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Despite the significant setback caused by the Covid-19 pandemic, the global economy has shown remarkable resilience in recent times. While the economy experienced a slowdown in 2018 and slipped into a Covid-19 pandemic induced recession in 2020, it has been on the mend since the beginning of 2022. Countries such as the US, China, and India have successfully regained their pre-Covid-19 pandemic levels, indicating a strong economic recovery. Governments have learned from the Covid-19 pandemic and are better prepared for similar events in the future. Economies that were hit hard appear to be recovering. Commodity prices that rose sharply due to geopolitical tensions have moderated and supply chain disruptions have eased out.

But early signs that the global economy would stabilise in 2023 on account of steady growth and inflation coming down have receded recently amid stubbornly high inflation and increased uncertainty due to the recent turmoil in the financial sector. The baseline forecast is for global GDP growth to fall from 3.4% in 2022 to 2.8% in 2023, before settling at 3.0% in 2024. The tepid outlook reflects the tight policy stances needed to bring down inflation, the fallout from the recent deterioration in the banking and financial sector, ongoing geopolitical tensions and growing geo-economic fragmentation.


Indias economy has made significant strides in recent years, positioning itself as a major player on the global economic stage. In a significant development, India has surpassed the United Kingdom to become the fifth-largest economy in the world based on nominal GDP (US$). The economy has stood strong through 2022, largely due to the significant economic reforms and enterprising initiatives implemented by the Government over the past five to six years. The Government has been working to encourage and expand the manufacturing sector, taking advantage of the global trend towards diversification of supply chains. Corporate tax reductions and fiscal incentives through various schemes like PLI (Production Linked Incentive) have attracted investments in a wide range of industries. These efforts, along with macroeconomic factors such as supply chain gaps and rising trade conflicts, are expected to help the Indian economy reach its target of US$5 trillion in nominal GDP up from an estimated US$3.7 trillion this year. In terms of growth, India is better positioned and remains a bright spot compared to other economies, thanks to supportive Government policies and sound macroeconomic fundamentals. The Real GDP growth for 2023-24 is projected at 6.4 percent by the RBI. Broad-based

credit growth, improving capacity utilisation, moderating commodity prices, Governments thrust on capital spending and infrastructure should bolster investment activity. Manufacturing, services and infrastructure sectors are quite optimistic about the business outlook. But, on the other hand, protracted geopolitical tensions, global financial market volatility and slowing external demand may pose downside risks to domestic output.


Specialty chemicals are specific molecules or combinations that are designed to provide unique performance or functionality in various industries. These industries include automotive, construction, electronics, consumer goods, pharmaceuticals, food & beverage, flavours & fragrances, specialty polymers, paper & pulp, mining, and industrial sectors.

The global specialty chemicals market is projected to register a CAGR of 5.1% during the period of 2023 to 2030. The markets expansion is driven by an increasing demand for specialty chemicals in various industries on account of increased adoption in the end-user industries due to increasing population, rising disposable income and rapid urbanisation.The rising popularity of green chemistry is also contributing to the markets growth as the industry focusses on sustainability.

The Asia-Pacific region has emerged as the dominant market for specialty chemicals, representing the largest proportion of revenue with a share of 48.5% in 2022. This can be attributed to the economic progress, industrialisation, and growth of major end-user sectors, with China and India being the leading contributors.

In the Middle East & Africa region, the market for specialty chemicals is expected to experience a CAGR of 3.6% by 2030, driven by rising demand for cosmetic chemicals in countries like the U.A.E., Kuwait, and Saudi Arabia. The food & beverage sector in the region is also anticipated to contribute to the market growth, propelled by changing consumer preferences, strategic geographic position, and Gulf food programmes.

In Latin America, the presence of major manufacturers is expected to drive demand for specialty chemicals, with the automotive, transportation, chemical processing, and construction industries being the key consumers. Nevertheless, the market is susceptible to macroeconomic factors such as fluctuating energy prices and rising costs, which indicate instability in the global economy and can adversely impact the market.

