ISGEC Heavy Engineering Ltd Management Discussions

(i) It was a good year for the Company.

(ii) The total income was Rs. 4906.14 crores against Rs. 4686.91 crores in the previous year.

(iii) Profitability was much better, with profit before tax at Rs. 303.90 crores, up from Rs. 234.40 crores last year.

(iv) Profitability has improved because of higher sales and much higher profits in the Manufacturing Segment. The revenue and margins of the Engineering Procurement and Construction (EPC) segment remained flat.

(v) Fresh order booking during the year was Rs. 4249 crores compared to Rs. 6059 crores in the previous year. We are starting the new financial year with a comfortable order backlog of Rs. 6786 crores (last year Rs. 7727 crores).

(vi) Order booking during April and May 2024 has also been excellent.

(vii) We have been making capital investments to increase manufacturing capacities for almost all our product lines in the manufacturing segment and will continue to make further investments. This will help us continue increasing this segments revenue in the next few years.

(viii) In the EPC segment, we are focusing on orders that will use Isgecs technological expertise but have comparatively shorter execution periods and less site work than the orders we have been executing in the past. Because of the shorter duration of the orders (less than 30 months) and less site work, we expect the revenues and margin profile for this segment to improve.

(ix) Our net borrowings at the end of the year were "Nil," and surplus funds were parked in bank deposits and short-term investments.

(x) The Indian economy is poised for rapid growth over the next few years, with significant investments coming up in almost all our customer industries, including Power, Sugar, Steel, Cement, Oil and Gas, Petrochemicals, Fertilizers, and Railways. Thus, Isgec is in a favorable position to supply products and services and participate in Indias growth story.

(xi) Further details are given in the Management Discussion and Analysis section.

12. Management Discussion and Analysis:

[a]. Economic Overview:

Global Economy:

(i) The global economy in 2024 will be influenced by various factors, including geopolitical conflicts and tensions, technological advancements, environmental challenges, and ongoing shifts in consumer behaviour. However, it continues to show resilience.

(ii) Overall, while uncertainties and risks are inherent in the global economic outlook for 2024, there are opportunities for sustainable growth, technological advancement, and societal progress.

Positive factors impacting the Global Economy:

Several positive factors could contribute to a favourable outlook for the global economy in 2024:

a. Infrastructure Investments: Governments

worldwide prioritise infrastructure development as part of economic stimulus packages and long-term growth strategies. Investments in transportation, telecommunications, and other infrastructure projects can create jobs, improve connectivity, and support economic development.

b. Green Transition: Increasing awareness of climate change and environmental sustainability drives a transition towards cleaner energy sources and sustainable practices. Investments in renewable energy, energy efficiency, and green infrastructure can spur economic activity while mitigating the risks associated with climate change.

c. Technological Innovation: Ongoing advancements in technology, such as artificial intelligence, automation, and renewable energy, have the potential to drive productivity gains, efficiency improvements, and new business opportunities. Investments in innovation can stimulate economic growth and create jobs in many industries.

d. Digital Transformation: The accelerated adoption of digital technologies during the COVID-19 pandemic has opened up new possibilities for remote work, e-commerce, digital finance, and telemedicine. Digitisation can enhance efficiency, connectivity, and access to services, fostering innovation and economic resilience.

e. Trade Integration: Despite challenges posed by protectionism and geopolitical tensions, many countries benefit from international trade and global supply chains. Trade agreements, regional integration initiatives, and efforts to reduce trade barriers can enhance market access and promote economic cooperation.

f. Human Capital Development: Investments

in education, skills training, and workforce development are essential for building a competitive and adaptable workforce. Empowering individuals with the skills and knowledge needed for the jobs of the future can drive innovation, entrepreneurship, and economic growth.

Negative factors impacting the Global Economy:

a. Geopolitical Tensions: Ongoing regional wars, rising geopolitical tensions between major powers, and trade disputes can disrupt trade flows, increase uncertainty, and deter investment, negatively impacting economic growth.

b. Supply Chain Disruptions: The COVID-19 pandemic exposed vulnerabilities in global supply chains, leading to shortages of critical goods, production delays, and increased costs. Ongoing supply chain disruptions, including scarcity of semiconductors and shipping bottlenecks due to wars, continue to hamper economic recovery and increase inflationary pressures.

c. Inflationary Pressures: Inflationary pressures

have intensified due to supply chain disruptions, commodity prices, and fiscal stimulus measures. Rising inflation erodes purchasing power, reduces consumer confidence, and has prompted central banks to tighten monetary policy, potentially slowing economic growth and inducing economic recession.

d. Climate Change Impacts: Climate change-related events, such as extreme weather events, natural disasters, and environmental degradation, pose significant economic risks. These events disrupt supply chains, damage infrastructure, increase insurance costs, and threaten livelihoods, particularly in vulnerable regions.

e. Cybersecurity Threats: Cyber attacks and data breaches pose growing threats to businesses, governments, and critical infrastructure. Disruptions to digital systems, theft of sensitive information, and ransomware attacks can lead to financial losses, reputational damage, and disruptions to economic activities.

Conclusion

a. Despite significant central bank interest rate hikes to control inflation and restore price stability, the global economy has been surprisingly resilient.

b. Interest rates seem to have peaked and will likely show a downward trend in the coming year. This will boost investments.

c. The International Monetary Fund (IMF) continues its baseline forecast for the world economy to grow at 3.2 percent in 2024 and 2025, the same pace as in 2023.

International Monetary Fund

d. The forecast for global growth five years from now is 3.1 per cent, which is at its lowest in decades. While keeping a moderate outlook on the global growth path, the IMF projects global inflation to decline. Global headline inflation is expected to fall from an annual average of 6.8% in 2023 to 5.9% in 2024 and 4.5% in 2025, as per the IMFs World Outlook Report 2024.

e. Adaptability, Resilience, and innovation remain critical for businesses and policymakers navigating this complex landscape.

(N(N(N(N(N(N(N(N(N(N(N

• India ?World

Source: International Monetary Fund Forecasts Notes: dotted (---) lines show projected figures

a. With a stable political climate, proactive Government initiatives, a long-term vision, and robust government and private sector investments, India is seen in the global market as an upcoming "Manufacturing" and "Services" powerhouse. It is poised to become a top international investment destination.

b. With nearly 70% of Indias GDP driven by domestic consumption, the country remains the worlds fourth-largest consumer market. Besides private consumption, Indias GDP is also fueled by Government spending, investments, and exports. The service sector makes up more than 50% of the GDP and remains the fastest-growing sector, while the Industrial and Agricultural sectors employ most of the labour force.

c. Foreign Investments have been complementing the domestic private investor and government funding. According to the UNCTAD data on green field project announcements in 2023, India remained among the TOP 5 destinations globally. In addition, the FDI watchlist by IMF and FDI Intelligence Indicators ranks India among the TOP 10 countries for investments in 2024.

d. According to ICRA, many of the sectors that Isgec is interested in, show a positive or stable outlook for the coming year.

e. The Governments focus on infrastructure, climate goals, domestic manufacturing, and improving international trade is visible through various schemes and policies like Make in India, Production Linked Incentive Scheme, National Logistics Policy, National Green Hydrogen Mission (including Green Ammonia, and E-fuels) and National Infrastructure Pipeline.

f. All the above augur very well for good business prospects for Isgecs portfolio of products and services.

[b]. Industry Structure and Developments:

Several foreign companies are considering India for their "China plus One" strategy in the current geopolitical situation. Isgec is gaining from this development.

