SIS Ltd Management Discussions

Economic Overview

Global Economy Overview

The global economic environment in 2026 continues to reflect a complex interplay of moderating inflation, uneven growth recovery, and heightened geopolitical uncertainty. At the beginning of the year, global growth expectations remained relatively stable, supported by resilient consumption trends and easing monetary tightening across major economies. However, recent geopolitical tensions in the Middle East have introduced additional uncertainty to the global macroeconomic outlook, particularly through their impact on energy prices, supply chains and trade flows.

The Middle East remains central to global energy supply, and any disruption in this region has immediate implications for oil prices, inflation trajectories, and trade flows. Recent escalations have heightened concerns around the security of critical shipping routes, including the Strait of Hormuz and Red Sea corridors, which are vital for global energy and merchandize trade. These disruptions have already contributed

to increased freight costs and insurance premiums, thereby impacting global supply chains and business costs.

In the April 2026, World Economic Outlook ("WEO"), the International Monetary Fund ("IMF") projected global GDP growth at 3.1% for 2026, slightly lower than previous estimates due to disruptions from the Middle East conflict, partly offset by carryover from strong 2025 momentum and reduced US tariffs. Global inflation is expected to rise to approximately 4.4%, driven by increases in energy commodity prices in 2026, including higher oil prices, alongside higher food prices reflecting elevated fertilizer costs and disrupted shipping routes. World trade volume growth is projected to decelerate to 2.8% in 2026, reflecting the combined drag of tariff measures and conflict-related disruptions.

These projections assume that geopolitical disruptions remain contained and temporary in nature. Any prolonged escalation may adversely impact inflation, trade flows, and global growth prospects.

Global Macroeconomic Indicators

Indicator	2025 (E)	2026 (P)	2027 (P)
Global GDP Growth (%)	3.4	3.1	3.2
Inflation (%)	4.2	4.4	3.7
Trade Growth (%)	5.1	2.8	3.8

Source: IMF World Economic Outlookl April 2026. Projections reflect a "reference forecast" that Incorporates the impact of the Middle East conflict assuming the conflict remains limited in duration, intensity, and scope, with disruptions fading by mid-2026. Adverse scenarios involving longer or broader conflict would imply weaker growth and higher inflation.

These macroeconomic developments translate into both risks and opportunities for the Company. While higher inflation and supply-chain disruptions may exert pressure on operating costs, the elevated geopolitical and security environment - combined with Indias continued investment in critical infrastructure - is expected to drive sustained demand for security and facility management services across logistics, energy, and urban infrastructure sectors.

Indian Economy Outlook

India continues to remain one of the fastest-growing major economies globally, despite significant downside risks stemming from the Middle East conflict and the related supply chain disruptions, the economys strong macroeconomic fundamentals and policy buffers offer some insulation. The countrys economic momentum has been sustained through robust domestic demand supported by income tax and Goods and Services Tax (GST) rationalisation and accommodative monetary conditions.

GDP growth in India is estimated at approximately 6.5% in FY26, reflecting continued strength in private consumption.

On the supply side, manufacturing strengthened, driven by automobiles and fast-moving consumer goods. Services sector activity benefited from strong urban demand - reflected in retail trade, hospitality, transportation, and real estate services - and buoyant exports of financial and professional services. On the demand side, private consumption increased, supported by rising household disposable income amid personal income tax cuts (announced in the Union Budget FY26), and the GST rationalization, which reduced the effective indirect tax rate.

Headline CPI inflation moderated sharply in FY 2025-26, driven largely by falling food prices (World Bank IDU, April 2026). For FY2026-27, however, the RBI now projects CPI inflation at 4.6%, reflecting upside risks from the West Asia conflict, elevated crude prices, a weaker rupee, and potential El Nino conditions (RBI MPC, April 2026). The RBI has held the repo rate at 5.25% with a neutral stance, viewing the shock as primarily supply-side, with Indias macroeconomic buffers and energy diversification efforts providing partial insulation.

On the external front, Indias current account deficit narrowed to 1.0% of GDP in the first three quarters of FY2025-26, as strong inward remittances and a larger services trade surplus more than offset a modest widening of the merchandize trade deficit (World Bank IDU, April 2026). Merchandize export performance has been supported by the sharp reduction in US tariffs on Indian goods. The Current Account Deficit is expected to widen on a higher energy import bill before stabilising over the medium term, with the external position remaining adequately financed by foreign investment inflows and supported by foreign exchange reserves, despite recent rupee pressure from FPI outflows linked to the Middle East conflict.

