Sambhv Steel Tubes Ltd Management Discussions

Indian economic review

Overview

The Indian economy grew at 6.5% in FY 2024-25, compared to a revised 9.2% in FY 2023-24. This represented a four-year low due to a moderate slowdown within the Indian economy (marked by slower manufacturing growth and a decline in net investments). Despite the slowdown, India retained its position as the worlds fifth-largest economy. Indias nominal GDP (at current prices) was H330.68 trillion in FY 2024-25 (H301.23 trillion in FY 2023-24). The nominal GDP per capita increased from H2,15,936 in FY 2023-24 to H2,35,108 in FY 2024-25, reflecting the impact of an economic expansion. The Indian rupee weakened 2.12% against the US dollar in FY 2024-25, closing at H85.47 on the last trading day of FY25. In March 2025, the rupee recorded the highest monthly appreciation since November 2018, rising 2.39% (arising out a weakening US dollar). Infiationary pressures eased, with CPI inflation averaging 4.63% in FY 2024-25, driven by moderating food inflation and stable global commodity prices. Retail inflation at 4.6% in FY 2024-25, was the lowest since the pandemic, catalysing savings creation. Indias foreign exchange reserves stood at a high of $676 billion as of April 4, 2025. This was the fourth consecutive year when rating upgrades outpaced downgrades on account of strong domestic growth, rural consumption, increased infrastructure investments and low corporate leverage (annualized rating upgrade rate 14.5% exceeded the decade-long average of 11%; downgrade rate was 5.3%, lower than the 10-year average of 6.5%).

Gross foreign direct investment (FDI) into India rose 13.6% to $81 billion during the last financial year, the fastest pace of expansion since 2019-20. The increase in the year was despite a contraction during the fourth quarter of 2024-25 when inflows on a gross basis declined 6% to $17.9 billion due to the uncertainty caused by Donald Trumps election and his assertions around getting investments back into the US.

Growth of the Indian economy

	FY22	FY23	FY24	FY25
Real GDP growth (%)	8.7	7.2	9.2	6.5

E: Estimated

(Source: MoSPI, Financial Express)

Growth of the Indian economy quarter by quarter, FY 2024-25

	Q1 FY25	Q2 FY25	Q3 FY25	Q4 FY25
Real GDP growth (%)	6.5	5.6	6.2	7.4

E: Estimated

(Source: The Hindu, National Statistics Office)

The banking sector continued its improvement, with gross non-performing assets (NPA) for scheduled commercial banks (SCBs) declining to 2.6% as of September 2024, down from 2.7% in March 2024. The capital-to-risk-weighted assets ratio for SCBs stood at 16.7% as of September 2024, reflecting a strong capital position. Indias exports of goods and services reached $824.9 billion in FY 2024-25, up from $778 billion in the previous fiscal year. The Red Sea crisis impacted shipping costs, affecting price-sensitive exports. Merchandise exports grew 6% YoY, reaching $374.1 billion.

Indias net GST collections increased 8.6%, totalling H19.56 lakh crore in FY 2024-25. Gross GST collections in FY 2024-25 stood at H22.08 lakh crore, a 9.4% increase YoY.

On the supply side, real gross value added (GVA) was estimated to expand 6.4% in FY 2024-25. The industrial sector grew by 6.5%, supported by growth in construction activities, electricity, gas, water supply and other utility services.

Indias services sector grew at 8.9% in FY25 (9.0% in FY24), driven by public administration, defence and other services (expanded at 8.8% as in the previous year). In the infrastructure and utilities sector, electricity, gas, water supply and other utility services grew a projected 6.0% in FY25, compared to 8.6% in FY24. Meanwhile, the construction sector expanded at 9.4% in FY25, slowing from 10.4% in the previous year.

Manufacturing activity was subdued in FY25, with growth at 4.5%, which was lower than 12.3% in FY24. Moreover, due to lower public spending in the early part of the year, government final consumption expenditure (GFCE) is anticipated to have slowed to 3.8% in FY25, compared to 8.1% in FY24.

The agriculture sector grew at 4.6% in 2024-25 (1.4% in 2023-24). Trade, hotel, transport, communication and services related to broadcasting segment were estimated to grow at 6.4% in 2024- 25 (6.3% in 2023-24).

From a demand perspective, the private final consumption expenditure (PFCE) exhibited robust growth, achieving 7.2% in FY 2024-25, surpassing the previous financial years rate of 5.6%. The Nifty 50 and SENSEX recorded their weakest annual performances in FY 25 in two years, rising 5.3% and 7.5% during the year under review respectively. Gold rose 37.7% to a peak of $3,070 per ounce, the highest increase since FY 2007-08, indicating global uncertainties.

Total assets managed by the mutual fund (MF) industry jumped 23% or H12.3 lakh crore in fiscal 2025 to settle at H65.7 lakh crore. At close of FY25, the total number of folios had jumped to nearly 23.5 crore, an all-time peak. During last fiscal, average monthly systematic investment plan (SIP) contribution jumped 45% to H24,113 crore.

Foreign portfolio investments (FPIs) in India experienced high volatility throughout 2024, with total inflows into capital markets reaching approximately $20 billion by year-end. However, there was significant selling pressure in the last quarter, influenced by new tariffs announced by the new US government on most countries (including India).

Outlook

India is expected to remain the fastest-growing major economy. Initial Reserve Bank of India estimates have forecast Indias GDP growth downwards from 6.7% to 6.5% based on risks arising from US tari_ levies on India and other countries. The following are some key growth catalysts for India in FY26.

Tari_-based competitiveness: India identified at least 10 sectors such as apparel and clothing accessories, chemicals, plastics and rubber where the US high tariffs give New Delhi a competitive advantage in the American market over other suppliers. While India faced a 10% tari_ after the US suspended the 26% additional duties for 90 days, the levy remained at 145% on China, the biggest exporter to the US. Chinas share of apparel imports into the US was 25%, compared with Indias 3.8%, a large opportunity to address differential (Source: Niti Aayog).

Union Budget FY 2024-25: The Union Budget 2025-26 laid a strong foundation for Indias economic trajectory, emphasizing agriculture, MSMEs, investment, and exports as the four primary growth engines. With a fiscal deficit target of 4.4% of GDP, the government reinforced fiscal prudence while allocating H11.21 lakh crore for capital expenditure (3.1% of GDP) to drive infrastructure development. The February 2025 Budget marked a shift in approach, with the government proposing substantial personal tax cuts. Effective April 1, 2025, individuals earning up to H12 lakh annually will be fully exempt from income tax. Economists estimate that the resulting H1 lakh crore in tax savings could boost consumption by H3-3.5 lakh crore, potentially increasing the nominal private final consumption Expenditure (PFCE) by 1.5-2% of its current H200 lakh crore.

Free trade agreement: In a post-Balance Sheet development, India and the United Kingdom announced a free trade agreement to boost strategic and economic ties. This could lead to a significant increase in the export competitiveness of Indian shipments in the UK across the textiles, toys, leather, marine products, footwear, and gems and jewellery sectors. About 99% of Indian exports to UK will enjoy zero-duty access tari_ cuts; India will cut tariffs on 90% of tari_ lines and 85% could become fully duty-free within 10 years.

Pay Commission impact: The 8^th Pay Commissions awards could lead to a significant salary revision for nearly ten million central government employees. Historically, Pay Commissions have granted substantial pay hikes along with generous arrears. For instance, the 7^th Pay Commission more than tripled its monthly salaries, raising the range from H7,000 to H90,000 to H18,000 to H12.5 lakh, triggering a widespread ripple effect.

Monsoons: The India Meteorological Department predicted an ‘above normal monsoon in 2025. This augurs well for the countrys farm sector and a moderated food inflation outlook.

Easing inflation: Indias consumer price index-based retail inflation in March 2025 eased to 3.34 per cent, the lowest since August

2019, raising hopes of further repo rate cuts by the Reserve Bank of India.

Deeper rate cuts: In its February 2025 meeting, the Monetary Policy Committee (MPC) reduced policy rates by 25 basis points, reducing it to 6% in its first meeting of FY 2025-26. Besides, Indias CPI inflation is forecasted at 4% for the fiscal year 2025-26. Lifting credit restrictions: In November 2023, the RBI increased risk weights on bank loans to retail borrowers and NBFCs, significantly tightening credit availability. This led to a sharp slowdown in retail credit growth from 20-30% to 9-13% between September 2023 and 2024. However, under its new leadership, the RBI has prioritized restoring credit flow. Recent policy shifts have removed restrictions on consumer credit, postponed higher liquidity requirements for banks, and are expected to rejuvenate retail lending.

