Steel Exchange India Ltd Management Discussions

Steel Exchange India Limited (SEIL) MDA FY 2026

Overview

The objective of this report is to convey the Managements perspective on the external environment and steel industry, as well as strategy, operating and financial performance, material developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during Financial Year 2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in the Annual Report and Annual Accounts 2025-26. The Companys financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with the requirements of the Companies Act, 2013, as amended and regulations issued by the Securities and Exchange Board of India (SEBI) from time to time.

Global Economy and Economic Outlook: 2026

Global Economy

The global economy recorded an estimated growth of 3.4% in 2025 despite a volatile economic and geopolitical landscape. The year witnessed substantial increases in U.S. tariffs, elevated uncertainty surrounding trade policies, the announcement of several trade agreements whose full effects are yet to materialize, and continued momentum in artificial intelligence-related investments. Global economic performance was shaped by changing trade relationships and the growing importance of technology-led growth, particularly across North America and Asia.

Geopolitical tensions remained elevated throughout the year, with conflicts in the Middle East contributing to increased uncertainty in energy markets and international trade routes. These developments led to fluctuations in commodity prices and disruptions in global supply chains. The resulting challenges are expected to persist and continue influencing economic conditions during FY2026-27.

Economic Outlook

Global economic growth is expected to moderate to 3.1% in 2026 before improving slightly to 3.2% in 2027. Growth in advanced economies is projected at 1.8% in 2026, while emerging market and developing economies are forecast to expand by 3.9 %.

Global headline inflation is anticipated to rise to 4.4% in 2026 before easing to 3.7% in 2027. This interruption in the disinflation trend is primarily attributed to higher energy and food prices. These projections assume a relatively early resolution of disruptions arising from the Middle East conflict. However, inflationary pressures remain vulnerable to fluctuations in energy markets. Sustained increases in oil and gas prices could raise production costs, complicate monetary policy decisions, and increase cost volatility across industrial sectors.

In the United States, economic growth is projected at 2.3% in 2026, supported by fiscal stimulus measures under the Big Beautiful Bill and continued investment in AI-related capital expenditure. Nevertheless, public debt levels, estimated at approximately 125% of GDP, continue to pose a significant risk. Elevated debt burdens may limit future fiscal flexibility, place upward pressure on long-term interest rates, and reduce investment appetite in capital-intensive industries.

The Euro Area is expected to grow by 1.2% in 2026, supported by fiscal expansion in Germany, although structural challenges such as ageing populations are likely to remain a constraint. The United Kingdom is forecast to achieve growth of 1.1% in 2026, aided by lower interest rates and a gradually easing labour market.

Chinas economy is projected to expand by 4.4% in 2026, supported by domestic stimulus initiatives and a trade truce with the United States. While this development has helped stabilize broader bilateral relations, many countries continue to pursue sector-specific protective measures to safeguard domestic industries from excess global production capacity.

Global trade volumes are forecast to grow by 2.8% in 2026 and 3.8% in 2027, reflecting the ongoing realignment of trade networks and gradual improvement in international economic activity.

Indian Economy: 2025-26 Outlook

India continued to be among the worlds fastest-growing major economies, registering a growth rate of 7.5% in FY2025-26. Economic activity remained supported by strong domestic demand, government-led infrastructure investments, and resilience across key sectors of the economy.

Looking ahead, Indias real GDP is expected to grow by 6.7% in FY2026-27. Headline consumer price inflation is projected to increase to the Reserve Bank of Indias (RBI) medium-term target of 4.0%, compared with the exceptionally low level of 2.2% recorded in FY2025-26. Despite the anticipated rise in inflation, monetary policy is expected to remain broadly accommodative, with the repo rate likely to stabilize at around 5.0%.

The evolving interest rate and inflation environment suggests that while borrowing costs may remain supportive of economic growth, maintaining favourable real interest rates will be important to sustain consumption and investment, particularly in interest-sensitive sectors such as automobiles and housing.