(Source:https://www. grandviewresearch.com/industry- analysis/specialty-chemicals-market#:~:text=Asia%20 Paoifio%?0dominated%?0the%?0speoialty.%?C%?0 automotive%20and%20electrical%20%26%20electronics )

Key Global Industry Trends in the Next Five Years Green Chemistry:

With an increasing awareness about the effects of certain hazardous chemicals on humans and the environment, there is a growing trend in the chemical industry to shift towards green or sustainable chemistry. The application of green chemistry has the potential to significantly reduce the environmental footprint. One can achieve a reduction in environmental impact through two approaches: (i) curbing energy and water consumption during the process of chemical synthesis and (ii) minimising the chemical and biochemical oxygen demand of the waste generated, which consequently lowers the treatment costs of hazardous effluents and by-products. The evolution of green chemistry in the chemical industry will be a critical trend fuelling the sustainability focus of the chemical industry. The value of the green chemicals market is expected to register a CAGR of 11.6% from 2022 to 2029

Rise in the Demand of Specialty Chemicals in Different End-User Industries:

The specialty chemical manufacturing sector has witnessed significant growth in recent years. This is driven by increasing demand from end-user sectors such as textiles, agriculture, construction, food processing, personal care, pharmaceuticals, home care, autos, and consumer durables. The increasing population, improved standard of living, rise in per capita income, and busy lifestyles of people have resulted in a growing demand for a wide range of hygiene products, premium home and personal care products, and packaged foods that contain specialty chemicals. Similarly, growth in the usage of personal automobiles has boosted the demand for specialty chemicals, used in car paint and air freshener manufacturing.

INDIAN SPECIALTY CHEMICALS MARKET Specialty Chemicals Market in India (US$ billion)

The Indian specialty chemicals market is expanding rapidly and is estimated to attain a value of ~US$ 64 billion by 2025. Currently, it constitutes around 22% of the total chemicals market in India. Several factors are contributing to the growth of the Indian specialty chemicals market, including a significant demand from various end-user industries such as textiles, food, automobiles, construction, clothing, and personal cares, among others. Moreover, increasing urbanisation and growth in the number of middle-income households in the country are increasing demand for end-user segments which are further fuelling specialty chemicals demand in India.

Moreover, the Government has taken several measures to attract investments in the sector by introducing favourable policies and incentives, including the PCPIR policies, the extension of RoDTEP benefit to chemicals, and the active consideration of the PLI scheme. These initiatives are supporting the domestic manufacturing of specialty chemicals, and are expected to further boost the growth of the market.

(Source: https://assets.kpmg.com/content/dam/kpmg/in/ pdf/2022/1 1/Specialty-Chemicals-industry-India.pdf )

Key Trends in Indian Specialty Chemicals Market R&D Focus: Amidst growing uncertainty surrounding China and rising production costs in Europe, Indian chemical makers have an excellent opportunity to expand their footprint in the global market. However, to tap the existing opportunity and ensure long-term sustainability, the companies need continuous innovation through increasing focus on R&D.

The Rise of Green Chemicals: The growing pollution and damage to environment resulting from the discharge of harmful chemical effluents is raising concerns about sustainability. The adoption of green chemicals in India is rapidly evolving as India continues to prioritise sustainable development. Despite the growing awareness about sustainability in India, companies are still in the process of incorporating this new concept into their manufacturing activities, right from the input materials, the production process to the final manufactured product. A major challenge to the adoption of these environment-friendly chemicals by service providers and consumers is the high initial cost of such products.

A host of departments and ministries under the Government of India, including bodies such as the Department of Science and Technology, the Ministry of Chemicals and Fertilisers, and the Department of Pharmaceuticals, are beginning to establish various green chemistry initiatives. In some cases, they have entered into partnerships with SMEs to partially fund investments in green technology.

