SRF Ltd Management Discussions

The following section presents Managements overview of the

Companys operating and financial performance during together with an outlook for future business performance.

Businesses

SRF Limited is a chemicals-based, multi-business conglomerate engaged in the manufacture of industrial and specialty intermediates. The Company is globally recognised for its strong R&D capabilities, particularly in the niche domain of Chemicals. SRF is a market leader across most of its business segments in India and select international markets.

The Company operates 16 manufacturing facilities - 13 in India and one each in Thailand, South Africa, and Hungary - and has further strengthened its global presence with an office in Dubai. SRF has commercial interests in over 90 countries worldwide. Its operations are organised into four business verticals: Chemicals Business (CB), Performance Films

& Foil Business (PFB), Technical Textiles Business (TTB), and Other Businesses.

Chemicals Business

The Chemicals Business comprises two product segments: Fluorochemicals and Specialty Chemicals.

Fluorochemicals (FCB)

Refrigerants & Propellants, Industrial Chemicals & Fluorochemicals

FY26 was a year of exceptional growth for the

Fluorochemicals business, supported by firm pricing, improved execution, and stable operations, amid a challenging global environment. The year began with moderate domestic demand impacted by unseasonal weather patterns. In the US, continued destocking of HFCs and the transition towards lower-GWP alternatives, coupled with tariff-related uncertainties, weighed on demand. In response, the business proactively expanded its geographic footprint to mitigate risks. Encouragingly, Middle East operations scaled up well during the year. The Propellant segment increased market share across domestic and international markets and continues to expand. Overall, the Refrigerants business delivered strong performance in both domestic and international markets.

The Industrial Chemicals segment witnessed subdued demand from the agrochemical industry and stable demand from the pharmaceutical industry. Owing to low domestic demand and supply chain disruptions at customer ends, margins remained under pressure. However, the business outperformed the industry, supported by cost reduction initiatives, stable operations, and improved performance in niche products.

In the Fluoropolymers segment, the existing PTFE product recorded all-round improvement in costs, sales, and customer approvals. The business began receiving key account approvals globally, with performance improving over the previous year. The speciality polymers project remains on track and is expected to be commissioned in early FY27. The partnership with Chemours for high-end polymer projects progressed well,withsignificantmilestones achieved and completion expected as planned.

During FY26, both manufacturing sites reported safe and stable operations. With several operational excellence initiatives in place, most plants achieved

The Industrial Chemicals segment witnessed subdued demand from the agrochemical industry and stable demand from the pharmaceutical industry. Owing to low domestic demand and supply chain disruptions at customer ends, margins remained under pressure. However, the business outperformed the industry, supported by cost reduction initiatives, stable operations, and improved performance in niche products.

their highest-ever production levels during the year. The business will continue to focus on optimising raw material sourcing, strengthening supply chains, enhancing cost efficiency, and building capabilities in new product portfolios, with sustainability as a key priority. The new site at Odisha was successfully completed during the year to support future expansion. Overall, the business delivered a robust performance in FY26.

Outlook

In FY27, the global and Indian economies are expected to deliver moderate growth amid geopolitical uncertainties and fragmented trade conditions. The Indian air-conditioning industry is expected to witness robust growth, supporting increased demand for refrigerants. The US market is likely to remain stable in the near term, while the Middle East is expected to grow, assuming ongoing disruptions ease. Expanding into new geographies and maintaining a resilient supply chain will remain key focus areas, with pricing expected to remain stable.

The Industrial Chemicals segment is expected to remain moderate, with continued softness in the agrochemical and pharmaceutical industries.

In the Fluoropolymers segment, while good progress has been made in stabilising operations and adding new grades, commissioning of the new speciality polymer plant will be a key focus area in FY27. The business will also continue to strengthen its application development whilecapabilities. managing

Overall, the business is expected to deliver improved performance in FY27.

Specialty Chemicals Business (SCB)

The Specialty Chemicals Business (SCB) operated in a challenging global environment during FY26, marked by elevated inventory levels, pricing pressure from China, and sluggish demand in the agrochemicals sector. Despite these headwinds, the business demonstrated resilience and adaptability, making steady progress in strengthening its strategic position and laying the foundation for long-term growth through new products.

