Arcee Industries Ltd Management Discussions

Overview

As on December 15th, 2020, your company had taken on lease the Land, Building and Machinery of Arcee Ispat Udyog Private Limited, a unit for manufacturing of Black Steel tubes & pipes, for a period of 10 years. Company had started its Commercial production of Black Steel tubes & pipes on January 14th, 2021. After this, Company was working in two segment:- 1. PVC pipe 2. Steel pipe. But due to continuous loss in the steel pipe manufacturing, On 22nd May, 2023, Company had cancelled the Lease of Land, Building and Machinery with Arcee Ispat Udyog Private Limited.

The Company has been incurring losses for several years. In this era of rapidly changing technology, the plant and machinery of the PVC unit has become outdated and inefficient. The Company also attempted to establish itself in the manufacture of MS Pipes and to invest further in plant and machinery, but did not succeed owing to the longer working capital cycle inherent in the steel pipe industry. The Company has been unable to obtain working capital or term loan facilities from banks and has continued operations only with the support of extended payment terms from raw material suppliers. Due to continuing losses, payments to raw material suppliers could not be made, and to avoid legal action by them, the sale of plant and machinery has become inevitable to settle amounts due to creditors. Moreover, the Company has not yet been able to recover amounts outstanding as advances to suppliers, security deposits and earnest money deposited with government departments. There was no production during the year 2025-2026, and the factory remains non-operational to date. The Board is considering various avenues to raise funds for new technology-based plant and machinery for PVC pipe manufacturing.

PRODUCT SEGMENT WISE SHARE IN TURNOVER FOR THE LAST TWO YEARS

The Revenue from operations of the Company constitutes of:-

The Turnover of the PVC Pipe segment is Rs. Nil as against Rs. Nil during the previous year. The Turnover of the Steel Pipe segment is Rs. 9.90 Lacs as against Rs. 15.25 Lacs during the previous year.

RISK MANAGEMENT

Company continuously monitors the risks associated with its business and operations including timely identification of new risks, if any, and plans to mitigate risks so as to avoid any adverse impact on the Companys operations.

HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human Resources are one of the most important ingredients to fuel future growth and progress of the organization. The Company therefore strives to align human resource policy and initiatives to meet business plans. Companys focus on promoting well being of its employees, providing safe and congenial work environment continues. Training of employees to maintain high level of motivation is an ongoing process.

Career development opportunities are provided at all levels and across all functions. Industrial relations at all the units remained cordial during the year.

INTERNAL CONTROL SYSTEMS & THEIR ADEQUACY

The internal control systems for safeguarding and protecting assets of the Company against loss from unauthorized use or disposition are in place. Regular internal audits, review by management and documented policies, guidelines and procedures supplement the internal controls which are designed to ensure that financial and other records are reliable for preparing financial information and other data and for maintaining accountability of assets.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

The Company has nil production of PVC Pipe and Steel Pipes while the Company has sold Nil PVC Pipe and Steel Pipe as compared to Nil PVC Pipe and 40 MT of Steel Pipe in the previous financial year. The company has stopped the production completely and in the process of to disposes of Plant and Machinery to pay outstanding dues to the supplier of raw material

The Company has achieved turnover of Rs. 9.90 Lacs as compared to previous year turnover of Rs. 15.25 Lacs. During the year the company has Loss after tax of Rs. 35.68 Lacs as compare to last year Loss after tax of Rs. 13.37 Lacs. The reserve and surplus stood to Rs. (197.86) Lacs. The earnings per share is Rs. (0.69).

INDUSTRIAL RELATIONS AND RESOURCE MANAGEMENT:

The Company during the previous year continued its record of good industrial relations with its employees. During the year various initiatives had been taken to improve the performance and productivity levels in various departments of the Company. The Company conducts training sessions on various topics ranging from safety, productivity, handling of hazardous products etc. that help to train employees to overcome operational constraints. The Company has its in house technical centre in the plant to train the new recruits before their placement that helps in optimum utilization of resources as well as maintaining quality standards. It also indulges into and implements various HR initiatives and activities including employee welfare, special rewards, performance review system and various employee motivation activities.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis describing Companys objectives, estimates, expectations, or projections may constitute "forward looking statements", within the meaning of applicable laws and regulations. Actual results may differ materially from those either expressed or implied in the statements.

Important factors that could make a difference to Companys operations include economic conditions affecting demand/supply and price conditions in the domestic and international markets, changes in the Government regulations, tax laws / other statutes and other incidental factors.

FOR AND ON BEHALF OF THE BOARD

REGISTERED OFFICE: 7th K.M. Barwala Road, Talwandi Rana, Hisar - 125 001

Date: 8th September, 2026

CIN: L29120HR1992PLC031681 Phone: 98120-20111, 98120-40111 Email: arceeind@rediffmail.com Website: www.arcceeindustries.in

Shruti Gupta (Whole Time Director) DIN - 01742368

Akshat Gupta (Director) DIN - 00284927