Arcotech Ltd Directors Report

Dear Members,

Your Directors have immense pleasure in presenting the 45^th Annual Report on the business and operations of the Company together with Audited Statement of Accounts of your Company for the financial year ended on the 31^st March, 2026.

1. FINANCIAL SNAPSHOT

PARTICULARS	2025-26	2024-25
Sales	0.00	0.00
Profit Before Interest, Depreciation & Tax (PBDIT)	(0.93)	(64.90)
Less: Interest & Finance Charges	22.54	23.65
Profit Before Depreciation & Tax (PBIT)	(23.47)	(88.55)
Less: Depreciation	10.03	10.45
Profit Before Tax (PBT)	(33.50)	(99.01)
Less: Provision for Current Tax /Deferred Tax	58.15	(11.52)
Profit After Tax (PAT)	(91.65)	(87.49)

2. DIVIDEND

During the Period Company has incurred a loss of Rs. 91.65 crores, your Directors do not recommend any Dividend for the year under review.

3. GENERAL RESERVES

There was no transfer to General Reserve during the year under review.

4. BUSINESS AND OPERATIONS REVIEW

The Company possesses a state-of-the-art and fully integrated manufacturing facility covering the complete production process — from melting and casting to rolling and stamping. This integrated infrastructure enables the manufacture of high-precision Copper and Copper alloys, including Brass, Phosphor Bronze, Leaded Brass, and Cupro Nickel, in various value-added forms such as strips, foils, sheets, ingots, rods, profiles, bus bars, terminals, connectors, and specialty blanks.

Your Company has achieved a major milestone in its resolution process. The One-Time Settlement (OTS) proposal submitted to the consortium of lenders has received final, formal approval from all sanctioning authorities and was formally effected on July 1, 2026. Under the agreed terms, the legacy debt liabilities have been formally structured into a defined repayment schedule. The management has commenced gradual servicing of the OTS amount in accordance with the stipulated timeline. To ensure the smooth and timely discharge of the OTS liabilities while simultaneously securing operational capital, management is actively pursuing a comprehensive capital infusion strategy. This will include infusion by the Promoters by way of direct equity/debt participation toward the revival of the Company as well as infusion of fresh debt/ equity or other permissible funding by AIF/ NBFC/ other corporates to achieve revival objective. The fresh capital raised will be deployed in a dual-focused approach: systematically fulfilling the balance OTS obligations, and providing essential working capital to drive operational reboot.

Manufacturing Facilities & Operational Revival Roadmap Following the formal approval and execution of the OTS terms, the Company has immediately mobilized resources to prepare the plant for a systematic resumption of commercial operations. To ensure a smooth and safe transition back to commercial production, management has established a revival framework focusing on:

1. Plant Maintenance & Overhauling: Technical teams are executing thorough health checks, safety audits, and mechanical overhauling of all critical machinery, including furnaces, rolling mills, and stamping units, to restore optimal operational efficiency.

2. Infrastructure & Power Restoration: Restoring full utility services, power connections, and industrial infrastructure required for high-capacity manufacturing.

3. Supply Chain & Raw Material Sourcing: Re-engaging with key raw material suppliers and logistics partners to rebuild dependable vendor networks for Copper, Brass, and alloy stock.

4. Human Resource Mobilization: Re-aligning skilled technical personnel, plant operators, and key operational personnel to manage plant operations and quality control.

5. Customer Re-engagement: Rebuilding commercial ties with domestic and global client bases, leveraging the Companys longstanding reputation in precision non-ferrous components.

While achieving full commercial output will be a structured, phase-wise process requiring calibrated working capital deployment, the core groundwork for an operational reboot is actively underway.

Financial Performance & Outlook During the financial year under review, there were no commercial operations, resulting in a Profit After Tax (PAT) of (Rs. 91.65) Crores. Having historically established itself as a premier NonFerrous Engineering Company with recognized expertise in Copper and Brass precision products, the Company retains strong intrinsic value, infrastructure capabilities, and brand goodwill. With the OTS framework in motion, factory custody restored, and equity infusion plans progressing, your Company is strategically positioned to regain its market presence and re-embark on a path of operational efficiency and long-term profitability.

