Finolex Industries Ltd Management Discussions

1. Indian Economy

Overview

The global economy grew by 3.4- deg % in 2025, according to the IMF. In early 2026, the conflict in West Asia and disruptions in the Strait of Hormuz weakened the outlook by pushing up energy prices and adding pressure on global supply chains. Growth was underpinned by resilient performance in emerging markets, improving macroeconomic conditions in advanced economies, steady consumer demand, and easing inflation across multiple regions. However, uncertainties stemming from the West Asia conflict, blockade of the Strait of Hormuz and global tariff-related trade disputes continued to weigh on the overall economic outlook.

Amid this environment, India remained one of the fastest-growing major economies. Growth was driven by strong domestic consumption, steady investment activity, favourable demographics, and continued policy reforms. According to the Provisional Estimates released by the Ministry of Statistics and Programme Implementation (MOSPI) under the revised 2022-23 base year series, Indias real GDP growth accelerated to 7.7% 2 in FY26 from 7.1% 2 in FY25, reflecting robust domestic demand and sustained capital formation. Growth was further supported by strategic investments in agricultural value chains and allied activities, which improved farm incomes, strengthened rural livelihoods, and enhanced market linkages, thereby contributing to a more resilient agricultural sector and supporting overall economic development.

Indias manufacturing sector also continued to grow strongly, registering 10.7% 2 growth in FY26 compared with 9.3% 2 in FY25. This growth was supported by government efforts to boost manufacturing, encourage technology adoption, and improve the ease of doing business. At the same time, Indias innovation ecosystem has strengthened significantly, supporting a shift towards higher-value manufacturing. India s Global Innovation Index ranking improved from 66th 3 in 2019 to 38th 3 in 2025, reflecting the country s growing focus on innovation and research. India also

continues to be a global leader in intellectual property creation and advanced technology research, with strong positions in trademarks, patents, industrial design, and emerging areas such as AI, robotics, space, and quantum computing.

Despite external uncertainties, Indias economic fundamentals remain strong. Supported by resilient domestic demand and continued policy support, the economy is well placed to sustain its growth momentum.

Outlook

Indias economic outlook remains positive, supported by strong domestic consumption, sustained investment activity, favourable demographics, and continued policy support. The Governments ongoing focus on infrastructure development, manufacturing expansion, and industrial growth is expected to strengthen the countrys economic momentum in the coming years.

Initiatives such as Make in India, PM Gati Shakti and industrial corridor development are expected to enhance manufacturing capabilities, improve supply chain efficiency, and encourage greater private-sector participation. Continued investments in transport, logistics, and industrial infrastructure are also expected to improve connectivity, reduce costs, and support business competitiveness.

2. Industry Overview Agriculture Sector Overview

Indias agriculture sector remains a key pillar of the economy, supporting food security, rural livelihoods, and employment generation. Contributing nearly 18% 4 to Indias Gross Value Added (GVA), it is also a significant driver of demand for the PVC pipes and fittings industry. In FY26, agriculture and allied activities recorded growth of 3.0% 2 , compared with 4.2% 2 in FY25, reflecting steady performance supported by favourable monsoon conditions, expanding irrigation coverage, government support measures, and continued investments in rural infrastructure.

Sustained growth in output and exports, along with the gradual shift towards horticulture and other high-value crops, is strengthening farm incomes and encouraging higher investment in irrigation and water management infrastructure. Growing awareness of water efficiency is further driving the adoption of irrigation systems. Collectively, these developments are driving sustained demand for PVC pipes and fittings, which are widely used in irrigation networks and water distribution systems. Their durability and ease of installation make them well-suited to the diverse and demanding conditions of Indian agriculture, supporting their increasing adoption across farming applications.

Outlook

The increasing adoption of irrigation, precision farming and other water-efficient agricultural practices is expected to further boost demand for PVC pipes and fittings. Government initiatives aimed at improving farm productivity, expanding irrigation coverage and promoting water conservation are also likely to support industry growth.

