Selan Explorations Technology Ltd Management Discussions

1. This section shall include discussion on the following matters within the limits set by the Companys competitive position:

a. Industry structure and developments:

Indias GDP for Q4FY25 stood at 7.4%, reflecting continued momentum in domestic economic activity. For the full fiscal year FY25, the Indian economy grew by 6.5%, as per provisional estimates released by the Ministry of Statistics and Programme Implementation (MoSPI). Despite global headwinds, India remained one of the worlds fastest-growing major economy, driven by strong growth in manufacturing, construction, and government capital expenditure.

Brent crude peaked at $93.12 per barrel in April 2024, driven by fears that escalating tensions between Iran and Israel might lead to broader regional instability and disrupt oil supply chains. However, Crude oil prices remained moderately volatile, with monthly averages throughout 2024 fluctuating within a relatively narrow band of $70 to $90 per barrel. This price stability was largely due to subdued global demand and strong supply growth from non-OPEC+ producers, which offset the impact of persistent geopolitical risks, including Middle East tensions and Red Sea shipping disruptions. Repeated production cuts by OPEC+ played a crucial role in preventing prices from falling further.

Indias domestic petroleum product demand remained robust in FY25, continuing the upward trajectory seen in previous years. Consumption of petroleum products rose by 2.1% year-on-year to 239.171 million metric tonnes (MMT) . Growth was led by increased mobility, strong commercial vehicle sales, and rising aviation traffic. FY25 Domestic crude oil production was estimated at 28.71 MMT, a marginal increase from 29.36 MMT in FY24 , supported by enhanced recovery efforts and new production start-ups in the private sector. Liquefied Natural Gas (LNG) imports grew steadily, registering a 12.34% increase in FY25 to reach 35,720 million standard cubic meters (mmscm) . Rising demand from fertiliser, CGD (City Gas Distribution), and industrial sectors drove this growth, supported by improved import infrastructure and competitive LNG prices. Total natural gas consumption increased by 5.63% to 71,314 mmscm , underscoring the governments continued emphasis on gas as a transition fuel in Indias energy mix.

1. Provisional Estimates of Annual Gross Domestic Product For 2024-25 And Quarterly Estimates Of Gross Domestic Product For The Fourth Quarter (January-March) Of 2024-25” Government of India Ministry of Statistics And Programme Implementation.

2. “A look back at our forecast for global crude oil prices in 2024” U.S. Energy Information Administration (EIA).

3. Domestic Consumption of Petroleum Products, Petroleum Planning and Analysis Cell, Government of India Ministry of Petroleum and Natural Gas.

4. Indigenous Crude Oil Production, Petroleum Planning and Analysis Cell, Government of India Ministry of Petroleum and Natural Gas.

5. LNG Imports, Petroleum Planning and Analysis Cell, Government of India Ministry of Petroleum and Natural Gas.

Natural gas prices remained stable through most of FY25. The monthly average administered price for domestic gas was around USD 7.97 per MMBtu , influenced by winter demand supply logistics. Stable prices contributed to improved affordability for end users in power and fertiliser segments.

Driven by strong economic growth, accelerating urbanisation, and expanding industrial activity, Indias energy landscape including the natural gas segment—is poised for major transformation in the years ahead. As the country pursues its vision of a gas-based economy and seeks to lower its reliance on oil imports, Selan is positioning itself as a key player in leading this transition.

b. Opportunities and Threats

Your company operates within Indias dynamic upstream oil and gas sector, characterized by a landscape of both promising opportunities and formidable challenges. Our exploration and production activities benefit from the vast untapped reserves present in Indias onshore and offshore territories, presenting significant growth potential for our operations. Government initiatives such as the Open Acreage Licensing Policy (OALP) and Hydrocarbon Exploration Licensing Policy (HELP) continue to create an environment conducive to investment, streamlining regulations, andincentivizing exploration efforts.