Make in India Initiative: On 12th May, 2020, the Government announced the Aatmanirbhar Bharat Abhiyan. The initiative is aimed to combine relief, policy reforms and fiscal and

monetary measures to help businesses and individuals to cope with the situation created by the Covid-19 pandemic. The larger objective was to help transform India into a selfreliant economy. This campaign is especially expected to benefit the specialty chemicals sector. Several players in this sector are hoping to position themselves as an alternative to China as the Covid-19 pandemic prompts companies to diversify their supply chains. Specialty chemical companies are also set to look at import substitution along with exploring export opportunities to further drive their business.

Shift of Manufacturing Activities from China to India:

The Covid-19 pandemic has had a profound impact on global manufacturing operations, prompting many companies to reassess their dependence on China and opting for a China + 1 strategy. An increasing number of companies are now exploring alternative locations for their manufacturing activities, as well as for alternate sourcing options. Taking advantage of this situation, the Indian Government has taken policy initiatives to attract companies looking to shift their manufacturing base to India in the post-Covid-19 pandemic scenario. Global manufacturers have initiated talks with Indian firms to explore the possibility of shifting a part of their supply chains from China to India as they seek to diversify their operations geographically.

The tightening of environmental protection norms in China since January 2015 has resulted in an increase in operating costs, closures and relocations of certain manufacturing facilities. Rising labour costs and the recent trade tension between China and the United States, are some of the factors that have prompted many global companies to look beyond China for their key raw materials purchases and focus on India. In addition, Indian companies, which have been heavily reliant on sourcing from China, are now starting to adopt local sourcing. Put together, the increase in local sourcing by Indian companies and the shifting of manufacturing activities by global companies from China to India are expected to boost the manufacturing sector in India, including the chemical manufacturing segment.

Outlook for Indian Specialty Chemicals Industry

The Indian specialty chemicals industry has been growing over the years. Over the last decade, there has been a significant increase in revenue and profit for specialty chemical companies. There are a host of factors, driving the India-edge. Growing competitiveness of Indian companies vis-a-vis producers from other countries has played an important role in tilting the balance in Indias favour.

India continues to benefit from the existence of inherent growth drivers. These include a huge local demand base, significant exports with room for expansion, and substantial scope for import substitution. Competitive manufacturing costs, focus on R&D and innovation, availability of skilled and experienced workforce, strong adherence to compliance are some key differentiating enablers that have propelled the growth of the Indian specialty chemical space. Furthermore, the Indian Government has demonstrated its willingness to improve the ease of doing business and provide adequate policy support across multiple industries.This coupled with the pro-activeness of Indian companies, the global market share of India in this sector is expected to double in the coming years.

However, the industry is also susceptible to macroeconomic factors such as fluctuating energy prices, rising inflation and geopolitical uncertainties. This may lead to instability in the global economy and can adversely impact demand scenario.


CSTL manufactures functionally critical specialty chemicals across three major segments i.e. Performance Chemicals, FMCG Chemicals and Pharma & Agro Intermediates. The Company has a diversified product portfolio that find applications across various end-user industries such as personal care & hygiene, food & feed, flavours & fragrances, agriculture, pharmaceuticals, water treatment, construction and consumer goods. The Companys robust R&D capabilities help it meet global demand by formulating innovative and sustainable processes on a consistent basis. Performance Chemicals

Performance chemicals is the largest, fastest-growing and most margin accretive segment of the Company. It

contributes 69% of revenues. The Companys flagship products MEHQ and BHA along with the newly launched HALS form part of the performance segment. Other products include AP and TBHQ.

CSTL has increased capacities of MEHQ and Guaiacol by ~50% during 2022-23.

Pharma & Agro Intermediates

The Pharma & Agro intermediate segment contributes around 19% of revenues. Three key products manufactured by the Company in this segment are Guaiacol, DCC and p-BQ.

