The Board of Directors are pleased to present the report on the business and operations of Avalon Technologies
Limited ("the Company" or "Avalon"), along with the Audited Financial Statements for the financial year ended
March 31, 2026. The consolidated performance of the Company and its subsidiaries has been referred to wherever
required.

1. RESULTS OF OUR OPERATIONS AND STATE OF AFFAIRS

State of Affairs and Financial Overview

During the Financial Year 2025-26, the Company
recorded a 29.95% year-on-year increase in
standalone revenue from operations, reaching
' 8,210.19 million. The consolidated revenue also
witnessed a growth of 45.99%, amounting to '
16,032.05 million, as compared to the previous
financial year.

During the Financial Year 2025-26, the Company's
standalone profit after tax rose by 76.73% to '
893.74 million. The consolidated profit after tax for
the same period stood at ' 1,129.46 million, marking
a substantial increase of 78.04% compared to the
previous year.

A financial overview is also provided in the
Management Discussion and Analysis, forming a
part of this Annual Report.

2. DIVIDEND:

Considering the growth and investment prospects
of your Company, the Board of Directors have not
recommended any dividend for the Financial Year
ended March 31, 2026.

3. TRANSFER TO RESERVES

Your Company does not propose to transfer any
amount to General Reserve.

4. CHANGE IN NATURE OF BUSINESS, IF ANY

During the Financial Year, there was no change in
the nature of business of the Company.

5. SHARE CAPITAL

The paid-up share capital of the Company as
on March 31, 2026, is ' 13,35,32,326 consisting of
6,67,66,163 equity shares at ' 2 each.

6. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

Loans, guarantees and investments provided by
the Company under Section 186 of the Companies
Act, 2013 ("the Act") has been set out in the Notes
to the Standalone Financial Statements of the
Company, forming a part of this Annual Report.

7. PUBLIC DEPOSITS

Your Company has not accepted any deposits
from the public under Chapter V of the Companies
Act, 2013. As such, no amount of principal or interest
was outstanding as of the Balance Sheet date.

8. SUBSIDIARIES

The Company has three subsidiaries, including
two wholly owned subsidiaries, which are provided
below:

a) Avalon Technology and Services Private
Limited - Wholly-Owned & Material Subsidiary

b) Sienna ECAD Technologies Private Limited -
Subsidiary

c) ABV Electronics Inc. (DBA Sienna Corporation)
- Foreign Wholly-Owned & Material Subsidiary.

Pursuant to Section 129(3) of the Act, 2013, a
statement containing the salient features of
the Financial Statements of subsidiaries in
the prescribed Form AOC-1 is appended as
Annexure - I to this Report. Further, we confirm
that during the Financial Year, no entities ceased
to be a subsidiary, associate of the Company.

9. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS MADE WITH RELATED
PARTIES

During the Financial Year, all the Related Party
Transactions entered into by the Company were
during the ordinary course of business on an
arm's length basis and there were no contracts,
arrangements or transactions entered during
Financial Year 2025-26 that fall under the scope
of Section 188(1) of the Companies Act, 2013. As
required under the Act, the prescribed Form AOC-
2 is appended as Annexure - II to the Board's
report.

10. MANAGEMENT'S DISCUSSION AND ANALYSIS

I n terms of the provisions of Regulation 34 read
with Schedule V of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations,
2015 ("Listing Regulations"), the Management's
Discussion and Analysis Report is disclosed
separately in this Annual Report.

11. RISK MANAGEMENT FRAMEWORK

Your Company continuously evaluates and
monitors the various internal and external risks
surrounding its business environment and seeks to
mitigate and minimise any challenges or adverse
impact on its business objectives. Systematic and
proactive management of risk factors aid the
decision-making process of the Company. Risk
management is implemented by the Executive
Management of the Company and monitored by
the Board of Directors. Your company constituted
a Risk Management Committee on June 29, 2024.

12. MATERIAL CHANGES AND COMMITMENTS
AFFECTING FINANCIAL POSITION BETWEEN
THE END OF THE FINANCIAL YEAR AND DATE
OF THE REPORT

There have been no material changes and
commitments which affect the financial position
of the Company that have occurred between the
end of the financial year to which the financial
statements relate and the date of this report.

13. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The main objective of the CSR Initiatives of the
Company is to ensure environmental sustainability,
supporting education and protection and
development of flora and fauna. The Company's
CSR Policy is available on our website at www.
avalontec.com.

The details of the constitution, meetings and terms
of reference of the committees forms a part of the
Corporate Governance Report. The brief outline of
the initiatives undertaken by the Company on CSR
Activities during the reporting period is enclosed
as Annexure III.

14. HUMAN RESOURCES MANAGEMENT

Our employees are our most important assets.
We are committed to hiring and retaining the
best talent. In order to achieve the same, we focus
on promoting a collaborative and transparent
organization culture and also rewarding the
meritorious performance.

Pursuant to Section 197(12) of the Act read with
Rule 5 of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules,

2014, the ratio of the remuneration of each director
to the median employee's remuneration and such
other details are provided as Annexure - IV to this
Report.

15. SHARE BASED COMPENSATION

Your Company has an Employee Stock Option
plan in force i.e., Avalon - Employee Stock Option
Plan - 2022 ("ESOP Plan"). Under the ESOP Plan,
your Company granted share-based benefits to
eligible employees of the Company as well as its
subsidiaries, companies with a view to attract and
retain the best talent and to promote increased
participation by them in the growth of the
Company.

Avalon - Employee Stock Option Plan - 2022

On July 07, 2022, pursuant to approval by way
of Special Resolution by the shareholders in the
AGM, the Board has been authorized to introduce,
offer, issue, and provide share-based incentives
to eligible employees of the Company and its
subsidiaries under the Avalon - Employee Stock
Option Plan - 2022.

The maximum number of shares under this plan
shall not exceed 30,00,000 (Thirty Lakhs Shares)
equity shares. The ESOPs granted under the
ESOP Plan shall vest based on the achievement
of defined annual performance parameters as
determined by the administrator (the Nomination
and Remuneration Committee). Each of these
performance parameters will be distinct for the
purposes of calculation of the quantity of shares
to vest based on performance. These instruments
will generally vest between a minimum of one and
a maximum of seven years from the grant date.

Pursuant to the requirements of the Securities and
Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021, ("SEBI
SBEB Regulations"), the certificate issued by the
Secretarial Auditor of the Company confirming that
the Plan has been implemented in accordance
with the said Regulations, is enclosed herewith as
Annexure V.

During the financial year 2025-26:

• The Nomination and Remuneration
Committee of the Company granted 50,000
Employee Stock Options to eligible employees
of the Company and its subsidiaries.

• The Company allotted 6,09,047 equity
shares to the employees who exercised their
Employee Stock Options.

Pursuant to Regulation 12(1) of the SEBI (SBEB)
Regulations, 2021, the shareholders of the Company
ratified the Avalon Employee Stock Option Plan -

2022. by passing a special resolution at the 24^th
Annual General Meeting held on September 25,

2023. Further, the shareholders of the Company
approved the ratification and extension of
Avalon Employee Stock Option Plan - 2022 to the
benefits of employees of subsidiaries and group
companies of the Company by passing a special
resolution by way of Postal Ballot on November 29,

2024.

Further, the details required as per Regulation
14 read with Part F of Schedule I of the SEBI SBEB
Regulations are provided as an Annexure - V to
this Report.

16. CORPORATE GOVERNANCE

The Corporate Governance practice of our
Company is a true reflection of the values and
morale of the Company. Avalon is committed
to implement the best practices of Corporate
Governance and to manage the affairs of the
Company with integrity, transparency and
accountability as the driving forces. We believe
that this practice will continue to contribute to the
growing success of the Company and enhancing
our relationship with the stakeholders. We focus
on maximizing shareholder value legally, ethically
and sustainably.

The Corporate Governance Report for the
Financial Year ended March 31, 2026 as stipulated
under Regulation 34(3) read with Schedule V of
the Listing Regulations forms a part of this Annual
Report.