5. DIRECTORS AND KEY MANEGERIAL PERSONNEL

In pursuance with the provisions of Companies Act, 2013, Shri Radhanath Pattanayak, Whole-time Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for reappointment. In terms of Regulation 36(3) of SEBI (LODR) Regulations, 2015, the details of the Director to be reappointed are being provided in the notice of the ensuing Annual General Meeting.

The Board of the Company is constituted in accordance with the provisions of Companies Act, 2013 and rules made there under and Regulation 17 of SEBI (LODR) Regulations, 2015.

Company has optimum combination of Board of Directors. During the year Mrs. Megha Bansal (DIN: 08990382) and Mr. Rohit Agrawal (DIN: 06490313) were re-appointed as Independent Directors for the second term of 5 years pursuant to their performance evaluation and recommendation of the Nomination and Remuneration Committee. There were no other changes in the Board of Directors during the year.

Change in Key Managerial Personnel:

a) No changes took place in the KMPs during the year.

6. BOARD DIVERSITY AND POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Company believes that building a diverse and inclusive culture is integral to its success. A diverse Board, among others, will enhance the quality of decisions by utilizing different skills, qualifications, professional experience and knowledge of the Board members necessary for achieving sustainable and balanced development.

Accordingly, the Board has adopted a policy on Nomination, Remuneration and Board Diversity, which sets out the criteria for determining qualifications, positive attributes and independence of a Director. The detailed policy is available on the Companys website at http:/ / www.arcotech.in/New14/NOMINATION.pdf and http: / /www.arcotech.in/New14/Policy-on-Board-Diversity.pdf is also annexed to this Report as Annexure-A.

Annual Board Evaluation and Familiarisation Program for Independent Directors

The statement pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of SEBI (LODR) Regulations, 2015 indicating the manner in which formal annual evaluation of the Directors, the Board and the Board level Committees are given in the report on Corporate Governance, which forms part of this Annual Report. A note on the familiarization program adopted by the Company is available at Companys website at the link: http://www.arcotech.in/ New14/Familiarization%20Programmes%20for%20Independent%20Directors.pdf

Declaration by Independent Directors

The Company has received necessary declaration from each independent director that he/ she meets the criteria of independence laid down in section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of SEBI (LODR) Regulations, 2015. Board confirms that independent directors fulfill the conditions specified in these regulations and are independent pf the management. The Independent Directors have also confirmed that they have complied with the Companys code of conduct.

Registration in Independent Directors Data Bank: Independent Directors are already registered in Databank and Mr. Rohit Agrawal is exempted from passing of the proficiency test. Mrs. Megha Bansal will also go through the proficiency test. In the opinion of the Board of Directors of the Company all Independent Directors possess high integrity expertise and experience including the proficiency required to discharge the duties and responsibilities as Directors of the Company.

7. AUDITORS AND AUDITORS REPORT

Pursuant to the provisions of Section 139 and other applicable provisions, if any, of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force), the term of the outgoing Statutory Auditors, M/s. Amit Joshi & Associates, Chartered Accountants (FRN: 004898N), expires at the conclusion of the upcoming 45^th AGM.

Based on the recommendation of the Audit Committee and subject to the approval of the Shareholders at the ensuing 45th AGM, the Board of Directors recommends the appointment of M/s. Agarwal U R S & CO., Chartered Accountants (Firm Registration No.: 013910C), as the Statutory Auditors of the Company. M/s. Agarwal U R S & CO., established in May 2007, is a multi-disciplinary firm with over 19 years of professional standing. Headquartered in Noida (Delhi NCR) with offices in Gurugram and international presence across 6 countries, the firm comprises 10 Partners and over 50 professionals.

Upon appointment by the members, M/s. Agarwal U R S & CO. shall hold office for a period of five (5) consecutive years, commencing from the conclusion of the 45th AGM until the conclusion of the 50th AGM of the Company to be held in the year 2031.