FMCG Chemicals

The FMCG chemicals segment contributes 11% to revenues and has two key products, Anisole and 4-MAP

Product Application Outlook/Growth prospects
MEHQ (Monomethyl ether of Hydroquinone) Polymerisation inhibitor in the manufacturing of acrylic acids, acrylic esters, acrylates, and super absorbent polymers. Also used as a pre-cursor in agrochemical industry Super absorbent polymers are used in diapers, sanitary napkins and adult incontinence products. A booming personal care industry, especially in emerging economies, and growing consumer consciousness regarding personal hygiene, are projected to augment demand for super absorbent polymers
BHA (Butylated Hydroxy Anisole) Antioxidant in food, animal feed and nutrition industry to increase shelf-life Increased popularity and availability of convenience products are driving consumption of packaged foods and beverages in both developed and developing countries An increase in cattle farming and growing livestock industrialisation is driving increased demand for nutritious animal feed
AP (L-Ascorbyl Palmitate) Infant food formulations, breakfast cereals and cosmetics Increased adoption across different industries like food & beverages, pharmaceuticals, cosmetics, personal care and dietary supplements are major factors boosting demand
TBHQ (Tertiary Butyl Hydroquinone) Antioxidant to increase shelf life in the food industry Continuous growth in the demand for processed food products globally. Increased applications in new industries like cosmetics and the petrochemical industry
Hindered Amine Light Stabilizers (HALS) Clean Light Stab 770 Stabilisers in a range of polymers that find application across end-user industries like automotive, industrials, agriculture, construction, paints and pigments Growth in the construction industry, rising demand in the packaging industry and increasing premiumisation of consumer products are leading to demand for plastics that can maintain product integrity
Guaiacol Pre-cursor to manufacturing APIs for cough syrup The increasing incidences of respiratory disorders along with the rising levels of air pollution are some of the key factors contributing to the growth of the cough syrup market
DCC (Dicyclohexyl Carbodiimide) Reagent in anti-retroviral Anti-retroviral are essential in treating HIV infections. Easy availability of diagnosis tests, treatments and patient awareness regarding HIV infection and treatment will boost the global antiretroviral therapy market
p-BQ (para Benzoquinone) Intermediate in agrochemical industry An increased requirement for agrochemicals is triggered by the rising population and higher food demand. Agrochemicals are used to increase farm productivity and generate higher yields
4-MAP (4-Methoxy Acetophenone) Used in UV blockers in sunscreens (cosmetics industry) Rising concern about skin protection against detrimental UV rays of the sun and improved alertness regarding skin cancer are the major factors driving growth
Anisole Precursor to perfumes, fragrances, insect pheromones, pharmaceuticals Rising urbanisation and the increase in disposable income globally has led to a growing demand for cosmetics and personal care products. Also, the application of anisole in numerous other industries such as pharmaceuticals and dyes has been growing

Clean Light Stab (CLS) 770 - Hindered Amine Light Stabiliser (HALS)

During the year 2022-23, CSTL launched its new product, Clean Light Stab (CLS) 770. Manufacturing facilities for this product were commercialised in December 2022 at Unit 3. Clean Light Stab (CLS) 770 is a part of the HALS series.

UV radiation breaks down the chemical bonds in polymers, resulting in photodegradation. This leads to cracks, colour change, and loss of physical properties, such as tensile strength, elongations, and homogeneity. HALS protects polymers from degradation due to UV radiation and helps retain their properties. Generally, HALS provide excellent resistance to photodegradation and can be synergistically used with UV Absorbers and Antioxidants to improve the light and heat resistance of polymers. HALS are efficient scavengers and function by inhibiting the degradation of polymers that have already formed free radicals. They do not absorb UV radiation, but act to inhibit degradation of the polymer. They slow down the photochemically initiated degradation reactions.