SCB remained focussed on cost optimisation and improving operational supported by ongoing digital transformation initiatives. During the year, capacity expansions were also undertaken at select newly commissioned facilities.

While demand for certain flagship products softened, several newer products recorded encouraging traction. With a strong emphasis on innovation, SCB continued to work closely with customers to advance new product development and progress a critical project pipeline. Both the Bhiwadi and Dahej sites further improved operational an expanding portfolio of innovative products. The business also strengthened its capabilities in novel chemistries and made continued progress in the pharmaceutical segment.

During the year, SCB secured the Boards approval to set up a new intermediates plant for pharmaceutical applications, creating a strong platform for future growth.

The business continued to invest in safer, cleaner, and more efficient its sustainability initiatives. Several decarbonisation measures were undertaken during the year, including energy optimisation and initiatives aimed at reducing the overall carbon footprint.

Outlook

SCB is building a more agile and efficient operating model through the deployment of advanced technologies, automation, and next-generation systems to address evolving market conditions and changing customer expectations. Strategic priorities remain closely aligned with customer business strategies, enabling effective execution and consistent long-term value creation. Collaborations with global innovators continue for process development and commercialisation, supporting sustainable growth.

Looking ahead, the business will continue to focus on the agrochemicals and pharmaceuticals segments, strengthening customer partnerships and building capabilities in complex, high-value molecules. The journey ahead will remain anchored in the businesss core values, purpose, innovation, and unwavering commitment to operational excellence.

Chemicals Technology Group (CTG) operations, further strengthening The Chemicals Technology Group (CTG) continues to focus on strengthening its technological capabilities through the development of novel chemistries and innovative, cost-effective process routes for existing and next-generation products across the Specialty Chemicals and Fluorochemicals businesses.

CTG has consistently demonstrated its ability to overcome complex technological challenges, support timely scale-ups, enhance operational performance, and deliver cost efficiencies through innovative solutions. Several successful new product launches and on-schedule scale-ups during the year were enabled by the sustained efforts and deep expertise of CTGs technologists and scientists. As product complexity continues to increase and development timelines compress, CTG further strengthened its capabilities and support systems to drive long-term, future-ready growth.

CTG has been a key enabler of business growth through the introduction of new products, advancing novel chemistries, and developing complex technologies aligned with evolving customer and market requirements. The Group continues to nurture strong in-house technical and scientific capabilities to support the sustained development of next-generation products and foster a culture of excellence.

The Company continued to invest significantly in R&D to build future-ready value propositions, with capital and revenue expenditure of 160 crore incurred during

FY26. SRFs dedicated R&D infrastructure - including development laboratories and pilot plant facilities - brings together a strong pool of scientists and engineers working collaboratively to drive innovation and achieve technology-led leadership.

During the year, R&D activities covered over 50 molecules, significantnumber progressing with into process development. Of these, more than 35 molecules advanced to scale-up studies, with over half successfully commercialised across multipurpose and dedicated manufacturing facilities.

In FY26, CTG filed forty patents, taking the total number of patents filed to 521. Five patents were granted during the year, increasing the total number of patents granted to 156.

Performance Films & Foil Business (PFB)

FY26 marked a phase of recovery for the Performance Films and Foil Business (PFB), with operating performance showing steady improvement. While competitive intensity and geopolitical uncertainty continued to impact markets, demand supply dynamics across key film segments improved, resulting in higher capacity utilisation and margin recovery.

Margins in BOPP improved progressively during the year, supported by a better market balance. BOPET margins also began to show early signs of recovery, aided by price improvements in select Southeast Asian markets following Chinas recent anti-involution measures. Overall, Management believes the worst phase of the industry cycle is behind, although competitive pressures continue to persist.

Financial performance across all PFB units improved compared to the previous year, driven by margin recovery, productivity improvements, and an increasing share of value-added products. Several manufacturing units achieved their highest-ever production levels during the year, reflecting improved operational performance.

PFB continued to strengthen its strategic positioning through scale, portfolio diversification, expanding value-added product portfolio, enabling it to emerge as a "One-Stop Shop" for customers across packaging, specialty, and technical

The Businesss presence across BOPET, BOPP, CPP, aluminium foil, and capacitor-grade BOPP films, supported by downstream processing capabilities, provides a differentiated competitive advantage.

