Kay Cee Energy & Infra Ltd Management Discussions

OVERVIEW

The Company is a prominent player in the Engineering, Procurement, and Construction (EPC) sector, with a specialized focus on infrastructure development, particularly in the power transmission and distribution industry. Our comprehensive service offerings span across EPC projects, ancillary operations, and maintenance services. We cater to a broad spectrum of clients, including government agencies, private sector entities, anxd international markets.

Our core competencies include project planning, detailed engineering, procurement, project execution, commissioning, and postcompletion services. The Company also provides operations and maintenance services for the infrastructure we develop, ensuring longterm reliability and performance for our clients.

INDUSTRY STRUCTURE AND DEVLOPEMENT

The Engineering, Procurement, and Construction (EPC) industry in India continues to witness significant transformation, driven by infrastructure expansion, policy reforms, and increasing demand for reliable power supply. The Government of Indias focus on strengthening the transmission and distribution network through various schemes such as Revamped Distribution Sector Scheme (RDSS) and Green Energy Corridors has created ample opportunities for EPC players.

The power transmission and distribution sector are also benefitting from increased investments in renewable energy integration and grid modernization. Digitization, automation, and sustainability have become key themes shaping the industry structure. The Company operates within this dynamic framework, offering endtoend EPC solutions tailored to the evolving needs of the power sector.

OPPORTUNITIES AND OUTLOOK

The outlook for the company remains positive, with a robust order book and a strong pipeline of projects. The increasing focus on renewable energy and smart grid technologies is expected to drive demand for EPC services in the power sector. The company plans to leverage its technical expertise and global presence to capture new opportunities in emerging markets. However, the company remains vigilant of potential risks, including economic uncertainties and regulatory changes, which may impact growth prospects.

Opportunities:

Growing investments in renewable energy projects and smart grid initiatives offer significant growth potential.

Expansion in emerging markets, driven by urbanization and industrialization, provides new business avenues.

Technological advancements in energy storage and grid digitalization present opportunities for innovation and

service expansion.

Strategic partnerships and joint ventures with global players can enhance market reach and technical capabilities. RISK, CONCERNS AND THREATS

Economic and Political Risks: Economic slowdowns or political instability in key markets could delay projects or lead to cancellations, impacting revenue.

Supply Chain Risks: Disruptions in the supply chain, particularly in the procurement of critical components, could lead to project delays and increased costs.

Technological Risks: Rapid technological advancements may require continuous investment in new technologies, posing a risk if the company fails to keep pace.

Regulatory Risks: Compliance with evolving environmental and safety regulations may require additional capital expenditure and operational adjustments.

Economic uncertainties and geopolitical tensions may impact project funding and timelines.

Rising competition from global and local players can pressure margins.

Fluctuations in raw material prices and supply chain disruptions can increase project costs.

Compliance with stringent environmental regulations may require additional investments in technology and

processes.

INTERNAL CONTROL SYSTEMS AND ITS ADEQUACY

The Company has robust internal control systems commensurate with the size and nature of its operations. These systems are designed to ensure:

•Accuracy and reliability of financial reporting;

•Compliance with applicable laws, regulations, and internal policies;

Efficient use and safeguarding of resources;

•Timely execution and monitoring of projects.

The internal audit function is carried out by an independent firm, and their reports are regularly reviewed by the Audit Committee. Suggestions and recommendations are implemented to strengthen the control environment continuously.

SEGMENTWISE OR PRODUCTWISE PERFORMANCE

The EPC segment continues to be the primary revenue driver, with substantial contributions from power transmission and distribution projects.

The company successfully completed various projects during the year, contributing to the total revenue of the Company.

Company has despite challenges in various regions, maintained a steady performance, contributing increasing trend to the overall revenue of the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

A. Standalone Financial Performance:

(i) Net Sales and Other Income:

Net Sales and other income for the financial year 20232024 & 20242025 is INR 6486.32/ lakhs and INR 15316.94 / lakhs respectively.

(ii) Expenditure:

The total expenditure for the financial year 20232024 & 20242025 is INR 5587.88/ lakhs to INR 13040.94 / lakhs respectively.

B. Profit/Loss:

The total loss for the financial year 20232024 & 20242025 is INR 654.86/ lakhs & INR 1,706.20/ lakhs respectively.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company firmly believes that motivated and empowered employees are the cornerstone of competitive advantage.

The companys employee value proposition is based on strong focus on employee development, providing a satisfying work environment, performance appraisal and counseling and appropriate empowerment. The company continues to maintain and enjoy a cordial relationship with its employees, providing a positive environment to improve efficiency with regular investments in upgrading the knowledge skills of the employees. The industrial relations climate remained stable, with no significant disruptions reported.

The number permanent employees on the roles of the Company as on 31^st March 2025 is 832 employees.

