Honeywell Automation India Ltd Management Discussions

Key Financial Indicators and Performance Highlights for FY 2025-26

* Before exceptional item (Refer note 36 to the financial statements) and includes Other Income

INDUSTRY OUTLOOK AND OPPORTUNITIES

The Companys operating results are aligned to megatrends of Automation, Digitalization, Sustainability (energy resiliency and transition) and Urbanization including infrastructure creation. The Companys outlook is particularly dependent on the economic activity in India with respect to the above- mentioned megatrends and with exports to Honeywell, and global macroeconomic trends such as geopolitical changes, supply chain regional/local re-baselining, global talent mobility, movements in commodity prices and foreign exchange.

India Economic Overview

Indias GDP growth rate continues to be strong in the fiscal year 2025-26, with a real GDP growth rate of 7.6% with signs of reviving private consumption demand, and strong growth across service sector, manufacturing, and construction along with low inflation. Fiscal stimulus in the form of income tax/ GST rate cuts and favorable monetary policy are expected to sustain growth at a projected 6.4% to 7.2% in the fiscal year 2026-27 - however continued external headwinds such as geopolitical instability in terms of conflicts in the Middle East & Russia-Ukraine, geoeconomic instability in the form of tariffs continue to be major risks driving currency fluctuations, energy security, energy prices, and inflation. India macros are currently in a stable zone with benign inflation within RBI tolerance bands, continued capex from government while maintaining fiscal discipline and consolidation, steady GDP growth and relatively healthy corporate balance sheets. However, there is a looming threat of downside macro risks such as higher inflation driven by supply shocks/global supply chain disruptions, higher/volatile energy prices such as that of crude oil and gas where India is heavily import-dependent. Indias steep currency depreciation creating vulnerability in trade and financial flows going into 2026-27 fiscal year.

The Reserve Bank of India reduced policy rates down to 5.25% per annum from 6.25%, with the most recent reduction in December 2025 with a view to improve consumption and

growth in a benign inflation context. The scope for additional easing will potentially be limited by depreciation pressure on the rupee and inflation pressure due to supply disruptions, especially of energy. The reciprocal tariffs from US which were a significant headwind to India appear to have moderated due to the ‘India-US framework for an interim trade deal - this could potentially imply a lower average effective rate of tariff for India (for products exported to the US) V/S other competing countries. It is assumed that the Indian governments response at this stage would be measured and targeted, with a willingness to negotiate a mutually beneficial agreement. (Sources: Press Information Bureau). We continue to believe that the Indian Government will prioritize capital expenditure (10% YoY increase by Union government to a record 12.2 lakh crore rupees), particularly focused on infrastructure projects, energy security, and urban development, while slowly reducing subsidies to accommodate the fiscal glide path. The government had also initiated measures to revive private demand in the form of GST which may continue to spur the demand in FY2026-27, subject to inflationary headwinds - and hence, we are likely to see a wait-and-watch approach for the effects to play out on the private demand/consumption space.

The Government continues to push for ‘energy security as a core national priority, which has only been accentuated by recent events in the Middle East (in Feb-March 2026). Substantial fund allocation is expected to continue for clean energy expansion, including the Nuclear Energy Mission, which aims to achieve 100 GW by 2047 with an outlay of Rs. 20,000 crores - potentially including Small Modular Reactors in addition to Indias existing 3 stage nuclear program. Investments into renewable power such as solar, wind, biofuels etc. are expected to remain a priority. Additionally, India also continues its path of digital transformation across major sectors and themes such as financial services, direct benefit transfer, consumption and increasingly across the 5 layers of the AI stack - Energy, Chips (National Semiconductor Mission and PLI), Infrastructure (ports, datacenters), Models, and Applications. India is attracting significant domestic and foreign capital into this AI stack (especially in chips and infrastructure) which could be a big growth driver in the years to come. (Sources: S&P Global & Press Information Bureau)

Industry Overview

The Company continues to operate in multiple sectors, i.e. infrastructure, manufacturing and energy that are directly linked to the sustainable, digitalized, economic and industrial growth of the country. The Company also aspires to be an able supplier of choice to Honeywell globally maintaining its share of trade in the export of services and goods.

