Century Enka Ltd Management Discussions

OVERALL REVIEW

During the financial year 2025–26, the Company experienced a persistently challenging business environment, primarily due to ongoing macroeconomic uncertainties at both global and domestic levels. These uncertainties affected market dynamics and created headwinds for the industry.

In addition, geopolitical tensions in West Asia had a significant impact on the availability and cost of crude-based raw materials. The disruption in supply chains and increased input costs posed further challenges for the Company.

To address these challenges, the Company has focused on broadening its customer base and expanding its geographic reach. Furthermore, initiatives have been implemented to increase the proportion of Value-Added Products (VAPs) within the product portfolio, thereby mitigating pricing pressures from imports. The Company has also undertaken cost optimisation measures and enhanced operational efficiencies to ensure sustained and profitable growth.

The Synthetic Yarn sector is anticipated to face ongoing difficulties as a result of persistent low-priced imports from China, surplus global capacity, and a lack of robust trade protection measures. These factors are expected to maintain downward pressure on prices and margins. However, the Companys focus on Value-Added Products, differentiation, and customer solutions should improve resilience and help mitigate these effects.

The Reinforcement Fabric sector is projected to experience steady demand, supported by the replacement market, two- and three-wheelers, agricultural tyres, and the expanding passenger vehicle segment, which are increasing the need for Polyester Tyre Cord Fabric. The rollout of additional production capacities is likely to diversify the sales portfolio and promote long-term growth.

INDUSTRY STRUCTURE, DEVELOPMENT, THREATS, OPPORTUNITIES & OUTLOOK

Industry Status

The Company operates in the synthetic yarn segment of the textile industry, primarily engaged in the manufacture of Synthetic Yarn and Reinforcement Fabric.

Reinforcement Fabric

The Company manufactures Reinforcement Fabrics for diverse segments of the tyre industry. Nylon Tyre Cord Fabric is primarily used in bias tyres for commercial vehicles, two- and three-wheelers, agricultural equipment, mining and construction vehicles, and other off-the-road (OTR) applications, while Polyester Tyre Cord Fabric is mainly used in radial tyres for

passenger and light commercial vehicles.

The domestic automotive industry continues to grow, driven by increasing demand for passenger vehicles, two-wheelers, agricultural equipment, and electric vehicles (EVs), prompting tyre manufacturers to expand capacities and strengthen their global presence.

Rising preference for radial tyres is expected to support demand for Polyester Tyre Cord Fabric, while sustained demand from commercial vehicles, agriculture, mining, and construction is likely to underpin growth in Nylon Tyre Cord Fabric. Although geopolitical uncertainties and weather-related risks may moderately impact industry growth, the Companys diversified product portfolio and focus on operational excellence position it well to capitalise on long-term opportunities.

Synthetic Yarn

The Indian Nylon Filament Yarn (NFY) market presents a promising growth opportunity, supported by an expected medium-term growth rate of 6–7%. The global shift towards the China+1 sourcing strategy continues to enhance Indias position as a preferred manufacturing destination, creating significant opportunities for domestic textile producers. At the same time, rising consumer preference for functional apparel, athleisure, sportswear, workwear, and technical textiles is driving sustained demand for high-performance nylon yarns. These structural growth drivers are expected to strengthen the long-term growth prospects of the Indian NFY industry.

Government programs supporting Make in India and man-made fibers (MMF), together with issues like water shortages and limited natural fiber production, are causing a shift toward sustainable, scalable options. As a result, nylon is likely to benefit significantly from these changes.

NFY is witnessing growing adoption across athleisure, sportswear, workwear, lingerie, laces, defense, and technical textile applications. Demand is particularly strong for Micro and Fine Denier Nylon Filament Yarns, while DTY products are gaining increasing acceptance. These products offer superior comfort, moisture absorption, durability, elasticity, and performance retention, making them ideal for modern apparel and technical applications.

The growing focus on health, fitness, and active lifestyles is driving demand for lightweight, flexible, sweat-wicking, and durable fabrics, further strengthening NFYs position as a preferred fiber choice.

The industry continues to face challenges from rising imports and intense price competition from China and Vietnam. In the premium saree segment, Nylon Filament Yarn also competes with other synthetic fibres, particularly Viscose Filament Yarn,

supported by low-cost imports from China. To address these challenges, the Company remains focused on application-driven product development, customer-specific solutions, and expanding its portfolio of value-added products. This strategy reduces dependence on commoditised segments and supports sustainable margins.

Our investment strategy is aligned with Indias MMF-led textile transformation. Ongoing investments in Mother Yarn and DTY capacities are aimed at reducing dependence on low-margin commodity products and increasing participation in higher-value apparel and technical textile segments. Supported by product innovation and a strong focus on specialty applications, we are well positioned to deliver sustainable long-term growth and value creation.

Company Performance

In FY26 the Company faced challenges from rising imports and intense price competition from China and Vietnam. Due to geopolitical uncertainties, exports as well as export linked yarns were adversely impacted. Global trade tensions lead to volatile raw material scenario.

The increase in automobile sales following the GST rate cut led to higher demand for NTCF in second half of the year.

The Company remained focused on cost optimization and improving operational efficiency at manufacturing facilities, better availability of renewable energy also benefited in maintaining the overall performance of the Company.

The Company delivered a strong financial performance, with Earnings Before Interest, Depreciation and Tax (EBIDTA) increasing by 25% to 190 crore in FY 2025–26 from 152 crore in the previous year.

Company Outlook

The Company remains cautiously optimistic about FY 2026–27, despite prevailing concerns regarding below-normal monsoon forecasts, ongoing geopolitical uncertainties, and volatile raw material prices.

Demand for reinforcement fabrics is projected to stay steady during the year. Nylon Tyre Cord Fabric will mainly cater to the replacement market, along with consistent demand from two-wheeler and three-wheeler segments. Meanwhile, Polyester Tyre Cord Fabric is set to benefit from the ongoing growth in passenger vehicles.

The launch of Polyester Tyre Cord Fabric (PTCF) production is expected to further strengthen the Companys competitive position in the reinforcement fabric sector. This development is anticipated to enhance the Companys ability to capture new growth opportunities in a dynamic market environment.

