TruAlt Bioenergy Ltd Management Discussions

MACROECONOMIC OVERVIEW -GLOBAL & INDIAN ECONOMY

Global GDP Growth Outlook (2024-2025):

• The global GDP is projected to grow at a steady rate of 3.2% in both 2024 and 2025.

• The International Monetary Funds (IMF) April 2024 update forecasts a 3.2% growth rate for 2023, with the same growth rate expected to continue through 2024 and 2025.

• The latest estimate for 2024 is 0.1 percentage points higher than the IMFs January 2024 forecast.

• This revision is attributed to greater-than-expected economic resilience in the United States and several large emerging markets and developing economies, coupled with fiscal support in China.

• These economies are expected to experience stable growth through 2024 and 2025, though regional differences will persist.

• With disinflation and steady growth, the risk of a hard landing has diminished, and risks to global growth are now broadly balanced.

• Inflation has been falling faster than expected due to favorable global supply developments.

• On the upside, faster disinflation could lead to further easing of financial conditions.

Global GDP Outlook for 2023-2025:

E: Estimated; P- Projected

Source: IMF economic database, CRISIL Market Intelligence and Analytics (MI&A)

Global inflation to subside in medium term

As per the IMF, global headline inflation is expected to fall from an estimated 6.8% in 2023 (annual average) to 5.9% in 2024 and 4.5% in 2025. Disinflation is likely to be faster in advanced economies (inflation falling 2% in 2024 to 2.6%) than emerging market and developing economies, where inflation is projected to decline by just 0.1% to 8.3%. Overall, annual average headline and core inflation is likely to be lower in most of the worlds economies.

India among the worlds fastest-growing key economies

Real GDP growth comparison among India vs Advanced and emerging economies

Regions	2018	2019	2020	2021	2022	2023	2024P	2025P
US	2.9	2.3	-2.8	5.9	1.9	2.5	2.7	1.9
Euro area	1.8	1.6	-6.1	5.6	3.4	0.4	0.8	1.5
UK	1.7	1.6	-11.0	7.6	4.3	0.1	0.5	1.5
China	6.8	6.0	2.2	8.4	3.0	5.2	4.6	4.1
India*	6.5	3.9	-5.8	9.1	7.2	7.8	6.8	6.5
Advanced economies	2.3	1.7	-4.2	5.6	2.6	1.6	1.7	1.8
Emerging market and developing economies	4.6	3.6	-1.8	6.9	4.1	4.3	4.2	4.2
World	3.6	2.8	-2.8	6.3	3.5	3.2	3.2	3.2

Note: E: Estimated,

P: Projection as per IMF update.

* Numbers for India are for the financial year (2020 is FY21 and so on) and as per the IMFs forecast.

CRISILs GDP forecast for India: 6.8% in FY25.

Source: IMF economic database, World Bank national accounts data, OECD national accounts data, CRISIL MI&A.

Following the recovery from the COVID-19 pandemic, India exhibited a faster growth rate of 7.2% in fiscal 2023, surpassing both advanced economies at 2.6% and emerging and developing economies at 4.1%.

The United States expects growth of 2.7% in 2024, tempered by monetary tightening and labor market softening. The UK anticipates growth to reach 0.5% in 2024, driven by easing energy prices, with a further increase to 1.5% in 2025. The euro area forecasts growth of 0.8% in 2024 and 1.5% in 2025, supported by reduced energy costs and higher consumer spending. Emerging economies are projected to maintain stable growth at 4.2% through 2025.

Indias GDP logged 5.7% CAGR during fiscal 2012-2023

The countrys GDP increased at a compound annual growth rate (CAGR) of 5.7% to Rs 161 trillion in fiscal 2023 from Rs 87 trillion in fiscal 2012. In fiscal 2022, the economy recovered from the pandemic-related stress as restrictions were eased and economic activity resumed, though inflation spiraled in the last quarter due to geopolitical pressures, with a GDP print of 9.8% vs -5.8% in fiscal 2021. In fiscal 2023, GDP rose 7.0% on strong growth momentum propelled by investments and private consumption. The share of investments in GDP rose to an 11-year high of 34% and that of private consumption to an 18-year high of 58.0%.

In fiscal 2024, real GDP is expected to have grown by 7.6%. Even as the agricultural economy slowed sharply in fiscal 2024 following a weak monsoon, the surge in the non-agricultural economy has more than offset it. The government-driven investment push, along with easing input cost pressures for industry, has also played a major role in shoring up growth. In fiscal 2025, it is expected that the countrys GDP may expand 6.8% on a Y-o-Y basis, driven by continued disinflation supporting the purchasing power of consumers, growth in the agricultural sector coupled with gradual pick-up in the private sector capital expenditure.

However, the growth is estimated to be slower than fiscal 2024, as fiscal consolidation will reduce the fiscal impulse to growth, rising borrowing costs and increased regulatory measures could weigh on demand, net tax impact on GDP is expected to normalize, and exports could be impacted due to uneven growth in key trade partners and any escalation of the Red Sea crisis. On the other hand, another spell of normal monsoon and easing inflation could revive rural demand.

India saw robust growth in per capita income between FY12 and FY23

Indias per capita income, a broad indicator of living standards, rose to Rs 99,404 in fiscal 2023 from Rs 63,462 in fiscal 2012, i.e., 4.2% CAGR. Growth was led by better job opportunities, propped up by overall economic growth. Moreover, population growth was stable at ~1% CAGR. Also, as per the second advance estimates, per capita net national income (constant prices) was estimated to have increased to Rs 106,134, thereby registering an on-year growth of -6.8%. With per capita income rising to the upper middle-income category by fiscal 2031, the share of PFCE is expected to be dominant in Indias GDP growth.

INDUSTRY STRUCTURE AND DEVELOPMENTS

Biofuels Industry Overview

Global biofuel market and growth outlook

Global biofuel demand is set to expand significantly, increasing by 38 billion liters (10.4 billion gallons) between 2023 and 2028. The International Energy Agency (IEA) projects a 23 percent rise in total biofuel demand, reaching 200 billion liters by 2028. This growth will predominantly be driven by renewable diesel and ethanol, which are expected to account for two-thirds of the increase. Biodiesel and biobased sustainable aviation fuel (SAF) will make up the remaining third.

Emerging economies, particularly Brazil, Indonesia, and India, are poised to lead this surge in biofuel demand over the next five years. In these regions, ethanol and biodiesel usage is anticipated to see the most significant expansion. In contrast, advanced economies such as the U.S., European Union, Canada, and Japan will focus more on renewable diesel and biobased SAF as their primary growth segments.

Indian Biofuel market and growth outlook

With the Indian Governments increased support for alternative energy sources, Indias biofuel industry is growing at a tremendous pace and exploring forms of renewable bio-energy sources such as Sustainable Aviation Fuel (SAF), Compressed Biogas (CBG), Second Generation (2G) Ethanol, and Green Flydrogen along with promoting the manufacturing and consumption of Fermented Organic Manure (FOM). The current biofuel market in India is mainly divided into ethanol, compressed biogas (CBG), and biodiesel currently, of which ethanol forms a major chunk. Sizeable investments, especially by the government, aimed at converting excess sugar availability into ethanol to strengthen its pursuit of creating an ethanol economy are noteworthy. India may even surpass China as the third-largest ethanol consumer as early as 2026. Indian SAF market is in a very nascent stage and is expected to catch up by 2025.

