NILE Ltd Management Discussions

The management discussion and analysis report sets out developments in the business environment, and the Companys performance since the last report. The analysis supplements the Directors report, which forms part of this Annual Report.

Industry Structure and Development:

Lead and Wind Energy are the two divisions of the Company.

Pure Lead and Lead alloys are supplied to manufacturers of Lead acid batteries.

Your Company suspended the windmill operations pursuant to the expiration of the power purchase agreement with Transmission Corporation of Andhra Pradesh Limited.

Results of our operations for the year ended 31^st March 2026

Note: Previous years figures are regrouped and presented wherever necessary.

The sales to customers in the Lead division increased. Higher demand from battery manufacturers was supported by strong Lead prices and this enabled your Company to record the highest turnover as well as profit in its history.

Banking arrangements:

Your Companys banking arrangements with Kotak Mahindra Bank Limited and HDFC Bank Limited, as well as Axis Bank, are working satisfactorily, and have resulted in a reduction in finance costs.

Outlook:

There continues to be sustained demand for Lead acid batteries and the Companys order book remains strong.

The new Battery Waste Management Rules are in place, and the Extended Producers Responsibility (EPR) credits are being generated now. This is expected to channelize more battery waste material to larger recyclers like your Company. As this process gets further streamlined, the EPR credits market is expected to increase. Revenues from sale of EPR credits is also expected to gradually increase resulting in some additional revenue going forward.

Opportunities and Threats:

Your Companys major customer, Amara Raja Energy & Mobility Limited, has set up their own Lead smelter, and their operations have started. They will ramp up capacity in a phased manner. Your Company continues to explore other customers in domestic and international markets to make up for the resulting drop in offtake from Amara Raja. In addition, your Company is also pursuing the opportunity to become a registered member of the LME (London Metal Exchange). This will provide an avenue to directly sell metal to an LME registered warehouse as well as further boost the visibility of the Company to sell Lead in international markets.

Update of the Nile Li-Cycle Private Limited:

Our mechanical pre-processing operations are currently stable; however, sourcing domestic feedstock has become significantly more challenging over the past year. This issue stems from an influx of new battery recyclers entering the Indian market, coupled with a limited supply of end-of-life EV batteries and domestic plant scrap since major regional gigafactories are not yet fully operational.

Adding to these challenges, the MoEF&CC has recently classified black mass, which is an intermediate product in the processing of Lithium Ion batteries, as hazardous waste. This new classification requires separate export licenses from the DGFT, and the government is currently withholding these permissions in a strategic effort to retain critical minerals within the country. As a result, we can no longer export our black mass.

To address the supply constraints and adapt to the current situation, we have applied for an import license to explore and secure reliable sources of overseas battery scrap. Additionally, our forward integration strategy is progressing in a phased manner as we have received a Consent to Operate from the environmental authorities for our hydrometallurgy plant, which has a capacity of 500 tons per year. The plant is currently undergoing trial runs and is on track to begin commercial operations soon. Additionally, we have applied for an amendment to our EPR certification, upgrading from R2 (only mechanical pre-processing) to R4 (end- to-end recycler). This forward integration facility will enable us to directly source black mass from third-party mechanical preprocessors and also allow us to utilise our own material and mitigate raw material shortages. It will also position Nile Li-Cycle as a leading, high-value refining partner within the domestic ecosystem. To secure our future supply pipeline, the facility is undergoing audits by major electric vehicle (EV) original equipment manufacturers (OEMs) and Lithium-ion battery manufacturers.

Details of significant changes in Key Financial Ratios, Net Worth, along with detailed explanations therefor:

Internal Control Systems and their Adequacy:

Your Company has an established system of internal controls for ensuring optimal utilization of various resources. Investment decisions involving capital expenditure are taken up only after due appraisal and review, and adequate policies have been laid down for approval and control of expenditure. Internal Audit is carried out by a firm of Chartered Accountants to ensure adequacy of the internal control systems. The Internal Audit Report is reviewed by the Audit Committee to ensure that all policies and procedures are adhered to, and all statutory obligations are complied with.