TRF Ltd Management Discussions

1. Overview

This report aims to convey the Managements perspective on the external environment and industry structure, as well as strategy, operating and financial performance, key developments in human resources and industrial relations, risks and opportunities and internal control systems and their adequacy in the Company during FY 2025-26. This should be read in conjunction with the Companys financial statements, the schedules and notes thereto and other information included elsewhere in this 63 rd Annual Report and Annual Accounts of the

TRF Limited ( Company ) for FY 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.

2. Industry structure and Developments

Global Economy

In 2025, the global economy grew at an estimated rate of 3.4% despite significant marked by record increases in U.S. tariffs, heightened trade policy uncertainty, a series of new trade agreements whose long-term impact is yet to fully unfold, and a surge in AI-driven investments. At the same time, geopolitical risks intensified, particularly due to escalating conflicts in the Middle East. These developments increased uncertainty across energy markets and global trade corridors, leading to greater volatility in commodity prices and disruptions in logistics. Despite these challenges, sustained investments in infrastructure development, energy transition initiatives, and the growing demand for critical minerals continued to support industrial activity and long-term capital expenditure across key sectors.

Indian Economy

India remained one of the fastest-growing major economies, with a growth rate of 7.5% in FY 2025-26. The real GDP is projected to expand by 6.7% in FY 2026-27. Ongoing infrastructure development, capacity expansion, and export oriented manufacturing are expected to sustain industrial activity across key sectors.

3. Developments in Human Resources/ Industrial Relations

Human Resource development, employee cost, motivation and engagement continue to be a key focus area for the Company. The Company has sustained a culture of working through joint consultation between Union and Management and is committed to the well-being of its employees.

To remain competitive, optimizing employee cost, improving employee productivity and employee experience is of utmost importance to the Company and it strives to achieve the same through continuous capability building programs, employee welfare initiatives and providing a recognition platform for its employees.

To enable the Company to realise its full potential, it is imperative to foster and sustain a progressive work culture that promotes an engaged, skilled, and motivated workforce capable of delivering on commitments to all stakeholders. In line with this objective, the Company undertook a series of focused interventions to strengthen human resource processes, employee engagement, and organisational effectiveness. Key initiatives are outlined below: Talent Management

As part of its efforts to modernise HR systems, the Company implemented a revised Performance Management System for officers, aligned with Tata Steels framework, to drive performance excellence and accountability. Further, a Second Innings Voluntary Retirement Scheme was introduced after a gap of more than 20 years, enabling a dignified and well-supported transition for long-serving employees. The scheme provided stability along with medical and accommodation benefits. The Company continued to enhance employee through structured support mechanisms. The Voluntary Retirement Scheme was designed to ensure financial security and continued access to essential benefits, reinforcing the Companys commitment to responsible and humane workforce management across the employee life cycle. A total of 52 permanent employees opted for the scheme. ndustrial Relations I

The Company maintained healthy and cordial industrial relations through continuous engagement and dialogue. The annual bonus agreement with the Labour Union for FY 2024-25 was concluded amicably, reflecting the strength of mutual trust and cooperation between management and the workforce. The Workers Union actively supported and participated in all important initiatives of the Company during the challenging times.

Employee Engagement & Culture

The Company continued to promote a culture of inclusivity and engagement through various initiatives. Annual Sports 2026 was organised at the TRF Nagar for employees and their children, fostering camaraderie and work-life balance. Additionally, a Union Leadership Development Program was conducted for Trade Union representatives of Tata Steel Group companies, aimed at strengthening leadership capabilities and collaborative engagement.

Employee well-being remained a key priority. Annual health check-ups were conducted for executives and all employees. A series of health awareness sessions were also organised covering important topics such as HIV and AIDS, lifestyle diseases, prevention from heat-related illnesses, monsoon-related health precautions, tobacco consumption and oral health, thalassemia and blood donor education, and oral hygiene. Additionally, blood donation camps conducted in September 2025 and March 2026 resulted in the collection of 432 units of blood. CSR & Volunteering The Company demonstrated strong commitment towards community engagement and social responsibility. The Company recorded 6,742 volunteering hours which translates to 10.79 Per Capita Volunteering Hours (PCVH), significantly exceeding the Tata Group PCVH target of 4. In recognition of this achievement, the Company was honoured by the Tata Sustainability Group for the highest volunteering hours under the small-scale industries category for the first time among Tata Group companies during FY 2025-26.

These initiatives collectively underscore the Companys commitment to building a resilient, engaged, and future-ready workforce and were well received by the employees. The Company, in-line with its present business profile and requirements, rationalizes its manpower requirements on regular intervals. Number of employees on permanent roll of the Company was 354 as on March 31, 2026.

4. Operational and Financial Performance

Operational performance

Over the past decade, the Company has executed multiple Engineering, Procurement, and Construction ( EPC ) projects, as part of its material handling business. However, these engagements have posed significant contracting and operating, which resulted in strained cashflows, increased debt levels, cost overrun and project execution delays, further exacerbated by litigation and prolonged contract closure processes.