(Source: CNBC, Press Information Bureau, Business Standard, Economic Times, World Gold Council, Indian Express, Ministry of External Affairs, Times of India, Business Today, Hindustan Times, Statistics Times)

Steel industry overview

Steel is the worlds most vital engineering and construction material, indispensable across infrastructure, transportation, manufacturing and everyday life. From automobiles and construction materials to cargo ships and surgical tools, its wide-ranging applications make it an essential commodity. Moreover, steel is 100% recyclable without any degradation in quality, reinforcing its role in a sustainable future.

India, currently the worlds second-largest producer of crude steel, is poised to outpace other major steel-consuming economies in 2025 with an estimated demand growth of 8–9%. Indias steel consumption recorded a robust growth of 11.5% in FY 2024-25, the fourth consecutive year of double-digit growth. In the four years ending FY 2024-25, Indias GDP at constant prices increased 37% while steel consumption grew 60%. Over this period, the elasticity of steel consumption to economic growth (computed as the ratio of growth in steel consumption to growth in real GDP) was recorded at 1.5, compared to an elasticity of 0.8 during the decade before the pandemic. This momentum is primarily driven by steel-intensive investments in housing and infrastructure, alongside increasing demand from sectors like engineering, packaging and manufacturing. The countrys large, underpenetrated domestic market is a significant growth lever with per capita steel consumption at just 98 kg, far below the global average of 228 kg. This figure is projected to rise to 160 kg by 2030, indicating substantial room for expansion.

Between April and January 2025, India produced 124.92 million tonnes (MT) of crude steel, marking a 4.5% increase over the previous year. Finished steel production stood at 119.5 MT (up 4%), while consumption reached 124.8 MT, a robust 10.7% year-on-year growth. Domestic demand is estimated to grow further by 9–10% in FY25, underscoring the sectors upward trajectory. India enjoys a structural cost advantage in the global steel ecosystem, supported by the fifth-largest iron ore reserves and the availability of low-cost manpower. These factors continue to attract domestic and foreign investments. One such example is AM/NS Indias $4.7 billion steel plant in Odisha, approved in January 2023, which reflects the sectors shift toward modernization, scale, and sustainability. The growing focus on green steel production is also gaining prominence, aligning the industry with long-term environmental goals.

However, challenges remain. High logistics costs, particularly freight rates that are nearly 500% higher than countries like Australia that affect operational efficiency and weaken export competitiveness. Moreover, with nearly half of Indias workforce still employed in agriculture, accelerating the transition to a more industrial and skilled economy remains a policy priority.

On the trade front, finished steel imports rose by 24.5%, while exports fell by 6.4%, resulting in an additional availability of 3.2

MT of finished steel in the domestic market. This accounted for 2% of total domestic consumption and contributed to softening steel prices. Imports from all major exporting countries to India increased, with China continuing to supply value-added and specialty steel, such as galvanised and coated products, alloy steel, and stainless steel. South Koreas import share declined slightly due to modest growth.

Indias steel sector stands at a pivotal juncture backed by strong domestic demand, rising production, strategic investments, and a drive towards sustainability. As the nation continues to invest in infrastructure and push forward with industrialisation, steel will remain a cornerstone of Indias economic transformation.

Key metrics of Indian steel

	FY 2022-23	FY 2023-24	FY 2024-25
Crude steel production	127.2	144.3	152.0
Finished steel production	123.2	139.2	146.6
Import*	7.0	9.6	10.5
Export*	8.3	8.5	6.3
Consumption	119.9	136.3	152.0
Consumption per capita (kg)	86.7	97.7	107.8

*Import and export include semis

Steel pipes industry overview

The global steel pipe market is poised for steady expansion over the next decade, driven by increasing industrialisation, infrastructure development, and the rising demand for energy. Valued at USD 105.6 billion in 2025, the market is estimated to reach USD 154.8 billion by 2035, growing at a CAGR of 3.9%. Steel pipes are critical components across industries such as oil and gas, construction, water transportation, and manufacturing, making them indispensable to global economic growth.

Among these sectors, oil and gas remains the primary consumer of steel pipes. These pipes are essential for drilling, exploration, and transportation of hydrocarbons. Without steel pipes, the functioning of the energy sector would be severely hindered. Simultaneously, the construction industry is increasingly adopting steel pipes for structural applications, water transport, and HVAC systems.

Innovation in the sector is accelerating, with corrosion-resistant coatings and high-strength alloys enhancing the durability and performance of steel pipes. Environmental concerns are pushing manufacturers toward sustainable production processes that reduce emissions and energy consumption. Moreover, the competitive landscape is marked by mergers, acquisitions, and capacity expansions as companies aim to strengthen their market presence.

