Fiem Industries Ltd Management Discussions

GLOBAL ECONOMIC OUTLOOK

The global economic outlook remains challenging amid heightened geopolitical tensions and renewed supply-side disruptions. In its April 2026 World Economic Outlook, the International Monetary Fund (IMF) noted that the global economy has been disrupted by the outbreak of war in the Middle East, projecting global growth of 3.1% in 2026 and 3.2% in 2027, while expecting global inflation to rise modestly in 2026 before resuming its decline in 2027. The IMF highlighted that higher commodity prices, firmer inflation expectations and tighter financial conditions have increased downside risks to the global outlook, while also noting that its baseline projections assume the conflict remains limited in duration and scope, allowing global economic activity to remain resilient despite elevated uncertainty.

Consistent with this assessment, the World Banks Commodity Markets Outlook (released in late April 2026 and updated in May 2026) projects a significant increase in global commodity prices during 2026, led by a 24% rise in energy prices due to disruptions associated with the Middle East conflict, while cautioning that prolonged supply disruptions could result in substantially higher crude oil prices and exacerbate inflationary pressures.

Accordingly, the global macroeconomic environment is expected to remain characterized by elevated uncertainty, persistent inflation risks and continued volatility in commodity and financial markets, although a contained geopolitical environment and easing inflation beyond 2026 could support a gradual improvement in global economic conditions.

INDIAN ECONOMIC OUTLOOK

India remained one of the worlds fastest-growing large economies in FY2025–26. Indias macroeconomic fundamentals remained relatively strong through the year. The World Bank, in its April 2026 India Development Update, stated that India remained the fastest-growing major economy in FY 2025–26, with growth accelerating to 7.6%, supported by resilient domestic demand, stable employment conditions and strengthening formal job creation.

It also noted that the current account deficit stood at 1.0% of GDP and that fiscal consolidation continued. Indias external sector remained resilient, with total exports of goods and services estimated at US$860.09 billion in FY 2025-26, including merchandise exports of US$441.78 billion and services exports of US$418.31 billion.

Monetary conditions were remained supportive during the year. The Reserve Bank of India reduced the policy repo rate from 6.0% in April 2025 to 5.50% in June 2025, and by February 2026 the repo rate stood at 5.25%. Inflation also remained broadly under control: RBI reported headline CPI inflation at an eight-year low of 1.6% in July 2025 and 2.1%

in August 2025, while Ministry of Statistics and Programme Implementation (MoSPI) placed CPI inflation at 3.40% in March 2026 and 3.48% in April 2026.

From a medium-term perspective, India continues to benefit from its structural strengths, including a large domestic market, public infrastructure spending, digitalisation, formalisation of the economy and improving trade integration. During the period, India also advanced its external economic engagement through conclusion of the India–UK FTA, entry into force of the India–EFTA TEPA and conclusion of negotiations on the India–EU FTA. The India–EFTA Trade and Economic Partnership Agreement (TEPA) is a historic Free Trade Agreement between India and the four European nations that make up the European Free Trade Association (EFTA): Switzerland, Norway, Iceland, and Liechtenstein.

At the same time, the outlook is not without risks. The IMFs April 2026 World Economic Outlook noted that the global economy had again been disrupted by war in the Middle East, with rising commodity prices, firmer inflation expectations and tighter financial conditions weighing on growth. The World Bank has similarly warned that higher energy prices and supply-chain disruptions arising from the Middle East conflict could moderate Indias growth to 6.6% in FY 2026–

27. In this backdrop, the Iran-Israel flare-up and wider West Asia conflict remain important risk factors for oil-importing economies such as India. Nevertheless, supported by sound domestic drivers and policy buffers, India remains well placed to sustain healthy growth while maintaining macroeconomic stability.

The Economic Survey 2025-26 also highlight the following underlying data and trends: Growth in 2025-26 is largely driven by domestic demand. The share of private final consumption expenditure rose to 61.5% in 2025-26, the highest level since 2011-12. Following factors are conducive for domestic economy: (i) healthier balance sheets across households, firms, and banks, (ii) support from public investment, (iii) resilient consumption demand, and (iv) improving private investment intentions. External uncertainties remain, including slower growth in major trading partners, trade disruptions arising from tariffs, and volatility in capital flows, which may affect exports and investor sentiment. The Survey estimated Indias medium term GDP growth potential at 7%. It noted that this reflects compounding effect of sustained reforms with strong macroeconomic fundamentals.

