POCL Enterprises 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 Boards report, which forms part of this Annual Report.

OVERVIEW OF GLOBAL ECONOMY

The year 2025 was marked by a resilient yet uncertain global macroeconomic environment, with global growth remaining broadly stable at around 3.4%, albeit below its historical average. Global trade and manufacturing demonstrated resilience despite heightened trade and geopolitical uncertainties, including the impact of US tariff announcements. Growth was supported by fiscal measures, relatively accommodative financial conditions and Al-led investments, although the pace of recovery remained uneven across major economies. The United States remained a key driver of global growth, supported by technology-led capital expenditure and a resilient services sector, while Europe witnessed a services-led recovery amid continued energy-related challenges to manufacturing competitiveness. China continued to face weak domestic demand, stress in the property sector and subdued industrial activity, although its exports remained resilient.

Global financial conditions remained fluid during the year, with major central banks, including the US Federal Reserve and the European Central Bank, moving towards gradual monetary easing as inflationary pressures moderated. Global headline inflation eased to 3.8% in CY2025, however, elevated sovereign debt, increased defence and technology spending, and persistent geopolitical tensions continued to contribute to energy supply disruptions and commodity price volatility. Towards the end of FY 2025-26, escalating tensions in West Asia led to a sharp rise in crude oil prices, renewing concerns around energy security, commodity inflation and supply-chain continuity. Disruptions or supply concerns along strategic transit routes, including the Strait of Hormuz, further contributed to fluctuations and occasional spikes in crude oil prices, while affecting commodity imports and international trade flows. Consequently, imported input cost pressures remained a key concern, particularly for economies dependent on energy and commodity imports. Interest rates are also expected to remain above the ultra-low levels witnessed during the previous decade, requiring businesses to adopt prudent financial strategies and disciplined capital allocation.

Global manufacturing continued to operate in a challenging environment, with purchasing managers indices (PMIs) remaining close to the expansion- contraction threshold. Rising protectionism and significant increases in US tariffs disrupted established trade routes and increased costs across key global manufacturing hubs such as Mexico, Brazil and Vietnam. These developments heightened policy uncertainty and weighed on global capital expenditure and trade volumes. At the same time, global supply chains continued to evolve towards more localised and resilient models, resulting in higher costs while reshaping the dynamics of international trade.

Looking ahead, global growth is projected at 3.0% in 2026 and 3.4% in 2027, with the outlook remaining uneven across economies. Energy-importing and vulnerable economies may face greater pressure from geopolitical and energy-related disruptions, while countries integrated into the global technology value chain are expected to benefit from AI-driven demand. The global disinflationary trend has also stalled, with renewed geopolitical tensions and potential financial market repricing posing downside risks to the economic outlook. Policymakers are expected to focus on maintaining price stability, rebuilding fiscal space and strengthening economic resilience to navigate emerging risks.

Going forward, the global economic outlook is expected to remain cautiously resilient, with growth prospects influenced by the pace of monetary easing, geopolitical developments, trade policies, commodity price movements and the continued momentum of technology-led investment.

INDIAN ECONOMY OVERVIEW

Indian economy remained resilient amid a volatile global environment and continued to be among the fastest- growing major economies. The real GDP growth for FY 2025-26 stood at 7.7%, compared with 7.1% in FY 202425, while nominal GDP grew by 8.7%. The sustained growth momentum is noteworthy against a backdrop of moderating global growth and reflects the strength of domestic demand, continued public infrastructure investment and the progressive strengthening of Indias manufacturing capabilities.

Domestic economic activity remained supported by resilient private consumption, investment and broad- based growth across manufacturing and service sector. Policy measures, including the restructuring of personal income tax and rationalisation of GST rates, contributed to strengthening the domestic demand environment by supporting disposable incomes and consumption. Favourable financial conditions and monetary easing also supported economic activity. Investment remained robust, aided by the Governments continued focus on infrastructure development, structural reforms, improved credit availability and initiatives to strengthen domestic production and capacity.

The consolidation of labour laws into four Labour Codes represents a significant structural reform for a labour-

intensive economy such as India. These reforms are expected to promote formalisation, simplify compliance requirements, enhance workforce flexibility and strengthen worker welfare, thereby creating a more conducive operating environment for manufacturing and services-led growth.

