Banswara Syntex Ltd Management Discussions

A Resilient Global Economy:

The global economys resilience despite uneven growth is indeed noteworthy. Despite facing various challenges, such as geopolitical tensions, supply chain disruptions, and environmental concerns, many countries have managed to sustain economic momentum. Factors like technological innovation, robust fiscal policies, and effective monetary measures have contributed to this resilience. However, challenges still loom on the horizon, including income inequality, climate change, and potential financial instability

Addressing these issues will require coordinated efforts among governments, businesses, and international organizations to ensure sustainable and inclusive growth in the years ahead.

Global growth, estimated at 3.2 percent in 2023, is projected to continue at the same pace in 2024 and 2025. The forecast for 2024 is revised up by 0.1 percentage point from the

January 2024 World Economic Outlook (WEO) Update, and by 0.3 percentage point from the October 2023 WEO. The pace of expansion is low by historical standards, owing to both near-term factors, such as still-high borrowing costs and withdrawal of fiscal support, and longer-term effects from the COVID-19 pandemic and Russias invasion of Ukraine; weak growth in productivity. Global headline inflation is expected to fall from an annual average of 6.8 percent in 2023 to 5.9 percent in 2024 and 4.5 percent in 2025, with advanced economies returning to their inflation targets sooner than emerging market and developing economies. Resilient growth and accelerated disinflation suggest favourable supply developments, including the diminishing impact of previous energy price shocks.

Indian Economy:

The year 2023 marked a landmark achievement for India as it assumed the presidency of the G20, the worlds most prominent global economic assembly. This prestigious role provided India with a platform to showcase its economic strength and diplomatic finesse on the international stage

Amidst a challenging global scenario, India has emerged as a significant economic and geopolitical power. India has emerged as the fastest growing major economy in the world and is expected to be one of the top three economic powers in the world, backed by its robust democracy and strong partnerships. Its actions in the coming year could lay the groundwork for the country to become the worlds third largest economy in the next five years and a developed nation by 2047, setting an example for a, sustainable economic growth, digital development and climate action. As per estimates by CRISIL, the next seven fiscals (2025 - 2031) will see the Indian economy crossing the $5 trillion mark and inching closer to $7 trillion. A projected average expansion of

6.7% in this period favours the journey of India towards being the third-largest economy in the world.

Indian economy remained resilient with a robust 7.6% growth rate of GDP in FY 2023 - 24 Vs 7% growth rate in FY 2022 - 23. Accordingly, the International Monetary Fund (IMF) has raised Indias growth forecast for 2024- 25 to 6.8% from . 6.5% on the back of strong domestic demand and a rising working age population. Indias commitment to maintaining stability and implementing structural reforms has aided in striking a delicate balance between economic growth, social development and environmental sustainability which bolstered its economic resilience amid global challenges.

Indias economic performance has been stellar since the start of the 21^st century. Annual GDP growth averaged 6.8% in the decade before 2020 and quickly reverted to trend after the pandemic. This has made the country a global economic powerhouse and the uncontested favourite with emerging market investors. India is also on track to register the worlds fastest expansion among major economies in 2024 for a third straight year.

Global Oil Scenario:

The ripple effects of Covid-19 pandemic, the war in Ukraine, geopolitical realignments, the rise of AI, and the devastating consequences of severe climate-change-related weather events have profoundly affected the global economy and energy system. Continued fighting in Ukraine, more than a year after Russias invasion, is now accompanied by the risk of protracted conflict in the Middle East.

While some immediate pressures from the global energy crisis have eased, energy markets, geopolitics, and the global economy remain unstable, with the risk of further disruptions ever-present. After a steep decline due to COVID-19, oil . demand increased to pre-pandemic levels in 2023 at 101.7 million barrels per day (Mb/d). However, growth may not last long, as peak demand is projected to materialize before 2030. Also, Fossil fuel prices are down from their 2022 peaks, but markets are tense and volatile. Amid this complex backdrop, there are signs of a change in direction. The rise of new clean energy economy, driven by deployment of low-emissions alternatives offers a promising path forward. This has in-turn reduced the rate at which new assets that use fossil fuels are being added to the energy system.