To mitigate such risks, the Company has, in recent years, strategically realigned its focus towards strengthening its engagement with Tata Steel, other Tata Group companies and engagement with selective PSUs to leverage its OEM capabilities. This shift has enabled the Company to actively participate in their expansion initiatives and capitalize on emerging opportunities in terms of enhancement of manufacturing facilities for equipment and raw materials sectors. As a result, the Company has experienced improved cash flow, enhanced liquidity, and a significant reduction in external debt.

During the year, the Company recorded a total production of 2,100 MT, comprising 1,500 MT of Idlers, 450 MT of Equipment & Spares, and 150 MT of Pulleys. The Company continued its focus on strengthening manufacturing capabilities through ongoing modernization initiatives, including the refurbishment of nine machines, installation of three new machines, and upgradation of civil infrastructure with new roof sheeting. These initiatives have collectively enhanced operational efficiency.

Despite a challenging external environment, the Company made steady progress across key projects undertaken earlier. Out of eight active external projects, significant milestones were achieved in three projects, along with the successful closure of one project in Uttar Pradesh.

As we look ahead, our focus remains on agility, operational excellence, and deepening our partnership with our chosen customers. while upholding safety, precision, and financial discipline.

The Company in FY 2025-26 reported consolidated EBITDA of 2,464.09 lakh and Loss of 447.37 lakh. The Company, through its persistent and focused initiatives, realised collections from debtors for 12,307.15 lakh. On a consolidated basis, the Projects & Services segment posted a revenue of 531.17 lakh and the Products &

Services segment posted a revenue of 8,013.55 lakh.

Financial and Segment-wise Performance

On a standalone basis, the total income from operations of your Company during FY 2025-26 was 9,951.23 lakh (previous year: 13,540.73 lakh). Profit before tax for the year was 211.05 lakh (previous year: profit before tax 2762.70 lakh).

During FY 2025-26, Projects & Services segment generated a revenue of 531.17 lakh (previous year: 1,565.25 lakh) and the Products & Services segment posted a revenue of 8,013.55 lakh (previous year: 10,533.28 lakh), including inter segmental revenue of 41.50 lakh (previous year: 25.05 lakh).

The Projects & Services segment incurred a segmental profit of 89.27 lakh (previous year loss was 356.61 lakh) whereas the profit in Products & Services segment stood at 1,009.15 lakh (previous year: 3,247.70 lakh). The profit of the Company after deducting interest, other un-allocable expenditure/ income and Income Tax from the segmental results arrived at 211.05 lakh (previous year: 2,762.70 lakh). This includes income in the nature of liabilities no longer required amounting to 209.19 lakh.

On a consolidated basis, the total income of your Company during the year stood at 10,095.58 lakh

(previous year: 13,878.86 lakh), whereas the loss for the year was 447.37 lakh (previous year: profit before tax was 3,093.14 lakh). The total comprehensive profit for the year was90.26 lakh (previous year: 2,801.24 lakh).

Details of Significant Changes (Standalone)

(1) Change of 25% or more as compared to the immediately previous Financial Year in key financial ratios, along with detailed explanations thereof, including: -

Particulars	2025-26	2024-25	Remarks
(i) Trade Receivables Turnover	3.05	1.86	Trade Receivables Turnover improved on account of enhanced collection efficiency and better working capital management.
(ii) Inventory Turnover	1.65	3.24	Inventory Turnover declined due to lower sales volumes and higher inventory holding levels during the year.
(iii) Interest Coverage Ratio	1.92	3.02	Interest Coverage Ratio declined due to lower profitability, leading to reduced earnings available for servicing finance costs
(iv) Current Ratio	2.62	1.73	Current Ratio has improved following settlement of current liabilities.
(v) Operating Profit Margin (%)	9.39	22.37	Operating Profit Margin declined due to lower revenue and consequent reduction in operating profitability during the year
(vi) Net Profit Margin (%)	2.48	22.88	Net Profit Margin declined on account of lower revenue during the current year.

(2) Details of any change in Return on Net Worth as compared to the immediately previous Financial Year along with a detailed explanation thereof.

Return on average Net Worth FY 2025-26 is 0.03 Return on average Net Worth FY 2024-25 was 0.46

Return on average Net worth has declined due to lower profits during the current year as compared to previous year .

5. Risks

The Company proactively identifies, evaluates, and manages risks and opportunities through a robust Enterprise Risk Management ( ERM ) framework. Cross-functional teams have been constituted to periodically review these elements and develop both short-term and long-term mitigation strategies aligned with business objectives.

While the Company continues to pursue multiple growth opportunities, it remains cognizant of various risks, challenges, and uncertainties inherent in its operating environment. The key risks and corresponding mitigation measures are outlined below.

Lower Revenue Generation & cyclical demand risk: The organization faces challenges in the core sectors served i.e., steel, mining, and power, which are inherently cyclical, leading to fluctuations in customer capital expenditure and consequently affecting order inflows. To mitigate these risks, the Company is implementing cost reduction initiatives to improve competitiveness, while its marketing team continues active engagement with customers across business cycles to identify and capture opportunities.