Manufacturing continued to be an important driver of Indias structural transformation, supported by resilient domestic demand, capacity expansion and policy initiatives aimed at strengthening domestic production. Manufacturing activity remained in expansionary territory through much of the year, despite challenges in global export demand. Indias expanding manufacturing ecosystem, particularly across electronics and renewable energy, is enhancing its attractiveness as a global manufacturing and supply-chain destination and supporting greater integration into global value chains. These developments are expected to further strengthen Indias position as an important global production and supply-chain hub.

Inflationary conditions remained broadly supportive during FY 2025-26. Retail inflation declined to a multiyear low of 2.75% in January 2026 before rising amid movements in food and energy prices, while remaining below the Reserve Bank of Indias target for most of the subsequent period. Food prices moved out of deflation as favourable base effects normalised, while fuel inflation remained moderate and core inflation was largely contained, except for precious metals. The relatively favourable inflation environment and supportive financial conditions enabled monetary policy to remain conducive to economic activity. Towards the end of the financial year, however, imported inflation and input cost pressures increased following a sharp rise in global energy prices.

Indias large domestic market, relatively lower external dependence and diversified economic base continue to provide resilience against external shocks and global trade uncertainties. At the same time, geopolitical developments, global commodity price movements and energy price volatility remain key risks, particularly given Indias dependence on imported crude oil. The continued expansion of bilateral and multilateral trade arrangements, diversification of trade and supply-chain linkages, and sustained foreign investment are expected to strengthen Indias external economic position and support long-term economic stability.

The outlook for FY 2026-27 remains positive, with various projections indicating real GDP growth in the range of 6.4% to 6.9%, supported by resilient domestic demand, infrastructure investment, manufacturing capacity expansion and ongoing structural reforms. Overall, Indias broad-based growth, strengthening manufacturing and service sectors, sustained investment

and expanding trade and supply-chain linkages provide a favourable foundation for continued economic growth. Nevertheless, external volatility, geopolitical developments, commodity price movements, tariff- related uncertainties and supply-chain risks warrant continued focus on prudent demand management, disciplined cost control and effective execution.

INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK

Zinc

Zinc is a bluish-white metal characterized by its brittleness at room temperature and malleability when heated. Naturally found in the Earths crust, zincs unique combination of chemical, physical, and electrochemical properties makes it indispensable across a range of industries. It remains indispensable to both traditional infrastructure and emerging clean technologies. Its most prominent use is in galvanization, where it serves as an effective corrosion-resistant coating for steel. Beyond galvanizing, zinc finds extensive applications across the construction, transportation, infrastructure, agriculture and manufacturing sectors, including in the manufacture of alloys, chemicals, die-cast components and other specialized products. Its applications are also expanding in the energy transition space, particularly in renewable energy infrastructure such as solar mounting structures, as well as in emerging zinc-based energy storage technologies for electric vehicles and grid-scale applications. Its recyclability and potential for recovery from secondary sources further enhance its strategic relevance, supporting resource efficiency, strengthening raw material security and contributing to the transition towards a more sustainable and circular economy.

The global zinc industry is expected to maintain a steady growth trajectory, supported by infrastructure development, urbanisation, increasing use of corrosion- resistant steel and the transition towards renewable energy and electric mobility. The global zinc market is estimated at 13.93 million tonnes in 2026 and is projected to reach 15.06 million tonnes by 2031, representing a CAGR of 1.57% during 2026-2031. Asia-Pacific is expected to remain the largest and fastest-growing regional market, accounting for 62.86% of global zinc consumption in 2025 and projected to grow at a CAGR of 2.50% through 2031. Galvanising continues to be the principal application for zinc, accounting for 52.37% of the global market in 2025, while construction remains the largest end-use sector. Continued investments in roads, railways, power, infrastructure, housing and other large-scale projects, particularly across emerging economies in Asia-Pacific, are expected to further support sustained demand for zinc.

