PAE Ltd Management Discussions

1. Introduction

PAE Limited ("the Company"), a Mumbai-based entity, previously engaged in the marketing, distribution, and servicing of lead storage batteries, power backup systems, and automotive parts has changed its business in the Annual General Meeting of the company held on 07^th March 2026 to processing and dealing in various food products, grains, and other agricultural commodities. Listed on the BSE (Scrip Code: 517230), it has a legacy of over 70 years.

The Board of Directors, had approved the proposal for amendment of the Main Objects Clause of the Company to enable it to engage broadly in agricultural, food processing, and trading activities.

Subsequently, pursuant to the approval of the shareholders accorded at the Annual General Meeting of the Company held in March, 2026, the Main Objects Clause of the Company was duly amended. In line with the same, the Company has commenced its business operations in the agrocommodity and allied sectors, encompassing activities such as processing and dealing in various food products, grains, and other agricultural commodities; trading of food, agricultural, through wholesale, retail and other channels.

2. Economic and Industry Overview:

During FY 2025-26, the Indian economy demonstrated resilience supported by stable inflation, improved rural demand, and continued government focus on agriculture and allied sectors. Favorable monsoon conditions, increased minimum support prices (MSP), and policy continuity contributed to improved farm incomes and higher agricultural output.

The agriculture sector remained a critical pillar of the economy, contributing approximately 1518% to GDP while supporting a significant portion of the population. Growth in rural consumption positively influenced demand across agro-commodity value chains.

India witnessed robust crop production during the year, particularly in:

• Food grains (rice, wheat, pulses)

• Oilseeds

• Sugarcane and cotton

Timely monsoon and increased adoption of mechanization and Agri-tech solutions supported productivity. However, regional climatic variability and sporadic extreme weather events continued to pose risks to output stability.

The agro-commodity sector experienced moderate price volatility driven by:

• Global supply chain disruptions

• Geopolitical factors affecting commodity flows

• Export-import policy changes

• Fluctuations in international prices

Domestic demand remained strong, while exports of key commodities such as rice, spices, and sugar contributed significantly to foreign exchange earnings. Government interventions, including export restrictions on select commodities, were used to stabilize domestic prices.

The Government of India continued to prioritize agricultural reforms and infrastructure development through initiatives such as:

• Expansion of Agri-infrastructure under the Agriculture Infrastructure Fund

• Promotion of digital agriculture and e-NAM (electronic National Agriculture Market)

• Increased MSP for key crops

• Focus on self-sufficiency in oilseeds and pulses

Additionally, emphasis on supply chain efficiency, warehousing, cold storage, and logistics improved market access and reduced post-harvest losses.

3. Operational Review:

The Company has witnessed a strong and encouraging commencement of its operations in the agro-commodity segment. Within a short span following the initiation of business activities, the Company has been able to establish its presence in the market and build initial traction across its trading and supply channels.

During the month of March, 2026, the Company achieved a turnover of over Rs.2 crore, reflecting robust demand for its products and the effectiveness of its operational and commercial strategies. This early performance indicates the Companys ability to efficiently source, process, and distribute agro-commodities, while also demonstrating its readiness to scale operations in the forthcoming periods.

The management remains confident that, with the foundation laid during the initial phase, the Company is well-positioned to achieve sustained growth and further strengthen its footprint in the agro-commodity and allied sectors.

4. Financial Review:

Key highlights (Audited): (Rs in Lakhs)

Particulars	FY 2025-26	FY 2024-25
Revenue from Operations	253.13	0
Total Revenue	253.64	61,422.24
Total Expenses	220.50	60,074.10
EBITDA	33.14	1348.14
Profit/(Loss) Before Tax	33.14	1348.14
Net Profit/ (Loss)	33.14	1348.14
EPS (Basic & Diluted, Rs.)	3.31	12.94

5. Risks and Opportunities:

Risks:

• Climate change and weather unpredictability

• Price volatility and margin pressures

• Policy uncertainties (export bans / restrictions)

ANNUAL REPORT 2025-26

• Supply chain inefficiencies in certain regions

• Dependence on monsoon Opportunities

Opportunities:

• Rising global demand for Indian Agro-products

• Expansion of food processing and value-added products

• Digitalization of Agri-trade platforms

• Growth in organic and sustainable farming

• Increasing private sector participation

PAE LIMITED

6. Outlook:

The outlook for the agro-commodities sector continues to be encouraging, driven by robust domestic demand, supportive policy measures, and an increasing emphasis on improving agricultural output and infrastructure. Growing consumption of food and related products, along with expanding export potential, is likely to support consistent growth across the industry.

For PAE Limited, its entry into the agro-commodities segment represents the start of a strategic growth journey. Leveraging the operational groundwork laid during the year, the Company plans to progressively expand its trading operations, reinforce its supply chain capabilities, and broaden its footprint across key markets.

The management remains committed to improving operational performance, maintaining a prudent approach to risk management, and identifying opportunities across promising segments within the agro-commodity ecosystem. With a structured strategy and a focus on long-term sustainability, PAE Limited is well placed to drive steady growth and enhance value for all its stakeholders.

7. Internal control systems and their adequacy:

PAE Limited has implemented a structured and robust system of internal controls, designed in alignment with the nature of its business activities, including trading and operations in the agrocommodities segment as envisaged under its object clause. These controls ensure that all business transactions are conducted efficiently, assets are safeguarded, and operations are carried out in accordance with established policies and regulatory requirements.

Considering the Companys involvement in trading activities, the internal control framework places significant emphasis on procurement processes, inventory management, quality checks, logistics, and sales transactions. Appropriate checks and balances are embedded at each stage of the value chain to ensure transparency, accuracy, and accountability in operations.