Manufacturing growth jumped to 8.5% Year-on- Year, surpassing GDP growth of 7.6% in FY24. The manufacturing sector is showing signs of strength, is ready for good growth, and will raise its share of the

GDP. The Manufacturing sector has benefitted from improving logistics infrastructure, lower input raw material cost, export incentives, a series of Production Linked Incentive schemes (PLI), the Make in India Policy and government support for credit guarantee (ECLGS), and more accessible loans for the MSME sector.

India leads the emerging market for services exports. While computer services contribute half, professional consulting and engineering services have been the fastest growing sector, growing at a 17% CAGR to achieve a share of 18% in Indias services exports. Indias services exports in 2023 will be USD 338 Billion (9.7% of GDP).

India is moving towards becoming a "Manufacturing" and "Services" powerhouse, with international companies aggressively partnering with Indian companies to open Global Services Centre (GSC) and Joint Ventures in Manufacturing.

However, FY25 may witness lower growth due to geopolitical tensions causing disruptions in the supply chain. The consequent higher logistics costs are likely to hurt exports, and the Indian Parliament elections will delay spending on infrastructure for a quarter.

[c]. Opportunities and Threats:

Opportunities

• The Government continued supporting the Manufacturing and Services sector by improving logistics infrastructure and supporting policies and incentives. This is the primary reason for the continued market expansion in India. The "Make in India Policy", which applies to all manufacturing, is the umbrella scheme to promote domestic manufacturing.

• Increase in FDI inflow, mainly in the manufacturing sector.

• In addition to Indias traditional markets in the USA, Europe, and Africa, Indias new markets shall be Central Asia and Latin America.

• The Governments continued support to the Medium, Small, and Micro Enterprise (MSME) sectors provides subcontracting support for parts and services for the main sectors.

• Interest rates are expected to peak in 2025 and be gradually reduced by the central banks over the next couple of years.

• Due to stringent emission regulations in Power, Oil & Gas, Chemical, Steel and Cement Industries, the emission control equipment segment continues to see good demand.

• The Governments announcement of new thermal power plants, which will likely come up by 2030, will provide opportunities for Isgecs products, including ash handling, material handling, and emission control equipment.

• The expansion of the Oil & Gas sector continues to provide orders for Boilers, Process Equipment, Boiler Manufacturing & Piping, and EPC Process Plants.

• The countrys Ethanol Blending Programme (EBP) is continuing, with additional investment by many players and ethanol plants based on grain as feedstock besides molasses. This continues to provide good opportunities for Boilers, Sugar Plants, and Distilleries businesses.

• As a leading company providing products and solutions for a broad spectrum of industries, Isgec Heavy Engineering Limited (Isgec) is in a favourable position to participate in Indias growth story.

Threats:

• Volatility in commodity and crude oil prices due to global turmoil, the Russia-Ukraine war, and high inflation can increase input costs, impact profitability, and dampen export markets.

• Growth in the manufacturing segment could be dampened in FY25, mainly due to rising input costs, geopolitical tensions affecting the supply chain, and Indian Parliament elections affecting first-quarter economic activity.

• Overall, global growth is likely to moderate due to slowing Europe and China, causing a contraction in goods and services trade.

• Cheaper Chinese imports, due to their overcapacity & slowing growth, are a threat to domestic manufacturing.

• Higher transportation costs for exports, mainly due to geopolitical tensions and disruption in maritime trade routes, could fluctuate and impact manufacturing output.

• Talent attrition may go up, given the increased economic activity and capital investments, leading to shortage of skilled manpower.

[d]. Segment-wise or Product-wise Performance:

A. Engineering, Procurement and Construction (EPC) Segment:

A.01 Isgecs EPC segment executes projects on a turnkey basis for Boilers, Air Pollution Control Equipment Solutions, Sugar Plants, Machinery and Distilleries, Power Plant Solutions, Bulk Material Handling Systems, Process Plants, Installation of Factories & Workshops for Railways and other Projects.

A.02 The EPC segments total revenue was Rs. 3405 crores against Rs. 3368 crores last year. The profit was, however, marginally lower due to the following reasons:

• Some long-duration orders under execution continued during the year, and most will be completed in FY 2025. These have been adversely affected by the increase in commodity prices and time overruns, leading to lower profitability.

• The proportion of old orders reduced further during the current year.

• In recent months, new orders with better margins have been booked. These revenue and margins will accrue during the current year.

Industrial & Green Energy Boilers:

A.03 Isgec started its Boiler Division in 1959. Starting from grate-fired boilers, over the years, the division has diversified into a broad spectrum of fired and unfired boilers for various applications such as Process Steam, Captive Power, Cogeneration and

Utility Power. In addition to Boilers, we provide turnkey (EPC) solutions and a bouquet of services to our customers. Besides our technologies and continuing research and development on our technologies, we have made important technical collaborations with best technology companies around the world.

A.04 Following are various types of boilers offered by Isgec:

(1) Biomass-fired Boilers have different Grates, such as Travelling, Vibratory, Reciprocating, and Pin Hole Grates, for

burning biomass such as Bagasse, Rice Straw, Rice Husk, and Woody Biomass.

(2) Circulating Fluidized Bed Combustion (CFBC) Boilers are used for firing coal, petcoke, co-firing biomass, and oil and gas. CFBC technology is offered in collaboration with world leaders Sumitomo SHI-FW Finland.

(3) Oil & Gas fired Boilers for burning natural gas, refinery off gas, oil and blast furnace gas. In addition to sites erected boilers, we also provide shop-assembled package boilers. Shop-assembled boilers are offered in collaboration with Amec Foster Wheeler (Wood PLC) - Spain.

(4) Waste to Energy Boilers for incineration of municipal solid waste as well as slop/vinasse ensuring Zero Liquid Discharge (ZLD) from Distillery.

(5) Heat Recovery Steam Generators (HRSGs)

recover waste heat from exhaust gases from Gas Turbines. We offer HRSGs with technology from NEM Energy?The Netherlands, a global leader.

(6) Waste Heat Recovery Boilers use heat sources from waste gases in Cement Plants, Steel Plants, and Oil Refineries.

A.05 Recognizing the market needs, we have added the following indigenously developed new technologies to serve more industries:

(1) Tail Gas Fired boilers for the

Tyre / Black Carbon Industry:

We bagged our first domestic and export orders during the year.

(2) Rice Straw (Agri waste) fired boilers

below 40 tonnes per hour steam:

We secured our first order from an Ethanol Plant in North India during the year.

(3) Flue Gas Coolers:

It is a waste heat recovery boiler in an oil refinerys Fluidized Catalytic Cracking Unit (FCCU). We are executing our first order for this product for an EPC contractor for a Public- sector Oil Refinery.

A.06 We have focused on expanding our market share for Boilers by developing new products to meet the changing market demands in India and region-specific products to penetrate selected export markets like South-East Asia, the Middle East, Africa, Latin America, and neighbouring countries of India.

Turnkey Power Solution:

A.07 Isgec is an established player in building power plants up to 150 MW on EPC basis. It provides complete solutions to customers with singlepoint responsibility and executes projects within time.

The biggest advantage is our in-house manufacturing of boiler pressure parts, which is one of the packages key equipment. Solutions for other important allied packages, such as water treatment, fuel handling systems, and flue gas desulfurization, are also available in-house. Isgec has already executed EPC Power projects with a cumulative capacity of over 2000 MW.

Allied Business (Services):

A.08 Operation and Maintenance (O&M):

We have established ourselves as a leading partner in O&M services for power plants or boilers including boilers supplied by us or our competitors. Our services cover the full spectrum of O&M of independent power plants, captive power plants, and co-generation plants.

Currently, we operate and maintain more than 800 MW (cumulative) projects for our customers. This business has a good potential for growth as the end users increasingly wish to focus on their core business and offload these services to experts like us.