Indian Economic Highlights – at a Glance:

Indias GDP Growth: Robust real GDP expansion of 7.4% in FY2025–26 (versus 6.5% in FY2024–25). Growth was broad-based, led by services, manufacturing, construction and investment.

Policy Support: The government continued stimulus. The PLI scheme for automobiles & components (extended through FY2027–28) has drawn $8.1 billion in committed investment (vs. $5.1 billion target). Infrastructure spending remained elevated, and strategic trade agreements are being negotiated to boost exports. These measures bolster industry confidence and competitiveness.

INDUSTRY STRUCTURE AND DEVELOPMENT

Indian Automobile Industry

The automobile sector is a key economic pillar and innovation engine. India is the worlds largest two-wheeler market and among the top five for passenger and commercial vehicles. A well-developed OEM and supplier ecosystem, competitive labour costs, and improving R&D are core strengths. Demographics (a young, growing population) and rising incomes continue to drive vehicle ownership, especially in rural and small-town markets. Domestic demand is supported by government policies (e.g. enhanced road connectivity and GST relief) and a dynamic services sector.

Industry Landscape & Trends: The two-wheeler segment dominates in volume, fuelled by new models (including premium 125cc bikes and scooters) and deep rural penetration. The passenger vehicle (PV) market has shifted heavily to SUVs/UVs (utility vehicles), reflecting consumer preference for space and flexibility. Strong freight and infrastructure investment have revived the commercial vehicle (CV) segment, leading to higher demand for trucks and buses. Across segments, digitalization (e.g. online sales) and safety/norm enhancements (BS-VI emissions, crash standards) are reshaping product lines.

Policy Support & Investments: The government has extended several flagship schemes. Notably, the Production-Linked Incentive (PLI) program for Automobiles & Auto Components (now valid through FY2027–28) has spurred large investments. Over US$8.1 billion of projects have been approved under the PLI scheme (exceeding the $5.1 billion target), indicating strong investor interest. States continue to offer EV incentives and land to auto parks. These measures, coupled with Indias low-cost manufacturing base and skilled workforce, are attracting both domestic and foreign OEMs and component makers.

Electric Vehicles: Electric mobility accelerated in FY2025–26. The electric two-wheeler (E2W) market

led this shift; production volume surged from ~11.3 lakh units in FY2024–25 to ~13.60 lakh units in FY2025–26, a new record. Stable subsidies (PM-EV 2.0), extended tax incentives, and expanding charging infrastructure supported this growth. Traditional automakers (TVS, Bajaj, Hero/Vida, Ather) now account for most e-2W sales, indicating growing mainstream adoption. Meanwhile, the Advanced Chemistry Cell (ACC) PLI scheme is fostering local battery manufacturing. Auto OEMs also are rolling out e-scooters, e-bikes and electric three-wheelers at scale. In passenger cars too EV sales gaining momentum and rising on new SUV/e-SUV launches and a growing network of public chargers. Overall, electrification is a clear medium-term trend, supported by policy and innovation.

Auto Component Industry: Indias component sector (spanning large firms to MSMEs) is a robust growth engine. Its output rose on the back of higher vehicle production. Indian suppliers are increasingly integrating into global value chains: exports of auto parts grew strongly (especially to markets in Asia and Europe) on the back of quality and price competitiveness. New technologies (connected vehicle parts, lightweight materials, advanced electronics) and PLI incentives in components (beyond ACC batteries) are encouraging firms to upgrade capabilities.

In summary, the Indian auto industry remains positioned for continued growth. Strong domestic demand (population leverage, rising income) and export opportunities (to Africa, Latin America, Southeast Asia) provide upside. Government support (PLI, infrastructure, EV roadmap) and innovation (digital sales, new mobility models) are transforming the sector. Companies investing in electrification, sustainability and customer-centric R&D will be best placed to capitalize on this momentum.

Indian Automobile Industry Performance for FY 2025– 26:

For the automobile sector, the years industry performance is materially stronger than the FY 2024–25. SIAM reported that FY 2025–26 was a landmark year, with record domestic sales across passenger vehicles, commercial vehicles, three-wheelers and two-wheelers after seven years.