Key growth projects progressed as planned. The CPP film line was commissioned in November 2025, with approvals for value-added products progressing on a fast-track basis with leading brand owners.

The Capacitor Grade BOPP film line is expected to be commissioned shortly, marking the Businesss entry into technical films, leveraging growth opportunities arising from EVs, electronics manufacturing, and renewable energy in India. Work on other ongoing projects, including the BOPP-BOPE hybrid film line, is progressing as per schedule.

During the year, extensive development work was undertaken on value-added products, particularly in oine-coated films and CPP, supporting margin resilience and increased participation in high-performance and sustainability-led applications.

The Business continued to be guided by its "Easy to Do Business With (ETDBW)" philosophy. Sustainability remains integral to operations, with ongoing development of mono-material and mono-family structures,PCR-based energy across manufacturing locations.

Outlook

Industry conditions in FY27 are expected to remain dynamic. While demand growth for films is likely to remain healthy, new capacity additions - particularly in BOPP in India - may exert pressure on margins. In contrast, BOPET markets are expected to remain relatively better balanced. The operating

Key priorities for the year include the successful start-up and ramp-up of the Capacitor Grade BOPP and BOPP-BOPE film lines, improving profitability in the Aluminium Foil business, and continued productivity improvements. A key focus will be to further increase the share of high-impact value-added products, with emphasis on securing additional approvals from leading brand owners.

environment may also remain uncertain due to geopolitical developments, including concerns around the continuity of the ongoing US-Israel-Iranconflict and its potential impact on global supply chains, raw material availability, and business sentiment. Against this backdrop, the Business will continue to focus on minimising operational disruptions through supply chain flexibility, prudent sourcing strategies, and disciplined execution.

Key priorities for the year include the successful start-up and ramp-up of the Capacitor Grade BOPP and BOPP-BOPE film lines, improving profitability in the Aluminium Foil business, and continued productivity improvements. A key focus will be to further increase the share of high-impact value-added products, with emphasis on securing additional approvals from leading brand owners. The Business will also continue to strengthen its capabilities for sustainability-led growth, in line with evolving customer and regulatory requirements.

Technical Textiles Business (TTB)

During the year, the Technical Textiles Business (TTB) continued to strengthen its presence across key segments. The business sustained sales momentum in non-N6 Tyre Cord Fabric (TCF) products and successfully expanded its customer base in Belting Fabrics (BF) and Polyester Industrial Yarn (PIY).

On the sustainability front, TTB increased the share of renewable power in its energy mix, reinforcing its commitment to environmentally responsible and sustainable operations.

Tyre Cord Fabrics (TCF)

The TCF segment maintained its presence in Nylon 66

TCF and Polyester Tyre Cord Fabric (PTCF) during the year. Despite margin pressures arising from low-cost imports and volatility in lactam prices, the business was able to maintain its market share in the flat Nylon 6 TCF segment through improved operational efficiencies and

Belting Fabrics (BF)

Demand for Belting Fabrics remained flat compared to the previous year. The segment was adversely impacted by the imposition of reciprocal tariffs by the

US, along with continued pressure from low-priced imports from China.

Polyester Industrial Yarn (PIY)

Demand in the Polyester Industrial Yarn segment was marginally lower than the previous year. The withdrawal of the PIY Quality Control Order (QCO) led to increased imports from China, resulting in margin pressure during the year. Despite these challenges, the segment operated at full capacity utilisation and delivered a stable performance compared to the previous year.

Outlook

FY27 is expected to see improved market conditions, supporting growth across segments. Growth in non-N6 TCF is expected to be driven by a higher share of dipped fabric, while Nylon 66 and PTCF are likely to gaincustomerrelationships. market share through customer additions. Performance in the Belting Fabrics segment is expected to strengthen, supported by improved capacity utilisation, export growth, and expansion of the value-added products portfolio.

Overall, TTB is well positioned to deliver improved performance in FY27.

Other Businesses

Coated and Laminated Fabrics Businesses

SRF continued to maintain domestic market leadership in Coated Fabrics during the year. However, weak demand for food-grade liners posed challenges, which were mitigated by increased sales of other value-added products. The Business expanded textile capacity through the addition of new looms and a warper. New fabric knitting machines were also commissioned in the Laminated Fabrics business during the year. SRF continued to retain price leadership in the domestic market.

