Concord Control Systems Ltd Management Discussions

Indian Railways is one of the largest and most extensive railway networks in the world operating under a single management system, playing a vital role in the economic and social development of the country. As the lifeline of the nation, it provides an efficient, reliable, and cost- effective means of transportation for millions of passengers and vast quantities of freight every day. The railway network is particularly well suited for long-distance travel and the movement of bulk commodities such as coal, iron ore, cement, food grains, and fertilizers, while also serving as the preferred carrier of automobiles across the country. Recognizing the strategic importance of rail transport, the Government of India has consistently focused on strengthening railway infrastructure through progressive and investor- friendly policies. Significant efforts have been made to encourage private sector participation and attract foreign direct investment (FDl), particularly in areas such as freight corridors, highspeed rail projects, station modernization, rolling stock manufacturing, and logistics infrastructure. These initiatives have generated considerable interest from both domestic and international investors, creating new opportunities for growth and development within the sector.

The Ministry of Railways has undertaken numerous projects aimed at enhancing operational efficiency, expanding network capacity, and improving passenger experience. Key initiatives include network expansion into underserved regions, the establishment of modern locomotive manufacturing facilities, procurement of advanced railway wagons and coaches, redevelopment of railway stations into world- class transport hubs, electrification of railway lines, and the implementation of digital technologies for better service delivery. Continuous investments in modernization and innovation have enabled Indian Railways to improve safety standards, increase speed and capacity, reduce environmental impact, and enhance overall operational performance. As a result, the railway sector has witnessed strong growth in revenues and has emerged as a critical driver of economic progress and national connectivity. Supported by favorable government policies, expanding infrastructure investments, technological advancements, and increasing demand for efficient transportation solutions, the Company is well positioned to benefit from the sectors long-term growth prospects. Management remains confident about the future and believes that it has only begun to unlock the full potential of "Concord," leveraging emerging opportunities to create sustainable value and achieve higher levels of growth in the years ahead.

The Indian railway sector offers significant growth opportunities due to continuous government investment in railway infrastructure, network expansion, modernization projects, and the introduction of high-speed rail and dedicated freight corridors. Increased private sector participation and favorable FDl policies have opened new avenues for investment and collaboration. Rising demand for efficient, cost- effective, and environmentally sustainable transportation solutions is expected to drive freight and passenger traffic growth. Initiatives such as station redevelopment, railway electrification, digitalization of operations, and the expansion of logistics and multimodal transport services further create opportunities for companies operating in the railway ecosystem. Additionally, Indias growing economy, urbanization, and industrial development are likely to increase the demand for railway infrastructure, rolling stock, and related services, providing long-term growth prospects for the Company.

Despite the favorable outlook, the railway sector faces several challenges and threats. Delays in project approvals, land acquisition issues, regulatory changes, and policy uncertainties can affect the timely execution of projects. Rising costs of raw materials, labor, and technology may put pressure on profit margins. Competition from other modes of transportation, such as roadways, airways, and inland waterways, could impact freight and passenger volumes in certain segments. Economic slowdowns, fluctuations in government spending, and changes in investment priorities may also affect the pace of infrastructure development. Furthermore, technological disruptions, operational risks, cybersecurity concerns, and stringent environmental and safety regulations may increase compliance costs and require continuous investment in innovation and modernization. The Companys ability to effectively manage these challenges will be crucial to sustaining growth and maintaining its competitive position in the industry.

The Companys business activities primarily fall within a single business and geographical segment, namely the manufacturing of railway components. As the nature of operations, risks, returns, and regulatory environment are substantially similar across its products and markets, the Company does not identify separate reportable segments for financial reporting purposes. Accordingly, segment-wise reporting is not applicable.

During the year, the Company continued to focus on the manufacturing and supply of railway components, catering to the requirements of the railway sector and related industries. The performance of the business was driven by demand from railway infrastructure development, modernization initiatives, and ongoing investments in the transportation sector. The Company remains committed to maintaining high standards of quality, operational efficiency, and customer satisfaction while strengthening its market presence and exploring growth opportunities within its core business segment.

The continued growth of the Indian railway and infrastructure sector is essential for providing sustained support to industrial development and economic progress. The Company is making concerted efforts to accelerate the growth of its business by strengthening its operational capabilities and expanding its presence in the market. It expects to enhance its competitive position by focusing on technologically advanced and value-added products, catering to emerging market requirements and customer expectations. The Company is also emphasizing innovation, quality improvement, and product development to capitalize on opportunities arising from the modernization and expansion of railway infrastructure. Furthermore, it is working aggressively towards improving productivity, enhancing operational efficiency, optimizing resource utilization, and reducing costs across its operations. These initiatives are expected to strengthen profitability, improve overall business performance, and support sustainable growth in the coming years.

