The Directors have pleasure in presenting their Fiftieth Annual Report together with the audited statement of accounts of the Company for the year ended 31st March, 2025.

Financial Results

Rs. in Crores

REVIEW OF THE ECONOMY

In 2024, the global economy continued to demonstrate resilience while navigating prolonged monetary tightening, geopolitical tensions and evolving supply chain constraints. Despite constrained fiscal environments and persistent geopolitical challenges, the global economy remained stable, supported by policy interventions and a gradual reduction in inflation. While global growth remains moderate, positive indicators such as easing price pressures and a shift towards supportive monetary policies in several regions are expected to support overall demand. However, challenges persist in the form of elevated debt levels, high borrowing costs and continued policy uncertainty.

The global economy grew by 3.3% in 2024 with growth forecast at 2.8% in 2025 and 3% in 2026. Growth in developing economies, particularly India and Indonesia has offset slower recoveries in advanced markets such as European Union, Japan and United Kingdom. Global inflation is anticipated to ease to 4.3% in 2025 and further to 3.6% in 2026, supported by moderating energy and food prices and stabilisation of labour market pressures in advanced economies. However, the pace of decline is slightly slower than earlier projections.

The United States economy outperformed expectations in 2024, registering GDP growth of 2.8%, supported by strong household spending, public expenditure and private investment. Growth is projected to be moderate to 1.8% in 2025 reflecting policy uncertainty, trade tensions and a slowdown in consumer demand. In 2026, growth is expected to ease further to 1.7%, due to the impact of tariffs and subdued private consumption.

In the Euro region, growth is expected to decline marginally to 0.8% in 2025, primarily due to rising uncertainty and trade- related headwinds. A modest recovery is projected in 2026 with growth improving to 1.2% supported by stronger household consumption driven by rising wages. Japan's economy, which experienced a slight contraction in 2024 is expected to recover with projected growth of 0.6% in both 2025 and 2026. While external uncertainties and tariff-related pressures persist, these are likely to be partially offset by stronger private consumption and above-inflation wage growth, which are expected to support household disposable income.

China recorded GDP growth of 5% in 2024 with growth projected at 45% for both 2025 and 2026. This moderation reflects the impact of newly imposed tariffs which are expected to weigh on external demand and offset the momentum gained in 2024 from domestic policy support and fiscal expansion outlined in the latest budget.

Amidst a challenging global environment, the Indian economy has remained stable, reaffirming its position as the fastest- growing major economy. According to estimates from the National Statistical Office (NSO), GDP growth for FY 2024-25 was at 6.5%. Growth in the third quarter was at 6.2% of FY 2024-25, an improvement from 5.6% in the previous quarter, supported by higher consumer spending and increased public sector expenditure. Key contributors to growth included the construction, trade, and financial services sectors.

Amid mixed global conditions, India is well-positioned to sustain its growth momentum in the upcoming fiscal year. Stable macroeconomic fundamentals, continued infrastructure investment and steady progress across key sectors are expected to support India's economic performance. With a projected GDP growth of 6.5% in FY 2024-25 and easing inflationary trends, India remains a key driver of global growth and continues to offer a favourable outlook for the years ahead.

GRAPHITE INDIA

The Company's performance for FY 2024-25 was reasonably better compared to FY 2023-24. While revenue from operations decreased to Rs. 2,420 crore for FY 2024-25 as against Rs. 2,894 crore in the previous year, PBT increased to Rs. 569 crore as against Rs. 125 crore (before exceptional item) of previous year. This includes investment income of Rs. 409 crore as against Rs. 273 crore in the last year. The performance of the Company continued to be impacted by lower realisations, however, lower costs along with higher volume resulted in somewhat better performance. Global markets continued to be impacted by economic uncertainty, intense competition due to weak demand and lower capacity utilization. Geopolitical conflicts contributed to expanding disruptions of commercial trade, which resulted in persistently soft demand for graphite electrodes and weak pricing.

The Company's Graphite and Carbon Segment continues to be the primary source of revenue and profit, accounting for about 90% of the total revenue.

OVERSEAS SUBSIDIARIES

German graphite electrode production continued to remain closed while restructured speciality and coating businesses are in operation. Liquidation process of one step down subsidiary, Bavaria Electrodes GmbH is on.

DIVIDEND

Dividend @ Rs. 11/- per share on 19,53,75,594 equity shares of Rs. 2/- each for the financial year ended 31st March 2025 has been recommended by the Board of Directors.

MANAGEMENT DISCUSSION AND ANALYSIS

(i) Industry's structure and developments

A. Graphite and Carbon Segment

Graphite Electrodes

Graphite Electrode is used in electric arc furnace based steel mills for conducting current to melt scrap iron and steel and is a consumable for the steel industry. The principal manufacturers are based in USA, Europe, Middle East, India, China, South East Asia and Japan.