The Company has received written consent and eligibility certificate under Sections 139 and 141 of the Companies Act, 2013, from M/s. Agarwal UR S & CO. confirming that their appointment, if made, will be within the prescribed limits and that they satisfy the criteria laid down under the Act.

Statutory Auditors Report

The Notes on Financial Statements referred to in the Auditors Report are self-explanatory and do not call for any further comments under Section 134(3)(f) of the Companies Act, 2013.

8. COST AUDITOR

Company is outside the purview of Section 148 and Cost Audit is not applicable on Company and thus no appointment of Cost Auditor has been made by Company. Maintenance of cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013, is not required by the Company.

9. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

In accordance with the amended Regulation 24A of the SEBI Listing Regulations, every listed entity is required to appoint a peer-reviewed Company Secretary or a Firm of Company Secretaries as Secretarial Auditor for a tenure of five (5) consecutive years. The members of the Company had previously approved the appointment of M/s. A. Upadhyaya & Associates at the General Meeting held on September 25, 2025, for a term of five (5) consecutive financial years, commencing from FY 2025-26 through FY 2029-30. Accordingly, M/s. A. Upadhyaya & Associates continue to hold office as the Secretarial Auditors of the Company.

M/s. A. Upadhyaya & Associates is a New Delhi-based peer-reviewed proprietary firm having over 20 years of expertise in corporate, legal, and securities law compliances. The firm has confirmed that it holds a valid Peer Review Certificate issued by the Institute of Company Secretaries of India (ICSI) and satisfies all eligibility criteria and independence requirements prescribed under the Companies Act, 2013 and SEBI regulations.

The Secretarial Auditor has provided Secretarial Audit Report for the financial year and the same is attached hereto as Annexure-B and is self-explanatory and thus calls for no further comments under Section 134(3)(f) of the Act.

10. REPORTING OF FRAUDS BY AUDITORS

During the Year under review, none of the Auditors have reported to the Audit Committee or to the Board, under section 143(12) of the Companies Act, 2013, any instances of fraud committed against the Company by its officers or employees.

11. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS

The Board of Directors has reviewed and noted the Independent Auditors Report for the financial year ended March 31, 2026. The Statutory Auditors, M/s. Amit Joshi & Associates, Chartered Accountants, have issued a qualified opinion on the Standalone Financial Statements as follows:

"The restructuring of the companys business is under consideration by the lenders. Consequent to the filing of restructuring proposal with lenders, feasible TEV (techno economic viability) study/reports of the operations of the Company was conducted by outside agency where in certain reliefs/ concessions have been envisaged to make the project viable. Included in there is relief in interest rates effective from 01.11.2018. The company has provided interest at the rates mentioned in TEV. This along with other unprovided interest amounts to Rs. 3,053.44 lakhs (net of tax) for the current financial year. The company is in the process of settling the dues with the lenders towards which an amount of Rs. 1,485.00 lacs has been deposited with the bankers and financial institutions, for which final approval from a lender is still awaited. The restructuring of the Companys business is under consideration by the lenders. However, certain lenders of the company have filed applications/issued notices including in NCLT, DRT and SARFAESI. In view of the managements expectation of successful outcome of above proposal and revival of its business, the financial statements have been prepared on going concern basis. However, in view of above uncertainties, we are unable to comment on the ability of the company to continue as a "going concern" and the consequential adjustments to the accompanying financial statements, if any, that might have been necessary had the financial statements been prepared under liquidation basis."

Managements Explanation & Response: Subsequent to the date of the Independent Auditors Report (dated May 30, 2026), the Company has successfully reached a definitive resolution with its lenders. The One-Time Settlement (OTS) proposal — which were under consideration and awaiting final formal sanction—have been officially approved and finalized on July 1, 2026 and marks a pivotal turning point for the Company. By resolving the key uncertainties highlighted by the Statutory Auditors regarding interest concessions and debt obligations, the management has successfully reinforced the operational viability of the business.