During FY 2026, zinc prices remained buoyant, reaching a peak of US$ 3,487 per tonne and averaging US$ 2,970

per tonne, representing a 3% YoY increase. The price environment was supported by tight physical inventories, strong consumption in galvanising and infrastructure segments, geopolitical concerns and a weakening US dollar. Refined zinc supply increased by 4% YoY to 13.85 Mnt, resulting in a marginal market surplus, while inventory levels strengthened during the year. At the same time, the global demand base for zinc continues to broaden beyond galvanising, with applications across die-casting, brass and other alloys, chemicals, electrical and electronic products and renewable energy infrastructure. The increasing deployment of solar and wind power, electric vehicles and associated power-grid infrastructure is expected to support demand for zinc- coated steel and other zinc-based products. The industry is also witnessing increasing emphasis on secondary production and recycling, driven by resource efficiency, circularity and the need to reduce the carbon intensity of metals production. According to Mordor Intelligence, secondary zinc production is projected to grow at a CAGR of 2.71% through 2031, while zinc compounds are projected to grow at 2.89% during the same period. Emerging applications such as zinc-ion and zinc-air batteries are also being evaluated for long-duration and stationary energy-storage applications and could provide additional avenues for zinc consumption over the medium to long term.

The Indian zinc industry is expected to witness sustained growth, supported by infrastructure development, industrialisation, urbanisation and

expanding manufacturing activity. Indias zinc

consumption increased from 814 kt in CY 2024 to 851 kt in CY 2025, reflecting broad-based industrial and infrastructure growth. Investments in roads, railways, metro systems, power transmission, housing and industrial infrastructure are expected to sustain demand for galvanised steel, while renewable energy expansion is creating additional opportunities through galvanised structures such as transmission towers and solar mounting systems. Growth in automotive appliances, electrical and electronic applications, zinc alloys, castings and chemicals is expected to further diversify domestic demand. With India targeting 300 Mnt of crude steel capacity by 2030, domestic zinc demand is expected to grow alongside the steel and infrastructure ecosystem. Increasing focus on resource efficiency and the circular economy is also expected to support secondary zinc production and recycling, strengthening raw material security and contributing to a more sustainable and resilient domestic zinc value chain.

Zinc Oxide

Zinc oxide (ZnO) is an inorganic multifunctional compound. It is a white powder that is insoluble in water and is widely used as an additive in numerous materials and products. By application, the market is segmented into rubber and tyres, ceramics and glasses, pharmaceuticals and cosmetics, agriculture, paints and coatings, and other emerging uses. Among these, rubber and tyre manufacturing remains the most prominent segment, where ZnO plays a crucial role in the vulcanization process, enhancing the durability and thermal performance of tyres. In ceramics and glasses, ZnO is valued for its contribution to thermal resistance and mechanical stability, supporting its widespread use in construction and electronics. In pharmaceuticals and cosmetics, its antibacterial, anti-inflammatory, and UV-blocking properties make it a key ingredient in sunscreens, ointments, and skincare products. Given its broad utility across industrial and consumer sectors, the powder form of zinc oxide is projected to remain the dominant product type driving market growth.

The global zinc oxide industry is expected to maintain a favourable growth trajectory, with the global market projected to grow from US$ 6.29 billion in 2026 to US$ 8.17 billion by 2031, registering a CAGR of 5.3% during 2026-2031. Growth is expected to be supported by continued demand from automotive and tyre manufacturing, healthcare, pharmaceuticals, cosmetics, agriculture and other industrial applications. The rubber industry remains the largest application segment, accounting for 39.7% of the global market in 2025, while the shift towards electric vehicles and increasing preference for radial tyres are expected to sustain demand. Asia-Pacific, accounting for 53.3% of the global market in 2025, is expected to remain a key growth region, supported by its strong automotive, infrastructure and industrial base and increasing adoption of specialty zinc oxide products.

India is expected to remain an important growth market for zinc oxide, supported by the continued expansion of the automotive and tyre ecosystem, infrastructure and construction activities, industrialisation and downstream manufacturing. Growth in automotive production, coupled with increasing adoption of electric vehicles and radial tyres, is expected to support demand from the rubber and tyre industry. At the same time, expanding applications across agriculture, pharmaceuticals and cosmetics, ceramics, paints and coatings and other specialised segments are expected to further diversify the domestic demand base. The continued expansion of key end-use industries, along with growing demand for specialised zinc oxide products, is expected to support the sustained development of the Indian zinc oxide industry.