While we remain optimistic about the opportunities ahead, we acknowledgethechallengesinherentin tic gas price. our operating environment. Regulatory complexities and prolonged approval processes pose hurdles to project timelines and escalate costs, requiring us to maintain agility and efficiency in our operations. particularly in Moreover, infrastructure deficiencies, pipeline networks and storage facilities, necessitate strategic investments to optimize transportation and distribution capabilities, ensuring seamless operations across our value chain.

In addition to regulatory and infrastructural challenges, environmental considerations remain at the forefront of our operations. We are committed to adhering to stringent regulations and implementing sustainable practices to minimize our environmental footprint and promote responsible stewardship of natural resources. Our ongoing efforts in this regard underscore our commitment to sustainable development and corporate responsibility.

6. Natural Gas Consumption, Petroleum Planning and Analysis Cell, Government of India Ministry of Petroleum and Natural Gas.

7. Simple average calculated basis monthly Domestic Natural Gas Price notifications released by Petroleum Planning and Analysis Cell, Government of India Ministry of Petroleum and Natural Gas. Furthermore, we recognize the volatility inherent in globalmarkets,includingfluctuations in oil and gas prices and geopolitical tensions. Our strategic approach to risk management, combined with our focus on innovation and operational excellence, positions us to navigate these challenges effectively. By fostering collaboration with government entities, industry stakeholders, and local communities, we aim to overcome obstacles collectively, driving sustainable growth and delivering long-term value to our shareholders and stakeholders alike.

c. Segment-wise performance

Currently, the Company operates in the segment of Crude Oil and Natural Gas. The sales of Oil and Gas equivalent for the year increased by about 60.29% to an average of 1,193.13 barrels of Oil equivalent per day (boepd) in FY25 from 742.30 boepd in FY24. The Companys crude oil is sold to refineriesand its natural gas is consumed by local industry located around the vicinity of our fields. The crude oil prices are benchmarked to global markets and the gas prices are benchmarked to the Government of India notified

d. Outlook

Selan Exploration Technology Limited is a private sector listed company, incorporated in 1985, engaged in Oil & Gas Exploration and Production(E&P) since1992. The company is one of the first private sector companies to enter the Indian E& P sector. Following the move by the Government of India in 1992, that opened the E&P sector to private players, the company was amongst the first private sector companies to have obtained rights to develop discovered oilfields situated in the state of Gujarat. In 1995, Selan had executed Production Sharing Contracts (PSCs) for three fields namely Bakrol, Lohar and Indrora fields. The company further added two more fields to its portfolio, namely Karjisan and Ognaj fields in 2004. The contracts were for a of 25 years. In 2020, the Company, pursuant to a gazette notification issued by Ministry of Petroleum and Natural Gas (MoPNG), extended the contracts for the Bakrol and Lohar fieldsfor a period of 10 years, taking the tenure of the fields to 35 years (i.e. till 2030). Further, Selan has sought additional extension (beyond 2030) for Bakrol and Karjisan fields. For Indrora field, the Company decided not to pursue any further extension to the initial PSC tenure and the field was handed over to ONGC. This process was completed on March 12, 2020. In addition, the company has surrendered Ognaj field due to rapid urbanization around the field. MoPNG, in December 2023, approved the transfer of 100% participating interest in Elao field to Selan. During FY25, Selan successfully completed the acquisition of 50% participating interest in the Cambay field.

Government of India (“GoI”) on 19 July 2024 and the Farm Out Agreement with Oilex NL Holdings (India) Limited and Synergia Energy Limited closed on 1 August 2024. The closing of the farm-out agreement initiates the 18-month work programme period whereby Synergia will be carried by Selan through an agreed US$20 million work programme starting with the workovers of three legacy wells followed by the drilling of two new vertical wells and one new horizontal well. In addition, US$2.5 million upfront payment has been made to Synergia and Synergias Cambay operating personnel have been transferred to Selan now acting as Lead Joint Operator for the work programme.

e. Risks and concern

Resource Risk: Oil and Gas sector is a high yielding sector that involves equally high risks. Continuous addition of Resources and converting these resources to reserves is key to having a sustained business model. Any failure in our ability to discover new reserves, enhance existing reserves or develop new operations in sufficient quantities to maintain or grow the current level of our reserves could negatively affect our prospects.