According to the IMARC report, the Indian agriculture industry is expected to grow at a CAGR of 9.68% 5 during 2026-2034. This growth is expected to drive increased investment in farm infrastructure, irrigation networks, and water management systems, creating significant opportunities for the PVC pipes and fittings industry.

As agriculture continues to modernise and become more resource-efficient, demand for irrigation and water conveyance solutions is expected to increase, positioning the PVC pipes and fittings industry for sustained long-term growth.

Polyvinyl Chloride (PVC) Pipes and Fittings - Overview

PVC pipes and fittings have become an essential component of Indias infrastructure ecosystem, supporting applications ranging from irrigation and water supply to residential, commercial, and industrial construction. According to an IMARC report, Indias PVC market stood at 3.08 6 million tons in 2025 and is expected to grow to 5.62 6 million tons by 2034, expanding at a CAGR of 6.91% 6 during 2026-2034.

Demand is primarily driven by irrigation systems, water supply networks, sanitation projects, and residential construction activity. The market split by application in 2025 includes Irrigation Segment at 34.6% 6 , Water Supply at 26.8% 6 , Sewerage at 14.2% 6 , Plumbing at 11.5% 6 , HVAC at 7.1% 6 and Oil & Gas at 5.8% 6 .

In terms of product mix, Unplasticized Polyvinyl Chloride (UPVC) pipes account for largest market share in 2025, supported by their extensive use in irrigation and bulk water conveyance due to their costefficiency and durability. This is followed by CPVC pipes which represent the fastest-growing category, driven by adoption in modern residential plumbing and premium housing applications. Plasticised PVC pipes account for remaining market and are widely used in flexible, low-pressure applications.

The demand base is particularly strong in agriculturally intensive states such as Uttar Pradesh, Punjab, Haryana, and Rajasthan.

Key Growth Drivers

¦ Real Estate Demand: The sector remains a key driver of demand for PVC, UPVC and CPVC pipes and fittings. Growth in new housing projects, increasing renovation activities, and rising plumbing requirements across residential apartments and premium housing developments continue to support steady market demand.

¦ Replacement Demand: Replacement demand continues to support market growth, as ageing plumbing systems, leak repairs, and the replacement of lower-quality installations create a steady need for new pipes and fittings. This recurring demand helps sustain market activity even during periods of slower new construction.

¦ Irrigation Use: The agricultural sector remains a key driver of demand for PVC pipes, owing to their extensive use in irrigation systems, borewells, water transportation, and farm distribution networks. The growing focus on efficient water management and improved irrigation infrastructure continues to support demand from this segment.

¦ Increasing Urbanisation: Rapid urbanisation and the expansion of cities and semi-urban areas are driving demand for water distribution, drainage, and sanitation infrastructure. Growing investments in urban development and utility networks continue to create significant opportunities for the PVC pipes and fittings industry.

¦ Shift Toward Branded, Organised Players:

Customers are increasingly choosing quality certified, durable, and reliable piping solutions that offer better performance and longer service life. This shift is supporting organised manufacturers with established brands, strong distribution networks, and a proven track record of product quality.

¦ Product Premiumisation: The increasing use of CPVC pipes in hot and cold-water plumbing applications, along with growing demand for high-quality fittings, is driving a shift towards premium products. This trend is helping manufacturers improve product value and enhance overall market growth.

Key Risks

¦ Raw Material Price Volatility: The PVC pipes industry is highly sensitive to fluctuations in PVC resin prices, which are closely tied to crude oil prices. As India remains import-dependent for key raw materials, volatility in global crude prices and supply chain disruptions can significantly impact production costs and compress operating margins.

¦ Import Dependence and Global Exposure:

Reliance on imported PVC resin exposes the industry to fluctuations in global trade dynamics, currency volatility and geopolitical risks. Changes in trade policies, shipping costs, or the imposition of antidumping duties can further disrupt supply availability and create instability in domestic pricing.