Two-Wheelers (2Ws): The industry logged 21.70 million domestic two-wheeler sales in FY2025–26, up 10.70% from FY25. This surpassed the pre-pandemic peak and was supported by brighter rural demand (post-harvest liquidity) and strong uptake of new scooter models. The recovery accelerated in H2 FY26 after GST cuts boosted affordability. Exports of 2Ws also grew, with total exports reaching ~5.1 million units (including motorcycles and scooters) as global demand recovered. The segments momentum was broad-based across engine sizes (both commuter motorcycles and bigger scooters).

Passenger Vehicles (PVs): Domestic PV sales reached 46.43

lakh units, up 7.9% year-on-year. This was a record annual tally, led by UV/SUV models (which contributed ~60% of sales). The latter half of FY26 saw especially strong demand after GST rate cuts on compact SUVs and successive rate cuts improving loan affordability. Export markets also saw robust demand (PV exports grew ~17% in FY26), driven by competitiveness in Middle East, Africa and Latin America.

Three-Wheelers (3Ws): Demand for passenger carriers (rickshaws) and e-rickshaws remained strong. Overall 3W sales grew by 12.80% in FY26, driven by improved affordability.

Commercial Vehicles (CVs): CV sales also hit new highs in FY26, reversing last years slowdown. Total CV sales (goods and passenger vehicles) rose by 12.60%. Truck demand was strong due to rising freight movement (infra projects and mining) and modernization of fleet. Bus sales grew as state governments upgraded public transport fleets. Key drivers were improved last-mile cargo movement and infrastructure development.

5-Years Production Data across Vehicle Categories at a Glance (in 000)

[Source: SIAM Data]

Category	FY 2021- 22	FY 2022- 23	FY 2023- 24	FY 2024- 25	FY 2025- 26
Passenger vehicles	3,651	4,579	4,902	5,061	5,539
Commercial vehicles	805	1,036	1,066	1,033	1,170
Three-Wheelers	758	856	993	1,050	1,300
Two- Wheelers	17,715	19,459	21,469	23,884	26,692
Total	22,929	25,930	28,430	31,028	34,701

OUTLOOK, OPPORTUNITIES AND THREATS

Outlook

The Indian automotive industry is entering a decisive phase of transformation, supported by resilient domestic demand, improving consumer sentiment, expanding road infrastructure, policy-led manufacturing incentives, and the rapid shift towards cleaner and technology-led mobility. While cyclical factors such as interest rates, rural income trends, commodity prices and export demand will continue to influence short-term performance, the medium to long-term growth fundamentals of the sector remain strong.

Indias automotive ecosystem is expected to benefit from multiple structural drivers, including low vehicle penetration compared to developed markets, rising disposable incomes, increasing urbanisation, improved financing availability, higher replacement demand, and continued government focus on infrastructure creation. The two-wheeler segment is expected to remain central to Indias mobility landscape, given its affordability, utility, and deep relevance across urban, semi-urban and rural markets. At the same time, premiumisation, connected features, safety regulations, and electric mobility are steadily reshaping customer expectations and product architecture.

The auto component industry is expected to remain a key beneficiary of this transformation. With OEMs increasingly focusing on localisation, supply-chain resilience, cost optimisation and technology partnerships, Indian component manufacturers are well positioned to capture opportunities across domestic and export markets. The growing complexity of vehicles, including higher electronic content, LED lighting systems, sensors, controllers, wiring, thermal management solutions and EV-specific components, is expected to create new avenues for value-added manufacturing.

Electrification continues to be one of the most important long-term themes for the industry. The governments continued support through schemes such as PM e-DRIVE, PLI for Automobiles and Auto Components, ACC battery manufacturing incentives, and state-level EV policies is expected to accelerate the development of the EV ecosystem. The electric two-wheeler and electric three-wheeler segments are likely to remain early beneficiaries, driven by favourable running economics, expanding product availability, and growing consumer acceptance.

Opportunities and Key Growth Drivers

The Company sees meaningful long-term opportunities emerging from the following industry trends and growth drivers:

Rising Mobility Demand and Favourable Demographics

Indias young population, expanding middle class, rising disposable incomes and increasing need for personal mobility continue to support long-term demand for automobiles, particularly two-wheelers and passenger vehicles. In semi-urban and rural markets, two-wheelers remain a preferred mode of mobility due to affordability, fuel efficiency and ease of use. Improving rural infrastructure, better road connectivity and wider access to vehicle financing are expected to further deepen vehicle penetration.