Clean Light Stab 770 prevents photodegradation and increases the life of polymers like Polypropylene, EPDM, Polystyrene, ABS, SAN & ASA, Polyurethanes, Polyacetals and Polyurethanes

CLS 770 is the first of the range of light stabilisers CSTL has developed and commercialised in India to cater to the ever-increasing applications across various end-user industries. The Company has successfully developed other products in the HALS series and will be shortly introducing them in phases over the next year to serve customers with a complete range of polymer stabilisers.


Clean Science and Technology Limited (referred to as CSTL or The Company), incorporated in 2003, is a global leader in developing eco-friendly and cost-competitive in-house catalytic processes for manufacturing a variety of specialty chemicals that find applications across diverse end- user industries. The Companys commitment to product identification, research & development (R&D), process innovation, catalyst development, and significant scale of operations has led it to become the largest manufacturer of certain specialty chemicals worldwide. It has achieved this success through its strategic backward integration and inhouse plant engineering capabilities. Thus, enabling CSTL to be one of the fastest-growing and profitable specialty chemical companies, globally.

CSTL has three completely operational production facilities in India, located at Kurkumbh MIDC in the state of Maharashtra. Each facility is equipped with an independent

R&D unit, quality control department, warehouse, engineering, and utility section. Additionally, all of the Companys facilities are zero liquid discharge facilities and certified to ensure compliance with its strict quality, environment and safety standards.

CSTL continually strives to push the boundaries of innovation in its field. At the same time, the Company remains steadfast in its commitment to environmental sustainability. It is confident that its focus on technology, innovation, and strategic growth will enable it to continue and thrive as a leader in the specialty chemical industry.


CSTL strives to improve its financial performance by regular capacity augmentation & automation, strategic backward integration, improving yields and efficiencies of existing products, diversification of its customer base and optimising costs of sourcing raw materials and other fixed costs. Because of the Companys strong business performance that it has been able to maintain a healthy balance sheet with zero debt and strong return ratios. CSTLs long-term ratings have been upgraded by CRISIL to AA-(Stable) & short-term ratings maintained at A1+.

Particulars ( Million) 2022-23 2021-22
Export Revenues 6,713 4,807
Domestic Revenues 2,552 1,968
Other Operating Income 93 74
Total Revenues 9,358 6,849
Raw Material Costs 3,260 2,247
Employee Costs 450 345
Power & Fuel Costs 898 619
Repairs & Maintenance 100 129
Other Expenses 624 509
Total Expenses 5,332 3,849
EBITDA 4,026 3,000
EBITDA (%) 43.5% 44.3%
Depreciation Costs 358 249
EBIT 3,668 2,751
EBIT (%) 39.6% 40.6%
Interest Costs 2 1
Other Income 388 299
PBT 4,054 3,049
PBT % 43.8% 45.0%
Tax Expenses 1,019 763
PAT 3,035 2,286
PAT % 32.8% 33.7%

Financial Ratios

2022-23 2021-22 % Change
Inventory Turnover 3.3 3.2 3
(Cost of Goods old / Average Inventories)
2022-23 2021-22 % Change
Current Ratio 5.1 3.9 31
(Current Assets / Current Liabilities)
2022-23 2021-22 % change
Debtors Turnover 6.2 5.9 5
(Net Sales / Average Trade Receivables)
2022-23 2021-22 % Change
Operating Profit Margin (%) 39.6 40.6 (2)
(Profit Before Interest and Taxes / Net Sales)
2022-23 2021-22 % Change
Net Profit Margin (%) 32.8 33.7 (2)
(Net Profit After Tax / Net Sales)
2022-23 2021-22 % Change
Return on Net Worth (%) 34.0 34.9 (3)
(Net Profit After Tax / Average Net Worth)
2022-23 2021-22 % Change
Interest Coverage Ratio - - -
(Eamings Before Interest and Taxes/Interest Expenses)
2022-23 2021-22 % Change
Debt Equity Ratio - - -

(Net Debt/Net Worth)

Increase in current ratio - Increased investments due to higher cash accruals and reduction in trade payables.