In Nylon Filament Yarn, focus is more on Value added Products (VAPs), New Product Development and targeting improved footprint with increased customer base to cater the textile market with sustained growth. The Company remains committed to operational efficiency, cost optimisation, increased renewable energy consumption, broadening its customer base, expanding its portfolio of premium products to sustain margins and performance.

SAFETY, HEALTH, ENVIRONMENT & SUSTAINABILITY

The Company firmly believes that Life is precious, and we must safeguard it. Guided by this core principle, we are committed to preventing and minimizing safety risks arising from our operations. This commitment encompasses the protection of our employees, visitors, customers, vendors, contractors, neighboring communities, as well as our plants, assets, and equipment.

Safety is deeply embedded in the Companys culture and serves as a fundamental pillar of our business operations. Through a structured, proactive, and leadership-driven approach, we continuously strive to foster a safe and healthy working environment. Safety remains our highest priority at every level of the organization, supported by the active participation of employees, contractors, service providers, suppliers, and meaningful engagement with the communities surrounding our facilities.

Both the Pune and Bharuch facilities operate under a certified Occupational Health and Safety Management System compliant with ISO 45001:2018, demonstrating the Companys unwavering commitment to maintaining the highest standards of workplace health and safety.

The effectiveness of this commitment has been duly recognized through several prestigious external accolades. During FY26, the Bharuch facility was honoured with the National Safety Award 2025 by the National Safety Council of India (NSCI), acknowledging its exemplary safety performance. Additionally, the Bharuch site secured Gold Trophies from the Quality Circle Forum of India (QCFI), Surat Chapter, for its case study projects titled MCP Installation and Its Benefits and Installation of an Acrophobia Test Structure. These recognitions highlight the organizations focus on innovative safety practices, proactive risk management, and its unwavering commitment to continuous improvement.

Key Safety Initiatives Undertaken During the Year:

The Company actively fosters a culture of proactive safety by encouraging the systematic reporting of Near-miss incidents, Unsafe conditions, Unsafe acts (Behavioural Safety Observations) Potential SIF (Serious Injury & Fatality) observations and JCC

Management Discussion and Analysis Report (Contd.)

(Job Cycle Check). This approach strengthens early hazard identification, effective risk mitigation, and prevention of potential incidents. To further reinforce safety awareness, a wide range of initiatives were implemented throughout the year, including structured workshops, issuance of safety bulletins, dissemination of accident case studies, and comprehensive safety campaigns featuring contests and employee suggestion schemes. These efforts collectively contribute to enhancing safety consciousness and engagement across the organization.

During the year under review, the Company implemented its Life Saving Rules (LSR) and Process Safety Cardinal Rules (PSCR) across operations, supported by dedicated e-learning modules to enhance awareness and compliance. Employees were encouraged to incorporate adherence to these critical safety requirements into their individual Key Performance Indicators (KPIs), thereby reinforcing personal accountability for safety performance.

Workplace safety communication was further strengthened through the installation and enhancement of cautionary notices, safety instructions, and warning signage across facilities. In addition, physical safety controls were enhanced through improved machine guarding, perimeter fencing, regular safety inspections and rounds, and comprehensive safety surveys, contributing to a safer and more secure work environment.

The Company continued to strengthen its safety culture through the delivery of shop-floor safety training programs and leadership- focused safety workshops, reinforcing accountability, ownership, and safe behaviors across all levels of the organization. Fire prevention and protection measures were further enhanced through upgrades to firefighting systems and the conduct of regular third-party audits to assess fire safety preparedness and the adequacy of protection infrastructure.

Periodic emergency response mock drills and fire drills were conducted across facilities to evaluate emergency preparedness, response capabilities, and the effectiveness of emergency management systems. To commemorate National Safety Week 2026, the Company conducted a series of specialized training programs on key safety topics, including Electrical Safety, Mechanical Safety, Boiler Safety, LPG Safety, Process Safety Management (PSM), and Behaviour-Based Safety (BBS), aimed at enhancing employee awareness, competency, and commitment to safe work practices.

In addition, CPR and First Aid training programs were conducted for employees by FMO and certified medical professionals to enhance emergency response capabilities. As part of its commitment to community safety and stakeholder engagement, the Company also extended firefighting and accident prevention training to neighbouring small and medium enterprises (SMEs), School & ITI contributing to the promotion of safe work practices beyond its operational boundaries.

The Company successfully completed several independent third-party assessments and audits to strengthen its risk management and safety governance framework. These included a HAZOP Study by M/s KayPear, a Fire Adequacy Study, Fire Risk Assessment and Fire Audit by M/s Solomax LLP, a Safety Audit by the Gujarat Safety Council, Quantitative Loss Event Analysis (QLEA) by ABG-GSC, Quantitative Natural Event Analysis (QNEA) by SGS India Pvt. Ltd., and a Hazardous Area Classification Study conducted by specialized consultants M/s. EcoSafe Consultant. The findings and recommendations from these assessments were systematically reviewed and incorporated into the Companys continuous improvement initiatives.

During the year, the First Aid Standard Operating Procedure (SOP) was revised in accordance with updated Group Guidelines and applicable Occupational Health and Safety (OHS) requirements, further strengthening emergency medical preparedness across all facilities. The Company ensured the availability of adequately stocked first-aid boxes, trained first aiders, and supporting infrastructure at all operational locations.

Reinforcing its commitment to employee health and well-being, the Company conducted pre-employment medical examinations for 100% of new recruits and achieved 100% compliance with periodic medical examinations for all employees, including contract workforce personnel, enabling the timely identification and management of occupational health risks.

Health, Hygiene, and Well-being at the Workplace

The Company remains committed to providing a safe, healthy, and conducive work environment that supports the physical, mental, and overall well-being of its employees. A range of proactive measures and initiatives have been implemented across its operations to promote occupational health, workplace safety, and employee wellness.

Comprehensive medical facilities are available at both the Pune and Bharuch units to address employees healthcare needs. Regular preventive health check-ups are conducted to facilitate early diagnosis and timely intervention, while employees engaged in hazardous processes undergo half-yearly medical examinations in accordance with applicable health and safety requirements. To ensure workplace safety, employees are provided with appropriate Personal Protective Equipment (PPE) and are encouraged to adhere to established safety protocols.