A.09 Spares, and Renovation & Modernisation (R&M):

Isgec undertakes Spares and R&M services for all Industrial boilers, supplied by us or competitors. With decades of experience in supplying a wide variety of boilers, Isgec offers both replacement spares and Retrofit & Modernization solutions for all makes and sizes of Boilers. We offer cost- effective alternatives to the existing designs and offer solutions with less capital expense while increasing efficiency, safety, and output from the existing system.

A.10 Full Fledged Boiler Customer Service Cell:

A dedicated cell has been created to take care of customers instant service requirements on priority. We undertake value-added services like Residual Life Assessment (RLA) study and support to customers using our Online Remote Monitoring System (RMS) and Industrial Internet of Things (IIOT). We also provide specialised technical training to customers operating personnel, which includes job training, classroom training & simulator training for power plants.

- IIOT: We have developed IIOT (Artificial Intelligence based Application) which will improve Plant operation monitoring for customers. This shall eliminate operator intervention and would help to achieve better plant availability and efficiency. Pilot testing is presently under way after which this product will be offered to other customers commercially.

- During the year we developed a new App Tech Mitr. This Commissioning App will be launched

this year and will help our commissioning engineers for faster and more accurate commissioning. It will also provide 24x7 access to latest procedures to all users.

Boiler Business Highlights for FY 2024:

A.11 We exceeded our order booking for the last year and booked our largest ever value of boiler orders from the domestic market during the year. Significant orders booked during the year include: -

• Our first Order for Flue Gas Cooler from an EPC company.

• First Order for Bagasse Fired Cogeneration Boiler with Co-firing of Slop for a Public sector company.

• Our 100^th AFBC Boiler order (Boiler is designed with 70% Pith Firing).

• Our first Boiler order from another country in Latin America.

• A large Value Retrofit order for a customer in Latin America.

Other significant achievements for the year include:

• Our first Pith Fired Grate Boiler was commissioned.

• Our first 100% Biomass-fired AFBC Boiler was commissioned.

• 14 MW "Waste to Energy" Power Plant commissioned for a city in Maharashtra.

• We commissioned the worlds largest Cement Waste Heat Recovery Boiler for a customer in Rajasthan.

Engineering Excellence

A.12 Our efforts to gain an edge over competitors to supply equipment with better technology continued:

(1) We received Two Patents for drum feeders & Tube leak detection systems, which will further boost our market demand for Boilers.

(2) We completed the development of Rice Straw Boilers for below 40tph. We expect our first orders in 1st quarter of FY25.

(3) In house technology developed for Flue Gas coolers under implementation at a customers site.

A.13 We continue to work to improve planning, Project and Construction management, employee and contractor skill development, productivity monitoring, and the first-time-right approach. This has reduced construction times by 5%, and further improvements are planned.

A.14 Standardisation of commissioning procedures & protocols, robust pre-commissioning checks and engineer skill development enabled smooth commissioning. A total of 31 Boilers were commissioned, and 28 performance guarantee tests were conducted in FY-24.

Sugar Plants, Machinery & Distillery:

A.15 Isgec is a market leader in Sugar Plant & Machinery business in India.

A.16 We provide extensive end-to-end engineering solutions for setting up Greenfield Sugar Plants with captive Co-gen Power Plants and retrofitting/ expanding/modernizing/steam economy for existing sugar plants. We also provide complete Ethanol Plants, ENA Plants, Captive Power Plants integrated with Sugar Plants, Zero Liquid Discharge solutions, and Effluent Treatment Plants.

A.17 Services:

> Spares and Retrofit - We provide spares and retrofit services for all equipment used in Sugar and Ethanol plants.

> Operation and Maintenance Services for Sugar Plants, Ethanol Plants, Power Plants, Effluent Treatment Plants, Condensate Polishing units and Sugar Refineries.

Highlights of Sugar Plants, Machinery and Distillery

Business for FY 2025:

A.18 During the year we completed several Greenfield and Brownfield projects. Major projects commissioned include:

> 7500 TCD complete double sulphitation sugar plant with 120 KLPD distillery and 25 TPH incineration boiler and power plant on turnkey for a customer in Uttar Pradesh.

> A number of sugar plant Expansions and Modernization projects.

> Raw Syrup Plant of 7500 TCD capacity for a customer in Maharashtra with 500 KLPD distillery.

> Expansion from 9000 TCD to 11500 TCD of a sugar plant in Maharashtra.

A.19 Order booking for Sugar Plants as well as Ethanol Plants during the year was good.

A.20 Major Orders include:

> A big Bio Ethanol Project for a Sugar and Biofuels plant in Uttarakhand, which includes:

• 6000 TCD Milling plant with 3000 TCD Raw Syrup and 22 MW Cogen.

• 225 KLPD capacity Syrup based Ethanol Plant designed on Zero Liquid Discharge.

> Sugar plant Expansion and steam economy with a new technology from 7200 TCD to 8500 TCD from a sugar plant in Uttar Pradesh.

> Two nos. Mills of 54x100 size from Latin American country.

> Repeat order for Operation and Maintenance of 2G Ethanol Plant from a Public Sector Oil Major.

A.21 Sugar Technology:

> We continue to work on improving sugar technology. We use advanced equipment design software, such as AMEtanks, PVElite, and SigmaNEST. We have also developed an Artificial Intelligence (AI) system for sugar plant equipment to improve process efficiency and reduce manpower.

> With our R&D efforts, we have 11 Patents for important sugar plant equipment.

Ethanol:

A.22 Isgec offers Distillery Plants based on multiple feedstocks - molasses, cane juice and foodgrains.

A.23 The business outlook continues to be good, with a few new greenfield plants being planned in the northern states. Across the country, multiple sugar plants are planning expansion or replacement of old equipment. Several ethanol distilleries are expected to be set up, using molasses and foodgrain as feedstock.

Air Pollution Control Equipment (APCE):

A.24 Isgecs Air Pollution Control Equipment Solutions include:

1. DeSOx Technologies (reducing Sulphur Dioxide emissions):

> Wet Flue Gas Desulphurisation Projects for Thermal Power Plant Units of >100 MW Capacity.

> Semi-Dry Flue Gas Desulphurisation Projects for Thermal Power Plant Units of >50 MW Capacity.

> Dry Sorbent Injection System for Thermal Power Plant Units.

> Semi Dry Flue Gas Desulfurization projects for units up to 50 MW primarily catering to captive power requirements for Cement, Power, Waste to Energy, Carbon Black & Metallurgical applications.

> Tail Gas Desulphurisation Projects for Non-ferrous applications. This is a new technology addition that is offered based on technical support from overseas Technology Providers.

2. DeNOx Technologies (reducing Nitrogen

Oxide emissions):

> DeNOx Combustion Modifications for Tangentially Fired Pulverised Coal Boilers and Wall-Fired Boilers.

> Selective Non-Catalytic Reduction (SNCR) Systems for various applications including Power, Cement and other industries.

3. Particulate Matter Control Technologies:

> Electrostatic Precipitators (ESP) for Fossil Fuel fired Boilers and other Industrial Applications

i.e., Steel, Cement, Metallurgy etc.

> Renovation and Modernisation (R&M) of ESPs for Thermal Power Plants.

> Spares Business for ESPs.

> ESP for Carbon Neutral Agro based & Biomass Fired Boiler including Distillery Waste.

> Flue Gas Conditioning for Efficiency Improvement of Electrostatic Precipitators (ESPs).

A.25 Highlights of Air Pollution Control Equipment Business for FY 2024:

(1) We booked the following major orders:

> Tail Gas Desulphurisation (TGD) System Package for a Copper Smelter Application.

> Repeat Order for Dry Sorbent Injection (DSI) System Package for 2x210 MW (Phase -I) Thermal Power Plant Units from a reputed State Utility. We are already executing DSI system for 2x210 MW (Phase - II) for the same utility at the same plant which is in advanced stages of commissioning.