HUMAN RESOURCES Employee Well-Being and Safety

CSTL maintains high safety standards to ensure workplace safety at all times. Detailed training is given to employees on safe work practices and behaviour, along with the proper use of PPE kits. The Companys occupational health centre (OHC), comprising qualified doctors and nursing staff, is available for employees to reach out for any medical support. It has ties with local hospitals for medical support, and also conducts regular health checkups for its employees.

CSTLs regular training and re-training sessions reinforce strict adherence to safety procedures and norms at all

levels and across departments. The Company provides medical insurance to its employees, and has also achieved zero fatalities at its plants and offices.

Training and Development

CSTL continuously works on enhancing the capabilities of its workforce through various training programmes conducted by in-house and external expert faculty. The trainings are not only limited to technical topics but also include behavioural and managerial topics. The trainings are imparted by way of classroom sessions, project works, and mock drills, among others. The Companys training has a positive impact on the performance by improving productivity, product quality, and reducing incidents at the workplace. Compliance trainings are also held at regular intervals.

CSTL has also digitalised most of its HR processes, leading to accuracy, transparency, and accountability in the operational system. With employee well-being at its core, the Company is revising its policies and practices to be at par with the best in the industry.

Clean Connect Annual Day

CSTL offers various employee engagement programmes for its employees. Among these initiatives is the Annual Day, which serves as an excellent platform for employees to showcase their talents. The highlight of the Annual Day activity is the felicitation of employees who have completed 10 or 5 years of dedicated service to the organisation.

Communication Meeting

CSTL firmly believes that it is equally important not only to hire the right people but also seamlessly onboard new members. The Company ensures its new talent gets accustomed to the new work environment, and is supported through their induction in the respective departments. CSTLs communication meeting with the new joinees provides additional support in reaching out to them.

Talent Acquisition

CSTLs campus hiring from reputed colleges helps in attracting fresh talent both from local and esteemed engineering colleges. With an eye towards promoting inhouse leaders, the Company has high-potential programmes to nurture talent and prepare them for future positions. Moreover, it provides accelerated growth opportunities for its high-potential employees across various departments. The organisation also provides ample opportunities for employees to enhance their skills by internal job rotations.

Inclusive Workforce

As an advocate of equal opportunity, CSTL promotes diversity and inclusion. The Company provides an enabling

environment that supports the growth of its female employees. It encourages women in various leadership positions within the organisation.

Total employees and workers - 1,383 Women employees - 8%


CSTLs CSR philosophy is intertwined with its core focus on sustainability. The Company is committed to creating a better future and continuously endeavours to contribute to the social and economic development of the communities it operates in.

Since its inception, CSTL has deployed and supported numerous initiatives, especially in key areas, such as education, environmental sustainability, health and sanitation, skill development, and community development. The Company is sensitive to the greater needs of the nation and additionally supports projects for the preservation of heritage, and encourages disabled people to become self-reliant.

CSTLs objective is to shape a sustainable future for generations to come, with the goal of fostering the development and upliftment of society as a whole through its initiatives. The Companys employees engage actively in all its CSR initiatives, thereby enhancing its community outreach.


CSTL prioritises safety as one of its core values. The Company is committed to continuously improving its safety performance by benchmarking with industry leaders and implementing world-class environmental, health, and safety practices. The health and safety of CSTLs employees is an integral part of all its activities. The Company strives to prevent accidents and health risks through the continual improvement of its working environment and safety measures. Its efforts have resulted in a significant reduction in injury incidents across all its manufacturing plants. CSTL has implemented the ISO 45001:2018 Occupational Health and Safety Management System at all its manufacturing locations. In addition, the Company is ISO 14001:2015 certified. It is committed to reducing its environmental impact and has successfully reduced its GHG emissions and water consumption over the years. Over 50% of CSTLs power requirement is met through Company-owned, open access solar power projects.


