Spel Semiconductor Ltd Directors Report

Your Directors present the 41st Annual Report of the Company together with the Audited Accounts for the year ended Mar 31, 2026. Financial Highlights / Performance/ the Operating results of your Company as per Ind AS Financial Statements for the year ended Mar 31, 2026 are given below:

Financial Highlights / Performance

(Ind AS, Rs in Lakhs)

Particulars	Year ended Mar 31, 2026	Year ended Mar 31, 2025	Year ended Mar 31, 2024
Sales	6,28.00	7,86.42	1,200.41
Other Income	2,25.07	1,65.48	140.96
PBIDT	1,18.33	(3,99.91)	(1,15.86)
Finance Cost	5,05.83	2,88.48	2,57.02
Depreciation	1,14.30	2,00.50	2,87.91
Profit / (Loss) before Exceptional items	(5,01.81)	(8,88.89)	(6,60.78)
Less: Exceptional items	(18,82.31)	(12,57.14)	(9,76.18)
Profit / (Loss) before Tax	(23,84.11)	(21,46.03)	(16,36.96)
Tax Expense	—	43.60	41.78
Profit / (Loss) after Taxation	(23,84.11)	(21,02.43)	(16,78.74)

Note: The source tables column headers are malformed (headers overlap), but the three data columns align to FY2025-26, FY2024-25, and FY2023-24 respectively. The Tax Expense row shows "—" for FY26 in the source (blank cell).

Companys performance: Turnover decreased to Rs628 Lakhs vs Rs786.42 Lakhs previous year. Expected improvement in FY 2026-27; SPEL plans new customers from Europe & US.

Dividend: No dividend due to insufficiency of profits.

Material changes between year-end and report date: Nil.

Significant/material orders by regulators/courts/tribunals impacting going concern: Nil.

Transfer to Reserves: None during the year.

Adequacy of internal financial controls: Systems commensurate with nature/size/complexity of business; routinely tested by Internal Auditors; cover all key business areas.

Subsidiary/Joint Ventures/Associate Companies: None.

1. Notes on financial statements referred to in Auditors Report are self-explanatory; no further comments.

Deposits: Company has not accepted any public deposits; no principal/interest outstanding as on Balance Sheet date.

Statutory Auditors: M/s. Venkatesh & Co., Chartered Accountants (FRN: 004636S) hold office till conclusion of ensuing AGM. Per Section 139, 142 and Companies (Audit and Auditors) Rules, 2014, Board (on Audit Committee recommendation, meeting held June 27, 2023) recommended appointment for a further 4 consecutive years — from conclusion of 38th AGM till conclusion of 42nd AGM (2027). Auditors confirmed eligibility and willingness. Board recommends appointment at forthcoming AGM.

1. Notes on financial statements self-explanatory.
2. Auditors Report for FY ended Mar 31, 2026 is modified (qualified opinion). Management remarks provided in the Statement of Impact of Audit Qualifications submitted with Annual Audited Financial Results for quarter and year ended Mar 31, 2026.

Frauds reported by Auditors: Nil.

Secretarial Auditors: Per Section 204 of Companies Act, 2013 and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Company appointed Mr. S. Dhanapal, Senior Partner, M/s. S. Dhanapal & Associates LLP (Practising Company Secretaries) for Secretarial Audit. Per Regulation 24A(1)(b) of SEBI (LODR) Regulations, 2015, M/s. S. Dhanapal & Associates LLP proposed as Secretarial Auditors for first term of five consecutive years from FY 2025-26 to FY 2029-30, subject to shareholder approval at ensuing AGM.

Share Capital: No change during the year.

Directors and Key Managerial Personnel:

• Mr. Ramanujam Venkatesh (DIN: 07242631) retires by rotation; eligible, offers himself for re-appointment.
• Dr. G. Nagarajan (DIN: 08259812) appointed Additional Director in Board Meeting on Aug 13, 2025; regularized at AGM 2025.
• Dr. Enakshi Bhattacharya (DIN: 05277571), Independent Director, resigned w.e.f. close of business on Aug 13, 2025.
• Change in CFO — Mr. Parthasarathy removed as CFO on May 19, 2026 (after end of FY 2025-26).

Declaration by Independent Directors: Declarations received from all Independent Directors confirming they meet criteria under Section 149(6) of Companies Act, 2013 and SEBI (LODR) Regulations, 2015 for FY ended Mar 31, 2026. Independent Directors complied with Code for Independent Directors (Schedule IV).