The Company places significant emphasis on maintaining high standards of workplace hygiene, cleanliness, and housekeeping. Advanced engineering controls, including dust extraction systems, fume exhaust units, and noise mitigation measures, have been deployed to enhance workplace conditions and minimize occupational health risks. To further strengthen sanitation and hygiene practices, a dedicated WASH (Water, Sanitation and

Hygiene) Committee regularly monitors workplace cleanliness, sanitation facilities, and the availability of safe drinking water.

In line with its commitment to creating an inclusive and employee-friendly workplace, the Company has introduced several initiatives to enhance accessibility and well-being. Sanitary pad dispensing machines with integrated incineration facilities have been installed in womens washrooms to support menstrual hygiene management. Additionally, the Bharuch unit has established a wheelchair-accessible washroom designed to meet the needs of elderly employees and persons with disabilities.

The Companys strong safety culture is reinforced through periodic external audits covering critical areas such as fire safety systems, electrical safety, Job Safety Analysis (JSA), Hazard Identification and Risk Assessment (HIRA), and Integrated Management Systems (IMS). Both the Pune and Bharuch facilities are certified under ISO 45001:2018 Occupational Health and Safety Management System, underscoring the Companys commitment to maintaining globally recognized standards in workplace health and safety.

Recognizing that employee well-being extends beyond physical health, the Company also focuses on mental and emotional wellness. Through its association with MPOWER, an initiative of the Aditya Birla Education Trust (ABET) founded by Mrs. Neerja Birla, various awareness programmes, workshops, webinars, and engagement activities are conducted to promote mental health literacy, emotional resilience, and access to professional support. These initiatives contribute to fostering a healthier, more engaged, and productive workforce.

Mental Health and Well-being – MPOWER Initiative

The Company remains committed to fostering a workplace that prioritizes the mental health and well-being of its employees. In support of this commitment, it actively participates in MPOWER, a pioneering initiative of the Aditya Birla Education Trust that seeks to enhance mental health awareness, encourage preventive care, and improve access to professional support through a holistic and multidisciplinary approach.

During the year under review, MPOWER hosted the Mpowering Minds Summit in Mumbai, centered around the themes of Acceptance, Action, and Advocacy. The summit brought together mental health professionals, policymakers, thought leaders, changemakers, and individuals with lived experiences to facilitate meaningful dialogue and drive collective action towards addressing mental health challenges, particularly among youth.

At the operational level, the Company continued to strengthen employee well-being through focused interventions. A three-day Emotional Well-being Workshop was conducted at the

Pune Unit, covering approximately 250 man-hours of learning and engagement. Employees and workmen participated enthusiastically in sessions on mindfulness, meditation, and holistic wellness practices, including insights into the seven chakras, aimed at enhancing emotional resilience and overall well-being.

Further reinforcing its commitment to a supportive and inclusive workplace, the Company introduced the Mental Health Champions Program (MHCP) under the MITR initiative across its Pune and Bharuch units. Designed for manager-level employees, the programme equips participants to recognize early signs of mental distress, provide initial support as Mental Health First Aiders, and encourage open conversations around mental health. By promoting awareness and reducing stigma, the initiative contributes to a healthier, more engaged, and productive workforce.

Environment and Sustainability

The Company remains committed to minimizing the environmental impact of its operations through responsible and sustainable business practices. Both the Pune and Bharuch manufacturing facilities operate under a certified ISO 14001:2015 Environmental Management System (EMS), which provides a structured framework for identifying and managing environmental risks, implementing mitigation measures, monitoring performance, and ensuring compliance with applicable environmental laws, regulations, and standards. This systematic approach supports the Companys objective of achieving continual improvement in environmental performance.

The Company continued to operate in compliance with applicable environmental norms during the reporting period, maintaining resource consumption and the generation, treatment, and disposal of wastewater, hazardous waste, and atmospheric emissions within the regulatory thresholds prescribed by Statutory and Regulatory authorities.

Guided by its sustainability objectives, the Company continues to strengthen initiatives aimed at conserving natural resources, improving energy and water efficiency, and reducing the environmental impact of its operations. These efforts support the Companys commitment to sustainable development, environmental responsibility, and the creation of long-term value for stakeholders.

Key Highlights of Environmental Initiatives

During the year, the Company continued to strengthen its environmental performance and sustainability initiatives through a range of resource conservation, pollution prevention, renewable energy, and circular economy measures. Key initiatives undertaken during the reporting period include:

Conducted Life Cycle Assessments (LCA) for NTCF, NFY, and De-polymerized products through M/s Sphera to evaluate environmental impacts across the product life cycle and identify opportunities for improvement.

Completed the Annual Water Audit in association with the PHD Chamber of Commerce & Industry and undertook a third-party Environmental Audit through M/s Arel Labs, Ankleshwar.

Implemented organic waste management initiatives through the installation of a canteen waste composting system and conversion of horticultural waste into compost, which was utilized for landscaping and greenbelt development.

Enhanced biodiversity and green cover through the plantation of approximately 500 native saplings across operational locations.

Obtained regulatory approval for an improved hazardous waste disposal methodology involving pre-processing and co-processing, supporting responsible waste management and resource recovery.

Strengthened water conservation efforts through the installation of rainwater harvesting recharge wells and implementation of groundwater recharge measures.

Increased the use of renewable and cleaner energy sources through the adoption of biofuels in boilers and thermic fluid heaters. The Bharuch facility continued operations of its 1 MW captive solar power plant and further strengthened renewable energy sourcing through participation in a 10.5 MW Wind-Solar Hybrid Group Captive Power Project.

Improved energy and resource efficiency through the installation of Waste Heat Recovery Systems (WHRS) and Vapour Absorption Machines (VAM), enabling recovery and utilization of waste energy streams.

Utilized high-calorific-value hazardous waste as an alternative fuel through authorized co-processing facilities, promoting circular economy principles and reducing dependence on conventional fuels.

Operated a Zero Liquid Discharge (ZLD) system for process wastewater treatment and reuse. Treated effluent from the Sewage Treatment Plant (STP) continued to be utilized for greenbelt irrigation and maintenance.

Replaced ozone-depleting refrigerants with environmentally friendly non-ODS alternatives across applicable systems.

Observed World Environment Day and World Ozone Day through awareness programs conducted in collaboration with officials from the Forest Department and the State Pollution Control Board.

Conducted periodic third-party monitoring and audits of environmental control systems, including stack emissions, Effluent Treatment Plants (ETP), Sewage Treatment Plants (STP), and ambient air quality monitoring systems.