Government capital expenditure continues to remain robust at more than 5% of GDP, with a strong emphasis on infrastructure development and defence spending. Ongoing investments under major national infrastructure programmes, including projects aligned with the National Infrastructure Pipeline (NIP 2.0), are expected to support demand across core industries and contribute positively to economic growth.

However, external risks remain a concern. Prolonged disruptions in critical global trade routes, including the Strait of Hormuz, could result in higher fuel prices and increased energy costs. Given Indias dependence on energy imports, such developments may widen the current account deficit, exert pressure on fiscal balances, contribute to inflationary pressures, and potentially reduce consumer demand if these disruptions persist over an extended period.

Global Steel Industry and Developments

Steel consumption remained under pressure across several advanced economies during the year, largely due to continued weakness in residential construction activity in China, Europe, Japan and parts of North America. Demand from the automotive sector also remained mixed as manufacturers and consumers faced higher costs and cautious spending patterns. Nevertheless, sustained government-led infrastructure investments in many regions helped provide support to steel consumption and partially compensated for weakness in traditional end-use sectors.

Regional performance continued to vary significantly. While Chinas steel demand is expected to remain on a declining trajectory in the near term, the pace of contraction is likely to moderate. In contrast, developing economies outside China are projected to record healthy growth, supported by investments in infrastructure, industrial expansion and urban development. India is expected to remain a major contributor to global steel demand growth, while emerging markets across ASEAN, the Middle East and North Africa (MENA), and Africa continue to demonstrate improving consumption trends.

At the same time, persistent global overcapacity and elevated steel exports from China have intensified competition in international markets. This has led several countries to introduce or strengthen trade protection measures aimed at safeguarding domestic steel industries. Although medium- term demand prospects indicate gradual stabilization, the global steel sector continues to face challenges arising from excess capacity, trade-related uncertainties and uneven economic recovery across regions.

Demand Outlook

Global crude steel production stood at approximately 1.8 billion tonnes in 2025, representing a year-on-year decline of 2.0%. Growth in Indias steel sector helped offset production declines in several other Asian and European markets. China, the worlds largest steel producer, reported crude steel output of 961 million tonnes (MT), reflecting a decline of 4.4% compared with the previous year. In contrast, Indias crude steel production increased by 10.4% to 165 MT, while production in the European Union declined by 2.6% to 126 MT.

Weak domestic demand in China continued to drive higher export volumes, with finished steel exports reaching a record 119 MT in 2025, an increase of 7.5% over the previous year. This surge in exports contributed to growing trade protection measures across multiple regions seeking to protect local steel producers from import pressures.

According to the World Steel Association, global steel demand was estimated at around 1,749 MT in 2025, reflecting the combined impact of structural challenges and supportive demand fundamentals. Demand is expected to recover modestly by 1.3% in 2026, reaching approximately 1,773 MT, supported by improving financing conditions, continued public infrastructure investments and a gradual recovery in business confidence.

Regional trends are expected to remain diverse. In China, steel demand is projected to decline further in 2026, although at a slower rate than in recent years, as weakness in the property sector continues to weigh on consumption. Government support initiatives may help moderate the slowdown; however, challenges related to manufacturing activity and local government finances continue to present downside risks. The slowing pace of decline nevertheless suggests that Chinese steel demand could be nearing a cyclical trough.

By comparison, developing economies excluding China are expected to maintain strong growth momentum. Demand in these markets expanded by more than 3% during 2025 and is anticipated to strengthen further in 2026, driven by ongoing urbanisation, infrastructure development and manufacturing activity. India is expected to remain one of the fastest- growing steel markets globally, supported by broad-based growth across construction, infrastructure and industrial sectors. Other regions, including parts of ASEAN, MENA and Africa, are also expected to contribute meaningfully to global demand growth.

Steel demand across developed economies remained subdued in 2025, marking the fourth consecutive year of weak growth as elevated production costs and affordability concerns continued to affect industrial activity. However, conditions are expected to improve during 2026, supported by increased infrastructure and defence expenditure, moderating inflationary pressures and strengthening household purchasing power.