Cost efficiency & Order Pipeline: Legacy challenges and underutilized capacities pose operational risk. However, the Company has secured new orders from Tata Steel and other group companies, reaffirming customer confidence, and has also re-entered the equipment business with selected FY 2025-26. These measures are expected to improve capacity utilization, enhance cash flows, optimize working capital cycle, and strengthen liquidity. Further mitigation includes continued engagement with the external customers to optimize order inflows.

Legacy Project Closure & Working Capital Stress: Delays in the closure of certain legacy projects, despite contractual obligations having been fulfilled, have resulted in deferred financial closure, prolonged recovery of retention amounts, and certain contracts becoming onerous, thereby placing strain on financial resources and working capital. This is compounded by ongoing exposure to bank guarantees and tied-up capital. The Company is addressing these issues through proactive engagement with customers and leveraging Tata Steels ecosystem to achieve amicable commercial settlements wherever feasible and is optimistic of smooth resolution.

Supply Chain & Geopolitical Risk Exposure: Geopolitical tensions and global conflicts pose risks related to the availability and cost of critical inputs such as industrial gases and petroleum products, along with potential increases in logistics costs, which may impact manufacturing expenses and delivery timelines. The Company remains agile and vigilant in monitoring such developments and undertakes timely and appropriate actions to mitigate their impact to the extent possible.

6. Outlook

India remains one of the fastest-growing major economies, supported by continuing investments in infrastructure, manufacturing, steel, mining, ports, and logistics. Capacity expansion, modernization, and asset renewal initiatives across private enterprises and Public Sector Undertakings (PSUs), together with the development of freight corridors, multimodal logistics networks, and industrial infrastructure, are expected to sustain industrial activity and demand for bulk material handling (BMH) solutions. In parallel, increasing emphasis on operational efficiency, automation, digitalization, sustainability, and compliance with Environmental, Social and Governance (ESG) objectives is driving the adoption of advanced and energy-efficient material handling systems. These trends present opportunities for domestic solution providers, including TRF, particularly through its participation in

Tata Steels brownfieldand greenfieldexpansion projects and asset refurbishment programmes. While challenges such as capital intensity, skill availability, and import competition remain, continued localization, technological advancement, and industrial investment are expected to support demand, subject to prevailing market conditions.

7. Opportunities

The Company is actively exploring and remains committed to successfully leverage multiple opportunities unfolding in the Tata Steel ecosystem, Tata Group at large, engagement with Public Sector Undertakings (PSUs), and the significant opportunities around smart automation and ESG compliance, where the its expertise and core competencies can be well positioned to enhanced business outcomes. Some of the key opportunities include: Tata Steel Expansion Projects: Expansion of Neelachal Ispat Nigam Limited (NINL) at Kalinganagar, together with capacity augmentation and mining expansion initiatives by Tata Steel in Odisha and Jharkhand, is expected to contribute to additional requirements across mining, material processing, and logistics operations.

These developments are expected to create opportunities for the Company to participate in project related requirements through the supply of BMH equipment, systems and integrated engineering solutions.

Strategic Alignment with Tata Group: Continued focus on partnerships with Tata Steel and other Tata Group companies provides a stable and growing business pipeline aligned with their growth trajectories. Opportunities are expected in the areas of OEM and Non-OEM supply for a wide range of BMH equipment and associated spares & services. Engagement with Large PSUs: The Company has initiated strategic engagements with large PSUs through the supply of OEM spares for their ongoing operations. These engagements provide business continuity and enhance revenue visibility through recurring maintenance and spares requirements.

8. Internal Control Systems and their Adequacy

The Company has an Internal Financial Controls ( IFC ) framework that aligns with its operational size, scale, and complexity. The Board holds the responsibility for ensuring that the IFC is adequate and operating effectively. This framework has been designed to provide reasonable assurance regarding the accuracy of financial and operational reporting, compliance with applicable laws, safeguarding of assets against unauthorised use, proper authorisation of transactions, and adherence to corporate policies. Furthermore, this internal control framework complies with the requirements set forth in the Companies Act, 2013.

The internal control systems and procedures are continuously monitored to enhance its effectiveness and that it is commensurate with the scale and nature of operations of the Company. The Company has appointed the

Corporate Audit Division of Tata Steel Limited, as the Internal Auditor, who reports directly to the Audit Committee of the Board of the Company. During the year, the Audit Committee met regularly to discharge its responsibilities as required pursuant to Companies Act, 2013 and the SEBI Listing Regulations. The Internal Audit framework is as per the Annual Audit Plan of the Company duly approved by the Audit Committee.

The Audit Committee regularly meets with the Statutory Auditor to ascertain their views on the adequacy of internal controls and their observations on the financial reports.

9. Statutory Compliance

The Company has in place adequate systems and processes to ensure it is in compliance with all applicable laws. The Company Secretary and Compliance Officer is responsible for implementing the systems and processes for monitoring compliance with applicable laws and for ensuring that the systems and processes are operating effectively. A declaration regarding compliance with the applicable laws is placed by the Managing Director at the Board Meetings of the Company on a quarterly basis. The Company Secretary and Compliance Officer confirms compliance with Company law, SEBI Regulations and other corporate laws applicable to the Company.