Cenlub Industries Ltd Management Discussions

ECONOMY AND MARKETS

The year under review, 2025-26, continued to be marked by a dynamic global economic environment, with geopolitical uncertainties, fluctuations in commodity prices and changing International trade conditions. Despite these challenges, the Indian economy continued to demonstrate resilience and remained one of the faster growing major economies.Against this backdrop, your Company was able to maintain its business momentum despite the challenging external environment and continued to receive encouraging demand from various domestic industrial sectors as well as international markets.

The Company continued to focus on strengthening its existing customer relationships, developing new products and applications and expanding its presence in emerging business segments. These initiatives are expected to provide a stronger foundation for growth in the coming years.

INDUSTRY STRUCTURE AND DEVELOPMENTS

In the year 2025-26, Company consolidated its position in the Power sector as a preferred manufacturer and supplier of Lube Oil Systems and associated equipment. The Companys customer base in this segment includes reputed domestic customers as well as leading MNCs. During the year, the Company achieved a significant milestone by securing orders for Oil Consoles for 800 MW Power Projects. With these orders, your Company has successfully entered into the prestigious 800 MW Oil Consoles business. This development is an important addition to the Companys product portfolio and is expected to create immense opportunities in the large-capacity power project segment, not only in India but also in International markets.

Your Company has also consolidated its presence in the Oil & Gas sector by catering to domestic as well as international customers and MNCs. The Company continues to offer customized and application-specific lubrication and Fluid handling systems, in accordance with CE / UL requirementsfor European and US markets.

In machine tool sector, your company continued to maintain its leading position as a reliable and established supplier for Industrial Lubrication Systems for Steel, Cement, Sugar, Paper and Machine tools, particularly in the CNC segment. The Companys manufacturing facilities at Faridabad and Bengaluru successfully catered to the requirements of these industries during the year.

Another important development during the year was the successful development of new range of lubrication systems for construction sector and Heavy Earth Moving Machinery. This represents an important diversification within the Companys core lubrication business and opens up opportunities in the construction, mining and heavy equipment segments.

The Company continues to invest in product development, manufacturing infrastructure and process improvement with the objective of increasing its capabilities and preparing itself for future growth. Additional emphasis has also been placed on improving manufacturing efficiency a reducing project execution time and maintaining the Companys strong on-delivery performance. These measures have helped strengthen customer confidence and reinforce Cenlub position as a preferred supplier. The Company has also made appropriate investments in plant, machinery and facilities relating to statutory requirements, environmental protection, pollution control and overall sustainability.

FINANCE AND ACCOUNTS

The following financial review is intended to convey the Managements perspective on the financial performance of the Company at the end of the financial year 2025-26.

The financial statements have been prepared in compliance with the requirements of the Companies Act, 2013 and generally accepted Accounting Principles in India.

FINANCIAL PERFORMANCE

The financial performance of your Company remained satisfactory during the year under review, despite the challenging global and domestic business environment. Profit / (Loss) before taxation (PBT) for the current financial year 2025-26 was Rs979.87 lacs as compared to Rs.1293.93 lacs for the previous year. Companys performance in stock market has been satisfactory, with its shares trading at high values.

OPPORTUNITIES AND THREATS

Your Company continues to explore and develop opportunities in the Power Generation, Oil & Gas, Machine Tools, Steel and other industrial sectors. The successful development of new range of Lubrication Systems for construction sector and Heavy Earth Moving Machineryand companys entry in 800 MW Oil Consoles businesshave opened up promising new markets for the Company. Power, construction, mining and infrastructure sectors provide significant potential for such systems, and the Company is actively pursuing opportunities in these areas.The Oil & Gas sector, both domestic and international, also continues to offer encouraging opportunities. The Company is further strengthening its capabilities in customized systems and international certifications to meet the requirements of global customers.

At the same time, business in these sectors is subject to various factors, including Government policies, project investment cycles, International economic conditions and increasing competition. Your Company continues to address these challenges through product development, customization, quality improvement, cost optimization, efficient project execution and close customer engagement. The Management believes that the Companys technical capabilities, established customer relationships and diversified product portfolio place it in a sound position to capitalize on available opportunities.