> Various orders of ESP for Slop, CFBC, and Biomass-Fired Boilers, including Paddy/ Mustard Straw and Cotton /Soya Husk.

> Breakthrough Order of ESP for Sinter Cooler application for a large steel plant.

> Breakthrough Order from overseas market for Bag Filter in steel plant process application.

(2) Major Projects Commissioned:

> We have completed the commissioning of our first Semi-Dry FGD System for a 150 MW CPP Unit. The Performance Guarantee Test for this Unit was successfully completed as well.

> We have successfully completed the Commissioning of our first 800 MW Wet FGD Unit and targeted Gypsum Production was also achieved in March 2024.

A.26 Market Outlook for our Air Pollution Control Equipment products:

This business supplies equipment mainly to thermal power plants.

The Ministry of Power plans to add 80 Gigawatts (GW) of thermal capacity by FY32, in line with a growing appetite for electricity from the commercial and industrial (C&I) sector and households. Peak power demand is expected to rise to 366 Gigawatts (GW) by 2032 from 240 GW in 2023.

India has invested approximately Rs.20 lakh crores in the power sector over the past nine years, with an additional investment of Rs.17 lakh crores expected in the next five to seven years. Despite ambitious net-zero targets and an ongoing energy transition, Indias coal-based power continues to meet its growing electricity demand.

This planned capacity addition will also fuel the requirement of Isgecs Products and Technologies in the Sector.

(1) DeSOx Technologies:

The majority of the Central, State, and Private Utilities have completed ordering DeSOx systems for their existing plants. However, approximately 80 GW of existing capacity is still likely to be ordered for DeSOx systems, and Owners, mainly in the State and Private Sectors, have yet to make the investment decisions.

The upcoming power plants based on planned capacity addition will also require Wet FGD Systems to comply with the SOx emission norms.

There is also an increased thrust for SOx emission compliance in the industrial sector, and Isgec expects an opportunity in the Copper Refining sector to implement Tail Gas Desulphurisation Systems.

(2) DeNOx Technologies:

There is an increasing requirement for SNCR (Selective Non-Catalytic Reduction) Systems for NOx control from the Industrial sector. However, considering the relaxation of NOx emission norms for existing thermal power plants, SNCR requirement in the Power sector has diminished.

Isgec is currently executing DeNOx (Combustion Modifications) Package orders for 6 units of a reputed State Utility and expects a few enquiries for this technology in the current year.

(3) Particulate Emissions:

Considering the peak power demand, several ageing plants have been instructed to continue operating until 2030. In order to continue operating, some of these plants that are not complying with the particulate emission norms may require Renovation and Modernisation of Electrostatic Precipitators (ESPs). We are receiving ESP R&M enquiries from State Power Generation Companies that have yet to carry out ESP Retrofit.

Isgec also offers ESPs for Particulate Emissions control for various industrial applications.

Bulk Material Handling:

A.27 The main markets for our Bulk Material Handling products are Ports, Mines and Power Plants. There is steady investment in all these sectors.

A.28 For Ports, Isgec offers complete end-to-end solutions including Trough and Pipe Conveyors, Stackers, Reclaimers and Ship Unloaders for bulk materials.

A.29 For Container Terminals, we offer Gantry Cranes and Ship to Shore Cranes at the terminals.

A.30 For Power Plants, we offer complete coal-feeding solutions, including Stackers and Reclaimers.

Factories and Workshops for Railways:

A.31 We build workshops for Indian Railways on a turnkey basis, including all equipment, machinery, civil work, railway tracks and signals. We also build metro railway depots.

A.32 India plans to invest more than Rs. 1 lakh crores in Rail and Metro rail infrastructure in the next five years. We expect continued business from these sectors.

Process Plants:

A.33 We offer Sulphuric Acid plants and Wet Sulphuric Acid Plants.

A. 34 Considering the expected expansion in the

Refinery, Petrochemical, Fertilizer and Chemical sectors, we expect good business in this business segment.

B. Manufacturing of machinery & equipment segment:

B.01 This Segment consists of the manufacture of Presses, Contract Manufacturing (Equipment built-to-print and built-to-specifications), Process Plant Equipment, Liquified Gas Containers, Boiler

Pressure Parts & Piping Spools, and Iron & Steel Castings. Each of these products is discussed in the following paragraphs.

B.02 Our products involve a significant level of intellectual property in terms of Manufacturing technology and design (Finite Element Analysis, Mechanical design, Thermal design, Hydraulics Pneumatics, Electrical and Instrumentation, and Tribology). In addition, our products involve elaborate and heavy fabrications, sophisticated welding, complex machining, and assembly skills, as well as skills related to foundry products.

B.03 The total revenue from this segment was Rs. 1704 crores as against Rs. 1534 crores in the preceding year. The profit was substantially higher during the financial year.

Presses and contract manufacturing

B.04 Our Mechanical and Hydraulic Presses are used in many Industries. While Automotive is the main sector for Presses, they also find applications in forging, white goods, refractory, railways, and defense sectors.

B.05 The Automotive sector reported appreciable growth in FY-24 as compared to FY-23. Automotive OEMs have expansion plans, which would favor us with consistent order booking.

B.06 Total order booking for Presses for the year was at an all-time high.

B.07 The press business line (Business Unit) booked the following strategic orders during the year:

a) 3000T Transfer Press solution with high productivity.

b) Refractory Press along with automated transfer solution for the refractory industry as an import substitute.

c) Presses for the forging industry/ close die forging.

B.08 We added 13 new customers from domestic and export markets. In addition to Presses, we could bag orders for sophisticated Robotic and transfer Automation Systems, enhancing our product basket. Some of the Presses will be built together with the more value-adding and sophisticated Robotic and Transfer Automation Systems.

B.09 The order booking prospects for this year appear encouraging and we expect major requirements to be generated from Tier-1 and Tier-2 suppliers of OEMs in the Automotive sector.

B.10 We expect growth in the domestic market and the opportunity to serve the target overseas market viz. Central Eastern Europe, South Africa, Mexico, and South-East Asia.

B.11 We also expect growth in the non-automotive sector for presses from the Forging, Refractory & Sheet Moulded Composite sectors.

B.12 We have added 2 new service partners in Europe & South Africa. We are further working to strengthen our after-sales support in Europe, South Africa, and South-East Asia through tie-ups with local partners to expand our footprints in the region.

Contract manufacturing

B.13 Capitalizing on Isgecs skills in heavy fabrication, machining, welding and assembly, our Contract Manufacturing Group manufactures built-to- print as well as built-to-specification equipment for diversified sectors like Steel, Defence, Space, Nuclear, Mining & Hydro Power.

B.14 This year, we had the highest order booking for Contract Manufacturing Group in the last 10 years, and it is expected to be good for FY-25 as well. Major orders booked include: -

1. LD Converters and Trunnion Rings from a Steel Plant technology provider.

2. Palletizing Discs and Caster Steel Segments for Steel Sector.

3. Repeat order for critical components of 155 mm howitzer for the Defense Sector.

4. Repeat order for High Wall Mining equipment. Process plant equipment:

B.15 Our Process Equipment Division manufactures static process plant equipment, critical to various chemical process industries such as Green Energy, Fertilizer, Crude Oil Refinery, Petrochemicals, and Chemicals. Our knowledge of metallurgy, welding skills, and non-destructive testing, as well as our manufacturing infrastructure, has been recognised and acclaimed by almost all major process licensors, owners, engineering consultants and EPC companies for their requirement of the following equipment: -

• Reactors

• Shell & tube heat exchangers

• Breech lock type (special closure) high-pressure exchanger.