There are numerous uncertainties inherent in estimating oil and gas reserves, and geological, technical, and economic assumptions that are valid at the time of estimation and may change significantly when new information becomes available. Mitigation Measures: The Company identifies and monitors the key risks and uncertainties affecting its operations and runs the business in a way that minimizes their impact where possible. Data acquired for seismic evaluation of oilfields& reservoir modeling involves interpretation by technologically advanced software and equipment which is highly capital intensive and is largely prone to obsolescence. Therefore, the data is constantly being reanalyzed and reinterpreted with modern software and technology to help improve recovery of oil and gas reserves. The interpretation of data is done by using highly sophisticated and technologically advanced systems. We have a team of highly experienced individuals to ensure that there is a continuous focus on enhancing technical capabilities. Peer Review & Internal review systems are in place so as to review projects to ensure these projects provide our threshold returns.

Health, Safety and Environment Risk: The E&P sector is a high-risk sector and the sector is under scrutiny to ensure we comply to all the necessary health, safety and environmental laws, regulations and standards. These stringent requirements and stakeholder expectations could result in increased costs or litigation or threaten the viability of operations in extreme cases. Large-scale environmental damage, though rare, is amongst the key risks of our Industry.

Mitigation Measures: HSE Policies have been implemented in the company to ensure that the

HSE culture is a proactive based approach and not reactive. The safety culture in the company is top management driven and the focus is to mitigate and minimize any HSE-related occurrences. Safety standards are continuously reviewed, and pro-active reporting of any safety related issues is encouraged, to prevent and reduce the re-occurrence of similar incidents. The company has initiated a KPI based performance management system where employees are rewarded for safe behaviors and effective risk management.

The Oil and Gas business is subject to operating risks. As protection against financial loss resulting from some of the operating hazards, we maintain insurance coverage for all operated and non-operated assets, including physical damage, control of well, seepage and pollution and employers liability, third party liability, goods in transit, coverage for assets and comprehensive general liability insurance. The coverage is subject to customary deductibles, waiting periods and recovery limits. We maintain insurance at levels that we believe are appropriate and consistent with industry practice and we regularly review our potential risks of loss and the cost and availability of insurance and revise our insurance program accordingly. The Company also procures directors liability insurance covering the cost of legal representation and crisis management. The potential environmental risks are covered via Environmental Impact Assessments studies which are done periodically and are approved from authorities before any project is executed.

Stakeholder Management Risk: The oil & gas operations for the company are located in areas which are surrounded by the local communities. The continued success of our operations is dependent on support and healthy relationships with our local communities. Any failure to identify and manage local concerns and expectations can have a negative impact on the organizations reputation and social licence to operate and grow.

Mitigation Measures: Our core operational philosophy lies in partnering with the local community and make them a part of our growth. Our employees are proactively engaging with local communities through a proper and structured engagement plan, to ensure healthy relationship with the local community. Our leadership teams have periodic engagements with the local communities to build relations based on trust and mutual benefit. This builds transparency and promotes dialogue with the stakeholders.

Commodity Price Risk: The companys revenue is dependent on the prevailing commodity prices. These prices are highly volatile and are dependent on a multitude of factors not limited to financial markets, macro-economic indicators & geo-political situations prevailing across the world.

Mitigation Measures: Commodity price fluctuations can be actively managed using financial instruments and hedging techniques. However, the company currently does not engage in such financial products.