Total of 58 Nos of conventional urinals have been replaced with waterless urinals resulting in fresh water saving of average 2025 m3/year.

Completed third-party water audits and hydrogeological impact assessments to enhance water-use efficiency and strengthen long-term water stewardship.

Ensured NTCF products remained compliant with Annex

XIV and Annex XVII requirements under the European REACH Regulation and ECHA SVHC requirements. Nylon textile products continued to be certified under OEKO- TEX® Standard 100 and compliant with applicable REACH and ECHA SVHC requirements.

At the Bharuch facility, 28 rainwater recharge wells were operational, providing significant groundwater recharge capacity and contributing to sustainable water resource management.

Converted an LDO-fired boiler/heater system to a dual- fuel (RLNG and LDO) configuration, resulting in an annual

reduction of approximately 984 MT of CO 2 emissions and fuel cost savings of approximately 300 lakhs.

Replaced an existing 1,000 TR chiller with an energy- efficient and environmentally friendly alternative to improve cooling efficiency and reduce energy consumption.

Upgraded PSA towers in the nitrogen plant, resulting in reduced compressed air consumption and improved energy efficiency.

Replaced legacy cable corder machines with advanced energy-efficient technology, enhancing operational efficiency and reducing energy intensity.

Achieved additional energy savings through process optimization measures, including speed reduction initiatives for cable corder machines.

Reduced packaging material consumption through redesign of finished goods packaging, including replacement with three-ply cartons and elimination of plastic honeycomb inserts, resulting in annual paper savings of approximately 24.2 MT.

Reduced paper consumption by optimizing the thickness of mother yarn spinning machine paper tubes, resulting in annual savings of approximately 21 MT of paper.

Increased the use of in-house reusable pallets, resulting in annual wood savings of approximately 25 MT.

Transitioned the AH3 pre-heater system from diesel to natural gas, further reducing greenhouse gas emissions and improving energy efficiency. This initiative contributed to an estimated annual reduction of approximately 984 MT of CO 2 emissions.

HUMAN RESOURCE AND INDUSTRIAL RELATIONS

The Human Resource Department (HRD) continues to be a key enabler of the Companys sustained growth and organizational excellence. Recognizing employees as its most valuable resource, the Company places strong emphasis on fostering an inclusive, and engaging work environment. HR remains closely integrated with the priorities of all business functions, ensuring that people practices effectively support organizational goals. Through a progressive and employee-focused approach, the department strives to strengthen talent development, employee engagement, and workplace well-being, thereby enhancing overall employee satisfaction and organizational effectiveness. The key HR initiatives and achievements during the year are highlighted below:

Learning Fest – Embrace the Future

Learning Fest, a flagship learning and development initiative of the Aditya Birla Group, successfully completed its second year with enthusiastic participation across the organization. Reinforcing its commitment to fostering a culture of continuous learning, Century Group was honoured with the Classroom Learning Champions award. Employee-centric initiatives such as Suraksha Quest and Gyan Se Nirmaan promoted innovation, creative thinking, and knowledge sharing across teams. The programme also drove a significant increase in digital learning adoption, with average e-learning hours per employee.

Diversity & Empowerment:

Women Engineers on the Shop Floor

As part of the Companys ongoing commitment to diversity, equity, and inclusion, women employees have been progressively deployed in shop-floor roles across both management and staff categories. This initiative is designed to foster a more inclusive and equitable workplace by creating greater opportunities for women to participate in core operational roles. By enhancing gender representation across the workforce, it contributes to a broader diversity of perspectives, strengthens organizational capability, and promotes a progressive work environment where growth and advancement are driven by talent, performance, and merit.

Behavioural and Leadership Development Programmes

To enhance managerial effectiveness and support continuous improvement, the Company conducts structured behavioural training programmes for managers and their reporting managers. These programmes are designed to strengthen leadership and people-management capabilities, improve communication and decision-making skills, and foster alignment with the Companys values and business objectives. By equipping leaders with the skills needed to effectively engage and develop their teams, the Company aims to nurture a positive, collaborative, and high- performance work environment that promotes employee well-being, individual growth, and sustained organizational success.

PRIDE (Performance Recognition in Delivering Excellence)

PRIDE, a prestigious Aditya Birla Group recognition platform, celebrates individuals and teams whose contributions create a significant and lasting impact on business performance and organizational excellence.

The spirit of excellence is demonstrated when individuals and teams go beyond conventional responsibilities, drive innovation, and create meaningful business impact. Recognizing such outstanding contributions, the Aditya Birla Groups PRIDE initiative honours employees who exemplify commitment, continuous improvement, and exceptional performance. Five employees at the Bharuch Unit were recognized under the PRIDE platform for their noteworthy contribution to the project Waste Reduction in Old Spinning Machines. Their efforts led to significant operational improvements, enhanced process efficiency, and reinforced the culture of innovation and excellence within the organization.

At the Pune Unit, a cross-functional team comprising from Dipping & PTCF, Marketing, and Quality department were honoured under the PRIDE initiative for their successful implementation of the project Dipping Breaking Strength Conversion Efficiency Improvement. The project demonstrated the power of collaboration across functions in driving operational excellence and business value.

Additionally, a member from IT was recognized in the individual category for his valuable contribution to the Traceability Project, reflecting his commitment to innovation and process enhancement.

These achievements exemplify the Companys commitment to fostering a culture of excellence, innovation, and continuous improvement. By recognizing and celebrating such accomplishments, the organization reinforces its focus on people development, collaboration, and value creation, while building a stronger foundation for sustainable growth and future success.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has established a robust internal financial control framework commensurate with the nature, size, and complexity of its business operations. The framework comprises comprehensive policies, procedures, and control mechanisms designed to:

Ensure compliance with applicable laws, regulations, and the Companys internal policies;

Safeguard the Companys assets from unauthorized use, loss, or misappropriation;

Promote the efficient and effective utilization of resources;

Prevent and detect fraud, errors, and other irregularities;

Maintain accurate, complete, and reliable accounting records; and

Facilitate the timely preparation of accurate financial information and financial statements.

The Audit Committee of the Board provides ongoing oversight of the Companys internal financial control system and periodically reviews its adequacy and effectiveness to ensure that appropriate controls remain in place.