Indicator	FY25 ^	FY26 (Est.)	FY27 (Est.)
GDP Growth (%)	7.6	6.5	6.5
CPI Inflation (%)	2.1	4.7	4.0
CAD (%)	(0.9)	(2.0)	(1.6)

Source: V\Qrid EkCApriic Outlook, April 2026

Indias structural growth drivers — rapid urbanisation, rising household incomes, accelerating formalisation of the workforce (further reinforced by the recent adoption of the Labour Codes), and a sustained public capital expenditure push continue to create long-term opportunities. For the Company, this translates into sustained demand for security and facility management solutions across infrastructure, manufacturing, logistics, and urban commercial real estate. Heightened focus on safety, regulatory compliance, and asset protection, alongside the structural shift toward technology-led integrated security solutions, further reinforces the relevance of the Companys man-tech service model.

Australian Economy Outlook

Economic growth exceeded expectations in late 2025, though momentum remains fragile and heavily reliant on public demand, with weak private activity, subdued productivity and soft household consumption.

The Australian economy also remains exposed to geopolitical uncertainties, particularly through their impact on global commodity demand, shipping costs, energy prices, and trade flows. Prolonged geopolitical disruptions may affect business confidence and investment activity across key sectors.

GDP growth in Australia is estimated at approximately 2.0% in 2026, reflecting subdued household consumption and the renewed monetary tightening in response to the energy-driven inflation rebound. Headline inflation is now projected to rise in 2026, driven largely by energy price pressures linked to the Middle East conflict.

Australias economic performance remains closely linked to global commodity demand, particularly from Asia. While demand for key exports such as iron ore and LNG remains relatively stable - both iron ore and LNG export earnings have come under material pressure from falling prices. Disruptions to global shipping routes, particularly those linked to the Middle East conflict, softening Chinese steel demand, and new iron ore supply from Brazil are expected to remain headwinds.

Labour market conditions remain relatively stable, with wage growth and employment remaining broadly stable. Sustained infrastructure investment and public spending continue to provide support to economic activity.

Australia Key Economic Indicators

Indicator	2025	2026 (Est.)	2027 (Est.)
GDP Growth (%)	2.0	2.0	1.7
Inflation (%)	2.9	4.0	3.2
Unemployment (%)	4.2	4.2	4.3

Source: World E2momio Outlook, April 26

For the Company, Australia represents a mature and stable market, where demand for security services is closely linked to commercial activity, infrastructure projects, and regulatory compliance requirements. While economic moderation may impact short-term growth in certain sectors, the long-term outlook remains supported by urban development, institutional demand, and a strong regulatory framework emphasising safety and risk management.

Industry Overview

Security Services

Indias security services industry continues to expand, supported by rapid urbanisation, infrastructure creation, and rising enterprize focus on asset protection and compliance. The APAC private security market, in which India is a leading contributor, was valued at ~US$ 85.9 Billion in 2025 and is projected to reach US$ 92.4 Billion in 2026. India hosts one of the worlds largest private security workforces, with over 8.9 million personnel. The industry remains highly fragmented, with a large unorganized base, creating significant headroom for organized, compliant players with technology-led solution delivery to consolidate market share.

For a manpower-intensive industry such as security services, the Labour Codes, operationalized in late 2025, represent a structural shift. Combined with ongoing minimum wage revisions, these changes are expected to drive a near-term increase in human resource costs across the sector, while accelerating formalization — a structural tailwind for organized players already operating with compliance-led cost structures.

Another structural trend is the shift towards integrated and technology-enabled security solutions. Increasing adoption of AI-based surveillance, biometric access systems, and IoT- enabled monitoring is transforming service delivery models, particularly in large enterprizes and urban infrastructure projects, and smart city deployments. This combination is accelerating the transition from a purely manpower-intensive model to a hybrid "man-tech" model that integrates trained personnel with technology and analytics.

The demand environment continues to be anchored by sectors such as infrastructure, logistics, BFSI, IT/ITeS, and manufacturing, all of which require scalable and reliable security frameworks. Additionally, government-led initiatives in smart cities, transport infrastructure, and industrial corridors are expanding the addressable market for organized security service providers.

At the same time, the industry is navigating structural cost pressures. Labour remains the single largest cost component, and regulatory changes related to wages and compliance are influencing pricing structures and contract design. This is accelerating the shift towards organized players with the ability to deliver compliant, scalable, and technology- integrated solutions.

Overall, the industry remains highly fragmented, with a large unorganized base, creating significant headroom for organized players with the compliance capability and technology integration scale to consolidate market share.

Facility Management

The Facility Management (FM) industry in India has evolved into one of the largest and fastest-growing services markets in the Country, anchored by sustained expansion in Grade A commercial real estate, rapid build-out of manufacturing and infrastructure capacity, and the steady migration of non-core functions to specialist service providers.

The India facility management market is estimated at US$ 13 Billion in 2025 and is projected to grow at a CAGR of 9.3% through FY30. Within this, the Integrated Facility Management

(IFM) segment - the structural growth engine for organized players - is growing materially faster.

