Waa Solar Ltd Management Discussions

1. INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian renewable energy sector, particularly solar, has emerged as one of the most attractive investment opportunities globally. As per the Ministry of New and Renewable Energy (MNRE), India has set an ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030, with solar power contributing significantly.

The countrys solar installed capacity has already crossed ~82 GW (as of March 2025), positioning India among the top five globally. The sector is witnessing rapid developments in:

? Utility-scale solar parks, hybrid renewable projects, and floating solar.

? Domestic module manufacturing under the Production Linked Incentive (PLI) scheme.

? Solarization of industries, commercial establishments and residential rooftops.

? Green hydrogen initiatives driving demand for solar power integration.

2. FORWARD-LOOKING STATEMENTS

This Report contains statements that constitute forward looking statements including, without restraint, statements relating to the expectations, projections and implementation of strategic initiatives and other statements relating to the future business growth/ developments and economic performance. These statements based on certain expectations, believes, projections and future expectations concerning, the development of strategic growth, market risks, uncertainties and other factors depends on the managements thoughts. It could differ from actual performance and results, to differ significantly from Managements thoughts / expectations.

3. INDIAN ECONOMY

Despite the prevailing global uncertainties, the Indian economy is estimated to grow between 6.256.50% during the year 2025-26. The agriculture sector is expected to grow 4%, the industrial sector 6% and the services sector 7%. In absolute terms, the agriculture sector continued to operate well above pre-pandemic trend levels.

Whereas, in the industrial sector, sustained growth through FY 2023-24 and FY 2024-25, has led to the closure of the trend gap. The recovery within the services sector has been uneven and as a result, the sector is only now approaching its long-term trend levels. Policy rates remained unchanged through the April-December 2024 period with the repo rate at 6.50%. However, with relatively weaker growth prints and falling underlying inflation, the Monetary Policy Committee (MPC) changed its policy stance from Withdrawal of Accommodation to Neutral in October 2024. Further, to inject liquidity into the banking system a reduction in CRR to 4.00% of NDTL from 4.50% was announced in December 2024. In February 2025, the RBI lowered the repo rate to 6.25% in response to downward revisions in growth forecasts for H1 FY 2025-26, while keeping the inflation trajectory aligned with its target.

The Indian economy is expected to remain resilient, supported by robust consumption from households, alongside the governments continued focus on capital expenditure. Capacity utilisation in manufacturing remains high and balance sheets of banks and corporates remain healthy. The economy has also undergone rapid digitalisation over the past decade, significantly boosting productivity. The service sector has increasingly shifted towards high-tech digital solutions, including e-commerce, fintech, cloud computing and AI-driven services.

The risks to growth remain largely external - rising tariff barriers, stretched supply chains and continuing geopolitical tensions. The country will have to adapt to the evolving global landscape and harness its domestic strengths to drive growth in a sustainable manner.

4. GLOBAL ECONOMY

World GDP grew by 2.7% in calendar year 2024, with regional growth varying significantly. The United States saw robust growth at 2.8%, while the Eurozone experienced more subdued growth at

0.8%. Growth in emerging markets was driven by India and China, which recorded growth rates of 6.5% and 5%, respectively. For the most part, the year was marked by improving financial conditions,

declining inflation and a partial de-escalation of regional conflicts. With global cross-border trade and investment flows slowing there is a growing risk of rising cost pressures, reduced productivity and slower efficiency gains. However, with trade in services not being directly affected by tariff elated disruptions, the global IT outsourcing market is expected to remain relatively resilient. Indias technology sector is expected to grow by around 5% in FY 2025-26, with revenues projected to exceed USD 300 billion. India remains relatively insulated from global headwinds and is on track to become the worlds third-largest economy in the medium-term. It continues to be one of the fastest- growing large economies, supported by favorable demographics, investment led impetus and ongoing regulatory reforms.

5. GOVERNMENT INITIATIVES

The Government of India has been actively investing in the renewable energy sector to meet its sustainability goals and several initiatives have been announced or are expected for the financial year 2024-25:

National Green Hydrogen Mission: To make India a global hub for green hydrogen production, the government is expected to significantly invest in scaling up green hydrogen infrastructure. Projected Budget: T19,700 crore (Approximately).