• Infrastructure: Infrastructure sector is expected to grow in line with GDP at 7-9% CAGR till 2030, driven by continued build-out of multi-modal transport networks in line with schemes such as PM Gati Shakti, Sagarmala, Bharatmala, UDAN etc. Significant investments continue to flow into the roads (3 lakh crore+), ports, railways and metros (2.5 lakh crore+), logistics parks, industrial cities, data centers (several Gigawatt scale investments announced worth more than $100 billion), cold storage and warehouses. A growing middle class and continued rural to urban migration are key drivers of infrastructure growth and are expected to continue over the next decade. Indias real estate market is currently between $550-600 billion in size annually and expected to grow at ~7% CAGR - real estate sector is expected to become a $1 trillion market by 2030 and $5-7 trillion market by 2047 signifying significant future growth potential in India over the next two decades. (Source: S&P Global, IBEF)

• Manufacturing: Indias manufacturing & industrial sector remains a pivotal driver of economic growth, contributing 15-16% to GDP and supporting significant employment generation. India has an ambitious target of taking manufacturing share of GDP to 25% by 2035 under the National Manufacturing Mission. The sector is also strengthened by other government initiatives such as Make in India, Atmanirbhar Bharat, and Production-Linked Incentive (PLI) schemes, which aim to enhance domestic production, attract foreign direct investment (FDI), and strengthen export capabilities. The sectors growth globally and in India continues to be driven by advancements in Industry 4.0 technologies, including automation, artificial intelligence, and smart manufacturing, which are enhancing productivity and global competitiveness - which automation companies are well poised to serve. Manufacturing sector registered 8.1% growth in December 2025 and Manufacturing GVA grew 7.7% in Q1 and 9.1% in Q2 of FY26. However, manufacturing PMI has dropped to 53.9 in March 2026 which is the lowest since June 2022, driven by uncertainty from Middle East conflict, higher cost, supply chain shocks, and moderating demand. Despite these challenges in the short-term, Indias manufacturing & industrial sector is well-positioned to be a pillar of strength for the country, assuming structural as well as process reforms and investment momentum are sustained. (Source: S&P Global)

• Energy: India is currently the worlds third largest energy consumer and is seeing robust energy demand growth (expected to be 6-6.5% per annum between 2025-2030). India is expected to account for close to a quarter of the global energy demand growth through 2040. There is sustained push to move towards renewables, with solar capacity alone exceeding 140GW (both utility scale parks and rooftop schemes combined) as of January 2026 -

while the target is of 500GW of non-fossil-fuel based power capacity by 2030. Wind power is currently at 55GW, large and small hydro is another 55GW, biomass at 11.75 GW, nuclear at ~9 GW (with another ~1 GW under construction). The Government of India (through Ministry of Petroleum and Natural Gas, MoPNG) aims to increase the share of natural gas in its energy mix from 6% to 10% by 2030. The current geopolitical environment in the Middle East may lead to accelerated move away from LPG to natural gas (through piped gas supply for homes), especially in urban India, driving increased demand for natural gas. This is driven by self-sufficiency considerations since India produces ~50% of its natural gas requirement domestically (97.5 mmscmd domestically sourced vs demand of ~189 mmscmd), while 60% of LPG is imported. Crude oil imports (projected to reach 5.8 million b/d by 2030 by MoPNG) continues to be the Achilles heel for Indias macro outlook - however efforts by MoPNG to diversify sourcing to 40 countries currently (up from ~27 two decades ago) and strategically rerouting supplies away from both geopolitical flashpoints (e.g., in the Middle East recently) as well as other sanctioned countries should hold Indias energy security in good stead going into 2026-27.

As we observed last year, Indias energy landscape is poised for continued dynamic growth, with oil and gas ensuring supply stability and renewables continuing to drive sustainability. In 2026-27, the macro priorities continue to include expanding refining capacity, completing gas pipeline networks, and accelerating scaling of renewable infrastructure. Renewables (such as solar, wind etc.) are no longer policy preferences but central to energy security for Indias growing economy. India is also taking the lead globally in sustainability initiatives like green hydrogen (one of the most competitive cost of production anywhere in the world of ~$3.08 or INR 279 per kg as of Feb 2026), Carbon Capture, Utilization and Storage (CCUS with a INR 20,000 Crores budgetary allocation announced over the next 5 years under Ministry of Power), and Electric Vehicles (EVs) will also enhance Indias global leadership in clean energy. Companies in this sector continue to be well-placed to capitalize on growth opportunities while contributing to Indias vision of energy independence and net-zero emissions by 2070.

