Kernex Microsystems India Ltd Management Discussions

(A) Industry and Business Overview: Review of Operations

Your Company recorded a turnover of Rs.42,580.96 Lakhs for the financial year 2025-26. The Company has reported a profit before tax of Rs. 10,942.47 Lakhs, compared to a profit of Rs. 5,004.88 Lakhs in the previous financial year.

The Company is executing the following:- Domestic North Central Railways (NCR Projects): 13. NCRA 382/408 RKM:

The supply and installation works for the entire section is complete along with the supply of maintenance spares.

The commissioning is completed for the below mentioned sections: Chipyana Burgz (Excluding) - Tundla (Excluding) [2-Jun-26] : 175 RKm Tundla (Excluding) - Pankidham (Excluding) [1-Jul-26] : 207 RKm The work in the balance section is in progress as planned.

All the locos were installed and maintenance phase has started The ISA documentation for the balance section is in progress

14. NCRB 250/343 RKM:

The supply and installation works for the entire section is complete along with the supply of maintenance spares. The commissioning is completed for the below mentioned sections:

Kanpur (Excluding)-Prayagraj (Excluding) [22-Mar-26] : 190 RKm

Mirzapur (Including)- Block Hut K (Including) [30-Jul-26] : 60 RKm

The work in the balance section is in progress as planned. All the locos were installed and maintenance phase has started The ISA documentation for the balance section is in progress

15. NCRD 108.66 RKM

The supply of units for the entire section is complete and installation is in progress

Three milestones have been completed, and the fourth milestone is progressing as planned

The ISA documentation is in progress as planned

Total no. of Kms commissioned in NCR section was 632 RKM Kernex has emerged as :

First OEM interfaced Kavach with 4 Electronic Interlocking systems First OEM to run Vandhe Bharath commercially

16. South Central Railways (SCR)

The handing over and commissioning activities for the SCR projects is complete and the sign off activities are in progress

The Company continued support and maintenance activities in respect of commissioned sections.

17. ICF (Integral Coach Factory, Chennai)

A total of 55 TCAS units have been supplied, out of which 50 units have been successfully installed and commissioned at designated locations, in compliance with all functional and tech- remaining units is currently in progress and is being nical carried out as per the planned schedule by ICF (as per the applicable JIT clause) The company continues to do the maintenance support in respect of commissioned locos allocated to various Zonal railways

18. Chittaranjan Locomotive Works (CLW) – Supply and Installation of Loco TCAS

Your company has bagged order for Supply, Installation, Testing and commissioning and defect liability and long term annual maintenance of On-Board KAVACH equipment along with supply and installation of CAB roof antenna including complete wiring, harnessing, cabling and connection with Loco KAVACH System from Chittaranjan Locomotive Works. Total no. of units to be supplied is for 3,024 with a value of approximately Rs.2465.70 crores across 37 loco sheds in India The company has supplied 44% of the units to various loco sheds and 34% of the installations were complete.

The Production and supply of balance units is progressing as planned.

19. South Eastern Railways (SER) - (GD & GQ Routes)

Kernex Microsystems (India) Limited, in consortium with MRT Signals Limited, has successfully secured a major contract valued at approximately 325.33 crores. This prestigious order involves the Supply, Installation, Testing, and Commissioning of Kavach across GO & GO routes covering 688 RKM in the Kharagpur and Chakradharpur Divisions of South Eastern Railway. expertise and execution capabilities of both con Thissignificant -sortium partners in the field of advanced railway signaling and safety systems. It also marks a key milestone in their contribution to the Indian Railways modernization and safety enhancement initiatives.

The first two milestones were completed successfully, and third milestone work is in progress as planned. The units related to three milestones were delivered and installation work is in progress.

Two FAT setups were done as scheduled. One Lab setup was completed for training purpose. Another FAT setup & Lab setup material is planned during the Milestone 3.

The installation work at different stations is in progress as planned. The appointment of asses -sor for the ISA activity was finalized and the documentation is in progress

20. MAS-GDR, MAS-AJJ, AJJ-RU SR Section of Chennai Division in Southern Railways – (SR)

KERNEX-VRRC CONSORTIUM has bagged order for Provision Of Kavach (Train Collision Avoidance System), In MAS-GDR, MAS-AJJ, AJJ-RU Sections (271km) Of Chennai Division in SR valued at approximately 173.11 crores.

The work related to first two milestones is complete and the activities planned for milestone

3 are in progress. The units were supplied as per the milestones and the installations are in progress.