¦ Intense Competition and Unorganised Market:

The presence of a large unorganised segment, particularly in rural and semi-urban markets, intensifies pricing pressure on organised players. Low-cost, unbranded products further compress realisations and constrain branded manufacturers ability to expand market share.

¦ Regulatory and Environmental Compliance:

Increasing regulatory focus on product quality, safety standards (including BIS compliance) and environmental sustainability is raising compliance requirements. Additionally, evolving norms in plastic waste management may increase operational costs, especially for smaller manufacturers.

¦ Cyclicality in End-Use Industries: Demand for PVC pipes is closely linked to agriculture, real estate, and infrastructure development. Any slowdown in housing activity or delays in government-led projects such as water supply and sanitation schemes can temporarily affect demand growth.

Outlook

The industry is expected to maintain steady structural expansion over the medium- to long-term, supported by sustained demand across the agriculture, housing, and urban infrastructure segments.

Between 2026 and 2034, CPVC pipes are projected to grow the fastest followed by plumbing and HVAC supported by rising demand from premium residential projects and expanding urban infrastructure. UPVC pipes will continue to dominate overall volumes due to their strong presence in irrigation and water distribution networks.

Regionally, growth is expected to remain broadbased, with East and Northeast India emerging as the fastest-expanding region from a smaller base, supported by improving infrastructure penetration and rising coverage of water supply schemes. North India is expected to retain its position as the largest demand centre.

Structurally, the industry is moving towards greater formalisation, with organised players steadily gaining share through stronger branding, wider distribution, and increasing preference for certified products. This is gradually reducing dependence on unorganised suppliers and improving overall industry quality standards.

Government Initiatives

Initiative Name	Scheme Overview	Progress Under Initiatives	Target Areas	Key Objectives
Rural Water & Housing Infrastructure Ecosystem (JJM & PMAY-G)	Large-scale rural infrastructure push combining household tap water and housing, driving PVC/CPVC piping demand.	As of June 2026: 15.86 7 crore households covered under JJM; 3.05 7 crore rural houses completed under PMAY-G.	Rural India	Provide universal tap water access and pucca housing with in-house plumbing and sanitation.
Rural Infrastructure Convergence (Integrated Rural Push)	Convergence of water, housing, sanitation, and connectivity programmes creating sustained multilayered piping demand.	Rural Dev Budget: ^ 2.73 s Lakh Crore (FY27, up 211% 8 since FY17). PMGSY: 4.11 7 lakh km of roads completed during 2014-2026.	Rural India	Improve rural connectivity and access to essential infrastructure services.
Urban Water & Sanitation Upgrade (AMRUT & SBM)	Urban infrastructure modernisation requiring PVC pipes for water distribution, sewerage networks, and drainage.	AMRUT 2.0: ^ 2.99 7 Lakh Crore outlay (4,800 7 towns). SBM- Gramin: 12.14 7 crore household toilets constructed; urban waste processing: 82% 7 .	Urban India (4,800+ towns)	Improve urban water supply, sanitation, and waste management infrastructure.
Agricultural Water Storage Infrastructure	Expansion of reservoirs and village water bodies requiring conveyance pipelines and distribution networks.	Development of integrated fisheries value chains across 500 9 reservoirs and Amrit Sarovars was proposed under the Union Budget for FY27.	Water- stressed regions	Strengthen irrigation water availability and improve water distribution systems.
Industrial & Manufacturing Infrastructure Expansion	Plug-and-play industrial parks and manufacturing clusters driving demand for industrial piping and utility systems.	Accelerated manufacturing expansion across electronics, chemicals, textiles and biopharma (FY27 Budget).	Industrial clusters	Strengthen manufacturing ecosystem and industrial infrastructure development.
City Economic Regions (CERS) & Urban Expansion	Development of Tier- 2/3 economic hubs driving large-scale urban infrastructure water and drainage piping.	^ 5,000 10 Crore per CER over 5 10 years under Union Budget for FY27.	Tier-2 & Tier-3 cities	Create regional economic hubs and expand urban infrastructure base.