The demand environment was reinforced in 2025 by strong absorption in commercial real estate: With Grade A office supply reaching ~71 mn. sq. ft. during 2025, across the top 7 cities. Global Capability Centres (GCCs) accounted for an estimated 35-40% of office leasing in 2025, materially expanding the addressable pool of 24x7, high-specification facilities that depend on professional FM coverage. Industrial demand is being driven by the Production Linked Incentive (PLI) scheme, semiconductor and electronics manufacturing investment, and Tier-2 city expansion.

Three structural shifts are reshaping the industry:

Integrated, single-provider models: Organisations are increasingly consolidating soft services (housekeeping, security integration) and hard services (mechanical, electrical, plumbing, HVAC, fire safety) under a single integrated contract, driven by the need for single-point accountability, operational efficiency, and lower total cost of ownership.

Technology-led service delivery: IoT sensors, predictive maintenance platforms, and AI-enabled occupancy and energy analytics are becoming baseline specifications in Grade A real estate. Outcome-based contracts that tie payment to measurable KPIs — equipment uptime, energy consumption, space utilisation — are gaining ground, favouring providers with digital reporting infrastructure and the scale to invest in command-centre operations.

Sustainability and ESG: Corporate landlords are embedding energy-performance guarantees into service-level agreements, and SEBI sustainability reporting requirements are accelerating demand for providers that can supply energy-efficiency advisory services. Green FM capability is increasingly a tender qualifier rather than a differentiator.

Together, these shifts position Indias FM market as one of the most attractive long-term growth segments in the broader business services landscape, with structural advantages accruing to scaled, technology-enabled, and compliance- capable providers.

Business Overview

Business Overview

SIS Group continues to be a leading provider of security, facility management, and cash logistics services, with a diversified presence across India, Australia, New Zealand, and Singapore. Through its subsidiaries, associates, and joint ventures, the Group delivers essential services across three core verticals, Security Solutions, Facility Management, and Cash Logistics, serving a wide range of industries including infrastructure, manufacturing, BFSI, logistics, and urban real estate.

The Groups operating model is anchored in delivering integrated service offerings that combine manpower-led services with technology-enabled solutions to enhance efficiency, scalability, and client outcomes. Over time, SIS has strengthened its positioning as a trusted partner for end-to-end integrated business support solutions provider across both domestic and international markets, supported by a workforce of over 3.5 lakh employees and a network of branches spanning over 600 districts in India and APAC. The Groups diversified geographic and segmental presence, combined with long- standing customer relationships across regulated and high- compliance sectors, continues to underpin the resilience and scalability of the business model.

During FY26, the business environment continued to be shaped by evolving client expectations, cost pressures, and increasing demand for compliant and technology-driven solutions. The Group remained focused on operational discipline, margin improvement, and selective growth, while continuing to invest in capability building and digital integration across its service lines.

Discussion on Financial Performance with Respect to Operational Performance

The Group delivered a strong financial and operational performance during FY2025-26, achieving its highest-ever revenue and EBITDA. Revenue from operations increased by 21.2% to ?15,981.5 crore in FY26 from ?13,189.0 crore in FY25, driven by robust growth across Security Solutions - India, Security Solutions - International, and Facility Management businesses. The growth was supported by new customer acquisitions, expansion of existing contracts, wage-linked pricing revisions, and the integration of A P Securitas Private Limited acquired during the year.

EBITDA increased by 19.9% to ?723.7 crore compared to ?603.7 crore in FY25. The improvement was supported by operating leverage, disciplined contract management, productivity enhancement initiatives, and increasing adoption of technology-enabled service delivery models across business segments. EBITDA margin stood at 4.5% during FY26.

The Group continued to strengthen its technology-led service offerings during the year through expansion of its ManTech solutions, electronic security business, alarm monitoring services, and digital workforce management platforms. These initiatives supported productivity improvements, operational efficiency, service quality, and long-term competitiveness.

Working capital management remained a key focus area during the year. Collection efficiencies improved across businesses, resulting in lower debtor days and stronger cash conversion. As of March 2026, the Group reported net debt to EBITDA of 0.99x and DSO of 63 days, reflecting continued improvement in balance sheet efficiency and cash flow management. The Group also returned approximately ?250 crore to shareholders through dividends and buybacks during FY26. Overall, the financial performance reflects the strength of the Groups diversified business model, market leadership positions, operational discipline, and ability to deliver profitable growth while continuing to invest in technology, workforce capability, and long-term value creation.