Familiarization Programme: Orientation program and power point presentation for Independent Directors covering Policies, Strategy, Operations, Product offerings, Organisation Structure, Human Resources, Technologies, Facilities and Risk Management.

Number of Board Meetings: Four meetings held during the year (details in Corporate Governance Report, which forms part of this report).

Audit Committee: Composition and meetings included in Corporate Governance Report (part of this report).

Nomination and Remuneration Committee: Details included in Corporate Governance Report (part of this report).

Nomination and Remuneration Policy: Salient features form part of this report; detailed policy hosted at http://www.natronix.net/.html.

Employees and Managerial Remuneration: Statement of disclosure under Section 197 and Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 provided as part of this Report. Information per Rule 5(2) and 5(3) forms part of this Report; however, per first proviso to Section 136(1) and Second Proviso to Rule 5, report and financial statements sent excluding statement of particulars under Rule 5(2) and 5(3). Members may write to Company Secretary at Registered Office; statement also available for inspection at registered office during office hours till AGM date.

Managerial Remuneration: Given as annexure forming part of this report.

Formal Annual Evaluation of Board: Board carried out annual evaluation of its own performance, Committees, and Independent Directors per the Act and Corporate Governance under Regulation 17(10) of SEBI (LODR) 2015 for FY ended Mar 31, 2026.

Loans, guarantees or investments: Particulars disclosed in financial statements.

1. Going concern — losses and negative cash flows (Note 5.2): Company incurred losses and generated negative cash flows during the period and earlier years; material uncertainty casting significant doubt on going concern ability. Statement prepared on going concern basis pending resolution.

• Management reply: Company actively implementing corrective actions to infuse additional capital, address financial shortcomings and rectify defaults; measures to strengthen financial position and reduce material uncertainties.

2. Resignation of major employees: Significant reduction in employee strength at reporting date; operational uncertainty casting doubt on going concern.

• Management reply: Temporary factory suspension necessitated reduction in employee strength; management actively resolving bottleneck to resume operations shortly.

3. Breakdown of major plant and machinery: Production not carried out in Q4 FY 2025-26; absence of production and non-functional critical machinery indicate material uncertainty on going concern.

• Management reply: Active steps to dispose 8.14 acres of surplus lease land (Board and Member approvals obtained); proceeds to minimize liabilities. Awaits India Semiconductor Mission 2.0 incentive guidelines for capex subsidy for Expansion project funding; actively pursuing low-cost debt funding for revamping business and potential customers for collaboration/business tie-ups.

4. Trade receivables/payables unconfirmed (Note 4.6 and 5.9): Trade receivables Rs58.76 Lakhs and trade payables Rs326.98 Lakhs as at 31 March 2026 subject to confirmation and reconciliation. Absence of independent balance confirmations/reconciliation — unable to determine whether adjustments necessary.

• Management reply: Comprehensive measures initiated to obtain independent balance confirmations and reconcile accounts with respective parties.

Vigil Mechanism: Whistle Blower Policy in line with Section 177(9) of the Act and SEBI (LODR) 2015; copy uploaded on Company website.

Risk Management: Board and Senior Management identify/monitor risks; review and evolve risk mitigation plan; periodic action on major risks.

Sexual Harassment of Women at Workplace Act, 2013: Anti-Sexual Harassment Policy in place; Internal Complaints Committee (ICC) set up. All employees (permanent, contractual, temporary, trainees) covered. No complaints received during FY ended Mar 31, 2026.

Compliance with Secretarial Standards: SS-1 (Board Meetings) and SS-2 (General Meetings) issued by ICSI duly followed/complied.

Conservation of energy, technology absorption, foreign exchange earnings and outgo:

• Conservation of Energy: Energy Committee meets monthly (cross-functional executives); assesses potential areas, develops savings means, implements with Management approval. Measures: reuse of dicing process water, rain water harvesting, power factor improvement, investment in air-cooled chillers and air compressors.

Savings in Electricity	20242 Units
Savings in Water Consumption	2980 KL

• Technology Absorption: Not applicable.
• Foreign Exchange: 100% Export Oriented unit. Foreign Exchange used during the year: 131 Lakhs; earned: 456 Lakhs.

Research & Development: Ambitious plan of investment in R&D, including Package Intellectual Property, to assist revenue and profitability in future years.

Corporate Governance Certificate: Certificate from Auditors or practising Company Secretaries regarding compliance of conditions of Corporate Governance as stipulated in Schedule V, Regulation 34(3) of the [SEBI (LODR) Regulations, 2015].