17. BOARD DIVERSITY

The Company recognizes and embraces the
importance of a diverse Board in its success.
We believe that a truly diverse Board will bring a
balance in thought, perspective, regional and
industry experience, cultural and geographical
background, age, ethnicity, race, gender,
knowledge and skills including expertise in financial,
business, leadership, information technology,
sales and marketing and Environmental, Social
and Governance (ESG), risk management and
cybersecurity and other domains, which will ensure
that Avalon retains its competitive advantage.

18. NUMBER OF MEETINGS OF THE BOARD

The Board met five (5) times during the financial
year. The meeting details are provided in the
corporate governance report that forms part of
this Annual Report. The maximum interval between
any two meetings did not exceed 120 days, as
prescribed by the Companies Act, 2013.

19. BOARD OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

As of March 31, 2026, the Board has seven members,
consisting of one Executive Director, one Non¬
Executive and Non-Independent Director and five
Non- Executive - Independent Directors. One of the
Independent Directors of the Board is a Woman
Director.

The details of Board and committee composition,
tenure of directors, areas of expertise, terms of
reference and details of Key Managerial Personnel
are available in the Corporate Governance Report
that forms a part of this Annual Report.

Changes in Directors during the Financial
Year:

• Mr. Luquman Veedu Ediyanam (DIN: 06493214)
was re-appointed (liable to retire by rotation)
as a Non-Executive Director under Non -
Independent Category by the shareholders
in the Annual General Meeting held on
September 26, 2025.

• Mr. Bhaskar Srinivasan (DIN: 02561215)
resigned from the position of Non-Executive
Director under Non - Independent Category
on February 10, 2026.

20. DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary
declarations from each Independent Director
under Section 149(7) of the Companies Act, 2013
read with Regulation 16(1)(b) read with Regulation
25(8) of the Listing Regulations, that they met the
criteria of independence laid down in Section
149(6), Code for Independent Directors of the
Companies Act, 2013 and of the Listing Regulations.

I n the opinion of the Board, all the Independent
Directors of the Company possess the requisite
integrity, expertise, experience to perform their
duties effectively.

21. BOARD EVALUATION

During the reporting period, your Company had
evaluated the performance of the Board including
performance of its committees, Independent
Directors, Chairperson of the Board and other
Directors.

22. FAMILIARIZATION PROGRAM FOR
INDEPENDENT DIRECTORS

During the reporting period, the Independent
Directors attended sessions to familiarize
themselves with the business operations.

The familiarization programme is available on our
website www.avalontec.com

23. COMMITTEES OF THE BOARD

As on March 31, 2026, the Board had five statutory
committees: the Audit Committee, the Corporate
Social Responsibility Committee, the Nomination
and Remuneration Committee, the Stakeholders
Relationship Committee and Risk Management
Committee.

All committees comprise combination of
Independent Directors and Non - Independent
Directors in compliance with the Listing Regulations
and the provisions of the Companies Act 2013.
During the year, all recommendations made by
the committees were approved by the Board.

A detailed note on the composition of the Board
and its committees is provided in the Corporate
Governance Report, which forms part of this
Annual Report.

24. INTERNAL FINANCIAL CONTROL AND ITS
ADEQUACY

The Board has adopted adequate policies and
procedures for ensuring the orderly and efficient
conduct of its business, including adherence to
the Company's policies, safeguarding of its assets,
prevention and detection of fraud, error-reporting
mechanisms, accuracy and completeness of the
accounting records, and timely preparation of
reliable financial disclosures.

25. POLICY ON DIRECTORS' APPOINTMENT AND
REMUNERATION

The Company has in place, a policy for
appointment and remuneration of Directors, Key
Managerial Personnel and Senior Management
and a defined appointment and remuneration
criteria which has been approved by the Board.

Attributes such as ethical standards of integrity,
qualification and expertise are investigated
during the time of appointment. The Nomination
and Remuneration Committee ensures that the
relationship of remuneration to performance
should be clear and meet appropriate
performance benchmarks.

The criteria of making payments to non-executive
directors are provided in the Nomination and
Remuneration Policy provided on the website at
https://www.avalontec.com/

26. SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders
passed by the regulators or courts or tribunals

impacting the going concern status and the
Company's operations in future.

