GEE Ltd Management Discussions

I. IN DUSTRYSTRUCTU RE & DEVELOPMENTS:

The Indian manufacturing sector has witnessed steady recovery during FY 2024-25, supported by favourable government policies, improved infrastructure investment, and a resurgence in core sectors like power, construction, and heavy engineering. The electrode and electrical equipment manufacturing segment, in particular, saw increased demand driven by infrastructure development, growth in renewable energy, and expansion in the fabrication and metal industries.

The Government of Indias emphasis on "Make in India" and the Production Linked Incentive (PLI) scheme have also positively impacted capital goods manufacturing. Rising global demand for welding consumables, driven by construction and shipbuilding sectors, has contributed to the growth of electrode manufacturers like GEE Limited.

GEE Limited is a well-established player engaged in the manufacture and marketing of welding electrodes, welding fluxes, and other electrical equipment. The company caters to various industries including construction, shipbuilding, railways, petrochemicals, and power.

With a long-standing market presence and a reputation for quality and innovation, the Company has built a diversified customer base and a strong distribution network across India. GEE Limited continues to invest in technology upgradation, R&D, and process optimization to enhance its product quality and competitiveness.

II. OUTLOOK,OPPORTUNITIES&THREATS Opportunities:

The outlook for the welding electrodes and electrical equipment industry remains optimistic, driven by robust demand across infrastructure, construction, manufacturing, and energy sectors. Government initiatives such as "Make in India," the National Infrastructure Pipeline (NIP), and the Production Linked Incentive (PLI) schemes have provided a strong impetus to domestic manufacturing, which directly supports the demand for industrial consumables like welding electrodes. The accelerated pace of infrastructure projects, particularly in railways, urban development, and renewable energy installations, offers significant growth avenues. Additionally, the rising focus on indigenization in sectors such as defence and shipbuilding has opened new opportunities for high-performance welding consumables and specialized equipment. On the global front, increasing industrial activity in developing economies, coupled with infrastructure development in Southeast Asia, the Middle East, and Africa, is creating a growing export market for Indian manufacturers. GEE Limited is well-positioned to capitalize on these opportunities through its diversified product portfolio, strong brand presence, technological capabilities, and an expanding distribution network.

Threats:

Despite a positive demand environment, the Company faces several challenges that could impact its performance. One of the primary concerns is the volatility in raw material prices, especially steel, ferro alloys, rutile, and other minerals, which directly affect the cost structure of electrode manufacturing. Global supply chain disruptions and logistics challenges can further exacerbate cost pressures and lead to delays in procurement or delivery. In the domestic market, the presence of unorganized and low-cost manufacturers leads to intense price competition, particularly in the commoditized product segments. This often results in margin pressures and demands continuous innovation and differentiation. Moreover, fluctuations in foreign exchange rates impact export realizations and import costs, posing a risk to profitability in overseas markets. Regulatory changes, including stricter environmental and safety standards, require ongoing compliance and investment in cleaner technologies. Additionally, global macroeconomic uncertainties, geopolitical tensions, and any downturn in infrastructure spending or industrial activity could adversely affect customer demand and overall business sentiment.

III. FINANCIAL PERFORMANCE AND OPERATIONAL PERFORMANCE:

GEE Limited recorded a total revenue of approximately Rs.33,410.71 Lakhs for the financial year 2024-25, as against Rs.36,987.20 Lakhs in the previous year, reflecting a decline primarily due to rising raw material costs and sustained pricing pressures in a competitive market environment. Despite these challenges, the Company has continued to focus on maintaining operational efficiency. It continuously endeavours to improve gross margins through a strategic mix of cost control initiatives, prudent product pricing, and ongoing innovation in its product offerings and manufacturing processes.

IV. INTERNAL CONTROL SYSTEMS AND TH El R ADEQUACY.

GEE Limited has implemented robust internal control systems commensurate with the size and nature of its business. These systems are designed to ensure reliable financial reporting, compliance with laws and regulations, and efficient use of resources. Internal checks and controls covering operations of the company are in place and are constantly being improved upon. An adequate system exists to safeguard companys assets through insurance on reinstatement basis and maintenance of proper records.

V. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES INCLUDING NUMBEROF PEOPLE EMPLOYED.

GEE Limited continues to nurture a performance-driven and employee-centric culture. The total employee strength as of March 31,2025, stood at approximately 363 - The Company conducted various training and development programs during the year focused on skill

enhancement, safety, and leadership development. Industrial relations remained cordial throughout the year.

VI. DETAILS OF SIGNIFICANT CHANGES (I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS:

During the financial year 2024-25, GEE Limited witnessed notable movements in several key financial ratios compared to the previous year. These changes primarily reflect the impact of increased input costs, pricing pressures, and adjustments in investment valuations.

The Debt Service Coverage Ratio declined significantly from 2.84 in the previous year to 0.85 in the current year, marking a 70.24% decrease. This was largely due to a relative increase in expenses coupled with a decline in gross profit, which adversely impacted the

The Company has not defaulted on any of its debt obligations

The Return on Equity (ROE) turned negative, falling from 0.06 in the previous year to -0.05 in FY 2024-25, representing a 177.42% decline. Similarly, the Net Profit Ratio decreased from 0.03 to -0.03 (-192.26%), and Return on Capital Employed (ROCE) dropped from 0.09 to -0.01 (-112.34%). These declines are attributable to a contraction in profit margins, primarily driven by higher raw material costs and persistent pricing pressures in a highly competitive market environment.

The Return on Investment (ROI) also witnessed a steep decline from 0.11 to -0.20, amounting to a 278.48% negative variance. This was due to a decrease in the fair value of certain investments, recognized through Other Comprehensive Income (OCI).

On a positive note, the Net Capital Turnover Ratio improved from 9.27 to 11.34, showing a 22.35% increase, although just below the 25% threshold. This improvement was largely the result of a reduction in working capital, reflecting improved capital efficiency during the year.

These changes highlight the financial pressures faced by the Company during the year, primarily due to external cost factors and market conditions. GEE Limited continues to focus on managing these challenges through strategic cost control, prudent working capital management and pricing discipline to restore profitability and improve overall financial performance in the coming periods.

VII. 0ETAILS0F ANYCHANGE IN RETURN ON NETW0RTH ASC0MPAREDT0THEIMMEDIATELYPREVI0USFINANCIALYEAR:

During the financial year ended March 31,2025, the Return on Net Worth (RoNW) of the Company declined significantly to-5.25%, as compared to 6.27% in the previous financial year. This decline was primarily due to reduced profitability on account of rising raw material costs, elevated operating expenses, and pricing pressures in the domestic and international markets. The decrease in net profit had a direct and adverse impact on shareholders returns, resulting in negative RoNW for the year. The Company remains focused on improving operational efficiency, optimizing cost structures, and enhancing product margins in order to restore and strengthen its return on net worth in the forthcoming financial periods.

Disclaimer: Certain statements in this report concerning future prospects may be forward-looking statements. Such statements are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially. Factors such as economic conditions, raw material availability, pricing pressures, and regulatory changes may affect the actual results. GEE Limited and the Management shall not be held liable for any loss, which may arise, as a result of any action taken on the basis of the information contained herein.

Forand on behalf ofthe

Board of Directors of Directors of GEE Limited

SD/-

Mr.UmeshAqarwal Joint Managing

Director DIN:01209962