OPERATIONS

The Company has only one segment as per Ind-AS namely

"Automation and Control Systems" across various business

operations, as stated below:

The global spin off of Honeywell Aerospace and Advanced

Materials business (now known as Solstice Advanced

Materials) does not affect the companys business.

Honeywell Process Solutions and Products: The Process Solutions business saw a strong momentum with many of our strategic customers and EPCs, with our business delivering healthy business growth. This business provides leading technologies from the plant floor to the boardroom as well as comprehensive lifecycle services to ensure more productive and stable operations. We also continued to optimize and integrate our wide portfolio of products and solutions that help customers to operate safely, reliably, efficiently, sustainably and achieve profitable operations. We have the expertise and breadth of resources to execute projects of every size and complexity in oil & gas, refining, pulp & paper, industrial power generation, chemicals & petrochemicals, biofuels, pharma & life sciences and metals. The Company also provides the equipment for monitoring and controlling the process parameters at various process industries such as Refineries and Petrochemicals, Metals, Chemicals and Specialty Chemicals. The business also provides equipment for the Tank Gauging and Oil Terminal Automation Solutions. We continue to expand our reach in various underpenetrated geographies within India through OEM engagements. These have helped the business of the Company to deliver reasonable performance in a challenging environment.

The business will continue to stay focused on its core strategies of creating at scale install base which eventually will drive life cycle value and aggressively pursue the new growth levers of digitization, sustainability and tailwinds across various industry segments like metals, life sciences, pharmaceuticals and gas etc. The entire business landscape is changing as the country drives make in India, sustainability goals, builds energy security & independence and encourages use of digital solutions. The Company is excited about the opportunities that these industries bring to the business. Apart from the core markets and solutions, the Company is uniquely positioned to drive growth in software solutions such as cyber security. The Company is also enhancing its reach and coverage to serve the renewable energy market with new and innovative solutions. As customers shift their focus to carbon neutral and environmentally compliant operations, the Company would like to serve these new needs in the industry.

Honeywell Building Solutions: Honeywell Building Solutions (HBS) is strategically aligning with market trends in advanced manufacturing, infrastructure, and data centers by leveraging sophisticated automation and control technologies. The business is well-positioned for growth, driven by increased government funding for critical infrastructure sectors such as airports, railways, and hospitals. Additionally, rising private investments in emerging industries—including data centers, semiconductor facilities, Li-ion battery manufacturing, and solar panel production—present significant opportunities for HBS to demonstrate its expertise.

The business delivers comprehensive system integration services designed to transform facilities into environmentally

sustainable, efficient, safe, and intelligent spaces. A key offering includes Honeywells Enterprise Building Integrator™ (EBI), which enables seamless integration of diverse building I systems to enhance operational safety and efficiency.

; HBS provides advanced airfield ground lighting systems that deliver optimal illumination for runways and taxiways at numerous airports, supporting aviation safety and operational _, effectiveness under all weather conditions. The Company also _; supplies Visual Docking and Guiding Systems (VDGS) within _: the airport sector, alongside Navitas software for integrated

, airport operations.

, Furthermore, HBS offers robust after-sales services and maintenance programs, ensuring long-term performance and ¹ reliability of building systems while minimizing downtime and ¹ promoting operational excellence. By utilizing data analytics for energy optimization, delivering connectivity solutions through innovative software, and implementing stringent . cybersecurity protocols, HBS supports secure, efficient, and ^ future-ready smart building environments.

Building Management Systems: Building Management Systems (BMS) is a leading provider of building automation products that seamlessly integrate with specific automation

/needs. BMS portfolio offers a comprehensive suite of controllers, field devices and software solutions, allowing customers to tailor their systems effectively. We excel in facilitating the easy monitoring and management of a buildings mechanical, electrical and electromechanical elements.

Our extensive portfolio includes solutions for Healthy Buildings and Heating, Ventilation, and Air Conditioning (HVAC) ^. applications, catering to a diverse range of sectors across India. These sectors include large, mission-critical facilities in pharmaceuticals, healthcare and public infrastructure (such as airports, stadiums and metro stations), as well as IT ¹ parks, residential complexes, industrial spaces and hospitality sectors.