The Company has clearly defined policies and standard operating procedures governing supplier selection, contract management, pricing, credit evaluation, and risk management. These controls are supported by proper documentation, authorization mechanisms, and periodic reconciliations to minimize operational and financial risks.

An independent internal audit system regularly reviews the effectiveness of these controls, with a specific focus on key operational areas relevant to the Companys business objectives. The findings and recommendations of internal audits are placed before the Audit Committee, which monitors corrective actions and suggests improvements wherever required.

Additionally, the management undertakes periodic reviews of business processes to identify potential risks associated with market volatility, supply chain disruptions, and regulatory

changes, particularly in the agro-commodities sector. Necessary control measures are implemented to mitigate such risks in a timely manner.

Based on continuous monitoring and evaluation, the management is of the opinion that the Companys internal control systems are adequate, commensurate with its business operations, and effective in supporting its objectives while ensuring compliance and operational efficiency.

8. Discussion on financial performance with respect to operational performance:

Following the approval of the revised object clause by the shareholders on March 07, 2026, PAE Limited commenced its operations in the agro-commodities trading segment. During this initial phase, the Companys financial performance remained closely linked with its operational activities, which are naturally influenced by agro-climatic factors, fluctuations in commodity prices, and evolving regulatory conditions.

a. Revenue from Operations:

The Companys revenue is primarily dependent on trading volumes and prevailing market prices of agro-commodities. During the year under review, the revenue performance was satisfactory considering that this was the first year of operations under the new business segment and management. The Company recorded its initial set of sales transactions while establishing its presence in the market.

b. Cost of Goods Sold (COGS) and Margins:

The cost structure is largely influenced by procurement prices, which are subject to seasonal trends and market volatility. As this was the first year of operations in the agro-commodities segment, comparable previous year figures are not available. However, the Company was able to maintain relatively favorable margins, supported by efficient procurement practices and disciplined pricing strategies.

c. Operating Profitability:

The Companys operating profitability (EBITDA) during the year was driven by multiple operational factors, including:

• Effective procurement planning and execution

• Efficient inventory management and turnover cycles

• Ability to manage price fluctuations and optimize trading spreads

The Company undertook focused efforts to enhance operational efficiency through improved supply chain coordination and cost optimization measures. As a result, it was able to maintain EBITDA margins above 7% during the year.

d. Inventory and Working Capital Management:

Inventory management remains a critical component of the Companys operations and financial performance. The Company maintained balanced inventory levels to effectively manage:

• Exposure to price volatility

• Storage and handling costs

• Market demand and supply conditions

Working capital requirements remained relatively high, primarily due to the need to fund procurement activities and maintain sufficient inventory to support trading operations.

e. Other Income and Finance Costs:

During the year, the Company did not avail any borrowings from banks or financial institutions. Consequently, finance costs remained minimal, reflecting a conservative financial approach.

f. Net Profit / (Loss):

The net profitability of the Company reflects the combined effect of its operational performance, cost control measures, and prevailing market conditions. Profitability was influenced by:

• Trading volumes and price realizations

• Margin management amid input cost variations

• Ongoing cost efficiency initiatives

Additionally, carried forward losses from previous periods were adjusted against the current years taxable income. As a result, the net profit for the year remained aligned with the EBITDA for the period.

9. Material developments in Human Resources / Industrial Relations front, including number of people employed:

During the year under review, PAE Limited focused on building a lean and efficient organizational structure in line with its transition into the agro-commodities business. The Company recognizes that human resources play a vital role in driving operational success and remains committed to attracting, developing, and retaining competent talent aligned with its business objectives.

Given the early stage of operations in the new business segment, the Company has maintained an optimal workforce size, ensuring agility and cost efficiency. The focus has been on deploying skilled personnel in key functional areas such as procurement, operations, logistics, and compliance to support business activities effectively.

The Company continues to emphasize a performance-driven work culture, encouraging accountability, collaboration, and continuous learning. Necessary policies and processes have been put in place to ensure smooth functioning of operations and adherence to regulatory requirements.

Industrial relations during the year remained cordial and harmonious. There were no instances of strikes, lockouts, or significant disruptions affecting business operations. The Company maintains open communication channels with its employees to foster a positive work environment.

As on March 31, 2026, the Company had a total of 3 (three) employees on its rolls.

10. Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including:

Financial Ratios	2025-26	2024-25	Reasons
Current Ratio	1.95	0.03	Improvement due to recognition of new trade receivables.
Debt-Equity Ratio	0.00	-0.62	No significant debt recognized in current period.
Debt Service Coverage Ratio	NA	1.21	No major debt servicing obligations.
Return on Equity Ratio	24.89	NA	Positive due to improved net worth and profit; previous year not meaningful due to negative net worth.
Inventory Turnover Ratio	NA	NA	No closing inventory held.
Trade Payable Turnover Ratio	2.00	NA	Initiation of new supplier credits.
Trade Receivable Turnover Ratio	2.00	NA	Recognition of fresh receivables.

Place: Ahmedabad Date: April 23, 2026

By order of the Board of directors For PAE Limited

Sd/-

Nimeshkumar Ganpatbhai Patel Chairman & Managing Director DIN:10939411

Registered Office:

Level 1, Block A, Shivsagar Estate,

Dr. Annie Besant Road, Worli, Mumbai City,

Mumbai Maharashtra, India, 400018.

Corporate Office:

A-1115, Titanium Business Park,

Near Makarba Underpass, Makarba,

Ahmedabad - 380051.

CIN: L46201MH1950PLC008152 E-mail ID: compliance.pae@gmail.com