Meson Valves India Ltd Management Discussions

MANAGEMENT DISCUSSION & ANALYSIS REPORT

1. INTRODUCTION:

Our Company was originally incorporated under the name "Sander Meson India Private Limited" under the provisions of the Companies Act, 2013 vide Certificate of Incorporation dated August 18, 2016 issued by the Central Registration Centre for and on behalf of the jurisdictional Registrar of Companies. Subsequently, the name of our Company was changed to "Meson Valves India Private Limited" vide special resolution passed by the shareholders at the Extra Ordinary General Meeting held on April 25, 2019 and a Fresh Certificate of Incorporation pursuant to change of name was issued by Registrar of Companies, Goa, Daman & Diu dated May 15, 2019. Subsequently, the status of the Company was changed to public limited and the name of our Company was changed to "Meson Valve s India Limited" vide Special Resolution passed by the Shareholders at the Extra

Ordinary General Meeting of our Company held on April 10, 2023. The fresh certificate of incorporation consequent to conversion was issued on May 04, 2023 by the Registrar of Companies, Goa, Daman & Diu. The Corporate Identification Number of our Company is L29299GA2016PLC012972.

Macro & Industry Overview (Global & India)

Global Economy: In FY 2024 25, the global economy showed resilience amid an uncertain environment. Growth in advanced economies began to stabilize, even as geopolitical tensions and inflationary pressures persisted. Worldwide GDP growth for calendar 2024 is estimated around 3%, and is projected to moderate slightly to about 2.8% in 2025, with inflation gradually receding and interest rates plateauing. Supply chain conditions improved compared to the prior year, and energy prices remained range-bound, providing a more stable backdrop for industrial activity. However, higher borrowing costs in many countries and cautious capital spending trends kept the global industrial growth modest. Overall, the external environment presented a mixed picture steady enough to support business momentum, yet calling for prudent navigation of risks like currency volatility and regional demand variations.

Indian Economy: Indias economy continued to be a standout performer. GDP growth in FY 2024 25 is estimated at 6.3 6.5%, making India one of the fastest growing major economies. Robust public infrastructure spending, strong private consumption, and a revival in private capex were key growth drivers. Government initiatives from a 17% increase in capital expenditure in the Union Budget 2024 25 to targeted production-linked incentive (PLI) schemes bolstered manufacturing and construction activity. Although merchandise exports faced headwinds due to subdued global trade, Indias domestic demand largely offset external weakness. Inflation remained within control for most of the year (hovering in mid-single digits) and the RBIs monetary stance helped ensure stability in currency and credit markets. Notably for our sector, there was heightened policy focus on indigenization in defence and on upgrading oil & gas infrastructure. These policy tailwinds, coupled with Indias push for self-reliance (Aatmanirbhar Bharat), created a favourable climate for capital goods suppliers.

Industry Trends Flow Control & Valves: The global flow control (valves and actuators) market continues on a steady growth trajectory, projected to expand at ~5% CAGR and exceed $100 billion by 2030. Demand is being spurred by investments in energy (oil & gas, renewables), water and wastewater management, and process industries worldwide. In India, the valves and industrial equipment industry benefited from upstream and downstream oil & gas projects (e.g., refinery upgrades, pipeline expansion) and power sector spending on both conventional and renewable power plants. The defence and marine sector emerged as a sunrise segment for domestic players with the Indian Navy and Coast Guard pursuing new shipbuilding programs, a host of complex systems (including marine valves, fluid control systems, etc.) are now part of the Positive Indigenisation Lists for local sourcing. This presents a significant opportunity for companies like us who have niche expertise in naval-grade flow control equipment. At the same time, competition remains intense with global players present in the market and continual pressure to meet international quality and certification standards. Technology integration is a defining trend in the industry products are getting smarter (with IoT-enabled valves, remote monitoring) and manufacturing is embracing automation and digitalization. Overall, our industrys outlook is positive, underpinned by multi-sector demand and innovation, albeit with careful watch on input costs and global economic shifts.