Outlook

In FY27, demand is expected to improve across both Coated Fabrics and Laminated Fabrics. However, price volatility may impact demand amid ongoing geopolitical developments, including the US Israel Iran

Key focus areas for the Coated Fabrics business will include scaling up tensile fabrics, expanding sales of value-added products (VAPs), and driving overall volume growth. In Laminated Fabrics, priorities will include ramp-up of the two newly commissioned fabric knitting machines and achieving full capacity utilisation of lamination assets.

Both businesses will continue to pursue cost-reduction initiatives to strengthen competitiveness and profitability.

Human Resources

philosophy, the HRBuilding function itspeople-first continued to play a transformative role during the year, with a strong focus on capability building, inclusivity, employee well-being, and social responsibility. Learning remained central to the people agenda, with focussed learning and development initiatives rolled out to strengthen competency development. Select leadership and capability journeys were undertaken, supported by the creation of a more structured learning and development framework. In parallel, a formal succession planning framework was instituted to identify and develop leaders, ensuring continuity, leadership-readiness, and long-term organisational sustainability.

Inclusivity remained a strategic priority, supported by targeted DEI interventions, including dedicated development workshops for women in middle management and the rollout of an actionable DEI framework aligned to the Companys strategic objectives. The organisation further strengthened its talent pipeline through the hiring and onboarding of a diverse cohort of fresh graduates via the campus management process, nurturing early-career talent to support future growth.

Strengthening the quality and rigour of people decision-making through data remained a key focus during the year. The HR analytics function made further progress with the development of comprehensive and intuitive dashboards for HR teams and business leadership, providing real-time visibility into key workforce indicators. These insights enabled improved governance, sharper decision-making, and timely data-led interventions, supporting more structured, objective, and aligned people decisions across levels.

Beyond dashboards, HR analytics continued to deepen its impact through targeted analytical interventions. Structured engagement surveys were conducted for newly hired employees to assess onboarding experiences and early integration, while post-exit telephonic surveys with separated employees helped identify key drivers of attrition and retention levers. In addition, analytical studies such as internal compensation positioning and benchmarking exercises strengthened the fact base for reward-related decisions. Predictive analytics continued to be leveraged within hiring processes, further enhancing the scientificrigour of talent acquisition and reinforcing

SRFs commitment to progressive, data-driven people practices. Collectively, these initiatives supported prudent people investments and reinforced HRs role in enabling sustainable organisational performance.

To embed a culture of openness and performance excellence, feedback campaigns centred on the art of giving and receiving feedback were conducted during the year. HR also reinforced its commitment to community and societal well-being through initiatives such as a cancer support run, a winter donation drive, and participation in other social causes aligned with the Companys values. Employee well-being continued to be prioritised through monthly wellness webinars, structured well-being challenges, enhanced EAP services, and improved employee and family rejuvenation initiatives - fostering an inclusive, supportive, and high-engagement work environment.

Industrial Environment

Employee relations across the organisation remained cordial and congenial throughout the year. Employees continued to remain engaged, motivated, and productive. Several initiatives were undertaken at plant locations to promote collaboration and participation, including programmes involving employees families. Overall, a safe, positive, and harmonious working environment was maintained across all manufacturing locations.

As on March 31, 2026, the total number of permanent employees at SRF and its subsidiaries stood at 9,640, of which 8,838 were based at Indian locations.

Information Technology

SRF has established a scalable, cloud-based technology foundation built on leading hyperscalers to support the Companys growth ambitions and enable the adoption of modern technologies, including Artificial

Intelligence, to address critical business challenges. As part of this journey, key digital transformation enablers - such as data warehousing, data lakes, AI/ ML platforms, and generative AI services - have been deployed on the cloud.

AI tools were made available to management staff to enhance productivity and improve the quality of work, with robust safeguards in place to ensure data security and confidentiality. Generative AI capabilities were embedded across multiple IT applications to automate processes and improve business outcomes. In parallel, technology teams leveraged AI tools to drive application modernisation initiatives.

Employee relations across the organisation remained cordial and congenial throughout the year. Employees continued to remain engaged, motivated, and productive. Several initiatives were undertaken at plant locations to promote collaboration and participation, including programmes involving employees families. Overall, a safe, positive, and harmonious working environment was maintained across all manufacturing locations.