Company Overview A Proven Legacy of Leadership in Pipes and Fittings

Finolex Industries Limited (hereafter referred to as Finolex or Our Company) is among India s leading manufacturers of PVC pipes and fittings, supported by a strong backwards-integrated model including PVC resin production as well as pipe and fittings manufacturing. Founded in 1981, Finolex has evolved from a single manufacturing facility into a multi-location enterprise, expanding its presence across PVC pipes, fittings and resin. Our Company s focus on quality, reliability, and innovation has enabled it to earn nationwide customer trust and strengthen its position as a key industry player.

We continued to strengthen our presence across both agri and non-agri segments, expand our project business, and enhance cost-effectiveness. Our strategic focus remains on capacity expansion, product innovation, and digital initiatives to deepen customer interaction and broaden our market reach. We remain committed to creating long-term value through sustainable growth, operational excellence, and customer-centric innovation.

Key Business Strengths

Well Diversified Product Portfolio

We maintain one of the largest product portfolios in the Indian pipes, and fittings industry, offering PVC, CPVC, specialty pipes and a comprehensive range of fittings. Our products serve a wide range of applications across agriculture, plumbing, sanitation, and infrastructure development, helping us meet the evolving needs of customers across the country.

We remain focused on delivering durable, reliable, and easy-to-install solutions that address changing market requirements. We continue to strengthen our position as a trusted partner across projects of varying scales and sectors, supporting sustainable growth and long-term value creation by leveraging our extensive product portfolio, technical expertise, and a customer- focused approach.

End-to-End Integrated Business Capabilities

We operate an integrated business model that includes in-house production of PVC resin, a key raw material for pipes and fittings. This enables us to achieve greater cost efficiency, stronger quality control, and a reliable supply of raw materials. Our flagship facility at Ratnagiri, Maharashtra, is equipped with advanced manufacturing technology, a captive cryogenic jetty, and a dedicated power plant, ensuring a consistent supply of high-quality PVC resin to our production units. This backward integration helps us mitigate volatility in raw material prices while maintaining product

quality and operational efficiency. Our Company has established a strategically located manufacturing network across Ratnagiri, Urse and Badhalwadi in Maharashtra, and Masar in Gujarat, all of which are certified to ISO 9001:2015. This footprint enables us to efficiently serve customers across India, optimise logistics, reduce delivery timelines, and ensure reliable product availability.

Pan-India Distribution Network

We have built a strong distribution network across India that helps us serve both rural and urban markets effectively. Our Company s well-established channel system ensures wide product availability, timely deliveries, and smooth customer service across regions, meeting the diverse needs of our customers.

Our Company s customer base includes farmers, plumbers, contractors, builders, government bodies, and institutional clients. We support large infrastructure and irrigation projects as well as the needs ofhouseholds and small businesses. With a strong market presence, long-standing channel partnerships, and an extensive network, we consistently deliver superior standards of performance, dependability, and value across all customer segments.

Strong Brand Visibility

Our Company s strong brand visibility has enabled us to build enduring trust and credibility across the markets we serve. Our Company s extensive market presence and well-established distribution network ensure broad product availability and strong brand recognition across both urban and rural regions. We actively engage with customers, channel partners, and industry stakeholders through marketing initiatives, trade events, and outreach programmes that strengthen awareness and deepen relationships. Our commitment to quality, innovation, and service excellence continues to enhance customer loyalty and strengthen our brand. We believe that our strong brand equity provides a robust foundation for sustained growth and long-term market leadership.