The industry is exposed to the following risk and concerns:

Competitive risk is the chance that competitive forces could prevent the Company from achieving its goal on account of declining revenues or margins.

Mitigation: The Company focuses on superior quality service and affordability. The Company knows its competitors and its customers and with differentiated services and marketing strategies mitigates this risk to a greater extent.

This risk includes a disruption of Companys business due to operational inefficiencies in existing technologies and IT processes.

Mitigation: The Company emphasizes on the analysis of security threats and their impact using the latest technologies which are periodically upgraded.

Market risk is the risk of losses in positions arising from movements in market prices.

Mitigation: The Director of the Company are vigilant on roles and responsibilities in understanding the movements and market situations.

Workforce risks can arise from issues such as critical skill shortages, increasing staff attrition or significant workforce retirement.

Mitigation: The Company trains its employees and ensures best FIR practices, while carrying out improvements and rewards to attract and retain the best talent in the industry.

Policy risk concerns the possibility that national governments — acting in their sovereign capacity — amend policy environments in ways that adversely impacts the financial stability of the Company.

Mitigation: The Company is proactive in monitoring and abiding by policies in a timely manner.

Supply chain risks include logistical, economic, political, cultural, competitive and infrastructural concerns.

Mitigation: The Company is continuously working on a comprehensive management strategy

to counter supply chain disruptions through a holistic approach. By diversifying its suppliers the Company expects to moderate risk factor.

Compliance risk captures the legal and financial penalties for failing to act under internal and external regulations and legislature.

Mitigation: The Company is aware of the legal, financial, reputational, and business impact due to non-compliance risk. The Company has a system to ensure regular compliance and monitoring thereof.

The Company has established an adequate and effective internal control system that is commensurate with the size, scale, and nature of its operations. These controls are designed to ensure the orderly and efficient conduct of business activities, safeguard the Companys assets, prevent and detect frauds and errors, and ensure the accuracy and completeness of accounting records. The internal control framework also facilitates compliance with applicable laws, regulations, and statutory requirements while supporting the timely preparation of reliable financial and operational information. The Company regularly reviews and strengthens its internal processes to enhance operational efficiency and risk management. The effectiveness of the internal control systems is periodically evaluated through internal audits, management reviews, and independent assessments conducted by statutory auditors. Based on these reviews, the management believes that the Companys internal control systems are adequate and operating effectively, providing reasonable assurance regarding the reliability of financial reporting and the achievement of business objectives.

Financial Year 2025-26 was marked by a strong performance across all geographies and product categories, with market share gains and improvement in operating margins, as compared to the previous Financial Year. The Revenue from operations has increased to Rs.21,047.45 Lakhs in FY 2025-26 compared to Rs.12,446.10 lakhs in FY 2024-25 representing a remarkable increase of approximately 40.87%. while Net Profit of Rs.4,188.14 Lakhs in FY 2025-26 compared to Rs.2,318.03 Lakhs in FY 2024-25 thereby recording an increase of 44.65%.

The Reserve and Surplus of Company has increased from Rs.,340.95 Lakhs for financial year ended 31^st March, 2025 to Rs.19,866.88 Lakhs for financial year ended 31^st March, 2026.

Further, our focus remains on strengthening our balance sheet as we fund our expansions through our internal accruals. The equity raised through subsequent preferential allotment in 28.01.2026 and its create the strong cash flow generation has led to an improvement in overall financial ratios.

The Company firmly believes that its employees are its most valuable asset and a key driver of its growth and success. It follows a policy of building strong teams of talented and dedicated professionals who contribute to the achievement of the Companys strategic objectives. The Company places significant emphasis on employee engagement, skill development, and fostering a positive work environment that encourages collaboration, innovation, and continuous learning. It is committed to maintaining healthy employee relations and providing opportunities for professional growth and career advancement. The Companys human resource practices are designed to attract, retain, and motivate competent personnel while promoting a culture of accountability and performance excellence. The strength and composition of the Companys human resources are commensurate with the size, nature, and scale of its operations, enabling it to effectively meet its business requirements and support its future growth plans. Employee relations remained cordial throughout the year.

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards applicable under Rule 2 of Companies (Accounting Standards) Rules, 2021 to the extent applicable and the relevant provisions of the Companies Act, 2013. The Ind AS are not applicable to the company in terms of SEBI guidelines. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company.

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different