Lead

Lead (Pb) is a versatile and highly recyclable non-ferrous metal that plays a critical role across automotive, energy storage, telecommunications and industrial applications. It is a soft, malleable, bluish-white dense metal typically found in ores alongside zinc, silver and copper. As one of the most recycled non-ferrous metals globally, its established role in lead-acid batteries, together with its reliability, cost-effectiveness and high recyclability, continues to support its relevance across conventional and emerging applications.

Building on these established applications, the global lead industry continued to witness steady demand during FY 2025-26. Lead prices averaged US$ 1,954 per tonne, reflecting adequate market supply rather than weakening demand. In CY 2025, global refined lead demand increased by 0.5% YoY to 14.24 Mnt, supported by automotive battery demand, stationary battery applications across data centres, telecommunications and grid storage, and robust growth in Asia. According to Fortune Business Insights, the global lead market is valued at US$ 17.64 billion in 2026 and is projected to reach US$ 22.78 billion by 2034, registering a CAGR of 3.25%. Global refined lead demand is projected to grow by 2.2% YoY to 14.56 Mnt in CY 2026, supported by sustained demand from automotive and stationary battery applications, energy storage and other industrial uses.

Looking ahead, lead demand is expected to remain anchored in starting-lighting-ignition and auxiliary batteries across internal combustion engine and hybrid fleets, as well as energy storage and backup power applications. The continued expansion of automotive, telecommunications, digital infrastructure and energy- storage applications is expected to sustain demand. Leads recyclability of over 95% of metal further strengthens its sustainability profile, supporting resource efficiency, circularity and reduced dependence on primary raw materials. Together, these factors are expected to support the resilience of the global lead industry over the medium to long term.

In India, the lead industry outlook remains favourable, supported by the expansion of the automotive and battery ecosystem, increasing energy-storage requirements, telecommunications and digital infrastructure, and broader industrial development. Indias total lead consumption for FY 2025-26 stood at 1.36 Mnt, driven primarily by batteries, cables and galvanisers, with additional applications across defence systems, telecommunications, railways, logistics and industrial backup power. Widespread electrification, growing electric mobility and increasing requirements for reliable backup power are expected to create further opportunities for lead consumption. Indias increasing focus on recycling, resource efficiency and sustainable manufacturing is also expected to strengthen the secondary lead ecosystem and raw-material security. These trends, together with sustained demand across key end-use sectors, are expected to provide a supportive foundation for the continued development of Indian lead industries.

PVC Stabiliser

Polyvinyl chloride (PVC) is a versatile synthetic polymer widely used in plumbing, electrical insulation, window frames and roofing materials. Its diverse applications extend across building and construction, packaging, automotive, electrical and electronics, making it an important material for infrastructure and industrial development. Its durability, cost-effectiveness and adaptability have supported its widespread adoption across both developed and emerging markets.

The global PVC industry is expected to maintain a steady growth trajectory. According to Fortune Business Insights, the global PVC market is projected to grow from US$ 81.55 billion in 2026 to US$ 113.33 billion by 2034, registering a CAGR of 4.20% during 2026-2034. Asia-Pacific is expected to remain the leading regional market, supported by its expanding construction, infrastructure and manufacturing base. Growing requirements for pipes and fittings, profiles, wires and cables, flooring and other PVC products are expected to provide continued support to global demand.

The Indian PVC market is projected to grow at a CAGR of 3-5% during 2026-2034. Government initiatives, including the Smart Cities Mission and Pradhan Mantri Awas Yojana, together with continued investments in water supply, sanitation, housing, rural irrigation and water management, are expected to support domestic consumption. Increasing activity across construction, automotive, electrical and electronics and other downstream industries is expected to further strengthen the market. However, the industry remains subject to fluctuations in crude oil and other raw material prices, regulatory developments and competition from alternative materials, including HDPE and other sustainable substitutes.

This growth in PVC consumption is also expected to support PVC stabilisers segment, particularly Calcium Zinc stabilisers, across applications such as pipes and fittings, construction, automotive, electrical and electronics and packaging. The gradual transition towards lead-free and more sustainable PVC solutions, alongside expanding downstream applications, is expected to support the continued development of the PVC stabilisers industry.