Overall, while the near-term outlook remains cautious, global steel demand is expected to gradually stabilize and improve, underpinned by structural demand growth in emerging economies and a gradual recovery in key developed markets. Nevertheless, geopolitical developments in the Middle East, including tensions involving the United States and Iran, continue to pose risks to global economic activity and the steel demand outlook.

Indian Steel Industry and Developments

India is expected to remain one of the fastest-growing steel markets globally, with steel consumption projected to increase by approximately 7-8% during FY2026-27. Apparent Steel Use (ASU) is estimated to reach around 176178 million tonnes (MT), supported by sustained investments in infrastructure and growing demand from emerging sectors such as data centres, defence manufacturing, and renewable energy. Government-led capital expenditure continues to play a critical role in supporting steel-intensive industries and long-term economic development.

While domestic steel demand is expected to remain strong, production capacity additions are likely to exceed consumption growth, positioning India as an increasingly important participant in global steel trade and strengthening its potential as a net exporter over the medium term.

Indias steel demand outlook continues to be supported by strong structural growth drivers. Sustained investments in infrastructure projects such as highways, railways, metro networks, ports, airports, and power facilities are expected to generate significant steel consumption, while rapid urbanisation and growing residential, commercial, and public infrastructure development will further support demand from the construction sector. Additionally, the continued expansion of domestic manufacturing, backed by government initiatives,

rising industrial investments, and increasing consumer demand, is likely to drive steel usage across a wide range of downstream industries. Together, these factors are expected to underpin the long-term growth of Indias steel market and strengthen its position as a key contributor to global steel demand.

Despite these positive domestic fundamentals, the industry faces a number of external challenges. Elevated steel exports from China and shifts in global trade patterns resulting from protectionist measures may continue to influence pricing dynamics and market competitiveness. In addition, the implementation of carbon-related trade regulations in major export markets, particularly Europe, along with growing customer preference for lower-emission steel products, may create new compliance and competitiveness requirements for Indian steel producers.

To strengthen its global position and sustain long-term growth, the Indian steel industry will need continued support through investments in infrastructure, reliable access to competitively priced energy and raw materials, and faster adoption of environmentally sustainable production technologies. Improving operational efficiency, increasing the share of value-added products, and accelerating innovation across the value chain will remain critical for enhancing competitiveness and capturing future growth opportunities in the global steel market.

Strategic Initiatives & Updates - SEIL

Your company is installing Re-Heating Furnace with a capacity of 1.50 lakh MTPA to execute the 2 years contract from Rashtriya Ispat Nigam Limited (RINL) for conversion of 1.20 lakhs MTPA of their 150 MM Blooms in to TMT Bars of Vizag Steel Brand. This facility is likely to commission its operations in Q2 of FY 27 and it can improve utilisation of Rolling Mill at higher capacity and generate additional income.

Your Company has entered in to Memorandum of Understanding (MOU) on 14th Nov 2025 with AP State Govt for expanding the existing facility by setting up a Green Steel and Alloy plant of 1 Mill MTPA size near our existing plant with an capital outlay of Rs 3450 cr in 3 phases and sought the help of AP Govt for allotting and / or arranging land of 200 acres apart from other fiscal incentives as per AP Govt Industrial policy.

As per the AP Industrial Development Policy the proposed expansion project is eligible for fiscal incentives like waiver / refund of SGST, allotment of Govt Land, Exemption of stamp duty, exemption of land conversion charges, concessional charges for water up to a significant portion of Fixed Capital Investment as seen in other similar projects.

Further the company is considering various options for monetisation of its idle / underutilised assets and use those proceeds to repay/ prepay in its efforts to reduce the debt and finance cost going forward.

We are pleased to inform you that your companys products have been approved by CRDA for use in construction of Green City Capital of AP with huge capital outlay. With the state government focus on faster construction of Green Capital i.e Amaravathi and improving the infrastructure in the state, the company expects stable and steady increase in demand for steel. All these factors augur well for the company in the coming years. The management is committed to continue its efforts in minimizing the costs and improving the intrinsic value of the company for the benefit of all stakeholders.