Graphite Electrode demand is primarily linked to the global production of steel in electric arc furnaces which is one of the three basic methods for steel production i.e. - [1] Bessimer Oxygen Furnace (BOF); [2] Electric Arc Furnace (EAF); and [3] Induction Steel Furnaces (ISF). According to the World Steel Association (“WSA”), global (excluding China) EAF steel production grew at a 2% to 3% compounded annual growth rate from 2015 to 2023, the most recent year for which WSA has published such figures. This compares to a 1% compounded annual growth rate for overall global (excluding China) steel production during this same period. As a result, the EAF method of steelmaking accounted for 50% of the global (excluding China) steel production in 2023, compared to 44% in 2015, with increasing share of growth in nearly every region.

EAF steelmaking is more energy efficient and is beneficial in terms of its low carbon footprint, compared to steel produced through the BOF steelmaking model. According to the Steel Manufacturers Association (“SMA”), EAF steelmaking produces 75% fewer carbon dioxide emissions compared to BOF steelmaking. Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and infinitely) recyclable at the end of its useful life. In addition to these advantages, EAF steel producers benefit from their flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as Direct Reduced Iron (DRI) and Hot Briquetted Iron (HBI), both made directly from iron ore. China's share in EAF production, which was only 10.1% of global steel making till 2023, aims to make 15% by 2025 and is estimated to become higher going forward as per S&P Global report.

Reflecting on these positives and other strategic advantages, EAF based steel production is expected to grow at a faster rate than BOF steel production. Based on industry announcements on proposed additional EAF steel capacities, this could result in global (excluding China) EAF production capacity increasing at approximately 3% to 4% compounded annual growth rate through 2029. This should translate into similar increase in demand for UHP graphite electrodes over the same period to support EAF capacity expansion, besides further potential graphite electrode demand from production increases at existing EAF steel plants to support overall expected growth in steel demand.

Captive Power

The Company has an installed capacity of 18.9 MW wind power plant at Nandurbar (Maharashtra). All nine Wind Turbines have been commissioned. This has significantly brought down power cost for Nashik plant and has reduced carbon emission. The Company has also installed 8.8 MWp Solar Power plant at Bhoom, Maharashtra, which has been commissioned in February, 2025.

Calcined Petroleum Coke and Paste

Graphite India's Coke plant in Barauni, Bihar, specializes in the manufacture of Calcined Petroleum Coke (CPC), Carbon Paste and Electrically Calcined Anthracite Paste. This facility represents one of the company's key backward integration initiatives. The plant manufactures two grades of CPC - aluminium and graphite. CPC plays a crucial role in various industries, including the manufacturing of anodes for aluminium smelters, graphite electrodes and as a carburiser in steel production. Additionally, the division manufactures four grades of Paste, i.e. Electrode Paste based on either CPC or Electrically Calcined Anthracite Coal (ECAC) and Tamping Paste derived from either CPC or ECAC. Electrode Paste is primarily utilised in Ferro Alloy Smelters while Tamping Paste serves as a lining material in submerged arc furnaces.

Despite challenging market conditions, the division has maintained a satisfactory performance. However, with rising raw material prices and significant supply shortage in the country, the division anticipates tougher market conditions.

Impervious Graphite Equipment (IGE)

IGE Division is in the business of design, manufacture and supply of Impervious Graphite Heat and Mass Transfer Equipment and Turnkey systems. It has an integrated facility for process/product design, manufacturing, inspection and providing supervision during erection and commissioning activities.

Impregnated graphite is an ideal material of construction for corrosive applications in sectors like Chloro-Alkali, Crop protection agrochemicals, Chlorinated Organic, Speciality & fine Chemicals, Phosphoric Acid, Fertilizers, Rayon, Steel Pickling, Metal Processing, Polymers, Drug Intermediates, Batteries & Gelatine etc.

The Company has built the product line into a reliable brand with a reputation for prompt service, good quality and consistent performance by investing in strengthening its core competencies. This division is capable of meeting any country specific design standard and has obtained many certifications relevant to the product profile. Sales in FY 2024-25 was affected by much lower order booking due to sluggishness in chemical sector. Overall order booking in this year is good which is expected to result in higher sales in FY 2025-26.

The new IGE expansion project at Gonde has become operational. This will increase capacity for IGE division which will help to service larger markets in India and exports in future. The increased capacity though not fully utilized in FY 2024-25, is expected to cater to sufficient order inflow in the upcoming years.

B. Steel

Powmex Steels Division (PSD) is engaged in the business of manufacturing high speed steel and alloy steel having its plant at Titilagarh in the State of Odisha. PSD is the single largest manufacturer of High Speed Steel (HSS) in the country. HSS is used in the manufacture of cutting tools such as drills, taps, milling cutters, reamers, hobs and broaches. HSS cutting tools are essentially used in - (a) automotive; (b) machine tools; (c) aviation; and (d) retail market. The industry is characterized by a single good quality manufacturer of HSS i.e. PSD which faces competition from small domestic producers and cheap imports from overseas manufacturers.

The performance of the division has been better during FY 2024-25 as compared with previous year. The division has continued export of HSS during this year with more penetration in new countries.