Particulars (K Crore)	FY26	FY25	% Change
Revenue from Operations	15,981.5	13,189.0	21.2%
EBITDA	723.7*	603.7	19.9%
EBITDA Margin (%)	4.5%	4.6%	-10 bps
PAT	367.2*	317.6**	15.6%
PAT Margin (%)	2.3%	2.4%	-10 bps

Key financial ratios

Ratio	FY26	FY25	% Change	Reason
Debtors Turnover		6.66	15.17%	-
Inventory Turnover	3.24	2.63	23.19%	-
Interest Coverage Ratio	3.69	2.63	40.30%	Ratio improved due to reduction in finance cost in line with Borrowings.
Current Ratio	1.41	1.44	-2.08%	-
Debt Equity Ratio	0.45	0.75	-40.00%	Debt levels were reduced during the year, leading to lower debt equity ratio.
Operating Profit Margin (%)	5.71%	5.64%	1.24%
Net Profit Margin (%)	1.85%	2.6,1%	29.12%	The decrease is on account of reduced profit due to the one-time impact recognized under exceptional items.
Return on Net Worth	9.07%	11.83%	-23.33%	-

Segmental Review Security Solutions - India

The Security Solutions India segment delivered strong growth during FY 2025-26, supported by sustained demand across manufacturing, education, retail, ecommerce, construction and media & entertainment, alongside the consolidation of A P Securitas Private Limited ("APS") (acquired in Q2 FY26).

Revenue for the segment stood at ?6,826.8 crore in FY26, compared to ?5,576.4 crore in FY25 — a growth of 22.4% year-on-year. Growth was driven by a combination of strong new contract wins, expansion of existing client relationships, pricing revisions linked to periodic minimum wage adjustments across states, and the integration of A P Securitas. Excluding APS, organic revenue growth (ex-APS) was 11.8% year-on-year in Q4 FY26.

Operating EBITDA for the segment grew 14.7% year-on- year to ?351 crore in FY26, with the segment maintaining its position as the largest contributor to consolidated EBITDA. Margin improvement initiatives and continued investments in technology-led service delivery, remain a key focus area for the management. Working capital efficiency also improved, with DSO reducing to 67 days as at March 2026 — among the lowest levels in recent years.

The Groups emphasis on technology-led solutions continued to strengthen its competitive positioning. Offerings under the ManTech framework, alongside the Groups electronic security and alarm monitoring businesses, saw growing adoption as clients increasingly migrated towards integrated, technology- enabled security models. During the year, the Group rolled out an Al-powered video management system for a marquee automobile client, enabling a transition from manpower-heavy operations to efficiency-driven, real-time monitoring, reinforcing the Groups positioning as a technology-first security partner. The electronic security and alarm monitoring business continued to scale, with the V-Protect business servicing over 25,749 customer connections as of the end of FY26.

The segment operates through multiple brands including SIS, SISCO, AP Securitas, Tech SIS, SIS Alarm, and others — across 247 branches with ~2,49,286 employees as of March 2026. With structural demand drivers including rapid urbanisation, infrastructure development, the formalisation of the workforce, and the growing focus on asset protection and integrated risk management, the segment remains well-positioned for continued growth, supported by scale, compliance capability, and accelerating adoption of technology-enabled service models.

Security Solutions - International

The Security Solutions International segment delivered a strong performance during FY2026, with broad-based growth momentum across all operating markets — Australia, New Zealand and Singapore — supported by sustained new contract wins, continued progress on operational restructuring, and gradual margin improvement.

Revenue for the segment grew to ?6,739.6 crore in FY26, compared to ?5,429.9 crore in FY25 - an increase of 24.1% year-on-year on a constant currency basis. Growth was driven by new wins across the defence, aviation, energy and steel sectors. The Group continues to be the market leader in private security in Australia and a top three player in New Zealand.

Operating EBITDA for the segment grew 19.3% year-on-year to T236.4 crore in FY26. Margin progression through the year was supported by new contract wins at improved margins, the scale-up of the technology-enabled service model, and disciplined execution on operational efficiency initiatives. Margin enhancement remains a continued focus area, with management implementing initiatives to drive further improvement in operating leverage and contract-level profitability.

Operating conditions across the international markets remained challenging through the year, with labour availability constraints — driven by persistently low unemployment in Australia (around 4.3% as of March 2026) — keeping wage pressures elevated. The Group continued to focus on operational efficiency, workforce optimisation, technology-led service delivery, and disciplined contract management to navigate these dynamics.

The Singapore business sustained its improved performance trajectory during the year, building on the progress achieved in FY25, where it reached break-even at the operating profit level. The turnaround was supported by cost rationalisation, exit from unprofitable contracts, and new business wins.

The international business also continued to scale its proprietary technology-enabled service model, embedding digital platforms into manpower-led contracts — structurally supportive of billing integrity, margin resilience, client retention, and operating leverage over the medium term.

Facility Management Solutions

The Facility Management Solutions segment delivered a strong performance during FY2025-26, with double-digit revenue growth and the highest margin expansion across the Groups three operating segments, supported by sustained demand for integrated, technology-enabled service models.

Revenue for the segment stood at ?2,494 crore in FY26, compared to ?2,247 crore in FY25, reflecting continued expansion across sectors. Growth was driven by new contract wins across the automotive, BFSI, real estate, oil and gas, IT, government, manufacturing, construction, healthcare, and energy sectors, alongside the continued ramp-up of existing client engagements.

