Patels Airtemp (India) Ltd Management Discussions

ANNEXURE - A

The Managements perspective on performance of the Company for the financial year 2024-25 is given in this report. This report should be read along with the Companys financial statements, the schedules and notes thereto and other information included in this Annual Report for the financial year 2024-25. The Company financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) complying with requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) as amended from time to time.

ECONOMIC OUTLOOK

In fiscal 2024-25, the global economic outlook is characterized by a widespread growth slowdown, with heightened trade tensions and high level policy uncertainty contributing to a weaker-than-expected performance which had significant impact on the economic activities. After achieving modest growth of approximately 3.2% in 2024, the global economy is projected to expand at a slightly slower pace of around 2.8% in 2025, as forecast by institutions. The India and Southeast Asia which are emerging markets, continue to show stronger momentum and advanced economies such as United States and Eurozone are expected to experience subdued growth.

Overall, FY 2024-25 for India looks strong and stable, supported by demand-led growth, enabling policy support, and manageable inflation—setting a solid foundation for continued expansion into FY 2025-26. Globally India is one of the fastest growing economy country and it demonstrated a growth rate 6.4% to 6.5% during the year. In the next couple of years, the growth around 6.5% to 7% as estimated by the institutions. This expansion is underpinned by strong domestic demand, resilient private consumption, and sustained investment—particularly in infrastructure and manufacturing—with the services sector continuing to drive value addition. This expansion is underpinned by strong domestic demand, resilient private consumption, and sustained investment—particularly in infrastructure and manufacturing—with the services sector continuing to drive value addition

The Indian Union Budget has played a significant role in shaping the countrys economic trajectory by focusing on growth, inclusion, and fiscal consolidation. Indian Government with a strong emphasis on capital expenditure in infrastructure, transportation, and green energy. The budget has aimed to stimulate investment-led growth, generate employment, and enhance long-term productivity.

By leveraging its domestic strengths and implementing strategic reforms, India is well-positioned to navigate global challenges and maintain its trajectory as a leading global economic powerhouse. Overall, Indias economic outlook remains strong, driven by robust domestic demand, policy support, and sectoral resilience. Improving trade relations with the developed economies will provide the requisite impetus to the economy.

INDUSTRY STRUCTURE & DEVELOPMENT

The engineering sector is the largest of the industrial sector in India. Indias engineering sector is divided into two major segments - Heavy Engineering and Light Engineering. The Heavy Engineering industry is one of the largest sectors in the world. It produces machinery, capital goods and components and parts for various industries.

The manufacturing facilities of your Company are located in Gujarat at Rakanpur, Dist: Gandhinagar and Dudhai, Dist: Kadi. During the FY 2024-25, under review of the top management, the staff in both units worked diligently towards meet its significant turnover. Despite of mixed bag of opportunities and challenges, strong domestic demand and global geopolitical uncertainty, the Company able to achieve considerable improvements across the targets and achieved its significant turnover of Rs. 38781.63 Lakhs even in highly cut-thought competition and the prevailing market conditions.

The Company is operating in single segment business namely Engineering. the Company is engaged in the manufacture and sale of extensive range of Heat Exchangers such as Shell & Tube Type, Finned Tube Type and Air Cooled Heat Exchangers, Pressure Vessels, Air-conditioning and Refrigeration equipments and Turnkey HVAC Projects in India & marketing of equipments in India and outside India. All these products are supplied to leading Industrial Sections like Power Projects, Refineries, Fertilizers, Cements, Petrochemicals, Pharmaceuticals, Textile and Chemical Industries make them a single window option for multiple products. With their design to delivery ability, The Company could always offer and deliver something extra to their clients, including ease of one-stop solutions.

EXPANSION, CAPITAL EXPENDITURE & FUTURE OUTLOOK

In respect of new Greenfield project set up by the Company in the year 2019-20 at Dudhai, Taluka. Kadi, Dist. Mehsana, Gujarat (Dudhai Unit) for dedicated manufacturing of Air Cooled Heat Exchanger/Air Fin Cooler and other engineering products,, the Company has constructed total four bays/shades with total covered area of 11,016 Sq. Mtrs. with total capital outlay of around Rs. 24.00 crores.

With this, the Company has created additional infrastructure required for the purpose of taking care of a part of the production process and primarily removed the space constraints and the company is in a position to carry out the assembly operations in a cost effective and efficient manner.

During the year under review, the Company has increased lifting facilities at its both Rakanpur and Dudhai Units to increase productivity. Also, the Company has converted one bay/shade for exotic materials at Rakanpur Unit.

During the financial year 2024-25, the Company has incurred total capital expenditure to the extent of Rs. 2.24 Crores including Rs. 1.25 Crores on Plant & Equipment and Rs. 3.56 Lacs on Buildings.