During the financial year, no application was made
or any proceeding pending under the Insolvency
and Bankruptcy Code, 2016.

There were no instances where your Company
required valuation to be done at the time of one
time settlement or while taking loan from the
Banks or Financial Institutions.

27. REPORTING OF FRAUDS BY AUDITORS

During the financial year, neither the statutory
auditors nor the secretarial auditor has reported
to the Audit Committee, under Section 143 (12) of
the Companies Act, 2013, any instances of fraud
committed against the Company by its officers or
employees, the details of which would need to be
mentioned in the Board's report.

28. ANNUAL RETURN

I n accordance with the Companies Act, 2013, the
annual return is available at company's website at
https://www.avalontec.com/investors.

29. SECRETARIAL STANDARDS

The Company complies with all applicable
secretarial standards issued by the Institute of
Company Secretaries of India ("ICSI").

30. LISTING ON STOCK EXCHANGES

The Company's equity shares are listed on BSE
Limited ("BSE") and the National Stock Exchange of
India Limited ("NSE").

31. DIRECTORS' RESPONSIBILITY STATEMENT

The financial statements are prepared in
accordance with the Indian Accounting Standards
(Ind AS) under the provisions of the Companies Act,
2013 and guidelines issued by SEBI. The Ind AS are
prescribed under Section 133 of the Companies
Act, 2013, read with Rule 3 of the Companies (Indian
Accounting Standards) Rules, 2015 and relevant
amendment rules issued thereafter.

Further as per Section 134 (3) (c), we, the Directors
confirm that:

(a) In preparation of the annual accounts for
the Financial Year ended March 31, 2026,
the applicable accounting standards have
been followed and there are no material
departures.

(b) we have selected such accounting policies
and applied them consistently and made
judgments and estimates that are reasonable
and prudent so as to give a true and fair view

of the state of affairs of the Company at the
end of the financial year and of the profit of
the Company for that period.

(c) we have taken proper and sufficient care
towards the maintenance of adequate
accounting records in accordance with the
provisions of the Companies Act, 2013 for
safeguarding the assets of the Company and
for preventing and detecting fraud and other
irregularities.

(d) we have prepared the annual accounts on a
going concern basis.

(e) we have laid down internal financial controls,
which are adequate and are operating
effectively.

(f) we have devised proper systems to ensure
compliance with the provisions of all
applicable laws, and such systems are
adequate and operating effectively.

32. AUDIT REPORTS AND AUDITORS
AUDIT REPORTS

The Statutory Auditors' Report for Financial Year
2025-2026 does not contain any qualification,
reservation, or adverse remark. The Report is
enclosed with the Financial Statements in this
Annual Report.

The Secretarial Auditors' Report for Financial Year
2025-2026 does not contain any qualification,
reservation, or adverse remark. The Secretarial
Auditors' Report is enclosed as Annexure - VI to
the Board's report, which forms part of this Annual
Report.

AUDITORS

Statutory Auditor

M/s. Varma & Varma, Chartered Accountants
(Firm registration number 004532S) ("Varma &
Varma") was appointed as the Statutory Auditors
of the Company on May 05, 2022, to hold office
for the term of five consecutive years from the
conclusion of the 23^rd AGM of the Company till the
conclusion of the 28^th AGM to be held in 2027, as
required under Section 139 of the Companies Act,
2013 read with the Companies (Audit and Auditors)
Rules, 2014.

Secretarial Auditor

Alagar & Associates LLP (Formerly known as M.
Alagar & Associates) Company Secretaries,
(LLP Registration Number: L2025TN019200) were
appointed as the Secretarial Auditor of the

Company at the 26^th Annual General Meeting
held on September 26, 2025, for a period of five
consecutive financial years, i.e., from Financial Year
2025-2026 till Financial Year 2029-30 as required
under Regulation 24A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015.
The Secretarial Audit Report provided by them in
Form MR-3 has been provided as Annexure VI to
this Report, forming a part of the Annual Report.

33. COST RECORDS AND COST AUDIT

Your Company is located and operating from MEPZ,
which is a Special Economic Zone and therefore as
per Rule 4(3)(ii) of the Companies (Cost Records
and Audit) Rules 2014, cost audit is not applicable.
However, your Company is maintaining the
prescribed Cost Records as stipulated under the
applicable Rules.