Indian Biofuel market is dominated by Ethanol, followed CBG and biodiesel. SAF and other renewables do not form a major chunk of the total biofuel demand in India currently, but the scenario is expected to change with governments current Net Emissions Targets.

• Indian ethanol market

First Generation Ethanol:

Ethanol demand in India is expected to grow at a CAGR of 17.7% till Fiscal 2026. Apart from the advancing of the 20% blending target to 2025 from 2030, the Government has also shifted focus towards 2G ethanol which will further help the sector. In Fiscal 2023, Indias ethanol contribution to Ethanol Blended Petrol (EBP) Program stands at approximately 548 crore litres, a figure projected to rise substantially to 1,016 crore litres by Fiscal 2026. In 2022-2023, the overall ethanol market including ethanol for other uses is estimated to be at 828 crore litres and is anticipated to expand significantly, reaching 1,350 crore litres by the year 2026. This upward trajectory underscores the nations robust commitment to increasing ethanol utilization, higher blending targets under EBP potential utilisation of ethanol for bio-diesel, flex fuel vehicles, cooking fuel and sustainable aviation fuel, reinforcing sustainable energy practices, and fostering a greener future. The current ethanol blending as on June 2024 stands at 15.9%.

Second Generation (2G) Ethanol:

Studies indicate that Indias annual lignocellulosic biomass surplus can yield 2500 to 3000 crore litres of Second Generation (2G) ethanol, significantly reducing dependence on imported crude oil.2G Ethanol Biorefineries produce cellulosic ethanol and valuable by-products like biogas, liquid C02, pellets, and compost, supporting horticulture and reducing chemical fertilizer use. These biorefineries will boost rural socio-economic development by providing income to farmers and creating numerous jobs. They also hold potential for high-value by-products like furfural and xylitol, enhancing profitability. 2G ethanol supports local fuel needs, with significant opportunities in the aviation sector for Sustainable Aviation Fuels (SAF) and in I automotive fuel efficiency and emission reduction.

It can also generate renewable electricity, contributing to energy security. Additionally, 2G ethanol serves as a feedstock for bioplastics and biochemicals, promoting sustainable manufacturing. I The government is fostering 2G ethanols viability through initiatives like the PM JI-VAN Yojana, supporting a sustainable and profitable bioeconomy.

• Indian Sustainable Aviation Fuel Market

Indias aviation sector is rapidly growing, with a 12.5% increase in ATF consumption in February 2024 compared to the previous year.

The total ATF consumption from April to February FY 2023-24 reached 6.8 million metric tons, up 11.9% year-on-year. The global aviation industry has set an ambitious net-zero carbon emission target by 2050, which is focused on delivering maximum reduction in emissions at source using SAF, innovative new propulsion technologies and other efficiency improvements. SAF demand is expected to begin from 2025 and would play an important role in ensuring the Net Zero emission targets globally. SAF market in India is in nascent stages. Indian government has set a target of 1% blending of SAF by 2027 and 2% blending by 2028 both for international flight initially. This presents significant investment opportunities, aligning with environmental standards and supporting Indias aviation industrys growth.

Indias biodiesel market has been gaining traction as a sustainable alternative to petroleum/ fossil diesel. The sector is driven by the need to reduce dependence on imported fossil fuels, mitigate environmental impact, and promote i rural development through agriculture. Key factors U shaping the market include government policies :j and incentives encouraging biodiesel production such as the National Biodiesel Mission of 2002-03 which kicked off the biodiesel sector in India, it is presently governed by the National Biofuels Policy, 2018 which sets a blending target of 5% for biodiesel by 2030 which would require almost 4.5 billion litres of biodiesel per year. About 90% of biodiesel produced presently in India is from imported palm stearin, while the rest is from animal tallow, acid oil and Used Cooking Oil. Challenges remain including feedstock availability, technological advancements, and infrastructure development. However, the biodiesel market in India shows promise with increasing interest from the government, research institutions, and the broader market.

• Indian Compressed Biogas (CBG) Market

India aims to become a gas-based economy by taking the share of natural gas in Indias present 6.7% to 15% by 2030. While India is less reliant on imports of natural gas as compared to crude oil, the dependence still hovers in the range 45%-50% and is expected to rise significantly as the demand for natural gas grows, this is something that can be mitigated through CBG, a biofuel capable of replacing natural gas. The government is, thus, looking forward to exploring compressed biogas (CBG) as an addition to the biofuel mix of the country. India biogas market is expected to grow up to $2.25 billion in 2029, logging a CAGR of 6.3% between 2022 and 2029. Despite Covid-19 denting the sectors growth, it has shown a good recovery and is expected to continue the upward trajectory with large investments coming in from big conglomerates, both Indian and international, Public-Sector Units and entrepreneurs.

India, with over 1.3 billion people, faces significant challenges in meeting sustainable energy demands. Current cooking fuels, LPG and biomass, contribute 90 million tons of C02 annually. LPG dependency poses supply risks, while biomass fuels cause deforestation, emissions, inefficiencies, and indoor pollution. Logistics and subsidy costs for LPG are substantial. Ethanol, a clean, green, and cost-effective alternative, can replace LPG and fossil fuels, addressing environmental concerns and enhancing energy security. Substituting 484 crore liters of ethanol can replace 2500 TMT of LPG, reducing Indias LPG import dependence by 15%, saving Rs. 8000 crores in forex annually, and cutting C02 emissions by 67 lakh metric tons per year.

Ethanol offers a sustainable solution for cleaner cooking fuel, reducing dependency on non-renewable resources.

BUSINESS ENVIRONMENT AND OUTLOOK

Global biofuel demand is set to expand significantly, increasing by 38 billion liters (10.4 billion gallons) between 2023 and 2028. The International Energy Agency (IEA) projects a 23 percent rise in total biofuel demand, reaching 200 billion liters by 2028. This growth will predominantly be driven by renewable diesel and ethanol, which are expected to account for two-thirds of the increase. Biodiesel and biobased sustainable aviation fuel (SAF) will make up the remaining third.

Emerging economies, particularly Brazil, Indonesia, and India, are poised to lead this surge in biofuel demand over the next five years. In these regions, ethanol and biodiesel usage is anticipated to see the most significant expansion. In contrast, advanced economies such as the U.S., European Union, Canada, and Japan will focus more on renewable diesel and biobased SAF as their primary growth segments.

Several countries are making notable progress in biofuel initiatives. Brazil plans to boost its biodiesel blending mandate to 15% by 2026, up from 10% in 2022, reflecting its commitment to enhancing biofuel utilization. The United States is significantly supporting the biofuel sector through the Inflation Reduction Act (IRA), which provides an estimated USD 9.4 billion in production and investment support for biofuels through 2031. Canada, meanwhile, is implementing its Clean Fuel Regulations in 2023, aiming for a 13% reduction in greenhouse gas emissions intensity for transport fuels by 2030, showcasing its commitment to cleaner energy.

The European Union is also nearing agreement on the updated Renewable Energy Directive (RED III).