The steel pipe market is segmented by material type into carbon steel, alloy steel, stainless steel, and tool steel. Application-wise, it caters to diverse sectors including automotive, construction and mining, textile machinery, chemicals, pharmaceuticals, energy, refinery petrochemicals, oil and gas processing, and water treatment. Regionally, the market spans North America, Latin America, Western Europe, Eastern Europe, East Asia, South Asia Pacific, and the Middle East and Africa.

India, one of the fastest-growing markets, reached a steel pipe consumption of 13.56 million tons in 2024. According to IMARC Group, this is expected to grow to 27.76 million tons by 2033, at a CAGR of 7.65% during 2025–2033. Growth is being driven by rapid infrastructure development, expanding oil and gas projects, rising exports, government initiatives, and increasing demand for both seamless and welded pipes.

Seamless steel pipes, in particular, are witnessing high demand in India due to their strength, durability, and resistance to high pressure, making them ideal for oil and gas as well as infrastructure applications.

Further supporting market expansion, projects like the Pradhan Mantri Urja Ganga and Indias broader push for energy production have accelerated the use of steel pipes in oil extraction, water delivery, and construction. The automotive and power sectors are also increasingly adopting seamless pipes to meet performance and reliability standards. In response to growing demand, Indian manufacturers are investing in state-of-the-art technologies to enhance seamless pipe production capacity.

Sustainability is becoming a strategic imperative for the Indian steel pipe industry. Manufacturers are adopting eco-friendly production methods, such as electric arc furnaces and hydrogen-based steelmaking, in response to stringent national and global carbon regulations. There is rising demand for recyclable and corrosion-resistant pipes, especially galvanized and epoxy-coated variants, which extend service life in infrastructure and water supply projects. Government initiatives to promote green steel and circular economy practices are providing further impetus. In January 2025, the Ministry of Steel sought H150 billion ($1.74 billion) in the 2025–26 budget to incentivize low-carbon steel production, focusing on emission reduction, R&D, raw material efficiency, and renewable energy adoption.

(Source: IMARC, Future Market Insights)

Steel tubes industry overview

The steel tubes market in India has witnessed significant growth and development over the years, driven by the countrys expanding infrastructure, construction, and manufacturing sectors. This surge in demand has led to the emergence of numerous companies operating in a highly competitive landscape. These companies not only support the domestic economy but also help meet national demand by producing high-quality products that adhere to both local and international standards, making Indian steel tubes globally competitive. The India steel tubes market which reached USD 7.50 billion in 2024, will grow to USD 8.20 billion by 2033, registering a CAGR of 0.90% between 2025 and 2033. This growth is supported by several factors including rapid infrastructure development, rising automotive production, increasing oil and gas exploration, and growing demand for water and sewage systems. Government initiatives such as Make in India and technological advancements in manufacturing processes are also contributing to market expansion.

One of the primary growth drivers is the booming construction industry, which is increasingly reliant on steel tubes for structural applications. Large-scale government programs like the Smart Cities Mission, Bharatmala, and Pradhan Mantri Awas Yojana (PMAY) have created widespread demand for steel tubes in infrastructure, bridges, and high-rise buildings. In August 2024, India approved 12 industrial smart cities across 10 states with an investment of H28,602 crore, attracting H1.52 lakh crore and generating 9.39 lakh jobs, boosting steel tube consumption in construction projects.

Moreover, rapid urbanization and growing foreign direct investment (FDI) in the real estate sector have further heightened the need for durable and cost-e_ective construction materials. Steel tubes, with their strength, corrosion resistance, and recyclability, are increasingly becoming the material of choice for architects and engineers. To meet these evolving requirements, manufacturers are enhancing product quality through high-frequency induction welding (HFIW) and galvanization technologies, which improve both performance and lifespan. Consequently, the demand for steel tubes continues to rise, fuelled by public infrastructure spending and expanding private sector activity.

(Source: 6wresearch, IMARC)

Growth drivers

Strong domestic demand: Indias steel consumption is rising on the back of large-scale infrastructure projects under schemes like PM Gati Shakti and Smart Cities. Real estate revival and growth in automotive, white goods, and capital goods sectors are fuelling demand for long and fiat steel products. Moreover, rural development initiatives are driving consumption of steel in housing and agri-infrastructure.

