Emkay Taps & Cutting Tools Ltd Management Discussions

Global Economic Overview

Global macroeconomic conditions remain broadly resilient but uneven, amid elevated policy and geopolitical uncertainty. Against this backdrop, India continued to exhibit relative macroeconomic resilience. The estimates released by the Ministry of Statistics and Programme Implementation place real GDPgrowth at 7.7% in FY 2026, upfrom 7.1% in FY 2025.

In response, the RBI reduced the repo rate cumulatively from 6.50% to 5.25% by December 2025, while maintaining a neutral stance. On the external front, the current account deficit narrowed to 0.8% of GDP in the first half of FY2026, supported by strong services exports, providing a buffer against global volatility. Key risks stem from geopolitical-led commodity price shocks and renewed trade disruptions, while low inflation, a narrowing CAD, and robust domestic demand remain critical macroeconomic buffers.

During FY 2026, Indian equity markets experienced heightened volatility, with benchmark indices reaching a peak in December 2025 before moderating amid escalating geopolitical tensions in the Middle East. The Nifty index closed the fiscal year lower by 5.1%.

FPI investment in Indian markets turned sharply negative in

2025-26, recording net outflows of ^1,52,692 crore, the highest annual outflow in any financial year on record. Bond markets remained largely stable through FY 2026, before witnessing a sharp upward movement in yields from November 2025. Since then, interest rates have increased by around 30 basis points to 6.95%.

Our Industry

Emkay Taps and Cutting Tools Limited primarily derives its revenue from the trading and sale of commodities, including silver and other traded commodities. In addition to its core trading operations, the Company generates income through renewable energy produced by its windmill power generation facilities.

The Companys other income comprises returns from its investments, including dividend income, capital gains, and other investment-related earnings, which contribute to its overall financial performance.

The Company remains committed to strengthening its core business, expanding its customer base, and improving operational efficiency while continuing to benefit from renewable energy generation and prudent investment management. With a focus on sustainable growth, quality products, and long-term value creation for its stakeholders, the Company is optimistic about achieving strongerfinancial performance and looks forward toa brightand prosperous future.

Outllook for the Company

Given the space the Company has selected and details in the management discussions about the sector are hopeful that going forward, in this sectortheoutlookforthe Company will be bright.

During the year 2024-25, the Honble Mumbai Bench of the National Company Law Tribunal (NCLT) granted its approval to the Scheme of Arrangement vide Order No. C.P.(CAA) 122(MB) 2024 dated October 28,2024. The entire business of manufacturing tools i.e., Demerged Undertaking, as defined in the Scheme, of the Company was demerged, transferred and vested into Emkay Tools Limited ("Resulting Company") on going concern basis in accordance with the Composite Scheme.

Internal control systems and their accuracy

Considering the size and nature of the business, presently adequate internal control systems are in place. However, as and when company achieves further growth and higher level of operations, Company will review the internal control system to match with changed requirement.

The company has proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against unauthorized use or disposition and that transaction are authorized and recorded correctly. The company has constituted Audit Committee consisting of non-executive and independent Directors to look into various aspects of Accounts. The company has a clearly defined organization structure in place.

Discussion on Financial Performance with Respect To Operational Performance

? Revenue

Gross Revenue from main business operations was INR 3258.94 lakh as recorded in the financial year 2025-26 with a decrease of Rs. 927.56 Lakhs as against the preceding year, because the entire business of manufacturing tools i.e., Demerged Undertaking, as defined in the Scheme, of the Company was demerged, transferred and vested into Emkay Tools Limited ("Resulting Company") as per orderof the Honble Mumbai Bench of the National Company LawTribunal (NCLT).

? Profits

The company has earned Profit before Taxes (PBT) of INR 1013.66 lakhs during the financial year under review as against the previous financial years PBT of INR 3112.57 lakh. The profit after tax for the financial Year 2025-26 was INR 811.31 lakhs as against profit aftertax of INR 2,681.58 lakhs forthefinancial year 2024-25.

? Earnings pershare (EPS)

The basic and diluted EPS on INR 10/- paid up share are INR 7.60 and INR 7.60 respectively for the financial year ended March 31, 2026. The basic and diluted EPSon INR 10/-paid up share is INR 25.13 and INR 25.13 respectively for financial year ended March 31,2025.

? Reserves and Surplus

The Reserves and Surplus of the Company as on March 31,2026 stood at INR 28513.28 lakhs as against INR 27,701.97 lakhs as on March 31,2025.

Net worth

As on March 31,2026 the Net worth of the company stands at INR 29580.41 lakhs as against INR 28769.10 lakhs in the financial year2024-25.

Return on Net-Worth for current year is 2.74%.

Segment W^!se or Product Wise Performance

The reportable segments of the Company are Investment and Power. Detailed reporting along with figures relating to each reportable segment is disclosed as a part of the notes to the accounts in Note no. 33.

Material Developments in Human Resources/Industrial Relations Front, including number of People Employed

The company recognizes that human resources will be a key driver of its future growth and success. It continues to undertake planned initiatives to attract, develop, and retain talent. The learning and development programs are focused on enhancing employees professional capabilities and skills. The company promotes internal talent by providing growth opportunities through increased responsibilities, relevant exposure, and training. It remains committed to fostering a positive work environment and maintaining constructive employee relationships while continuously improving productivity and operational efficiency.

? Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations may be forward looking statements. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, amongst others, economic conditions affecting demand/supply and price conditions in the markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.

The information in this section is based on Industry sources and publications. Industry sources and publications generally state that the information contained therein has been obtained from sources it believes to be reliable, but their accuracy, completeness and underlying assumptions are not guaranteed and their reliability cannot be assured.