The scenario does not eliminate the need for fossil fuel investment, but it diminishes the justification for increased spending. Previously, meeting projected demand in the STEPS scenario implied rising oil and gas investments throughout this decade. However, a more optimistic clean energy outlook and lower projected fossil fuel demand have changed this dynamic. Currently, investment in oil and gas is nearly double the level needed for the Net Zero Emission Scenario by 2030, indicating a significant risk of prolonged fossil fuel use that could jeopardize the 1.5 ?C climate goal.

Clean electrification, improvements in efficiency and a to lower and zero-carbon fuels are key levers available to emerging and developing economies to reach their national energy and climate targets. Getting on track to meet these targets, including net zero goals, has broad implications for future pathways.

The global energy crisis was not a clean energy crisis, but it has highlighted the importance of ensuring rapid, orderly, and people-centred transitions to sustainable energy sources. Three interlinked issues are paramount: the risks to affordability, electricity security, and the resilience of clean energy supply chains. To address this trilemma concerns, it is essential to deploy cost-effective, clean technologies at scale, particularly in poorer households, communities, and countries that struggle to finance the necessary upfront investments. As the world moves towards a more electrified, renewables-based system, security of electricity supply is also paramount. Higher investment in robust and digitalised grids needs to be accompanied by a role for batteries and demand response measures for short-term flexibility and lower-emissions technologies for seasonal variations, including hydropower, nuclear, fossil fuels with carbon capture, utilisation and storage, bioenergy, hydrogen and ammonia.

Oil Scenario in India

Indias role in global oil markets is poised for substantial expansion over the remainder of the decade, driven by robust economic growth, a burgeoning population, and favourable demographic trends. The global energy crisis elevated energy security to a key political priority for countries worldwide, and it is especially critical for India, which heavily relies on oil imports to meet its supply needs. This crisis has also accelerated the momentum behind clean energy transitions.

Indias role in Combating the Increase in Oil demand:

Indias oil consumption is set to increase at a faster pace than other countries, in part, because the country is still in the initial stages of economic development.

India is projected to be the single largest source of global oil demand growth from 2023 to 2030, narrowly surpassing China driven by robust economic and demographic expansion. India is expected to see an increase in oil demand of nearly 1.2 million barrels per day (Mb/d) over this period, accounting for more than one-third of the projected global gain of 3.2 Mb/d.

Against this potential for additional growth in refinery activity, it is important to recognise that Indian refineries face several domestic constraints that may yet slow progress. Factors such as land acquisition constraints, the domestic pricing regime, and the inability for refineries to pass through Goods & Services Tax (GST) to their customers may adversely affect the industry. The flip side to increased crude processing is that India will become more reliant on crude imports and hence increased attention is needed on its security of supply and how the government and industry can best prepare for any possible disruptions.

Indias refining industry has built an enviable reputation as a key source of light and middle distillate supplies to global markets, in addition to meeting robust domestic demand growth. This assessment of oil demand and refining dynamics points to India being well placed to cement its position as a reliable international product supplier. Despite increased competition from Middle East Gulf export refineries, the 1

Mb/d rise increase in crude processing and upgrading capacity expansions by 2030 offer the prospect of private and public refinery operators meeting both robust domestic oil demand growth and sustaining substantial product exports.

The challenge of decarbonising:

In common with refineries elsewhere, Indian operators face the challenge of decarbonising their activities while delivering the energy needs of the customers they serve. Lowering Scope 1 and Scope 2 emissions will require substantial investment in the coming years. This in turn requires the industry to maintain a healthy level of profitability. Refiners are investing to include low-carbon hydrogen into their processes and attempting to source an increased share of electricity from renewable sources, such as solar and wind power as a step towards decarbonisation. However, the greater global challenge of responding to falling domestic demand, which refineries in mature markets will face by the end of this decade.