Financial Analysis FY26

Financial Overview

Our Company sold 3,32,736 metric tonnes (MT) of pipes and fittings in FY26. PVC demand in India follows a distinct seasonal pattern, with stronger demand ahead of the monsoon and a slowdown during the monsoon period. During the year, the industry also witnessed continued volatility in PVC resin prices, while geopolitical disruptions and supply constraints influenced global polymer markets. Despite these challenges, our integrated business model and operational discipline enabled us to maintain a resilient performance.

Our standalone revenue remained largely stable at ^ 4,113 Crore in FY26, despite lower volume. Our EBITDA increased by 43% to ^ 679 Crore in FY26 driven by improved operating efficiencies and margin expansion. Profit before exceptional item and tax ^ 765 crore in FY26 reflecting improved underlying operating performance. Our Company has recommended a final dividend of ^ 2 per share and a special dividend of ^ 0.75 per share, for a total of ^ 2.75 per share for FY26, subject to shareholder approval.

Our balance sheet remained strong in FY26, with a net cash surplus of ^ 2,563 Crore and a return on capital employed of 37.98%. We continue to focus on margin improvement, enhancing operational efficiency and strengthening our non-agri portfolio to support future growth.

Financial Review and Analysis

Particulars	Unit	FY26	FY25	Variance (26 vs 25)	Reasons for Variation (>25%)
EBITDA	Cr	679	476	43%	EBITDA increased sharply, driven by higher realisations, improved operational efficiencies
EBITDA Margin	%	16.50	11.49	44%	EBITDA margin increased sharply, driven by higher realisations, improved operational efficiencies
PAT Margin	%	14.11	18.78	(24.87%)	-
RoCE	%	37.98	25.59	48%	RoCE has improved primarily due to increase in operational efficiency
Interest Coverage Ratio	Times	32.99	16.05	106%	Increase in interest coverage ratio is due to higher operating profit during the year
Debt-Equity Ratio	Times	0.07	0.04	75%	Increase in debt equity ratio is due to increase in year end borrowings
Inventory Turnover Ratio	Times	2.71	3.60	(24.72%)	-
Current Ratio	Times	3.54	3.56	(1%)	-
Debtors Turnover Ratio	Times	11.09	9.90	12%	-
Return on Net Worth	%	9.55	13.01	(27%)	Variance is primarily owing to exceptional gain in previous year

Business Outlook

We have a future-ready business supported by an integrated PVC resin-to-pipes value chain, strong manufacturing capabilities, and a wide distribution network. This helps us meet growing demand across irrigation, housing, and infrastructure efficiently and with resilience. We expect long-term growth to be driven by structural trends such as rural water management, agricultural modernisation, and rapid urbanisation. Another key driver will be the rising demand for organised and value-added piping solutions.

Our integrated operations, in-house resin production, and disciplined supply chain provide us with stability and strength. We are well-positioned to benefit from continued investments in infrastructure and water supply projects, supported by our strong brand, wide reach, and manufacturing base. Our strategy focuses on expanding our presence in non-agricultural segments and strengthening our CPVC and fittings portfolio. We remain committed to disciplined growth through operational excellence and backward integration.

Awards and Recognition

The Company s campaigns received recognition across industry platforms for creativity, storytelling, and communication effectiveness. Leadership recognition at prominent forums further reinforced the organisation s standing and reputation.

Our Chairman, Shri Prakash P. Chhabria was honoured with the prestigious Kohinoor of India award at Lokmat Global Convention, London

Global Customer Engagement Award - Mahakumbh

Received Global Customer Engagement Award for Badhte Kadam by Finolex, our

initiative at Mahakumbh focused on supporting devotees with essentials like caps and walking sticks. This award reflects our commitment to driving positive change through meaningful action.

E4M Golden Mikes Award - Mahakumbh

Received E4M Golden Mikes 2025 award for our Kumbh Mela Radio Campaign with Big FM, awarded in the Best Single Commercial category.