With the formal resolution with lenders now in place, the managements decision to present the financial statements on a Going Concern basis stands fully validated, eliminating any requirement for adjustments under a liquidation framework. Moving forward, the Company is well-positioned to focus its efforts on operational recovery, stabilizing revenues, and fulfilling its statutory and corporate governance obligations effectively.

12. NUMBER OF MEETINGS OF THE BOARD

During the year under review, total 5 (five) meetings of the Board were convened and held, the details of which are given in the Report on Corporate Governance forming part of this report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and Regulation 17(2) of SEBI (LODR) Regulations, 2015.

Audit Committee: The Composition and function of Audit Committee of the Board of Directors of the Company is disclosed in the Report on Corporate Governance, which forms part of this report.

13. VIGIL MECHANISM

The Company has established a vigil mechanism which incorporates a whistle blower policy in terms of the listing regulations for directors and employees to report their genuine concerns. The objective of the policy is to create a window for any person who observes an unethical behavior, actual or suspected fraud or violation of Companys code of conduct. Protected disclosures can be made by the whistle blower through an email or phone or a letter to the chairman of the audit committee. The policy can be assessed from the Companys website www.arcotech.in/New14/WHISTLEBLOWERPOLICY.pdf

14. SUBSIDIARY & JOINT VENTURE

The Company has framed a policy for Determining material Subsidiaries. There is no Subsidiary or Joint Venture of the Company as on 31^st March, 2026.

15. DIRECTORS RESPONSIBILITY STATEMENT UNDER SECTION 134(3)(C) OF THE COMPANIES ACT,2013

The Board of Directors hereby confirms, in terms of Section 134(5) of the Companies Act, 2013:

a) That in the preparation of the Annual Accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;

b) That appropriate accounting policies have been selected and applied consistently, and made judgments and estimates that are reasonable and prudent have been made 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 or loss of the Company for that period.

c) That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) That the Annual Accounts have been prepared on a going concern basis.

e) That the Directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively.

f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

16. ANNUAL RETURN

In accordance with the provisions of section 134(3)(a) of the Companies Act, 2013, Annual Report will be placed on Companys website at www.arcotech.in

17. LISTING

The equity shares of your Company are listed with the BSE Ltd and National Stock Exchange of India Ltd.

18. DEPOSITS

During the year under review, your Company has not accepted any deposits from the public within the meaning of Sections 73 and 74 of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. However, to sustain regular operational expenses, meet recurring financial obligations, and support the execution of the rehabilitation and business revival plan, the Company has availed financial assistance in the form of unsecured loans and advances from its Directors and Promoter Group entities. These receipts are explicitly excluded from the definition of "Deposits" under the applicable statutory provisions and rules. Detailed disclosures regarding these unsecured loans, including balances and transaction terms, have been appropriately incorporated in the Audited Financial Statements and in the Related Party Transaction (RPT) disclosures submitted to the Stock Exchanges pursuant to Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

19. THE NAMES OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under review, no company have become or ceased to be its subsidiaries, joint ventures or associate Company.

20. STATUTORY STATEMENTS

A. Conservation of energy and technology absorption

Information under section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014:

I. Conservation of Energy: Company had no active commercial production during the year and thus there was no energy consumption & conservation.

II. Technology Absorption, Adaptation and Innovation: Company had no active commercial production during the and thus no new R&D has been undertaken. No new technology has been absorbed or imported during the year.

B. Foreign Exchange Earnings and outgo

During the year under review, your Company has not dealt with foreign exchange earnings and outgo and the Foreign Exchange earned in terms of actual inflows as well as outgo in terms of actual outflows is Nil.

C. Particulars of Employees

Information in accordance with the provisions of Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, regarding employees is a part of this report.

Disclosures regarding ratio of the remuneration of each Director to the median employees remuneration and other details in terms of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as under:

Managerial Remuneration:

i) The percentage increase in remuneration of each Director, CFO and CS in the financial year:

There was no increase in the remuneration of any of the Director and CFO.