This directive proposes doubling the renewable content requirements in transportation fuels, including biofuels, compared to existing targets, further emphasizing the EUs dedication to sustainable energy solutions.

Biofuels in India is of strategic importance as it augers well with the ongoing initiatives of the Government such as Make in India & Swachh Bharat Abhiyan and offers great opportunity to integrate with the ambitious targets of doubling of Farmers Income, Import Reduction, Employment Generation, Waste to Wealth Creation. India achieved an impressive ethanol blending rate of 15.9% as of June 2024, demonstrating its dedication to integrating biofuels into its energy strategy.

With the Indian Governments increased support for alternative energy sources, Indias biofuel industry is growing at a tremendous pace and exploring forms of renewable bio-energy sources such as Sustainable Aviation Fuel, Compressed biogas (CBG), 2G Ethanol, and Green Hydrogen along with promoting the manufacturing and consumption of Fermented Organic Manure (FOM).

These efforts highlight a global trend towards increasing the adoption of biofuels as part of the broader strategy to reduce carbon emissions and promote sustainable energy solutions.

KEY GOVERNMENT POLICIES

Policies for First Generation (1G) Ethanol & Biodiesel

National Biofuels Policy- The National Biofuels Policy, 2018 aims to reduce Indias fossil fuel dependence, promote cleaner energy, and ensure energy security. It targets 20% ethanol blending with petrol by 2025 and 5% biodiesel blending with diesel by 2030. The policy encourages diverse feedstocks, prioritizing non-food sources.The 2022 amendment expanded feedstocks to include agricultural residues, forestry residues, and industrial wastes, and added advanced biofuels like 2G ethanol and compressed biogas (CBG). Financial incentives include subsidies, tax reductions, viability gap funding, and interest subvention, with additional incentives to attract private investment and favorable loan terms.

Ethanol Blended Petrol ("EBP") Programme- The EBP programme was launched in 2003, aiming to promote the use of environmentally friendly alternative fuels and reduce import dependency for energy requirements. Under the EBP program, the government undertook several measures like re-introducing administered price mechanisms, exploring alternate routes to ethanol production and differential pricing mechanism for ethanol products. The government also introduced several schemes to reduce the price of ethanol blended petrol like reduction in GST on ethanol for EBP and interest subvention scheme. Furthermore, the government has released long term procurement targets for ethanol. In 2019, the targets were revised to selling 10% ethanol blended petrol by 2022 and 20% by 2030; however, the government achieved its 2022 stated targets and has taken several measures to prepone the existing target of 20% blending in 2030 to 2025. In addition to these efforts, the Government is also using taxes and duties to encourage ethanol usage and boost the market for ethanol. For instance, an additional basic excise duty of Rs. 2/ litre is being levied on unblended petrol (not blended with ethanol or methanol) intended for retail sale with effect from November 1, 2022, showcasing the Governments commitment towards bringing ethanol to the forefront.

To increase indigenous production of ethanol, the Government since 2014 took multiple interventions including administered price mechanism, opening alternate route for ethanol production, amendment to Industries (Development and Regulation) Act, 1951 which legislates exclusive control of denatured ethanol by the Central Government, reduction in GST from 18% to 5%, Notification of National Policy on Biofuels - 2018, increasing scope of raw material for ethanol procurement, interest subvention scheme for enhancement and augmentation of ethanol production capacity and extension of EBP Programme to whole of India except islands of Andaman Nicobar & Lakshadweep with effect from April 1, 2019. It has been decided that the price of ethanol derived from damaged and surplus food grains has to be fixed by oil marketing companies ("OMCs").

Interest cost subsidy for setting up ethanol plants- Under the scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity, the Government of India extends soft loan to the mills for setting up new distilleries/ expansion and installation of incineration boilers or installation of any method as approved by central pollution control board for zero liquid discharge and interest cost subsidy on the loans to be extended by banks for five years including a one-year moratorium.

Production Linked Incentive- To increase the production of ethanol in the country and achieve the much-stated target of 20% blending by 2025, the Government has announced several schemes for the aligning industry, ultimately benefiting the ethanol production in the country. Government of Karnataka has introduced a scheme where certain industries receive an incentive of 1.75% of their gross revenue for actively participating in and supporting the states economy and job creation initiatives. (Source: CRISIL Report Under the Government of Karnatakas scheme, if a company has a top line of Rs. 1,000 crore in a financial year, it would receive incentives benefitting it to the tune of Rs. 17.5 crore.

Ethanol Interest Subvention Schemes have been introduced between 2018 and 2022, incentivizing entrepreneurs to establish new distilleries or expand existing ones. These schemes provide an interest subvention, which is borne by the Government of India of 6% or 50% of the interest charged by banks/financial institutions for five years, whichever is lower, accompanied by a one-year moratorium.

Special incentives package- The Government of Karnataka has granted a special incentives package for TruAlt Bioenergy effective from May 2023, concerning the ethanol production plants, which have collectively been recognized as a Super Mega Enterprise under the Industrial Policy 2020-2025. The incentives include a five-year exemption or reimbursement of all kinds of applicable stamp duty and registration charges, in addition to other incentives in line with the New Industrial Policy 2020-2025.

Exemption of excise duty- The Central Board of Indirect Taxes and Customs (CBIC), in July 2022, exempted the excise duty on 12% ethanol blended petrol and 15% ethanol blended petrol in order to support the ethanol production in the country.

Ethanol projects under priority sector lending- Some State Governments have also included ethanol projects under priority sector lending which has encouraged banks to sanction loans for ethanol projects.

Under the New Industrial Policy 2020 - 2025, the government has also introduced the Production Linked Incentive (PLI) scheme for automotive & auto component industry, specifically for flex fuel engine (capable of running ethanol 85 (E85) fuel) manufacturers, providing them with tax incentives. This move is expected to accelerate introduction of Flex Fuel vehicles in India, thus, growing the demand for ethanol in the country.

To further enhance the biofuel roadmap of India, Madhya Pradesh and Rajasthan government have come up with specific ethanol policies, providing incentive packages & subsidies of around Rs 1.5 per litre of ethanol produced for a period of 7-10 years.

Policies for the CBG Sector- Potassium Derived from Molasses (PDM), a potassium rich fertilizer derived from ash in molasses-based distilleries, is a by-product of the sugar-based ethanol industry. The potash-rich ash can be processed to produce PDM having 14.5% potash content and can be used by farmers in the field as an alternative to MOP (Muriate of Potash with 60% potash content). The Central Government has facilitated a mutually agreed price of PDM at INR 4263/ MT for sale by sugar mills to fertilizer companies for the current year. In addition, PDM Manufacturers can also claim subsidy at INR 345/ Ton at present rates under Nutrients Based Subsidy Scheme (NBS) of Department of Fertilizers. The idea behind these efforts of the government is to facilitate long-term sale/ purchase agreement on PDM between sugar mills and fertilizer companies.

Interest cost subsidy for setting up ethanol plants- Under the scheme for extending financial assistance to sugar mills for augmentation of ethanol production capacity, the central government extends soft loan through banks to the mills for setting up new distilleries/ expansion of existing distilleries and installation of incineration boilers or installation of any method as approved by Central Pollution Control Board for Zero Liquid Discharge. The Government bears interest subvention for the loan disbursed. The Central Government has decided to extend the timeline for disbursement of loans up to 30th September 2023 in respect of all the schemes notified during 2018-2021.

