The Anup Engineering Ltd Management Discussions

(a) Industry Structure and Developments:

The Company serves a diverse range of process industries, including Oil & Gas, Petrochemicals, LNG, Fertilisers, Chemicals, Power, Hydrogen, Water, and Paper & Pulp, among others. Its comprehensive portfolio comprises Heat Exchangers, Reactors, Pressure Vessels, Columns & Towers, Industrial Centrifuges, Silos, and Storage Tanks, enabling it to address a wide spectrum of customer requirements across these sectors.

India continues to strengthen its position as a preferred global manufacturing hub for critical process equipment, supported by enhanced manufacturing capacities, advanced engineering capabilities, and a well-established reputation for delivering high-quality products. This evolving landscape presents significant growth opportunities for domestic manufacturers.

The increasing focus on green ammonia, driven by its role in the production of green fertilisers and as a key enabler of the hydrogen economy, is expected to create substantial long-term opportunities for the process equipment industry. Additionally, sectors such as Thermal Power, Petrochemicals, Fertilisers, Natural Gas, and Hydrogen continue to exhibit positive macroeconomic growth indicators, supported by ongoing investments and capacity expansion initiatives.

The Company expects sustained momentum in the domestic market in the coming quarters, underpinned by robust capital expenditure across core process industries. Furthermore, the continued development of natural gas infrastructure projects, particularly in the Middle East, is expected to provide attractive export opportunities and support future business growth.

Opportunities: The global emphasis on energy security and self-sufficiency is expected to drive sustained investments in both conventional and cleaner energy infrastructure. As geopolitical conditions stabalise, particularly in conflict-affected regions, significant opportunities are expected to emerge in the Middle East for repair, replacement, and capacity enhancement projects, especially in the natural gas sector.

Thermal power investments continue to gain momentum across several Asian economies, while the growing focus on nuclear energy is expected to create additional opportunities for manufacturers of critical process equipment. Furthermore, the accelerated global transition towards cleaner energy sources, including green hydrogen, green ammonia, carbon capture, and renewable energy, is anticipated to generate substantial demand for process equipment, particularly across developed economies in the coming years.

Threats: The evolving geopolitical landscape, ongoing regional conflicts, supply chain disruptions, and uncertainties arising from global trade policies and tariff regimes continue to pose challenges for manufacturers with significant export and import exposure. These factors may impact project execution timelines, material availability, logistics costs, and overall business operations.

In addition, the Companys business involves the design and manufacture of highly engineered, custom- built equipment, making the availability of a skilled workforce a critical success factor. The industry continues to face challenges in attracting and retaining skilled operators and technical personnel required to support growing demand. To address these challenges, the Company remains focused on enhancing automation, digitalisation, and productivity across its manufacturing facilities and business processes, while continuing to invest in workforce development and operational excellence initiatives

Over the years, the Company has established a strong market position in the manufacture of Shell & Tube Heat Exchangers, which have historically contributed approximately 70% of its annual revenue. With the commissioning and operationalisation of the Companys new manufacturing facility at Kheda, strategically located in close proximity to the National Highway, the Company has significantly enhanced its capability to manufacture larger and heavier process equipment. This expanded capacity is expected to strengthen its presence in product categories such as Reactors, Pressure Vessels, Columns & Towers, and other large- scale fabricated equipment, thereby broadening the overall product portfolio. While Heat Exchangers are expected to remain the Companys flagship product, their contribution to revenue is projected to moderate to approximately 60% during the current year as the product mix becomes more diversified.

The Company continues to differentiate itself through its consistent on-time delivery performance, benchmarked against global industry standards. This operational excellence has reinforced its reputation as a reliable and trusted supplier to customers across domestic and international markets.

Another significant milestone during the year was the successful integration and stabilisation of the operations of Mabel Engineers Private Limited, the Companys manufacturing subsidiary in Tamil Nadu. The acquisition has strengthened the Companys geographical presence in southern India while expanding its product portfolio to include Silos, Storage Tanks, and Process Vessels, complementing its existing range of engineered equipment.

Further, the successful completion of Phase II of the expansion at the Kheda manufacturing facility has enhanced production capacity, operational efficiency, and manufacturing flexibility, positioning the Company to capitalise on emerging growth opportunities across key end-user industries.

From an industry perspective, the Company continues to witness encouraging demand across Thermal Power, Natural Gas, and Fertiliser projects, supported by ongoing investments in energy infrastructure and industrial capacity expansion. These sectors are expected to remain important growth drivers for the Companys business in the near to medium term.