• Thick-walled high-pressure vessels.

• Distillation and other process columns

B.16 During the year, order booking from the Oil and Gas sector was slightly lower due to certain investments being postponed/deferred by some Oil and Gas and Petrochemical industry customers. However, significant orders were booked in the first quarter of the current year.

B.17 While order inflow from the Oil & Gas sector in the domestic market was slow last year, order inflow from Fertilizer and Blue Hydrogen for overseas projects was good. Most overseas projects in the Oil Refinery and Petrochemical sectors, which were deferred, are expected to take off during this financial year.

B.18 Refinery projects in the domestic market have seen a decline but expected capacity expansion by some selected plants together with integrated petrochemical units will offer good business potential in the Indian market during the next two to five years.

B.19 As the energy landscape changes, investment in Green Hydrogen and Ammonia projects will take off, giving us good business for supplying heat exchangers and pressure vessels.

B.20 Indias annual petrochemical consumption could nearly triple to 80 million tons by 2040, forcing the country to either raise imports or invest in building new facilities. New Petrochemical plants have been announced with huge investments, and some projects have started implementation and Process Licensors have been selected. These projects will give us a good opportunity, either as a direct supplier or as a supplier to their EPC contractors.

B.21 The Governments continuous focus on "Make in India" will be favorable to us in indigenizing critical equipment that was earlier imported.

B.22 The Middle East market has opened up, and we have several ongoing bids for new orders and equipment for new projects. Good demand is also expected for the export of equipment for Green Hydrogen/Green Ammonia projects, though there is stiff competition on prices and deliveries.

B.23 In the domestic market, due to the general elections, approvals for new investments in the Oil & Gas and Petrochemical sectors moved slowly. However, Government clearances are expected, post elections.

B.24 During the year, we have tied up with two more Process Licensors, who will include our name as the "preferred manufacturer" for supplying their licensed equipment to the end customers.

Liquified gas containers:

B.25 We are one of the worlds largest manufacturers of Ton containers used for transporting liquified gases under high pressure.

B.26 We have supplied over 375,000 units to more than 65 countries.

B.27 We received authorization to apply the ASME T stamp applicable for the manufacture of Class 1 transport tanks.

B.28 We expanded the Shops to improve production capacity to 1800 nos. per month and achieved the highest production in a financial year during the current year.

B.29 We continued to be the global leader in the manufacture and supply of Liquified Chlorine Containers.

Iron casting

B.30 Our Cast Iron Foundry is one of the best foundries in India. We are globally renowned for manufacturing Quality Grey & Ductile Iron Castings. We are amongst the top three Soda Ash Castings manufacturers in the world and first in India.

B.31 During the year, we booked good business from a wide spectrum of industry sectors, including the Soda Ash, Steel Plant, Machine Tools, Pumps, Compressors, Valves, and Tool and die sectors. The market for these sectors is expected to be good, except for some slowdown in the Soda Ash sector.

B.32 We have seen a dip in demand from Russia, which used to be a major market for export for Iron Castings. In the current year, we are looking to develop additional markets for export of Iron Castings for Steel Plants, Machine Tools, Pumps and Compressors.

B.33 Our Iron castings manufacturing facilities are state-of-the-art, fully integrated facilities with an experienced pool of skilled and talented manpower.

B.34 We are continuing to improve the automation, from Pattern Manufacturing to the 3D Routers, Pattern painting through flood coating mechanized arrangement, and inspection of Patterns and castings through the 3D scanning process.

B.35 The outlook for these products for the Financial Year 2025 is good.

Steel casting

B.36 Financial Year 2023 was good for this product group, with substantial increases in production and sales of Steel Castings and record order booking. During the year, production increased by a further 10%, and order booking was also higher, which is a new record.

B.37 Export was close to 30% of the total sales.

B.38 The "China plus One" strategy of the developed world, coupled with the Government of Indias "Made in India" programme, has improved our business for this product.

B.39 We continue to see good demand for Valve Castings from the Oil and Gas sector and High- Alloy Steel Castings from Steam Power Turbine Manufacturers.

B.40 Both the domestic and export markets appear poised to give us good business, and we expect FY 2025 to be a good year for this product line.

Boiler manufacturing & piping:

B.41 This business unit manufactures the following:

1. Pressure parts for various boilers for our own Industrial & Green Energy boiler group as well as for external customers. Typically, the pressure parts include boiler drums, riser & downcomers, water wall panels, headers, evaporators, superheaters and economizers.

2. Cooling stacks for steel plants.

3. Prefabricated piping spools.

4. Skids & Modules.

B.42 During the financial year, this business line recorded its highest production and sales since its inception. Additional fabrication capacity set up for the Piping Spools was well utilised.

B.43 During the year, manufacturing capacity was expanded because of good orders from Refineries, Petrochemicals, Biomass, Waste-to- Energy, Renewable Energy, etc., and expected good orders in FY2025.

B.44 On the export front, we are focusing on the Pulp and Paper sector, in which investments are expected in Latin America and some parts of Europe. Major export demand is expected from developing economies in the plastics, fertilizer, and chemical sectors.

B.45 We have prepared ourselves to move up the value chain to offer complete solutions for skids and modules to clients including detail Engineering, Procurement, Fabrication and Shop Assembly.

These will be used by process industry sectors like Oil & Gas, Petrochemicals, Fertilizer, Desalination, Renewable, Sustainable Aviation Fuel, Ethanol, and Hydrogen, etc.

C. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations thereof enclosed as Schedule-I.

D. Details of any change in Return on Net Worth as compared to the immediately previous financial year along with as detailed explanation thereof enclosed as Schedule-I;

3. Report on the performance and financial position of subsidiary and joint venture companies:

(A) Saraswati Sugar Mills Limited (Wholly Owned Subsidiary Company):

1. Highlights

The profit before tax for the financial year is Rs..84.16 crores and is almost at the same level as last year in spite of lower revenue.

Sugarcane Crushing:

Like other factories in Haryana, Punjab, and Western Uttar Pradesh, our factory also experienced lower sugarcane availability. Therefore, we crushed only 146.64 lakh quintals in the season 2023-24, compared to 166.36 lakh quintals in the previous season.

Efforts are being made to increase sugarcane planting and increase sugarcane supply to our factory in the next season by offering incentives to farmers for cultivating additional areas under sugarcane and supplying their full production of sugarcane to our factory. We are also trying to develop a scheme to help farmers with mechanised harvesting to economise on increasing manual harvesting costs, so that farmers continue to plant sugarcane over the long term.

Government Policies:

At the start of the season 2023-24, the Central Government, as well as the Indian Sugar Mills Association, estimated much lower All India sugar production for the season and to mitigate this the Government chose to change some Policies, which had some adverse impact on the sugar industry as well as our factory. The change in Policies included:

• banning of export of sugar.

• reducing the amount of sugar that can be diverted to produce ethanol by banning the manufacture of ethanol from sugarcane syrup, and restricting the manufacture of ethanol from B-Heavy Molasses. The Government directed that sugar mills should produce most of the ethanol from C-Heavy molasses (which has lower sugar content).

• The Government directed the Public Sector Oil Marketing companies to reduce the amount of B-heavy molasses-based ethanol they would buy and encourage sugar mills to make and supply C-heavy molasses-based ethanol. To mitigate some of the losses to ethanol manufacturers, the Government also increased the price of C-heavy molasses-based ethanol by Rs. 6.87 per litre.

Many sugar factories, in the country had difficulties in shifting the production process to C-heavy molasses in the middle of the season and had to operate their plants sub-optimally.

Our factory, like many others, will need to invest in additional plants and machinery to manufacture sugar with C-heavy molasses.