The FAT setup & Lab setup is complete as scheduled. The training activities using lab (Coim-batore) have commenced.

Appointment of assessor for the ISA activity is finalized and the documentation is in progress

21. Arakkonam (AJJ Jn)-Jolarpettai(JTJ Jn) Section of Chennai Division in South Railways (SR)

KERNEX-VRRC CONSORTIUM has bagged order for Provision of KAVACH (Train Collision

Avoidance System) along with Tower and 48 Fiber OFC as backbone Network in Arakkonam

(AJJ Jn)-Jolarpettai(JTJ Jn) Section of Chennai Division in SR valued at approximately 135 crores. The survey of stations in the entire section is complete.

The work related to first two milestones is complete and the activities planned for milestone 3 are in progress. The units, FAT & Lab setup material are planned and supplied as per the Milestone 3 commitments Appointment of assessor for the ISA activity is finalized and the documentation is in progress

22. Palanpur - Samakhiyali – Gandhidham Section (300.71 Km) On Ahmedabad Division of Western Railway

KERNEX-KEC Consortium has bagged order for Provision of KAVACH Version 4.0 or latest (formerly known as Train Collision Avoidance System-TCAS), including provision of communication back bone based on UHF and OFC on Palanpur Samakhiyali Gandhidham Section on Ahmedabad Division of Western Railway valued at approximately 182.81 crores.

Two Milestones were completed and the work was completed as planned. The survey of all stations is complete and the materials were dispatched as per the milestone commitments. The towers are erected as planned. The installation work in Stations & LC s is in progress and the production of balance material is progressing as planned.

Appointment of assessor for the ISA is finalized and the documentation is in progress.

23. Itarsi (Excl) – Khandwa (Excl) – Bina (Excl) – Ruthiyai (Excl) Section (355 Km) On Bhopal division of Western Central Railway

KERNEX-KEC Consortium has bagged order for Provision of KAVACH Version 4.0 or latest (formerly known as Train Collision Avoidance System-TCAS), including provision of communication back bone based on UHF and OFC on Itarsi (Excl) Khandwa (Excl) Bina (Excl) Ruthiyai (Excl) Section (355 Km) On Bhopal division of Western Central Railway valued at approximately 151.4 crores.

Three milestones were completed as planned. The survey activity of entire section is complete.

The setup of PMIS offices at 3 locations is complete.

Materials were dispatched as per the milestone commitments. The erection of towers & installations at Stations & LCs is in progress as planned.

Appointment of assessor for the ISA is finalized and the documentation is in progress.

24. ISA Activity:

Kernex has completed interoperability tests at Lab and in fieldduring Kavach 4.0 Development. As per directivefromRailwayBoardandRDSO, the interoperability shall be certified by Independent safety assessor (ISA). The witness trials were completed and the safety assessment

report, followed by approval is awaited.

B) Future outlook of India s strong commitment towards TheUnionBudget2025 2026has the modernization and safety of Indian Railways, with a continued emphasis on high capital expenditure (CAPEX) and the deployment of advanced safety technologies.

Key Highlights & Impact Areas:

Overall railway allocation: The Union Budget 2026-27, presented February 1, gave Indian Railways a record 2.92 trillion for the sector, 10 per cent higher than the 2.65 trillion in the FY26 revised estimates, with budgetary support rising to 2.77 trillion, a 9.9 per cent increase over the FY26 RE of 2.52 trillion. Utilisation has stayed strong too - as of December 2025, Railways had spent 80.54 per cent (around 2.03 trillion) of the current year s allotted capex.

Signalling/KAVACH specifically - the part that matters most to Kernex:

Signalling and telecom allocation rose to 7,500 crore, up from 6,500 crore in the prior year.

The Kavach-specific allocation for 2026-27 is 2,066.24 crore, 3,874.9 crore up to June 2026.

Rollout progress: Kavach 4.0 has been commissioned on 2,490 route km covering the high-density Delhi Mumbai and Delhi Howrah routes, with work under progress on a further 21,937 route km, and installation being taken up on 7,435 locomotives and 1,200 EMU/MEMU trains.

Government continues to frame Kavach as a flagship safety priority, citing a reduction in consequential accidents from 135 (FY15) to 16 (FY26) and a safety budget that has more than tripled to 1.2 lakh crore reducing policy and funding-continuity risk on ongoing and upcoming KAVACH contracts.

Seven new high-speed corridors were announced, including Hyderabad Bengaluru and Hyderabad Chennai both touch your home turf.