Pradhan Mantri Kisan Urja Suraksha Evam Utthaan Mahabhiyan (PM-KUSUM) Scheme: Aiming to provide solar power solutions to farmers, this scheme includes installing solar pumps and creating decentralized solar power generation systems. Projected Budget: T34,422 crore (Over 5 years, with T9,000 crore allocated for 2024-25)

Production-Linked Incentive (PLI) Scheme for Solar Modules: To promote domestic manufacturing of solar modules and reduce dependence on imports, the government has launched the PLI scheme. Projected Budget: T19,500 crore (For 2022-2030, with an annual allocation of around T2,000 crore for FY 2024-25). Focus Areas: Solar cell and module manufacturing, providing incentives to companies for scaling up domestic production.

Renewable Energy Research and Development (R&D): To drive innovation in the sector, especially in next-generation renewable energy technologies like advanced solar PV cells and grid storage systems. Projected Budget: T500 crore (For FY 2024-25). Focus Areas: R&D for advanced renewable technologies, including floating solar, offshore wind and green hydrogen.

6. OUTLOOK

With Indias accelerated focus on renewable capacity addition and strong policy support, the solar industry is poised for double-digit growth in the coming years. Your Company aims to leverage its technical expertise and execution capabilities to:

? Expand presence in utility-scale solar parks and hybrid renewable projects.

? Strengthen its EPC order book through participation in SECI/NTPC tenders.

? Explore new opportunities in floating solar, battery storage, and green hydrogen projects.

? Focus on cost optimization, digitalization of project management, and strengthening supply chain resilience

7. OPPORTUNITIES AND THREATS Opportunities:

? Rising demand for renewable energy due to climate commitments and ESG goals.

? Government incentives, including solar park schemes, viability gap funding, and accelerated depreciation benefits.

? Growing corporate demand for Open Access and Captive Solar Projects.

? Export opportunities in module manufacturing and EPC services.

Threats:

? Rising competition leading to pressure on margins in EPC contracts.

? Dependency on imported raw materials (e.g., polysilicon, wafers).

? Policy uncertainties, including safeguard duties and tariff structures.

? Land acquisition challenges and transmission bottlenecks.

8. RISKS AND CONCERNS

Your company being engaged in the business of solar power generation and its transmission and totally depend upon the Government Policies. So, advert government policy may affect the business in negative like reduction in PPA unit rate or increase in rate of material which may cost high to the company and get low return or margin on investment. The Company has sufficient risk management policies in place that act as an effective tool in minimizing the various risks that the businesses are exposed to during the course of their day-to-day operations as well as in their strategic actions.

9. FINANCIAL PERFORMANCE

An overview of the financial performance is given in the Directors Report. The Audit Committee constituted by the Board of Directors periodically reviews the financial performance and reporting systems.

10. INTERNAL CONTROLS AND THEIR ADEQUACY

Your Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. It has documented procedures covering all financial, operating and management functions. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with best practices in these areas as well. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels.

The Audit committee of the Board reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the company, recommendations made for corrective action and the internal audit reports. The committee reviews with the statutory auditors and the management, key issues, significant processes and accounting policies. The company continues its efforts in strengthening internal controls to enable better management and controls over all processes.

11. HUMAN RESOURCES / INDUSTRIAL RELATIONS

The Company believes human capital is its key strength. The Company continues to invest in employee training, safety, and welfare. Industrial relations remained cordial throughout the year.

12. CAUTIONARY STATEMENT

Some of the statements in this Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may be forward looking statements within the meaning of applicable Laws and Regulations. Actual results might differ substantially from those expressed or implied. Important developments that could affect the Companys operations include changes in economic conditions affecting demand, supply and price movements in the domestic and overseas markets in which your Company operates, changes in the Government regulations, Tax Laws and other Statutes or other incidental factors. Market data and products information contained in this Report have been based on information accumulated from various published and unpublished reports and their accuracy, reliability and completeness cannot be assured. The Company assumes no responsibility in respect of forward-looking statements which may be amended or modified in future.