There was an increase in the remuneration of CS during the year.

ii) The percentage increase in the median remuneration of employees in the financial year: Nil

iii) The number of permanent employees on the rolls of Company: 03 employees as on 31.03.2026

iv) Average percentile increases already made in the salaries of employees other than managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: NIL

v) Comparison of each remuneration of the Key Managerial personnel against the performance of the Company:

	WTD	CFO	CS
Remuneration in FY 25-26 (Rs in Cr.)	0.00	0.0644	0.1290
Revenue (Rs in Cr.)		00.0
Remuneration as % of revenue	NA	NA	NA
Profit before Tax (PBT) (Rs in Cr.)		(33.50)
Remuneration (as % of PBT)	NA	NA	NA

vi) The key parameters for any variable component of remuneration availed by the Directors: There is no such variable component

vii) The ratio of the remuneration of the highest paid director to that of the employees who are not Directors but receive remuneration in excess of the highest paid director during the year: NA

viii) The Remuneration is as per the remuneration policy of the Company.

The remuneration of Whole Time Director (Executive Director) for the financial year ended 31^st March 2026

Name & Designation	Age (Years)	Gross Remuneration (Rs.)	Net Remuneration (Rs.)	Total Experience (Years)	Date of Commencement of Employment	Last Employment
1 Shri. R N Pattanayak (Wholetime Director)	66	0	0	40	18.12.2006	Business

D. Variations in the market capitalization of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate of previous year.

Particulars	As at 31st March, 2026*	As at 31st March, 2025*	Variation (%)
Closing Share Price	2.34 (Face Value of Rs.2)	2.34 (Face Value of Rs.2)	NIL
Market Capitalization (Rs in Crores)	24.57	24.57	NIL
(Market Value per share *No. of
Outstanding Shares)
P/E ratio (Market Value per share/EPS)	(0.27)	(0.28)	1.04

*Note: Shares were traded till 30^th August, 2021 on Trade for Trade basis in Z group only on the first trading day of every week. Thereafter trading has been temporarily suspended and discontinued. Above mentioned price and values are taken as per last traded price of Company as on 30^th August, 2021.

21. CORPORATE GOVERNANCE

A separate report of Board of Directors of the Company on Corporate Governance is included in the Directors Report as Annexure-C and the Certificate from M/s A. Upadhyaya & Associates, Practicing Company Secretary, confirming compliance with the conditions of Corporate Governance as stipulated in Schedule V of SEBI (LODR), Regulations, 2015 is attached to the report on Corporate Governance.

22. COMPLIANCE WITH SECRETARIAL STANDARD

Secretarial Standard 1 on Meetings of the Board of Directors and Secretarial Standard 2 on General Meetings, as applicable, have been complied by the Company.

23. RISK MANAGEMENT POLICY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Board of directors of the Company. The financial statement of Company also explains the risk factors in detail.

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by statutory as well as internal auditors. However, there were no business activities in the Company at the end of year.

24. CORPORATE SOCIAL RESPONSIBILITY

The provisions of corporate social responsibility as per Section 135 of the Companies Act, 2013 are not applicable on Company and therefore, Annual Report on CSR activities as per Rule 8 of The Companies (Corporate Social Responsibility Policy) Rules, 2014 do not form part of this report. However, Company has a duly formulated CSR policy in place. Policy can be assessed from the Company Website http: / / www.arcotech.in/New14/CSR.pdf.

25. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year under review, Company has not given any loan, guarantee or investments under section 186 of the Companies Act, 2013.

26. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY.

Save as disclosed elsewhere in this Report, a significant material change and commitment affecting the financial position of the Company occurred between the end of the financial year (March 31, 2026) and the date of this Report.

Execution of One-Time Settlement (OTS) with Lenders: Subsequent to the end of the financial year, the Company achieved a critical milestone by finalizing and executing a comprehensive One-Time Settlement (OTS) with its lenders on July 1, 2026. This agreement formally resolves the debt obligations and restructures the financial liability framework of the Company. The execution of this settlement substantially improves the Companys overall financial health, provides clear visibility for operational recovery, and significantly enhances long-term business sustainability.