The segment also recorded improvement in operating margins during the year, supported by focused execution of contract portfolio refinement and rationalization of SG&A expenses, and a gradual shift in the service mix towards higher-margin integrated solutions. The focus remained on enhancing long-term profitability while maintaining service quality and client retention.

Client expectations continue to evolve towards more automated, data-driven, and sustainable solutions, leading to increased adoption of technology across service delivery. The integration of digital tools, monitoring systems, and process automation has enabled improved efficiency, transparency, and scalability.

With strong structural tailwinds from urbanisation, Grade A commercial real estate expansion, the rapid build-out of Global Capability Centres, growing enterprize focus on workplace experience and sustainability, and accelerating adoption of technology-led service delivery, the segment is well-positioned to deliver sustained, profitable growth.

Risk Management

SIS has instituted a structured and comprehensive risk management framework to proactively identify, assess, and mitigate risks that may impact its operations, financial performance, and strategic objectives. The framework is embedded across the Groups businesses and is overseen by the Risk Management Committee of the Board, which periodically reviews the Groups principal risks, the adequacy of mitigation measures, and emerging risks across the business. Each identified risk is supported by a documented mitigation plan with clearly assigned ownership at the management level, ensuring accountability and effective execution.

The Risk Management Committee periodically reviews the Companys Risk Management Policy, including emerging risks and mitigation measures, and recommends appropriate updates to the Board.

The Company maintains a comprehensive Risk Library covering key risk categories, including Operational, Strategic, Human Resources, Legal & Compliance, Information Technology & Cyber Security, and Financial. The risks are periodically evaluated based on their potential impact and likelihood of occurrence, and are presented to the Risk Management Committee along with defined mitigation strategies. The framework also integrates a structured approach to managing risks arising from mergers, acquisitions, and business integration — including pre-transaction due diligence, integration planning, and post-acquisition monitoring — given the Groups continued inorganic growth agenda.

Risks and Concerns

Operating Risks

Operational risk refers to the potential impact arising from failures in processes, systems, workforce management or service delivery. Given the recurring and service-intensive nature of the security and facility management businesses and a workforce of over 3 lakh employees deployed across multiple geographies and thousands of customer sites, consistency and quality of execution remain critical to sustained performance.

With an extensive network of operations across multiple locations, maintaining uniform service standards is a strategic priority. SIS continues to strengthen its operational resilience through well-established processes for recruitment, training, deployment, supervision and performance management, supported by standardized operating procedures and a tiered review framework across branches and regional offices.

During FY26, the Group made significant progress in consolidating its core technology infrastructure: all Indian SBUs have migrated to a unified Oracle financial platform, and the in-house SISCORE platform - already live across SIS, DTSS, SLV, and Uniq - is being extended to all remaining

Indian SBUs. A common Shared Services Centre is used to centralize financial transactions, with payroll and invoicing progressively being migrated. The Group has also deployed digitized attendance systems (MySIS in the Security business, third-party platforms in FM) and is implementing the QUACA compliance platform to provide customers with real-time visibility of site-level compliance documentation.

The Company continues to invest in technology-enabled monitoring systems - including command centre operations, real-time deployment tracking, mobile-first supervisory tools, and integrated man-tech offerings - to enhance visibility, control and audit-readiness across operations. Standardisation of processes, digitization of compliance reporting and consolidation of branch-level deployment frameworks remain key focus areas, improving efficiency, scalability, and risk mitigation.

In the current environment, operational risks are also influenced by labour availability, attrition, and wage inflation across geographies, and the operational transition associated with regulatory changes in workforce frameworks.

The Group continues to invest in workforce planning, productivity initiatives, and supervisory capability to manage these dynamics, while pricing frameworks across most customer contracts enable proportionate adjustments for statutory cost changes.

Information Technology and Cyber Security Risks

Given the Groups increasing reliance on technology platforms for service delivery, financial reporting, workforce management, and customer interface, IT and cyber security risks receive heightened management attention. During FY2026, the Group implemented a multi-layered cyber security and IT resilience framework, with progress reviewed by the Risk Management Committee.

Key actions undertaken during the year included:

• identity and Access Management: Microsoft 365-based Identity and Access Management deployed across MSS Australia (~2,200 users) and Indian SBUs on SISCORE and Oracle ERP, with role-based access controls enforced. Multi- Factor Authentication (MFA) has been implemented for critical applications and users; Privileged Access Management (PAM) deployed for all administrative and server logins; and Zero Trust Network Access (ZTNA) and VPN deployed for secure remote access.

• Data Protection: Encrypted cloud backup implemented across databases, applications, and user data; full disk encryption mandated on all Group-issued devices; and network segmentation isolating critical systems from general traffic.