Marketers Excellence ET Trendies Award - Award - Diwali Film Diwali Film

Received Marketers Excellence Award - for our Diwali Film , a

quiet affirmation of our pursuit of meaningful content, bold ideas, and stories that truly resonate.

Received ET Trendies 2025 Award for our Diwali campaign .

This recognition celebrates the artistry, commitment, and teamwork that made this project truly special.

Risk Management & Mitigation

Risk	Potential Impact	Mitigation
Fluctuations in Raw Material Prices	Volatility in PVC prices and other input costs may affect the Company s margins and overall profitability.	We mitigate this risk through backward integration into captive resin production, a diversified supplier base covering domestic and import sources, dual sourcing of key raw materials, continuous monitoring of market trends, and proactive adjustments to pricing and inventory strategies to reduce the overall impact.
Macroeconomic Risks	Macroeconomic conditions such as inflation, interest rate movements, currency volatility, and economic slowdowns may impact demand, input costs and overall profitability.	We maintain a flexible business model and periodically review our cost structure to ensure agility amid economic uncertainty. Through prudent financial management, including conservative leverage, we safeguard our operations against adverse macroeconomic movements. Our diversified product portfolio and wide customer base reduce reliance on any single sector or geography, providing a natural buffer during periods of economic slowdown. This disciplined approach enables us to sustain stable performance and continue delivering value to all stakeholders, regardless of external market conditions.
Changes in Regulatory Environment	Frequent changes in environmental, product quality, or industry- specific regulations may impact our operations, cost structure, or market access.	We maintain a robust compliance framework through continuous monitoring of regulatory developments and proactive alignment of internal policies, processes, and controls with applicable statutory requirements. To strengthen compliance governance, we have implemented a legal compliance management tool that captures all applicable compliances with clear department-wise ownership and accountability. Users are regularly trained on the system and compliance updates. Compliance dashboards are monitored periodically to identify delays, exceptions, or potential non-compliances and ensure timely corrective action. The tool also generates a comprehensive compliance certificate, which is reviewed and approved by the Board of Directors for oversight. This structured and disciplined approach helps mitigate compliance risks, supports business continuity, and reinforces our commitment to the highest standards of corporate governance and regulatory compliance.
Data Security and Privacy Protection	Cyber threats or data breaches may disrupt our operations or compromise sensitive information.	We have put in place a strong cybersecurity system with round-the-clock monitoring and response through CrowdStrike Managed Detection and Response (MDR) for endpoint protection, supported by FortiGate Next-Generation Firewalls that safeguard the network by preventing intrusions and filtering traffic. Centralised monitoring is supported through a next-generation Security Information and Event Management (SIEM), with implementation of QRadar to further enhance end-to-end visibility. These measures collectively strengthen system reliability, protect sensitive data, and reduce operational risk. In addition, we have implemented comprehensive IT security protocols, conduct regular system audits, and provide ongoing employee training to safeguard digital assets and ensure data privacy.
Risk	Potential Impact	Mitigation
Brand Identity and Trademark Safeguarding	The presence of counterfeit products in the market may adversely affect our brand reputation and lead to a loss of sales.	Our intellectual property is protected through partnerships with leading IPR consultants and legal experts who assist in identifying counterfeit products in the market and provide actionable intelligence. We regularly undertake enforcement actions, including market raids, against entities involved in the manufacture or distribution of counterfeit goods. In addition, we actively monitor trademark filings and consistently oppose applications that are identical or deceptively similar to our registered trademarks, thereby preventing brand dilution and consumer confusion.
Environmental Risks	Increasing environmental regulations and growing stakeholder expectations around sustainability may impact the Company s operations and reputation.	We comply with all applicable environmental standards and continuously invest in sustainable practices across our operations. Regular ESG reviews and transparent reporting further strengthen our commitment to responsible and sustainable growth. We had adopted BRSR reporting to bring transparency in our ESG efforts. We have rainwater reservoirs and Recovery/Recycle plant and RO unit to ensure sufficient availability of water reducing dependency and preserving ground water. We are increasing share of green power for pipe plants.
Competition Risk	Increasing competition from new entrants as well as established players expanding their market share continues to pose a risk to our projected margins and market position.	We address competition risk through continuous investment in product quality, expansion of our distribution network, and strengthening of our brand presence. Our initiatives include deepening relationships with dealers, introducing new products to sustain our competitive advantage. We also focus on operational efficiency, cost optimisation, and regular engagement with channel partners to enhance loyalty and ensure timely service. These measures enable us to respond effectively to market dynamics and maintain our leadership in the pipes and fittings industry.
Geopolitical Conflict and War Risk	Geopolitical conflict and war risk refers to the potential adverse impact on supply chains which might affect the business operations and financial stability due to geopolitical conflicts, military actions, or civil unrest in regions critical to the Companys operations or sourcing.	We address geopolitical conflict risk by developing alternate sources for key raw materials from different geographies and obtaining commercial supplies to ensure that we are not dependent on any one country or geography for our key raw materials. Our dual strategy of risk mitigation i.e. reduce and share help us to mitigate the risk and ensure business continuity.