OPPORTUNITIES AND THREATS

POEL operates in the lead and metal industry, which is characterized by both significant growth opportunities and inherent risks. Growing demand from the automotive, energy storage, construction, infrastructure and industrial manufacturing sectors, coupled with the increasing adoption of lead-acid batteries for automotive and backup power applications, continues to support industry growth. Expanding renewable energy and energy storage projects, government investments in infrastructure and urbanization, and the increasing focus on recycling, circular economy practices and sustainable resource management provide favorable conditions for companies such as POEL with strong operational and recycling capabilities. Technological advancements in metal processing, improved recovery rates, strategic customer partnerships and expansion into export markets further enhance growth prospects and revenue diversification. Favorable movements in commodity prices and foreign currency exchange rates can also create opportunities by improving export competitiveness, enhancing realizations from international sales, optimizing procurement costs and supporting margin expansion.

At the same time, the industry remains exposed to several challenges. Its cyclical nature makes it sensitive to fluctuations in commodity prices, demand patterns and global economic conditions. Volatility in lead and other metal prices arising from changes in supply- demand dynamics, geopolitical developments and international trade policies, can adversely affect the profitability, inventory valuations and operational planning of POEL. Similarly, unfavourable foreign currency movements may increase the cost of imported raw materials, reduce export realizations and impact overall financial performance. Stringent environmental, health and safety regulations may require continuous investments in compliance, pollution control and sustainable manufacturing practices. In addition, supply chain disruptions, rising energy costs, raw material shortages, transportation constraints and increasing competition from domestic and international players can exert pressure on production schedules, margins and market share. Accordingly, effective risk management, operational efficiency and strategic planning remain critical for POEL to sustain long-term growth and create value for its stakeholders.

FINANCIAL AND OPERATIONAL REVIEW

Brief highlights on the financials and operational performance for the year 2025-26 is summarized below:

• Revenue from Operations for the financial year 202526 was Rs. 1,431.68 Crores as against Rs. 1,450.10 Crores in the previous year.

• Our export sales for the financial year 2025-26 was Rs. 331.78 Crores as against Rs. 217.31 Crores in the previous year, reflecting a phenomenal growth of 52.68% in export sales.

• Major expenditure of the Company is accounted towards material cost. Material cost including changes in inventories for the year 2025-26 was Rs. 1,274.13 Crores which is about 89% of the total revenue.

• The employee benefit expense for the year was Rs. 28.35 Crores as against Rs. 22.99 Crores in the previous year.

• Finance cost for the year was Rs. 16.63 Crores as against Rs. 18.73 Crores in the previous year.

• Depreciation and amortization costs increased significantly during the year to Rs. 552.79 Lakhs as compared to Rs. 339.65 Lakhs in the previous year. This significant increase was primarily due to substantial additions to fixed assets and the capitalization of new projects.

• Other expenses for the year was Rs. 56.95 Crores as against Rs. 52.83 Crores in the previous year majorly getting contributed from power & fuel, conversion charges and freight cost.

• The company reported profit before tax of Rs. 5,360.79 Lakhs with earnings per share of Rs. 13.14/-.

• The total shareholders funds as on March 31, 2026 stood at Rs. 192.68 Crores.

KEY FINANCIAL RATIOS
Sl.No. Key Financial Ratio	2025-26	2024-25	Remarks
1. Debtors Turnover Ratio	20.33 times	24.13 times	--
2. Inventory Turnover Ratio	15.94 times	18.53 times	--
3. Interest Coverage Ratio	4.24 times	3.23 times	The improvement in the ratio is primarily attributable to the reduction in finance costs, as funds raised through the preferential issue were utilised towards working capital, thereby reducing the Companys reliance on bank borrowings, coupled with improved profitability during FY 2025-26.
4. Current Ratio	1.93 times	1.62 times	--
5. Debt Equity Ratio	0.68 times	1.07 times	During the FY 2025-26, the Company made a preferential issue of equity shares, leading to an increase in securities premium forming part of other equity, and a consequent increase in average equity. Accordingly, due to increase in the equity, there has been a decrease in the debt equity ratio in comparison with the previous year FY 2024-25.
6. Operating Profit Margin	5.31%	4.41%	--
7. Net Profit Margin	2.77%	2.15%	During the current year, the Company recorded a reduction in purchases of stock-in-trade and a decline in finance costs consequent to a reduction in interest rates on loans availed, resulting in improved operating profitability. This was further supported by an increase in other income during the year. Accordingly, there has been an increase in the net profit ratio in comparison with the previous year.
8. Return on Net worth	20.56%	31.85%	The decrease in the ratio is primarily attributable to the significant increase in the Companys net worth on account of the funds raised through the preferential issue. Although profitability improved during FY 202526 in comparison to previous years, the increase in profit was not proportionate to the growth in net worth, resulting in a lower Return on Networth.