During the year under review, the Companys internal financial controls were evaluated and tested and were found to be operating effectively. No material weaknesses or significant deficiencies were identified. The Internal Auditor continues to conduct independent assessments of the design and operating effectiveness of the control environment. Significant observations and recommendations arising from internal audit reviews are placed before the Audit Committee for its consideration, and corrective actions are implemented, wherever necessary, to further strengthen the Companys internal control framework.

INFORMATION TECHNOLOGY

Amid a rapidly evolving digital and interconnected business landscape, the Company continued to strengthen its technology capabilities, prioritizing operational excellence, digital resilience, and enterprise agility. Targeted investments in digital initiatives enhanced process efficiency, enabled informed decision-making, and supported robust business continuity across the organization.

During the year, the Company accelerated its digital transformation journey through the expanded adoption of cloud-based platforms, integrated enterprise applications, and modern digital workplace solutions. These initiatives enhanced collaboration, improved scalability and operational flexibility, and enabled seamless access to business applications across locations, supporting a more connected and agile work environment.

The Company further strengthened its data-driven decision-making capabilities by expanding business analytics and digital reporting platforms across key functions. Enhanced analytics and intelligent reporting tools provided greater operational visibility, accelerated access to actionable insights, and enabled more effective performance monitoring and business oversight.

In line with its commitment to manufacturing excellence, the Company continued to strengthen its Operational Technology (OT) and digital manufacturing capabilities through increased automation, enhanced system integration, and the deployment of intelligent monitoring solutions. These initiatives contributed to improved process efficiency, greater operational reliability, and enhanced manufacturing performance.

The Company also planning to initiate adoption of Artificial Intelligence (AI), Machine Learning (ML), and intelligent automation across selected business processes. These initiatives supported improved operational responsiveness, optimized process performance, and enhanced product quality and operational outcomes.

Recognizing the evolving digital risk landscape, the Company continued to strengthen its cybersecurity and digital governance framework through the enhancement of security controls, proactive risk management practices, and ongoing technology modernization initiatives. These efforts reinforced the resilience of the Companys digital infrastructure and supported the secure and reliable operation of business systems.

During the year under review, the organization focused on strengthening its enterprise cybersecurity capabilities and enhancing digital resilience across the business. Significant efforts were made to reinforce digital governance and technology risk management frameworks, ensuring a robust and secure technology environment. The Company also expanded its business analytics, data intelligence, and digital reporting capabilities to support data-driven decision-making and improve operational visibility. In addition, initiatives were undertaken to advance secure, seamless, and efficient access to digital platforms and business applications across the enterprise. Further emphasis was placed on enhancing business continuity, disaster recovery, and operational resilience capabilities to ensure uninterrupted business operations and preparedness for potential disruptions.

Through sustained investments in digital transformation, intelligent technologies, automation, and enterprise modernization, the Company continues to strengthen its digital capabilities and build a resilient, future-ready technology ecosystem. These initiatives are enhancing organizational agility, driving operational excellence, reinforcing governance frameworks, and supporting sustainable long-term value creation for all stakeholders.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

Highlights

Return on Net Worth

Particulars	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Net Revenue from	1,70,541	2,00,169	1,70,541	2,00,169
Operations
Profit before	18,969	15,208	18,969	15,208
Depreciation,
Financial Cost,
Exceptional Items and Tax
Depreciation	(5,542)	(5,497)	(5,542)	(5,497)
Finance Cost	(289)	(454)	(289)	(454)
Exceptional Items	(186)	-	(186)	-
Share of Loss in	-	-	(85)	(63)
Associate (net of tax)
Taxation (Net)	(2,783)	(2,547)	(2,783)	(2,547)
Net Profit after	10,169	6,710	10,084	6,647
Tax

Net Revenue from Operations

( Lacs)

CORPORATE SOCIAL RESPONSIBILITY (CSR)

At the Aditya Birla Group, our Corporate Social Responsibility (CSR) initiatives are driven by a strong commitment to fostering sustainable and inclusive community development. Our efforts are focused on key priority areas, including Vocational Skill Development, Education, Infrastructure Development, Healthcare Services, and Womens Empowerment.

We implement our CSR programs through long-term strategic partnerships with grassroots NGOs that possess deep community understanding and strong execution capabilities. We also work closely with district-level government authorities to enhance the effectiveness, efficiency, and long-term impact of our initiatives, particularly in rural and tribal regions.

During the period under review, our CSR interventions have achieved significant outreach and impact:

Collaborated with 53 Anganwadis, 47 schools, and more than 50 villages

Net revenue for the year was lower by approx. 15% on account of lower volume and lower realization both for NTCF and NFY linked to lower raw material prices.

Profit before Depreciation, Financial Cost, Exceptional Items and Tax (PBIDT)

Higher margin over raw material and cost saving initiatives resulted in approx. 25% higher PBIDT.

Finance Cost

Lower finance cost is on account of loan repayment.

Key Financial Ratios

Ratio	2025- 26	2024- 25	Explanation for change
Debtors Turnover Ratio	9.15	10.70	Reduction in sales
Inventory Turnover Ratio	6.42	7.45	Lower sales and better inventory man-agement
Interest Coverage Ratio	65.03	33.50	Higher PBIDT and lower interest cost in current year
Operating Profit Margin (On PBIT excl. Other Income)	7.10%	4.29%	Higher margin
Net Profit Margin	6%	3.35%	Higher Profit after Tax
Debt Equity Ratio	0.01	0.02	Repayment of Debt

Positively impacted the lives of 48,669 beneficiaries

Focused on the tribal communities of Bharuch district and Narmada, an aspirational district in Gujarat

Through these focused interventions, we continue to create meaningful and lasting social impact while contributing to the holistic development of underserved communities.

Empowering Communities through Vocational Skill Development

Support for Teaching Staff (75%)

As part of our commitment to strengthening vocational education, our CSR initiative supports 75% of the teaching staff cost at Rajashree Industrial Training Institute (ITI), operated by Cenka Samaj Kalyan Sanstha in Kariyapura. This contribution enables the institute to engage and retain nine qualified and experienced faculty members, ensuring the delivery of high-quality training across a range of vocational disciplines, including:

Attendant Operator (Chemical Plant)

Electrician

Fitter

Sewing Technology

Computer Operator & Programming Assistant (COPA)

By investing in skilled educators, we aim to enhance the quality of vocational training and create better livelihood opportunities for youth and women from rural and tribal

communities. This initiative empowers them with the knowledge, technical skills, and confidence required to thrive in todays competitive workforce. During the reporting period, 124 students benefited from this project.