A short note on Bio fuels:

Biofuels will play a major role in Indias efforts to as well as enhance its energy security policy with affordable energy supplies. India is now the worlds third largest producer and consumer of ethanol with more than a six-fold production increase over 2016 - 2023. From 2023 - 2030, it has the potential to nearly triple consumption and production by removing roadblocks to higher ethanol blends and diversifying biofuel use to replace diesel and jet fuel. However, monitoring costs, feedstock sustainability and deploying more supportive policies, including for other biofuels beyond ethanol, will be important. Based on the current policy framework, ethanol supply is projected to increase from 90 kb/d in 2023 to 200 kb/d by 2030, with additional potential post 2030.

Focus on Renewables:

Renewables are set to contribute 80% of new power capacity to 2030, with solar PV alone accounting for more than half.

However, this uses only a fraction of the worlds potential.

Renewables, including solar, wind, hydropower, biofuels and others, are at the centre of the transition to less carbon-intensive and more sustainable energy systems. Generation capacity has grown rapidly in recent years, driven by policy support and sharp cost reductions for solar photovoltaics and wind power in particular. The deployment of renewables is one of the main enablers of keeping the rise in average global temperatures below 1.5?C. In the Net Zero Emissions by 2050 scenario. Indias announcement that it intends to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity needs from renewable sources by 2030 marks a historic point in the global effort to combat climate change. Accelerating wind and solar PV capacity additions are driving the growth in renewable energy supply, but activity needs to ramp up rapidly to align with the NZE Scenario.

Solar has become a major global industry and is set to transform electricity markets. But there is significant scope for further growth given manufacturing plans and the technologys competitiveness. By the end of the decade, the world could have manufacturing capacity for more than 1200 GW of panels per year. Boosting deployment would require measures notably expanding and strengthening grids and adding storage to integrate the additional solar PV into electricity systems and maximise its impact.

CPCL is planning to install 7 MW solar power plant at the available land near CPCL polytechnic college, for which administrative approvals are in place and tendering process has started. The green power generated from the Solar PV panels will be connected to the TNEB grid for captive consumption through Wheeling arrangement. The renewable energy portfolio of the Company also includes grid connected power and off-grid solar power. CPCL has solar roof top panels installed at different locations in Manali refinery premises. The total installed capacity of roof top Solar panels is 1245 kW as of Mar ‘24.

In addition to the above, installation of Solar Roof Top Panels in substation building and at available space in offsite areas with a combined capacity of 1040 KW is taken up. The green power generated from the Solar PV panels will be connected to the CPCL power system and consumed internally.

To harness the renewable sources of energy and as a part of sustainable development and a step towards net zero, CPCL has set up a 6 kWh Rooftop wind mill plant (2 Machines 3 KWh each) in CPCLs Corporate Office premises. The power generated by these turbines will cater to the energy needs during the night time and will be complemented by our solar PV panels during the daytime. This one of a kind, initiative which symbolises CPCLs commitment towards sustainability.

Your company is planning to implement Green Hydrogen at 2 KTPA capacity by 2026 -27 and subsequently scale-up the same to 10 KTPA by 2030 as per the capacity allocated by MoPNG. Feasibility for production of Compressed Biogas

(CBG) in Chennai is being explored through collaboration with existing CBG operators. It is targeted to commence CBG production by 2026-27.

Operational excellence in refineries:

Operational excellence in refineries is a strategic imperative that ensures the efficient, safe, and cost-effective production of refined petroleum products. It involves a holistic approach that integrates advanced technologies, robust process management, and a culture of continuous improvement. Your company is leveraging cutting-edge technologies to enhance their operations. This includes the use of automation, data analytics, and Internet of Things (IoT) devices to monitor and optimize processes in real time. Advanced control systems help in maintaining optimal operating conditions, reducing waste, and improving overall efficiency. Efficient process management is at the heart of operational excellence and

CPCL had continually analyse and refined their processes to identify bottlenecks and areas for improvement. With the above improvement measures CPCL clocked the highest ever throughput of 11.642 MMT of crude processing during the

FY 2023-24. highest ever capacity utilization of about 111%.