27. RELATED PARTY TRANSACTIONS

All related party transactions entered into by the Company during the financial year under review were conducted in the ordinary course of business and on an arms length basis. Prior approval of the Audit Committee was obtained for all related party transactions, and omnibus approvals were granted for repetitive transactions in accordance with statutory requirements. A statement of all related party transactions was placed before the Audit Committee and the Board of Directors on a periodic basis for review and approval. The details of the transactions with related party as provided in the Companys financial statements is in accordance with the Accounting Standard. None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the year under review and hence does not form part of this report.

The Policy on the Related Party Transactions is available on the Companys website at http://www.arcotech.in/New14/Policy%20on%20Related%20Party%20Transaction.pdf

28. MANAGEMENT DISCUSSION AND ANALYSIS

(a) Industry Scenario & Future Challenges

The Company operates in the non-ferrous metals sector, primarily specializing in copper and copper-alloy fabricated products. Demand for non-ferrous metals in India continues to expand, driven by structural growth across key consuming sectors such as electrical infrastructure, power generation, automotive, electronics, and renewable energy. While long-term macroeconomic demand drivers remain intact, the industry is characteristically capital-intensive and vulnerable to global raw material price volatility, currency fluctuations, and intense competitive pressures from domestic as well as global manufacturers.

After the formal execution and finalization of the One-Time Settlement (OTS) with lenders on July 1, 2026, the primary focus of the management moving forward is to complete all procedural settlement milestones, normalize working capital arrangements, and systematically resume manufacturing operations to regain commercial viability

(b) Opportunities and Threats

Government Initiatives: National infrastructure projects, the expansion of green energy systems, and the "Make in India" initiative offer significant domestic demand opportunities for specialized copper and nonferrous products.

Level Playing Field: Tariff corrections by the Government of India over recent years have addressed historical inverted duty structures, creating a fairer domestic manufacturing landscape against imports.

Post-Restructuring Revival: Resolution of long-standing bank obligations under the OTS, gives way for major debt overhaul and allows management to focus entirely on operational turnarounds and customer reengagement.

Re-ignition Delays: Ramping up production capacity, restoring supply chains, and re-establishing credit terms with suppliers following a period of nil operational activity present short-to-medium-term execution risks.

(c) Operating Performance, Future Outlook etc.

Commercial production during the financial year ended March 31, 2026, remained suspended due to debt settlement process. With the successful execution of the OTS package with financial institutions, the Company has established a clear roadmap for financial stabilization. The future outlook is anchored on a phased restart of plant operations, optimizing capacity utilization, restoring customer contracts, and enforcing strict cost discipline. Management expects operational performance to recover progressively as regular working capital flow is restored post-OTS implementation.

(d) Adequacy of Internal Controls

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and that all transactions are authorized, recorded, and reported correctly. Independent Internal auditors conduct audit covering a wide range of operational matters and ensure compliance with specified standards.

(e) Financial performance and operational performance

Because commercial production was not there during FY 2025-26, revenue generation remained nil. The financial results reflect net losses, primarily driven by fixed administrative overheads, essential compliance expenditures, finance costs, and necessary provisions / adjustments. After finalization of OTS, Company has already started working towards resumption of operations and expects to regain the path of profitability soon.

(f) Human Resources/ Industrial Relations

Your Company has always acknowledged the commitment, competence and dedication of its employees at all areas of business. It recognizes that its workforce represents a fundamental asset necessary for achieving operational recovery. As operations prepare for a phased re-commencement, human resource initiatives will focus on re-aligning technical skills, technical safety training, shop-floor equipment maintenance protocols, and deploying appropriate health and safety standards to support a smooth operational restart.