The Company continued to expand its Industry 4.0 initiatives to strengthen manufacturing capabilities across an increasing number of plants and sites. Edge Industrial IoT (IIoT) solutions are now complemented by cloud-based data warehouses, enabling plant teams to deploy AI/ML models on manufacturing data for improved insights and decision-making. Strengthening Manufacturing Operations Technology (OT) security remains a key priority. During the year, OT security assessments were conducted across multiple sites, followed by improvement initiatives. An OT Security Operations Centre was also established to continuously monitor plant networks and track deviations.

In addition, a comprehensive digital transformation roadmap was developed in collaboration with a consulting partner, outlining priority initiatives over the next few years. To support these aspirations, the IT operating model was redefined, including identification of future capability requirements.

The Company has commenced execution of this roadmap and continues to advance its digital transformation journey in a structured and outcome-oriented manner.

Community Partnerships

In alignment with its commitment to sustainable and inclusive development, SRF Foundation - the CSR arm of SRF Limited - expanded its initiatives during FY26 in accordance with Section 135 of the Companies Act, 2013. The Foundation continued to strengthen its Public-Private-Community Partnership (PPCP) model, enabling deeper community engagement and delivering measurable social impact across its key intervention areas.

Education

During FY26, SRF Foundation strengthened its education initiatives through an integrated approach combining Model Schools and Digital Inclusion. Government schools were transformed into Model Schools through focussed interventions in infrastructure development, digital integration, academic enhancement, and leadership development. The programme spans 327 schools across 38 locations in 13 states and one Union Territory, benefiting over 1,31,509 students. Capacity building remains central to the approach, with 3,111 teachers and 191 headmasters trained to enhance teaching effectiveness and improve learning outcomes. Vocational exposure programmes were also conducted to provide students with industry insights and career-readiness.

Complementing these efforts, digital inclusion initiatives - including HP World on Wheels, Smart Shiksha Mobile Digital Labs, Common Service Labs, and Smart TV Classrooms - continued to expand access to technology-enabled education. Future skills programmes such as Tinker Coding and Innovation Labs equipped students with foundational skills in coding, artificial intelligence, robotics, and design thinking. Additionally, the Anganwadi Development Programme strengthened early childhood care, reaching 25,578 children across 314 centres.

A key milestone during FY26 was the completion of the SRF School at Bharuch, developed to address the educational needs of the local community. Designed to provide quality education supported by modern infrastructure and digital learning facilities,thefirst phase of the school is scheduled to commence operations by June 2026. With ver 13,000a capacity of approximately 1,600 students, the school will support holistic development through well-equipped science laboratories, a library, digital classrooms, and dedicated sports infrastructure.

In addition, SRF Foundation operates two schools -SRF Vidyalaya, Manali and SRF Vidyalaya, Gurugram - serving over 800 students and focussing on academic excellence and holistic personality development, further strengthening the Foundations institutional education footprint.

Vocational Skills

The Foundation continued to strengthen employability through its Basic Electrician Training Programme, designed for school dropouts, unemployed youth, and women. Implemented across 13 centres in seven states, the programme trained 1,180 participants during the year, providing hands-on training aligned with industry requirements and enabling pathways to employment and self-employment.

Building on this, in collaboration with Shell plc, the Skills4Future initiative expanded to 217 ITIs, focussing on electric vehicle (EV) training and future mobility skills. The programme equips students with industry-relevant knowledge in EV technology, maintenance, and sustainable mobility solutions, supporting employability in the green economy.

Further strengthening the skilling ecosystem, the Skilling for Future Programme - implemented in partnership with SBI Foundation - focussed on green skills, soft skills, and software development. The initiative trained 610 students across centres in Mysore and Gwalior, enhancing both technical proficiency and workplace-readiness.

In collaboration with Standard Chartered Bank, the Empowering Youth with Green Skills programme focussed on solar technology and EV technician skills, equipping youth with practical knowledge in renewable energy and electric mobility. Complementing these efforts, the Aadhaar Digital Literacy Programme strengthened digital capabilities among underserved communities, certifying 18,847 participants and benefiting.