C. Other Segments

Glass Reinforced Plastic Pipes (GRP)

GRP Division is engaged in manufacturing of large diameter Glass Fibre Reinforced Plastic Pipes suitable for municipal application, seawater, effluent, irrigation, penstock as well as Pipe-liners for rehabilitation of old pipes/ducts by trenchless technology in metro cites. The product is manufactured by the Continuously Advancing Mandrel Filament Winding Process with computerized advanced technology comparable to other plants worldwide. The plant operations are dependent upon tenders floated by government / semi-government authorities which have been virtually absent during the year. Currently the division does not foresee much demand in the near future. Part of the Gonde plant facility is being used for manufacture of Graphite Heat Exchanger for IGE Division.

18 MW Hydel Power

The Company has an installed capacity of 18 MW of power generation through Hydel route in Chunchunkatte (CCKT), near Mysore. The power generated through this Unit is being sold to third parties. Another 10 MW capacity is being added to this CCKT Unit - 5 MWp Solar and 5 MW Hydel of which 4.5 MWp Solar power plant was commissioned in November, 2024 and remaining 0.5 MWp of Solar power will be installed by first quarter of FY 2025-26. Commissioning work for 5 MW Hydel plant is going on and will be completed by June, 2025 end.

(ii) Opportunities and threats

According to the World Steel Association (WSA), global crude steel production declined by 0.9% y-o-y in 2024, amounting to 1,839.4 million tonnes (MT). Despite this annual contraction, production in December 2024 registered a 5.6% y-o-y increase, reaching 144.5 MT, signaling initial signs of stabilisation. China retained its position as the leading crude steel producer, contributing approximately 55% to the global output. However, production volumes recorded a marginal decline, due to weakened demand in the real estate sector, which was partially offset by increased public investment in manufacturing and infrastructure. Steel demand in developed economies declined in 2024, as key steel-consuming nations, including the United States, Japan, South Korea and Germany, recorded reductions in consumption levels.

Looking ahead to 2025, a recovery is projected, with steel demand in developed markets expected to grow by 1.9% This anticipated improvement is underpinned by a gradual recovery in the European Union and modest gains in the United States and Japan.

Meanwhile, India retained its position as the world's second- largest crude steel producer, with production reaching 144.3 MT in 2024. During April to December 2024, crude steel production was 110.99 MT, while finished steel production was recorded at 106.86 MT. Domestic consumption of finished steel increased to 111.25 MT as of December 2024, marking a seven-year high, driven by demand across infrastructure, automotive and construction sectors. During this period, India emerged as a net importer of finished steel, with imports reaching 7.28 MT, also a seven-year high, while exports was at 3.60 MT. The rise in imports, particularly from China, has brought renewed focus on cost competitiveness and the importance of strengthening import substitution measures within the domestic steel producers.

For 2025, India's domestic steel demand is estimated to grow by 9% to 10%, supported by sustained economic growth, higher government capital expenditure and increased private sector participation across core sectors. India continues to benefit from the availability of low cost labour and substantial iron ore reserves which support its long-term positioning as a steel manufacturing centre of a global scale.

The immediate opportunities for India's steel sector include:

(a) Continued investment by both public and private sectors in infrastructure projects, including roads, railways, ports and housing, which will drive demand for long and flat steel products; (b) The implementation of the Production- Linked Incentive (PLI) scheme for specialty steel aimed at enhancing value-added production, fostering technological advancements and reducing reliance on high grade imports; (c) Increasing global and domestic commitments to decarbonization and the green transition, resulting in higher demand for steel in clean energy projects, electric vehicles and low-carbon construction technologies; (d) Expanding export opportunities in engineering goods, capital equipment and automotive sectors, where steel is a critical input and India has established competitive advantages; and (e) Recent provisional safeguard duty of 12% on certain steel producers will restrict import giving boost to local steel production.

However, the sector faces several challenges in the near term, including:

(a) A significant increase in steel imports, particularly of finished steel from China and certain Free Trade Agreement (FTA) countries, which may result in market imbalances and pricing pressures for domestic producers; (b) Volatility in global steel prices and raw material costs, which could affect margins and capital planning; (c) Ongoing global economic uncertainty arising from elevated debt levels, shifts in monetary policies and uneven recovery across regions; (d) Geopolitical developments, including the prolonged Russia- Ukraine conflict and instability in the Middle East, which continue to influence global commodity prices and disrupt established trade routes; and (e) The rise of protectionist trade policies, including tariffs and export restrictions imposed by key steel-producing and consuming nations, which could impact export competitiveness and limit market access for Indian steel products.

Overall, while the Indian steel industry is well-positioned for growth, driven by infrastructure development and government initiatives, it must navigate challenges such as rising imports, price fluctuations due to tariff imposition and geopolitical risks to maintain its competitive advantage in the global market.

Graphite India is one of the leading producers of graphite electrodes globally by capacity. The company has over 60 years of proven technical expertise in the industry and manufactures full range of graphite electrodes, with focus on the large-diameter, ultra-high power (UHP) electrodes preferred by the large steel manufacturers. It is therefore well positioned to meet the growing demand for electrodes from both domestic and international Electric Arc Furnace steel manufacturers despite intense competition from global competitors both in domestic and international markets.