About SEIL

Steel Exchange India Limited (SEIL) is the flagship company of the Vizag Profiles Group. Established in 1999, SEIL is a leading manufacturer of TMT Rebars under the brand SIMHADRI TMT. The company is primarily engaged in the manufacturing of steel products and allied activities at its Integrated Steel Plant located close to Visakhapatnam, Andhra Pradesh. It has the largest private integrated steel plant in Andhra Pradesh. It manufactures sponge iron, billets, and TMT bars.

Trading Division

Apart from its manufacturing operations, the corporation also trades a few products to improve its top and bottom line and to meet the requirements of its existing customers. Currently, the trading division deals in mainly finished steel products of 8- and 10-MM size Re-bars and supplementary products such as semis, coal, scrap, and others. The division has been largely responsible for expanding the companys marketing and sales base throughout Andhra Pradeshs coastal region.

The steel trading division reported a turnover of Rs. 44.70 crores for the year ended 31st March 2026 compared to Rs. 75.85 crores in the previous year ended 31st March 2025.

Integrated Steel Plant

The main Integrated Steel Plant (ISP) of the Company located at Sreerampuram Village, L. Kota Mandal, Vizianagaram District consists of the following units:

1. Sponge Iron Unit - 2,20,000 TPA

2. SMS Billet Unit - 3,62,000 TPA

3. Rolling Unit -3,57,000 TPA

4. Captive Thermal Power Plant- 60 MW

The total revenue including other operating revenue for the period 2025-26 under review from ISP stood at Rs.998.90 crores as against Rs.1044.96 crores in the previous year 2024-25. The division reported decreased in turnover on year-to-year basis compared to previous year and TMT Bars produced are sold under the well-established brand name Simhadri TMT Bars. The Power Division recorded total revenue of Rs. 15.84 crores from the sale of surplus power during the period under review, compared to Rs. 23.22 crores in the previous year. The year-on-year decline in turnover was primarily due to lower demand, decrease in the selling price resulting in reduced power units sold.

FINANCIAL PERFORMANCE OF THE COMPANY FOR THE YEAR ENDED 31.03.2026

(Amount in Crores, unless otherwise stated)

<td ALIGN=RIGHT>26.99

	FY26	FY25
Total Income	1,066.42	1,163.38
EBITDA	140.35	143.18
EBITDA Margin	13.16%	12.31%
Profit before tax (PBT)	40.25	45.50
Deferred Tax Liability (Asset)	13.25	19.56
Profit after tax (PAT)	25.93
PAT Margin	2.55%	2.27%

Disclosure of Accounting Treatment:

The Company has prepared financial statements, which comply with Ind AS applicable for periods ending on March 31, 2026, together with the comparative period data as at and for the year ended March 31, 2025, as described in the summary of significant accounting policies. Primarily, a treatment different from that prescribed in an Accounting Standard has not been followed in the preparation of financial statements.

However, as regards amendments to certain accounting standards, the applicability / effect on the financial statement has been evaluated and been treated accordingly as explained in Notes to the Financial Statements.

Further, the financial statements represent a true and fair view of the underlying business transactions.

Reserves and Surplus

For the year ended 31st March 2026, the Reserves and Surplus have increased from Rs. 586.21 crores to Rs. 643.13 crores due to primarily on account of issue of Share Warrants Rs.34.79 Crs.

Secured Loans

Secured loans was Rs.323.58 crores as on March 31, 2026 as compared to Rs.340.26 crores as on March 31, 2025

Unsecured Loans

Unsecured loans were Rs.0.13 crores as on March 31, 2026 as compared to Rs.0.39 crores as on March 31, 2025.

Fixed Assets

During the year under review, the total Fixed Assets (net Block) stands at Rs.590.01 crores as against Rs.613.37 crores in the previous year.

