Forbes & Company Ltd Management Discussions

General Performance and Outlook

The macroeconomic environment in India during FY 2025-26 remained resilient despite ongoing global uncertainties, including geopolitical developments and commodity price volatility. As noted in the Economic Survey 2025-26, India continues to demonstrate strong macroeconomic fundamentals, supported by stable domestic demand, prudent fiscal management, and a sound financial system.

Indias GDP growth is estimated at approximately 7.4% in FY 202526 and is expected to remain in the range of 6.5%-7.0% in FY 202627, driven by sustained public capital expenditure, gradual recovery in private investment, and resilient consumption. Inflation moderated during the year, while monetary policy remained calibrated to balance growth and stability.

The Governments continued emphasis on infrastructure development, manufacturing, and digitalisation has supported investment activity and created opportunities across sectors. In this context, the Company witnessed steady demand across its coding solutions and industrial automation businesses, supported by increasing adoption of technology and efficiency-led initiatives. The real estate segment also benefited from improved demand conditions and ongoing urbanisation.

Looking ahead, the outlook remains cautiously optimistic. While global uncertainties and input cost volatility persist, the underlying strength of the Indian economy and continued policy focus on investment and reforms are expected to sustain growth momentum.

Over the medium term, Indias structural growth drivers are expected to remain intact, providing a stable foundation for the Companys diversified business portfolio.

Performance and outlook

During the year under consideration, your Company has undertaken several actions, which are detailed below, followed by a discussion of the results. These actions enable the Company to concentrate on growth-oriented businesses, specifically Coding & Industrial Automation and Real Estate. The Company maintains a tradition of excellence, with total customer delight as its singular aim. Significant actions taken in various areas are summarized hereunder for a better understanding of all stakeholders:

Coding & Industrial Automation Business (CIAB):

The Coding & Industrial Automation Business (CIAB), comprising conventional marking systems, Dot Peen Marking Systems, Laser Technologies, and Industrial Project Automation, recorded a growth of 12% during the year. The operations were impacted by cost pressure arising from currency fluctuations and higher commodity prices and ongoing geopolitical developments.

The Company continued to advance its product development initiative, including the successful demonstration and delivery of on- the-fly marking applications. A key achievement during the year was the deployment of a high-speed marking solution operating at 750 PPM, marking on ECU (Electronic Control Unit) for two a wheeler manufacturing facility, introduction of a new marking solution integrated with an air balancer and the revival of conventional marking machines portfolio.

Looking ahead, the Company is focused on further enhancing the performance of its laser machines and expanding its product portfolio within the CO2 and UV domains. These initiatives are expected to strengthen the Companys portfolio and enhance its capability to address diverse customer requirements.

The Company has undertaken several key initiatives over the past year to strengthen its talent pipeline, particularly through the development of Graduate Engineering Trainees (GETs) to address capability gaps in PLC and software resources. In parallel, focused efforts are underway to stabilize critical positions across design and operations functions.

On the sales front, new roles have been created to support growing demand across key sectors such as steel, pharmaceuticals, and FMCG, supported by dedicated sales team members. The teams are also actively driving the development of non-automotive key accounts. This strategic approach has enabled the Company to effectively expand its customer base and address a broader range of applications beyond conventional automotive components.

The Project Automation and Conventional Marking segment recorded a growth of 38% and 14% respectively during the year, albeit on low volume. The Dot Peen Marking Systems segment remained largely flat, while the Laser business witnessed a decline of 11%.

On the profitability front, the Company achieved improvement in gross margins compared to the previous year. This improvement was achieved through optimal utilization of resources and effective cost controls. It reinforces competitiveness of the Companys products.

We believe that our actions are well aligned with our long-term strategic direction, and we have outlined several focused initiatives to build on this momentum. As a technology-driven organization, the Company remains committed to expanding its portfolio in line with industry needs and trends. With a clear focus on innovation, operational excellence, and market responsiveness, we are well positioned to strengthen our product portfolio and create sustained value in a dynamic and competitive landscape.

(i) Project Vicinia, Chandivali

Your Company has successfully completed the construction of the project, which includes Towers A, B, C, D, and F from Phase I, as well as Towers E, G, and H from Phase II. The possession of the flats sold has been handed over to customers for both phases. Currently, the Company is in the process of completing the final stage of the remaining amenities and infrastructure facilities, with full Occupation Certificate (OC) of the Project is expected to be completed by December 2026.

The Company has sold the entire flat inventory with the exception of five flats across the project.

(ii) Project - Wagle Estate, Thane

Your Company is developing 10,671.49 square metres (2.63 acres) of land parcel located within MIDC Industrial Area of Wagle Estate, Thane. The Project is a private IT Park encompassing retail, commercial and office space under IT/ ITES policy framework. The total built up area of development is approx..6.2 lacs square feet.

The said Project is prominently located in the heart of Thane and has good proximity and connectivity to road and rail network. The company has received approval for change of use from Industrial use to IT /ITES development. The Company is in the process of finalizing development designs and plans and submit the same to MIDC, Thane in due course.