The Company continues to witness healthy capital expenditure across key end-user industries, including Petrochemicals, Natural Gas, Fertilisers, Hydrogen, and Power. Increasing emphasis on energy security and self-sufficiency has led to significant greenfield and brownfield investments across global markets.

While the transition towards a lower-carbon energy mix is expected to accelerate investments in clean energy, Oil & Gas is likely to remain a critical part of the global energy mix, supported by rising energy demand, economic growth aspirations of developing economies, and energy security considerations.

The positive macroeconomic outlook across the industries served by the Company provides confidence in sustaining its growth momentum, with opportunities expected in both domestic and export markets.

The Company has in place a mechanism to identify, assess, monitor, and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis.

The Companys Internal Control Systems encompasses various management systems, structures of organisation, standard and code of conduct which all put together help in managing the risks associated with the Company. With a view to ensure the internal controls systems are meeting the required standards, the same are reviewed at periodical intervals. If any weaknesses are identified in the process of review, the same are addressed to strengthen the internal controls which are also in turn reviewed at frequent intervals.

The Company has a Risk Management Committee of the Board of Directors and Risk Management Policy consistent with the provisions of the Act and the Listing Regulations. The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and related procedures & status.

The framework defines the process for identification of risks, its assessment, mitigation measures, monitoring and reporting. While the Company, through its employees and Executive Management, continuously assesses the identified Risks, the Audit Committee reviews the identified Risks and their mitigation measures annually.

The Risk Management Policy is available on the website of the Company at https://www.anupengg.com/ policies/.

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. The Company has an Internal Audit Department with adequate experience and expertise in internal controls, operating system and procedures.

The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency.

The Internal Audit Department reviews the adequacy of internal control system in the Company, its compliance with operating systems and laid down policies and procedures. Based on the Report of Internal Audit Function, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board of Directors from time to time.

This discussion covers the Financial Results and other developments during the Financial Year 2025-26 and 2024- 25 in respect of the Company. Published result is prepared as per Indian Accounting Standards (Ind AS). The highlights below are given only for comparison.

Financial Highlights for operating performance of FY 2025- 26 & FY 2024-25:

Overall revenues for the year stood at Rs.82,228.77 Lakhs as compared to Rs.73,278.60 Lakhs in previous year. Sales and other income for the year ended March 31, 2026 were Rs.82,541.79 Lakhs as compared to Rs.73,792.01 Lakhs in previous year. The net profit for the year ended March 31, 2026 stood at Rs.11,039.24 Lakhs as compared to Rs.11,830.27 Lakhs in previous year.

Strong order pipeline of Rs.769 Crores to provide good execution visibility.

At The Anup Engineering Limited, we firmly believe that our people are the cornerstone of our success. We prioritise talent acquisition, engagement, development, retention, and reward initiatives to drive organisational growth and prosperity.

An integral aspect of our HR strategy is our responsiveness to evolving trends shaping the future of work. By embracing agility and productivity enhancements, we continuously refine our HR systems and processes to elevate the employee experience.

Our concerted efforts are evident in our emphasis on effective recruitment practices and the cultivation of our employer brand. We actively promote internal mobility, align organisational structures with business imperatives, and institute robust rewards and recognition frameworks.

Central to our employee-centric approach is our commitment to facilitating growth opportunities.

We prioritise internal mobility initiatives, enabling employees to explore diverse functional roles and ascend to higher positions within the Company.

In the realm of learning and development, we are steadfast in our digitisation efforts. By offering e-learning courses encompassing managerial and functional competencies, we equip our workforce with the requisite skills for success in an increasingly digital landscape.

At the heart of our HR philosophy lies a culture of open communication and support. Regular dialogues between managers and team members foster an environment where concerns can be voiced, improvements can be initiated, and individuals feel empowered to contribute their best.

Our performance management approach is multifaceted, combining accountability with continuous development opportunities. We champion a holistic view that nurtures talent, aligns with our compensation framework, and fuels career progression.

Through these concerted efforts, we endeavor to create a workplace where our employees thrive, excel, and contribute to the enduring success of The Anup Engineering Limited.

As on March 31, 2026 there were 391 permanent employees of Management Staff on-roll of the Company.

Statements in this report on describing the Companys objectives, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could however differ materially from those expressed or implied.

The Company assumes no responsibility in respect of the forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.