2. Financial Performance:

• Total Revenue: Rs. 816 crores, approximately 17% lower than the previous years Rs. 986 crores.

• Revenue Breakdown:

- Sugar Segment: Rs. 608 crores, decreased from Rs. 768 crores.

- Ethanol Segment: Rs. 207 crores, slightly decreased from Rs. 218 crores.

• Profit Before Tax: Rs. 84.16 crores, only 6% lower than the previous years Rs. 89.82 crores, despite reduced revenue, because of higher sugar prices and higher profit in the ethanol segment.

• Sugar Sales Revenue:

- Domestic sales dropped due to a reduced quota released by the Government and the absence of exports.

- Quota Allocation: The Government reduced the sugar sale quota, discontinuing additional sugar quota incentives for B-heavy molasses production, around the middle of the year.

- Domestic Sales: 15.73 lakh quintals, down from 18.30 lakh quintals.

- Exports: No sugar exports were permitted this year due to anticipated reduction in national sugar production, contrasting with 2.6 lakh quintals exported last year.

3. All India Sugar Scenario:

• India is the second-largest producer and consumer of sugar in the world. The Indian Sugar Industry is highly fragmented, with Private Sector, Government Undertakings, Cooperatives, and unorganized players. The unorganized players are mainly involved in the production of Gur and khandsari, which are less refined forms of sugar.

• The crushing period varies from region to region. It begins in October/November and lasts until April/ May in all states except in the southern states, where it continues until July/August.

• In the domestic context, sugar is the second largest Agro-based industry, supporting over five crore farmers along with indirect employment to the unorganized rural population.

• India is structurally a sugar surplus nation, and the Governments policy, particularly for ethanol and permitting the export of sugar from India, have been designed to find alternate outlets for the excess sugarcane/sugar available in the country.

Indian Sugar Balance (Lakh Tonnes)

Particulars	Sugar Season (October to September)
	2021-22	2022-23	2023-24 (Projected)
Opening Stock	82	70**	56
Sugar Production*	358	328	320
Diversion for Ethanol	32	38	20
Sugar Consumption	273	278	285
Sugar Export	111	64	-
Closing Stock of Sugar	55	56	91
Closing Stock as % of Sugar Consumption	20%	20%	32%

*Source - Indian Sugar Mills Association (ISMA) and Market Sources.

**ISMA has reconciled the figures with the Government & revised the opening stock.

4. Sugar Export:

Sugar exports from India decreased from 111 lakh tonnes in 2021-22 to 64 lakh tonnes in 202223, reflecting restrictions imposed by the Central Government. In anticipation of reduced sugar production during the 2023-24 season and potential increases in sugar prices, the Government has banned sugar exports for the current season.

5. Restriction on the amount of sugar that can be diverted to ethanol:

The Central Government has reduced the amount of sugar permitted to be diverted to ethanol production from both sugarcane juice and B-heavy molasses to 17 lakh tonnes, down from 38 lakh tonnes last year, in order to increase domestic sugar availability. Because of these restrictions, total sugar production in India unexpectedly reached over 320 lakh tonnes, surpassing the initial estimates of 280-290 lakh tonnes.

6. Domestic Sugar Market:

The Central Government has continued its policy of the Monthly Release Mechanism, which restricts mills from selling more than the allotted quantity of sugar for each month. Additionally, the Government continued the Minimum Sale Price (MSP) policy, setting it at Rs. 3,100 per quintal throughout the year. Despite repeated appeals from the industry, there has been no increase in MSP since February 2019.

Our sugar prices have, however, always been higher than the MSP.

For the year 2023-24, we had an average sugar price which was Rs. 240 per quintal higher than the sugar price realised in the previous year.

7. Sugarcane Price:

The Government of India has raised the Fair and Remunerative Price (FRP) for sugarcane procurement from Rs. 305 per quintal in the 2022-23 season to Rs. 315 per quintal for the 2023-24 season, both calculated at a basic recovery rate of 10.25%. Additionally, a premium of Rs. 3.07 per quintal is awarded for every

0.1% increase in recovery above 10.25%. For our sugar mill, the FRP for the 2023-24 season is Rs. 345.70 per quintal, an increase from Rs. 330.62 per quintal in the previous season.

8. Our Factory:

Sugarcane Price:

• The Haryana Government increased the State Agreed Price (SAP) of sugarcane by Rs. 14/- per quintal. Our sugarcane price continued to be the second highest in India, next only to Punjab.

• The Haryana Government continued with the policy of giving subsidy to partly compensate the difference between SAP & FRP. However, since sugar prices are higher this year, our factory will get smaller amount of subsidy of about Rs. 3 crores this season, compared to Rs. 42 crores previous season.

• The comparative SAP for sugarcane in Haryana, Punjab and Uttar Pradesh are as under:

Refined Sugar:

• The Company has converted the sugar manufacturing process from double sulphitation in the factory to refined sugar from sugar season 2023-24.

• Our refined sugar has been well accepted in the markets and is also finding demand from newer pockets of markets in Haryana, Punjab and Chandigarh.

• The Cane crushing has been lower by about 20 Lakh quintals in the 2023-24 season compared to the previous season due to lower sugarcane availability because of a reduction in cane yield. The main reasons for the reduction in cane yield have been waterlogging in a very large area of our zone due to excessive rainfall of about 600 mm in a span of 5 days only during 2nd week of July 2023 in the catchment areas of Yamuna Nagar and foothills of Himachal Pradesh and effect of 4^th brood of Top Borer.

• In spite of comparatively lower Pol in cane, sugar recovery is comparatively higher. This is mainly on account of the following factors:

- Increase in recovery due to refinery process.

- Lower losses in press mud because of use of decanters instead of vacuum filters.

• The working of the Plant and Machinery was good. However, because the sugarcane supplies finished earlier, we missed the high recovery period during which the to-date recovery keeps rising.

• The table below compares working results for seasons 2023-24 and 2022-23.

Comparison of Working Results:

Particulars	Sugar Season (October to September)
	Season 202324 (Refined Sugar Process)	Season 2022-23 (Sulphitation Process)
Date of Start of crushing operations by SSM	31.10.2023	08.11.2022
Date of Close of crushing operations by SSM	05.04.2024	08.05.2023
No. of crop days	157	181
Cane Crushed [Lakh Quintals]	146.64	166.36
Sugar Bags [Lakh Quintals.]	14.53	16.24
Recovery (%)	9.90	9.75
Crush Rate [Tonnes Crushed Per Hour]	412.40	414.20
Average cane crushed per crop day [Lakh Qtls.]	0.93	0.92

9. Ethanol Plant:

• The company expanded the Ethanol Plants capacity from 100 Kilo Litres Per Day (KLPD) to 160 KLPD, enhancing profitability and operational efficiency through reduced steam and power consumption.

• Throughout the year, the plant operated at full capacity. However, we experienced a temporary shutdown in March 2024 due to restricted off-take by Public Sector Oil Marketing Companies (OMCs), leading to full storage tanks. Production resumed in April once some of the ethanol was lifted by the OMCs.

• The financial performance of the Ethanol Plant was much better, and attributable to:

- Better ethanol recovery from molasses, because of sulphur-less molasses produced in sugar refinery, increasing recovery by 4.5 BL/MT on molasses.

10. Outlook for coming Sugar Season 2024-25:

Cane planting is currently underway, and initial estimates suggest that the area under cultivation will slightly exceed last seasons coverage. For the 202425 season, we anticipate improved cane yields due to healthy initial crop conditions and better germination of the ratoon crop.

In order to ensure sustained cane availability over the coming years, we are taking the following steps:

• Introducing a new, high-yielding sugarcane variety, COLk-14201, in the area.

• Continue to encourage the establishment of small seed nurseries by farmers to produce healthy cane seeds.