BMS has experienced consistent growth throughout the year and remains committed to its core strategies. This commitment is evident through a focus on commercial excellence, including optimized sales deployment, efficient onboarding processes, channel partner excellence, robust pipeline expansion and the introduction of innovative new products. These initiatives ensure continued growth by leveraging our existing product portfolio. The business is actively targeting high-growth sectors such as healthcare, data centers and government infrastructure. We are fostering this expansion through exciting new initiatives, including Connected Buildings and upcoming product launches, alongside a strategic enhancement of our market reach. These efforts strengthen our position in a rapidly evolving , market.

Honeywell Sensing Solutions: As machines are getting smarter every day it needs a lot of sensors to gather information about surroundings and critical physical parameters. Honeywell Sensing Solutions (HSS), business consists of various sensors and switches which make machines safer, more productive and energy efficient. These sensors are used in key industries like Transportation (including EV), Medical & Health Care, and Defense & Aerospace. HSS offers a wide portfolio, which includes pressure switches, airflow sensors, humidity and temperature sensors, oxygen and breath sensors.

HSS also enhanced its defense & military product portfolio to get into new military programs of government customers. HSS business did a good job in marketing products for upcoming new verticals and on-time supply to customers by efficient operations management. This business rationalized its portfolio and gave priority to the right technologies and future customer demand. To drive higher business growth, the Company took number of initiatives like channel footprint expansion, establishing the application engineering support system in India, technology day events to improved reach to focused customers, Digitization in sales process to improve productivity and enabled us to focus on strategic accounts.

Exports: The Exports business focuses on Engineering Services, Contract Manufacturing including Projects across Companys line of businesses for Honeywell affiliates. The Exports business is predominantly service-oriented and contract manufacturing, centered on engineering, project management and global supply chain support. This asset-light model prioritizes high asset turnover, operational agility, common processes, a variable cost structure, and technology-enabled platforms.

Global Engineering business provides engineering

services across multiple verticals in Process Solutions & Building Solutions businesses. It provides basic and detailed engineering, application software development, project management services, solution consulting, system integration and testing, site commissioning for Projects, Life Cycle Services, Connected Process, Measurement Controls, Building Solutions and Building Management solutions of Honeywell. This delivers projects efficiently by leveraging technical competency, economy of scale and improving productivity and cost competitiveness for several Honeywell businesses and regional affiliates. For Process Solutions, it serves several core verticals like oil & gas, refinery & petrochemical, power, minerals, mining, & metals, etc. and new areas like life sciences, energy management and storage, etc. For Building Solutions, it provides services for airports, data centers, pharma, commercial and residential buildings, etc. Capability development and engineering skill enhancements to cater to evolving technologies are managed through full- fledged Honeywell Academy which provides training to the engineers.

Under contract manufacturing we deliver high-quality products and project solutions quickly and efficiently to global markets. By embedding built-in and continuous improvement processes within the Honeywell Accelerator framework, it ensures excellence in every aspect of our operations. There is continuous focus on strategic investments in new product development, meaningful automation, capacity enhancement, and localization efforts. These initiatives are designed to enhance cost competitiveness while improving delivery performance. In the realm of project solutions, the Company excels in delivering turn-key automation and control contracts for industrial applications, including both batch and continuous processes. This business serves as a Center of Excellence for end-to-end project execution for global projects involving Process Solutions systems, safety and environmental controls, industrial security system, software application engineering and advanced software applications. This competitive edge enables Honeywell to thrive in highly competitive markets, particularly within the EMEA and APAC regions, as well as in large-scale global programs. The offerings are tailored to meet the needs of critical industries such as oil & gas, refining, power production, water, chemicals and life sciences. With a strong emphasis on delivering innovative and reliable solutions, we continue to drive growth and create value in the global marketplace.

PEOPLE

Leadership and Talent : The Company believes in the immense potential of its human capital and continues to invest in technical and leadership capabilities as key enablers for business growth. The Company leverages processes that have been the cornerstone of its growth we are pivoting in new areas of business & verticals, and our skilled people plays very important role in this. We have strong processes like Honeywell Performance Development (HPD) and Management Resource Review (MRR). These foundational processes enable careful and continual review of leadership talent within the organization, while promoting meritocracy, clarity in goals, providing structured feedback, development planning, Individual Development Plan (IDP) and proactive succession planning for all key positions across the organization.