Business Overview & Strategy

Quest Flow Controls Ltd. (formerly Meson Valves India Ltd.) is a triple-ISO-certified specialist in flow-control technology, offering end-to-end capabilities that span design engineering, component sourcing, in-house machining and hydro-testing, assembly, distribution, installation, and after-sales service for critical-service valves, actuators, strainers and remote-control valve systems. Operating from an integration and pressure-testing facility in Verna, Goa, the Company supplies defence & marine shipyards, oil & gas refineries, power and process plants, water & wastewater utilities and a broad set of general-industry OEMs.

The product suite ranges from manual and RCVS-enabled gate, globe, butterfly and speciality valves to smart electric / pneumatic actuators, control cabinets, pumps and allied pipe-fittings each qualified under ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 (T?V Austria).

Following its successful SME IPO and BSE listing in September 2023, Quest deepened its naval credentials with turnkey vessel-outfitting packages, executed refinery shutdown supplies, and exported assemblies to European and GCC ship-system integrators reinforcing its positioning as a one-stop flow-control partner.

In June 2025 the Company adopted the name "Quest Flow Controls Ltd." to signal a broader, globally oriented mandate beyond its original Scandinavian JV roots. The refreshed identity aligns with our mission to be the trusted quest for reliable, high-performance flow-control solutions worldwide, supported by a growing network of international channel partners and an expanding pipeline of domestic indigenisation programmes.

Strategy "Flow 2030" Vision: The Companys growth blueprint is driven by our long-term vision, internally called "Flow 2030". This strategy is built on four pillars that are shaping our actions today:

Localisation, Digital Integration, Export Expansion, and Sustainable Value Creation.

Deepening Localisation: We aim to manufacture and source more components locally to reduce import dependence and improve cost competitiveness. In FY 25, we onboarded several domestic suppliers for castings and forgings, and began in-house machining of critical valve components. These steps not only support the Make in India initiative but also shorten our supply chain and lead times. We are also working closely with defence PSUs and shipyards under indigenization programs to develop tailor-made solutions for instance, developing indigenous naval-grade valves and tank safety systems to replace imports. Our commitment to localisation enhances self-reliance and positions us favourably for government procurement which now prioritizes local content.

Digital Integration: Embracing industry 4.0, we continued to integrate digital technology across our operations. This year we implemented a new ERP system company-wide to streamline processes from order management to shop-floor control. We invested in modernizing our production line with IoT-enabled machinery and testing equipment, which allows real-time monitoring of production metrics and product performance. Additionally, comprehensive training initiatives were rolled out to upskill our workforce in using these digital tools effectively reflecting our "Digital First" approach similar to industry leaders . By harnessing data and automation, we are enhancing productivity, reducing errors, and building a scalable platform for future growth.

Export Expansion: Recognizing the vast global market for flow control solutions, Quest Flow Controls has a strategic thrust on increasing exports. In FY 25, export sales grew and contributed roughly a quarter of our revenues, with shipments to regions like the Middle East, Southeast Asia and Europe. We achieved a breakthrough in North America by initiating the acquisition of a majority stake in Quest Flow Controls, LLC (USA) . This acquisition (expected to close in FY 26) will give us a local foothold in the U.S. market, access to established distribution networks, and a base for servicing global OEM customers. Our export strategy also involves obtaining internationally recognized certifications (we carry ISO 9001 quality and CE/PED marks for various products) to meet global technical standards. With a broader global presence, we plan to leverage cross-border synergies for example, offering cost-effective manufacturing from India combined with the U.S. entitys engineering support to win bigger contracts. Over the next few years, we aspire to build exports into a significant share of our business, thereby diversifying geographic risk and capturing new growth arenas.