• Vulnerability Assessment and Penetration Testing: Periodic

Vulnerability Assessment and Penetration Testing ("VAPT") exercises are conducted and identified vulnerabilities are remediated in a timely manner.

• Cyber Attack Simulation: A cyber security attack simulation exercise was conducted during FY26 by an external specialist across all IT services and 10 randomly selected office locations, in line with directions from the Board.

• Disaster Recovery: The Group operates a primary data centre in New Delhi with a Disaster Recovery site in Bengaluru, supported by real-time replication, Pan-India VPN access, and quarterly restore testing. A DR test in late 2025 confirmed successful failover across all five critical systems (OTC, FLM, ERP, Mail Server, Server) — with a Recovery Time Objective of 24 hours and Recovery Point Objective of 4 hours.

• integration Audit: Integration audits of critical systems were conducted during the year to strengthen system reliability and control effectiveness.

• Awareness: Cyber security awareness training and phishing simulation exercises were conducted across the Group during the year.

Legal, Compliance & Regulatory Risks

The Group operates in a highly regulated environment across multiple jurisdictions, with compliance requirements relating to labour laws, licensing, taxation, and industry- specific regulations. Variations in regulatory interpretation and enforcement, particularly across regions, may expose the business to compliance-related risks. To manage compliance risk, the Group has institutionalized a centralized Compliance Tool that tracks statutory compliance obligations across regulations to which the Group is subject, with designated process owners and quarterly review by Executive Committees of each SBU. Compliance status is reported to the Board on a quarterly basis. The Groups core business and ERP platforms have been configured to support statutory compliance modules, and the QUACA platform — under implementation — will provide customers with direct visibility of compliance documentation at their sites.

Human Resources, Workplace Safety and Succession Risks

The recruitment, development, and retention of management talent is fundamental to the Groups growth trajectory. The Risk Management Committee, supported by the Nomination and Remuneration Committee, oversees a Board-approved succession planning policy. Each Strategic Business Unit is now led by a professional CEO, with leadership and structural changes implemented at zonal and regional levels during FY2025-26 as part of the Groups Vision 2030 planning.

Leadership development programmes, recruitment of senior talent, and targeted training initiatives have been undertaken to build management bandwidth aligned with the Groups growth ambitions.

SIS maintains a comprehensive health and safety framework, supported by structured training programs, standard operating procedures, and regular monitoring across client locations. These measures are designed to minimize workplace incidents and ensure compliance with applicable safety standards.

M&A and Integration Risks

Given the Groups use of strategic acquisitions to scale and diversify, the framework includes a structured approach to managing M&A and integration risks. A defined acquisition cycle framework — covering due diligence, transaction execution, transition planning, and post-acquisition integration — is in place with clearly assigned roles and responsibilities.

The Group also undertakes periodic post-integration reviews and system integration audits to strengthen governance, process harmonisation, and internal controls across acquired businesses.

Each acquisition is governed by an integration plan with defined objectives, milestones, and synergy targets, monitored through systematic oversight and review mechanisms. This framework has been operationalized through recent transactions, including the integration of A P Securitas during FY26.

Financial Risks

The Group aims to maintain stability and predictability in its financial performance while managing exposure to market, credit, and liquidity and foreign currency risks.

Given the nature of its operations, the business is exposed to cost inflation - particularly in employee compensation, statutory contributions, and wage revision - as well as client concentration and working capital cycles. The Company continues to focus on disciplined contract selection and pricing working capital cycles, and currency movements on the international business. The Group manages these risks through disciplined contract selection, well-defined pricing frameworks that enable pass- through of statutory and minimum wage changes under most customer contracts, active receivables management, and a continued focus on cost optimisation and operating leverage. Liquidity risk is managed through diversified funding sources, conservative leverage, and an active treasury function. Foreign currency risk arising from the international operations is monitored on an ongoing basis, with natural hedges available through the Groups geographic structure and intra-group funding arrangements.

Detailed disclosures on financial risk management are provided in the notes to the standalone and consolidated financial statements.

Emerging & External Risks

The evolving macroeconomic and geopolitical environment has introduced new dimensions to the risk landscape.

Heightened geopolitical tensions, particularly in key global regions, may lead to volatility in energy prices, supply chain disruptions, and cost pressures, indirectly impacting client industries and operating conditions. Additionally, increasing digitisation and reliance on technology heighten exposure to cyber and data-related risks.

The Company continues to closely monitor these developments and adapt its risk management approach to ensure resilience and continuity in a dynamic operating environment.

Opportunities and Threats

Opportunities

The long-term outlook for the company remains supported by several structural growth drivers across its core operating markets.

In India, rapid urbanisation, continued investment in infrastructure, industrial corridors, logistics networks, transportation assets, and commercial real estate are expected to drive sustained demand for security and facility management services. The increasing formalisation of the workforce, implementation of Labour Codes, and greater emphasis on regulatory compliance are accelerating the shift from unorganized operators towards organized service providers with established compliance frameworks and scale advantages.