As part of our evolved Honeywell Behaviors (ACT WITH), talent development continues to be a strategic priority for us as we work to develop and retain niche talent. Career advancement and development opportunities continue to fuel retention and engagement. Several initiatives are undertaken within the organization like mid-year reviews, learning sessions, Individual development plans and accelerate readiness and succession for future career progression.

Developing leadership capability in employees is a key expectation of every business leader and the Company actively promotes internal movements for career growth.

Development plans help focus on capability building and skills development to enable leaders to take up larger roles. The HPD process ensures that there is a consistent framework to assess our employees on goals and behaviors, creating opportunities for objective feedback and discussions on development plans. We are committed to inclusion culture within our company and drive various initiatives to drive and promote the same as unconscious bias trainings, partnership with leading external forums and focus intervention to promote inclusive culture in all walks of diversity.

As on March 31, 2026 the Companys full time employee strength was 3,167 as compared to 3,140 as on March 31, 2025.

Employee Health, Safety (HSE) and Volunteering: The

Company prioritises the health and safety of our employees, recognising that a safe workplace is essential for both the well-being of our workforce and the sustainability of our operations. Our commitment to health and safety is not just a regulatory obligation but also a core value that shapes our company culture. Throughout the past year, we have strived to create a working environment free from hazards, fosters wellness, and enhances productivity.

Our health and safety program aims to achieve the following objectives:

• Regulatory Compliance and Governance: Ensure full compliance with all applicable local, national, and international health and safety regulations, statutory requirements, and recognized standards, including ISO 45001 & ISO 140001, supported by strong governance, monitoring, and reporting mechanisms.

• Risk Prevention and Incident Reduction: Systematically identify, assess, and mitigate occupational health and safety risks with the objective of achieving a sustained reduction in workplace accidents, injuries, occupational illnesses, near misses, and property damage incidents.

• Employee Engagement, Empowerment, and Safety Culture: Foster a strong and proactive safety culture by

actively engaging and empowering employees at all levels. This includes structured safety training programs, regular awareness initiatives, and safety Committee participation. Employees are encouraged and empowered to identify hazards, report unsafe conditions, participate in risk assessments, and contribute to continuous improvement initiatives, reinforcing shared accountability for workplace safety. ^•

• Continuous Improvement: Continuously enhance health and safety performance through periodic reviews, audits, training, and data driven actions, contributing to long term social sustainability, improved workforce resilience, and enhanced stakeholder confidence.

Throughout the past year, we have implemented various initiatives and programs to support our employees in maintaining and improving their health. The key highlights include:

Health and Wellness Programs: We offer a range of health and wellness programs, such as nutrition workshops and mental health awareness sessions. These programs are designed to empower employees to make positive lifestyle choices and take control of their health. Our company gym provides access to fitness equipment and exercise classes, ensuring employees have the resources to stay active and maintain their physical well-being. We also conduct ergonomic assessments to ensure employees have a proper workstation and equipment to support their physical wellbeing and prevent musculoskeletal injuries. We also provide personalised ergonomic training and help implement ergonomic solutions tailored to each employee.

Training and Awareness Programs: Training remains a cornerstone of our health and safety strategy. In the past year, we have conducted various training sessions, reaching employees in critical areas such as emergency response, high-risk operations, and workplace ergonomics.

Slip, Trip, and Fall Awareness Campaign - "Step Smart, Stay Safe": Slips, trips, and falls continue to be one of the leading causes of workplace incidents. The "Step Smart, Stay Safe" campaign was organized to raise awareness among employees, encourage proactive hazard identification, and promote vigilance in day-to-day activities, with the objective of reducing slip, trip, and fall-related incidents.

Employee engagement: As part of employee engagement and social responsibility initiatives, a number of volunteering activities were conducted to promote voluntary participation, community support, and a culture of care among employees. The response has always been overwhelming. Some of activities are the Blood donation drive at our Hadapsar office and Factory, Earth Day - Plantation Maintenance Drive, Girls in ICT Day - STEM Mentoring/Guidance for college students, Seed Ball Making, Learning Fair "Thrive" - Empowering Young Minds, IGNITE With Honeywell: Empowering Literacy Through STEM, Honouring the International Day of Older Persons - Resilient Futures with Honeywell - Wellness Kit Drive and IGNITE With Honeywell - Anganwadi Painting.