OPERATIONAL PERFORMANCE OF THE COMPANY FOR THE YEAR ENDED 31.03.2026

Income

The total income of the company stood at Rs.1066.42 Cr for FY 2025-26 against Rs.1,163.38 Cr for FY 2024-25. During the year, the total operational revenue of the company was decreased by 7.39 % compared to the previous financial year.

Direct Cost & Other expenses

The Direct Costs comprising of cost of material consumed, changes in inventories of finished goods, stock in trade & work- in-progress and purchases of traded goods was to Rs. 790.33 Cr for FY 2025-26 against Rs. 890.49 Cr for FY 2024-25.

Other expenses comprise of other manufacturing expenses, staff costs, administration and selling & distribution expenses etc. was Rs. 135.74 crores for FY 2025-26 against Rs. 129.71 crores for FY 2024-25.

During the year, the total expenses of the company decreased by 8.2 pared to the previous financial year while decrease in turnover was 8.33%.

Interest Cost

For the year under review, the interest and financial charges were Rs. 69.46 Crores representing 6.56 % of the turnover as against Rs. 74.54 Crores representing 6.52% of the turnover in the previous year. The decrease in finance cost / interest cost is on account of repayment of High cost debt, take over of new loan with lower cost of debt and principal repayment of NCDs and term loans as per repayment schedule. The company is taking various initiatives to reduce the financial costs in the coming year to make the company more sustainable in the long run.

Depreciation

The company has provided a sum of Rs. 28.32 crores towards depreciation for the year under review as against Rs. 23.57 crores in the previous year and the increase is due to enhanced capacities in SMS and Re-Bar mills.

Provision for Tax

There was no current tax due to carry forward of business losses and unabsorbed depreciation of previous years which will be offset against current year profit. However deffered tax Asset recognised on business loss in previous years has been reversed in current year as the same could not be utilised with in allowable period.

Total Comprehensive income/Loss (Net Profit/Loss)

The operations for FY 2025-26 resulted in a net profit of Rs. 26.99 Cr as against net profit of Rs. 25.93 Cr in FY 2024-25.

Dividend

No Dividend is recommended on the Equity Shares for the year ended 31st March 2026

Details of significant changes in Key Financial Ratios:

	FY26	FY25	Change in %
Debt Equity Ratio	0.42	0.48	(13%)
Debt Service Coverage Ratio	0.90	1.15	(22%)
Interest Service Coverage Ratio	1.97	1.71	15%
Current Ratio	2.26	1.91	18%
Long Term debt to working capital	0.71	0.88	(19%)
Total debts to Total Assets	0.24	0.27	(11%)
Debtors Turnover (no. of days)	71	59	22%
Inventory Turnover (no. of days) (i)	149	101	48%
Operating Profit Margin	12%	10%	18%
Net Profit Margin	2.55%	2.27%	14%
Return on Equity	3.66%	3.79%	(3%)

Detailed explanation on significant changes (i.e., change of 25% or more as compared to FY25) in the above key ratios:

(i) Increase in inventory due to stock holding for better prices

Environmental, Social and Governance (ESG) & Corporate Social Responsibility (CSR)- Safety, Health, Sustainability

The steel industry is one of the most energy- and carbonintensive sectors in the world economy, responsible for approximately 7-8% of global anthropogenic carbon dioxide (CO2) emissions. As nations collectively strive to achieve the goals of the Paris Agreement, the decarbonization of the steel industry has emerged as a critical challenge. This is particularly true for countries such as India, which is both the second-largest steel producer globally and a rapidly growing economy with ambitious infrastructure development plans.

The steel Industrys significance extends beyond its economic role, it is foundational to the development of transport, construction, infrastructure, and energy sectors. However, its heavy reliance on coal-based technologies particularly the Direct Reduced Iron (DRI) process, contributes to elevated carbon intensities compared to international benchmarks.