Government policy support: Policies like the National Steel Policy 2017 aim to raise steel capacity to 300 MT by 2030. The PLI Scheme has attracted H10,000 crore (US$ 1.2 billion) in FY25, boosting specialty steel production. Budgetary support of H3,362 crore in FY26 and trade protection measures like import restrictions and anti-dumping duties further strengthen the domestic industry.

Capacity expansion and investments: Major players are undertaking large-scale expansions, including JSWs H1,00,000 crore greenfield plant in Gadchiroli. Capacity additions across fiat and long products are underway to meet growing demand. Backward integration by companies like Sambhv Steel is enhancing cost efficiency and supply chain control.

Abundant raw material availability: Indias fifth-largest iron ore reserves provide a stable and cost-e_ective raw material base. Production hubs in states like Odisha and Chhattisgarh ensure logistical advantages, reducing input costs and supporting competitiveness.

Export potential and global positioning: As the second-largest crude steel producer, India enjoys economies of scale and a strong export position. Supply chain shifts and China+1 strategies are boosting exports, while FTAs with UAE, Australia, and others are expanding market access.

Technological advancements: Automation, digitization, and advanced materials are improving efficiency and product quality. Investment in green steel and energy-e_cient processes is attracting global collaborations and catering to sustainability-conscious markets.

Company overview

Sambhv Steel is a leading domestic manufacturer of steel pipes and structural tubes (hollow sections), operating two strategically located, backward-integrated facilities in Raipur, Chhattisgarh. It is the only company in India with a single-location setup that produces narrow-width HR coils in-house, using advanced technology, an industry-first in the Indian market.

Raipurs status as a logistics hub, along with proximity to high-quality coal and iron ore, provides key raw material and distribution advantages.

In Fiscal 2025, the company expanded its portfolio by commencing production of galvanized (GP) coils, pre-galvanized (GP) pipes, and stainless steel HRAP and CR coils using captively produced stainless-steel blooms/slabs. These additions cater to growing demand from industries such as ABC (architecture, building and construction), ART (automobiles, railways and transport), process industries, consumer goods, and more.

SWOT analysis

Strengths

The only Indian company with a single-location, fully backward-integrated ERW pipe facility, enabling complete in-house production of key intermediates like sponge iron, slabs, and HR coils for cost and quality control.

Indias sole producer of narrow-width hot rolled coils using a secondary steelmaking route (DRI + induction furnace), offering a strategic product advantage in niche applications.

Captive WHRB and AFBC power plants utilize sponge iron by-products to generate energy efficiently, reinforcing cost savings and sustainability.

Proximity to coal and high-grade iron ore belts in Chhattisgarh ensures lower logistics costs, raw material security, and supply chain stability.

A strong dealer-distributor network across 15 states and 1 UT supports steady market access, contributing to a ~2% share in the national ERW pipe segment and consistent double-digit operating margins.

Weaknesses

Despite operational strengths, Sambhv Steel holds only ~2% share in the ERW pipe segment, indicating limited market penetration in a highly fragmented and competitive industry.

All production is concentrated in Raipur, Chhattisgarh. While this enhances logistical efficiency, it exposes the company to regional risks like local disruptions, policy changes, or natural calamities.

Compared to large integrated steel producers, Sambhv lacks brand recognition and recall among large institutional buyers and national infrastructure contractors.

Heavy reliance on ERW pipes and narrow-width HR coils could limit growth if these product segments face reduced demand or increased commoditization.

Due to the unavailability and high cost of high-quality steel scrap, the company relies on sponge iron for primary steelmaking, which may limit flexibility in adapting to global trends favoring scrap-based EAF routes.

Opportunities

Steel pipe demand in India projected to grow at 8–9% CAGR (FY25–FY29) to 18–20 MTPA, driven by government investments in urban infrastructure and irrigation.

Schemes like Jal Jeevan Mission and Har Ghar Nal Yojana to drive demand in water-related infrastructure.

Rising demand for stainless steel tubes (7–9% CAGR) across oil and gas, auto, infra sectors.

Focus on value-added products: corten steel pipes, GI and GP pipes with advanced threading, eco-friendly door frames.

Diversified into SS HRAP coils, CRFH pipes, GP coils, serving end uses like plumbing, irrigation, construction, fire_ghting, telecom, fencing, and signage.

GP pipes targeted for coastal markets with higher corrosion-resistance needs.

Potential for export growth in GI, GP, and ERW pipes.

Threats

Even with backward integration, fluctuations in iron ore and coal prices driven by global commodity cycles or domestic policy can impact input costs and margins.