(g) Significant changes in Key Financial Ratios

The significant changes in the key financial ratio of the Company, which are more than 25% as compared to the previous year, are as given below:

Particulars	2025 26	2024 25	Changes (in %)	Explanations
i) Interest Coverage Ratio	-0.49	-3.19	-84.73%	Interest Coverage Ratio was affected due to improvement in EBIT (EBIT to Sales Ratio FY 2024-25 Vs. 2025-26: "78.94 Vs. -2810.87")
ii) Operating Profit Margin	0	0	0%	Revenue from operations is NIL during the year
iii) Net Profit Margin	0	0	0%	Revenue from operations is NIL during the year
iv) Change in Return to Net worth	0.24	0.30	-20.36%	Due to increase in net loss during the year which results in decrease in total equity.
v) Trade Receivables Turnover Ratio	0	0	0%	Revenue from operations is NIL during the year
vi) Inventory Turnover Ratio	0	0	-0%	Revenue from operations is NIL during the year
vii) Current Ratio	0.07	0.06	-14%	Due to increase in current liabilities and increase in current assets
viii) Debt Equity Ratio	-1.46	-1.83	-20%	Due to increase in net loss during the year which results in decrease in total equity.

29. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS

No significant and material order has been passed by the regulators, courts, tribunals impacting the going concern status and Companys operations in future. There was a SEBI Order passed on 27^th February, 2026 imposing penalties and debarment on Company, Directors and KMP which was duly disclosed and is available on website of Company at http://www.arcotech.in/New14/Regulation%2030%20-%20Award%20of%20Order.pdf and stock exchanges and the same has been challenged in SAT and the matter is under appeal.

30. DISCLOSURE AS PER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has a policy on prohibition, prevention and redressal of Sexual Harassment of women at workplace and matters connected therewith or incidental thereto covering all the aspects as contained under "The Sexual Harassment of women at workplace (Prohibition, Prevention and Redressal) Act, 2013".

During the year under review, no such complaint was received under the policy and nothing remains pending.

31. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

During the year under review, no proceeding in the name of the Company is admitted in NCLT under Insolvency and Bankruptcy Code, 2016. Also no new application has been made by the Company under the said code.

32. DETAILS REGARDING OTS DONE DURING THE YEAR

While no One-Time Settlement (OTS) was executed during the financial year under review (FY 2025-26), the Company was in advanced negotiations with its consortium lenders regarding its restructuring proposal. Subsequent to the close of the financial year, the Company achieved a major milestone by successfully finalizing and executing the definitive One-Time Settlement (OTS) and business restructuring agreement with its lenders on July 1, 2026. The details of OTS was duly disclosed to the stock exchanges and is available on website of Company at http://www.arcotech.in/New14/Regulation%2030%20-%20One%20Time%20Settlement.pdf.

33. STATEMENT WITH RESPECT TO THE COMPLIANCE OF THE PROVISIONS RELATING TO THE MATERNITY BENEFIT ACT 1961

The provisions of the Maternity Benefit Act 1961 were not applicable to the Company during the Financial Year under review.

34. INTERNAL FINANCIAL CONTROL

The Company has adequate internal control systems and procedures designed to effectively control the operations at its corporate office, Head office and plant. The internal control systems are designed to ensure that the financial and other records are reliable for the preparation of financial statements and for maintaining assets. The Company has well designed Standard Operating Procedures.

Independent Internal Auditor conducts the internal audit covering a wide range of operational matters and ensures compliance with specified standards. Planned periodic reviews are carried out by Internal Auditor. The findings of Internal Audit are reviewed by the top management and by the Audit Committee of the Board of Directors.

Based on the deliberations with Statutory Auditors to ascertain their views on the financial statements including the Financial Reporting System and Compliance to Accounting Policies and Procedures, the Audit Committee was satisfied with the adequacy and effectiveness of the Internal Controls and Systems followed by the Company.

35. ACKNOWLEDGEMENT

Your Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment. The enthusiasm and unstinting efforts of the employees in the past had enabled the Company to achieve the forefront position of the Industry and Company hopes to again achieve the same in future. Your Company looks upon them as partners in its progress and has shared with them the rewards of growth. Directors also take this opportunity to thank all Investors, Banker, Clients, Vendors, Companies, Government authorities and Stock Exchange(s) for their continued support.