Steel Exchange India Limited (SEIL), an integrated steel plant is also significant contributor to regional industrial output. SEILs operations associated with Direct Reduced Iron (DRI) production, a Steel Melting Shop (SMS), Rolling Mills, and a Captive Power Plant (CPP), enabling vertically integrated production from raw materials to finished steel products such as billets and Re-bars.

SEILs Emission Intensity of 2.45 CO2 per tonne of Billets/ Rolled Products positions within the Global BF-BOF (average) of 2.2-2.5 (Source: World Steel Association). SEILs performance remains consistent with its domestic peers and reflects the structural reliance in Indias steel sector.

This result is consistent with performance of coal-based Direct Reduced Iron (DRI) combined with Electric Arc Furnace (EAF) operations, which dominate the Indian secondary steel sector.

SEIL identified several mitigation opportunities to reduce carbon intensity over short, medium, and long-term horizons:

- Short-term: Enhance Waste Heat Recovery efficiency, optimize CPP operations, and improve energy management systems.

- Medium-term: Increase scrap utilization in SMS, substitute imported coal with higher-grade fuel, and integrate renewable electricity sources.

- Long-term: Explore deployment of carbon capture, utilization and storage (CCUS), and adoption of hydrogen- based DRI to Produce Green Steel.

These measures will enable SEIL to align with Indias

decarbonization commitments and international best practices.

SEIL adopts continuous measures to reduce Direct & indirect emissions also, specifically upstream transport of raw materials and downstream distribution of finished products. This year SEIL Installed a New fully automated continuous rolling mill having 16 Passes and followed by Block Mill (4 passes) for manufacturing 8mm Re bars, which controlled the Downstream emissions (transportation of Billet to other facility) and also controlled Direct emissions of Re heating of Billets in that other facility.

Opportunities

The Indian steel industry continues to present significant long-term growth opportunities, driven by robust economic fundamentals, sustained infrastructure development, rapid urbanization, expanding manufacturing activity, and increasing investments across core sectors. The Governments continued emphasis on capital expenditure, infrastructure creation, housing, transportation, renewable energy, and industrial development under various policy initiatives is expected to support sustained demand for steel over the medium to long term.

Growing demand from sectors such as infrastructure, construction, engineering, automotive, railways, capital goods, oil and gas, and renewable energy is expected to create new avenues for growth. In addition, increasing emphasis on import substitution, localization of manufacturing, and capacity expansion across industries is expected to strengthen domestic steel consumption.

The Company remains well positioned to capitalize on these opportunities through its established manufacturing capabilities, diversified product portfolio, strong customer relationships, and continued focus on operational excellence, product quality, and customer satisfaction. The Company also continues to explore opportunities to expand its value- added product offerings, enhance operational efficiencies, and strengthen its market presence across key customer segments.

Risks and Concerns

The steel industry operates in a dynamic and competitive environment and is subject to various internal and external risks that may impact business performance. Key risks include volatility in raw material prices and availability, fluctuations in domestic and international steel prices, changes in demand- supply dynamics, inflationary pressures, rising energy and logistics costs, foreign exchange volatility, and evolving regulatory and environmental compliance requirements.

The industry is also exposed to risks arising from global economic uncertainties, geopolitical developments, changes in international trade policies, import and export regulations, and cyclical variations in end-user demand. Intensifying competition from domestic and global steel producers, together with increasing customer expectations relating to quality, delivery, and sustainability, continues to present operational and commercial challenges.

Further, the transition towards low-carbon manufacturing and evolving environmental, social, and governance (ESG) expectations require continuous investments in cleaner technologies, resource efficiency, and sustainable manufacturing practices.

Mitigation Strategies

The Company has established a robust enterprise risk management framework that facilitates the timely identification, assessment, monitoring, and mitigation of key strategic, operational, financial, and regulatory risks. Risk management is integrated into the Companys decisionmaking processes and is periodically reviewed by the Management and the Board to ensure effective oversight.

To mitigate raw material and supply chain risks, the Company follows a disciplined procurement strategy supported by supplier diversification, strategic sourcing initiatives, inventory optimization, and continuous vendor engagement. Operational risks are managed through preventive maintenance, process standardization, continuous improvement initiatives, technology adoption, and rigorous quality management systems.