CSTL is facing multiple risks that are affecting the smooth functioning of its operations. These risks may be caused by internal and external factors. As a result, they have an

adverse impact on the achievement of the Companys strategies, operational and financial objectives, earning capacity, and financial position. The Companys risk management activities are designed to recognise, assess, and manage risks in their early stages, while implementing appropriate measures to mitigate them. At CSTL, risk management is a continuous process involving the analysis and management of all risks posed to the business, and it has adopted a structured framework to achieve this.

1. Regulatory Risk

Impact - CSTL is required to obtain, renew, or maintain statutory and regulatory permits, licences, and approvals for the operation of its business and manufacturing facilities. Any failure or delay in doing so, may adversely affect the Companys operations. Mitigation - CSTL maintains a compliance checklist, including information on the scheduled renewal dates for various licences and approvals. The Company closely monitors this checklist, and through its regular internal audits, it ensures that its manufacturing facilities are in compliance with local and international regulatory requirements.

2. Environmental Risk

Impact - The inefficient handling of effluents is a key risk for chemical manufacturing companies. Certain environmental laws impose strict liability for accidents resulting from hazardous substances, and noncompliance with these laws may lead to penalties. Mitigation - At CSTL, effluent treatment is one of the key criteria for product commercialisation. The Company has the lowest effluent cost across products due to its innovative technology and clean processes. Investment in ETP plant continues to be driven by advanced equipment and strong controls.

3. Raw Material Risk

Impact - The majority of the raw materials CSTL consumes are commodities and, hence, subject to high volatility in price. Any adverse movement in raw material price could have a negative impact.

Mitigation - Long-term relationships with suppliers and robust inventory management practices ensure a steady supply of raw materials at a competitive cost. Also, the Company is not dependent on a single source and has multiple suppliers for all its procurement needs.

4. Macro Risk

Impact - Given CSTLs global sales profile, it is impacted to some extent by any worldwide disruption. In the event of any adverse macro-factor, like geopolitical

tension or supply chain disruption, could significantly impact its business.

Mitigation - The Companys sales profile is greatly de-risked as it caters to diverse end-user industries across multiple geographies. CSTL continues to be a key player and a preferred supplier in the products it manufactures, and hence, it is relatively well- positioned to mitigate the adverse impacts of macro conditions.

5. Forex Risk

Impact - CSTL has a net forex exposure as 72% of revenue is derived from exports. There is a risk of financial loss on account of volatility in foreign exchange.

Mitigation - Under the forex policy, currency movements are tracked regularly, and all foreign currency exposure is hedged using plain vanilla forward contracts.

6. Technology Risk

Impact - CSTL faces risks generally associated with new process technologies and product introductions. Mitigation - The Company has four R&D centres, and a strong, dedicated team of 90 individuals, including seven PhDs. CSTL is committed to strengthening its R&D capabilities, thus enabling the consistent introduction of new products and processes.


CSTLs Board of Directors take responsibility for the implementation and assessment of effective internal financial controls. The Company has established policies, procedures, control frameworks, and management systems. These initiatives ensure compliance with regulatory requirements, internal controls, and accurate financial and operational reporting. At the entity and

process levels, internal control mechanisms are designed to promote adherence to established procedures and ethical codes of conduct. Senior management certifies the effectiveness of internal controls, ensures compliance with financial and commercial transactions, and declares any conflicts of interest. Independent internal auditors further bolster the internal control process. The Audit Committee of CSTL reviews and approves the audit plan. In addition, regular meetings are held to review auditor reports and compliance. Significant audit observations and follow-up actions are reported to the Audit Committee for further review.


Statements in the Directors Report, Management Discussion and Analysis or elsewhere in this Annual Report, may be forward-looking including, but without limitation, statements relating to the implementation of strategic initiatives and other statements relating to Clean Science and Technology Limiteds future business developments and economic performance. While these forward-looking statements indicate the Companys assessment and future expectations concerning the development of its business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macroeconomic, Governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Clean Science and Technology Limited undertakes no obligation to publicly revise any forward-looking statements to reflect future / likely events or circumstances