(iii) Segment-wise Performance Revenue of the Company

The revenue from operations amounted to Rs. 2,420 crore as against Rs. 2,894 crore in the previous year.

Aggregate Export Revenue of all divisions together was Rs. 791 crore as against Rs. 989 crore in the previous year.

Graphite and Carbon Segment

The performance of the segment was dismal in FY 2024-25 as compared to FY 2023-24. This was attributable to higher volume of production and sales and lower costs offset by lower realisation.

Production of Graphite Electrodes and Other Miscellaneous Carbon and Graphite Products during the year under review was 85,225 MT as against 80,627 MT in the previous year.

Production of Calcined Petroleum Coke during the year was 50,788 MT as against 45,098 MT in the previous year.

Production of Carbon Paste during the year was 1,755 MT against 3,033 MT in the previous year.

Production of Impervious Graphite Equipment (IGE) and spares during the year was 1,495 MT as against 2,010 MT in the previous year.

The segment revenue remained lower at Rs. 2,166 crore from Rs. 2,673 crore in the previous year. Segment recorded profit of Rs. 178 crore in FY 2024-25 compared to loss of Rs. 112 crore in FY 2023-24 due to higher volume and lower costs despite lower realisations.

Steel Segment

Production of HSS and Alloy Steels was 3,004 MT during the year as against 2,865 MT in the previous year.

Other Segments

GRP division produced 978 MT pipes as against 867 MT in the previous year.

Power generated from Hydel Power plant at CCKT of 18 MW capacity amounted to 59.70 million units during the year as against 25.84 million units in the previous year. 38.39 million units were sold during the year as against 14.63 million units in 2023-24. During the year, generation from newly installed 5 MWp Solar at CCKT was 2.56 million units and 2.44 million units was sold.

(iv) Outlook

India continues to strengthen its position in the global steel industry, with a strong outlook for the sector as we progress through FY 2024-25 and beyond. Steel demand in India is expected to grow by 8% to 9% annually in FY 2025, primarily driven by continued infrastructure expansion, affordable housing projects under the Pradhan Mantri A was Yojana (PMAY) and industrial growth supported by government initiatives such as the Gati Shakti Master Plan. This growth trajectory will significantly contribute to India's position as one of the largest consumers of steel globally.

The Indian steel industry, which has seen remarkable growth in recent years, is expected to continue its upward trajectory. India's finished steel consumption for FY 2024-25 is projected to reach approximately 138.5 MT, continuing its upward trend from 119.17 MT in FY 2023-24. With the country's growing infrastructure requirements, steel demand will remain robust, supporting long-term industry growth despite some mid-term dip in consumption.

India's steel production capacity is set to expand significantly, with the National Steel Policy targeting 300 MT per annum by FY 2030-31. The government's continued emphasis on infrastructure investment, highlighted by the allocation of Rs 11.11 lakh crores in the budget for FY 2024-25, is expected to provide substantial momentum to the sector. Furthermore, the introduction of the Production Linked Incentive (PLI) Scheme for Specialty Steel is likely to strengthen the industry by attracting investment, encouraging innovation and reducing dependence on imports.

On the global front, steel demand in 2025 is expected to register a modest recovery of 1.2%, supported by the stabilisation of global economies and increased investments in infrastructure and manufacturing. India and other countries in Southeast Asia are expected to be the primary contributors to this recovery. While global steel demand in 2024 was affected by supply chain disruptions and geopolitical tensions, in 2025, the demand is projected to improve gradually, supported by improved economic conditions and investments in emerging markets. Developed economies, including the European Union and the United States, are expected to experience a strengthening of steel demand in 2025, driven by infrastructure development and sustained manufacturing activity.

China's steel demand is expected to decline, with projections indicating a 3% decrease in 2024, followed by a further 1% contraction in 2025, as the country transits from an infrastructure-led economy to consumption driven economy. Despite this moderation, China continues to hold a leading position in global steel production. The shift towards higher- value steel products, such as hot-rolled coils and automotive steel, is expected to support its role in the global steel market.

Globally, overcapacity in steel production remains a concern, particularly in emerging markets. While regions such as India, countries in Southeast Asia and MENA are expected to continue registering growth, steel producers in developed economies are facing headwinds from rising energy costs and evolving trade policies. Protectionist measures and tariffs in regions including the European Union and the United States are likely to impact global trade flows, with China's steel exports facing increased scrutiny and heightened trade barriers.

The adoption of green steel technologies is reshaping the global steel industry. As governments and companies increasingly prioritise sustainability and decarbonisation, green steel is emerging as a key area of growth. India, with its emphasis on clean energy transition and sustainable infrastructure development, is well-positioned to benefit from the global shift towards greener production methods. The Indian government's initiatives to decarbonise the steel industry are expected to drive demand for low-carbon steel solutions, further supporting the growth of the domestic steel market.