GEOGRAPHICAL REVENUE ANALYSIS

The companys revenue continues to be primarily driven by the domestic market, although its international contribution has increased during FY 2025-26. The table below summarises the companys geographical revenue mix.

Particulars	2025-26	2024-25
Domestic	77%	85%
International	23%	15%

SEGMENT-WISE PERFORMANCE

The business of your Company is structured into three segments i.e., (i) Metal (ii) Metallic Oxides and (iii) Plastic Additives. The segment-wise performance is as follows:

(Rs. in crores)

Segment wise Performance - Turnover
Particulars	2025-	2024-	2023-	2022-	2021-
	26	25	24	23	22
Metal	1,051.81	1,087.55	763.86	602.08	291.01
Metallic	444.41	421.75	374.22	354.50	181.74
Oxides
Plastic	104.85	85.82	79.82	72.24	58.78
Additives
(Rs. in crores)

Segment wise Performance - Profit before interest & tax

Particulars	2025 26	2024 25	2023 24	2022 23	2021 22
Metal	58.49	49.81	26.64	15.02	9.60
Metallic	17.01	16.50	13.63	15.60	3.78
Oxides
Plastic	5.74	5.92	5.67	4.16	2.96
Additives

The Metal segment remained the largest contributor to the Companys turnover, recording Rs. 1,051.81 crores in FY 2025-26, compared with Rs. 1,087.55 crores in FY 2024-25. The segment reported a profit before interest and tax of Rs. 58.49 crores, translating into a margin of approximately 5.56% on turnover.

The Metallic Oxides segment recorded turnover of Rs. 444.41 crores in FY 2025-26, up from Rs. 421.75 crores in the previous year. The segment reported a profit before interest and tax of Rs. 17.01 crores, representing a margin of approximately 3.83% on turnover.

The Plastic Additives segment recorded turnover of Rs. 104.85 crores during FY 2025-26, compared with Rs. 85.82 crores in FY 2024-25. The segment reported a profit before interest and tax of Rs. 5.74 crores, resulting in a margin of approximately 5.47% on turnover.

RISKS AND CONCERNS

At POEL, risk is an inherent factor in all aspects of business. We proactively measure, assess, and manage risks, regardless of their type or origin, through a consistent approach that combines deep business insight, competitive awareness, and adaptability.

Risk management is embedded at the core of our strategic and operational decision-making. It is not treated as a parallel function, but as an essential component of how we plan, operate, and grow sustainably. Our Risk Management framework is designed to identify, evaluate, and respond to both current and emerging risks that could impact our business objectives.

This framework is supported by a culture that promotes risk awareness across all levels of the organization. We work closely with functional heads to ensure timely identification and mitigation of risks within their respective domains. Regular assessments, employee training, and open communication helps to maintain a high level of preparedness throughout the enterprise.

The Board and the Management provide strategic oversight, ensuring alignment with the companys risk appetite. They monitor the effectiveness of our risk systems and ensure that critical risks are addressed with diligence and foresight.

RISK MANAGEMENT FRAMEWORK

At POEL, we have an established robust risk management process to streamline risk identification, assessment, and prioritisation of risks. This framework ensures the effective execution of our action plan, enabling timely mitigation measures and to make informed responses to emerging threats.

(1) Risk Identification - Systematic identification of internal and external risks across strategic, operational, financial and compliance domains of the organisation.

(2) Risk Assessment - Analysing and assessing the identified risks inorder to determine the potential triggers and impacts.

(3) Risk Mitigation - Deployment of tailored mitigation strategies, including process controls, technology adoption, insurance and business continuity planning.