34. DETAILS OF IMPLEMENTATION OF VIGIL
MECHANISM

The Company has established a Vigil Mechanism
and also formulated a Whistle Blower Policy as per
the provisions of Section 177(9) of the Companies
Act, 2013 read with Regulation 22 of the Listing
Regulations. The Policy also provides for direct
access to the Chairperson of the Audit Committee
in appropriate or exceptional cases.

All Employees of the Company are eligible to
make Protected Disclosures under the Policy in
relation to matters including ethical, legal and
moral standards of the Company.

35. DISCLOSURE PERTAINING TO THE SEXUAL
HARASSMENT OF WOMEN AT WORKPLACE
(PREVENTION, PROHIBITION AND REDRESSAL)
ACT, 2013 ("POSH ACT")

The Company has formulated a Policy for the
prevention of Sexual Harassment of Women at
Workplace. The main objective of the Policy is
to provide a work environment that is safe and
free from sexual or gender-based harassment.
The said Policy is also available at the website
of the Company athttps://www.avalontec.com/
investors/. All employees of Avalon and its group
companies are governed by this policy, with
appropriate adjustments, to accommodate local,
legal or contractual requirements.

The Company has constituted an Internal
Complaints Committee ("Committee"), including
an external member, in compliance with the
provisions of the POSH Act. During the financial year,
no complaints were received by the Committee.

The disclosure in relation to the Sexual Harassment
of Women at Workplace (Prevention, Prohibition

and Redressal) Act, 2013 during the year under
review is as under:

(a) Number of complaints of sexual harassment
received in the year: NIL

(b) Number of complaints disposed off during the
year: NIL

(c) Number of cases pending for more than
ninety days: NIL

36. MATERNITY BENEFITS

The Company extends all statutory maternity
benefits in compliance with the Maternity Benefit
Act, 1961 which includes medical benefits, and
other related facilities to ensure the health and
well-being of its female employees.

37. CONSERVATION OF ENERGY, RESEARCH AND
DEVELOPMENT, TECHNOLOGY ABSORPTION,
FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars, as prescribed under sub-section
(3)(m) of Section 134 of the Companies Act, 2013,
read with the Companies (Accounts) Rules, 2014,
are enclosed as Annexure - VII to the Board's
report, which forms part of this Annual Report.

38. BUSINESS RESPONSIBILITY AND

SUSTAINIBLITY REPORT

Pursuant to Regulation 34(2)(f) of the SEBI Listing
Regulations, your Company is providing the
prescribed disclosures on Environment, Social and
Governance ("ESG") parameters as part of the
Business Responsibility and Sustainability Report
("BRSR"), which forms a part of the Annual Report.
The BRSR includes details on performance against
the nine principles of the National Guidelines on
Responsible Business Conduct and a report under
each principle is provided.

39. ACKNOWLEDGMENTS

Your Directors would like to convey their gratitude
to all the clients, vendors, investors, bankers and
the employees of our Company. We place on
record our appreciation for the contribution and
tremendous effort made by our employees at all
levels. Our consistent growth was made possible
by their hard work, cooperation, and support.

We thank the governments of various countries
where we have our operations. We thank the
Government of India, particularly the Ministry of
Labour and Employment, the Ministry of New and
Renewable Energy, the Ministry of Communications,
the Ministry of Electronics and Information
Technology (Dept of IT), the Ministry of Commerce
and Industry, the Ministry of Finance, the Ministry

of Corporate Affairs, the Central Board of Direct Taxes, the Central Board of Indirect Taxes and Customs, GST
authorities, the Reserve Bank of India, Securities and Exchange Board of India (SEBI), various departments
under the state governments, the Special Economic Zones (SEZs) - Chennai, and other government agencies
for their support, and look forward to their continued support in the future.

For and behalf of the Board of Directors of
AVALON TECHNOLOGIES LIMITED

Sd/-

Kunhamed Bicha

Place: Chennai Chairman and Managing Director

Date: August 04, 2026 DIN: 00819707