In conclusion, the outlook for India's steel sector remains positive, supported by strong domestic demand, favourable government policies and strategic investments in infrastructure and technology. While global challenges such as trade protectionism, price volatility and geopolitical tensions persist, India's steel industry is well-placed to sustain its growth momentum. With a focus on expanding production capacity, reducing import dependency and advancing towards more sustainable steel production, India is poised to strengthen its role as a leading contributor to global steel consumption and production in the years ahead.

(v) Risks and Concerns

Exports to certain regions may continue to face challenges arising from protective trade measures including higher import duties, anti-dumping policies, countervailing duties and other trade restrictions. These measures have the potential to reduce export volumes, particularly in markets where steel manufacturers are subject to elevated tariff regimes. In addition, ongoing geopolitical tensions, such as the conflict in Ukraine and unrest in the Middle East, pose further risks to international trade operations by disrupting global supply chains and contributing to increase in raw material costs. The evolving and uncertain nature of these geopolitical developments necessitates continuous monitoring and agile adaptation of export strategies to mitigate potential adverse impacts.

Our business is heavily dependent on the global steel industry, particularly the Electric Arc Furnace (EAF) steel production sector, which has historically experienced significant cyclicity. Economic downturns within these industries could materially and adversely impact the Company's performance. The EAF steel sector serves critical end-use industries such as automotive, construction, machinery, equipment and transportation, all of which are susceptible to general economic slowdowns and financial headwinds. Major steel producers, who constitute a significant portion of the Company's customer base, have previously experienced periods of financial distress, which may adversely affect receivables. Consequently, the financial stability of these customers continues to represent a material risk factor for the Company's business.

Graphite electrode prices, which have historically demonstrated cyclical patterns, are influenced by demand- supply dynamics within the EAF steelmaking industry. A key driver of graphite electrode pricing is the cost and availability of petroleum needle coke, a critical raw material in the production process. Prolonged disruptions in the supply of suitable needle coke could materially affect production levels and the Company's ability to meet customers' demand.

In addition to needle coke, the Company is also exposed to volatility in the prices of other critical raw materials, particularly Raw and Calcined Petroleum Coke and Coal Tar Pitch. The pricing of these inputs has been subject to significant fluctuations driven by geopolitical tensions, supply chain disruptions and evolving regulatory frameworks. Additionally, the availability of these materials may be affected by legislative changes, supplier production interruptions, or broader market conditions, contributing to the operational risks the Company faces. Cost escalation by power generating companies may also impact all cost structure being power intensive industry.

Persistent weakness in global manufacturing activity, particularly in key sectors such as housing construction, continues to weigh on steel demand. Following a period of strong growth supported by historically low interest rates, housing construction activity has moderated across major economies, including China, the United States and the

European Union. This slowdown, driven by rising interest rates and broader economic uncertainty, has adversely impacted demand for steel and graphite electrodes. Continued uncertainty in global manufacturing activity presents ongoing risks to the demand for graphite electrodes and may affect the Company's sales volumes and profitability.

The Company, with balanced exposure to exports and imports, faces potential impacts from foreign currency market volatility. However, the inherent natural hedge through diversified exposures could partially offset this risk. In the graphite industry, competition is based on price, product quality/ performance, delivery reliability and customer service, with graphite electrodes experiencing intense price competition. Adapting to these dynamics is crucial for maintaining the Company's competitive edge and financial stability.

(vi) Internal control systems and their adequacy

The Company has proper and adequate systems of internal controls. Internal audit is conducted by outside auditing firms. The Internal audit reports are reviewed by the top management and the Audit Committee and timely remedial measures are enabled. IT Security Policy is in place to ensure that the risks associated with non-compliance of information gathering, processing, security (against cyber crimes) and preservation are assessed and adequately and ably managed. The purpose and objective of the policy is to address the risks by defining, developing and implementing adequate controls through proper categorization. An internal committee reviews the adherence and suggests any changes are required. Independent systems audit is performed by TUV Nord, India. Third party product inspections are performed by agencies like SGS, BV India.

(vii) Discussion on financial performance with respect to operational performance

Revenue from Operations recorded Rs. 2,420 crore as against Rs. 2,894 crore in the previous year.

Profit after tax was Rs. 452 crore as against Rs. 872 crore in the previous year. Profit before tax was lower at Rs. 569 crore as compared to Rs. 1,079 crore in the previous year which included onetime gain on sale of land at Bengaluru for Rs. 954 crore.

Borrowing at Rs. 85 crore was lower than Rs. 96 crore as compared to previous year and the Finance Cost decreased to Rs. 6 crore from Rs. 12 crore in the previous year.

Capital expenditure during the year amounted to Rs. 166 crore as against Rs. 258 crore in the previous year.

ICRA has reaffirmed the long term rating at [ICRA] ‘AA+' (pronounced ICRA double A plus) with stable outlook. The short-term debt programme rating has been reaffirmed at [ICRA] 'A1+' (pronounced ICRA A one plus). This rating indicates highest-credit-quality. The retention of these ratings reflects comfortable financial risk profile characterized by low gearing, strong coverage indicators and the financial flexibility emanating from large liquid investment portfolio.

Details of contingent liabilities are given in Note 34 to the Financial Statements.