Health Programmes

Support to the Nalcha Primary Health Centre (PHC) strengthened primary healthcare delivery through improved accessibility, early diagnosis, and quality medical services. Operating through 12 sub-centres, the initiative conducted over 58,000 OPDs during the year, reflecting significant outreach in the region.

Swasthya Seva Van continued to promote preventive healthcare through awareness, early detection, and access to basic medical services. Covering 15 villages, the initiative conducted 9,317 OPDs, further strengthening community access to healthcare.

The Clubfoot Project provided specialised treatment and care for children across six districts of Madhya Pradesh, focussing on early intervention and continuity of care. During the year, 192 children were enrolled under the programme, with 13 successfully treated, improving mobility and quality of life outcomes.

Environmental Initiatives

Through its Natural Resource Management (NRM) programme, the Foundation promoted sustainable livelihoods and environmental conservation using a watershed-based approach. Since inception, the initiative has benefited over 21,450 farmers across

35 villages by improving water management, soil conservation, and climate-resilient agricultural practices. During the year, eight new paals were constructed, further enhancing water conservation efforts.

Under the Farmer Livelihood Enhancement Project, implemented in partnership with Global Vikas Trust, the Foundation undertook a plantation initiative in Bharuch involving over 7,00,000 banana saplings. The project positively impacted 272 farmer families by enhancing agricultural productivity, improving incomes, and supporting environmental sustainability.

Art & Culture its

The Foundation continued to promote Indian art and cultural heritage through focussed initiatives aimed at enhancing cultural awareness and engagement. Under Music in the Park, four concerts were organised in the Delhi NCR, featuring 13 artists and attended by

4,713 audience members.

Through the SRF Virasat programme, 508 events were organised during the year, engaging 120 artists and reaching over three lakh youth and students, thereby promoting appreciation for Indian classical music and dance.

The Gurukul initiative provided immersive traditional training under expert guidance, with five students receiving over 1,200 hours of mentorship, contributing to the preservation of Indias artistic legacy.

Awards & Recognition

In recognition of its impact, SRF Foundation received several prestigious awards during the year, including the Bhamashah Award from the Government of Rajasthan, the CSR Times Award for Excellence in Education, and the NAS Certification from the reaffirming MinistryofHealthandFamilyWelfare, commitment to high standards in social development and healthcare delivery.

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Internal Control System and Internal Audit

The company has a well-documented system of internal financial controls in place commensurate with its size, scale, and complexity of operations. These controls have been designed to provide reasonable assurance with respect to recording and providing reliable financial and operational information, complying with applicable laws, safeguarding assets, executing transactions with proper authorisation, and ensuring compliance with corporate policies.

The company has a well-established independent Internal Audit & Risk Management function which drives and coordinates the Internal Audits, and review of the Internal Financial Controls and Enterprise Risk Management System. These frameworks are supported by a well-defined organisation structure, roles and responsibilities, documented policies and procedures, financial delegation of authority, ERP controls, among others.

The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems in the company, the ERP solutions, the accounting procedures, and policies at all locations.

Internal Audit reviews are conducted on an ongoing basis, based on a comprehensive risk-based audit plan commensurate with the size and nature of business activities of the company. The Internal Audit plan is approved by the Audit Committee, which also reviews compliance to the said plan. Any significant audit observations and corrective actions thereon are presented to the Audit Committee which reviews the reports submitted by the Internal Auditors (both internal and external) in each of its meetings. Based on the gaps reported in the internal material impact.audit report, process owners undertake corrective actions in their respective areas and thereby strengthen the internal control framework. In addition, the statutory auditors also obtain reasonable assurance on the adequacy and operating effectiveness over the companys internal financial controls with reference to financial statements as a part of their annual audit exercise.

A robust Control Self-assessment (CSA) process enables process owners to perform self-assessment and promote self-compliance in accordance with laid down policies and procedures, regulatory environment through IT-enabled platform such as CSA tool and Compliance Manager.

Risk Management

The company has developed and implemented a Risk Management Framework, which is approved by the Board. Further, Board has constituted a Risk Management Committee (RMC) to oversee key risks and assist the Board in efficient management of risk management process.