Presence of large, integrated steel majors and low-cost regional players in the ERW and HR coil segments could lead to pricing pressure and margin erosion.

Tightening environmental norms, especially around induction furnace-based production and DRI units, could necessitate additional capex for compliance and green transition.

While the company has adopted automation (e.g., HAGC system), rapid advancements in steelmaking, AI-driven quality control, and low-carbon production may require continual upgrades to stay competitive.

Any geopolitical shifts, anti-dumping measures from importing countries, or currency volatility could impact export competitiveness and disrupt global supply chains.

Risk and mitigation

Financial review

Revenues: Revenue from operations reported a 17.55 % growth from H12,857.57 millions in FY 2023-24 to reach H15,113.55 millions in FY 2024-25 due to increase in sales volume of Finished Goods in the current year. While, other income of your Company reported a sharp increase of 79.33 % due to the increase in interest income from deposits and unsecured loans.

Expenses: Total expenses increased by 22.08 % from H11,786.10 millions in FY 2023-24 to H14,388.85 millions in FY 2024- 25 due to increase in cost of material consumed, changes in inventories of stock-in-trade and finished goods. Cost of goods sold, accounting for a 70.43 % share of your Companys revenues increased by 15.68 % from H9,201.84 millions in FY 2023-24 to H10,644.69 millions in FY 2024-25 owing to an increase in Changes in inventories of stock-in-trade and finished goods. Employees expenses accounting for a 5.85 % share of your Companys revenues increased by 54.76 % from H571.33 millions in FY 2023-24 to H884.21 millions in FY 2024- 25.

Particulars	FY 2024-25 (Amount	FY 2023-24 (Amount
	in Rs millions)	in Rs millions)
Net Sales/Income from Operations	15,113.55	12,857.57
Other Income from Operations	64.88	36.18
Total Income from Operations	15,178.43	12,893.75
Total Expenses excluding Finance cost and Depreciation	13,567.24	11,258.85
EBITDA*	1,546.31	1,598.72
EBITDA Margin (%)	10.23%	12.43%
Depreciation	343.83	209.10
Finance Cost	477.78	318.15
Profit Before Tax (PBT)	789.58	1,107.65
Provision for Tax	209.14	283.26
Profit/Loss after tax (PAT)	580.44	824.39
PAT Margins (%)	3.84%	6.41%

* excluding other income

Key ratios

Particulars	FY 2024-25	FY 2023-24
EBITDA/turnover (%)	10.23%	12.43%
Debt/Equity Ratio (Times)	1.08	0.80
Return on equity (%)	12.42%	25.42%
Book value per share (H)	10	10
Earnings per share (H)	2.41	3.79
Debtors turnover (days)	35	27
Inventory turnover (days)	61	42
Creditors turnover (days)	78	28
Working Capital (days)	18	41
Interest coverage ratio (x)	2.65	4.48
Current Ratio (Times)	0.96	1.06
Net profit margin (%)	3.84%	6.41%

Human Resource

At Sambhv Steel, human resource practices form the backbone of its operational strength and future-readiness. The Company continues to invest in the holistic development of its workforce through structured training programmes, on-the-job learning, and cross-functional exposure. Sambhv Steel fosters a culture of continuous improvement and engagement by offering meaningful work profiles, encouraging open communication between employees and leadership, and nurturing a collaborative work environment. With a strong focus on internal talent development, the Company is committed to building future leaders from within. As of March 31, 2025, Sambhv Steel has a total of 1,774 people across its manufacturing and corporate operations.

Internal control system and their adequacy

Your Company has implemented robust internal control procedures tailored to its size and operations. The Board of Directors oversees this system, establishing guidelines to ensure its sufficiency, effectiveness, and application. Designed to facilitate efficient management and enable the measurement and verification of outcomes, the internal control system relies on

SAP for ensuring the reliability of accounting and management information. Moreover, the system ensures compliance with all relevant laws and regulations, safeguarding the Companys assets. Its primary purpose is to identify and manage risks promptly and effectively, encompassing operational, compliance-related, economic, and financial risks.

Cautionary statement

This statement made in this section describes your Companys objectives, projections, expectation and estimations which may be ‘forward looking statements within the meaning of applicable securities laws and regulations. Forward– looking statements are based on certain assumptions and expectations of future events. Your Company cannot guarantee that these assumptions and expectations are accurate or will be realised by your Company. Actual result could differ materially from those expressed in the statement or implied due to the influence of external factors which are beyond the control of your Company. Your Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements on the basis of any subsequent developments.