Key Policies for Second (2C) Generation Ethanol- India is at the cusp of transforming to the 2nd

Generation of Ethanol, due to recent government mandates and introduction of the policy "Pradhan Mantri JI-VAN (Jaiv Indhan- Vatavaran Anukool fasal awashesh Nivaran) Yojana" ("PM JI-VAN Yojana") for funds providing an initial push to the 2G ethanol capacity in India and attract further investments in the sector. Under the scheme, financial support to twelve integrated 2G Bio-ethanol Projects with a total financial outlay of Rs. 1,969.5 crore for the period 2018-19 to 2023-24 has been provided. The PM JI-VAN Yojana initiative has been introduced, which establishes a maximum financial aid of Rs.150 crore for commercial projects and Rs.15 crore for demonstration projects, and aims to enhance the economic viability of projects and foster research and development in the realm of 2G ethanol production technologies.

Apart from the financial assistance granted through the PM JI-VAN Yojana, various measures have been implemented to encourage the growth of ethanol plants. These include introducing extra excise duty on non-blended fuels, ensuring a guaranteed offtake for 15 years to private stakeholders through Ethanol Purchase Agreements signed by OMCs, diversifying the feedstock for 2G ethanol production, establishing a distinct price for 2G ethanol, reducing the GST rate to 5% on ethanol for the EBP Programme, and more.

Policies for the CBG Sector:

Sustainable Alternative Towards Affordable Transportation scheme introduced by the Government of India in 2018 ("SATAT") - The SATAT initiatives ambitious target is to produce 15 million metric tonnes per annum ("MMTPA") of CBG and a remarkable 50 MMTPA of bio-manure. The scheme envisages setting up of 5,000 CBG plants for production of 15 MMTPA of CBG by 2025, with an envisaged initial outlay of Rs. 30,000 crore for setting up of 900 plants in the first phase.

CBG Blending Obligation - In November 2023, the Government of India made it mandatory for the City Gas Distribution ("CGD") sector to blend CBG into the CNG (transport) and PNG (domestic) segments. This significant move aims to promote sustainable energy practices nationwide. Under the CBG Blending Obligation ("CBO"), CGD entities are required to mix CBG with natural gas, with the blending percentages gradually increasing over time. Initially starting as a voluntary effort until Fiscal 2025, the CBO mandates blend percentages of 1%, 3%, and 4% for Fiscal 2026, 2027 and 2028, respectively, and by Fiscal 2029, this obligation rises to 5%. Furthermore, until the CGD network is fully operational across the country, CBG marketed separately by all CGD entities will also count towards meeting the blending obligation.

CBC-CCD Synchronisation Scheme - The Ministry of Petroleum and Natural Gas has issued policy guidelines dated April 9, 2021 and October 26, 2021 for synchronization of CBG produced by plants in CGD networks. (Source: CRISIL Report) GAIL has been mandated to operationalize the Synchro Scheme and supply biogas/CBG co-mingled with domestic gas at Uniform Base Price to all CGD entities for use in CNG (Transport) and PNG (Domestic) segments of CGD network. The term of CBG-CGD Synchro Scheme has been further extended by 10 years. In February 2023, in an effort to prevent the stacking of taxes on blended CNG, the Ministry of Finance granted an exemption from excise duty on the portion equivalent to the GST paid on CBG when mixed with CNG.

CBG initiatives have the potential to produce carbon credits via the Clean Development Mechanism established by the United Nations Framework Convention on Climate Change - these carbon credits can be marketed to organizations and governments seeking to neutralize their carbon emissions, offering an extra income stream for CBG projects.

CBG projects fall under Agriculture infrastructure as per RBI guidelines. Loans to agriculture infrastructure are being classified under priority sector lending which has encouraged banks to sanction loans for CBG projects.

Market development assistance - The Department of Fertilizers has introduced a Market Development Assistance ("MDA") scheme with an outlay of Rs.1,451.82 crore for three years, from Fiscal 2024 to Fiscal 2026. Under this scheme, an MDA of Rs.1500/MT will be granted for the sale of FOM, liquid FOM, phosphate-rich organic manure produced at biogas/CBG plants under the GOBARdhan initiative.

Department of Agriculture, & Farmers Welfare: Agri-lnfra Fund - The Department of Agriculture & Farmers Welfare has introduced a new Scheme under the National Agriculture Infra Financing Facility called Agriculture Infrastructure Fund ("AIF"). The AIF offers financial assistance for investments in viable projects related to post-harvest management infrastructure and community farming assets. CBG is among the eligible projects under the community farming assets project. All loans obtained through this financing facility will benefit from a 3% per annum interest subvention, capped at a loan amount of Rs.2 crores. This subvention will be applicable for a maximum duration of 7 years.

Additionally, in 2023, India introduced the 2023 Carbon Credit Trading Scheme, encompassing both compliance and voluntary sectors. However, the compliance segment is scheduled to commence in 2025-26 and there is no set timeline for the launch of the voluntary carbon market. Nevertheless, it shows the intent towards sustainability. Under Indias revised carbon market scheme, obligated entities have the flexibility to purchase additional credits or sell surplus ones. Meanwhile, businesses can trade CCCs to offset their emissions. Such schemes will further boost green fuels and energies once they are brought into action.

Scheme for Development of Pipeline Infrastructure for injection of Compressed Biogas (CBC) in City Gas Distribution (CGD) network - The Ministry of Petroleum and Natural Gas announced a financial outlay of Rs.994.50 crore during the period of FY 2023-24 and Fy 2025-26 for creating CBG CGD grid connectivity for 100 CBG projects and create ecosystem for offtake of CBG with reduced logistic cost.