The Company continues to focus on cost optimization through enhanced manufacturing efficiencies, improved yield management, energy conservation initiatives, digitalization, and prudent working capital management. Continuous investments in process improvements and operational excellence initiatives enable the Company to enhance productivity while maintaining high standards of product quality and customer service.

The Company also places significant emphasis on regulatory compliance, environmental stewardship, occupational health and safety, cybersecurity, and business continuity planning to strengthen organizational resilience and ensure sustainable business operations.

Strategic Response and Resilience

The Companys long-term strategy is centered on sustainable growth, operational excellence, customer- centricity, technological advancement, and prudent financial management. The Company remains committed to strengthening its competitive position through continuous improvement in manufacturing capabilities, optimization of product mix, expansion of value-added products, and enhancement of customer engagement.

Strategic investments in modernization, automation, digital technologies, energy efficiency, and environmentally responsible manufacturing practices continue to improve operational reliability, productivity, and cost competitiveness. Simultaneously, the Company remains focused on developing organizational capabilities, strengthening governance practices, and fostering a culture of innovation and continuous improvement.

The Company maintains a disciplined approach towards capital allocation, liquidity management, and financial risk management, thereby providing the flexibility required to respond effectively to changing market conditions. Its diversified customer base, established operational capabilities, experienced management team, and strong governance framework provide resilience against cyclical industry challenges and macroeconomic uncertainties.

While the business environment continues to remain dynamic, the Company believes that its strategic priorities, strong operational foundation, prudent risk management practices, and unwavering focus on sustainable value creation position it well to capitalize on emerging opportunities and deliver long-term value to its stakeholders.

These initiatives position SEIL to remain resilient and agile, even amidst uncertainty, while preparing the foundation for long-term, sustainable growth.

Human Resource Management, Industrial Relations

The Company considers its human resources to be one of its most valuable assets and recognizes that the quality, commitment, and capabilities of its workforce are fundamental to its long-term success. Accordingly, the Company places significant emphasis on employee training and development across all levels of the organization, fostering continuous learning, skill enhancement, and leadership development. It also strives to provide a safe, inclusive, and conducive work environment that promotes employee well-being and professional growth.

The Management firmly believes that sustainable business growth is driven by the effective utilization and development of human capital. In line with this philosophy, the Company continues to invest in initiatives aimed at enhancing employee engagement, productivity, and organizational effectiveness.

As on March 31, 2026, the Company had a total workforce of 1,094 employees, including trainees. The Company continues to maintain harmonious industrial relations and is committed to ensuring the health, safety, and well-being of its employees through robust safety standards and best workplace practices.

The Board of Directors and the Management place on record their sincere appreciation for the dedication, commitment, and valuable contributions of all employees, whose continued efforts have been instrumental in the Companys growth and success.

Internal Financial Control Systems and Internal Audit

The Company has established an adequate and effective internal financial control framework commensurate with the size, scale, and complexity of its operations. These controls are designed to provide reasonable assurance regarding the safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of accounting records, compliance with applicable laws and regulations, and the timely preparation of reliable financial information.

The Companys internal control systems ensure that business transactions are appropriately authorized, recorded, and reported in accordance with established policies and procedures. The internal audit function periodically evaluates the adequacy and effectiveness of these controls and recommends improvements, wherever necessary, to strengthen the overall control environment.

The Audit Committee of the Board regularly reviews the effectiveness of the Companys internal financial controls and internal audit processes. It also interacts with the Internal Auditors and Statutory Auditors to assess the adequacy of the control framework, discuss significant audit observations, monitor the implementation of corrective actions, and ensure continuous improvement in governance and risk management practices.

Cautionary Statement

Statements contained in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations, or predictions may constitute "forward-looking statements" within the meaning of applicable securities laws and regulations. These statements are based on certain assumptions and expectations of future events and are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required under applicable laws.