Sustainable Value Creation: We are equally focused on long-term sustainable growth for all stakeholders. This means pursuing financial performance hand-in-hand with environmental, social, and governance excellence. Sustainability is embedded in our strategy from designing products that improve energy efficiency for customers, to reducing waste and emissions in our own operations. (Our facilities are ISO 14001:2015 certified for environmental management and ISO 45001:2018 for occupational health & safety, underlining our commitment to high EHS standards.) We believe that by investing in our people, innovation, and a strong governance framework today, we are creating the foundation for value that endures. Our strategy thus balances aggressive growth moves with prudent risk management, ensuring Quest Flow

Controls journey to 2030 is both ambitious and sustainable.

In summary, Quests business strategy is geared towards becoming a leading mid-cap engineering player with a unique positioning in flow control solutions. Through continual capability-building and strategic initiatives, we are aligning ourselves with industry best practices and benchmarks set by top peers (such as leveraging digital optimization, expanding service offerings, and maintaining financial discipline like other successful engineering firms). We remain agile and responsive to market changes, and are confident that our strategy will drive us to new heights in the coming years.

Segment & Geographic Performance

In FY 25, Quest Flow Controls delivered a broad-based performance across its key industry segments and markets. Below is an overview of segment-wise and geographic highlights:

Defence & Marine Segment: This emerged as a major growth driver during the year. We successfully executed multiple orders for the Indian Navy and associated contractors. Revenue from the defence/marine segment more than doubled year-on-year, contributing roughly 35% of total revenues in FY 25 (up from ~20% in FY 24). A landmark achievement was the completion of our first naval Integrated Platform Management System (IPMS) valve project, which established our credentials in this niche. The defence segment growth was supported by orders for both surface ships and a submarine project (for which we supplied specialized fuel system valves). Our recent order win from BHEL for naval valves , though received in July 2025, was prepared during FY 25 and signifies the strong momentum in this segment.

Oil & Gas and Petrochemicals: This segment accounted for around 25% of revenues. Activity was steady, backed by maintenance demand and small expansion projects at refineries and petrochemical plants. We executed orders for critical service valves used in refinery operations and exported some high-pressure valves to a Gulf region petrochemical client. While large greenfield oil & gas projects were limited during the year, our focus on after-market services and replacement orders helped maintain revenue. We also saw enquiries picking up towards year-end, indicating a healthier pipeline for FY 26.

Power & Water This vertical contributed roughly 11 crore, or 15 % of FY 25 revenue, and is poised to become our next growth engine. Indias valve demand in power generation and water infrastructure is expanding at an estimated 8 9 % CAGR, underpinned by three long-cycle spending programmes: mandatory flue-gas-desulphurisation (FGD) retrofits across 165 GW of coal capacity, the 45,000-crore "fleet-mode" build-out of twelve 700 MW PHWR nuclear reactors, and the 2.8-lakh-crore Jal Jeevan Mission that is bringing treated water to every household.

During the year we supplied Class-1500 gate and globe valves for NTPC Talchers FGD retrofit ahead of schedule, completed a third batch of 1 200 mm zero-leakage butterfly valves for the Kaleshwaram Lift Irrigation Scheme, and cleared seismic and thermal-shock tests to become an approved NPCIL vendor for the upcoming PHWR fleet. A new Water & Waste-water business unit has already built a live bid pipeline of 28 crore covering municipal sewage-treatment plants and large pumping stations.

Quests competitive edge in this space rests on nuclear-ready design protocols (our ASME Section III ‘N-Stamp application is in progress), a proprietary hard-facing alloy that extends valve life in high-chloride desalination duty, and IoT-enabled smart actuators that meet utilities digital-maintenance mandates. The segment closed FY 25 with an order backlog of 11.6 crore (16 % of company total), and management targets elevating Power & Water to 25 % of revenue by FY 28 as FGD retrofits, nuclear fleet orders, smart-city wastewater projects and emerging desalination or green-hydrogen facilities move into execution.