OPPORTUNITIES AND THREATS

SWOT Analysis

STRENGTHS	WEAKNESS
Abundance of Biomass: India is endowed with abundant renewable energy resources, supporting local biofuel production, reducing the need for petroleum imports, and enhancing energy security with diverse, indigenous energy sources.	Seasonality: The seasonality of crops and feedstock causes supply fluctuations that disrupt production schedules in the ethanol and biofuels industry, leading to potential shortages or surpluses. This variability increases storage costs and price volatility, complicating cost management and planning for producers.
Government Support: India has rapidly emerged as a major biofuel producer and consumer due to a series of coordinated government policies. This robust governmental backing has fueled industry growth, positioning India as a key player in the global biofuel market.	Access to Feedstock: Access to feedstock is impacted by weather changes, geographical constraints, and competition with other industries, driving up prices and reducing availability. Logistical challenges in transporting feedstock from remote areas further impact the reliability and cost-effectiveness of supply.
Rising energy demand: Indias rising energy demand presents a significant opportunity for the biofuel industry. As the country seeks sustainable and alternative energy sources to meet its growing needs, biofuels offer a viable solution.	High Production Costs: The biofuel industry faces high production costs due to expensive raw materials and advanced conversion technologies. This can limit competitiveness and profitability, making it challenging for biofuels to compete with the lower costs of fossil fuels.
Rural development opportunities: The biofuel industry significantly boosts rural development by creating jobs and providing additional income for farmers through the use of agricultural waste. This not only strengthens the rural economy but also promotes sustainable agricultural practices, making it a vital component of Indias energy strategy.	Technological Challenges: Technological challenges in biofuel production and processing hinder efficiency and scalability. Significant investment in R&D is needed to improve conversion processes and reduce costs, but innovation is slow due to the high risks and expenses involved.
Environmental Benefits: The biofuel industry reduces greenhouse gas emissions, lowers fossil fuel dependence, and promotes sustainable waste management, contributing to a cleaner environment and a smaller carbon footprint for India.	Infrastructure Limitations: Limited infrastructure for biofuel distribution and storage poses significant challenges to widespread adoption and market growth. Existing networks are primarily designed for fossil fuels, requiring substantial investment to adapt, while specialized storage facilities for biofuels are scarce.
Strong Research and Development Capabilities: Indias robust R&D infrastructure supports ongoing innovation, enhancing the biofuel ecosystems growth and sustainability.	Skilled Manpower: A shortage of skilled manpower affects the ethanol and biofuels industry, which requires expertise in biotechnology, chemical engineering, and agricultural sciences. Attracting and retaining such professionals is challenging, leading to higher recruitment and training costs.
Growing awareness and adoption of biofuels: Increasing awareness and adoption of biofuels in India is driving demand and supporting industry growth. This shift towards sustainable energy solutions enhances market opportunities and contributes to a greener, more sustainable future.

OPPORTUNITIES AND THREATS

SWOT Analysis

OPPORTUNITIES	THREATS
Rising Energy Demand: The increasing energy demand in India presents significant opportunities for the biofuel industry. As the country seeks sustainable and alternative energy sources to meet its growing needs, biofuels offer a viable solution.	Competition with Fossil Fuels: Biofuels face strong competition from cheaper and more established fossil fuels, which can limit market share and profitability.
Increase in targets of Ethanol Blended Petrol (EBP) Program: Going forward, higher targets for ethanol blending in petrol will create a growing market for ethanol producers.	Food vs. Fuel Debate: The use of agricultural feedstocks for biofuel production can lead to conflicts with food supply, impacting public perception and policy support.
Transition to Flex-Fuel Vehicles:The shift towards flex fuel vehicles will open new markets for biofuels, supporting industry growth.	Climate Variability: Climate variability and extreme weather events can affect the availability and reliability of feedstocks, disrupting biofuel production.
The Diverse End-Use Applications: Biofuels can be used in various applications, from transportation to industrial processes, increasing their market potential. With the growth of these sectors, the demand for biofuels is poised to grow significantly.	Regulatory and Policy Changes: Uncertainty and changes in government regulations and policies can impact the biofuel industrys growth and stability.
Growing Alcoholic Beverages Market: The expanding market for alcoholic beverages boosts demand for ethanol, a key biofuel component creating more market opportunities for producers.	Technological Advancements in Electric Vehicles: The rapid advancement and adoption of electric vehicles pose a significant threat to the biofuel market by reducing demand for liquid fuels.
Increased adoption of ethanol in Industrial Applications: Greater use of ethanol in industrial applications drives demand and supports industry expansion.	Global Economic Instability: Economic instability can affect investment in the biofuel sector and disrupt global supply and demand dynamics.
Growing Sustainable Aviation Fuel Market: With the growth of the aviation sector and the need to move to sustainable aviation fuel as per the norms set globally to offset and reduce carbon footprint globally through international aviation, the market for Sustainable Aviation Fuel (SAF) is growing, providing new opportunities for biofuel producers.	Infrastructure Limitations: Insufficient infrastructure for biofuel production, distribution, and storage can hinder market expansion and accessibility.
Technological Innovations for high value by-products: Innovations that create high-value by-products from biofuel production offer significant opportunities to enhance profitability and market appeal. Developing high-value products from by-products will create more opportunities to command premium prices, further boosting profit margins.
Shift towards Sustainable Mobility: The global shift towards sustainable mobility will increase the demand for biofuels as a cleaner energy alternative, presenting Vnumerous opportunities for the industry. y

TruAlt Bioenergy stands at a pivotal juncture, leveraging its strengths to capitalize on burgeoning opportunities in the energy sector. The companys commitment to biofuels aligns seamlessly with the global shift towards greener energy solutions. With a robust focus on rural development and the vision of Aatmanirbhar Bharat, TruAlt Bioenergy is well-positioned to contribute significantly to reducing crude imports and enhancing farmer incomes.

The strengths of TruAlt Bioenergy, including access to abundant feedstock, strong partnerships, and strategic market positioning, provide a solid foundation for growth. However, the company must remain vigilant to potential threats such as regulatory changes and market competition. By addressing these challenges and maximizing its opportunities, TruAlt Bioenergy can lead the charge in the biofuels sector, driving forward sustainable development and energy independence in India.

Company Overview

We are one of Indias largest biofuels producers, having strategically positioned ourselves as a prominent and diversified player in the biofuel industry in India, primarily in the manufacturing of Ethanol. We hold the distinction of being the largest ethanol producer in India based on installed capacity, with an aggregate production capacity of 1,400 kilo litres per day as of March 31, 2024. We have the largest market share in terms of ethanol production capacity in Fiscal 2024, at 3.7%.

Further we intend to expand our production capabilities by 600 KLPD making our capacity 2000 KLPD and also set up dual feed integrations of 1000 KLPD to produce ethanol from grain based feedstocks (grains unfit for human consumption). We also produce extra neutral alcohol ("ENA"), which is the primary raw material in the production of alcoholic beverages. Further, we also sell dry ice and liquid carbon dioxide ("C02") that are by-products.

We are one of the first producers of compressed biogas ("CBG") under the Sustainable Alternative Towards Affordable Transportation ("SATAT") scheme introduced by the Government of India in 2018 (Source: CRISIL Report) as of March 31, 2024. Through our Subsidiary, Leafiniti, as of March 31, 2024, we operate one CBG plant with a capacity of 10.2 tonnes per day ("TPD"), alongwith solid and liquid fermented organic manure ("FOM"). To strengthen our CBG capabilities further, we have entered into MOUs with two Maharatna PSUs to set up 24 more CBG plants, subject to definitive agreements upon due diligence and receipt of requisite approvals.

Going forward, we intend to venture into the following business verticals:

• Manufacture second generation ethanol ("2G ethanol"),

• Manufacture sustainable aviation fuel ("SAF"),

• Manufacture mevalonolactone ("MVL") and allied biochemicals,

• Establish biofuel dispensing stations.

In the last two years, TruAlt Bioenergy has markedly improved its financial performance while simultaneously broadening its operational footprint. Its strategic goal is to establish itself as an integrated biofuels company, aligning with the evolving trends of the biofuels industry. Key initiatives include venturing into:

• Manufacturing of Second Generation (2G) Ethanol:

TruAlt Bioenergy plans to expand its operations by venturing into the production of 2G ethanol. Leveraging bagasse, a byproduct of sugar manufacturing, as a raw material, the company aims to utilize 800,000 MT to produce approximately 6 crore liters of ethanol annually. To facilitate this initiative, TruAlt Bioenergy has entered into Technology Transfer Agreements with Praj Industries Limited for commissioning its 2G ethanol unit.