(viii) Material developments in Human Resources / Industrial Relations front, including number of people employed

The Company's HR policies and practices continue to focus on contemporary as well as pragmatic people centric initiatives. New policies are being formulated vis-a-vis Environmental Social Governance (ESG) and Business Responsibility & Sustainability Report (BRSR).

While designing these policies, special attention is given to Company's vision as well as changing needs. Optimal utilisation of people and periodic review of the organogram is addressed continuously.

The HR function has actively participated in formulation of ESG policy of the Company and an HR person from each of the plant / location is being trained on ECOVADIS, a platform where all ESG related processes are being uploaded/ maintained.

Training and development programs are specifically targeted to address Company's progressive needs with focus on behavioral part of the training. Formulation of unit-wise training, calendar basis training need, identified are being held by in-house resources, mainly on the technical part.

Safety plays a major role in the success of any organization and the Company recognizes the same. Hence, emphasis has been given to adopting and maintaining best safety practices across the units and periodic audit of the same.

Multiskilling and multitasking of employees are achieved through suitably designed training modules as well as rotation through different job roles. This ensures a mix of learning, innovation and excellence leading to continual improvements.

Company considers its employees as an intelligent and responsible resource for effectively and optimally managing other material resources like money, machines and materials. Hence, productive and effective engagement of all resources at various levels is critical to achieve Company's objectives of cost optimisation, profitability as well as business growth. This is critical in ensuring the interests of all stakeholders.

Specific initiatives are being taken to develop successors to key roles. Emphasis is given to improve the fundamental understanding of leadership competencies of Team Building, Lateral Thinking, Influencing Outcomes and Problem Solving. Engagement with local bodies, union leaderships and the local communities are done on a periodic basis in order to maintain seamless and smooth functioning of the Units.

The total number of permanent employees in the Company is 1,666 as on 31st March, 2025.

The employee relations continue to be cordial and harmonious at all the locations of the Company.

(ix) Occupational Health and Safety

Internal Safety Audits are conducted at regular intervals at plants. Audit observations relating to unsafe acts, practices, conditions are discussed in "Corrective and Preventive Action” meetings. Protection and safety of our personnel and assets are our top priority. We believe in in-depth investigation of unfortunate accidents, if any, so that root causes are identified and corrective and preventive measures are undertaken. Consultation and participation of workers and statutory bodies are encouraged.

Health, Safety, Environment and Quality policies are in place and are audited by external agencies. Safety Audit once in two years, as specified, is carried out by External Safety Auditors. Every year health check-up of all employees is being carried out by competent medical professionals.

Environmental, Social and Governance (ESG)

ESG performance of a business is its corner stone in creating long term value. It can represent risks and opportunities that will impact Company's ability to create value. This includes environmental issues like climate change and scarcity of natural resources. It covers social issues like human capital practices, diversity, health and safety, community relationship and value chain engagement. It involves governance matters that includes performance of the board, ethical practices, disclosures and transparency.

The Company has been implementing the principles of ESG for the last couple of years and have made significant progress in the journey of excellence while creating value through ESG.

Some of the highlights of our ESG related performance for the

FY 2024-25 are:

(a) Reduction in Energy consumption by 29.1% with respect to that of previous year FY 2023-24;

(b) Reduction in GHG emissions (Scope 1 and 2) by 23.2% with respect to that of previous year FY 2023-24;

(c) Reduction in water consumption by 34.4% with respect to that of previous year FY 2023-24;

(d) Installed Zero Liquid Discharge (ZLD) systems in all our plants. As a result of this we are not discharging any water outside the plants;

(e) EcoVadis has emerged as a widely used supplier ESG assessment platform and some of the customers are requesting us for EcoVadis score. We participated in EcoVadis assessment during the year and achieved an improvement in EcoVadis percentile score to 58;

(f) Disclosed our ESG Report with stakeholders (through our website) and will continue to do so every year;

(g) Obtained Environmental Management System certification ISO 14001, Occupational Health & Safety Management System certification ISO 45001 and Energy Management System certification ISO 50001 for all our manufacturing plants;

(h) Initiated Social accountability process as per SA 8000.

Plan for the year 2025-26 includes the following, among others:

(a) Obtain further reductions in Energy consumption, GHG emissions and Water consumption;

(b) Further improve EcoVadis percentile score;

(c) Improve our gender diversity;

(d) Set five-year goals for GHG emissions reduction and Water consumption reduction;

(e) Set Science Based Targets for GHG emissions reduction;

(f) Obtain SA 8000 certification for Durgapur plant.

(x) Significant changes (i. e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with explanations are as under:

* Does not include exceptional income.

Explanations :-

The Company's interest coverage ratio and operating profit margin has increased due to higher profitability as compared to last year. Net profit margin and return on net worth has declined since exceptional income of Rs. 954 crore was included in last year due to sale of Bengaluru land.

Transa.ction of the Company with any person or entity belonging to the promoter/promoter group which hold(s) 10% or more shareholding in the listed entity is given below:-

Emerald Company Private Limited (ECPL)

(An entity of the promoter Group holding 61.33% of the share capital).

