MPF Systems Ltd Management Discussions

1. Industry Structure and Developments

The renewable energy sector continues to play a pivotal role in the global transition towards sustainable and low-carbon sources of energy. Governments across the world, including India, are implementing various policy measures to encourage investments in renewable energy, energy storage, green hydrogen and other clean energy technologies.

India remains committed to increasing the share of renewable energy in its energy mix and has announced various initiatives to promote solar, wind and green hydrogen projects. These developments are expected to create long-term opportunities for companies operating in the clean energy sector.

The Company proposes to explore opportunities in renewable energy and related sectors, including solar energy, wind energy, green hydrogen and green ammonia, in line with its objects and long-term business strategy.

2. Opportunities and Threats Opportunities

• Growing emphasis on clean and sustainable sources of energy.

• Supportive government policies and regulatory initiatives for renewable energy projects.

• Increasing participation of industries and corporates in meeting sustainability and ESG objectives.

• Emerging opportunities in green hydrogen and green ammonia value chains.

• Availability of innovative technologies and financing options for renewable energy projects.

Threats

• Changes in government policies and regulatory framework.

• Intense competition from established industry participants.

• Fluctuations in capital costs and financing availability.

• Technological changes requiring continuous adaptation.

• Dependence on external factors such as infrastructure availability and market conditions.

3. Segment-wise or Product-wise Performance

The Companys are of operations are broadly classified into the following business verticals:

1. Solar Energy - Development, installation, and supply of solar power plants, rooftop systems, and distributed solar solutions.

2. Wind Energy - Generation and distribution of wind power projects in high potential corridors.

3. Green Hydrogen - Setting up electrolyser-based projects for industrial decarbonisation, mobility, and export markets.

4. Green Ammonia - Integrated projects for ammonia production catering to fertilizers, marine fuel, and export demand.

The Company will initiate projects in solar and wind energy while progressing towards pilot- scale green hydrogen and green ammonia facilities.

4. Outlook

The long-term outlook for the renewable energy sector remains positive due to increasing energy demand, environmental concerns and supportive government initiatives.

The Company remains optimistic about the future prospects of the sector and will continue to evaluate commercially viable opportunities that can contribute to sustainable growth and value creation for stakeholders.

5. Risks and Concerns

The Company is exposed to various risks associated with its business and the industry in which it operates, including:

• Regulatory and policy-related risks.

• Project execution and implementation risks.

• Technology and market-related risks.

• Financial and funding risks.

• Competition and economic uncertainties.

The Company continuously reviews and monitors these risks and takes appropriate measures to mitigate their potential impact.

6. Internal Control Systems and Adequacy

The Company has adequate internal control systems commensurate with the size and nature of its operations. These systems are designed to ensure the safeguarding of assets, accuracy of accounting records, compliance with applicable laws and regulations and efficiency of operations.

The Audit Committee periodically reviews the adequacy and effectiveness of internal controls, supported by internal and external audits.

7. Financial Performance (with respect to Operational Performance)

During the year under review, the Company recorded limited operational activities and continued to focus on evaluating business opportunities in line with its strategic objectives. The financial performance of the Company reflects its current stage of operations and ongoing efforts towards identifying suitable avenues for future growth.

The management remains focused on strengthening the Companys business prospects and exploring opportunities capable of generating sustainable revenues in the future.

8. Human Resources / Industrial Relations

The Company considers its human resources as an important asset and remains committed to maintaining a professional and productive work environment.

Industrial relations remained cordial throughout the year. The Company continues to focus on employee development, engagement and compliance with applicable labour laws and regulations.

9. Important Ratios:

The details of key financial ratios and explanations for significant variations are provided in the notes forming part of the Financial Statements and are reproduced below:

Sr. No Particulars	As at 31-3-2026	As at 31-3-2025	% Variance	Reason for Variance
1 Current Ratio	11.30	19.13	-40.90%	The decrease in the current ratio is primarily due to a disproportionate increase in Current Liabilities relative to Current Assets.
2 Debt-Equity Ratio	0.77	-7.47	-110.26%	The significant variance is driven by a complete turnaround in the denominator (Shareholders Equity). The company moved from a negative equity position in the previous year to a substantial positive net worth in the current year, fueled by the generation of significant net profits.
3 Return on equity ratio	244.45	75.64	223.16%	The exceptional positive variance is the direct result of a major operational turnaround.
4 Trade Receivables Turnover Ratio	2.00	0.00	NA
5 Net Capital Turnover Ratio	107.36	NA	NA
6 Net Profit Ratio	86%	NA	NA	-
7 Return on Capital Employed	1.20	4.88	-75.36%	The variance is largely a mathematical anomaly driven by the base years figures. In the previous year, the ratio of 4.88 was generated by dividing a negative EBIT by negative Capital Employed.

10. Cautionary Statement

Statements in this Management Discussion and Analysis Report describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied depending upon economic conditions, regulatory developments, market trends, government policies and other factors beyond the control of the Company.