For Promotion of School Education

Engagement of Poshanvahini Volunteers for Anganwadi

Through this impactful CSR initiative, the Company created employment opportunities for 35 local women who were engaged as Poshanvahini volunteers. These women played a pivotal role in delivering nutritional support and awareness interventions to more than 1,800 children throughout the year. Beyond addressing immediate nutritional needs, the initiative contributes to the long-term physical and cognitive development of children, laying a strong foundation for their future learning, health, and well-being.

This initiative aligns with Sustainable Development Goal (SDG) 2: Zero Hunger, recognizing access to nutritious food as a fundamental human right. In partnership with the Integrated Child Development Services (ICDS) under the Ministry of Women and Child Development, the program was implemented in the aspirational district of Narmada, Gujarat. Through this collaboration, we ensured that children received essential nutrition, early childhood care, and learning support through Anganwadi centres.

The initiative has yielded encouraging outcomes in improving child nutrition. Out of 218 children identified as severely malnourished, 74 children were successfully restored to the normal nutritional category, demonstrating the positive impact of sustained nutritional interventions and community-based support systems.

Engagement of Volunteers for Shiksha Sathi project

To address the shortage of teaching staff in government schools, our company partnered with the Education Department of Bharuch district to sponsor 30 volunteer teachers from local communities. These teachers were strategically deployed across identified schools in the Jhagadia, Valia, and Netrang talukas of Bharuch district to strengthen classroom learning and enhance educational outcomes.

Through this initiative, we positively impacted the educational journey of more than 2,200 students, ensuring continuity of learning and improving the overall quality of education. By bridging critical teacher gaps, the program has contributed to creating a more supportive and effective learning environment for students in underserved rural and tribal areas.

This initiative aligns with Sustainable Development Goal 4 (SDG 4): Quality Education, reinforcing our commitment to providing inclusive, equitable, and quality education opportunities for all.

Kanya Kelvani and Shala Praveshutsav

The Company has been a committed partner in the State Governments flagship Shala Praveshotsav and Kanya Kelavani campaigns for many years. Organized annually at the commencement of the academic session in June, these initiatives are designed to promote universal school enrolment, strengthen retention rates, and encourage the education of girl children. Through active participation, the company supports the Governments efforts to ensure that every eligible child is enrolled in school and has access to quality education from the very beginning of the academic year.

During the year under review, we partnered with 17 primary schools and 18 Anganwadi centres to support these important initiatives. As part of our contribution, we sponsored and distributed essential educational materials, including school uniforms, shoes, school bags, and water bottles. Students also received a wide range of learning resources such as notebooks, long books, square notebooks, compass boxes, geometry kits, slates, patti pens, pencil boxes, drawing books, ball pens, and sketch pens.

Through this initiative, we helped create a supportive and encouraging learning environment for children, particularly those from underserved communities. The program positively impacted 1,239 children, contributing to improved school readiness, attendance, and access to quality education.

Basic Education in rural & tribal area

A CSR contribution was extended to M/s. Ekal Vidyalaya, an initiative of the Friends of Tribals Society, a non-profit organization dedicated to providing non-formal primary education in rural and tribal communities through its One Teacher School (OTS) model. These schools serve children aged 4–10 years (Grades I–III), focusing on foundational literacy, numeracy, and holistic development in underserved areas where access to formal education is limited.

Through this contribution, 60 children of rural and tribal communities benefited during the reporting period, gaining access to foundational education and learning opportunities that support.

Financial assistance for pursuing professional courses

A CSR contribution was extended to M/s. Mahesh Forum, a charitable trust committed to supporting deserving and economically disadvantaged students through financial assistance for professional courses and higher education at recognized educational institutions.

Through this initiative, 71 students benefited from financial assistance for higher education, enabling them to pursue their academic aspirations without financial barriers.

Benefit to children of Sharda Vihar Madhyamik Vidyalaya, Chorwane, Khed, Dist.- Ratnagiri.

As part of the Companys Corporate Social Responsibility (CSR) initiatives, a contribution was made toward the distribution of school bags and umbrellas to students of Sharda Vihar Madhyamik Vidyalaya, Chorwane, located in Khed Taluka, Ratnagiri District.

The initiative benefited 22 students, enhancing their learning experience and supporting their educational journey.

Upgradation of School Infrastructure

Upgradation of School infrastructure

As part of its commitment to community development and enhancing educational outcomes, the Company implemented initiatives to strengthen school infrastructure by providing knitted bird-protection nets, water coolers, furniture, and other essential amenities. These interventions were designed to create a safe, inclusive, and supportive learning environment for students.

Through this initiative, a total of 785 students benefited from the improved school infrastructure and facilities.

Financial assistance to Aditya Birla Education Trust

The Companys contribution to M/s Aditya Birla Education Trust supported school-based mental health initiatives aimed at promoting students emotional well-being and fostering a nurturing school environment. The Trusts curriculum, delivered during regular school hours for students in Grades 1–12, focused on holistic social, emotional, and psychological development.

Through this initiative, 125 students benefited and experienced positive improvements in their overall well-being and personal development.

Upgradation of ITI infrastructure

The Company undertook a comprehensive modernization of the infrastructure at the Rajashree Industrial Training Institute (ITI) to create a technology-enabled learning

environment that aligns with evolving industry standards and enhances the quality of vocational education.

As part of this initiative, key infrastructure upgrades included the installation of smart boards to enable interactive and digital learning, provision of an inkjet colour printer to support academic and administrative requirements, deployment of computers in the IT laboratory to strengthen practical training and digital literacy, and installation of an air-conditioning unit to provide a comfortable and conducive learning environment.

Through these infrastructure enhancements, 124 students directly benefited from improved access to modern learning resources, advanced classroom technology, and a more effective training ecosystem.

Health Care & Medical facility

Blood Donation Camp – Community Welfare Initiative

As part of its ongoing commitment to community welfare and public health, the Company organized a Blood Donation Camp in collaboration with the Red Cross Society, Bharuch District, on 21 February 2026 at its premises. The initiative was undertaken in line with the Companys CSR vision of promoting societal well-being and strengthening access to essential healthcare services within the region.