General Industry & Others: The remaining ~25% of revenue came from general industries (steel, chemicals, marine commercial, etc.) and miscellaneous jobs. Noteworthy among these was a large export order (valued ~$1.46 million) from an international client for a mix of industrial valves, which we executed successfully underscoring our competitiveness in global markets. We also catered to OEMs in the fire-fighting equipment space by supplying a range of small valves and fittings. While these are smaller-ticket segments, they provide a steady base load of business and help diversify our portfolio.

In terms of geographic performance, our Domestic (India) business contributed roughly seventy percent (70%) of revenues. Domestic sales grew strongly (~+20% YoY), fueled by defence orders and stable demand from core industries. We expanded our presence in key industrial clusters within India, opening a new regional marketing office in North India to be closer to large PSU clients. Export revenues constituted about 30% of total revenues in FY 25, compared to ~35% in FY 24. The slight dip in export share was due to the outsized growth in domestic defence sales this year. Nonetheless, in absolute terms, export turnover increased modestly. We shipped products to 12 countries during the year with the largest contributions from the Middle East (led by UAE and Saudi Arabia, for oil & gas valves), followed by Europe (marine equipment to Scandinavian partners) and some orders to Southeast Asia. Encouragingly, we made inroads in North America by securing trial orders in the USA for a marine application, which pave the way for larger opportunities post-acquisition. Strengthening our global distribution, we signed two new international representatives: one in South East Asia and another in Africa, which should help widen our export market reach in the coming years.

Overall, our revenue mix is progressively shifting in favor of high-value segments (like defence) and diverse geographies. We expect this trend to continue as our strategic initiatives in those areas bear fruit. The balance between domestic and export business gives us a natural hedge when one market faces a slowdown, the other provides stability and we will continue to calibrate our efforts to maintain a well-diversified revenue profile.

ESG & R&D Initiatives

Environmental, Social & Governance (ESG): At Quest Flow Controls, we believe that responsible business is the only way to do business. During FY 25, we advanced several ESG initiatives in line with emerging best practices and stakeholder expectations:

Environment: We remained focused on improving our environmental footprint. Our manufacturing facility is ISO 14001:2015 certified, and we strictly monitor key metrics like energy consumption, water usage, and waste generation. This year, we achieved a ~5% reduction in electricity use per unit of output by optimizing furnace operations and installing energy-efficient LED lighting in our shop floors. We also invested in a pilot solar rooftop installation at our Goa plant to begin tapping renewable energy. Waste segregation and recycling efforts were enhanced for instance, metal scrap from machining is now 100% recycled through authorized recyclers, and we have tied up with an e-waste handler to properly dispose of electronic waste. Additionally, we have started evaluating "green manufacturing" techniques

(like using water-based cutting fluids, improving process yields to reduce rejects) as part of our continuous improvement drive. These efforts are not only reducing our environmental impact but also often lead to cost savings, making them win-win initiatives.

Social (People & Community): Our employees are our most important asset, and we are committed to their well-being and growth. In FY 25, we provided over 1,500 hours of training to employees across departments, covering skill upgradation (technical training on new valve designs, quality control best practices) as well as soft skills and leadership programs for our managers. We reinforced a culture of safety through regular safety drills, hazard identification workshops, and achieving "zero lost-time injuries" during the year, a milestone we are very proud of. As part of our CSR (Corporate Social Responsibility), we continued our community initiatives in education and vocational training. One notable project was partnering with a local technical institute to support an industrial training program for youth, including a curriculum on basic machine operations and assembly techniques; our engineers volunteered as guest instructors and we offered internships to top performers. We also made contributions to local NGOs focused on water conservation in the communities around our facility. Our aim is to create a positive social impact, both within our workforce by fostering an inclusive, rewarding workplace, and outside by uplifting the communities we touch.