HSE Excellence: Our contract manufacturing facility

consistently demonstrates high standards of safety requirements, encompassing staging and customer experience, resulting in five years without a record and overwhelming. Additionally, at all our project and field services sites, we excel in implementing customer safety practices and adhering to Honeywell Management system requirements, ensuring the safety of our employees and contractors. This commitment has resulted in various recognitions and awards for our dedication to customer safety protocols.

ISO Certification: The Company is committed to maintaining exemplary standards in health, safety, and environmental management. Throughout the year, we have made significant strides in these areas, culminating in the achievement of both ISO 45001 and ISO 14001 certifications. These certifications reflect our commitment to creating a safe workplace and minimizing our environmental impact, thereby aligning our operations with internationally recognized standards.

Honeywells commitment to health and safety remains unwavering. We understand that the well-being of our employees is critical to our success, and we will continue to prioritise their safety in all aspects of our operations. By adapting to challenges and embracing continuous improvement, we strive to create a workplace where everyone can work safely and productively.

FINANCIALS

Overall revenue from operations was 46,819 million, registering 11.8% growth as compared to the previous year. The domestic segment registered revenue of 31,306 million for the current year as compared to 27,131 million in the previous year, registering a 15.4% growth. Revenue from exports was 15,513 million as against 14,765 million in the previous year, registering a growth of 5.1%. The external order book is increased by 14.1% to 35,144 million from 30,808 million in previous year.

Overall profit after tax was 5,250 million. The Company delivered a return of 11.2% on sales for the year (previous year: 12.5%). Cost of goods sold was 61.5% of sales (previous year: 60.8%).

Net cash flow from operations was 4,926 million, as compared to 4,263 million in the previous year, representing 93.8% of net profit (previous year: 81.4%). The Company will continue to focus on working capital performance and positive operating cash flows.

Related party transactions for the financial year ending 31st March 2026 are in accordance with the provisions of Section 188 of the Act and Regulation 23 of the SEBI Listing Regulations, 2015.

RISKS AND CONCERNS

The Company generates a significant portion of its sales and profits from non-affiliated third-party customers as well as from its relationships with Honeywell affiliates, including the ultimate holding company. The Companys capacity to sustain or enhance its revenue and profits from customer categories as above depends on several critical performance factors: ^•

• Identifying emerging trends and customer requirements to develop product and service offerings that are superior to those of competitors.

• Commitment to meet or exceed the price, quality, and delivery standards set forth by Honeywell affiliates and their end customers in a cost-effective and competitive manner.

• Developing and retaining employees and leaders with the necessary expertise.

• Honeywell-specific business considerations (independent of its shareholdings in the Company), including changes in Honeywells strategies regarding utilization of alternative opportunities to globally source products and services currently provided by the Company (including from alternative sources that Honeywell affiliates may acquire or develop), the level and/or mix of Honeywells business with the Company.

• The overall competitive landscape, which includes pricing pressures on the sale of goods and services to Honeywell, potential reductions in order volume, or shifts in the mix of orders or sales to Honeywell.

In addition, major macro and micro economic factors pose

some risks to business despite Companys diversified

products & services for varied industries as follows:

• Geopolitical risks: In 2026, India may face significant geopolitical risks stemming from the ongoing conflicts in the Middle East, as well as the Russia-Ukraine conflict. These geopolitical events and tension have caused disruptions in the global economy, and to global supply chain and chokepoints - leading to increased trading and logistics costs. The ramifications could be particularly pronounced in India, affecting supply chains across various sectors, including energy and agriculture.

• Inflation: India is a net energy importer with ~90% dependency on import for oil and 50-60% for gas. The total oil and gas import bill is projected to be more than $125 billion. The import bill can become much higher if oil prices remain elevated due to conflicts and if supply constraints materialize (such as the commercial LPG supply constraints in March 2026). Elevated oil prices due to geopolitical tensions, particularly in the Middle East and in Russia-Ukraine remain a significant headwind risk for growth in India. The high import dependency and increased volatility in oil prices and / or supply disruptions are also likely to exert upward pressure on inflation and threaten Indias macroeconomic stability if there are prolonged conflicts in critical energy producing regions of the world such as the Middle East. (Source: MoPNG, RBI, S&P Global)

