Harig Crankshafts Ltd Management Discussions

ECONOMIC OVERVIEW Global Economy

The global macro environment remained subject to heightened uncertainty during the year, influenced by geopolitical tensions, elevated energy prices and relatively tight financial conditions. Against this backdrop, the global economy is expected to maintain moderate growth, while continued volatility in capital flows, inflation and international trade may pose challenges to the broader economic outlook.

The Businesses are expected to remain focused on prudent financial management, operational efficiency and adaptability to changing market conditions.

Indian Economy

India continued to remain one of the fastest-growing major economies, demonstrating resilience and maintaining strong growth momentum despite global economic uncertainties. According to the National Statistical Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI), real GDP growth for FY 2025-26 is estimated at 7.6%.

Inflation remained broadly manageable during the year, providing room for monetary policy support. The Reserve Bank of India maintained a calibrated approach to monetary policy, with the policy repo rate at 5.25%, while continuing to closely monitor global economic developments, commodity prices, inflationary pressures and financial market conditions.

The Indian economy is expected to remain resilient, supported by domestic consumption, infrastructure development, investment activity and continued policy support. Nevertheless, global geopolitical developments, commodity price movements, international trade conditions and financial market volatility may continue to present challenges.

INDIAN REAL ESTATE INDUSTRY OVERVIEW

The construction sector is a key component of the Indian economy with linkages across more than 250+ sub sectors. The real estate and construction ecosystem continues to be a significant contributor to Indias economic growth. In FY 2025-26, the construction sector accounted for approximately 7.8% of Indias nominal GDP.

Indias residential real estate market remained in a favourable upcycle in CY 2025, driven by premiumisation, urbanisation, infrastructure development and rising household aspirations. New launches across the top seven cities stood at ~4,19,200 units, up 2% year-on-year, while absorption was ~3,95,600 units. Residential sales value crossed ^6 lakh crore, growing 6% year-on-year, supported by pricing power and a richer premium mix. Units priced above ^1.5 crore accounted for 42% of launches. The outlook remains positive, with continued premiumisation and consolidation favouring credible developers with strong brands and execution capabilities.

Indias office market recorded a landmark CY 2025, with gross leasing of ~7.68 msm (~82.6 msf), the highest annual absorption on record. GCCs, technology companies, flex-space operators and BFSI occupiers contributed ~60% of total absorption, while Bengaluru, Mumbai and Delhi-NCR accounted for ~61%. Strong GCC expansion, Indias cost competitiveness and deep talent pool continue to support

rental growth and occupancy. The outlook remains constructive, with sustained demand for high-quality, future-ready workspaces supporting long-term annuity growth.

Indias retail real estate market remained strong in CY 2025, with leasing activity of ~0.83 msm (~8.9 msf), supported by rising consumption, premiumisation and expansion of D2C brands. Hyderabad, Mumbai and Delhi-NCR accounted for ~65% of leasing activity. Fashion and apparel led demand at 52% of Q4 2025 absorption, followed by F&B at 11% and homeware and furnishings at 6%. The outlook remains positive, with quality retail assets expected to benefit from resilient occupancy, sustained tenant demand and steady rental growth.

DISCUSSION OF FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the year under review, the Company commenced activities in its newly identified business areas of real estate development and related services pursuant to the alteration of its Main Objects, as approved by the shareholders through Postal Ballot. The Company has initiated its operations in these areas on a limited scale and has been evaluating and pursuing suitable business opportunities. However, no major project was undertaken or executed during the year under review.

The Company continues to explore suitable opportunities in the real estate and civil engineering sectors with a view to developing sustainable business operations and creating long-term value for its stakeholders. The management remains focused on identifying viable projects and business opportunities while maintaining a prudent approach towards deployment of resources and capital.

The financial performance of the Company during the year should be viewed in the context of the transition from its erstwhile manufacturing business, which had remained discontinued since FY 201011, to its newly identified business activities. The Company expects its operational performance to progressively improve as it expands its activities and undertakes suitable projects in the coming years.

The financial statements of the Company have been prepared in compliance with the applicable provisions of the Companies Act, 2013 and the Indian Accounting Standards (“Ind AS”) prescribed by the Ministry of Corporate Affairs under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time, and other relevant provisions of the Act and the rules made thereunder.

OPPORTUNITIES & THREATS

The Indian real estate sector continues to present attractive growth opportunities, supported by increasing urbanisation, rising demand for residential and commercial properties, improving infrastructure, changing consumer preferences and growing demand for quality housing. The company entered into real estate business during the FY 2025-26 and intends to explore suitable opportunities in the sector with a focus on prudent and sustainable growth.