A new Dedicated Freight Corridor from Dankuni (West Bengal) to Surat (Gujarat) was announced to cut logistics costs.

Pre-budget commentary had flagged the signalling allocation as a weak spot a former DG of RISET called the FY26 signalling/telecom outlay of 6,800 crore grossly insufficient against the target of covering 44,000 route km with Kavach so the step-up to 7,500 crore this year is a partial, not full, response to that criticism.

Read on outlook for Kernex/KAVACH vendors: the direction is unambiguously supportive rising signalling capex, an explicit multi-year commitment to scale Kavach 4.0 across the network, and continued political safety story. The pace of tendering (21,937 route km still to be covered) is the emphasison itasaflagship number worth watching quarter to quarter for order-pipeline visibility, more than the headline crore figures.

Increased CAPEX Allocation:

The Railway Budget 2026 27 has allocated over 2.78 lakh crore with total capital investment (including extra-budgetary resources) of about 2.93 lakh crore.

Focus on Kavach Deployment:

Safety: Nearly 1.2 lakh crore has been earmarked for safety initiatives, including wider deployment of the Kavach automatic train protection system.

Target coverage discussed by Railways officials stands at 44,000 route km - implying roughly half the network-wide Kavach mandate is still to be tendered and executed, sustaining a multi-year order pipeline for established KAVACH-certified vendors like Kernex. Government continues to position Kavach as a zero-accident enabler, which underpins policy continuity and reduces the risk of funding disruption to the rollout across budget cycles.

Safety as Core Strategy:

Safety push (interlocking, track, Kavach) signals sustained demand for signalling-adjacent systems well beyond Kavach line items alone, and reduces the risk of safety-linked capex being deprioritised in a tighter fiscal year.

Opportunities for Technology Providers:

The combination of unfinished core rollout, adjacent safety-tech demand, and greenfield corridor requirements supports a broadening, not just deepening, of the addressable market relevant context for order-book guidance and diversification narrative in board communications

Private Sector & PPP Collaboration:

SPV/JV-routed projects (metro, DFC, high-speed corridors) represent a parallel bidding pathway to traditional Zonal Railway tenders worth flagging in board discussions as a diversification order-book sourcing, alongside the core Kavach pipeline.

Strategic Direction:

Going forward,

Kernex Microsystems is strategically positioned to benefitfrom the Indian Railways increased emphasis on railway safety and modernization. The Railway Budget 2026 27 s focus on expanding the Kavach Automatic Train Protection (ATP) system, upgrading signaling infrastructure, and implementing advanced train control technologies aligns closely with Kernexs core competencies.

Key strategic directions for Kernex include:

Expansion in Kavach Deployment: Leveraging its expertise in railway safety systems to participate in large-scale Kavach implementation projects across the Indian Railways network.

Advanced Signaling Solutions: Strengthening its portfolio in electronic interlocking, signaling, and train protection technologies to support railway modernization.

Technology Innovation: Investing in research and development to develop indigenous, cost-effective, and globally competitive railway safety solutions.

Government-Led Growth: Capitalizing on sustained public investment in railway infrastructure and safety under the National Rail Plan and Make in India initiatives.

Export Opportunities: Exploring international markets by offering proven railway signaling and safety technologies to developing railway networks.

Strategic Partnerships: Collaborating with global technology providers, system integrators, and public sector organizations to execute large-scale railway safety projects.

Overall, the Railway Budget 2026 27 reinforces Kernex s long-term growth prospects by creating signaling, and railway safety technologies, significant positioning the company to benefit from India s ongoing railway transformation.

Various Safety Measures Taken to Enhance Safety in Train Operations

Kavach (Automatic Train Protection): Kavach 4.0 commissioned on 2,490 route km covering the high-density Delhi Mumbai and Delhi Howrah trunk routes, with rollout under progress on a further 21,937 route km; fitment underway on 7,435 locomotives and 1,200 EMU/MEMU rakes.

Electronic Interlocking: Deployed at 6,671 stations, replacing older mechanical/relay-based signaling to reduce human-error risk in train movement and route setting.

Complete Track Circuiting: Implemented to enable real-time, automatic detection of train position and track occupancy, reducing reliance on manual signaling processes.

Track Renewal & Doubling: 22,853 crore allocated for track renewal and 37,750 crore for track doubling in FY27, addressing fatigue-related failure risk on high-density routes.