Research and Development

The Company is committed for continual improvement, development of technology and development of import substitute materials through in-house R&D effort as well as under technical support from Government's technical centres. Company's R&D efforts have consistently supported it in becoming one of the best quality and low-cost Graphite Electrode and Carbon Materials manufacturers.

Company has successfully developed Isostatic Graphite of grade GLIA11, GLIA12, GLIA21 and, GLIA22 with average 40-micron particle size and trials for Isostatic Graphite products with 10-micron particle size are underway. Samples given to Marketing for commercial orders.

We have developed and supplied more than 100 numbers of Carbon Brush for Aerospace Application to HAL. Samples of Graphite Bushes developed for Aerospace application supplied to HAL are under trial.

Company has acquired technology from DRDO to produce Carbon-Silicon Carbide (CSiC) components for defence applications.

Apart from the above continual process development activities are regularly taken up for producing superior versions of Carbon-Carbon Brake Discs (CCBD) for fighter aircrafts.

Subsidiary Companies

Carbon Finance Limited is a wholly owned Indian subsidiary. Graphite International B.V. (GIBV) in The Netherlands is a wholly owned overseas subsidiary Company which is the holding company of four step down subsidiaries in Germany (viz) Graphite Cova GmbH, Bavaria Electrodes GmbH-in- liquidation, Bavaria Carbon Specialities GmbH, Bavaria Carbon Holdings GmbH and one step down subsidiary in USA (viz) General Graphene Corporation.

The Group had decided in FY 2022-23 to shut down its German graphite electrode production while restructuring speciality and coating operations as they were not so energy intensive and initiated liquidation of one step down subsidiary, Bavaria Electrodes GmbH-in liquidation, with effect from 1st October, 2022 which is ongoing.

The overseas subsidiaries recorded a turnover of Euro 15.06 million (Mn) as compared to Euro 15.15 Mn in the previous year. During the year, the loss of Euro 5.16 Mn was lower against loss of Euro 6.60 Mn in the previous year.

The Company, by way of royalty, earned Rs. 0.12 crore during the year, as against Rs. 0.45 crore in the previous year, from overseas subsidiary.

GIBV has made investment in General Graphene Corporation (GGC) of USD 22.60 Mn as on 31st March, 2025 which constitute 60.25% of capital.

Associate Company

The Company in October, 2023 had invested in compulsory convertible preference shares of Godi India Private Limited (GIPL). GIPL is in development stage & has not yet commenced commercial operations of any product. Details of investment are given in Note 49 to the Financial Statements.

Other Information

No Company has ceased to be a subsidiary of the Company during the year.

Statement containing salient features of the financial statements of subsidiaries is enclosed - Annexure 1.

The Consolidated Financial Statements of the Company along with those of its subsidiaries prepared as per IndAS 110 forms a part of this Annual Report.

Information pursuant to Section 134 of the Companies Act, 2013

a. Pursuant to Section 92(3) read with Section 134(3) (a) of the Act, the Annual Return as on 31st March 2025 is available on the Company's web site on www.graphiteindia.com

b. Four meetings of the Board of Directors of the Company were held during the year on 7th May 2024, 6th August 2024, 11th November 2024 and 12th February 2025.

c. All the Independent Directors of the company have furnished declarations that they satisfy the requirement of Section 149 (6) of the Companies Act, 2013.

d. Relevant extracts of the Company's policy on directors appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a director and other matters provided in section 178(3) of Companies Act, 2013 is enclosed - Annexure 2.

e. There is no qualification, reservation or adverse remark or disclaimer made by the statutory auditor in his audit report and by Company Secretary in practice in the secretarial audit report and hence no explanations or comments by the Board are required. No fraud has been reported by Statutory Auditors.

f. Particulars of loans, guarantees or investments under Section 186 of Companies Act, 2013 is enclosed - Annexure 3.

g. Particulars of contracts or arrangements with related parties referred to in Section 188(1) of Companies Act, 2013 is enclosed - Annexure 4.

h. Details of conservation of energy, technology absorption, foreign exchange earnings and outgo as prescribed vide Rule 8(3) of Companies (Accounts) Rules 2014 is enclosed - Annexure 5.

i. Risk management policy has been developed and implemented. The Board is kept informed of the risk mitigation measures being taken through half yearly risk mitigation reports / Quarterly Operations Report. There are no current risks which threaten the existence of the Company.

j. Corporate Social Responsibility (CSR)

As part of its CSR activities, the Company has initiated several projects (as permitted by the CSR provisions) aimed at promoting education, employment enhancing vocational/employability skills, livelihood enhancement projects, healthcare initiatives, rural development projects, sports training etc. as detailed in the CSR annual report for the year ended 31st March, 2025 which forms part of this report - Annexure 6. The CSR policy has been displayed on Company website www. graphiteindia.com and can be viewed under the head CSR.

k. Formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors on the basis of a set of criterias by the Nomination and Remuneration Committee / Board.

l. The Company has adopted a Vigil Mechanism which has been posted on the Company's website www. graphiteindia. com and can be viewed under the head Corporate Governance.

m. The Company does not accept deposits from public.

n. There were no significant and/or material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

Disclosures pursuant to Section 197(12) of Companies Act, 2013 read with Rule 5(1), Rule 5(2) and Rule 5(3) of Companies (Appointment & Remuneration of Managerial Personnel) Rules 2014 are contained in Annexures 7 and 8.

o. Dividend Distribution Policy has been posted on the Company's website www.graphiteindia.com and can be viewed under the head Corporate Governance.

p. There was no application made or proceeding pending against the Company under the Insolvency and Bankruptcy Code during the year under review.

