Quality Foils (India) Ltd Management Discussions

<dhhead>MANAGEMENT DISCUSSION AND ANALYSIS REPORT</dhhead>

Your Company is engaged in the manufacture of Cold Rolled Stainless Steel Strips and Stainless Steel Tubes & Pipes. From manufacturing process involved, it may be classified as a stainless steel strips, tubes and pipes manufacturer. The Indian steel industry has made a rapid progress on strong fundamentals over the recent few years. The industry is getting all essential ingredients required for dynamic growth. The government is backing the industry through favorable industrial reforms. Indian steel demand is expected to boost by Infrastructure & Construction development sustained by industrial, manufacturing and capital goods and be stimulated by the automotive, railways and consumer durable sectors.

A. Industry Structure and Developments

The stainless steel manufacturing industry in India continues to evolve with rising demand from sectors such as automotive, construction, consumer durables, and infrastructure. The demand for Cold Rolled Stainless Steel Strips and Stainless Steel Tubes & Pipes has remained steady, driven by government initiatives such as Make in India, smart city development, and increased infrastructure spending. The industry is witnessing increasing adoption of high-precision stainless steel products with improved corrosion resistance and strength.

The company’s production of Cold Rolled Stainless Steel Strips and Stainless Steel Flexible Hoses (excluding Job production) was 7203.834 MT in the current financial year, as compared to 6786.345 MT in the previous Financial year. The reserve and surplus stood to Rs. 2729.66 lakh for the current year as compared to Rs. 2587.81 lakh for the previous year. The current market price of share is Rs. 69.80/-

B. Opportunities and Threats Opportunities:

• Growing domestic infrastructure and industrial projects.

• Expanding export potential to Europe and Southeast Asia.

Threats:

• Volatility in raw material prices, particularly nickel and chromium.

• Rising imports from countries with subsidized manufacturing.

C. Segment-Wise or Product-Wise performance

Cold Rolled Stainless Steel Strips Growth in FY 2024-25 was driven by increasing demand in auto and appliance sectors.

• Stainless Steel Tubes & Pipes Contributed with strong traction from construction and industrial clients.

D. Outlook

With infrastructure investment continuing and industrial consumption rising, the outlook for FY 2025-26 remains positive. The company plans to increase production capacity, invest in automation, and explore new export markets. Strategic sourcing and R&D will be emphasized to maintain competitive cost structures and product quality.

• Supply Chain Risk: Dependency on imported raw materials could affect continuity.

• Regulatory Risk: Changes in import-export duties, BIS norms, or environmental regulations may impact operations.

F. Internal Control Systems and their adequacy

The company has policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, in place to cope with internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation was observed.

In the context of the Companys core manufacturing operations — including the production of Cold Rolled Stainless Steel Precision Strips and Coils and Stainless Steel Flexible Hoses — the internal Financial controls are specifically aligned to:

• Procurement and Raw Material Inventory Management

Controls are in place for vendor selection, purchase order approvals, goods inward checks, and inventory reconciliation.

• Production Planning and Cost Control

Systems have been implemented to monitor machine utilization, process yields, and wastage, helping to track cost efficiency at every stage of manufacturing.

• Sales, Dispatch, and Receivables

Controls exist to ensure proper billing, dispatch tracking, credit management, and receivables aging analysis.

• Fixed Asset Management

Asset acquisition, capitalization, and depreciation processes are governed by defined policies.

• IT and Data Controls

The Company uses ERP systems for finance, inventory, and production tracking. Access rights are restricted and reviewed periodically to ensure data integrity.

The internal audit team, in coordination with the statutory auditors, periodically evaluates the adequacy and effectiveness of internal controls. Based on their reports, corrective measures are undertaken to enhance the control environment

G. Discussion on Financial Performance with Respect to Operational Performance

The total income for the financial year 2024-25 has decreased to Rs. 15280.19 Lakhs, as against Rs. 15538.30 Lakhs in the financial year 2023-24, and the profit after tax has increased to Rs. 141.58 Lakhs in the financial year 2024- 25, from Rs. 133.58 Lakhs in the financial year 2023-24.

H. Material Developments in Human Resources / Industrial Relations

During the year, the company focused on training programs in quality control, safety, and lean manufacturing practices. The total number ofemployees as on March 31,2025, stood at 204. Industrial relations remained cordial throughout the year, with no strikes or disruptions.

I. Ratios:

with a detailed explanation thereof

There is a slight increase of 0.05% in return on Net Worth as compared to the previous financial year.

Date: August 05, 2025 Place: Hisar

For and on behalf of the Board of Directors

airman

DIN:00011103 R/o: Anand bhawan, Hisar, Haryana-125001