The growing adoption of technology-enabled solutions presents a significant opportunity for the Group. Increasing demand for integrated security solutions incorporating AI-enabled surveillance, remote monitoring, analytics, electronic security systems, and alarm monitoring services is creating opportunities to expand the Groups ManTech service model and enhance service value proposition. Within Facility Management, increasing outsourcing of non-core activities, expansion of Global Capability Centres (GCCs), growth in Grade A commercial real estate, and rising focus on workplace experience, sustainability, and energy efficiency continue to expand the addressable market for integrated service providers.

The companys diversified presence across India, Australia, New Zealand, and Singapore provides access to multiple growth markets and enables it to leverage operational expertize, technology platforms, and best practices across geographies.

Threats

The Group operates in an environment exposed to various external and industry-specific risks. Labour availability constraints, rising wage costs, statutory compliance requirements, and periodic revisions in minimum wages continue to exert pressure on operating costs across the security and facility management sectors. While a significant portion of these costs are recoverable through customer contracts, timing differences and competitive market conditions may affect profitability. The business remains exposed to macroeconomic volatility, geopolitical developments, inflationary pressures, and supply chain disruptions that may affect client spending patterns, infrastructure investment, and business activity across key sectors served by the Group.

Increasing competition from both organized and unorganized market participants may result in pricing pressures and contract renewal risks. At the same time, rapid technological advancements require continued investment in digital platforms, cyber security infrastructure, and technology- enabled service capabilities to remain competitive.

The Group is also exposed to regulatory changes across multiple jurisdictions relating to labour laws, taxation, licensing requirements, data privacy, and industry-specific compliance obligations. Any adverse regulatory developments or changes in interpretation may impact operating costs and business processes.

Cyber security threats, information security breaches, and technology disruptions remain emerging risks as the Group continues to increase its reliance on digital platforms and technology-enabled service delivery models.

Human Resources: Our greatest competitive advantage

At SIS people are the product. In a business where service quality is entirely dependent on the competence, conduct, and commitment of the person standing at a clients gate or maintaining a clients facility, the Groups ability to attract, train, deploy, and retain a large and capable workforce is the single most important operational capability it possesses. Human capital management is not a support function at SIS — it is a core strategic discipline.

Workforce at Scale

As of March 31, 2026, the Group employed approximately 3,57,028 (compared to FY25: 3,00,475) personnel across its security, facility management, and cash logistics operations — making SIS one of Indias largest private-sector employers. This workforce supports lakhs of families through stable employment, statutory benefits, and structured welfare initiatives, and represents a significant contribution to formal employment generation.

In recognition of its contribution to employment generation and workplace practices, SIS has been acknowledged by reputed institutions such as the Great Place to Work Institute.

Employee Well-being and Benefits

The Company remains committed to providing a comprehensive and compliant employee benefits framework. This includes:

• Statutory wages and social security benefits

• Health and medical insurance coverage

• Retirement and long-term financial security programs

• Employee Stock Option Plans (ESOPs)

These initiatives are designed to extend a sense of ownership and long-term alignment to eligible employees.

Beyond statutory requirements, the Group continues to invest in employee welfare through financial inclusion programmes, on-ground support mechanisms, and structured grievance redressal systems — recognising that a workforce of this scale requires proactive and accessible welfare infrastructure, not just policy compliance.

Workforce Management and Capability Building

As a people-intensive organisation operating in a sector where skill quality directly determines service quality, SIS has built one of the countrys most extensive integrated manpower supply chains through its proprietary Recruit & Train framework. This framework covers the full employment lifecycle — from sourcing and screening through structured training, deployment, performance monitoring, and upskilling — enabling the Group to consistently deliver compliant, capable, and client-ready personnel across its business lines.

SIS currently operates 32 training centres across 14 states, with an annual training capacity of 35,000 personnel. This is supported by a network of 200 Training Officers and 1,200 Training Champs, ensuring consistent and standardized training delivery.

The Company continues to leverage its proprietary MTrainer platform to enable digital training delivery, improve last-mile reach, and enhance monitoring of training outcomes.

Employee Engagement and Retention

SIS benefits from a stable and experienced workforce, with a meaningful proportion of employees serving the organisation for over 25 years. This reflects strong employee trust and alignment with the Companys values and culture.

The Company continues to focus on:

• Career progression pathways and internal mobility

• Continuous skill development and upskilling initiatives

• Structured performance management systems

These efforts support retention, improve productivity, and ensure service quality across operations.

Outlook

With increasing formalisation of the security and facility management sectors, the demand for trained and compliant workforce solutions continues to rise. SIS is well- positioned to address this opportunity through its scale, training infrastructure, and technology-enabled workforce management systems.

By continuously investing in people, processes, and digital capabilities, the Company aims to enhance workforce productivity, improve service delivery, and build a resilient talent pipeline for future growth.