Premiumisation and Higher Content per Vehicle

Across vehicle categories, customers are increasingly seeking products with better styling, safety, comfort, visibility, connectivity and convenience. This has led OEMs to differentiate models through advanced features and improved aesthetics. In the lighting segment, this shift is resulting in greater adoption of LED headlamps, tail lamps, DRLs, fog lamps, projector lamps, ambient lighting and smart lighting solutions. As lighting becomes both a safety-critical and design-defining component, the value of lighting systems per vehicle is expected to increase steadily.

Electrification and New-Age Mobility

The rapid adoption of electric mobility is creating fresh opportunities for component manufacturers. Electric vehicles require lightweight, energy-efficient and electronically integrated components. LED lighting solutions are particularly relevant in EVs due to their lower power consumption, design flexibility and compatibility with modern vehicle architecture. The growth of electric two-wheelers, electric three-wheelers, electric buses and emerging electric passenger vehicles is expected to open new product-development opportunities for agile and innovation-driven suppliers.

Government Policy Support and Manufacturing Push

Government initiatives such as Make in India, PLI for Automobiles and Auto Components, PM e-DRIVE, ACC PLI, vehicle scrappage policy and infrastructure-led capital expenditure are strengthening the domestic automotive ecosystem. These initiatives are encouraging localisation, technology development, domestic manufacturing, clean mobility and supply-chain integration. Such policy continuity provides a strong platform for Indian auto component companies to invest in capacity, technology, quality systems and future-ready products.

Localisation and Supply-Chain Rebalancing

Global disruptions over the past few years have encouraged OEMs to reduce excessive dependence on concentrated supply sources. Localisation is now being driven not only by cost considerations but also by supply security, faster development cycles and regulatory alignment. This trend is favourable for Indian component manufacturers with proven quality, engineering capability, scale and customer trust. Companies that can deliver consistent quality, cost efficiency and design support are likely to gain higher business share from OEMs.

Export and Global Sourcing Opportunities

India is increasingly being recognised as a reliable and cost-competitive manufacturing base for automotive components. Global OEMs and Tier-1 suppliers are actively diversifying sourcing strategies to build resilience and reduce geopolitical risk. Indian auto component manufacturers with strong process discipline, international quality certifications, competitive cost structures and product-development capabilities are well placed to expand exports and participate more deeply in global value chains.

Technology, R&D and Product Innovation

The automotive industry is witnessing rapid technological change across lighting, electronics, sensors, connected systems, EV components and advanced manufacturing. This creates opportunities for companies that invest consistently in research and development, tool design, electronics integration, product validation and automation. In the lighting space, innovation in energy-efficient LEDs, optical design, thermal management, electronics, styling integration and intelligent lighting became important differentiators.

Operational Excellence and Scale Benefits

As OEM expectations become more demanding, suppliers with robust manufacturing systems, lean operations, quality control, automation, cost management and timely delivery capabilities will have a competitive advantage. Operational excellence will be critical not only for profitability but also for securing repeat business, supporting new launches and meeting global customer expectations.

Threats and Risks

While the industry outlook remains positive, the Company remains mindful of the following risks and uncertainties:

Global Economic and Geopolitical Uncertainty

Geopolitical conflicts, trade tensions, protectionist policies, inflationary pressures and recessionary trends in key global markets may affect export demand,

investment decisions and supply-chain stability. Any prolonged weakness in global automotive demand could impact component exports and imports and production schedules.

Supply-Chain Disruptions

The automotive industry remains exposed to disruptions in semiconductors, electronic components, rare earth elements, battery materials and logistics networks. Since vehicles are becoming increasingly electronics-intensive, any disruption in critical components can affect production continuity.

Rare Earth and Critical Mineral Dependence

The global automotive industry faces a significant challenge from concentrated supply chains for rare earth elements and critical minerals. Export restrictions or supply disruptions from dominant producing countries can affect EV motors, magnets, electronics and certain advanced components. This risk is particularly relevant as electrification accelerates and the industrys dependence on specialised materials increases.