Miscellaneous:
a. No shares with differential rights issued — no information under Section 43(a)(ii) / Rule 4(4) of Companies (Share Capital and Debenture) Rules, 2014.
b. No sweat equity shares issued — no information under Section 54(1)(d) / Rule 8(13).
c. No equity shares issued under Employees Stock Option Scheme — no information under Section 62(1)(b) / Rule 12(9).
d. No instances of non-exercising of voting rights for shares purchased directly by employees under a scheme per Section 67(3) / Rule 16(4).
e. No proceeding initiated by or against the Company under Insolvency and Bankruptcy Code, 2016 being addressed by the Company.
f. Disclosure of difference between valuation at one-time settlement and valuation while taking loan from Banks & Financial Institutions — not applicable.
g. Company complied with Maternity Benefit Act, 1961.
h. A few cases pending before National Company Law Tribunal (NCLT), Chennai Bench. Company aware of legal obligations; actively engaged in addressing/resolving matters — engaging legal counsel, submitting timely responses/documentation, cooperating with procedural requirements; efforts underway to conclude matters at earliest with due compliance to NCLT directives.

Directors Responsibility Statement (Section 134(5)): Board confirms:
a. Applicable accounting standards followed in preparation of annual accounts, with proper explanation of material departures.
b. Accounting policies selected and applied consistently; judgments and estimates reasonable and prudent to give true and fair view of state of affairs and loss.
c. Proper and sufficient care taken for maintenance of adequate accounting records per the Act for safeguarding assets and preventing/detecting fraud and irregularities.
d. Annual accounts prepared on going concern basis.
e. Internal financial controls laid down and adequate and operating effectively.
f. Proper systems devised to ensure compliance with all applicable laws; systems adequate and operating effectively.
g. Based on framework of internal financial controls and compliance systems, work of internal/statutory/secretarial auditors and external consultants, and reviews by management and Board Committees including Audit Committee — Board opinion: internal financial controls adequate and effective during FY 2025-26.

Acknowledgements: Gratitude to Promoters (assisted significantly on recovery path), Government of India, Government of Tamil Nadu, Financial Institutions, Bankers, Insurance Companies, Customs & Excise authorities, valued overseas Customers & Vendors, and Promoters for continued assistance and support.

Directors wish to place on record appreciation of efficient and loyal services rendered by supportive Employees at all levels. Directors wish to thank Shareholders — the mainstay of the Company — for their unstinted support, forbearance and confidence reposed in the Management.

Date: Aug 20, 2026 Place: Chennai

By order of the Board — For SPEL Semiconductor Limited

• Sd/- S. Chandramohan, Director, DIN: 0052571
• Sd/- P. Balamurugan, Head Operations & Whole-Time Director, DIN: 07480881

Form for disclosure of particulars of contracts/arrangements with related parties referred to in Section 188(1) of Companies Act, 2013, including arms length transactions under third proviso thereto:

1. Details of contracts/arrangements/transactions NOT at arms length basis: Nil
2. Details of material contracts/arrangements/transactions at arms length basis: No material transactions falling under Section 188 of the Act during the year.

Date: Aug 20, 2026 Place: Chennai

By order of the Board — For SPEL Semiconductor Limited

• Sd/- S. Chandramohan, Director, DIN: 0052571
• Sd/- P. Balamurugan, Head Operations & Whole-Time Director, DIN: 07480881

Remuneration Policy Disclosure (2020-2021 header retained as in source)

Particulars	Details
Remuneration policy	Remuneration determined based on performance correlated to Company performance.
Market capitalization variations, P/E ratio, share price variation vs last public offer (listed) / net worth variation (unlisted)	Market capitalization: Rs629.04 Crs (Mar 31, 2026); Price Earnings Ratio: (20.89)
Average percentile increase in salaries of non-managerial employees vs managerial remuneration, justification, exceptional circumstances	There was no increase in the Managerial Remuneration.
Key parameters of any variable component of remuneration availed by Directors	Not applicable
Ratio of remuneration of highest paid Director to employees (non-Directors) receiving remuneration in excess of highest paid Director	Not applicable
Affirmation that remuneration is as per remuneration policy	The remuneration of Directors, Senior Management and Employees is as per the Remuneration Policy of the Company.

Date: Aug 20, 2026 Place: Chennai

By order of the Board — For SPEL Semiconductor Limited

Sd/- S. Chandramohan, Director, DIN: 0052571

Sd/- P. Balamurugan, Head Operations & Whole-Time Director, DIN: 07480881