Ratio	Current Period	Previous Period	Variance in %	Reason for variance by more than 25%
Current Ratio	1.60	2.12	24.53%	Ratio is decreased mainly due to increase in current liabilities during the year.
DebtEquity Ratio	0.89	0.59	50.85%	Ratio is increased mainly due to increase in borrowings during the year.
Debt service coverage ratio	0.48	0.46	4.35%	HT>Ratio is increased mainly due to increase in earnings before interest and tax during the year.
Return in equity ratio	32.10%	19.60%	63.78%	Ratio is increased mainly due to increase in profit during the year.
Inventory turnover ratio	3.70	1.74	112.64%	Ratio is increased mainly due to increase in turnover during the year.
Debtors Turnover ratio	5.32	5.45	2.39%	Ratio is decreased mainly due to increase in average trade receivables.
Trade payables turnover ratio	2.79	1.48	88.51%	Ratio is increased mainly due to increase in purchase during the year.
Net capital turnover ratio	3.03	1.86	62.90%	Ratio is increased mainly due to increase in turnover during the year.
Net profit ratio	11.17%	10.15%	10.05%	Ratio is increased mainly due to increase in operating efficiency and better cost management during the year.
Return on capital employed	23.59%	18.44%	27.93%	Ratio is increased mainly due to increase in profit during the year.
Return on investment				NA

DETAILS OF ANY CHANGE IN RETURN ON NET WORTH AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR ALONG WITH A DETAILED EXPLANATION THEREOF

The Return on Net Worth (RoNW) for the current year stands at 15.58%, compared to 5.97%, in the previous year. The change is attributed to [detailed explanation, e.g., higher profitability, equity infusion, etc.

ENVIRONMENT, HEALTH & SAFETY (EHS)

The Company commits to ethical and sustainable operation in all business activities. Company maintains and implements an Environmental Management System (EMS) for meeting the purpose of organizations policy and objectives regarding environment. The aims of the system is use of processes, practices, techniques, materials, products, services or energy to avoid, reduce or control the creation, emission or discharge of any type of pollutant or waste, in order to reduce adverse environmental impacts. Adequate Occupational Health & Safety Management System is adopted by the Company for ensuring the conformance to the Occupational Health & Safety Management System, legal & statutory requirements, continual improvement and satisfaction of interested parties (i.e. customers, suppliers, employees and public).

DISCLOSURE OF ACCOUNTING TREATMENT

The Company has followed all the treatments in the Financial Statements as per the prescribed Accounting Standard: our company has followed all required accounting standards also disclosed significant accounting policy. Financial statements include balance sheet, profit and loss, cash flow statement with schedules/Notes.

CORPORATE GOVERNANCE REPORT

As per regulation 15(2) of the Listing Regulation, the Compliance with the Corporate Governance provisions shall not apply in respect of the following class of the Companies:

a. Listed entity having paid up equity share capital not exceeding Rs. 10 Crore and Net worth not exceeding Rs. 25

Crore, as on the last day of the previous financial year;

b. Listed entity which has listed its specified securities on the SME Exchange.

Since, our Company falls in the ambit of aforesaid exemption (b); hence compliance with the provisions of Corporate Governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 202425.

DECLARATION SIGNED BY THE CHIEF EXECUTIVE OFFICER STATING THAT THE MEMBERS OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT PERSONNEL HAVE AFFIRMED COMPLIANCE WITH THE CODE OF CONDUCT OF BOARD OF DIRECTORS AND SENIOR MANAGEMENT

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of declaration signed by the chief executive officer stating that the members of board of directors and senior management personnel have affirmed compliance with the code of conduct of board of directors and senior management shall not apply to the Company and it does not form the part of the Annual Report for the financial year 202425.

COMPLIANCE CERTIFICATE FROM EITHER THE AUDITORS OR PRACTICING COMPANY SECRETARIES REGARDING COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

Since, our Company falls in the ambit of SME Listed entity; hence compliance with the provisions of Compliance certificate from either the auditors or practicing company secretaries regarding compliance of conditions of corporate governance shall not apply to the Company and it does not form the part of the Annual Report for the financial year 202425.

DISCLOSURES WITH RESPECT TO DEMAT SUSPENSE ACCOUNT/ UNCLAIMED SUSPENSE ACCOUNT

During the year under review there are no shares in the DEMAT suspense account or unclaimed suspense account, hence this provision is not applicable.

DISCLOSURE OF CERTAIN TYPES OF AGREEMENTS BINDING LISTED ENTITIES (1) INFORMATION DISCLOSED UNDER CLAUSE 5A OF PARAGRAPH A OF PART A OF SCHEDULE III OF THESE REGULATIONS

During the year under review the Company has not executed certain types of agreements binding listed entities as required to be disclosed under clause 5A of paragraph A of Part A of schedule III of the Listing Obligations and Regulations Act, 2015.

CAUTIONARY STATEMENT

The statements in the "Management Discussion and Analysis Report" section describes the company objectives, projections, estimates, expectations, and predictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those expressed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors.