Camlin Fine Sciences Ltd Management Discussions

1. Business Environment

A. Global Economic Outlook

The Global Outlook has been significantly and abruptly shadowed following the break of war in the Middle East on February 28, 2026. The closure of the Strait of Hormuz and critical damage to production facilities in the region which is the heart of global hydrocarbon supply, can lead to a severe global energy crisis on an unpredictable and unprecedented scale. India, which is devoid of internal hydrocarbon suppy seems to be looking down the barrel which may lead to local spike in inflation due to lack of critical feedstocks.

The global economy which was on a steady growth trajectory is likely to be severely hit by this war. Prior to the war, International Monetary Fund, in fact, was poised to upgrade the global growth forecast, which was buoyed by the continued momentum supported by investment boom in Technology Sector, some moderation in trade policy, fiscal support granted by some countries and overall stabilisation in financial conditions. War has unfortunately not only overwhelmed by these conditions but also disrupted the recovery.

Wars impact on the global economy is unfathomable at this juncture as it will depend on the duration and scale of the conflict, and the time it will take for normalisation after the end of hostilities. These factors would ultimately determine the size of the shock to the global economy.

The environment is so fluid that any forecast can be based only after considering a number of scenarios. To understand the situation, one can assume three references, a bottom up assessment assuming a relatively short lived conflict together with two more references encompassing an assumption of a longer lasting conflict and even expanding for an extremely long drawn dragging scenario.

Assuming a short lived conflict, it consequences may lead to a global growth of 3.1% for 2026 being a downward revision of 0.2 % points. In the same breath headline inflation is expected to rise from 4.1% in 2025 to 4.4% in 2026.

In the scenario of long lasting conflict, global output may decline to 2.5% with inflation rising to 5.4%. In a more severe scenario, the global economy may plunge into recession with growth below 2% for next couple of years and inflation skyrocketing near 6%. Such a scenario has a tremendous downside risks.

Most worrying situation is the impact leading to a siege of international order. Fiscal policies would take a back seat to address national security concerns. Deteriorating historical and tactical alliances will fray further. War, beyond its human cost, would prove an affair with an extremely high and long lasting economic cost which may lead to creation of unprecedented & unthought of trade offs.

The call of the hour is the swiftly cease the hostilities, and enshrine the principles that are paramount for preservation of global prosperity.

Yet, the precariousness of situation should not lead us to losing sight of the need to invest in durable sources of growth. The rise of Artificial Intelligence AI and more recent phenomenon of Agentic AI, is like a light at the end of the tunnel, promising an exciting prospect of very meaningful productivity gains and ultimately driving global well being. However a caution is required such that the enthusiasm run beyond the basic fundamentals leading to utility and cost melt down.

The challenge to the policy makers would be to encourage dissemination and adoption of this new age tech by ensuring adequate investments in skill with an eye on smooth transition with minimal impact on labour market.

Focus may also be increased on an agile adoption of renewable energy to strengthen the resilience to energy stocks, improve energy security and of course in turn support the well being of the climate.

B. Performance of Major Economies India

For 2026, India is expected to grow at around 6.5% as against growth in 2025 at 7.6%. This growth is led likely by positive contributions from the carry-over of the strong 2025 outrun and the decline in additional US tariffs on Indian manufactured goods from 50% to 10%. This seems to have outweighed the adverse impact of the Middle East conflict, but an extreme lingering of the conflict for long time may have an catastrophic impact on the growth of India.

China

Growth is expected at 4.4% in 2026 reflecting the lower US effective tariff rates on Chinese goods and stimulus measures, offset the negative impact of the shock induced by the conflict. The economys growth rate is expected to decelerate to 4% in 2027 as structural headwinds - including those from grinding slow down in the housing sector, declining and aging labour force, decreasing returns on investment and slower growth in productivity accentuate and intensify.

United States

Economy is likely to expand to 2.3% in 2026 with the growth supported by fiscal policy and the lagged impact of monetary policy rate cuts in 2025. This is even with rise in trade barriers since April 2025 continuing to weigh on the level of activity. The impact of War seems to be minimal here as US remains net energy exporter and it is offset by the positive impact resulting from end of the last years Federal Government shutdown. Growth will remain stable at 2.1% in 2027. However, the strong productivity growth is projected to gradually fade and converge to historical levels.

Europe

Growth is expected to decline from 1.4% in 2025 to 1.1% in 2026 and 1.2% in 2027. Growth will be subdued due to the lingering effect of the persistent rise in energy prices since Russias invasion of Ukraine, dragging and stuttering manufacturing activity with an additional pressure from the real appreciation of Euro in relation to the currencies of countries exporting similar products.

Brazil

Growth is estimated at 1.9% in 2026 and 2% in 2027. As the country is a net energy exporter, the war may have a small positive impact by boosting the growth by 0.2 percentage points. However in 2027, slowing global demand, higher input costs and tighter financial conditions are expected to dominate reducing the growth rate by 0.3 percentage points. Adequate international reserves, low reliance on foreign currency debt, large government cash buffers and flexible exchange rate are expected to help the country weather the shock.

Mexico

Weaker growth in 2025 amid fiscal consolidation, restrictive monetary plicy, and headwinds from trade tensions is expected to give way to a mild recovery, with the economy growing at the rate of 1.6% in 2026 and 2.2% in 2027.

C. India Economic Outlook

Despite the impending negative shock of War in Middle East, Indias economic outlook remains robust. The GDP growth is range bound 6.3 to 6.6% in 2026, which is reduced from earlier target to consider the impact on account of availability and prices of hydrocarbons. IMF has projected a growth rate of 6.5% in 2027. Inflation is projected to increase to around 5.1% due to elevated imported energy inputs. Central bank is likely to hold the repo rates in the range of 5.2 to 5.25% in 2026. IMF has projected a growth rate of 6.5% in 2027.

If the conflict prolongs then they would be stress on existing foreign currency reserves and appreciating dollar, a double mammal with high energy costs. The real challenge for the Government is to focus on fiscal consolidation and try to meet the target deficit of 4.4% of GDP. These negative headwinds doesnt desist India and it remains the fastest growing major economy of the world, primarily driven by structural reforms, deep percolation of digitalisation and strong domestic consumption and fundamentals.

D. Global Chemical Industry Outlook

The global chemical industry was expected to struggle and remain subdued though in the mode of stabilization in 2026. The issues such as persistent over capacity and sharp regional divergence remain a bane for the industrys growth. Before the war broke in Middle East, the outlook for the industrys growth in production was to be at 2%. This was not a very exciting prospect as the growth was below the long term averages as well as the global GDP.

Regionally China remains the central challenge for the industry. Chinas weak domestic demand further accentuated by slowdown in its housing sector combined with state driven aim of self-sufficiency has pressurised global markets with aggressive exports and predatory pricing. Efforts for capacity rationalization seem to be extremely slow and is devoid of rapid rebalancing.

In North America growth is tepid but stable and resilient which is buoyed by advantage from shale based feedstocks. However, the uncertainty in trade policy still remain risk for growth.

The onset of the war has had an extreme impact on the Global chemical Industry and the issues would now be about structural volatility and fragmented markets. Scale, no more defines the growth but the survival will now be based on strategic adaptability and flexibility.

The war has triggered a major disruption in the supply of energy stocks which in turn have disrupted the core feed stocks required by chemical industry. It has also disrupted the Global chemical supply chains especially constraining the supply of petrochemicals and more importantly fertilizers. Increased freight, cost of war-risk insurance, extended delivery times and forced re-routings across South Africa have impacted margins as well as tenure of working capital cycle and consequently its requirement. The increase in freight cost has been unprecedented with a spike in the range of 25-40% at this juncture with a probability of it increasing further in the near future.

War is more than likely to reshape the global trade flows and investments in chemical industry. Even if the hostilities cease sooner than later, the impact is so overreaching that it will take more than a year to normalise the chemical industry and its markets.

E. India Chemical Industry Outlook

India remains one of the fastest growing chemical market in the world largely supported by domestic demand and governmental initiatives. The growth of production in chemical industry is likely to be around 10%. The overall scenario indicates high CAGR of 8 to 9% for the industry upto 2030. However, the profitability and the margins would be volatile and under pressure due to the geopolitical scenarios. Outlook is also prepped up by the reduction in trade barriers, reducing US tariff and robust domestic consumption.

The current economic conditions and global conflicts, with combination of currency devaluation and high energy cost have resulted in slip of global ranking of India below UK and Japan but the status of India as the fastest growing economy fuelled by chemical industry remains intact.

Outlook should remain positive backed by internal demand, investment in infrastructure and strategic public initiatives. Impetus of programs such as Make in India coupled with the PLI schemes is likely to give traction for growth of the industry. The chemical industry is likely to suffer from the headwinds due to war as cost and availability of feedstocks and energy remains extremely volatile. Inadequate feedstocks and high prices would be a dampener and reduce the growth prospects.

To add to the woes, the external pressure of oversupply and predatory pricing by countries like China would also weigh down on the industry. Inflation induced by rising price of crude and high logistic costs would also hamper the margins. The tenure and dragging of conflict for longer term will decide the outlook of the industry for next couple of years.

ESG & SUSTAINABILITY

Sustainability considerations continue to reshape global manufacturing and specialty chemical industries. (Source: Industry publications, ESG and sustainability reports across global chemical and specialty ingredient sectors) Increasing focus on resource efficiency, cleaner technologies, responsible sourcing and emissions reduction is driving businesses to strengthen environmental stewardship across operations and supply chains.

Shelf-life enhancement technologies and functional ingredient solutions continue to play an important role in reducing food loss, improving supply-chain efficiency and supporting food security objectives globally. Similarly, demand for sustainable animal nutrition solutions, functional feed ingredients and nutrition-focused products continues to increase as the industry focuses on improving feed efficiency, animal health, and food safety standards.

The industry is also witnessing increasing adoption of energy-efficient manufacturing systems, renewable energy integration, waste reduction initiatives and circular economy practices as part of broader decarbonisation efforts.

In parallel, sustainability expectations are extending across the value chain, with increasing emphasis on supplier assessments, traceability, responsible sourcing and ESG disclosures. Companies with strong compliance systems, sustainable manufacturing practices and transparent supply chains are expected to benefit from improving customer preference and evolving regulatory requirements.

COMPETITION & BUSINESS ENVIRONMENT

Your Company (CFS) operates in a competitive global specialty chemicals environment characterised by pricing pressure, changing customer requirements and increasing regulatory expectations. Competitive intensity remains particularly high in commodity and straight ingredient categories, where pricing pressures continue to influence margins.

However, the global antioxidant blends market continues to maintain relatively high entry barriers due to regulatory complexity, technical expertise requirements, formulation capabilities and supply-chain integration. Over the years, CFS has strengthened its market position through backward integration, proprietary blending capabilities, technical expertise and a diversified global customer network.

The Company continues to focus on value-added specialty products, customer-centric innovation, sustainable solutions and operational efficiency to strengthen competitiveness and support long-term growth.

The long-term outlook for the specialty chemicals and ingredients industry remains positive, supported by rising global demand for sustainable, functional and high-performance solutions across food, nutrition, personal care and industrial applications.

While geopolitical uncertainty, trade volatility, inflationary pressures and regulatory changes may continue to create short-term challenges, long-term structural drivers including supply-chain diversification, sustainability transition, manufacturing expansion and increasing demand for specialty ingredients are expected to support future growth opportunities for the industry and for CFS.

CFS operates in a competitive specialty chemicals environment with margin pressure in the ingredients business, driven by pricing pressure and increased competition · particularly in straights. The global antioxidant and blends market carries high entry barriers due to regulatory, technical and supply chain complexity · barriers CFS has built over decades through backward integration, proprietary blending formulations and a global multi-geography customer network.

BUSINESS OVERVIEW & PERFORMANCE

CFS is an integrated specialty chemicals company engaged in research, development, manufacturing, and marketing of specialty chemicals and blends used across food, feed, animal and pet nutrition, fragrance, pharma, and industrial products. The business serves over 1,300+ customers across more than 80+ countries, with products marketed globally across Asia Pacific (including India), Europe, Africa, Middle East, and the Americas. The business is structured into four verticals: Diphenols, Specialty Ingredients, Performance Chemicals, and Aroma Ingredients.

DIPHENOLS

The Diphenols business manufactures Hydroquinone and Catechol at the Dahej SEZ facility · the backbone of CFSs vertical integration, supplying captive raw material requirements across all four business verticals. The European diphenol facility under subsidiary CFS Europe S.p.A., Italy, is being liquidated following its closure in July 2023, with European operations being wound down to stem ongoing cash losses · a decisive portfolio rationalisation that sharpens focus on the India-based Dahej facility as the sole diphenol manufacturing hub. For production of Diphenols, the current environment has created numerous hurdles such as spiralling costs of input, extensive competition, predatory pricing, expected global capacities. The management is confident of manoeuvring through these turbulent times by seeking avenues for various alternative solutions.

SPECIALTY INGREDIENTS

The Shelf-Life Solutions portfolio comprises traditional antioxidants under Xtendra (TBHQ, BHA, Ascorbyl Palmitate), natural antioxidants under NaSure (rosemary, green tea, tocopherols, acerola extract), functional blends under Ezential, and additives for safety of livestock feed, its performance, and pet nutrition. During the year, our Company expanded its portfolio with emulsifier-based functional ingredients designed to improve texture, consistency, mouthfeel, and yield across food applications.

Over last two years, our Company has invested to strengthen the global techno commercial & marketing teams in this sector to achieve and sustain the growth in the various sub verticals. The fruits of this investment would be reaped in the next 2-3 years.

Overall business strategy of focused product portfolio, deeper customer penetration coupled with a strong team and geographical reach & expansion, lends confidence to the management for the growth of the Blends business with a guidance of ~20% CAGR over the next 2-3 years. The product portfolio under Straights continues to face pricing pressure and increased domestic competition, resulting in softer realizations and margin pressure within the Specialty Ingredients segment.

AMEA REGION - Driving Growth Through Application-Led Innovation

The Food business in the AMEA region delivered strong growth driven by increasing demand for antioxidant, antimicrobial and functional ingredient systems across edible oils, processed foods and dairy applications. The Xtendra and NaSure portfolios strengthened their market position through customised blends, shelf-life enhancement solutions and deeper engagement with large institutional customers. The Ezential platform continued to expand as a differentiated functional excellence system supporting texture, stability and formulation optimisation across food applications.

The Animal Nutrition business demonstrated resilient and profitable growth supported by innovation-led offerings, performance nutrition solutions and expanding export opportunities. Growth was led by poultry and key livestock segments, while the business also strengthened precision nutrition capabilities, feed efficiency solutions and customer responsiveness across regional markets.

EUROPE REGION - Building Precision Nutrition and Sustainable Ingredient Platforms

The Europe region continued to strengthen its speciality ingredients platform for food industries through customer-centric and regulatory-aligned solutions supporting clean-label, shelf-life enhancement, and performance-oriented food applications. The business remains focused on strengthening technical collaboration and expanding value-added speciality ingredient offerings across strategic markets.

Vitafor, Belgium, significantly strengthened CFSs Animal Nutrition platform through precision liquid drinking water supplement technologies and farm-level nutritional solutions. The portfolio, built on EU-compliant formulations, continued to gain traction across Europe, Asia and the Middle East. Focus areas included feed safety, animal performance, gut health and reduced antibiotic dependency, supported by continued innovation across poultry and ruminant nutrition.

AMERICAS REGION - Accelerating Clean-Label Growth and Performance Nutrition Solutions (North America, Mexico, LATAM & Brazil)

The Americas region continued to strengthen its position through clean-label antioxidant systems, functional ingredient platforms and speciality food solutions. In North America, increasing transition away from synthetic antioxidants accelerated adoption of the NaSure portfolio, while the Ezential platform expanded capabilities across application-led functional systems. Mexico and LATAM delivered growth through emulsifiers, natural antioxidant solutions and speciality ingredient platforms including Xtendra, and Ezential. In Brazil, the Food business continued its strategic transition toward higher-value blends and performance-oriented offerings.

The Animal Nutrition business across the Americas demonstrated resilient growth supported by advanced feed performance solutions, feed preservation technologies, and expanding Vitafor integration. Mexico and LATAM strengthened performance nutrition, pellet binders and toxin management solutions, while Brazil and North America focused on value-added blends, advanced nutrition systems, and long-term customer engagement across livestock and petfood applications.

Biofuels / Biodiesel

The Biodiesel business in Brazil delivered strong operational performance supported by increasing adoption of blended solutions, stronger account penetration and application-led innovation. The region continues to strengthen its market position through scale advantages, customer-focused solutions, and operational optimisation initiatives.

The acquisition of Vinpai, completed on November 30, 2025, further strengthened the blends portfolio. Vinpai is expected to contribute in the growth and we see potential for the expansion of CFSs presence in natural and clean-label ingredients across Americas, Europe, North Africa, and Southeast Asia.

PERFORMANCE CHEMICALS

Performance Chemicals · derivatives of Catechol and Hydroquinone including Guaiacol, Veratrole, TBC, MEHQ, and HQEE · serve the petrochemicals, pharmaceuticals, agrochemicals, dyes, and fragrance industries, and are marketed under the “Dinamic” brand. Our Company leverages its captive diphenol platform for manufacture of higher-value downstream derivatives.

AROMA INGREDIENTS

The Aroma Ingredients business manufactures Vanillin and Ethyl Vanillin at the fully integrated Dahej SEZ facility under the adorr™ brand, serving food & beverage, flavour and fragrance, pharmaceutical, and agrochemical industries globally.

FY2025-26 was a year focused on volume ramp-up, operational stabilisation, and strategic market positioning for the vanillin business. Vanillin volumes grew sequentially in Q2 with sales of approximately 1,700 tonnes for FY2026.

During the year, the Company prioritised scaling up Adorr Vanillin Premium in order to optimise production efficiency, strengthen market penetration and establish customer relationships in key export markets. In line with this focused scale-up strategy, commercial production of Ethyl Vanillin was rescheduled to FY2026-27 alongside the planned segregation of the two production lines, enabling better operational flexibility, product quality management, and long-term manufacturing efficiency.

The vanillin plant operated at sub optimal capacity during Q2 as operations continued to stabilise and scale progressively. In Q3, vanillin dispatches were selectively moderated to align with expected improvements in market realisations following the anticipated reduction in US tariff rates of 50% with improved price realisations of approximately USD 14-14.5/kg expected in the future. The Company continues to see strong long-term growth potential in the vanillin business, with a much higher volumes in FY2027.

The investment in our Chinese JV (CFS Wanglong) has been completely impaired. These operations are being wound down to stem ongoing cash losses.

OTHER BUSINESSES

Our Company continues to hold a licensing arrangement with Hardware Renaissance, USA, for the manufacture and marketing of hardware and decorative accessories including door and window locks and handles. Manufacturing is outsourced on a job-work basis, with direct sales made to Hardware Renaissance USA against royalty consideration. This business remains peripheral to CFSs core specialty chemicals operations.

RESEARCH & DEVELOPMENT, CUSTOMER SERVICE AND APPLICATIONS LABORATORY

Research & Development continues to be a strategic driver of innovation at CFS, supporting the advancement of specialty ingredients in food and feed, performance chemicals, and aroma ingredients, across global markets. During FY 2025-26, our focus remained on clean-label technologies, functional ingredient systems, Animal nutrition, and application-driven specialty solutions aligned with evolving customer and regulatory requirements.

Our Companys in-house R&D unit at Tarapur remains recognised by the Department of Scientific and Industrial Research (“DSIR”), Government of India, underscoring our commitment to scientific excellence and technology-led innovation. Supported by application laboratories across India, USA, Italy, Brazil, and Belgium, our R&D ecosystem continues to strengthen product development, process optimization, and customer-centric applications.

During FY2025-26, CFSs R&D initiatives were focused on three strategic priorities: strengthening vertical integration, accelerating differentiated specialty ingredient development, and optimising processes to enhance quality, efficiency and sustainability. The Company continued to advance its transformation from a chemistry-led organisation into a solutions-driven portfolio through integrated innovation across Food, Animal Nutrition, Aroma Ingredients and Performance Chemicals.

At the R&D and Application Centre in Tarapur, India, efforts in Specialty Ingredients focused on customised antioxidant blends, emulsifier-based systems, clean-label solutions and nature-identical ingredients designed to improve food safety, protection, stability, texture, shelf life and formulation efficiency. In Animal Nutrition, innovation centred on next-generation feed additives, heat-stable functional ingredients, precision nutrition systems, and field validation programmes across poultry, aquaculture and livestock.

Aroma Ingredients R&D focused on quality, product consistency, and process efficiency for vanillin and its derivatives under the adorr? brand. In Performance Chemicals, the Company expanded applications of hydroquinone and catechol into higher-value industrial segments, including polymers, detergents and specialty derivatives under the Dinamic™ range.

During the year, for the Performance Chemicals division, we further strengthened our intellectual property portfolio through patent-backed technologies and process innovations. Our research and development capabilities have led to the grant of four patents, and we have also applied for a process patent related to the generation of mixed multicomponent within Diphenols in India.

In North America, R&D efforts supported the market transition toward clean-label antioxidant systems using rosemary extracts and mixed tocopherols, alongside investments in laboratory capability, analytical infrastructure and technical services. Mexico and LATAM initiatives focused on region-specific developments in Animal Nutrition segment, cost-effective product development supported by planned investments in a pilot plant and laboratory expansion.

Vitafors Belgium R&D Centre strengthened the Animal Nutrition platform through precision liquid supplement technologies, with EUCAVITAL? emerging as a key innovation supporting calf health, gut integrity and reduced antibiotic dependency.

Driven by vertical integration, CFS continues to pursue both organic and inorganic expansion. The Vinpai acquisition strengthens the blends portfolio with natural and functional ingredients, while the forward integration into high-margin blends and vanillin positions the business for superior value-added growth.

Our Company continues to strengthen customer engagement capabilities through focused investments in commercial expansion, technical support, and application-led services. Expansion of technical professionals across the United States, Brazil, Europe, and India, representing an increase in customer-facing teams, has further enhanced our ability to deepen customer relationships and strengthen market responsiveness.

Our Customer Service and Applications Laboratory network continues to play a pivotal role in delivering customized, application-driven solutions across Shelf-Life Solutions, Performance Chemicals, Diphenols, and Aroma Ingredients. Our Company operates dedicated Application Laboratories in Ravenna (Italy), Mumbai (India), Urbandale (USA), Mexico City (Mexico), and Indaiatuba (Brazil), providing technical support, formulation development, efficacy testing, and shelf-life studies aligned with evolving customer and industry requirements.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

Our people continue to be the foundation of our organizations growth, innovation, and long-term success. We remain committed to fostering a collaborative, inclusive, and performance-driven work culture that promotes employee well-being, continuous learning, and professional development across global operations.

During the year, our Company strengthened employee engagement through wellness initiatives, learning and development programs, cultural activities, and team-building initiatives aimed at creating a positive and progressive workplace environment. We also continued to enhance our global talent base across key functions and geographies, further strengthening organizational capabilities and customer responsiveness.

The total employee count of the Company as on March 31, 2026 was 674. Further, at the group level (consolidated) total employee count as on March 31, 2026 was 1,141. The increase in group level employee strength during the year was primarily supported by the integration of the Vinpai as well as continued global expansion.

INFORMATION TECHNOLOGY

Information Technology continues to play a critical role in driving operational efficiency, business integration, and digital enablement across our global operations. During the year, we continued to enhance our digital infrastructure, enterprise systems, and technology platforms to improve process efficiency, decision-making, and collaboration across functions and geographies.

The continued evolution of our IT ecosystem directly supports our integrated operating model as the Company expands through Vinpai consolidation and the ongoing growth of our blends and specialty solutions network. Our IT initiatives remain focused on enabling seamless business integration, improving operational agility, and supporting faster response to evolving market and customer requirements. We have initiated the evaluation of Global S/4HANA ERP transformation strategy at the CFS Group level, which will drive significant improvements in enterprise resource planning and process efficiency.

The Information Technology team also continues to conduct regular inspections, monitoring, and security audits of network systems. We plan to set up Security Operations Center (SOC) dedicated to defending the organization against cyber threats, safeguarding data security, alongside a Network Operations Center (NOC) that focuses on maintaining network performance and uptime. This will also ensure system reliability. Through continuous investments in digital capabilities and secure technology infrastructure, our Company remains committed to building a resilient, efficient, and future-ready operating environment.

RISKS AND CONCERNS

Our Company operates in a dynamic global business environment and remains exposed to various strategic, operational, financial, and regulatory risks. Key risk areas include volatility in raw material prices, foreign exchange fluctuations, evolving regulatory requirements, supply chain disruptions, competitive pricing pressures, and changing demand patterns across end-user industries. Geopolitical developments, inflationary pressures, and global trade disruptions across international markets also continue to impact the operating environment.

Operational risks relating to manufacturing continuity, environmental and safety compliance, utility availability, and management of geographically diversified operations remain areas of focus. During the year, the fire incident at one of our Brazil manufacturing facilities highlighted the importance of operational resilience and business continuity planning. Our Company responded promptly through alternative servicing arrangements and continued operations at the second Brazil facility, minimizing disruption to customer supplies and operations. Additionally, profitability during the year remained impacted by pricing pressures across straights and raw material volatility.

The management of our Company continues to address these risks through a structured risk governance framework supported by the Risk Management Committee, Audit Committee, senior management, and the Board of Directors. Our approach remains focused on operational excellence, portfolio diversification, expansion of value-added blends and specialty solutions, supply chain optimization, digital enablement, and innovation-led growth through continuous investments in R&D and application capabilities. Our Company also continues to closely monitor regulatory developments, cybersecurity risks, environmental obligations, and evolving global market dynamics to support sustainable and resilient long-term growth.

INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

Our Company has an established adequate system of internal financial controls which commensurate with the nature, size, and complexity of its operations. The internal control framework is designed to provide a reasonable assurance regarding maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, and protecting assets from unauthorized use or losses, compliances with regulations. Company continues its efforts to align all the processes and controls with global best practices.

Our Company continues to enhance its control environment through standardized processes, system-driven controls, periodic reviews, and risk-based internal audits across business functions and geographies. The Internal Audit findings are periodically reviewed by the Audit Committee, which monitors the adequacy and effectiveness of the internal control systems and corrective actions undertaken by the management. During the year under review, no material weakness was observed in the design or operating effectiveness of the Companys internal financial controls.

The scope and authority of the Internal Audit function is approved by the Audit Committee. The company has engaged a reputable external-internal audit firm to support the internal audit function for carrying out the internal audit reviews. These reviews are conducted on a regular basis on a risk-based audit plan which is approved by the audit committee at the beginning of each financial year. The internal auditors review and report to the management and the audit committee about compliance with internal controls and the efficiency and effectiveness of operations as well as the key process risks.

The Audit committee meets every quarter to review and discuss the internal audit reports and follow up on the action plans of past significant audit issues and compliance with the audit plan. Our internal control system is further fortified by the steps taken to address risks and concerns referred under the section, “Risks and Concerns.”

There have been no significant changes in our internal control over financial reporting that occurred during the period of the annual report that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. During the financial year, we have assessed the effectiveness of the internal control over financial reporting and have determined that the system was effective as on March 31, 2026.

FINANCIAL PERFORMANCE REVIEW Standalone Annual Performance

1. Standalone Financial Results Analysis

(in Lakh)

	FY2026	FY2025
Revenue From Operations	83,791.82	88,649.13
EBITDA*	4,789.02	7,060.22
Profit before tax (PBT)**	(3,782.27)	(2,742.84)
Profit after tax (PAT)***	(3,296.62)	(7,631.05)

* Excluding foreign exchange (gain)/loss and other income ** Before Exceptional Items

*** After Exceptional Items of Rs. 1,626.95 lakh in FY2026 and Rs. 9,600.21 lakh in FY2025

2. Standalone performance for the year ended March 31, 2026

(in Lakh)

Particulars	FY2026	FY2025	% Change	Remarks
Revenue from Operations	83,791.82	88,649.13	(5.48%)	Decrease in revenue of shelf solutions and service income.
Cost of Material Consumed	40,182.17	48,126.40	(25.48%)	Decrease in volumes and product mix.
Purchases of Stock-in-Trade	369.14	1,695.32	(78.23%)	Lower trading sale during the year.
Employee Benefit Expenses	7,597.96	7,248.10	(4.83%)	Increase in personnel, increments and amortisation of ESOP expense.
Power & Fuel Expenses	9,674.41	9,850.32	(1.79%)	Better efficiency during the year.
Sub-Contract charges	2,334.81	2,296.19	1.68%	Increase in production during the year.
Labour charges	2,515.69	2,473.92	1.69%	Increase in production during the year.
Transport and forwarding charges	2,353.69	2,860.04	(17.70%)	Lower freight rates during the year.
Finance Cost	6,698.69	6,611.93	1.31%	Higher exchange loss offset by interest saving on account of repayments during the year.

3. Exceptional Items of Rs. 1,626.95 lakh for FY2026 includes primarily impairment provision of loan, interest, trade and other receivable as well as impact of new labour codes.

4. Standalone Balance Sheet Analysis

a. Investment: (Non-Current and Current)

(in Lakh)

Particulars	FY2026	FY2025	% Change
Investment in Equity - Subsidiaries & Associate*	21,708.49	6,352.91	250.36%
Investment in Equity - Others	0.50	0.50	-
Investment in Listed Securities - Bonds	-	3,801.28	(100.00%)

*Increase due to investment in Vinpai S.A. Rs. 14,733.61 lakh and Cleanmax Sundarban Pvt. Ltd. Rs. 549.85 lakh (including gain on fair valuation of Rs. 58.88 lakh).

b. Trade Receivable:

(in Lakh)

Particulars	FY2026	FY2025	% Change
Trade Receivables (Net of Provision)	47,409.63	41,447.74	14.38%

Due to slight increase in receivable days.

c. Other Assets: (Non-Current and Current)

Particulars	FY2026	FY2025	% Change
Other Financial Assets	4,221.41	3,642.02	15.91%
Advance Tax Assets (net)	739.82	701.31	5.49%
Other Assets	12,667.58	13,393.91	(5.42%)

Decrease is mainly due to decrease in balance with statutory authorities, provision towards loans offset by increase in accrued interest and higher prepaid expenses.

d. Deferred Tax Assets (Net)

(in Lakh)

Particulars	FY2026	FY2025	% Change
Deferred Tax Assets (Net)	6,588.13	4,223.28	56.00%

Increase is due to recognition of deferred tax assets mainly on tax deductible payments, provision for advances and tax losses during the year.

e. Borrowings (Net) / Cash & Cash equivalent (Net)

			(in Lakh)
Particulars	FY2026	FY2025	% Change
Non-Current Borrowings	28,219.35	22,058.94	27.93%
Current Borrowings	18,958.72	19,172.75	(1.12%)
Total Borrowings	47,178.07	41,231.69	14.42%
Less: Cash & cash equivalent (including bank balances)	8,313.73	8,485.71	(2.03%)
Borrowings (Net)	38,864.34	32,745.98	18.68%

Increase in borrowings is on account of additional loans taken during the year offset by repayment of long-term borrowings during the year. Reduction in Cash & cash equivalents is due to utilisation of funds from the proceeds of Rights Issue.

f. Trade Payables

(in Lakh)

Particulars	FY2026	FY2025	% Change
Trade Payables	31,565.02	29,736.30	6.15%

The increase in creditors is on account of liquidity stress. g. Other Liabilities (Non-Current and Current)

Particulars	FY2026	FY2025	% Change
Other Financial Liability	2,531.72	2,327.33	8.78%
Other Liability	821.44	892.92	(8.01%)
Provisions	1,197.81	867.17	38.13%

Increase is mainly due to the increase in other financial liability and provision towards gratuity and leave encashment due to impact of new labour codes.

5. Key Standalone Financial Ratios

Financial ratios are disclosed under note 49 to financial statements.

The details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in financial ratios are as follows.

a. Interest Service Coverage Ratio (times):

This ratio improved to 1.31 times (FY25 0.64 times) due to increase in earnings before interest during FY26.

b. Net Profit Margin (%):

This ratio improved to negative 3.93% (FY25 negative 8.61%) due to lower net loss incurred during the year.

c. Operating profit margin (%):

This ration reduced to 5.72% (FY25 negative 7.96%) due to lower operating profit during the year.

d. Return on Equity (%):

This ratio improved to negative 3.68% (FY25 negative 9.67%) due to lower net loss incurred during the year.

e. Debt-Service Coverage Ratio (times):

This ratio improved to 1.02 times (FY25 0.54 times) due to increase in earnings before interest during FY26.

f. Return on Capital Employed (%):

This ratio reduced to 2.08% (FY26 3.04%) due to reduction in earnings before interest, depreciation and taxation during FY26 as well as higher capital employed as on March 31, 2026 on account of increase mainly in securities premium due to additional shares issued during the year.