• Manufacturing of Sustainable Aviation Fuel (SAF):

Building on its ethanol production expertise, TruAlt Bioenergy intends to enhance its value chain by producing Sustainable Aviation Fuel (SAF) from ethanol. The company has signed a Memorandum of Understanding (MOU) with LanzaJet, a sustainable fuel technology company based in the USA, to set up a facility capable of producing 10 crore liters of SAF annually. This strategic move positions TruAlt Bioenergy to potentially become the worlds largest producer of SAF from ethanol, pending the finalization of manufacturing and technology licensing modalities.

• Manufacturing of Mevalonolactone (MVL) and Allied Biochemicals:

As part of its ethanol production process, TruAlt Bioenergy plans to manufacture Mevalonolactone (MVL) and allied biochemicals. MVL, derived during ethanol production, serves as a precursor for elastomers, specialty fuels, and SAF molecules. The company has entered into an MOU with Visolis Inc., a biotechnology firm based in the USA, to explore technology collaboration for MVL and SAF production. Feasibility studies are underway to assess the potential of producing MVL using dual-purpose fermenters capable of ethanol and MVL production.

• Establishment of Biofuel Dispensing Stations:

With increasing government support for non-fossil fuel vehicles and access to ethanol and Compressed Bio-Gas (CBG), TruAlt Bioenergy plans to establish biofuel dispensing stations. The company is in the process of setting up its first station in Mudhol, Karnataka, pending regulatory approvals. These stations will offer motor spirit, high-speed diesel, E85 and E93 blending fuels, bio-CNG, and include EV charging points, battery swapping facilities, and a non-fuel retail division for FMCG and automotive products. This initiative allows TruAlt Bioenergy to enter the direct-to-consumer market as a retail supplier.

SEGMENT-WISE AND PRODUCT WISE PERFORMANCE

In the last year, we faced significant challenges following the directive on restrictions on ethanol produced from sugarcane juice and sugar syrup, issued on 7th December 2023 by the Department of Food & Public Distribution, Government of India. This circular from the government created widespread uncertainty within the sector, affecting not only our business but also impacting rural communities and disrupting the socio-economic and financial health of all involved entities.

The broader implications indicated potential distress across the entire ethanol ecosystem. In response, we recognized the urgency of the situation and the need for various efforts to address the challenges. Despite the abrupt notification and ensuing uncertainties, we successfully navigated these obstacles, emerging stronger and more resilient. Our adaptability and determination enabled us to not only withstand the disruption but also achieve noteworthy performance outcomes despite all the challenges.

Standalone Financial Information:

Our revenue from operations increased to Rs.1,21,707.96 lakhs in Fiscal 2024 from Rs.76,238.03 lakhs in Fiscal 2023 by 60% during the year.

Our total income increased to Rs.1,27,342.93 lakhs in Fiscal 2024 from Rs.76,238.03 lakhs in Fiscal 2023 by 67% during the year.

EBITDA amounting to Rs.18,774.81 lakhs in Fiscal 2024 increase from Rs.10,504.65 lakhs in Fiscal 2023 mainly due to reduction in Cost of Goods sold to 62.96% in Fiscal 2024 from 65.77% in Fiscal 2023 and power and fuel cost to 6.74% from 7.92% and S&D expense to 2.88% from 3.75% as a % of Total income.

Finance costs increased to ^14,101.02 lakhs in Fiscal 2024 from Rs.3,531.06 lakhs in Fiscal 2023 due to increase in borrowing by Rs.47,581.40 lakhs in Fiscal 2024 and in the previous year the borrowing was obtained at the end of the financial year in March 2023 as the Company started its operations from October 1 , 2022. It comprises of interest on Compulsorily Convertible Preference Shares (CCPS) of Rs.3,132.86 lakhs in Fiscal 2024 and Rs.1,395.24 lakhs in Fiscal 2023 and. The interest on CCPS is notional in nature and not payable to the subscriber as per Ind AS 109, Other than interest on CCPS the total finance cost has increased by Rs. 8,832.34 lakhs in Fiscal 2024 to 8.61% from 2.80% in Fiscal 2023 as a percentage of Total Income. Subsequently, all the CCPS got converted into equity shares in May 2024.

Our depreciation and amortisation expenses stood at Rs.5,578.30 lakhs in Fiscal 2024 and Rs.2,075.08 lakhs in Fiscal 2023 and, comprising depreciation of Rs.4,472.38 lakhs and Rs.1,524.09 lakhs and amortization of intangible assets Rs.1,105.92 lakhs and Rs.550.99 lakhs respectively due to increase in gross block by Rs.12,471.08 lakhs.

Board has proposed a preference dividend @ 1.25% p.a. on 4,69,19,000 shares @ INR 100 per CCPS amounting to Rs.586.49 lakhs in Fiscal 2024.

Net Worth increased to Rs.58,729.59 lakhs in Fiscal 2024 from Rs.52,729.87 lakhs in Fiscal 2023.

** Networth includes CCPS of Rs. 31,813.25 lakhs for Fiscal 2024 and Rs. 28,680.40 lakhs for Fiscal 2023 considered as a debt instrument in the restated financials.

Total Assets increased to Rs.2,36,317.02 lakhs in Fiscal 2024 from Rs.1,85,597.93 lakhs in Fiscal 2023.

Net Working Capital stood at Rs.5,627.48 lakhs in Fiscal 2024 from Rs.10,133.67 lakhs in Fiscal 2023 mainly due to increase in inventories of Rs.202.88 lakhs, increase in trade receivables of Rs.21,032.29 lakhs, decrease in trade payables Rs.17,115.05 lakhs, increase in other financial liabilities of Rs.10,665.71 lakhs, decrease in other current liabilities of Rs.72.45 lakhs, decrease in other financial assets of Rs.16,385.27 lakhs and increase in other assets of Rs.9,935.75 lakhs.

Investment in Subsidiary

The Board of Directors of the Company at its meeting held on September 18, 2023 has approved the purchase of 72,19,494 equity shares of Leafiniti Bioenergy Private Limited. (LBPL) from its shareholders. On October 4, 2023, the Company has invested INR 866.34 lakhs constituting 51.22% of the paid-up share capital of LBPL, resulting to gain of control as per Ind AS103 - Business combinations, thereby making LBPL a subsidiary of the Company.

In a subsequent meeting on November 6, 2023, the Board approved an additional investment of INR 63.94 lakhs for purchase of 5,32,829 equity shares constituting 3.78% of shareholding in LBPL, which was executed on December 27, 2023.

Furthermore, the Company has invested INR 761.24 lakhs, to acquire the remaining 45% of LBPLs paid-up share capital, thereby making LBPL a wholly-owned subsidiary as on 24th February, 2024.

Cash-flow

Cash-flow from Operating Activities

Net cash flows generated from operating activities was Rs.2,832.92 lakhs in Fiscal 2024. In Fiscal 2024, profit before tax was Rs.4,730.46 lakhs. Primary adjustments consisted of depreciation and amortization expense of Rs.5,578.30 lakhs and finance cost of Rs.14,101.03 lakhs.