Rolling Stock Modernization: LHB coach production up more than 21x since 2014 to 49,366 units, with a 93% reduction in weld failures reducing derailment risk from equipment fatigue.

AI-Based Monitoring: Deployment of AI-based thermal cameras along tracks in some zones (e.g.,

Odisha) to detect elephant movement and prevent animal-strike accidents.

Level Crossing Safety: 800 crore allocated specifically for road safety works at level crossings, a historically high-risk interface point.

Dedicated Safety Funding Architecture: Multi-year ring-fenced allocations 45,000 crore to the Railway Safety Fund, 10,000 crore to the Rashtriya Rail Sanraksha Kosh insulate safety capex from annual budget volatility.

C) Mission Raftar: Indian Railways rolls out Train Collision Avoidance System

Mission Raftar is an initiative by Indian Railways aimed at enhancing train safety, operational efficiency, and network capacity through the large-scale deployment of the Kavach Train Collision Avoidance System (TCAS). Kavach is an indigenously developed Automatic Train Protection (ATP) system designed to prevent train collisions by automatically applying brakes when a train driver fails to respond to warning signals or exceeds permitted speed limits.

Under Mission Raftar, Indian Railways is accelerating the installation of Kavach across high-density and high-priority routes, alongside the modernization of signalling systems, telecom infrastructure, and locomotive equipment. The initiative supports the government s vision of creating a safer, faster, and more technologically advanced railway network.

For companies such as Kernex Microsystems,MissionRaftarrepresents significantgrowth opportunity.

As a provider of railway signalling and safety solutions, Kernex is well positioned to benefit from increased investments in Kavach deployment, signalling upgrades, and indigenous railway safety technologies. The initiative is expected to drive long-term demand for train protection systems, strengthening the companys role in Indias railway modernization program.

D) Opportunities

With the Indian Railways undergoing a historic transformation through large-scale modernization, electrification, and safety enhancement programs, significant growth technology providers, OEMs, and system integrators.

1. Expansion of Kavach Deployment

Indian Railways plans to roll out Kavach (TCAS) across 40,000+ Route Kilometers in a phased manner.

Increasing number of zonal tenders and bundled packages will offer long-term, multi-crore project opportunities for qualified vendors and consortiums.

Successful implementation in pilot sections positions players like Kernex Microsystems to participate in upcoming high-value tenders.

Domestic and International Successes: Pioneering Implementation of TCAS (Kavach):

Successfully executed pilot and commercial projects of Train Collision Avoidance System (TCAS) now known as Kavach in partnership with Indian Railways and RDSO. Kernexs role in the development and deployment of indigenous ATP systems has been central to Indias rail safety modernization.

Ongoing Projects Across Multiple Railway Zones:

Kernex Microsystems is executing and delivering large-scale Kavach (Train Collision Avoidance

System) projects across multiple Indian Railway zones and production units, reinforcing its position as a leading provider of railway safety and signalling solutions. The company s scope includes the supply, installation, testing, integration, and commissioning of Kavach systems across strategically important railway corridors spanning hundreds of Route Kilometers (RKMs).

Key ongoing projects include:

Railway Production Units: Chittaranjan Locomotive Works (CLW), Integral Coach Factory (ICF), and Banaras Locomotive Works (BLW).

Indian Railway Zones: North Central Railway (NCR Divisions A, B & D), South Central Railway (SCR), South Eastern Railway (SER), Western Railway (WR), and West Central Railway (WCR).

Dedicated Freight Corridor: Deployment of Kavach across the Dedicated Freight Corridor Corporation of India Limited (DFCCIL) network to enhance freight train safety and operational efficiency.

Comprehensive Project Execution: End-to-end execution covering equipment supply, installation, system integration, testing, validation, commissioning, and operational support.

Strategic Network Coverage: Projects span hundreds of Route Kilometers (RKMs), contributing to the nationwide rollout of Kavach and the modernization of railway signalling infrastructure.

Strong Execution Capability: Successful delivery across multiple railway zones demonstrates

Kernex s technical expertise, execution capability, and ability to manage large, multi-location railway safety projects.

These ongoing projects strengthen Kernex s execution track record, enhance its visibility for future railway tenders, and position the company to capitalize on the continued expansion of Kavach and railway safety initiatives across India.

E) Threats

Despite the strong growth outlook driven by railway modernization and the nationwide rollout of

Kavach, Kernex Microsystems faces several risks that could impact its business performance.

Execution Delays: Delays in project approvals, site readiness, commissioning, or customer acceptance can affect project timelines, revenue recognition, and cash flows.