Forbes Campbell Finance Limited (FCFL)

Forbes Campbell Finance Limited ("FCFL"), a wholly owned material subsidiary of the Company, reported total revenue of Rs. 119 Lakhs for the financial year ended March 31, 2026 and Profit after tax for the year stood at Rs. 80 Lakhs. FCFL is unregistered Core Investment Company ("CIC") with an asset size below Rs. 100 crores.

The investment portfolio of FCFL as at March 31, 2026 aggregated to Rs. 6,128 Lakhs, comprising investments in Forbes & Company Limited amounting to Rs. 527 Lakhs, Eureka Forbes Limited amounting to Rs. 3,063 Lakhs, Forbes Precision Tools and Machine Parts Limited amounting to Rs. 2,257 Lakhs and Forbes Bumi Armada Limited amounting to Rs. 281 Lakhs.

EFL Mauritius Limited (EFLM)

EFL Mauritius Limited (EFLM), is a wholly owned subsidiary of the Company. EFLM was holding investment in Forbes Lux International AG, which was liquidated in earlier years. As on March 31, 2026, there are no material assets/liabilities in EFLM. EFLM is in the process of strike -off of its name from the Register of Registrar of Companies (ROC), Mauritius.

Forbes Bumi Armada Limited (FBAL)

The total revenue for the financial year ended March 31, 2026 stood at Rs. 8,185 Lakhs compared to Rs. 7,485 Lakhs for the financial year ended March 31, 2025. Profit after Tax is at Rs. 441 Lakhs as against Rs. 381 Lakhs in the previous year.

FBAL maintains qualified and experienced manpower which continues to provide quality manning services for Operation and Maintenance of Floating Production Storage Offload "FPSO" Vessels.

FBAL is providing Operations and Management manning services to three (3) FPSOs. Manpower resources of FBAL are delivering international standard services while maintaining high level Health Safety and Environment track records.

The Company has duly complied with ISO 9001, 14001 & 45001 certifications, which are valid till January 17, 2027 and ISO 27001: 2013 - Information Security Management System Certification valid till July 27, 2026. All the compliances in terms of renewal of certification, licenses and other imperative regulations are regularly renewed and fully complied with by the company without any delay.

During the year under review, there has been no change in the nature of business and share capital of the Company.

The Svadeshi Mills Company Limited (Svadeshi)

Grand View Estates Private Limited (GVEPL) is majority shareholder in Svadeshi Mills Company Limited (Svadeshi). The Company and Forbes Campbell Finance Limited (a wholly owned subsidiary of the Company) collectively own 22.7% and this shareholding is pledged in favour of Asia Pragati Strategic Investment Fund, the lenders of GVEPL. GVEPL is now attempting to revive Svadeshi. In addition to the pledged shareholding, all the secured debt dues and other receivables due from Svadeshi to the Company are assigned and/or hypothecated until the settlement of the debt.

There is also a litigation presently ongoing on the winding up of Svadeshi. Both GVEPL and the Company have filed fresh Interim Application before the Honble Bombay High Court invoking powers u/s 466 of Companies Act, 1956 seeking permanent stay on the winding up order against Svadeshi. Vide Order dated 23rd February 2026, the Honble High Court, Bombay dismissed the Interim Application. The Company and GVEPL filed an Appeal challenging the Order dated 23rd February 2026 before the Division Bench of the High Court, Bombay. Appeal was argued and the same is reserved for Order as on date.

Financial Performance

The Consolidated Financial Statements of your Company and its subsidiaries, its joint ventures and associate companies are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Companies Act, 2013. The Notes to Consolidated Financial Statements are disclosed and forms part of the Consolidated Financial Statements.

Segment wise performance

The summarized performance of segment revenues and segment results is as under:

Key Financial performance, Operational Information and Ratio Analysis

Revenue

During the year your Company has achieved total standalone revenue (including other income) of Rs. 8,519 lakhs (previous year Rs. 21,280 lakhs),

During the year your Company achieved consolidated revenue (including other income) of Rs. 9,028 lakhs (previous year Rs. 21,557 lakhs),

Standalone EBIDTA is Rs. 2,196 lakhs (previous year Rs. 4,186 lakhs) while Consolidated EBIDTA is Rs. 2,423 lakhs (previous year Rs. 4,407 lakhs),

Proflt/(Loss) Before Tax ("PBT")

Consequent to the above, during the year standalone PBT is Rs. 1,852 lakhs (previous year Rs. 3,780 Lakhs)

Consolidated PBT is Rs. 1,818 lakhs (previous year Rs. 4,022 lakhs)

Fixed Assets

The opening gross block of standalone financials is Rs. 753 lakhs (previous year gross block is Rs. 586 lakhs) Consolidated Gross Block of assets is Rs. 780 lakhs (previous year Rs. 606 lakhs).

Total Comprehensive Income / (Loss)

During the year standalone profit after other Comprehensive income of Rs. 401 lakhs (previous year Rs. 3,485 lakhs).

