Refex Industries Ltd

Dear Shareholders,

It is with immense pleasure and enthusiasm that I connect with you through our Annual Report for FY 2022-23.

I am delighted to share that the past year has been exciting. Despite the challenging economic scenario, we delivered exceptional performance across all business segments, setting the foundation for long-term growth and progress. This is largely attributed to the successful execution of our strategic initiatives into uncharted territories and the expanding customer base. This accomplishment underscores our commitment and the value that Refex delivers to its stakeholders.

Refex's evolution has been driven by our unrelenting pursuit of innovation and excellence, a driving force that has propelled us for more than 20 years. As the year unfolded, the various business segments flourished, each contributing its own unique strengths to the overall success. This holistic growth approach has not only strengthened our market position but has also solidified our brand reputation and presence.

I would like to stress the importance of environmental, social, and governance (ESG) issues critical to the

success of our business and society. Refex Industries Limited has made a proactive investment in formulating and implementing ESG framework across the business verticals ensuring sustainable performance excellence and innovation. I am also delighted to share that this year, we launched Refex Green Mobility Limited (RGML) business to contribute towards the reduction of greenhouse gas emissions and commenced operations from Bengaluru. RGML will run technology-enabled 100% 4-wheeler electric vehicles with trained drivers, and excellent response teams towards smart urban mobility. This stands as testimony to our strong commitment to the environment and society.

Refrigerant Gases:

As pioneers in forging groundbreaking solutions and backed by extensive expertise, your Refex earns a prominent stature in the refrigerant gas industry. Distinguished by our pioneering introduction of 450 ml refilling cans and on-site refilling facilities at OEM locations, innovation has remained our core focus. This dedication has set our product apart, commanding a premium price compared to existing brands. In FY 2022-23, we initiated

supplying refrigerants to prominent OEMs such as Carrier, TVS Mobility, LG, and Voltas. Our reach extends to over 450 dealers and distributors across India, and we continue to grow.

Ash and Coal Handling:

Your Refex's heightened business activities led to a significant increase in coal trading volumes during the year. In tandem with coal handling, we offer ash handling and disposal services. We employ advanced technologies for the safe collection, transportation, and disposal of ash. Your Refex source ash from reputable plants in Rajasthan, Maharashtra, and Chhattisgarh, supplying it to leading cement manufacturers in these states to minimise environmental impact.

During the year, we underwent a positive shift by using our own fleet of vehicles for ash transportation from power plants. This strategic move resulted in substantial cost savings and boosted profit margins. Additionally, securing a major contract from a Public Sector Undertaking (PSU) for ash disposal and partnering with six more thermal power plants expanded our ash handling operations, manifesting in robust revenue growth from ash and coal handling.

Power Trading:

Power trading business generated substantial revenue growth during the year, for your Refex. We provide a comprehensive array of power trading solutions, serving diverse entities across India. As a major player, we are ranked within the top ten power traders nationally in terms of electricity volume traded through bilateral in March 2023. With a CERC-approved Category-I licence for inter-state power trading, we possess the capability to engage in power trading activities with no upper limit on traded electricity volume.

A significant addition to our portfolio is Refex Green Mobility Limited, a wholly-owned subsidiary of Refex Industries (from 17th April 2023), poised to create substantial value

in the years ahead. The Company commenced operations in Bengaluru on March 31, 2023. With a strong belief in this initiative contributing positively towards the environment, we are enthusiastic about our four-wheeled EV initiative, which not only aligns with our vision but also contributes to reducing carbon emissions, thus safeguarding the environment.

Overview of the financial performance

During the year, we achieved unprecedented milestones, attaining the highest revenue and profits, with revenue surpassing the % 1,500 Cr mark. This remarkable growth was propelled by a substantial 267% increase in revenue from operations from nearly % 444 Cr in FY 2021-22 to approximately % 1629 Cr in FY 2022-23. The growth in revenue was primarily attributed to the significant expansion of the business verticals.

Throughout the year, we executed a strategic shift from outsourcing vehicles from vendors to utilising our own fleet for ash transportation, leading to notable cost savings in logistics. Net Profit grew by 156%, rising from nearly %45 Cr in FY 2021-22 to around % 116 Cr in FY 2022-23. This increase was propelled by effective control over fixed overheads, operating leverage optimisation, and the substantial revenue generated during the year. Our operating profit margins stood at 10.72%, while net profit margins were at 7.12% during the year.

Advancing Digital Transformation

In today's rapidly evolving business landscape, digital transformation stands as a paramount necessity. Through proactive measures and cutting-edge digital technologies, we are rapidly streamlining our operations, elevating our core offerings, and fostering enduring growth. With the vision of profoundly impacting our people, processes, and overall business, our leadership team is deeply immersed in the digital journey. Achieving compliance with

the Business Software Alliance (BSA) marks a significant milestone in this endeavour. Our overarching goal is to transform into a digitally agile and robust organisation capable of navigating the complexities of the evolving business landscape and enhancing efficiencies.

Business Outlook

We have set ambitious plans to expand our business and drive sustainable growth. Our outlook within the power segment remains strongly positive, driven by a substantial upsurge in both industrial and commercial demand, amplified by the upward trajectory of the Indian economy. The increased demand for power is intricately linked to heightened requirements for coal within thermal plants. Consequently, we anticipate robust opportunities not only within the power segment and its impact on the coal supply but also on ash handling, as the surge in power demand correlates with the same.

Our strategic focus remains on expanding our market presence and diversifying revenue streams. This year, we will be toiling hard to operate across multiple geographies, thereby growing our customer base and capturing a greater market share. We are progressively establishing refrigerant refilling facilities to generate value for our stakeholders. In this pursuit, we plan to establish refilling centres in both the western and eastern regions of India.

Our ash business is expected to become more concentrated and we will pursue to secure orders in the coming years as well. During the past year, we successfully established a substantial customer base, including renowned thermal plants showcasing our capabilities. This achievement has paved the way for ongoing discussions with customers to expand our scope of work. Notably, a growing number of thermal plants seek comprehensive end-to-end service providers, actively seeking our expertise.

In addition to Chhattisgarh, we intend to extend the ash distribution network to encompass Madhya

Pradesh, Uttar Pradesh, Odisha, and Gujarat. We are actively targeting tenders from PSUs to expand our ash disposal operations. Notably, some of the projects on road construction and highway expansion could offer abundant opportunities to enhance ash disposal services across the nation and that too for the cause of nation's infrastructure building. We are quite confident about refining our processes and leveraging our expertise to drive positive outcomes for this business vertical.

As we move forward, we will continually evaluate market opportunities, invest in innovation, and enhance operational efficiency. Through these endeavours, we aim to optimise our performance and capitalise on growth opportunities spanning various sectors and markets.

Focus on sustainable practices

It is imperative to emphasise that our growth aspirations reflect our unwavering commitment to sustainable and responsible business practices. We prioritise striking a harmonious balance between growth and profitability, ensuring sustainable value creation for all our stakeholders. Our dedication to achieving ESG compliance is a pivotal factor in driving the success of our business. With this in mind, we are resolute in taking every essential measure towards ESG compliance.

Conclusion

I would like to extend my heartfelt gratitude to each and every stakeholder for supporting and guiding us in this journey. I also express my gratitude to our dedicated employees whose relentless efforts have propelled us to the forefront of opportunities and steered our growth. As we head into an exciting future, we seek your continued support so that we can create value for all and shape a stronger future for your Refex.