Cash-flow from Investing Activities

Net cash flow used in investing activities in Fiscal 2024 was Rs.38,882.08 lakhs, primarily due to payments for purchase of property, plant and equipment including capital work in progress of Rs.36,190.54 lakhs, investment in mutual funds of Rs.999.95 lakhs and acquisition of shares of subsidiary (net of cash acquired) of Rs.1,691.59 lakhs.

Cash-flow from Financing Activities

Net cash flow from financing activities in Fiscal 2024 was Rs.37,309.34 lakhs, primarily on account of proceeds from loans (net) of Rs.21,936.42 lakhs and on account of current borrowings of Rs.25,455.37 lakhs which was partially offset by interest paid of Rs.10,082.45 lakhs.

Financial Ratios

The financial performance of TruAlt Bioenergy for Fiscal 2024 presents a balanced picture with both positive developments and areas for improvement. The Interest Coverage Ratio has reduced to 1.71 in FY 24 as against 4.92 in FY23, and the Debt Service Coverage Ratio (DSCR) has moderated to1.10 in FY 24 from 3.72 in FY 23, reflecting a shift in debt servicing dynamics. On the positive side, the Debt/EBITDA Ratio has improved to 5.78 in FY 24 as against 8.22 higher in FY23, indicating stronger earnings relative to debt. The Net Working Capital Cover has adjusted to 1.10 from 1.28 for the above comparative tenure, showing more efficient working capital management. Return on Capital Employed (ROCE) has reduced to 7.52% from 11.38%, while Return on Equity (ROE) has increased to 10.23% from 8.81% for the similar period, highlighting improved shareholder returns. The Debt/Equity Ratio has increased to 1.85 from 1.64 almost being stable, reflecting a strategic approach to financing. These changes suggest a period of strategic adjustments and growth potential for TruAlt Bioenergy.

This is the first full year of operation. In FY 23 the Company started the operations on Oct, 1 2022. Hence all the financial ratios are not fully comparable.

Consolidated Financial Information:

Our revenue from operations increased to Rs.1,22,340.47 lakhs in Fiscal 2024 from Rs.76,238.03 lakhs in Fiscal 2023 by 60% during the year.

Our total income increased to Rs.1,28,018.77 lakhs in Fiscal 2024 from Rs.76,238.03 lakhs in Fiscal 2023 by 68% during the year.

EBITDA amounting to Rs.18,808.51 lakhs in Fiscal 2024 increase from Rs.10,504.65 lakhs in Fiscal 2023 mainly due to reduction in Cost of Goods sold to 62.80% in Fiscal 2024 from 65.77% in Fiscal 2023 and power and fuel cost to 6.80% from 7.92% and S&D expense to 2.91% from 3.75% as a % of Total income.

Finance costs increased to Rs.14,307.61 lakhs in Fiscal 2024 from Rs.3,531.06 lakhs in Fiscal 2023 due to increase in borrowing by Rs.50,415.40 lakhs in Fiscal 2024 and in the previous year the borrowing was obtained at the end of the financial year in March 2023 as the Company started its operations from October 1, 2022. It comprises of interest on Compulsorily Convertible Preference Shares (CCPS) of Rs.3,132.86 lakhs in Fiscal 2024 and Rs.1,395.24 lakhs in Fiscal 2023. The interest on CCPS is notional in nature and not payable to the subscribers as per Ind AS 109, Other than interest on CCPS the total finance cost has increased by Rs. 9,038.93 lakhs in Fiscal 2024 to 8.73% from 2.80% in Fiscal 2023 as a percentage of Total Income. Subsequently, all the CCPS got converted into equity shares in May 2024.

Our depreciation and amortisation expenses stood at Rs.5,691.74 lakhs in Fiscal 2024 and Rs.2,075.08 lakhs in Fiscal 2023 and, comprising depreciation of Rs.4,576.35 lakhs and Rs.1,524.09 lakhs and amortization of intangible assets Rs.1,115.39 lakhs and Rs.550.99 lakhs respectively due to increase in gross block by Rs.17,347.83 lakhs.

Total Cash Accrual for the operations increased to Rs.13,312.06 lakhs in Fiscal 2024 from Rs.8,368.83 lakhs in Fiscal 2023 by 59%. The cash earning per share is Rs.21.80 in Fiscal 2024 and was Rs.13.70 in Fiscal 2023.

Board has proposed a preference dividend @ 1.25% p.a. on 4,69,19,000 shares @ INR 100 per CCPS amounting to Rs.586.49 lakhs in Fiscal 2024.

Net Worth increased to Rs.58,273.96 lakhs in Fiscal 2024 from Rs.52,729.87 lakhs in Fiscal 2023.

** Networth includes CCPS of Rs. 31,813.25 lakhs for Fiscal 2024 and Rs. 28,680.40 lakhs for Fiscal 2023 considered as a debt instrument in the restated financials.

Total Assets increased to Rs.2,41,908.13 lakhs in Fiscal 2024 from Rs.1,85,597.93 lakhs in Fiscal 2023.

Net Working Capital stood at Rs.4,719.75 lakhs in Fiscal 2024 and was Rs.10,133.67 lakhs in Fiscal 2023 mainly due to increase in inventories of Rs.448.37 lakhs, increase in trade receivables of Rs.21,160.12 lakhs, decrease in trade payables Rs.17,440.09 lakhs, increase in other financial liabilities of Rs.11,454.66 lakhs, increase in other current liabilities of Rs.568.87 lakhs, decrease in other financial assets of Rs.16,342.87 lakhs and increase in other assets of Rs.9,971.09 lakhs.

Cash-flow

Cash-flow from Operating Activities

Net cash flows generated from operating activities was Rs.3,547.65 lakhs in Fiscal 2024. In Fiscal 2024, profit before tax was Rs.4,487.46 lakhs. Primary adjustments consisted of depreciation and amortization expense of Rs.5,691.74 lakhs and finance cost of Rs.14,307.61 lakhs.

Cash-flow from Investing Activities

Net cash flow used in investing activities in Fiscal 2024 was Rs.38,366.56 lakhs, primarily due to payments for purchase of property, plant and equipment including capital work in progress of Rs.35,680.27 lakhs, investment in mutual funds of Rs.999.95 lakhs and acquisition of shares of subsidiary (net of cash acquired) of Rs.1,686.34 lakhs.

Cash-flow from Financing Activities

Net cash flow from financing activities in Fiscal 2024 was Rs.36,676.04 lakhs, primarily on account of proceeds from loans (net) of Rs.21,850.73 lakhs and on account of current borrowings of ^25,112.62 lakhs which was partially offset by interest paid of Rs.10,287.31 lakhs.

Financial Ratios

The financial performance of TruAlt Bioenergy for Fiscal 2024 presents a balanced picture with both positive developments and areas for improvement. The Interest Coverage Ratio has reduced to 1.68 in FY 24 as against 4.92 in FY23, and the Debt Service Coverage Ratio (DSCR) has moderated to 1.08 in FY 24 from 3.72 in FY 23, reflecting a shift in debt servicing dynamics. On the positive side, the Debt/EBITDA Ratio has improved to 5.91 in FY 24 as against 8.22 higher in FY23, indicating stronger earnings relative to debt. The Net Working Capital Cover has adjusted to 1.08 from 1.28 for the above comparative tenure, showing more efficient working capital management. Return on Capital Employed (ROCE) has reduced to 7.42% from 11.38%, while Return on Equity (ROE) has increased to 9.83% from 8.81% for the similar period, highlighting improved shareholder returns. The Debt/Equity Ratio has increased to 1.91 from 1.64 almost being stable, reflecting a strategic approach to financing. These changes suggest a period of strategic adjustments and growth potential for TruAlt Bioenergy.