Human Resource

Our people remain at the core of our success. Our HR strategy is built on three foundational pillars: Culture, Career, and Learning and Development. These pillars embody our commitment to fostering a workplace that promotes collaboration, inclusivity, and high performance.

Employee Value Proposition - Defining Our Desired Workplace Culture

We aim to be the best at what we do, not only in the eyes of our customers, but also in the eyes of our colleagues. We are committed to ensuring a healthy work-life balance and strongly believe in the power of teamwork, where each employee s unique strengths contribute meaningfully to our collective goals. We are also driven to make a positive social impact through active community engagement. The following characteristics define our Employee Value Proposition:

The following key attributes form the foundation of our Employee Value Proposition:

We have implemented a range of structured initiatives to enhance employee capabilities and nurture engagement, contributing to a vibrant organisational culture.

Our approach includes personalised leadership engagement, open-door policies, cross-functional career mobility, and skill-based development programmes. We ensure that every employee is empowered to grow and reach their full potential.

As of March 31, 2026, we employed 1,325 individuals across our Company. During FY26, we also invested 2,884 learning mandays in employee development, reinforcing our belief that continuous learning drives both individual and organisational excellence.

Information Technology

The Company continued to strengthen its digital and IT capabilities through investments in modern infrastructure, network enhancements and advanced cybersecurity measures. These initiatives improved system reliability, data security, business continuity, and operational efficiency, while reinforcing our commitment to digital resilience through compliance with globally recognised information security standards. During the year, we also advanced our digital transformation agenda by launching a Dealer Performance Dashboard, providing channel partners with real-time business insights to support informed decision-making and stronger alignment with our growth strategy.

Cybersecurity

We follow a proactive and comprehensive approach to strengthening our cybersecurity framework through continuous awareness, training, and technology- driven initiatives. Our phishing simulation exercises are conducted regularly to assess employee preparedness and enhance awareness of email-based cyber threats. Our structured cybersecurity awareness programme includes educational campaigns, informational posters, and role-based training modules delivered through our Learning Management System (LMS). We use these initiatives to promote secure work practices, strengthen compliance awareness, and keep employees informed about evolving cybersecurity risks and industry best practices.

Our Company s cybersecurity capabilities have been significantly strengthened through the implementation of Security Information and Event Management (SIEM) systems and Veeam backup and disaster recovery solutions, improving threat detection, incident response, and business continuity. Our Company s endpoint and data protection measures have been enhanced through Microsoft Intune. We have also implemented Data Loss Prevention (DLP) tools, advanced device security controls, Microsoft Azure Internet Protection and comprehensive email security solutions. Collectively, these measures safeguard critical information assets and maintain a secure digital environment.