Product pipeline CTMPL achieved highest ever single MS batch size of 45 TKL in Aug ‘23. RLNG consumption surged to a record 441 TMT in 2023-24, a 1.5-fold increase from the previous year, with CPCL as the top consumer from the Ennore Terminal. In March 2024, consumption peaked at 2.35

MMSCMD. CPCL achieved 0.30% reduction in F&L, 115 KTCO2e reduction in emissions and a 2.5% drop in Energy

Intensity Index compared to 2021-22 levels due to increased consumption of this cleaner fuel. CPCL reduced its water consumption from 7.2 MGD to 5.5 MGD during FY 2023 24 by implementing various water conservation measures and improving recycle and reuse of water. Three parcels (40 TMT each) of HFHSD was exported in a single month for the first time during Oct ‘23. With excellence in various key performance indices coupled with a combination of advanced technology, skilled workforce, stringent safety measures, and a culture of continuous improvement your company achieved better operational efficiency, reduce costs, and maintained a competitive edge in the global market. Operational excellence at your company has not only driven profitability but also ensured sustainability and regulatory compliance, paving the way for long-term success.

Robust Risk Management Framework:

Your company has a robust risk management framework which is crucial for ensuring a safe, efficient, and reliable operation. This framework involves identifying, assessing, and mitigating risks to protect both personnel and assets while maintaining operational integrity. By systematically identifying, assessing, and mitigating risks, refineries can protect their workforce, minimize environmental impact, and ensure regulatory compliance. Continuous monitoring and adaptive strategies have aided in maintaining a resilient and robust risk management framework. The risk methodology categorises risks as high, medium, low and risk at radar at multidisciplinary levels. Your company had made a continual improvement by analysing the key factors influencing capacity utilisation like crude supply insecurity, disruption in port operations, number of unplanned shutdowns .Other KPIs such as variation in product mix, crude price fluctuation, variations in planned throughput, and volatile cracks may contribute to erosion in Refinery Margin. Any cost and time over run in planned projects is also considered as high risk as they will likely reduce the profit margins expected from the project implementation. Medium risks include data leakage, security risk, environmental risk and other Govt. policy decisions impacting the profitability and ability to do business have been analysed to ensure compliance in regulatory aspects. Low risk includes factors which are less likely related to continuous operation, like variations in interest rate, currency risk, and commodity risk. Risks on Radar includes statutory levies by tax authorities and other related liabilities. The risk management framework provided a structured approach to combat the effects of the identified risk while maintaining operational integrity.

Your company considers safety as a paramount importance.

The framework insists of safe practices in refinery practices that not only protects workers, but preserves the environment, and safeguards the industrys sustainability. Your company has been providing various training programs on having safe operations and have taken up numerous initiatives like conducting onsite and off-site mock drills as per Emergency Response and Disaster Management Plan, inculcate the culture of BBS, utilisation of inherent fire-retardant suits to safe guard from flash fires etc. By adhering to rigorous safety measures and staying proactive your company has recorded no instances of threat to safety and security of the installations.

Other information: The details regarding the Companys CSR programmes, Internal Control Systems and their Adequacy, Financial Performance, Operational Performance & Human Resources / Industrial relations, Material Developments are adequately dealt in the Directors Report.

Cautionary Statement: The information and statements in the Managements Discussion & Analysis regarding the objectives, expectations or anticipations may be forward looking within the meaning of applicable securities laws and regulations. The actual results may differ materially from the expectations. The various critical factors that could influence the operations of the Company include global and domestic demand & supply conditions affecting the selling price of products, input availability and prices, changes in Government regulations/tax laws, economic developments within the country and factors such as litigation and industrial relations.