This is the first full year of operation. In FY 23 the Company started the operations on Oct, 1 2022. Hence all the financial ratios are not fully comparable. The Company is taking respective steps to improve the financial ratios in the near future.

Internal control systems and their adequacy

The company maintains a robust internal Control system that undergoes continuous monitoring and updates. Its primary objectives include safeguarding assets, ensuring compliance with established regulations, and promptly addressing any pending issues. Board of Directors: plays a critical role in ensuring that company has a strong system of Internal Financial Controls (IFC) by approving the Internal Financial Control Framework and regularly reviewing the effectiveness of IFC.

During the Fiscal 2023-24, BDO has conducted Internal Financial Control Operative Effectiveness.The Report includes summary of IFC testing Results for each process along with detailed observations and Managements Action Plan to address each observation. The Testing Report for Internal Financial Controls and the Auditors observations have been reviewed by the audit committee, and reported to the Board of Directors. The Audit committee maintains open communication with both statutory and internal auditors to ensure the effective operation of internal control systems.

Human Resources

At TruAlt Bioenergy, we firmly believe that our employees are the cornerstone of our success. They are not just individuals within our organization; they are our most valuable asset. We are committed to nurturing their growth and development by continually upgrading their knowledge and enhancing their skills. This commitment extends beyond mere professional advancement; it is about empowering our team members to reach their fullest potential. Through comprehensive training programs, mentorship opportunities, and a culture that promotes continuous learning, we aim to foster a workplace where innovation thrives and productivity flourishes. Our investment in our employees reflects our belief that their success translates directly into the success of our company. The Companys employee strength and training details as on 31st March 2024.

Particulars	UOM
Total Workforce	470
In-plant Trainees	381
Attrition in Corporate Office & Units	94
Number of hours of training	36
Number of hours of safety training	28

Risk Management Approach / Risks and Concerns

The Company has adopted a rigorous, integrated approach to risk management aimed at ensuring long-term sustainability. This includes identifying, assessing, and mitigating all significant risks. Clear policies, standard operating procedures, and controls have been established to minimize these risks effectively. Over time, the Company has refined and regularly updates its integrated risk management framework to adapt to evolving challenges and opportunities. We have expanded our risk management perspective from strategic and macro-level considerations to include detailed scrutiny of risks associated with individual transactions. This holistic approach enhances our capacity to manage risks comprehensively, ensuring robust preparedness and effective mitigation strategies at every level?from governance to daily operations.

Risk	Mitigation Plan
Feedstock Availability	To ensure a reliable and continuous supply of raw materials, the company has entered into supply agreements with MRN Chamundi Canepower and Biorefineries Private Limited, a member of our Promoter Group and Group Company, as well as with MRN Bhima Sugar and Power Private Limited and MRN Canepower and Biorefineries Private Limited. These agreements enable uninterrupted access to essential resources such as bagasse, sugar syrup, and molasses for ethanol production, without imposing any minimum purchase obligations on our part.
	Furthermore, to increase flexibility and maximize profitability, the company is integrating fungible dual-feed technologies for ethanol production.
Regulatory Clampdown	The Company has made substantial investments in plant and machinery aimed at environmental protection, specifically to mitigate pollutants and greenhouse gas emissions. We have implemented zero discharge facilities across our units to treat all liquid effluents, ensuring no discharge into the environment.
	Additionally, we have adopted a rigorous process of recycling and reusing process water to minimize freshwater withdrawal. Effluent treatment plants have been strategically established at our distillery units to further reduce fresh water usage and minimize ecological impact. Our commitment extends to utilizing spent wash from the distillation process for CBG production, contributing to resource efficiency.
	Furthermore, each of our units is equipped with cogeneration units featuring boilers and turbines, which generate steam and power for our own consumption, thereby reducing our reliance on external power sources.
Change in Government Policies	To mitigate the risks associated with changes in government policies, our company adopts a comprehensive approach. The company proactively monitors the regulatory landscape to remain well-informed about potential shifts that may impact our operations. Engaging in industry associations and advocacy efforts enables the company to influence policy decisions and protect its interests effectively. The company continuously develops scenario plans and contingency strategies to swiftly adapt to new policy environments.
	Leveraging legal and compliance expertise ensures precise interpretation and timely adherence to regulatory updates. Promoting operational flexibility and implementing effective strategies allow the company to navigate regulatory changes while maintaining transparency and trust with stakeholders. Through strategic long-term planning, the company integrates potential policy shifts to ensure resilience and adaptability in an evolving regulatory landscape.
Climate-related Risks	The company mitigates climate-related risks through proactive measures. They conduct thorough resilience assessments, implement tailored adaptation strategies, and practice sustainable resource management. Furthermore, the Company ensured contingency plans to address potential shortages.
Technological Obsolescence Risk	Continuous investments in plant and machinery have been instrumental in enhancing operational efficiency. The Company systematically upgrades its equipment through periodic replacements and upskilling initiatives, supported by strategic capital expenditure aimed at sustained improvement. Training and upskilling programs are integral to ensuring effective cost management strategies are implemented across all operations.
Technology failures and Security Risks	The company upholds a robust and secure IT infrastructure to bolster operational efficiency and safeguard data integrity. Comprehensive data backup and recovery procedures are in place to ensure seamless business continuity in the event of data loss or system failures. Stringent access controls restrict access to sensitive systems and data, ensuring only authorized personnel can handle them securely.
Financial Risks	The company rigorously evaluates creditworthiness before extending credit terms and limits to customers, whom we closely monitor for compliance. A significant portion of our ethanol sales is directed to public Oil Marketing Companies, substantially reducing credit default risks. Additionally, we diligently track the collection of outstanding amounts, ensuring they are typically resolved within 12 months, and to date, we have not encountered significant defaults. While our financial instruments, including trade receivables, loans, cash equivalents, bank deposits, and other assets, are managed to mitigate credit concentration risks, trade receivables represent the primary area of potential credit exposure. We employ established policies, procedures, and controls specifically tailored to manage customer credit risks effectively.
Human Resource Risk	The company prioritizes attracting top talent and retaining current employees by offering competitive compensation, benefits, and opportunities for career advancement. Additionally, the company has developed contingency plans to ensure the safety and well-being of employees in the event of emergencies or disasters.

Cautionary Statement

The statement made in this section includes the Companys objectives, projections, expectations, and estimates, which may constitute "forward-looking statements" as defined by applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations regarding future events. However, the Company cannot guarantee that these assumptions and expectations are accurate or will be realized. Actual results may materially differ from those expressed or implied in the statements due to external factors beyond the Companys control. The Company assumes no obligation to publicly update or revise any forward-looking statements based on subsequent developments, information, or events.