FINANCIAL AND OPERATIONAL PERFORMANCE

Despite a challenging global business environment marked by geopolitical uncertainties, and currency volatility, the Company delivered an exceptional performance during FY 2025-26, achieving its strongest financial results since inception. The year was characterized by robust execution, continued customer confidence, operational excellence and sustained investments in technology and innovation, enabling the Company to such outstanding performance.

The Companys strong performance reflects the resilience of its business model, the depth of its long-standing relationships with leading automotive OEMs, and its continued focus on technology-driven, value-added products. The steady transition of the automotive industry towards premium vehicles, LED lighting and electrification has further reinforced the Companys growth trajectory, given its strong technological capabilities and established presence across major OEM platforms.

The Financial Performance Highlights of the Company is as under:

Company has achieved Net Sales of Rs. 2,790.65 crore, registering a healthy growth of 16.04% over Rs. 2,404.96 crore in the previous financial year.

EBITDA increased to Rs. 393.34 crore from Rs. 320.73 crore in the previous year, with the EBITDA margin improving to 14.09%, reflecting the benefits of the Companys integrated manufacturing operations and disciplined cost management.

Profit After Tax (PAT) for FY 2025-26 stood at Rs. 253.87 crore, as against Rs. 204.14 crore in the previous year, representing a robust growth of 24.36%.

KEY FINANCIAL RATIOS:

Please refer to Note No. 50 of Standalone Financial Statements forming part of this Annual Report.

The Companys product portfolio continued to evolve in line with changing customer preferences and technological advancements. LED lighting further strengthened its contribution to the automotive lighting business, accounting for 63% of total automotive lighting sales during FY 2025-26 as compared to 59% in the previous year. The increasing share of LED lighting reflects the Companys technological leadership, growing acceptance of advanced lighting solutions and continued premiumization across vehicle segments.

The Company continued to deepen its strategic relationships with its key OEM customers during the year. It further strengthened its longstanding association with TVS Motor Company across several flagship platforms, while expanding its engagement with Honda, including participation in electric vehicle models. The Company also continued to support key platforms of Royal Enfield and made further progress

in emerging electric vehicle initiatives. In addition, healthy business growth was recorded with Suzuki and Yamaha. Significantly, a majority of the new business secured during the year comprised LED-based lighting solutions, reaffirming the Companys competitive position in next-generation automotive lighting technologies.

In line with its commitment towards sustainable and responsible manufacturing, the Company also initiated its transition towards renewable energy during the year. Rooftop solar and open-access renewable energy projects are being progressively implemented across manufacturing facilities. At the Hosur plant, approximately 65% of the energy requirement is currently being met through open-access solar power, with an additional 20% expected to be sourced through wind energy. Similar renewable energy initiatives are being implemented across other manufacturing locations. These initiatives are expected to reduce energy costs, improve operational stability, lower the Companys carbon footprint and support its long-term sustainability objectives.

The Company also continued to strengthen its presence in the four-wheeler segment and remains well positioned to capitalize on emerging business opportunities. Execution of key orders for leading OEM customers, including Mahindra & Mahindra, is expected to further support growth in the coming years.

Backed by a healthy order book, a strong customer base, continued investments in technology and manufacturing capabilities, and increasing demand for premium and technology-rich vehicles, the Company remains confident of sustaining its growth momentum and creating long-term value for all stakeholders.

COMPANYS PRODUCT PORTFOLIO REVIEW

(i) Automotive Lighting and Signalling Equipments

The Company has established a diversified and technology-driven product portfolio, with Automotive Lighting constituting its core business, complemented by a strong presence in Rear View Mirrors. The Companys broad product offering, supported by advanced manufacturing capabilities, integrated operations and strong customer relationships, enables it to cater to the evolving requirements of leading automotive OEMs across two-wheelers, three-wheelers and four-wheelers. Continuous investments in technology, product innovation and manufacturing excellence have further strengthened the Companys position as a preferred supplier.

Automotive Lighting and Signalling Equipments continue to be the Companys largest product segment and the primary contributor to its revenues. The Company manufactures a comprehensive range of LED and conventional lighting products, including Head Lamps, Tail Lamps, Blinker Lamps, Fog Lamps, Warning Triangles and Interior Lamps, catering to the requirements of two-wheelers, three-wheelers and four- wheelers.