(4) Risk Monitoring & Reviewing - Monitoring mitigation actions on an ongoing basis, with periodic reviews by the Management.

PRINCIPLE RISKS

Commodity Fluctuations: Raw material availability and commodity price fluctuations remains an area of challenge for the Company. In the non-ferrous metals industry, raw material prices are closely tied to global commodity market trends. Volatility in lead, zinc, and other metals can significantly influence revenue, costs, and profit margins. To mitigate these risks, the Company implements a comprehensive risk management approach that includes hedging on the London Metal Exchange (LME), back-to-back hedging and dynamic pricing mechanisms. Additionally, long-term sourcing arrangements help manage supply stability amid market volatility.

Currency Fluctuations: Your Company operates both in the domestic and international market. Having our global presence with import and export operations, we are subjected to currency rate fluctuations which may result in gains or losses. To safeguard profitability from adverse currency movements, the Company adopts a range of hedging strategies, including natural hedging through exports and the use of forward contracts to cover net exposures. The Company also undertakes proactive measures such as inventory planning, monitoring market forecasts, and tracking product movement to manage risks effectively. Given the potential impact of foreign exchange fluctuations on imports, exports, and the overall cost of capital, the Company closely monitors these movements to take timely mitigation and responsive measures.

Commodity Inflation: In the metal manufacturing industry, sharp increases in raw material prices can significantly raise production costs, affecting profit margins and product affordability. Such inflation may also dampen consumer sentiment and demand. To address this, the Company implements strategic sourcing, long-term supplier agreements, and efficient inventory planning. Commodity hedging through exchanges like LME helps manage price volatility. These measures enable the Company to maintain cost competitiveness and ensure business stability.

Increase in Competition: While competition is an inherent aspect of the industry, it can become a risk when it leads to irrational market behaviour, such as aggressive pricing and unsustainable trade practices. The growing presence of unorganized players further intensifies this challenge, potentially impacting margins and hindering sustainable growth. Intensifying competition in segments like lead metal, zinc metal, and PVC additives, also poses a risk to market share. In response, the Company focuses on value-added products, operational efficiency, and cost optimization to maintain its competitive edge.

Procurement/Supply Chain Risk: Disruptions in sourcing scrap materials or logistics delays can adversely affect plant operations. To mitigate these risks, the Company employs strategic diversification of suppliers and maintains strong vendor engagement. Additionally, localized procurement practices are implemented to enhance supply chain resilience. These measures collectively ensure operational stability and continuity.

Regulatory/Compliance Risk: The Company operates in highly regulated sectors such as Metal manufacturing and PVC additives production, where frequent changes in import/export regulations, taxation, environmental/ EPR norms, and other legal requirements can increase the compliance burden and disrupt operations. The Company mitigates these risks through robust legal and regulatory oversight, supported by external consultants and internal compliance teams. Regular updates from plant heads and functional teams ensure timely adherence to evolving norms. Proactive compliance mechanisms are in place to monitor and enforce legal standards across business operations, enabling the Company to stay agile and compliant in a dynamic regulatory environment.

Geopolitical and Trade-Related Risks: Global supply chains face ongoing vulnerabilities due to geopolitical tensions, trade restrictions, and changing international policies, which can disrupt raw material availability, increase costs, and affect export markets. The Company mitigates these risks through a diversified procurement

base, regional supply redundancies, and localized storage and manufacturing.

Technology Obsolescence: In todays rapidly evolving manufacturing landscape, staying technologically relevant is essential for maintaining competitiveness and operational excellence. Technology obsolescence can adversely affect productivity, process efficiency, and cost structures. The Company recognises this risk and remains committed to continuous innovation in both product development and manufacturing processes. By adopting advanced technologies and upgrading systems regularly, the Company enhances operational efficiency, ensures quality consistency and sustained market relevance.

Cyber Security & IT Risk: Cyber threats pose a risk of operational disruption and data loss. The Company mitigates this through robust IT security protocols, including firewall upgrades, regular audits, and advanced encryption frameworks.

Pandemic: Deterioration in supply chain and demand due to any pandemic can act as a significant business risk. Strong supply chain system with robust digitisation and interlinking of various divisions are some of the mitigating steps taken by the Company to tackle a similar situation in future.