The primary objective of the camp was to support the healthcare system by contributing to the availability of blood for patients requiring emergency and critical medical care. The event witnessed enthusiastic participation from employees, demonstrating their strong commitment to social responsibility and community service.

The camp successfully collected 62 units of blood, making a valuable contribution to local hospitals and healthcare institutions. This effort will help meet critical blood requirements, support life-saving medical interventions, and strengthen the overall healthcare infrastructure in the district.

Free eye check-up & Cataract operation camps

In alignment with Sustainable Development Goal (SDG) 3 – Good Health and Well-being, the Company partnered with Sewa Rural, Jhagadia, a reputed non-governmental organization, to enhance access to quality healthcare services and promote early diagnosis and timely treatment in rural communities. This collaboration reflects the Companys commitment to strengthening preventive healthcare, improving health outcomes, and creating a positive and sustainable impact on underserved populations.

Details of the Initiative

Number of Camps Organized: 5

Locations: Amletha, Rajpardi, Indore, Asha, and Umalla villages across Bharuch and Narmada districts

Target Group: Residents of rural communities with limited access to healthcare facilities

Key Activities and Impact

Individuals Screened for Eye-related Conditions: 1,331

Cataract Surgeries Successfully Conducted: 135

Patients Provided with Essential Medicines: 361

Beneficiaries Provided with Corrective and Protective Eyewear: 1,042

Through these healthcare outreach camps, the initiative significantly improved access to eye care services in rural areas, enabling early detection and treatment of vision-related ailments. By facilitating screenings, surgeries, medication support, and the distribution of eyewear, the programme enhanced the quality of life and overall well-being of the beneficiaries.

Womens hygiene (Distribution of sanitary Napkins)

Good menstrual hygiene is fundamental to the health, dignity, and well-being of girls and women. However, in many rural communities, the use of sanitary napkins remains limited due to factors such as lack of awareness, inadequate availability, affordability challenges, and social stigma associated with menstrual health.

To address these challenges and promote menstrual health and hygiene, the Company partnered with Dev Foundation, a reputed non-governmental organization, to implement a comprehensive menstrual hygiene awareness and support programme. The initiative aimed to improve awareness, encourage the adoption of safe menstrual hygiene practices, and contribute to the overall health and dignity of rural women and adolescent girls.

As part of the programme, 40,608 sanitary napkins—sufficient to meet the requirements of beneficiaries for six months—were distributed. In addition, awareness sessions were conducted to educate participants on menstrual hygiene management, dispel myths and misconceptions, and encourage the regular use of sanitary napkins during the menstrual cycle.

Through this intervention, 1,128 rural girls and women successfully adopted the use of sanitary napkins, leading to a significant improvement in menstrual hygiene practices

and health outcomes. The programme was implemented across six villages in Bharuch district, namely Bamalla, Kariyapura, Tavadi, Shir, Raisangpura, and Vali.

Support in eradication of T.B.

The National Tuberculosis Elimination Programme (NTEP), implemented under the National Health Mission (NHM), is a flagship Government of India initiative aimed at achieving a TB-free India through its National Strategic Plan for TB Elimination. The programme provides free diagnostic services and quality-assured treatment to all tuberculosis patients across the country.

Despite ongoing efforts, several challenges continue to hinder TB elimination, including low testing rates, delayed health-seeking behaviour, inadequate awareness, and undernutrition among patients. These factors significantly impact treatment outcomes and contribute to increased morbidity and mortality among individuals affected by TB.

Recognizing the importance of comprehensive patient care, the Company collaborated with the District TB Centre authorities to support TB elimination efforts through its CSR programme. The initiative focused on strengthening differentiated TB care and providing nutritional support to patients undergoing Anti-Tuberculosis Treatment (ATT), thereby improving treatment adherence and recovery outcomes.

As part of the Governments Ni-kshay Mitra initiative, the Company enrolled as a Ni-kshay Mitra and extended nutritional support to TB patients receiving treatment in its adopted areas of Jhagadia and Netrang talukas in Bharuch district, Gujarat. Nutritional support plays a critical role in enhancing immunity, improving treatment effectiveness, and supporting the overall recovery of TB patients.

During the year, nutritional support was provided to 2,753 TB patients. The intervention contributed to encouraging treatment completion and improving health outcomes, resulting in a treatment success rate of 92% among TB patients in Jhagadia Taluka and 93% among TB patients in Netrang Taluka, who successfully completed their treatment and were declared cured.

This initiative reflects the Companys commitment to strengthening public health systems, supporting vulnerable communities, and contributing to the national goal of eliminating tuberculosis while advancing Sustainable Development Goal (SDG) 3 – Good Health and Well-being.

School Sanitation Infrastructure Initiative

Access to adequate sanitation facilities is essential for ensuring the health, safety, and well-being of students.

The absence of clean and functional toilets in schools can contribute to health-related issues, discomfort, and absenteeism, particularly among girl students, thereby affecting their educational experience and outcomes.

To address this need, the Company, under its CSR programme, provided financial support for the construction of a toilet and urinal block at Shri Kailash Ashram Shala, located in Vankhuta village, Jhagadia Taluka, Bharuch district. The infrastructure was developed with a focus on hygiene, safety, accessibility, and long-term sustainability.

The facilities include separate toilets for boys and girls, handwashing stations with access to clean water, an appropriate drainage and waste management system, and a maintenance framework to ensure the continued upkeep and functionality of the infrastructure.

Through this initiative, 55 students now have access to safe and hygienic sanitation facilities, fostering better hygiene practices and creating a more conducive learning environment. The intervention is also expected to support improved school attendance and retention, particularly among girl students.

This initiative contributes to improved health and educational outcomes while supporting the objectives of the Swachh Bharat Mission and advancing United Nations Sustainable Development Goal (SDG) 6 – Clean Water and Sanitation.

Medical Aid nearby area

As part of its commitment to improving the health and well-being of disadvantaged communities (Baggers), the Company extended support to M/s. Soham Trust, Pune, through the distribution of assistive aids and essential healthcare materials. The initiative was aimed at addressing the health, mobility, safety, and hygiene needs of vulnerable individuals, thereby enhancing their quality of life and overall well-being.