Automotive lighting has evolved beyond its conventional role of illumination to become an integral element of vehicle safety, functionality and styling. The increasing adoption of LED technology and electronic integration is transforming the automotive lighting landscape by enabling enhanced safety features, improved energy efficiency, superior durability and greater design flexibility. This ongoing technological transition continues to create significant opportunities for the Company, given its strong design, engineering and manufacturing capabilities in advanced lighting solutions.

The Companys product portfolio continues to align with these industry trends. During FY 2025-26, LED lighting accounted for 63% of total automotive lighting sales as compared to 59% in the previous year, reflecting increasing customer preference for advanced lighting technologies and the growing penetration of LED-based solutions across vehicle segments.

(ii) Rear View Mirrors (RVM)

Rear View Mirrors represent the Companys second-largest product category and continue to be an important contributor to its revenue. The Company supplies Rear View Mirrors to almost all of its OEM customers, predominantly in the two-wheeler segment. For several of its valued OEM customers, the Company remains the sole supplier for their Rear View Mirror requirements, reflecting the trust earned through consistent quality, reliable delivery and long-standing business relationships.

The Company operates state-of-the-art mirror manufacturing facilities across four manufacturing facilities, where the complete manufacturing process—including plate making, profile cutting, washing, grinding, cleaning, aluminium or chrome coating, painting, assembly and testing—is carried out under one roof. In addition, the Company has established in-house injection moulding and rod-making facilities, enabling seamless integration of all sub-components, improved manufacturing efficiencies and stringent quality control throughout the production process.

(iii) Plastic Moulded Parts

In addition to manufacturing moulded components for Automotive Lighting and Signalling Equipments and Rear-View Mirrors, the Company also manufactures and supplies a broad range of standalone plastic parts for two-wheelers. These include Front Fenders, Floor Panels, Side Covers, Rear Fenders, Handlebars, Seat Bases and several other finished plastic parts.

The Company has established robust plastic processing capabilities through best-in-class injection moulding machines installed across its nine manufacturing plants.

(iv) Others

The Others category comprises products that individually contribute less than 10% of the Companys total revenue. This segment primarily includes fabricated products such as Sheet Metal Parts, Canisters, Bank Angle Sensors, Moulds and other engineering and traded components.

The Company has well-established sheet metal fabrication facilities together with dedicated mudguard rolling plant for the manufacture of front and rear mudguards for motorcycles and mopeds and for other parts. These capabilities complement the Companys core product portfolio, strengthen backward integration and enable the Company to provide comprehensive product solutions to its OEM customers.

RISKS AND CONCERNS

The automotive industry continues to operate in a rapidly evolving business environment characterised by changing customer preferences, technological advancements, geopolitical developments, supply chain disruptions, regulatory changes and macroeconomic uncertainties. While these factors present potential risks, they also reinforce the need for a resilient and agile organisation. The Company remains committed to proactively identifying, assessing and managing risks through a structured enterprise-wide risk management framework that supports sustainable growth and long-term value creation.

Risk management forms an integral part of the Companys overall governance framework and business decision-making process. The Company has established a comprehensive Enterprise Risk Management (ERM) framework that enables systematic identification, assessment, mitigation and continuous monitoring of key strategic, operational, financial and compliance risks across the organisation. This structured approach facilitates timely implementation of appropriate mitigation measures, thereby minimising the potential impact of emerging risks on business operations and performance.

The risk management process is undertaken by the Management and is overseen by the Risk Management Committee (RMC) of the Board. Based on periodic risk assessments, appropriate mitigation plans are formulated, implemented and continuously monitored. The status of key risks and mitigation measures is regularly reviewed by the RMC, which also evaluates the effectiveness of the risk management framework and recommends necessary enhancements to ensure that it remains robust, responsive and aligned with the Companys evolving business environment.

The Companys senior management team actively participates in the risk management process by continuously monitoring key business risks, evaluating their potential impact and implementing timely corrective and preventive actions. This collaborative and organisation-wide approach

strengthens the Companys ability to respond effectively to emerging challenges while reinforcing operational resilience and business continuity.

The Companys risk management framework encompasses a broad range of risks, including cybersecurity risks arising from increasing digitalisation of business processes, natural calamities that may disrupt manufacturing operations, and risks relating to the safety and security of employees, assets and infrastructure. The framework also addresses potential risks associated with fire, theft, accidents and other unforeseen events through appropriate preventive measures, established protocols and periodic reviews.