Internal Quality Control and Adequacy

Control Philosophy and Board Oversight

The SIS Board has instituted robust internal control systems, policies, and procedures to ensure the efficient, ethical, and compliant conduct of business operations that supports the Groups growth in scale and geographic complexity. The control framework is designed around four objectives: safeguarding assets across a large and distributed operating network; ensuring the integrity and completeness of financial reporting; enabling regulatory compliance across multiple jurisdictions; and supporting informed, data-driven decision- making at every level of the organisation.

With the continuous growth and increasing complexity of operations, there is an ongoing emphasis on strengthening and modernising internal systems and processes and the internal control framework has evolved accordingly.

Internal Controls and Adequacy

The Company maintains a comprehensive internal audit function to provide independent assurance on the adequacy and operating effectiveness of internal financial controls, risk management processes, and compliance with applicable policies and regulatory requirements. This approach enables the Company to maintain operational discipline, regulatory compliance, and business continuity.

Information systems across the SIS Group are regularly assessed and enhanced to provide accurate, real-time data and insights to stakeholders. Recognising the strategic role of IT in todays dynamic environment, the Group partners with expert teams to continuously evolve and upgrade its technology platforms.

The internal audit programme is approved by the Audit Committee of the Board and is carried out by the internal team as well as an independent external firm through a structured cycle of quarterly reviews. Observations, management responses, and the status of remediation are tabled before the Audit Committee at each of its meetings. Emphasis on compliance, customer satisfaction, and process quality remains central to retaining and attracting clients in a competitive market.

The internal audit programme covers operational processes, branch operations, revenue assurance, treasury, procurement, accounting, taxation, statutory compliance, and information technology controls through a risk-based audit approach.

The audit methodology applied across review periods comprized initial process and workflow understanding through management discussion, data acquisition and analysis, risk-based sample selection, documentation review, and structured reporting.

Technology-Enabled Financial Controls

A defining feature of the Groups control environment in FY26 is the deepening integration of technology across financial and operational processes. The deployment of Oracle Fusion as the Groups financial ERP has substantially strengthened controls in accounts payable, statutory reporting, and reimbursements. Robotic Process Automation ("RPA") tools are being increasingly deployed across finance and operational processes to improve efficiency, accuracy, and control.

SISCORE, the Groups core business management platform, provides end-to-end visibility across client contracts, manpower deployment, billing, and revenue recognition — creating a unified audit trail that links operational execution to financial outcomes. This integration between the operational and financial systems strengthens the reliability of reported results and supports timely variance analysis.

The Group continues to invest in configurable rule engines that enforce internal policy compliance and regulatory adherence in finance and operations decision-making, reducing dependence on manual oversight for routine compliance tasks.

Governance Uplift: Cash Logistics IPO Readiness

The proposed IPO process for SIS Cash Services Limited has further strengthened governance, reporting, and internal control frameworks within the Cash Logistics business.

Internal Audit

The Groups internal audit function operates independently of management and reports directly to the Audit Committee of the Board. Audits are conducted periodically across all business units, service lines, and geographies, with scope calibrated to risk — higher-frequency audits in areas of greater complexity or regulatory sensitivity, and lighter-touch reviews where controls are well-established.

In FY26, the internal audit programme included an increased emphasis on technology and cybersecurity controls, reflecting the growing reliance on digital platforms across service delivery and support functions. Audit findings are tracked to closure with defined timelines and reported to the Audit Committee, with repeat findings treated as an escalation trigger. The function also plays a proactive role in reviewing the design of new processes and systems before they are deployed, rather than auditing purely after the fact.

Digitisation of Compliance and Audit Workflows

Compliance monitoring has been progressively digitized during FY26, with automation of key regulatory tracking activities including labour law compliance, licensing renewals, and statutory filings across states. This reduces the risk of compliance gaps in the Groups large and geographically dispersed operations and enables real-time visibility into compliance status at a site and contract level, rather than relying on periodic manual review.

The Groups Supply Chain Management application ensures procurement governance and vendor tracking discipline across business units, while digitized finance workflows have improved the accuracy and auditability of cost recognition across the service delivery chain.

Outlook

The Groups focus for the year ahead is on further integrating its operational and financial control systems to eliminate remaining data silos, completing the rollout of unified platforms across all entities, and building out real-time dashboards that give management and the Board contemporaneous visibility into key control metrics. As the Group scales and the regulatory environment continues to evolve — particularly in the context of the Cash Logistics IPO and increasing data governance requirements — the internal control framework will continue to be a strategic investment, not merely a compliance obligation.

Cautionary Statements

Certain statements contained in this Management Discussion and Analysis 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 due to various risks and uncertainties including economic conditions, government policies, taxation changes, natural calamities and other incidental factors. The Company undertakes no obligation to publicly amend, modify or revise any forward-looking statements on the basis of subsequent developments, information or events.