Governance: We uphold the highest standards of corporate governance. The Companys Board is diverse and comprises a majority of Non-Executive Directors, including accomplished Independent Directors who bring in external perspectives. We complied with all applicable SEBI regulations and LODR requirements in letter and spirit throughout FY 25. Transparency and accountability guide our actions from robust internal controls to ethical business conduct. We have a zero-tolerance policy towards corruption and have an active whistle-blower mechanism by which employees can report any wrongdoing confidentially to the Audit Committee. During the year, we also strengthened our data protection and IT security frameworks, acknowledging the importance of safeguarding stakeholder data in an increasingly digital world. Our goal is to ensure that as the Company grows, our governance framework grows even stronger to support sustainable, long-term value creation.

R&D and Innovation: Technological innovation and R&D are central to maintaining our competitive edge in the engineering sector. In FY 25, we continued to invest in R&D initiatives, focusing on both product development and process innovation:

New Product Development: Our engineering team worked on developing next-generation valve designs, especially for niche applications. We successfully indigenized a specialty high-pressure valve for submarine fuel systems a first in India in collaboration with a naval research lab. This product has passed initial type tests and is slated for field trials, potentially opening a new revenue stream if approved for service use. We also expanded our range of actuators and control systems introducing an IoT-enabled smart actuator that can provide real-time performance data and diagnostics. This aligns with industry trends towards "smart" valves and has been well-received by pilot customers. To protect our innovations, we filed two patent applications during the year: one for a unique sealing mechanism design and another for a remote monitoring system for valves.

Collaboration & Partnerships: Acknowledging that innovation can be accelerated through collaboration, we forged ties with external institutions. We are part of a consortium with a premier technology institute for research on material coatings that improve valve lifespan in corrosive environments. Additionally, as mentioned earlier, we signed a term sheet to acquire Quest Flow Controls, LLC in the US beyond the market access, a key rationale is to tap into their engineering know-how and product range (which includes advanced control valves for aerospace and LNG sectors). Post-acquisition, our combined R&D teams will work on cross-utilizing designs and jointly developing products for both markets.

Process Innovation: On the manufacturing front, our R&D efforts extend to improving process capability. In FY 25 we commissioned a new in-house test bench capable of simulating extreme operating conditions (high-pressure, high-temperature) to validate our valves performance more rigorously. We also implemented software for CFD (Computational Fluid Dynamics) analysis which helps in optimizing valve flow paths during the design stage, reducing the need for multiple physical prototypes. These investments in design and testing infrastructure enhance our ability to innovate faster and with greater precision.

Through these ESG and R&D initiatives, Quest Flow Controls is not only aligning with sectoral best practices but in many areas setting new benchmarks for companies of our size. We remain committed to continuous improvement seeking out ways to make our products better, our people happier, and our planet healthier, all while delivering value to our shareholders.

Key Risks & Mitigation

As with any business, we face certain risks and uncertainties that could impact our operations and financial performance. The Company follows a proactive risk management approach, identifying key risks and implementing mitigation measures. Outlined below are some significant risks and our strategies to mitigate them:

Market Demand & Concentration Risk: A portion of our business, particularly in defence, comes from large project-based orders which can be lumpy. An economic slowdown or delays in government capex can affect new order inflows. Moreover, a few big customers (e.g. defence PSUs) constitute a significant share of revenue. Mitigation: We are expanding and diversifying our customer base across sectors and geographies to reduce over-reliance on any single segment. Our push into exports and new industries (water, international oil & gas clients) is part of this diversification. We also maintain a strong order backlog to buffer short-term demand fluctuations, and closely monitor the market pipeline to adjust our production planning accordingly. Additionally, building long-term service contracts with clients ensures recurring revenue streams even when new capital orders are cyclical.

Working Capital & Liquidity Risk: As discussed, the business is working capital intensive, and growth can strain our liquidity if not managed well. Large projects often require significant inventory and have long receivable cycles, which could lead to cash flow mismatches. Mitigation: The Company has tightened its working capital management by enforcing stricter credit controls (careful assessment of customer creditworthiness, negotiating progress payments on big orders) and improving inventory turnover (through better demand forecasting and supplier management). We maintain adequate banking lines and have a healthy cash buffer to meet interim funding needs. Furthermore, the successful equity infusion last year and low leverage give us flexibility to raise funds quickly if required. We review cash flow projections regularly to foresee and address any liquidity crunch well in advance.