Dependence on Indian Railways: A significant portion of the company s Indian Railways and government-funded projects, making it vulnerable to changes in public spending priorities and procurement schedules.

Competitive Intensity: Increasing participation from domestic and global signalling companies may intensify competition, leading to pricing pressure and reduced margins.

Tendering and Procurement Risks: Government procurement processes are highly competitive and subject to stringent technical and commercial qualification requirements, creating uncertainty in order wins.

Technology and Compliance Risks: Rapid advancements in railway signalling, communication, and safety standards require continuous investment in R&D and compliance to remain competitive.

Supply Chain Disruptions: Shortages or delays in the availability of electronic components, semiconductors, and specialized equipment may impact project execution and costs.

Working Capital Pressure: Large infrastructure contracts often involve milestone-based payments, potentially increasing working capital requirements and affecting liquidity.

Policy and Regulatory Changes: Changes in railway safety standards, procurement policies, or regulatory requirements may require additional investments or delay project implementation.

Cybersecurity Risks: As railway systems become increasingly digital and connected, cybersecurity threats to signalling and train control systems present emerging operational risks.

While these challenges could affect short-term performance, Kernex s established expertise in railway safety systems, strong execution capabilities, and alignment with India s long-term railway modernization strategy position the company to manage these risks and capitalize on future growth opportunities.

F) Segment wise or product wise performance

The Company operates exclusively in the Rail Safety equipment and services sector, which constitutes its single business segment. The details of the performance of this segment are comprehensively outlined in the Directors Report. This focused approach allows the Company to concentrate its resources and expertise on enhancing its offerings and delivering specialized solutions within this niche market.

G) Risks and areas of concern

While the outlook for the railway signaling, safety systems, and electronics manufacturing sectors remains strong, several risks and areas of concern must be considered to ensure sustainable growth and operational resilience. The key directives and implications are as follows:

1. Project Execution Delays

Large-scale infrastructure and signaling projects are often subject to delays due to site readiness, dependency on third-party contractors (e.g., Civil/EI vendors), and clearance bottlenecks from Indian Railways.

Any lag in coordination can lead to cost escalations and delay in milestone-based payments.

2. Regulatory and Compliance Risks

Strict adherence to specifications laid down by RDSO, Indian Railways, and global safety standards (e.g., CENELEC, SIL levels) is mandatory.

Delays in product approvals, changes in technical specifications, requirements may impact timelines and go-to-market plans.

3. Supply Chain and Component Dependency

High dependency on imported electronic components and semiconductors exposes the business to global supply chain disruptions, currency fluctuations, and lead time uncertainties.

Geopolitical factors can impact the availability and pricing of critical hardware.

4. Working Capital Pressure

Railway and government contracts often have long payment cycles, with payments linked to inspections, commissioning, and verification by third-party authorities.

Companies may face cash flow strain due to inventory holding, advance procurement, and delayed receivables.

5. Technological Obsolescence

Rapid evolution in safety and automation technologies may render existing systems outdated unless R&D and upgrade investments are continuously made.

Competitors offering more integrated or AI-driven systems could affect market share

6. Policy and Tendering Risks

Any change in government policy, tender eligibility criteria, or shift toward different technology frameworks (e.g., imported ATP vs. indigenous systems) may alter the business landscape.

Increased competition and L1-based tendering sometimes lead to price undercutting and margin pressure.

7. Talent and Skilled Manpower

Shortage of trained engineers, software developers, and commissioning experts poses a challenge in scaling up multiple projects simultaneously.

Dependence on a small pool of domain experts increases operational risk.

8. Cyber security Threats

As signaling and safety systems become more connected and digitized, the risk of cyber attacks on critical infrastructure increases.

Lack of robust cyber security measures can lead to data breaches, system failures, or safety violations.

Conclusion

While the industry holds immense promise, managing risks proactively through robust project planning, compliance management, financial discipline, R&D investment, and cyber resilience will be crucial. Building strong partnerships with Railways, vendors, and regulatory authorities will also help navigate these challenges effectively.

H) Discussion on financial performance with respect to operational performance

The details of the Company s revenue and financial performance for the year under review are comprehensively covered in the Directors Report. Please refer to the respective section of the

Directors Report for a detailed analysis and insights into the Company s financial results.

I) Internal control systems and their adequacy

The Company has appointed an external firm of chartered accountants to conduct Internal Audit, ensuring that our internal control systems are robust and appropriate for our size and operational nature. These systems are designed to:

Provide reasonable assurance regarding the accuracy and reliability of financial and operational information.