Access to Capital and Project Execution Risks: A key aspect of Oil and Gas Company s is requirement of significant capital toexecute reporting and project.Also,on compliance with time execution of a project to ensure the requisite economic returns on capital invested are achieved. Extending the production of old fields often entails making significant investment in existing pipelines and infrastructure to extend their lives. This is also an issue for many small fields, which require access to existing infrastructure if they are to be economic to develop. In addition, the hydrocarbon business is a high investment, high risk with long gestation periods, therefore timely execution as per planned timelines plays a significant role to ensure apropos returns are made on the investment. Another area of concern is urbanization and the delay in land acquisitions, which affects various development and production activities to be implemented.

Mitigation Measures: A strong stage gate process is initiated in the company to review a project before a final investment decision is taken. Partner with reputable contractors to ensure timely execution of these projects and ensuring project objectives are in sync with the business plan and growth targets. Also, we actively engage and communicate our credentials through representations to government and industry associations, to keep a regular dialogue with the government to ensure that statutory approvals are granted to us prior to undertaking any development activity.

f. Internal control systems and their adequacy:

The Company maintains a comprehensive system of internal control. This comprises the management systems, organizational structures, processes, and standards that are implemented to conduct our business operations. The Company has a proper and adequate system of internal control commensurate with the size and nature of its business. These systems provide a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies. The Company also conducts periodic evaluations, mainly through its Internal Audit, to determine the adequacy of its Internal Controls System.

The Company has appointed M/s V. Sankar Aiyar & Co, Chartered Accountants, an independent firm with expertise in internal audit. Reasonable assurance of the effectiveness and reliability of financial applicable laws and regulations help ensure that

Selans Corporate Governance structure is robust. Together, our management systems, organizational structures, processes, standards and Code of Conduct and Ethics form the system of internal control that governs how the Company conducts its business and manages the associated risks. The

Board has ultimate responsibility for the management of risks and for ensuring the effectiveness of internal control systems.

This system forms an integral part of the entire cycle of planning, budgeting, management, accounting and auditing. It is a proactive methodology to control and mitigate risks and it supports the effectiveness and the integrity of every step of the process and provides continuous feedback to management. The Company carefully considers the appropriate balance between controls and risk in their programs and operations. The internal controls are designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets. As part of the Companys internal control process, any transactions with related parties are approved by the Audit Committee and Board of Directors, and appropriately disclosed in the financial statements. We treasure integrity and transparency as the core value in all our business dealings. We have dedicated Internal Auditors who make sure that transactions taking place under due authority / power are received and reported in a prudent manner. These systems are reviewed by the Audit Committee in its quarterly meetings and suggestions are givento strengthen and regularly improve their application, keeping in view the dynamic business environment. Internal and external audits are conducted on a regular basis to ensure transparency and statutory compliance. During the year, due care has been exercised by the Company with respect to all the requirements of the Companies Act and SEBI Listing Regulations.

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

Operational performance

This year, through effective production and operations management, the Company successfully boosted output and curbed the annual decline rate. It also strengthened its workforce by recruiting skilled professionals with diverse expertise to address organizational gaps and assembled a capable team focused on strong execution.

Gas prices were re-negotiated while continuing its crude oil sales to Indian Oil Corporation Limited. Further, crude oil sales to private parties, pursuant to the deregulation of sales crude notification, which allowed sale of crude oil to parties other than

Government or Government nominees, effective October 01, 2022, has contributed to an increase in crude oil revenues. The company produced from all the four fieldsduring the year. The average sales for FY25 from all the fieldsat ~ 1193 boepd. Bakrol: Average Sales at ~650 boepd an increase of ~30% from FY24. Uptick in average sales due to the following activities;

• Pre-emptive maintenance of wells.

• Chemical dosing to ensure flow assurance.

• Installation of Heat tracing systems.

• Hot Oil circulation jobs.

• SRP maintenance.

Lohar field: Average sales at ~72 boepd, a decrease of ~15% from FY24.

Karjisan field: Average sales at ~464 boepd, an increase of ~192% from FY24.

