Sumax Engineering Ltd.

Rising costs, supply disruptions, and import restrictions on essential raw materials may impact our expenses, timelines, and overall financial performance. The prices of our primary raw materials, including those imported for the production of Adhesive Tapes, Polishing and Buffing Pads, Rubbing and Polishing Compounds have been volatile. The cost of raw material consumed represented 36.57%, 43.26% and 44.29% of our total revenues in Fiscal 2026, Fiscal 2025 and Fiscal 2024, respectively. If the costs of these raw materials rise due to factors such as rise in input and commodity prices or shortages in supply, and our Company is not able to recover these costs through cost saving measures elsewhere or by increasing the prices of its products, our results of operations could be adversely affected.(Business Related Risk)

We are significantly dependent on imports for our raw material procurement, which exposes us to risks arising from geopolitical developments, trade sanctions, international trade tensions, and foreign exchange fluctuations. For the financial year ended March 31, 2026, import purchases were ₹8,182.37 Lakhs (76.65% of total purchases). For the financial year ended March 31, 2025, import purchases were ₹7,392.58 Lakhs (62.11% of total purchases). For the financial year ended March 31, 2024, import purchases stood at ₹6,460.75 Lakhs (61.71% of total purchases). This consistent and increasing import dependency makes us susceptible to any disruptions in global supply chains.(Business Related Risk)

Our Registered Office premise situated at Plot No. 45, Shanthinikethan Colony, Mahendra Hills, East Marredpally, Secunderabad, Telangana, India, 500026 is not owned by us, but it is taken on lease basis from our Promoter Group Individual, Mrs. Vimla Mehta, being the owner of the property. Our Manufacturing Units situated at Manesar... is not owned by us but are instead taken on lease from third party. We cannot assure you that we will be able to continue these arrangements on commercially favourable terms in the future. In the event that we are required to vacate the current premises, we would need to make alternative arrangements for new office spaces, manufacturing units, and other infrastructure. We cannot assure you that these new arrangements will be made on commercially acceptable terms.(Internal Issue Related Risk)

Our Company proposes to close of one of its manufacturing units operating from a leased premises i.e. Manufacturing Unit II - Ground Floor, Plot No.32, Sector 5, IMT Manesar, Gurgaon, Haryana 122052 and intends to consolidate its operations into its proposed manufacturing facility. The process of closure and consolidation may result in temporary disruptions to manufacturing operations, which could impact the Company’s ability to fulfill customer orders in a timely manner and maintain existing service levels. Any delay in commissioning or stabilizing operations at the proposed facility may further affect production schedules and revenue generation. Our Company may also incur incremental costs in connection with such transition, including expenses related to relocation and reinstallation of machinery and workforce realignment. There is no assurance that such costs will not exceed current estimates.(Internal Issue Related Risk)

The transition may also involve operational integration challenges, including alignment of processes, systems, and manpower, which could temporarily affect efficiency and productivity. However, the proposed transition is not expected to result in any material disruption or adverse impact on the overall business performance of the Company. Any inability to effectively execute the closure of the existing facility and the ramp-up of operations at the proposed manufacturing unit could have a material adverse impact on our business, operations, financial condition, and cash flows.(Internal Issue Related Risk)

Imports accounted for 76.65 % of total purchases for the period ended March 31, 2026 (62.11% in FY25 and 61.71% in FY24), primarily sourced from China (17.54%), Portugal (27.10%), South Korea (11.46%), and Japan (1.13%). Duty changes (by the Indian government and exporting countries) can result in price fluctuations, and hence volatility in demand.(Business Related Risk)

We are subject to the risks associated with carrying out business operations on an international scale, including the following, the occurrence of any of which may adversely affect our business, results of operations, financial condition, cash flows and future prospects: Import and export regulations that may erode profit margins or restrict trade, changes in foreign exchange controls and tax rates, and fluctuations in foreign currency exchange rates, including devaluations. Shifts in regional and local economic conditions, such as inflation, economic cycles, and demand for our products in international markets. Changes in laws and regulations, political instability, and the potential for terrorist attacks in countries where we sell products or maintain other interests.(Business Related Risk)

Raw materials used in the manufacturing of Adhesive Tapes, Rubbing and Polishing Compounds, and Buffing Pads are global commodities, and their prices tend to be cyclical, fluctuating in response to global market conditions. Our raw materials are imported from China, Japan, Portugal, Taiwan, United States of America, Spain, Thailand, South Korea, Vietnam, Germany, Malaysia and Turkey. In the event prices for these raw materials subsequently decline there can be no assurance that our Company will be able to price our products based on the material costs it actually incurred.(Business Related Risk)