Ensure compliance with applicable statutes and regulations.

Safeguard assets from unauthorized use or losses.

Execute transactions with proper authorization.

Ensure adherence to corporate policies.

The effectiveness of these internal controls is regularly reviewed to ensure they remain adequate and effective.

The Internal Audit process is meticulously designed to review the adequacy and effectiveness of the areas of the Company s operations. This includes, but internal control systems across all significant is not limited to:

Software and Hardware Delivery: Ensuring the systems meet required standards and specifications.

Production: Monitoring production processes to ensure efficiency and compliance.

Accounting and Finance: Reviewing financial records and controls to ensure accuracy and adherence to policies.

Procurement: Verifying that procurement processes are transparent and in line with company policies.

Employee Engagement: Assessing processes related to employee management and engagement.

Travel and Insurance: Evaluating travel policies and insurance coverage for adequacy and compliance.

The Company has established an Audit Committee, with details provided in the Corporate

Governance Report. The Audit Committee plays a crucial role in overseeing the internal audit process. Its responsibilities include:

Reviewing Audit Reports: The Committee meticulously reviews the reports submitted by the Internal Auditors to ensure that all findings and recommendations are addressed.

Systematic Improvements: Suggestions for systematic improvements identifiedduring audits are considered by the Committee. It monitors the implementation of corrective actions to enhance the effectiveness of internal controls.

Engagement with Auditors: The Committee regularly meets with both the Companys statutory auditors and Internal Auditors to discuss the adequacy of internal control systems. These discussions help in assessing the effectiveness of controls and addressing any concerns.

Reporting to the Board: The Audit Committee keeps the Board of Directors informed of its major observations and the status of corrective actions, ensuring that the Board is aware of key issues and improvements.

This proactive approach ensures that internal control systems are robust and continuously improved, maintaining the integrity and efficiency of the Company s operations.

Your Company has established well-defined internal control systems designed to ensure the integrity and efficiencyof its operations. These and operational information, safeguarding assets, and ensuring compliance with applicable laws and corporate policies.

Certifications Obtained:

(i) ISO 9001:2015: This certification demonstrates the Company s commitment to quality management systems, ensuring that processes meet customer and regulatory requirements.

J) Material developments in HR / Industrial relations area including number of people employed: changes in the Human Duringthe year,therehavebeennomaterially significant Resources (HR) domain. The total number of employees as of March 2026 stands at 609, compared to 363 in the previous year. This increase reflects the Company s expansion and its commitment to enhancing its workforce capabilities.

The Company prides itself on maintaining a positive work environment that fosters innovation and meritocracy. This vibrant work ethic provides employees with opportunities to engage with cutting-edge technologies and leverage their talents effectively. As an organization committed to constant upgrading, the Company has focused on building competence through training, cross-training, and skills up gradation. The aim is to ensure that employees are equipped with the latest knowledge and skills to meet evolving industry demands.

Details of Key Financial Ratios:

S No Details	2025-26
1 Debtors Turnover	2.54
2 Inventory Turnover	1.23
3 Interest Coverage Ratio	5.91
4 Current Ratio	1.31
5 Debt Equity Ratio (Times)	0.63
6 Operating Profit Margin (%)	31.03
7 Net Profit Margin (%)	18.93

along with detailed explanations therefor mentioned Detailsofsignificant in Note No. 44 of Standalone Financial Statements forming part of 34th Annual Report.

K) Cautionary Statement

Statements in the Managements Discussion and Analysis Report that describe the Companys objectives, projections, estimates, expectations, or predictions may be considered forward-looking statements as required by applicable laws and regulations. These statements reflect the Company s current views and expectations and are based on certain assumptions.

Key Points:

Risk of Actual Results Differing:Actual results may differ significantly from those projected or implied in forward-looking statements due to various factors. domestic demand-supply conditions, raw material Influencing prices, technological advancements, changes in government regulations and policies, tax laws, and other statutory requirements may impact actual outcomes.

By order of the Board
For Kernex Microsystems (India) Limited

Sd/-	Sd/-	Sd/-
Sreelakshmi	Badari Narayana	Sitarama Raju
Manthena	Raju Manthena	Manthena
Managing Director	Whole Time Director	Whole Time Director
DIN : 07996443	DIN : 07993925	DIN : 08576273

Place : Hyderabad
Date : 13th August 2026