DIRECTORS

Mr. Rahulkumar N. Baldota (DIN: 00130764) and Mr. Harsh Pati Singhania (DIN: 00086742) were appointed as Independent Directors for a term of five years with effective 1st April 2024. Shareholders approval for the said two appointments were obtained through postal ballot on 28th March, 2024. The Board is of the opinion that both the Directors are persons of integrity with decades of experience and expertise in running of businesses.

Mr. Ashutosh Dixit's (DIN: 06678944) five-year term as Whole-time Director was upto 31st March, 2025. Members of the Company by Postal Ballot on 24th March, 2025 approved re-appointment of Mr. Dixit as a Whole-time Director of the Company designated as "Executive Director” for a further period of three years effective from 01st April, 2025.

Mr. Debanjan Mandal (DIN: 00469622) was appointed as an additional director by the Board of Directors of the Company in its meeting held on 14th May, 2025. He holds office up to the date of the ensuing Annual General Meeting (AGM). The Board also appointed him as an Independent Director of the Company for a period of five years from 14th May, 2025, subject to approval of the members of the Company. Members approval is being sought in the forthcoming AGM.

Mr. A. V. Lodha (DIN: 00036158) retires by rotation in the forthcoming AGM and being eligible offers himself for reappointment.

No director is related inter-se to any other director of the Company.

KEY MANAGERIAL PERSONNEL

Mr. B. Shiva, retired as Company Secretary and Compliance Officer of the Company on 31st May 2024. Mr. Sanjeev Marda was appointed as the Company Secretary and Compliance Officer of the Company w.e.f. 01st June 2024.

Recognition/Award and Certificates

The Company continues to enjoy the status of a Four-Star Export House. This year the Company has received the following awards for export performance from EEPC:

- 38th & 39th Eastern Regional Award Special Trophy for excellence in Exports of High-Technology Products Large Enterprise for 2019-20 & 2020-21;

- 54th Indian National Award for Star Performers in Product Group 28 Mica and other Mineral Products Large Enterprise 2021-22.

The Company has accreditation for the standards ISO: 9001, 14001, 45001 and 50001.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013, the Directors state that -

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed;

(b) The directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

(c) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) The directors have prepared the annual accounts on a going concern basis;

(e) The directors, have laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance Report

A Report on Corporate Governance along with a Certificate of Compliance from the Auditors forms part of this Report - Annexure 9.

Business Responsibility and Sustainability Report (BRSR) and Assurance Statement on BRSR Core forms part of our Annual Report. Annexure 10 and 10.1

Auditors

S. R. Batliboi & Co. LLP, Chartered Accountants, was reappointed as Auditors of the Company for a second term of five (5) years at the 47 th AGM held on 5 th August, 2022. They have confirmed that they are not disqualified from continuing as Auditors of the Company.

Cost Auditors

The Company had appointed following Cost Auditors for FY 2024-25 for conducting cost audit in respect of accounts and records made and maintained by the Company as required u/s 148(1) of Companies Act, 2013 as detailed below-

Consolidated Cost Audit Report for FY 2023-24 was filed with the Ministry of Corporate Affairs, Government of India, on 3rd September, 2024.

The above Cost Auditors have been appointed to conduct cost audit for the same divisions as mentioned above for FY 202526 also.

Secretarial Auditor

In compliance with Regulation 24A of the SEBI (LODR) Regulations, 2015 and Section 204 of the Companies Act, 2013, the Board of Directors of the Company at its meeting held on May 14, 2025, based on recommendation of the Audit Committee, has approved the appointment of M/s Bajaj Todi & Associates, a peer reviewed Firm of Company Secretaries in Practice (Firm Registration Number P2020WB081300) as Secretarial Auditors of the Company for a term of five consecutive years commencing from FY 2025-26 till FY 202930, subject to approval of the Members at the ensuing AGM.

Secretarial Audit/Compliance Report

Secretarial Audit Report and Secretarial Compliance Report for FY 2024-25 received from M/s. Bajaj Todi & Associates, Practicing Company Secretaries are annexed herewith - Annexure 11 and 12.

Secretarial Standards

The Company is in compliance of all applicable Secretarial Standards as specified by the Institute of Company Secretaries of India.

Prevention of Sexual Harassment of Women at Workplace

The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013.

Acknowledgement

Your directors place on record their appreciation of the assistance and support extended by all government authorities,financial institutions, banks, consultants, solicitors and shareholders of the Company. The directors express their appreciation of the dedicated and sincere services rendered by employees of the Company.