• Global economy: In 2026, the global economy will continue to work around the effects of tariffs and countertariff policies along with a continued reassessment of

trade relationships and de-risking of supply chains. The tensions between the U.S. and China continue to weigh in the background forcing several countries and economic groups to realign and "friend-shore" supply chains. New trade agreements and regional partnerships continue to be pursued aggressively - India has been a prominent forerunner in this with several agreements announced e.g., with EU, EFTA, UK, Oman, New Zealand etc. - to mitigate the impact of geo-economic uncertainty. As businesses navigate these challenges, the focus on diversification of sourcing, agility of supply chains, and investment in technology to enhance efficiency will continue to be critical for maintaining competitiveness in an increasingly protectionist environment. Your company will continue to closely monitor the impact of global tariff changes and trade agreements on supply chains, import prices, and currency volatility, among other factors.

• Forex rate fluctuations: Indian rupee has been under pressure through 2025 falling from INR 85 per USD to INR 92-95 per USD and this pressure and volatility is expected to continue going into 2026. Fluctuations of the Indian rupee against key currencies are expected to continue driven by geopolitical events, rising oil prices, Indias domestic as well as international macro and monetary policy factors. The rupees value may rise or fall in response to interest rate adjustments made by the Reserve Bank of India (RBI) aimed at managing inflation and promoting growth, as well as changes in Indias current and capital account flows. Moreover, variations in global oil prices and trade / services export balances will significantly impact on the rupees exchange rate. The company normally takes advantage of natural hedge position given a good mix of Exports business before taking any decision on hedging.

• Global supply chain disruptions and energy price shocks:

India may likely face challenges from global supply chain disruptions and high energy costs, which could hinder industrial output in 2026-27. These disruptions may delay production and reduce material availability, while elevated energy prices could compress corporate profit margins and fuel consumer price inflation. As demand weakens and investments slow, India may experience slower-than- expected GDP growth, highlighting the need for improved supply chain resilience and energy diversification.

• Competition: The Company faces a highly competitive environment in India, with escalating pricing pressures on goods and services in both domestic and export markets. Increased competition from local startups and global players may impact revenue and profit margins.

INTERNAL CONTROLS

The Company has instituted robust internal control procedures

that are appropriate to the nature of its business and the scale of

its operations. The Companys internal control processes have

been effective, providing reasonable assurance regarding the reliability of financial information, compliance with prevailing laws and regulations and adherence to standard operating procedures. These processes ensure the documentation and evaluation of entity-level controls through existing policies and procedures, primarily to identify significant gaps and define key actions for improvement. The Company has consistently endeavored to align all its processes and controls with the best global practices. We believe that our system of internal controls offers reasonable assurance concerning the reliability of financial reporting and the effectiveness and efficiency of operations. We remain committed to continuously evaluating and enhancing our internal control framework to adapt to evolving risks and business requirements. In addition to external audits, the Companys financial and operational controls are regularly reviewed by the internal audit team in accordance with the annual plan approved by the Audit Committee. The Committee routinely reviews the significant audit findings, corrective action plans (CAP), the adequacy of internal controls, compliance with accounting standards, and any changes in accounting policies and practices. The Company also maintains a robust Integrity and Compliance (I&C) programme, wherein all employees undergo communications and training to become acquainted with leadership expectations regarding behaviors and compliance, legal requirements, avoiding conflicts of interest, maintaining a healthy and safe workplace, safeguarding Company property and information, appropriate use of information technology resources, and understanding how to report any suspected unethical or illegal conduct without fear of retaliation. The Companys Code of Conduct outlines the fundamental standards to be adhered to by employees in all business dealings and day-to-day operations. The Company also has a formal process to receive and address incidents related to business conduct reported by employees and other stakeholders.

SUMMARY

Overall revenue improved 11.8%. Net income was 11.2% of sales as compared to 12.5% in the previous year. Increased competitive environment in both domestic and exports segments, supply chain and project execution disruptions and inflation continue to be a challenge. The risks and concerns mentioned above are being addressed through concerted efforts on operational excellence, driving productivity and cost rationalization. The Company is continuously driving new productivity initiatives to remain committed to the journey of profitable growth. The Companys mix of exports revenue marginally decreased as compared to the previous period.

Details of various key ratios have been presented in the "Performance Highlights" section. Please note that the interest coverage ratio and debt equity ratio is not applicable to the Company as there is no debt.