LEEL Electricals Ltd Management Discussions

?‚? Industry Structure and Developments:

The Indian Heating, Ventilation & Air Conditioning (HVAC) industry continues to expand rapidly, driven by rising urbanization, increasing disposable incomes, hotter climatic conditions, and sustained growth in residential and commercial real-estate. The market for air conditioners, HVAC systems, and key components such as coils, evaporators, condensers, compressors, and heat exchangers recorded strong momentum during FY 2024-25.

Government initiatives such as Make in India, PLI schemes for white goods, and import- substitution policies accelerated domestic component manufacturing. Customers increasingly prefer high-efficiency products complying with updated BEE energy labelling norms and global environmental regulations (low-GWP refrigerants), leading to increased demand for advanced heat exchangers, micro-channel technology, and precision- engineered AC components.

Despite global supply chain volatility and fluctuations in metal prices (copper, aluminium), the HVAC supply base in India remained stable, supported by diversified sourcing and localization.

?‚? Opportunities:

?‚? Rising demand for energy-efficient Acs in residential and commercial segments.

?‚? Growth in data centers, cold-chain logistics, healthcare and industrial refrigeration, all of which require high-performance heat exchangers.

?‚? Replacement and retrofit markets expanding due to ageing infrastructure and new environmental standards.

?‚? Export opportunities as global customers diversify supply chains to India.

?‚? Increased adoption of micro-channel heat exchangers, offering cost and efficiency advantages.

?‚? Backing of government incentives and PLI schemes for component manufacturers.

?‚? Threats:

?‚? Volatility in raw material prices, especially copper and aluminium.

?‚? Intense competition from domestic and global component manufacturers.

?‚? Regulatory shifts regarding environment-friendly refrigerants may require continuous redesign.

?‚? Currency fluctuations affecting imported inputs and export competitiveness.

?‚? Slowdowns in real estate, white goods, or industrial capital expenditure could impact demand.

?‚? Segment-wise or Product-wise Performance:

The Company operates primarily in the HVAC component manufacturing segment, producing:

?‚? Air Conditioner components - coils, tubing assemblies, sheet-metal parts, copper/aluminium components.

?‚? Heat exchangers - evaporators, condensers, micro-channel heat exchangers, industrial heat-exchange units.

During FY 2024-25, the AC components division reported improved order flow from OEM customers, backed by strong summer demand and higher realization. The heat exchanger division benefitted from growth in industrial refrigeration, heat pumps, and HVAC retrofits. The production was started post the end of the Financial Year.

The last couple of years were adversely affected due to extreme financial crunch and various reasons beyond the control of the Management and your Company had under gone CIRP process. Your company went into liquidation and has been taken over by Krishna Ventures Limited [KVL" or Acquirer].

The total revenue (net) of the Company for the year ended March 31 st, 2025 stood at Rs.0.01 Crores. During the year, the Company has incurred losses of Rs.0.87 Crores. The performance during the year was not satisfactory due to various reasons beyond the control of the

Management. The CIRP process, shortage of funds and financial crisis has affected the working of Company

?‚? Outlook:

The long-term outlook for the HVAC and heat exchanger industry remains robust. Increasing penetration of air conditioning, emergence of green buildings, and migration toward low- GWP refrigerants will continue to drive component innovation. The Company remains focused on:

?‚? Enhancing manufacturing automation and expanding capacity.

?‚? Strengthening presence in high-efficiency heat exchanger technologies.

?‚? Growing OEM partnerships and export markets.

?‚? Investing in R&D, reliability testing, and product customization.

?‚? Cost optimization and supply chain resilience.

Barring unforeseen circumstances, the Company expects stable growth in FY 2025-26.

?‚? Risks and Concerns:

?‚? Commodity price risk: Copper and aluminium price volatility impacts margins.

?‚? Technology obsolescence: Rapid adoption of new heat-exchange technologies requires continuous upgrades.

?‚? Customer concentration risk: Dependence on a limited number of AC OEMs.

?‚? Foreign exchange risk: Exposure due to imported materials and export sales.

?‚? Environmental compliance: Transition to eco-friendly refrigerants may require product redesign and capex.

The company remains committed to mitigating these risks and ensuring long-term sustainability and growth

?‚? Material developments in Human Resources / Industrial Relations front, including number of people employed:

The Company considers it workforce to be it most valuable asset and continues to invest in skill development, safety training, and operational excellence. Industrial relations remained

cordial, and the Company maintained a strong focus on workplace safety, upskilling, and retention of technical talent. As on March 31 st, 2025, the Company employed permanent employees.

?‚? Internal Control Systems and Their Adequacy:

The Company has robust internal financial controls commensurate with the scale and complexity of it operations. The systems ensure:

?‚? Accurate financial reporting

?‚? Compliance with applicable laws, SEBI regulations, and accounting standards

?‚? Safeguarding of assets

?‚? Efficient procurement, production, and inventory control

?‚? Periodic internal audits by independent auditors with reports submitted to the Audit Committee

No material weaknesses were observed during the year.

?‚? Discussion on Financial Performance with respect to Operational Performance

Since commercial operations of the Company were yet to commence during the year under review, no operational revenue was generated. Therefore, discussion on financial performance vis-? -vis operational performance and associated financial ratios is not applicable for the said period.

?‚? Significant Changes in Key Financial Ratios

Since the Company was acquired by the new management vide NCLT Order dated 21.03.2024 and Board was reconstituted on 01.07.2024, this information stands not applicable for the FY 24-25.

?‚? Return on Net Worth (RoNW)

Since the Company was acquired by the new management vide NCLT Order dated 21.03.2024 and Board was reconstituted on 01.07.2024, this information stands not applicable for the FY 24-25.

?‚? Cautionary Statement:

Statements in the "Management Discussion and Analysis" above describing the Companys objectives, projections, estimates and expectations or predictions may be forward looking. Actual results could differ substantially and materially from those expressed or implied.

Important factors that could make a difference to the Companys operations include economic conditions effecting demand/supply and price conditions in the domestic and price conditions in the domestic and overseas markets in which the company operates, changes in the government regulations, tax laws and other statutes and other incidental factors.

For and on behalf of the Board of Directors LEEL Electricals Limited

NEERAJ GUPTA Managing Director DIN: 07176093	DURGESH KUMAR Director DIN: 10686556
Date: 04.12.2025 Place: Noida	Date: 04.12.2025 Place: Noida