OUTLOOK

The overall outlook for the Company remains very positive with strengthening of existing business and development of new product lines, which provide the Company with an opportunity to enter a large and growing application segment. The Management remains optimistic about achieving improved business performance in the coming years through focused product development, enhanced operational efficiency, improved customer service and expansion into further new market segments.

RISKS AND CONCERNS

Inflationary pressures, fluctuations in the prices of raw materials and other inputs, increasing cost of manpower and availability of skilled personnel continue to remain areas requiring continuous attention. Competition in domestic and international markets also can exert pressure on pricing and profitability.International geopolitical developments and changes in global trade conditions may also affect export opportunities and project execution.

The Company, however, continues to proactively monitor these risks and take appropriate measures to mitigate their impact. Better planning, lean manufacturing practices, inventory optimization, productivity improvement, vendor development and close monitoring of project execution are being adopted to improve efficiency and control costs.The Company is also continuing its efforts towards skill development, employee engagement and retention of trained manpower. The Management believes that the Companys diversified customer base, established market position, technical capabilities and continuing product development efforts provide adequate resilience to meet the challenges arising from these risks.

INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY

Your Company has implemented an ERP system which has resulted in significant improvements in various areas of the Companys operations, including internal financial controls, inventory management, supply chain optimization and effective Human Resource Management.The system ensures that activities and transactions are appropriately recorded, authorized and reported with improved efficiency and accuracy, while also safeguarding the Companys assets against loss arising from wastage, unauthorized use or removal.

The internal control system is supplemented by documented policies, guidelines and procedures. The Companys internal

auditors continuously monitor the effectiveness of internal controls with a view to providing the Audit Committee and the Board of Directors with independent, objective and reasonable assurance regarding the adequacy of the Companys internal controls and risk management procedures.The Internal Auditor submits detailed reports on a quarterly basis to the Audit Committee and the Management. The Audit Committee reviews these reports with the executive management and provides appropriate oversight of the internal control system.The Company regularly reviews its policies, guidelines and internal control procedures in view of the changing business environment and evolving operational requirements.

MATERIAL DEVELOPMENT IN HUMAN RESOURCES AND INDUSTRIAL RELATION FRONT

The Company continues to maintain cordial and healthy relations with its employees and recognizes that its people are an important contributor to its long-term growth and success.Your Company accords high priority to the safety, health and welfare of its employees and necessary Environmental, Health and Safety measures are adopted and enforced across the Companys operations.The Company further puts emphasis on the development of its employees through internal training, skill enhancement and on-the-job learnings. These initiatives are aimed at improving technical capabilities, productivity and employee attachment with the company.Continuous development of technical and project management capabilities is being given appropriate importance.

CORPORATE GOVERNANCE

Your Company is in compliance with the governance requirements provided under the Companies Act, 2013, the applicable provisions of the Companies (Amendment) Act, SEBI (Listing Agreement and Disclosure Requirements) Regulations, 2015 and the applicable Secretarial Standards issued by the Institute of Company Secretaries of India and approved by the Central Government.

The Company has in place all statutory committees as required under applicable laws. Details of the Committees are given in the Corporate Governance Report.The policies framed and adopted by the Company in compliance with statutory requirements are available on the Companys website at https://cenlub.in/investor-relations/

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 also provide for formulating the Code of Conduct for members of the Board and Senior Management, Codes of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information and Code of Conduct to regulate, monitor and report trading by employees and other connected persons. Your Company has formulated the applicable codes and continues to abide by the relevant regulations.

STATUTORY COMPLIANCE

A declaration is made at the Board Meetings regarding compliance with the provisions of various applicable statutes after obtaining confirmation from all units of the Company. The Company Secretary ensures compliance with the applicable SEBI regulations and other statutory requirement.

For and on behalf of the Board of Directors

Date: 13/08/2026

Place: Faridabad

MADHU MITTAL

Chairman and Managing Director

DIN:00006418

Registered Office:

233-234-235, Sector-58

Faridabad-121004