Consolidated Profit/(loss) after Other Comprehensive Income of Rs. (2012) lakhs (previous year Rs.14,064 lakhs)

Borrowing

Total standalone borrowing is Rs. Nil in current year (previous year: Rs. 3,69 lakhs,

The companys consolidated borrowings stood at Rs. Nil for the current financial year. (previous year: Rs. 3.69 lakhs).

OPPORTUNITIES & RISKS

The Company operates in an environment where growth is driven by increasing adoption of new technologies, rising demand for automation, and the need for product traceability, particularly in sectors such as pharmaceuticals, defence, automotive, engineering, and electronics, The aforesaid manufacturing sectors continues to create opportunities for the Companys coding and industrial automation solutions,

At the same time, the business is exposed to certain risks, including global economic and geopolitical uncertainties, fluctuations in input costs, competitive pressures from domestic and international players, rapid technological changes, and dependence on industrial capital expenditure cycles, which may impact demand and margins,

Our success as an organization depends on our ability to identify opportunities and leverage them while mitigating the risks that arise while conducting our business. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis, Some of the opportunities and key risks, anticipated impact on the Company and mitigation strategy is as follows:

Market Development

Your Company monitors external market trends and collates consumer insights to understand Industry requirements and enable them to provide the right solution,

Efforts are focused on expanding the customer base across multiple sectors, including non-automotive industries such as steel, pharmaceuticals, and FMCG, thereby reducing dependence on any single segment and supporting stable growth,

Your Company actively develops new technologies and products, both in-house and in collaboration with partners, to respond to the market requirements in a timely manner.

Your Company remains committed to maintaining high standards across its vendor ecosystem, ensuring that suppliers and contractors operate in a safe and compliant environment while delivering expected quality.

Political and Global Uncertainty

Political uncertainty or volatile economic uncertainty may adversely affect the reduced demand and could restrict revenue growth opportunities.

Your Company mitigates this risk through diversified businesses across industries and markets, along with continued focus on cost control and operational efficiency.

Legal and Regulatory

Compliance with laws and regulations is an essential part of your Companys business operations. We are subject to laws and regulations in diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, Water and Air Pollution, corporate governance, listing and disclosure, employment, and taxes. Frequent changes in legal and regulatory regime and introduction of newer regulations with multiple authorities regulating same areas lead to complexity in compliance. We closely monitor and review our practices to ensure that we remain complaint with relevant laws and legal obligations.

Systems and Information

Your Companys operations are increasingly dependent on IT systems and the effective management of information.

Increasing digital interactions with customers, suppliers and consumers place even greater emphasis on the need for secure and reliable IT systems and infrastructure, and careful management of the information that is in our possession.

The cyber-attack threat of unauthorized access and misuse of sensitive information or disruption to operations continues to increase.

To reduce the impact of external cyber-attacks impacting our business, we have sufficient security measures including firewalls and threat monitoring systems in place, complete with immediate response capabilities to mitigate identified threats. Our employees are trained to understand these requirements.

Internal control systems and their adequacy

Your Company has an internal control system, which ensures that all transactions are recorded satisfactorily and reported and that all assets are protected against loss from unauthorized use or otherwise. The internal control systems are supplemented by an internal audit system carried out by a team under the direct supervision of the Head of Internal Audit.

The findings of such internal audits are periodically reviewed by the management and suitable actions taken to address the gaps, if any. The Audit Committee of the Board meets at regular intervals and addresses significant issues raised by both the Internal Auditors and the Statutory Auditors. The process of internal control and systems, statutory compliance, information technology, risk analysis and risk management are inter-woven to provide a meaningful support to the management of the business.

M/s Sharp & Tannan Associates, the statutory auditors of the Company, have audited the financial statements included in this annual report and has issued a report on the Companys internal financial controls over financial reporting as defined in Section 143 of the Act.

Material Development in Human Resources and Industrial Relations

The Human Resources function continued to focus on strengthening a future-ready organization through initiatives aimed at employee engagement, capability development, and performance management.

Various employee engagement initiatives were organized during the year, including National Safety Week, International Womens Day, Transcendental Mediation Program, International Yoga Day, health check-ups, and environmental initiatives such as tree plantation activities. Festival celebrations and team-building programs were also conducted to promote employee participation and strengthen organizational culture.

Talent development remained a key focus area. Structured induction programs and initiatives such as "New Joiner Connect" were implemented to support effective onboarding and integration of new employees.

Your Company continues to follow a structured performance management framework including quarterly functional reviews and annual performance appraisals to encourage a performance-driven culture.

Industrial relations during the year remained cordial and harmonious, contributing to a stable and productive work environment.

By focusing on these areas, your company has created a supportive and dynamic work environment that fosters employee growth, operational efficiency, and sustainable development. These initiatives have laid a strong foundation for continued success and growth in the coming years.

Cautionary Statement

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward-looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic demand and supply, input costs, availability, changes in government regulations, tax laws, economic development within the country and other factors such as litigation and industrial relations.