Shreyas Intermediates Ltd Management Discussions

ANNUAL OVERVIEW, OUTLOOK

Your Directors are pleased to present the Management Discussion and Analysis Report for the year ended 31st March, 2025. Indian economy is expected for slow revival with continued inflationary prices, rising raw material cost, depreciating rupee. The global economy shows signs of revival but with no significant upturn. Developed economics like North America and Europe which are major consumers of pigment are gradually recovering and accordingly demand for printing inks,paints and coating is expected to pick up, which will benefit the Company. The Company will continue its efforts to increase the utilization of its installed capacities, which will be crucial to achieve an improvement in the operational results. Caustion however is drawn to the steep Counter Vieling Duty imposed by China on Phthalocyanins being imported from India. The Indian Indusrty has thus lost a sizeable chunk of it business from China and in turn China has become competitior in the World to Indian Phthalocyanines. Priority will be on the quality of the products. The disciplined focus will be cost reductions, operating efficiencies and diligent cash deployment in value creating opportunities. The Company is also taking efforts to increase the product line whereby company will be in a position to increase the margin on sales. Today, we are the leading manufacturers of Phthalocyanine Blue Crude and its downstream products in India and contribute up to 15% of the entire Copper Phthalocyanine market of India. The company has a global presence in 15 countries. The production capacity of Shreyas Intermediates Limited in Copper Phthalocyanine Blue Crude is 1500 metric tons per month, in Alpha Blue is 200 metric tons, Beta Blue 400 metric tons per month and Pigment Green 7 is 50 metric tons per month.

Chemicals are an integral part of our modern day life. There is hardly any industry where chemical substances are not used. Pigments are an integral ingredient of the chemical industry. Pigments are colouring agents that can be classified into phthalo and azzo pigments. Phthalocyanine pigments are one of the largest categories of pigments manufactured in India. Your Company is engaged in the manufacture of Phthalocyanine Blue Crude and its downstream products in India.

The global pigments industry produces hundreds of colourants for a wide spectrum of industries and consumers. The major markets are printing inks, paints and coatings, plastics, paper, ceramics, textiles, glass, food and cosmetics. With more and more people are moving to urban areas there has been a hefty growth in the paints and coating industry. The Asia Pacific region is expected to grow as demand and production of pigment are shifting from the US, Europe and Japan to the emerging markets of Asia, especially China and India. A steady increase in the large pigments markets such as paint and coating will catalyse volumes. With the printing ink industry also performing well, it will open up newer opportunities for the Company. Raw material availability and their costs are always a concern. The key raw materials used in the manufacture of the pigments are derivatives of crude oil. Hence, prices of raw material vary with fluctuation in the international crude oil prices. The Company has an in built system of monitoring the inventory and logistics. Further production process of the Company is vertically integrated, where CPC Blue Crude is the primary raw material for the production of Pigment Blue. This helps the Company to manage the raw material cost. The future of pigment production is completely dependent on the ability to treat the waste water. The Company has been investing continuously in meeting its obligations towards protecting the environment. Towards this step, the company aims at providing a seamless integration of quality and schedule by ensuring timely deliveries, state-of-the-art manufacturing products, new age technology, constant innovation and economic viability. The recent expansion in the field of own power manufacturing places the Company in a unique position as the dependence on Power from the Government is obviated. This also will help the Company in recycling more than 90% of it water and the dependence on the Government for intake and outtake of water is also minimized and will be miniscule. The Audit Committee monitors the implementation of the risk mitigation plans.

The Standalone total Revenues along with other income of the Company were 52 lakhs for the financial year under review as against previous year 51 lakhs registering total hike of 1.96%. The Standalone Profit after Tax was 1596 lakhs for the financial year under review as against previous year 158 lakhs which was almost at 12 times higher than previous year and PAT including Comprehensive Income was at 159 lakhs as compared to 158 lakhs which was almost at 1 times higher than previous year.

The Companys operating and business control procedures have been framed in order that they ensure efficient use of resources and comply with the procedures and regulatory requirements. The company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

As there are no subsidiaries of the Company, Investment made in Subsidiaries is NIL.

The Company operates in single reported segment with main business of Commodity Chemicals activity.

During the year under review, the performance of the Board & Committees and Individual Director(s) based on the below parameters was satisfactory:

(a) Most of the Directors attended the Board meeting;

(b) The remunerations paid to executive Directors are strictly as per the company and industry policy. (c) The Independent Directors only received sitting fees.

(d) The Independent Directors contributed a lot in the Board and committee deliberation and business and operation of the company and subsidiaries based on their experience and knowledge and Independent views. (e) Risk Management Policy was implemented at all critical levels and monitored by the Internal Audit team who places report with the Board and Audit committee.

The provision of the Companies Act, 2013 relating to CSR Initiatives are not applicable to the Company.

The Compliance function of the Company is responsible for independently ensuring that operating and business units comply with regulatory and internal guidelines. The Company continues to play a pivotal role in ensuring implementation of compliance functions in accordance with the directives issued by regulators, the Companys Board of Directors and the Companys Compliance Policy. The Audit Committee of the Board reviews the performance of the Compliance Department and the status of compliance with regulatory/internal guidelines on a periodic basis.

Companys objectives, projections, estimates, expectations and predictions may be "forward looking statements" within the meaning of applicable securities laws and regulations. Although the expectations are based on reasonable assumptions, the actual results could materially differ from those expressed or implied, since the Companys operations are influenced by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Claims against the Company not acknowledged as debts Rs. 497.39 Lacs (2022-Rs.497.39 Lacs) excluding interest, wherever applicable These comprise:

1. Excise duty disputed by the Company relating to issues of applicability and classification aggregating Rs. 456.01 Lacs (2022 - Rs.456.01 Lacs), excluding interest on claims, wherever applicable.

2. Other matters Rs. 41.38 Lacs (2022 - Rs.41.38 Lacs), excluding interest on other matters, wherever applicable.

3. Claims against the Company not acknowledged as Debts Rs. 1600 Lacs, excluding interest pending at Civil Court, Ratnagiri, Maharashtra. It is not practicable for the Company to estimate the closure of these issues and the consequential timings of Cash flows, if any, in respect of the above.