Cambay field: Average sales at ~12 boepd.

Financial performance

Total income increased by 54% to ~Rs.272 Cr, due to a large increase in production volumes of oil and gas. Expenses remained within line, as expected and Net Income for the period (FY25) increased by ~126% to ~Rs. 74 Cr. The company had a strong financialperformance during the year. The Company continues to focus on optimizing operations, implementing strong cost optimization initiatives, improving on marketing initiatives & also continues to focus on safe operations across our sites.

h. Material development in Human Resources / Industrial Relations front, including number of people employed.

People are a key resource at Selan and are the major driving force behind the performance and success of the Company. Selan encourages a harmonious work culture and provides a conducive environment that enables a fulfilling workplace. We ensure a culture of high employee engagement is created, so that each employee is empowered, and a culture of innovation and ownership is imbibed. We are committed to developing and employing people with the skills, capability and determination required to meet our business objectives. Opportunities for advancement are equal and not influenced by considerations other than performance, positive work attitude and alignment with the values of the company. The company has a flat structure, this promotes faster decision making and faster value creation due to lesser time from planning to execution. Our Company believes in being agile and nimble footed and therefore our focus is to right size the company in terms of human resources. The Company has a total strength of 78 employees as on March 31, 2025. The company during the year has also engaged multiple industry leaders on consulting assignments to ensure all the necessary techno commercial & financial systems are in place while we scale up our operations .

2. Disclosure of Accounting Treatment:

The Financial Statements have been prepared in accordance with the Companies (Indian Accounting Standard) Rules, 2015 (Ind AS) prescribed under Section 133 of Companies Act, 2013 and other recognized accounting practices and policies to the extent applicable.

i. 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:

Particulars	Formula	As at 31 March 2025	As at 31 March 2024	Variation (%)
a. Current Ratio (in times)	(Current Assets / Current Liabilities)	7.77	5.80	34.03%
b. Debt-Equity Ratio (in times)	(Debt / Equity)	Not Applicable as there is no debt outstanding
c. Debt Service Coverage Ratio (in times)	(Net Operating Income / Total Debt Service)	Not Applicable as there is no debt outstanding
d. Return on Equity Ratio	(Net Profit after Tax / Average shareholders equity)	17.14%	8.69%	97.22%
e. Inventory Turnover Ratio (in times)	(Cost of Goods Sold / Average value of Finished Goods Inventory)	34.38	30.83	11.51%
f. Trade Receivables Turnover Ratio (in times)	(Credit Sales / Average Trade Receivable)	7.40	6.20	19.40%
g. Trade Payables Turnover Ratio (in times)	(Total purchases / Average Trade payable)	2.96	1.96	51.51%
h. Net Capital Turnover Ratio (in times)	(Total Sales/ Working Capital Employed)	1.40	1.15	21.43%
i. Net Profit Ratio	(Net Profit / Total Sales)	28.67%	19.77%	45.00%
j. Return on Capital Employed	(Earning before interest and tax / Capital Employed)	18.25%	10.38%	75.87%
k. Return on Investment	(Income from Investment incl. FDs and Loan / Average Investments incl. FDs and Loan)	7.68%	6.84%	12.29%

Explanation for change in the ratio by more than 25% as compared to the preceding year

a. Current Ratio

Mainly on account of increase in current investments and decrease in current liabilities as compared to preceding year, current ratio is higher.

d. Return on Equity Ratio

Due to increase in profit after taxes for current year as compared to preceding year, return on equity ratio is higher.

g. Trade Payables Turnover Ratio

Due to decrease in average trade payables as compared to preceding year, trade payable turnover ratio is higher.

i. Net Profit Ratio

Due to increase in profit after tax and increase in net sales as compared to preceding year, net profit ratio is higher.

j. Return on Capital Employed

Due to increase in EBIT for current year as compared to preceding year, return on capital employed ratio is higher.