			(Rs. Per Quintal)
Sugarcane Variety	Early	Other (Medium / Late)
Haryana	Season 2023-24	386	379
	Season 2022-23	372	365
Uttar Pradesh	Season 2023-24	370	360/355
	Season 2022-23	350	340
Punjab	Season 2023-24	391	381
	Season 2022-23	380	370/365

• Continue to persuade more & more farmers to cultivate multiple ratoon crops to enhance yields.

• Implementing balanced fertiliser use, proper stubble shaving, trash incorporation into the soil, and the use of pre-germinated plants to increase ratoon crop yields.

• Closer monitoring pest and disease incidences and taking timely, effective control measures.

• Offering incentive schemes to encourage farmers to increase cane production and supply exclusively to our company for the coming season.

Financial Outlook for next year

The financial outlook for the next year remains uncertain, heavily influenced by sugarcane availability and the pricing policies to be set by the State Government.

(B) Isgec Hitachi Zosen Limited (Subsidiary and Joint Venture Company):

(1) The total revenue for the year was Rs. 478.22 Crores as against Rs. 596.44 Crores in the preceding year. As mentioned in last years report, we commenced the year with low order backlog and experienced underutilized capacities during the initial quarters. However, subsequently several projects that were deferred from the previous year were initiated, resulting in good order booking during the year.

(2) The profit before tax is Rs. 20.46 Crores as against Rs. 10.95 Crores in the previous year. While the profits were better than in the financial year 20222023, they could have been even higher if we had not experienced underutilized capacities at the beginning of the year.

(3) The order backlog at the start of the financial year 2024-25 is Rs. 1049 Crores, which is much better than the order backlog of Rs. 486 crores at the start of the financial year 2023-24. We are likely to be close to the desired loading of the facilities throughout the year.

(4) The market for the year was good, and several projects that were being deferred in the financial year 2023-24 moved to finalization. The order booking during the financial year 2023-24 is Rs. 1007 crores, which is much better than the order booking for the financial year 2022-23, which was Rs. 418 Crores.

(5) We were also able to export our products to several new countries, and the Company has now supplied to 24 countries globally.

(6) Important orders booked during the year were: -

a. Hydro-Chlorination Reactors for a Polysilicon Plant being set up in India. The Polysilicon will be used for the manufacture of wafers for the Solar Panels. These Reactors will be built in India for the first time.

b. 6 Coke Drums for a project in India of Diameter 9.6 meters and length approx. 42.5 meters. These will be among the largest coke drums to be installed in the country.

c. All the critical equipment for two streams of Ammonia plants for an overseas project.

d. All the critical equipment for a Urea plant being set up overseas.

e. Three Reactors in Cr-Mo-V Alloy Steels for supply to UAE through a leading international EPC Contractor.

(7) Apart from continuing to supply critical Reactors and Equipment for the Fertilizer, Oil & Gas Sector and Petrochemical sectors, we are also moving towards to supply of equipment for Green Energy projects such as for Polysilicon Plants as well as Blue and Green Ammonia Projects.

(8) We have also made reasonable advancements in repair and maintenance projects of critical process equipment, which provide good margins, and taken up two orders overseas in Bolivia and the USA, which were successfully closed during the year.

(9) We expect the coming financial year 2024-25 to be good in terms of billing and profits and reasonable in terms of order booking.

(C) Isgec Titan Metal Fabricators Private Limited (Subsidiary and Joint Venture Company):

(1) The Companys total income and profit fell sharply during the year despite having adequate orders in hand. This was due to delays attributable to client related issues.

(2) The total revenue for the year is Rs. 4162 lakhs against Rs. 6355 lakhs in the preceding year. The profit before tax is Rs. 493 lakhs against Rs. 903 lakhs in the previous year.

(3) Fresh order booking during the year was good at Rs. 8044 lakhs (previous year Rs. 4617 lakhs) and the opening order book for the year is good at Rs. 8479 lakhs (previous year Rs. 4517 lakhs)

(4) Anticipating robust order booking and future business growth, the company is expanding its fabrication capacities by constructing a new workshop and making additional capital investments, especially for reactive metal fabrication. Part of the investments for the expansion of production facilities are being made by Isgec Heavy Engineering Limited, the holding company, from whom the additional area and sheds will be leased. Investment in the new Plant and Machinery required for the capacity addition is being made by the company itself.

(5) The company has established good credibility in the market and continues to consolidate its reputation, securing repeat orders from various clients for sophisticated equipment to be manufactured for diverse sectors including Chlor-alkali, Salt, Oil & Gas, Fine Chemicals, Acid Plants and Fluro Chemical Industry.

(6) Some of the achievements during the year included the addition of new customers in the Oil & Gas and Petrochemical Industries. We also received our first orders for Titanium Gr.2 CPVC Reactors from a major Petrochemical company and our first breakthrough order for Oxidation Reactor weighing 150MT with Titanium Grade 2 Explosion Clad and Titanium Grade 7 Internals.

(7) We also booked a breakthrough order of Solid Inconel Jacketed Reactor from a Fluorochemical company.

(8) The Company continues to focus on improving the skill of its manpower to improve productivity and reduce cycle time.

(9) The market for our products continues to be good. In the Chlor Alkali Sector, a large project is expected to take off in Gujarat during this year and expansions are expected in Soda Ash Plants as well, which will create favorable business opportunities for the company.

(10) In the Fluoro Chemicals market segment, a large customer continues to invest in developing new chemicals for the growing market and we expect good business from this segment.

(11) Our primary business this year was from Petrochemical plants, and we expect to get major orders from this segment in the coming year as well.

(12) The Company expects to secure good business for the current year as well as in the years to come.

(D) Isgec Redecam Enviro Solutions Private Limited (Subsidiary and Joint Venture Company):

(1) Total revenue of the company during the Financial Year was Rs. 47.83 crores as against Rs. 14.47 crores in the preceding year. Profit was Rs. 2.24 crores as against Rs. 0.47 crores during the preceding year.

(2) Fresh order booking during the year was good at Rs. 103.2 crores (previous year Rs. 23.80 crores) and the opening order book for the year is good at Rs. 73.34 crores (previous year Rs. 21.21 crores)

(3) After overcoming the execution challenges in the last financial year, we achieved good success in the steel sector with major orders on a turnkey basis which has helped us in exceeding our targets.

(4) Carbon Black industry is showing growth and Semi Dry FGD (SDFGD) system enquiries for this industry are likely to be finalised in the next Financial Year.

(5) After long continued efforts, we secured a breakthrough order from a major cement group for Bag Filter in the process application.

(6) Our Bag Filters are now well established in the Ethanol sector. The past success and efforts in stabilising Bag Filters in Ethanol applications have resulted in bagging a major order from a well- established player for their existing distillery.

(7) We expect to grow and continue to get business from the Steel and Cement sectors.

(E) Isgec SFW Boilers Private Limited (Subsidiary and Joint Venture Company):

(1) Total revenue and profit for the year 2023-24 were less than the previous year mainly because one of the projects got suspended in December 2023. Total revenue in financial year 2023-24 was approximately Rs. 12.70 Crores as compared to Rs. 13.88 Crores in financial year 2022-23 and the profit before tax for financial year 2023-24 was Rs. 2.91 Crores as compared to Rs. 4.14 Crores in financial year 2022-23.

(2) Capacity utilization in the financial year 2023-24 was 80% as compared to 85% in the financial year 2022-23.

(3) Despite various measures taken to retain talents in the company, attrition has increased during the financial year 2023-24 mainly due to a spurt in recruitment by multinational companies in Oil & Gas and other sectors.

(4) To maintain optimum headcount in the joint venture company, additional engineering subcontractors have been developed during financial year 2023-24.