The Risk Management Policy, inter alia, includes identification therein of elements of risk, including those, which in the opinion of the Board/RMC may threaten the existence of the company or may have a significant management process has been an integral part of the company strategy and planning process. The company has established a risk management framework to identify, assess and frame a response to threats that can affectits business objectives and stakeholders. Further, it is embedded across all the major functions and revolves around the goals and objectives of the organisation. The responsibility of tracking and monitoring the key risks of the business/function periodically and implementing suitable mitigation plans proactively is with the senior executives of various business/ functional units.

The key roles and responsibilities regarding risk management in the company are summarised as follows:

1. Board of Directors (BOD) & the Audit Committee:

The Board of Directors hold the overall responsibility for an effective risk management system. The Audit Committee of the Board examines the appropriateness and effectiveness of the risk management system at least once a year and reports to the Board

Review the risks that may threaten the existence of the company

Consider the recommendation of Risk Management Committee on Risk Management Plan/Policy

2. Risk Management Committee (RMC):

Overview companys risk management framework and its compliance

Identification of key risks which may significantly impact the performance of the company

Review of policy, key risks as identified by the management, provide guidance to the management, and update the Board & Audit Committee on the same

Assist the Board/Audit Committee in evaluating the effectiveness of Risk

Management System

3. Corporate Leadership Team (CLT):

Develop risk management framework and policy

Review key risks and mitigation action plan

Review effectiveness of risk mitigation strategies, develop counter measures if any and update the same to RMC

4. Business Leadership Team (BLT) & Risk Owners:

Identification, classification,and prioritisation of risks into high, medium, and low as per risk management framework

Identify and implement risk mitigation measures

Periodically review mitigation measures status, develop counter measures, if any

Provide status update of key risks to the CLT

Risk Classification

All risks have been broadlyclassifiedintothefollowing categories:

Strategic Risk

Risks arising out of macro-economics and other external conditions (including change in customer preferences) which can significantly impact companys strategic business decision, future aspiration, and financial performance.

Regulatory Risk

The risks arising out of regulatory non-compliances due to changes in laws, regulations, or government policies adversely impacting organisations operations.

IT and Cyber Risk

Potential loss due to non-availability of technical infrastructure or appropriate software technology, impact on data integrity, data theft or loss of Intellectual Property Right (IPR) due to compromised network security.

Sectoral

These are the risks arising out of uncertainty with respect to changes in the economic and financial scenarios that are unique to a sector or industry.

Operational Risk

Risks of loss of due to inadequate manufacturing process, loss of market share due to technological disruptions, insufficient resources, inadequate safety processes or failure thereof, insufficient skills or people, loss of market due to trade remedial measures by various countries (including revocation of anti-dumping duties in India, anti-dumping by other countries), risk of supply chain disruptions due to geopolitical conflicts.

Financial & Reporting Risk

Financial reporting risk arises from the evolving accounting and financial reporting requirement, increasingly complex business models, etc.

Sustainability including ESG Risk

Risks arising due to inability to address unfavourable environmental, social or governance events or conditions including ESG related non-compliances that, if it occurs, could cause an actual or a potential material negative impact on the operations, reputation or value of the investment of the company.

During FY26, significant changes in the key financial ratios as per listing regulations were as follows:

Ratio	FY26	FY25	% Change	Reason
Interest Coverage Ratio (EBDIT	10.85	6.90	57.29%	Due to better operational performance
- Current Tax) / Gross Interest and				and reduction in interest cost
lease payments
Net Profit Margin (%) PAT /	13.89%	10.84%	28.09%	Due to better operational performance
Revenue from Operations including				and reduction in interest cost
other operating income
Return on Net Worth PAT / Net	13.60%	10.96%	24.08%	Better operation performance leads to
Worth				higher PAT support by accretion to net
				worth

Corporate Governance Report

Philosophy of the Company on Corporate Governance

For SRF Limited (SRF), good corporate governance means adoption of best practices to ensure that the Company operates not only within the regulatory framework but is also guided by broader business ethics. The adoption of such corporate practices ?€” based on transparency and proper disclosures ?€” ensures accountability of the persons in charge of the Company and brings benefits to investors, customers, creditors, employees and the society at large.

Board of Directors

Composition of the Board

As on March 31, 2026, SRFs Board consists of 10 Directors, of which three are executives of the Company (including the Chairman, who is an Executive Chairman), and six are independent and one is non-independent and non-executive. Table 1 gives the details of the Board as on March 31, 2026.