HUMAN RESOURCES

The Companys sustained growth and long-term success are underpinned by the strength of its people. Recognising that human capital is a key competitive differentiator, the Company continues to invest in building a skilled, agile and future-ready workforce capable of supporting its technology-led growth strategy and evolving business requirements. Its people philosophy is centred on attracting, developing, engaging and retaining talent while fostering a culture of innovation, accountability, collaboration and continuous improvement across the organisation.

Talent development remains an integral part of the Companys long-term strategy. The Company follows a balanced approach by nurturing internal talent through structured career development and succession planning, while selectively inducting experienced professionals into leadership positions to strengthen organisational capabilities and support future growth. Its performance management framework is designed to recognise merit, encourage excellence and create opportunities for employees to realise their full potential.

Building organisational capability continued to remain a strategic priority. The Company invested in comprehensive learning and development initiatives aimed at enhancing both technical and behavioural competencies across all levels of the organisation. These programmes are designed to equip employees with the knowledge and skills required to keep pace with technological advancements, changing customer expectations and evolving industry practices. During the year, employees participated in structured training programmes covering Environmental, Social and Governance (ESG), Fire & Safety, 5S, 7QC Tools, Total Quality Management (TQM), Environmental Awareness, Emergency Response Planning, PDCA, Kaizen, CSR Awareness and various other functional and behavioural development programmes.

The Companys people practices are closely aligned with its broader Environmental, Social and Governance (ESG) framework. It remains committed to fostering a workplace that is safe, diverse, equitable and inclusive, where employees are treated with dignity and respect and are provided equal opportunities for growth and development. The Company believes that diversity of thought, experience and perspective enhances innovation, strengthens decision-making and

contributes to sustainable long-term value creation.

The cordial industrial relations maintained across all manufacturing locations and offices during the year reflect the Companys continued emphasis on employee engagement, mutual trust and collaborative working relationships.

As on March 31, 2026, the Company had a permanent employee strength of 2,682. In addition, on an average calculation basis 8,100 contractual workers were engaged across its manufacturing locations during the year to support operational requirements. Significantly, more than 40% of the Companys total workforce comprised women, demonstrating the Companys continued commitment to promoting diversity, inclusion and equal opportunity across its operations.

Looking ahead, the Company will continue to strengthen its human capital by investing in capability development, leadership excellence, digital competencies and employee engagement while embedding sustainability and ESG principles across its people practices. By nurturing a high-performance and values-driven culture, the Company remains well positioned to support its long-term strategic objectives and create enduring value for its customers, employees, shareholders and other stakeholders.

INTERNAL ONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established a comprehensive and robust internal control framework that is commensurate with the nature, size and complexity of its operations. The framework is designed to provide reasonable assurance regarding the reliability of financial reporting, operational effectiveness and efficiency, safeguarding of assets, compliance with applicable laws and regulations, and adherence to the Companys policies and governance standards.

The internal control framework is an integral part of the Companys overall governance structure and supports disciplined business operations across all functions. It comprises well-defined policies, standard operating

procedures, authority matrices and control mechanisms that facilitate effective decision-making, promote operational efficiency and strengthen accountability across the organisation. These controls also support timely identification and mitigation of business risks while ensuring the integrity and reliability of financial and operational information.

The Companys control environment is supported by appropriate segregation of duties, clearly defined approval and authorisation processes, documented operating procedures and continuous monitoring of key business and financial transactions. These measures help ensure that transactions are appropriately authorised, accurately recorded and executed in compliance with applicable statutory requirements and internal policies.

The effectiveness and adequacy of the internal control framework are subject to periodic evaluation through internal audits as well as reviews conducted by the Statutory Auditors, with continuous oversight by the Management and the Audit Committee of the Board.

Based on the reviews carried out during the year, the Management is of the opinion that the Companys internal control systems and internal financial controls remain adequate and are operating effectively. The framework continues to provide reasonable assurance over the orderly and efficient conduct of business, protection of assets, prevention and detection of frauds and errors, accuracy

and completeness of accounting records, and the timely preparation of reliable financial information.

The Company remains committed to continuously strengthening its internal control environment in line with evolving business requirements, regulatory expectations and emerging risks. This ongoing focus reinforces sound corporate governance practices, enhances organisational resilience and supports sustainable value creation for all stakeholders.