While risk is an inherent aspect of any business, the Company is conscious of the need to have an effective monitoring mechanism and has put in place appropriate measures for its mitigation.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal checks and controls covering operations of the Company are in place and are constantly being improved upon. Adequate systems exist to safeguard Companys assets through insurance on reinstatement basis and maintenance of proper records. The internal control is designed to ensure that the financial and other records are reliable for preparing the financial statements and other data, and for maintaining accountability of persons.

The Companys internal controls commensurate with the size and the nature of its operations. These have been designed to provide a reasonable assurance with regard to recording and providing reliable financial and operational information, complying with applicable statutes, safeguarding assets from unauthorized use, executing transactions with proper authorization and ensuring compliance with corporate policies. Investment decisions involving capital expenditure are taken up only after due appraisal and review. Adequate policies have been laid down for approval and control of expenditure.

The Company has established a robust Internal Financial Controls (IFC) framework that aligns with its operational size, scale, and complexity. The Board of Directors holds the responsibility for ensuring that the IFC is effectively implemented and maintained. Furthermore, this internal control framework complies with the requirements as set forth in the Companies Act, 2013.

The CEO and CFO Compliance Certificate provided in this Annual Report discusses the adequacy of our internal control systems and procedures. Further, M/s. CNGSN & Associates LLP, the Statutory Auditors of the Company have reported that the Company has adequate internal financial control system over financial reporting and such internal financial control systems over financial reporting were operating effectively.

Additionally, the Company has an Internal Auditing system in place handled by a reputed Chartered Accountancy firm. Based on the observations of the Internal Auditor, the process owners undertake the corrective actions and improvements in their respective areas. Significant audit observations and corrective actions thereupon are presented to the Audit Committee. The Audit Committee considers suggestions for improvement. The Audit Committee, to ensure effectiveness of the internal control system, reviews the audit observations and corrective action taken thereon. The Partners of both, Statutory Auditor and Internal Auditor attend the Audit Committee meetings, as and when invited and considered necessary by the Audit Committee.

Based on the evaluation as defined in Section 177 of the Companies Act, 2013 and Regulation 18 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Audit Committee noted that, as of March 31, 2026, the Companys internal financial controls were adequate and operating effectively and no material weakness existed during the Financial Year 2025-26.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS

At POEL, we believe that our people are the foundation of our success and long-term growth. More than just contributors to daily operations, our employees are the driving force behind our innovation, resilience, and continued progress. POEL is committed to fostering a culture that empowers individuals through trust, transparency, and purpose-driven engagement. POEL takes pride in maintaining a strong employer-employee relationship.

POEL adopts a structured approach to recruitment, employee engagement, learning and development, and performance recognition to continuously strengthen workforce capabilities. The Company offers a dynamic work environment supported by competitive compensation, clear career progression, and targeted learning opportunities. The reward and recognition programs are designed to celebrate performance, foster a sense of belonging and encourage long-term commitment.

To maintain a competitive edge, the Company organizes structured training programs designed to train employees at various levels. Technical and safety training programs are conducted to enhance workers knowledge and application skills, ensuring that our workforce are well-prepared to meet the evolving demands of the business and the industry at large.

Beyond routine responsibilities, we actively encourage employees to explore their potential by undertaking voluntary, cross-functional initiatives that promote problem-solving, creativity and collaboration. This helps in building a culture of ownership and innovation across the organization.

The Company has a strength of 581 employees as on March 31, 2026, reflecting a broad and capable team that underpins our sustainable and scalable operations. Industrial relations remained cordial and harmonious throughout the year, driven by open communication and a strong focus on employee welfare, underscoring the Companys commitment to a collaborative and progressive work environment.

CAUTIONARY STATEMENT

Statements made herein describing the Companys expectations or predictions are "forward-looking statements". Forward looking statements are based on certain assumptions and expectations of future events. The actual results may differ materially from those expected or predicted depending on market conditions, input costs, economic development, Government policies and other incidental factors.

For POCL Enterprises Limited
Sunil Kumar Bansal	Devakar Bansal
Managing Director	Managing Director
DIN: 00232617	DIN: 00232565
Place : Chennai
Date : August 14, 2026