions, promote well-being, and prioritize resource stewardship
to create lasting value for our employees, affected communities, and the environment.

Our crews perform their services consistent with our Company-wide policies, procedures and processes, ensuring
all operations are carried out efficiently, effectively and with the highest regard for safety and environmental
compliance.

Jindal Drilling has sustainabilityrelated goals for health & safety, ongoing regulatory compliance. We define
sustainability as achieving commercial profitability in a way that is consistent with our fundamental ethical values
and with respect for individuals, the environment, and society. Our sustainability goals are organization wide, and
are therefore primary to the service that we provide.

Environmental Practices certified under International Standards

Jindal Rigs are certified under International Maritime Organization, MARPOL Convention for -

> International Air Pollution Prevention -

e Rigs are equipped with high efficiency engines to reduce fuel consumption and emissions
e Fuel oil used have Sulphur content of less than 0.5%

> International Oil Pollution Prevention -

• Rigs fitted with Oily Water Separator, all kind of oil wastes are collected and sent onshore for disposal

> International Sewage Pollution Prevention -

• Rigs have Sewage Treatment Plant

> Waste Management-

e The company is a registered Importer under Extended Producer Responsibility.
e Waste segregation and disposal through certified agency. The company has adopted strict guidelines for
disposal of waste including plastic waste, oil waste etc. and symptoms are in place to monitor generation
and disposal.

The Company has identified four key areas of sustainability priority - health & safety, people & society, climate &
environment, and responsible business We recognize the responsibility of our business and our sector to support
the achievement of the UN Sustainable Development Goals [SDGs]. Our operations and material topics present
particularly strong opportunities to have a meaningful and sustainable impact on the attainment of several SDGs
to our business. The Company values engagement with our stakeholders, including our customers, employees,
and regulatory bodies, to understand and meet their expectations regarding sustainability, strategy, and we
communicate our sustainability performance to them on an on-going basis through various channels.

6. Internal controls and systems

The Companys internal control environment ensures adherence to policies and procedures, compliance with
laws and regulations, efficient conduct of operations, security of assets, prevention and detection of frauds/errors,
timely remediation of deficiencies, accuracy and completeness of accounting records and the timely preparation
of reliable financial information.

The Company believes that internal controls are one of the key pillars of governance, which provides a platform
to the management to operate, within a framework of appropriate checks and balances. The Company has a
robust internal control framework, which has been established considering the nature, size and complexity of its
operations and risks in the business. The framework comprises, inter alia, a well-defined organisation structure,
roles and responsibilities, documented policies and procedures, financial delegation of authority for various
business activities, etc. These policies are complimented by a management information and monitoring system,
which ensures compliance with internal processes, as well as with applicable laws and regulations. The Company
has an independent, external Audit Firm that is responsible for providing assurance on compliance with operating
systems, internal policies, and legal requirements, as well as suggesting improvements to systems and processes.
The Internal Audit monitors and evaluates the efficacy, and adequacy of internal control systems in the Company.
The audit is carried out across all functional areas. The independent internal audit functionally reports to the Audit
Committee of the Company. Key internal audit findings are presented to the Audit Committee at its quarterly
meetings.

Human Resources:

Human Resource serves as the strategic backbone of the Company, aligning its goals closely with overarching business
objectives. HR utilises a multifaceted approach to ensure success of the organisation. The Company is dedicated to
nurturing a diverse and inclusive talent pool, ensuring that the workforce reflects a wide range of backgrounds and
perspectives. As mentioned before there is continuous training and development to enhance skills and competencies.
This extends to providing clear career paths and development frameworks, empowering employees to chart their
professional growth within the Company. To complement this, HR strategies are also tailored towards fostering high
retention rates, recognizing and rewarding employees contributions while ensuring a conducive work environment
that promotes engagement and well-being. To summarise, HRs major focus areas encompass cultivating a robust talent
pool, facilitating capability building, fostering career development, enhancing retention, promoting engagement, and
safeguarding employee well-being, all of which collectively contribute to the sustained success and growth of the
Company.