M/s. Soham Trust, established by Dr. Abhijit Sonawane, has been actively working towards the welfare of disadvantaged communities in Pune through healthcare support, awareness programmes, rehabilitation services, and livelihood-focused interventions.

Under this initiative, a range of assistive devices and healthcare essentials, including walkers, walking sticks, kneecaps, lumbar support (LS) belts, and skin-care soaps, were distributed to approximately 700 beneficiaries. These interventions were designed to improve mobility, provide physical support, promote personal hygiene, and enhance the overall health and comfort of the beneficiaries.

Gender equality, empowering women, setting up homes and hostels for women and orphans

Financial Assistance for Residential Infrastructure for Orphan Students

As part of its commitment to supporting vulnerable and underserved communities, the Company extended financial assistance to M/s. Snehwan, a charitable trust dedicated to the care and rehabilitation of orphaned children whose parents lost their lives due to the prolonged agrarian distress and drought conditions in the Vidarbha and Marathwada regions of Maharashtra.

The Trust provides free education, nutritious meals, accommodation, and holistic care to orphaned children, enabling them to pursue their education in a safe and supportive environment. The Companys contribution was utilized for the development of dining hall infrastructure and the procurement of related facilities and equipment, with the objective of enhancing nutritional services and improving the overall residential environment for the children.

This initiative directly benefited 100 orphan children residing at Snehwan, Village Koyali, Alandi, Pune, Maharashtra. By strengthening the institutions infrastructure, the project helped create a safe, hygienic, and dignified dining environment, contributing to the childrens health, well-being, and overall development.

Rural Infrastructure Development

Rural Street Lighting and Community Safety Initiative

The Bharuch site is situated in a predominantly tribal region where many nearby villages face challenges arising from inadequate street lighting infrastructure. Poor illumination in public areas not only limits mobility after sunset but also raises safety and security concerns for residents, affecting their daily activities and overall quality of life.

To address these challenges, the Company undertook a rural infrastructure development initiative by installing 12 high-mast light towers across six villages in the vicinity of its operations. The high-mast lighting system provides reliable and widespread illumination, significantly enhancing visibility and safety in public spaces during night-time hours.

Through this intervention, approximately 7,774 individuals benefited from improved access to well-lit roads and community spaces, enabling safer movement after dark and reducing risks associated with poor visibility.

Installation of RCC Benches

Access to adequate public seating is an important aspect of rural infrastructure, contributing to the comfort, convenience, and well-being of community members. In many villages, the lack of proper seating facilities in public

spaces such as bus stops, school premises, marketplaces, and community gathering areas often compels residents to sit on the ground, leading to inconvenience and unhygienic conditions.

To address this need and enhance the quality of public infrastructure, the Company undertook an initiative to install Reinforced Cement Concrete (RCC) benches in villages surrounding its Bharuch unit. The project aimed to improve accessibility, promote hygiene, facilitate social interaction, and create comfortable resting spaces for community members.

Under this CSR initiative, a total of 136 RCC benches were installed across 23 villages in the vicinity of the Bharuch plant. The benches were strategically placed in commonly used public areas to maximize community benefit and accessibility.

This intervention has provided clean, durable, and weather- resistant seating facilities, creating more comfortable and inclusive public spaces for residents. The availability of proper seating has encouraged greater community engagement, improved convenience for villagers, and contributed to a healthier and more welcoming environment.

The initiative has positively impacted approximately 24,161 individuals, strengthened rural infrastructure and enhanced the overall quality of life across the beneficiary villages.

Beauty Therapist Training for Women empowerment

The Beauty Therapist Training Programme was implemented as part of the Companys ongoing CSR commitment to promote womens empowerment, livelihood enhancement, and inclusive community development. The initiative aligns with national skill development priorities and contributes to the achievement of Sustainable Development Goal (SDG) 5 – Gender Equality, SDG 8 – Decent Work and Economic Growth, and SDG 10 – Reduced Inequalities.

The programme was designed to empower women from Umalla and Vaghpura Gram Panchayats and neighbouring underserved rural communities by equipping them with market-relevant skills and creating opportunities for sustainable income generation. Conducted over a period of four months, the training programme enrolled 55 women, providing them with comprehensive practical and theoretical knowledge in beauty and wellness services.

To further support entrepreneurship and self-reliance, the Company provided fully equipped beauty parlour kits to all participants, enabling them to establish and operate their own micro-enterprises. Upon successful completion of the training, all participants cleared the final assessment and received government-recognized certification, enhancing

their employability and opening avenues for both wage employment and self-employment.

Construction of P.C.C. Road

As part of its commitment to strengthening rural infrastructure and supporting community development, the Company provided financial assistance to the Raisingpura Gram Panchayat for the construction of a 356-metre-long and 4-metre-wide Plain Cement Concrete (P.C.C.) road in Raisingpura village. The road serves as a vital access route for local farmers and residents, facilitating daily transportation and agricultural activities.

The newly constructed road has significantly improved connectivity within the village by providing a durable, all-weather transportation link that ensures safer and smoother movement throughout the year. Enhanced road infrastructure has also eased the transportation of agricultural inputs and produce, thereby supporting the livelihoods of farming communities and improving access to essential services.

This initiative has positively benefited approximately 3,000 villagers, contributing to improved mobility, better rural connectivity, and enhanced socio-economic development. By strengthening local infrastructure, the project has helped create more accessible and resilient community assets that support long-term rural growth and development.

Environmental sustainability and ecological balance

Plantation for Ecological Balance

As part of its commitment to environmental sustainability and ecological conservation under its Corporate Social Responsibility (CSR) programme, the Company implemented a plantation development initiative in open spaces under the jurisdiction of the Pimpri Chinchwad Municipal Corporation (PCMC). The project was aimed at enhancing urban green cover, improving environmental quality, and contributing to a healthier and more sustainable ecosystem.

The plantation initiative sought to mitigate the effects of rising temperatures, improve air quality, enhance biodiversity, and create oxygen-rich green spaces that support the well-being of local communities. By increasing vegetation cover, the project also contributes to environmental resilience and promotes sustainable urban development in Pune city.

The initiative has positively benefited approximately 1,000 individuals, including local residents and members of the surrounding community, by fostering a cleaner, greener, and healthier environment. Through this intervention, the Company reaffirmed its commitment to environmental stewardship and the creation of sustainable communities for future generations