We conduct periodic internal security reviews to identify potential gaps and enhance our controls through a continuous improvement approach based on the Plan-Do-Check-Act (PDCA) methodology. We have strengthened terminal security using Microsoft Defender and CrowdStrike Falcon, with Falcon as our primary platform for advanced threat detection, monitoring, and response.

Round-the-clock monitoring of endpoint and perimeter devices is enabled through SIEM integration powered by IBM Qradar ensuring real-time threat detection and incident correlation. We also maintain active Cyber Threat Intelligence (CTI) subscriptions from credible sources such as CISA, CERT-In, Fortinet, and Wipro to stay informed of vulnerabilities and adapt our defences proactively. Additionally, we have developed a secure image-sharing process, reinforcing our dedication to safeguarding digital assets across all levels.

Data Management and Analytics

Building on the unified data platform established in last financial year, this year we took a significant step forward in our AI and Analytics journey. We deployed AI Chatbot, a conversational AI interface on our Data Platform, enabling business users across Sales, Procurement and Supply Chain to query enterprise data in plain language - without coding expertise or analyst intermediation. This has dramatically reduced reporting turnaround times and democratised data access across the organisation. Complementing this, we have initiated the Data Lake Project enterprise-wide establishing a single, governed repository of performance metrics.

To further augment this reporting layer, we have embedded AI capabilities directly within our dashboards, which automatically translate complex departmental KPI data into clear, actionable insights and plain-language commentary, empowering decision-makers to interpret performance trends at a glance and respond with greater speed and confidence.

On the operational intelligence front, we established an IoT data integration framework, connecting real-time sensor and machinery data from our manufacturing operations into the Data Lake. This provides live shop-floor visibility, lays the foundation for predictive maintenance, and bridges our physical operations with our digital intelligence layer. Additionally, we developed and deployed an Intelligent Nudge/Alert system that proactively surfaces personalised, role-based alerts and recommendations to stakeholders through email whenever KPI performance deviates from defined thresholds. This shifts our operating culture from reactive reporting to proactive management - ensuring the right person receives the right signal at the right time and driving greater accountability across teams.

Internal Control and Financial Systems

The Company has established an adequate and effective internal control framework commensurate with the size, scale, and complexity of its operations. These controls are designed to support efficient business processes, safeguard assets, ensure reliability of financial and operational information, and promote compliance with applicable laws and regulations. Independent evaluations are carried out periodically to assess the effectiveness of risk management, internal control and governance processes, and to identify opportunities for continuous improvement.

The Audit Committee provides overall oversight of the internal audit function, including review of the internal audit charter, annual audit plan, significant audit observations, adequacy of internal controls, risk management framework, and management s responses to key findings. Through this oversight, the Committee supports the Board in evaluating and enhancing the effectiveness of the Company s governance practices, risk management processes, and internal control systems.

We have also established strong, well-documented internal financial controls that are a key part of our supervisory framework and support responsible and efficient business conduct. These controls help us safeguard Company assets, ensure compliance with policies, prevent and detect errors, and maintain accurate financial records, while comprehensive checks and balances embedded in our processes ensure smooth day-to-day operations across the organisation.

We regularly review and assess our internal financial controls to ensure they remain effective, reliable, and relevant to our evolving business needs. This ongoing evaluation strengthens control practices, enhances operational refinement and ensures that our control systems continue to support sustainable business growth.

Cautionary Statement

This Annual Report and Management Discussion and Analysis include forward-looking statements relating to the Company s objectives, projections, estimates, and expectations, in accordance with applicable laws and regulations. These statements are subject to risks and uncertainties and actual outcomes may differ materially due to factors such as changes in global economic conditions, political developments, market dynamics, government policies, tax regimes, and other unforeseen events. The Company does not undertake any obligation to update or revise forward-looking statements to reflect future developments, except as required by law. Investors are advised to exercise caution and should not place undue reliance on such statements while making investment decisions.