(5) Re-certification of the Joint Ventures Quality System was done during the financial year 2023-24 by LRQA under ISO 9001-2015.

(F) Eagle Press & Equipment Co. Limited (Wholly Owned Subsidiary Company):

(1) It was a bad year for Eagle Press & Equipment Co. Limited.

(2) The total revenue for the year was Rs. 77.01 crores compared to Rs. 135.73 crores in the previous year.

(3) The loss before tax for the year is Rs. 13.18 crores compared to loss before tax of Rs. 10.35 crores in the previous year.

(4) Order booking continues to be slow, mainly because the customers in the Automotive sector are experiencing excess capacity as the offtake of electric vehicles in the US market is slow.

(5) Efforts are being made to book orders from other sectors. While there is a reasonable pipeline of orders, order finalization and fructification is slow.

(G) Cavite Biofuel Producers Inc. (CBPI):

(1) Construction of the Ethanol Plant has been completed in April 2024 and the Plant started operations. Trial operations have, however, been going on since March 2024.

(2) All the required licenses from the Government Authorities have been received for operating the Plant and operations have started on sugarcane as feedstock to produce ethanol. Allocations from the Department of Energy, Government of Philippines, have also been received permitting the Plant to sell ethanol. These permissions have been granted on a quarterly basis.

(3) First sales to major oil companies in the Philippines have started during the year.

(4) The sugarcane season finished early in April this year and the plant is now shifting to molasses as feedstock for producing ethanol.

(5) The next sugar season will start in November 2024.

(H) Other Wholly Owned Subsidiary Companies:

i. Free Look Software Private Limited and Isgec Exports Limited:

There was no commercial activity during the year.

ii. Isgec Engineering & Projects Limited:

There was no commercial activity during the year except letting out of property at Kasauli.

iii. Isgec Covema Limited:

(1) There were no fresh orders during the year.

(2) The total revenue during the year was Rs. 32.75 lakhs compared to Rs. 90.95 lakhs in the previous year. The revenue for the year was by way of interest on the surplus money parked in Fixed Deposits.

(3) Loss for the year was Rs. 1.90 lakhs compared to Rs. 1.27 lakhs in the previous year.

Particulars required under Rule 8 (3) of the Companies (Accounts) Rules, 2014:

A. CONSERVATION OF ENERGY:

The steps taken or impact on Conservation of Energy:

Taking steps for the conservation of energy is a continuing process. The steps taken for meaningful impact on the Conservation of Energy during the year are as under: -

(a) Steps to save energy:

(1) 20 nos. air conditioners were replaced with five star /inverter type air conditioners. A total of 176 air conditioners have been replaced so far in the last several years, thereby reducing power consumption by 20%.

(2) We are continuing to replace inefficient & high power consuming equipments with energy efficient units having less power consumption and using 3-R technique (Reduce, Reuse & Recycle) for waste management which also helps to conserve energy.

(3) We are continuously bringing down our water consumption despite expansions by recycling the wastewater and adopting other measures to control wastage of water.

(4) We have enhanced the capacity of induction furnaces by 20% which has helped us in reduction in consumption per ton by 5% (from 652 units to 621 units per ton).

(5) We have put in lots of effort to save energy by adopting various energy conservation measures. Approximately, 2.65 lakhs KwH saved in the last year which will be sustained and delivered good results in future also. Details of actions taken on energy conservation by various Divisions is enclosed herewith (Appendix-A).

(b) Steps taken by Company for utilizing alternate sources of energy:

(1) 1750 KW Solar Power Plant(s) have been installed in Yamuna Nagar and Rattangarh Plants. They generated green energy of 2021535 units worth Rs. 1.51 crores. This solar power provides clean energy and results in reducing our carbon footprint also. This is approximately equal to burning 1350 tons of coal.

(2) Under our CSR programme, over the years, we have set up solar power generation facilities at 119 Government Schools in the last 6 years to generate green energy of 714,000 units per year. This is equal to saving burning 478 tons of coal.

(3) Use of Re-gasified Liquid Natural Gases (RLNG)

We continue to use RLNG to operate stress- relieving furnaces and pre-heat welding material processes. We are happy with the environmental aspects of using natural gases. In the last year, we have used an average of 45005000 SCM/Day of RLNG.

(c) Capital investment in Energy Conservation: ? 40.31 lakhs.

B. TECHNOLOGY ABSORPTION:

The efforts made towards technology absorption:

(a) The Company has the following Technology Agreements: -

1. Boilers:

(i) With Sumitomo SHI FW Energia Oy, Finland:

• For Circulating Fluidized Bed Combustion (CFBC) Boilers up to 150 Mwe (since renewed in April 2022 and Capacity enhanced from 99.9 Mwe to 150 Mwe).

• For Reheat design for CFBC Boilers up to 100 MW.

(ii) With BHI FW, Korea:

• For Pulverized Coal Fired Sub-Critical Boilers and Super-Critical Boilers (60 Mwe to 1000 Mwe).

(iii) With Amec Foster Wheeler Energia S.L.U, Spain (Woods plc.):

• For Oil & Gas Shop Assembled Water Tube Packaged Boilers up to 260 Tonnes per hour.

(iv) With Siemens Heat Transfer Technology

b.v. Netherlands:

• For design, fabrication and installation of Drum type Heat Recovery Steam Generators.

2. Air Pollution Control Equipment:

(i) With Fuel Tech Inc., USA, for Selective NonCatalytic Reduction (SNCR) systems for reduction of Nitrogen Oxides for various applications including Power, Cement and other Industries.

(ii) With Babcock Power Environmental Inc., USA, for Wet Flue Gas De-sulphurisation systems for reduction of SO₂ produced by steam generators having gas flow equivalent to 100 Mwe.

(iii) With Sumitomo SHI FW Energia Oy, Finland, for Circulating Fluidized Bed Scrubbers for Power Plants and Industrial Purposes for reduction of SO₂.

(iv) With United Conveyor Corporation, USA, for Dry Sorbent Injection (DSI) Technology for removal of SOx generated from thermal power plants.

(v) With BHI FW Corporation, USA, for Combustion Modifications (TLN Retrofit) for reduction of NOx generated from Tangentially fired Pulverised Coal (PC) Boilers.

3. Presses:

With AP&T., Sweden, for Hot Stamping Presses.

4. Process Equipment:

i. With TEi, USA, for Screw Plug Heat Exchangers and Process Waste Heat Boilers.

ii. With CB&I Technology Inc. (formerly, CB&I Lummus) for design and manufacture of Helix Heat Exchangers.

iii. With Amec Foster Wheeler Energia S.L.U, Spain (Woods plc.), for Feed Water Heaters and Surface Condensers.

5. Ash Handling Packages:

Strategic Collaboration and Licensing Agreement with United Conveyor Corporation, USA for Ash handling Packages for Thermal Power Plants.

6. The Technology under these Agreements is being progressively absorbed by transfer of know-how and software, designs, and through deputing our personnel for training at the shops, offices, and installation sites of our collaborators. In case of clarifications, the designs are vetted by the collaborators. This process continued during the year.

In case of imported technology (imported during the last three years beginning of the financial year):

The Company did not import or buy any technology as such during the previous three financial years. However, it entered into Technical Collaboration Agreements as per details given below:

(a) Details of technology imported	From UCC Environmental, USA, for Dry Sorbent Injection (DSI) Technology.
(b) Year of Import	Year ended 31st March 2022.
(c) Whether technology has been fully absorbed.	Not yet.
(d) If not fully absorbed, areas where absorption has not taken place and the reasons thereof.	Technology will be partially absorbed on successful commissioning of the Projects under execution. Orders for 6 Units of 210 MW each, are under execution and expected to be completed in the first half of FY 2025.