Foreign Exchange Risk: With about 30% of our revenue from exports and some raw material imports, we are exposed to volatility in foreign exchange rates (primarily USD and Euro vs. INR). Unfavourable currency movements could affect our realized revenues or input costs. Mitigation: We follow a balanced forex risk mitigation policy. Naturally, a part of our exposure is hedged by natural hedging our imports provide a offset to export receivables in similar currencies. For the net exposure, we utilize forward contracts selectively to lock in rates when deemed necessary. We price our export contracts in a mix of INR and foreign currency; in some cases we quote in INR or include exchange variation clauses to pass on major fluctuations to customers. Regular monitoring by our treasury team ensures we respond swiftly to currency movements. Over FY 25, the rupee remained in a stable range, and our forex management resulted in no material impact on margins.

Supply Chain & Input Cost Risk: We rely on a network of suppliers for raw materials, castings, and bought-out components (like actuator parts). Any disruption at a suppliers end or sharp increase in input costs (e.g. steel, alloys) can impact our production schedule and profitability. Mitigation: To address supply risk, we have a dual-vendor policy for critical inputs and maintain safety stock for long-lead items. During FY 25, we onboarded new suppliers for key categories to broaden our vendor base. We also entered into rate contracts or bulk purchase agreements for commodities like stainless steel to get price stability and economies of scale. When input prices rise, we endeavour to pass on a portion through price escalation clauses in contracts, especially for longer-duration projects. Our design team also works on value engineering to reduce material content and substitute with cost-effective alternatives where feasible, without compromising on quality.

Quality & Reputation Risk: As a provider of mission-critical products (valves in defence ships, power plants, etc.), any failure in product performance can lead to reputational damage and liability claims. Ensuring top-notch quality is thus paramount. Mitigation: We have stringent quality control and assurance processes at every stage from design validation, material testing (each batch of raw material is lab-tested), to 100% pressure testing of finished valves. Our quality management system is ISO 9001:2015 certified. In FY 25, we further enhanced testing for special orders (e.g. X-ray radiography for critical castings to detect internal flaws). We also carry adequate product liability insurance as a safeguard. Most importantly, we foster a culture of quality in our workforce continuous training, clear quality benchmarks, and empowering any employee to stop production if they detect an issue. These measures help maintain our trusted reputation in the market.

Human Resources Risk: Being an engineering company, our success is closely tied to our skilled human capital engineers, designers, technicians. The risk exists of attrition or inability to attract new talent, which could slow down our R&D or project execution. Mitigation: We strive to be an employer of choice through various HR initiatives. Competitive compensation, performance-based incentives, and clear career progression paths are in place to retain talent. We have tie-ups with engineering colleges and training institutes to recruit fresh talent and groom them through internships and trainee programs. In FY 25, we introduced an Employee Stock Option Plan (ESOP) for senior management, aligning their long-term interests with the

Companys growth. Our work culture emphasizes innovation and recognition employees are encouraged to contribute ideas and are rewarded for exceptional contributions. As a result, our attrition remains below industry average, and we are confident in our ability to sustain a strong team.

In addition to the above, we continually monitor other risks such as regulatory compliance risk (changes in environmental or export-import regulations), IT/cybersecurity risk (mitigated by updated IT security measures and backups), and COVID or health-related risks (we have protocols and insurance in place, though the pandemic impact has receded). The Board and Audit Committee review the Companys risk management framework periodically. We believe our proactive approach towards risk identification and mitigation will help in safeguarding the Companys interests and ensure that we can achieve our business objectives with minimal disruptions.

Outlook FY 26

Industry Outlook: As we step into FY 2025 26, the overall outlook for our operating environment remains positive yet cautious. Globally, growth is expected to sustain at a moderate pace, with the IMF forecasting 3% growth and a gradual easing of inflationary pressures. This should translate into a stable demand scenario for industrial goods. In India, early indicators suggest that economic momentum will continue investment activity is on the rise and government spending on infrastructure and defense remains strong. Sectors relevant to us are poised for growth: the defence budget for FY 26 saw another healthy increase, including allocations for the Navys capital acquisitions, which bodes well for indigenous suppliers of marine systems. The oil & gas sector is anticipating new exploration rounds and possibly the greenlighting of refinery expansions given energy security priorities. Water and wastewater infrastructure spending is also climbing as urban development and the Smart Cities mission advance. These trends mean that demand for valves and flow control equipment in India should remain robust in the coming year.

Company Outlook: Quest Flow Controls enters FY 26 with optimism and readiness to capitalize on these opportunities. Our order book at the beginning of FY 26 is strong, standing at approximately 50+ crore (including the large BHEL naval order and other carry-forward orders), which gives us healthy revenue visibility for the year. Execution of these orders is on track our production capacity, which was augmented last year, is sufficient to handle the increased workload with some room to spare for new orders. We anticipate revenue growth in double digits for FY 26, driven by full-year contribution of defence orders and pick-up in export shipments. The integration of our U.S. acquisition (Quest Flow Controls, LLC) will be a key focus in the coming months; once completed, it is expected to start contributing to consolidated revenues and open cross-selling avenues. We will carefully manage this integration to ensure we realize synergies in procurement and product development without disruption to ongoing operations.

On the margin front, we expect the operating profit margin to remain healthy. Some challenges like commodity price inflation and wage cost increases are present, but we plan to mitigate these through improved internal efficiencies and better absorption of fixed costs over a larger volume. We also anticipate a reduction in finance costs as we normalise working capital this will directly aid net margin improvement. Overall, barring unforeseen macro shocks, profitability in FY 26 should improve relative to FY 25, given better economies of scale and our cost initiatives.

Strategically, FY 26 will also be about future-proofing our growth. We intend to launch new products (especially the smart actuators and certain niche valves currently in R&D) which will widen our market offerings. We will pursue more partnerships in international markets for example, exploring a European distribution tie-up to strengthen our reach there. Digital initiatives will continue unabated: we plan to implement a CRM (Customer Relationship Management) system to enhance our sales and service efficiency, and further automate some manufacturing processes using robotics in assembly. On the capital expenditure front, apart from routine maintenance capex, we are evaluating the setting up of a new testing and R&D centre dedicated to defence and high-end applications, which would be a strategic asset enabling us to undertake larger and more complex projects. A decision on this investment will be made after careful analysis of demand and potential returns.

The Company is also mindful of macro risks. We are closely watching global developments for instance, any drastic movement in currency or an unexpected downturn in a major economy and have contingency plans (such as alternate sourcing strategies or flexible cost structures) to adapt if needed. We carry forward the lessons learned during the pandemic years in terms of agility and preparedness. In essence, the outlook for FY 26 is one of cautious optimism: we are positioned for growth and have strategies in place to address challenges. The Board and management remain confident that with our sharpened strategic focus, growing brand recognition, and execution capabilities, Quest Flow Controls will continue on its upward trajectory in the coming year.

Cautionary Note

The Management Discussion and Analysis above may contain forward-looking statements, including those relating to the Companys objectives, projections, expectations and forecasts. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied in the forward-looking statements due to risks and uncertainties beyond the Companys control. Important factors that could influence the Companys operations and results include global and domestic economic conditions, volatility in currency or commodity prices, changes in government regulations, changes in tax laws, political developments, pandemics or other acts of God, and other factors discussed in this report. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Discussion on Financial Performance with respect to operational performance:

FINANCIAL PERFORMANCE:

The highlight of the financial performance of the Company for the year ended March 31, 2025 is summarized as follows:

STANDALONE:

Particulars	FY 2024-25	FY 2023-24
Revenue from Operations	6,110.33	6,314.46
Other Income	47.63	17.81
Total Income	6,157.96	6332.27
Cost of Material Consumed	3,404.61	1703.65
Purchase of Stock-m-trade	330.84	2305.55
Changes In Inventories	41.23	-202.52
Employee Benefits Expenses	604.34	427.35
Financial Cost	81.41	86.89
Depreciation and amortisation expenses	343.53	116.11
Other Expenses	559.56	603.22
Total Expenses	5,365.52	5040.26
Profit/(Loss) before Tax	792.44	1292.01
Less: Exceptional items	-	-
Profit/(Loss) before Tax	792.44	1292.01
Provision for Taxation (Net)	164.84	386.74
Profit/(Loss) after tax	627.60	905.27
Other Comprehensive income for the financial year	-	-
Total Comprehensive income/(loss) for the financial year	-	-
Earnings per Equity Share ( ) - Face value of 10/- each	6.18	8.91

CONSOLIDATED:

Particulars	FY 2024-25
Revenue from Operations	6721.24
Other Income	73.10
Total Income	6797.34
Cost of Material Consumed	3623.81
Purchase of Stock-m-trade	692.76
Changes In Inventories	-142.12
Employee Benefits Expenses	691.57
Financial Cost	81.41
Depreciation and amortisation expenses	344.26
Other Expenses	608.37
Total Expenses	5900.06
Profit/(Loss) before Tax	894.28
Less: Exceptional items	-
Profit/(Loss) before Tax	894.28
Provision for Taxation (Net)	209.88
Profit/(Loss) after tax	684.41
Profit/(Loss) from Associate	-4.90
Profit/(Loss) for the period	679.51
Other Comprehensive income for the financial year	-
Total Comprehensive income/(loss) for the financial year	-
Earnings per Equity Share ( ) - Face value of 10/- each	6.69

Material Developments in Human Resources / Industrial Relations front, including number of People Employed:

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable assets of your Company. The Company recognizes people as its best employees and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature, and operations of the Company.

Details of Key Financial Ratios, along with detailed Explanations Thereof:

Description	As at March 31, 2025	As at March 31, 2024	Variance	Remark
Current Ratio	4.79	3.59	33%	This is primarily due to a decrease in Inventory, Trade Payable as at balance sheet date
Debt-Equity Ratio	0.07	0.09	-24%	N.A.
Debt Service Coverage Ratio	5.33	2.66	100%	Increase in debt service coverage ratio due to decrease in debt
Return on Equity Ratio	0.10	0.23	-56%	Decrease in ratio due to substantial decrease in profit after tax
Inventory turnover ratio	3.46	2.79	24%	N.A.
Trade Receivables Turnover Ratio	1.68	2.51	-33%	Attributable to an increase in trade receivables during the year.
Trade payables Turnover Ratio	3.50	3.99	-12%	N.A.
Net Capital turnover ratio	1.28	1.32	-3%	N.A.
Return on Capital employed	0.12	0.21	-44%	Increase in return on capital employed due to decrease in EBIT.

Forward-Looking Statement:

Certain statements made in the Management Discussion and Analysis Report relating to the Companys objectives, projections, outlook, expectations, estimates, and others may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ from such expectations, whether expressed or implied. Several factors could make a significant difference to our operations. These include climatic and economic conditions affecting demand and supply, government regulations and taxation, any epidemic or pandemic, and natural calamities over which we do not have any direct/indirect control.

Cautionary Statement:

This report contains forward- looking statements based on the perceptions of the Company and the data and information available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.

For and on behalf of the Board

QUEST FLOW CONTROLS LIMITED

SD/-

SWAROOP RAGHUVIR NATEKAR

WHOLE-TIME DIRECTOR

DIN: 05154850

DATE: 05-09-2025

PLACE: GOA