The sector, however, is subject to various challenges, including fluctuations in interest rates, inflation, property prices, construction and input costs, availability and cost of land, customer affordability and changes in overall economic conditions. The development of real estate projects may also involve procedural and regulatory requirements relating to land acquisition, development permissions, environmental clearances, zoning regulations and other statutory approvals, which may affect project timelines and costs.

Other potential challenges include availability of financing, competition, supply-chain disruptions, changes in government policies, geopolitical uncertainties and fluctuations in market demand. Increased interest rates and rising property prices may also impact customer affordability and demand.

As the Company has recently entered into real estate business and does not have any project under execution as on March 31, 2026, its exposure to project execution-related risks is presently limited. The Company will continue to closely monitor market developments and emerging opportunities and, under the guidance of the Board and management, adopt appropriate measures to mitigate potential risks while building a sustainable presence in the real estate sector.

RISK AND CONCERN

The Company recognises that risk is an inherent part of its business and has put in place appropriate processes for identification, monitoring and mitigation of key risks. The risk framework is reviewed periodically to ensure that emerging risks are appropriately assessed and addressed.

During FY 2025-26, the Company expanded its business focus towards the real estate sector. As the Company establishes and scales its presence in this sector, it may be exposed to risks arising from changes in economic conditions, interest rates, regulatory and policy developments, market demand, availability and cost of capital, competition and changes in customer preferences.

The real estate sector is also influenced by factors such as property prices, liquidity conditions, input costs, availability of suitable opportunities and the overall regulatory environment. Any adverse change in these factors may impact the Companys future business plans, investments and financial performance.

As the Company currently does not have any major real estate project under execution, the immediate exposure to project execution and construction-related risks remains limited. Going forward, the Company intends to adopt a measured and disciplined approach to identifying and evaluating real estate opportunities, with due diligence, prudent capital allocation and appropriate risk assessment forming an integral part of its decision-making process.

The Company remains focused on building a sustainable real estate business while maintaining financial discipline and continuously monitoring the evolving market and regulatory environment.

FUTURE OUTLOOK

The outlook for the Indian real estate sector remains positive, supported by economic growth, urbanisation, rising household incomes, infrastructure development and evolving consumer aspirations. Continued urban migration is expected to drive demand for quality housing, while the expansion of sectors such as technology, manufacturing, e-commerce and Global Capability Centres is likely to support demand for commercial, logistics and warehousing spaces.

Government-led infrastructure development and improved connectivity are expected to create new growth corridors and unlock opportunities for real estate development. Premiumisation, increasing preference for organised developers and growing demand for quality and well-planned developments are expected to further support the sector over the medium to long term.

Against this backdrop, the Company intends to build its presence in the real estate sector in a measured and disciplined manner, evaluating opportunities based on market potential, location, project viability and risk-return considerations. The Company will focus on prudent capital allocation, strong governance and sustainable value creation as it identifies and develops suitable opportunities.

With a long-term approach and a focus on quality and responsible growth, the company remains optimistic about the opportunities presented by Indias evolving real estate landscape

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate internal control system commensurate with the nature, size and complexity of its operations. The internal control framework is designed to safeguard assets, prevent and detect errors and irregularities, ensure accuracy and reliability of financial and operational information, and facilitate compliance with applicable laws, regulations and internal policies.

The internal control framework is supported by defined policies, procedures, appropriate authorisation mechanisms, management reviews and periodic internal audit activities. The adequacy and effectiveness of internal controls are reviewed periodically by the management, with corrective measures undertaken wherever required.

The Company believes that its existing internal control systems are adequate and effective for its present scale of operations and provide a reasonable basis for managing business and financial risks.

INDUSTRIAL RELATIONS AND HUMAN RESOURCES DEVELOPMENT

The industrial relations have been cordial and satisfactory. We recognize the importance of Human resources and give full respect for its development and are committed to the development for human resource.

The Company recognises its employees as an important enabler of its business objectives and remains committed to fostering a positive, inclusive and supportive work environment. During the financial year, the Company continued to focus on employee engagement, learning and development, and overall wellbeing.

The Company encourages its employees to enhance their skills and capabilities through appropriate learning and development opportunities, as relevant to their roles and responsibilities. The Company also promotes a healthy work environment with due emphasis on work-life balance, employee welfare and well-being.

The Company remains committed to providing its employees with a safe, supportive and conducive workplace and to ensuring their overall development and well-being.

DISCLOSURES

During the year, the Company has not entered into any transaction of material nature which affects the Financials of the Company.

CAUTIONARY FORWARD LOOKING STATEMENTS

Statements in annual report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations, may constitute “forward looking statements” within the meaning of applicable laws and regulations. Although the expectations are based on assumptions, the actual results might differ.