Your Company is having confirmed orders of about Rs. 211.74 Crores on hand as on 1st August, 2025.

FINANCIAL AND OPERATIONAL PERFORMANCE

Your Company is engaged in single segment business namely engineering business. The Company has started its ever progressing journey with expertise of Design and Manufacturing of process equipments. This discussion covers the financial results and other developments during April 2024 to March 2025, in respect of the Company.

Against the backdrop of domestic economic resurgence amidst at world level volatility, the Company has recorded a healthy performance across its business, spread across geographies.

The Company has earned total revenue from operations of Rs. 38781.63 Lakhs during the year ended on 31st March, 2025 as against Rs. 37076.17 Lakhs earned during the previous year ended on 31st March, 2024.

Out of revenue from operations of Rs. 38781.63 Lakhs earned by the Company during the year under review, Rs. 38379.55 Lakhs represents sale of products (Domestic & Export), Rs. 159.17 Lakhs represents sale of Services (Processing Charges) and Rs. 242.91 Lakhs represents other operating revenue including export incentives. Out of Revenue from Operations, Rs. 36104.90 Lakhs represents Domestic Sales and Rs. 2274.65 Lakhs represents Export Sales.

The Company has earned the Profit before Tax of Rs. 2187.88 Lakhs during the year ended on 31st March, 2025 as compared to Rs. 2014.11 Lakhs earned during the previous year ended on 31st March, 2024.

The Company has earned Net Profit of Rs. 1651.01 Lakhs for the year ended on 31st March, 2025 after making Provision for Tax Expenses of Rs. 536.87 Lakhs and other adjustments, as compared to Net Profit of Rs. 1469.45 Lakhs earned by the Company during the previous year ended on 31st March, 2024.

Product wise bifurcation of total revenue of the Company during the financial year 2024-25:

Sr. No. Description	% as on 31/03/2025	% as on 31/03/2024
1 Air Cooled Heat Exchanger & Accessories	59.87	50.07
2 Heat Exchanger & Accessories	32.82	39.81
3 Other Products	7.31	10.12

FINANCIAL RATIOS

Pursuant to Regulation 34 of SEBI Listing Regulations, the details of Key Financial Ratios of the Company, Analysis and Variances and Reason as on 31st March, 2025 with 31st March, 2024 have been provided in Note No. 62 to the Audited Standalone Financial Statements of the Company for the year ended 31st March, 2025.

RECOGNITION OR AWARDS

Along with development of product design and product manufacturing application, the Company in its tenure of 52+ years continuously upgraded quality and product system by acquiring worlds most recognized system like ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 and ASME (U2, U, S-Stamps).

The Company is having Quality Management System as per ISO 9001-2015 certification from TUV-SUD and Certificate for Environment Management System as per ISO 14001:2015 and Occupational Health and Safety (OH&S) Management System as per ISO 45001:2018 from TUV-NORD.

The Companys products have ASME (American Society of Mechanical Engineers-USA)U,U2and S Stamp authorization. The Company is also having NB and R Stamp. In financial year 2024-25, the Company has Canadian Registration Number (CRN) and Pressure Equipment Directive (PED) jobs. The Pressure Equipment Directive is a European Union Directive (2014/68/EU) that sets standards for the design, manufacturing, and conformity assessment of pressure equipment.

The Company is also a member of HTRI (Heat Transfer Research, Inc, U.S.A.) for updating Heat Transfer Technology.

Due to U/ U2/ S Stamp authorization, it is expected to improve the Quality of the products/equipment of the Company and to achieve higher growth and profitability of the Company in future.

The Company has also licensed software of ANSYS, CREO, PVelite, Nozzle Pro and TEKLA for product development.

OPPORTUNITIES

Engineering Companies in India have numerous opportunities due to growing demand for infrastructure development, technological advancements, and a strong manufacturing sector.

With the expansion of infrastructure in Dudhai Unit, there are number of new opportunities are available to the Company to enhance its various products, enter into new market and industry sectors both in the domestic and international market through Export. Export in the developed countries like UK, USA, Canada & Singapore and other countries like Nigeria, Indonesia, Zambia etc. is to be developed and it is expected to provide large impetus to engineering exports to these countries after obtaining the ASME U/ U2/ S Stamp Authorization. Your company is preparing itself to meet the increased demand in the years to come through efficient production management system which will enable to minimize the risk of raw materials price fluctuations.

RISK FACTORS

The Company faces several risk factors that can impact production efficiency, product quality, and overall business operations. One of the primary risks is supply chain disruption, which can delay the availability of essential components and raw materials. Key concern of risk is design and engineering errors, where inaccuracies in blueprints or simulations can lead to costly rework or malfunctioning machinery. Additionally concern which are workplace safety hazards, Regulatory compliance to meet strict industry standards and environmental regulations, market volatility, such as fluctuations in demand or raw material prices, can affect profitability and planning, making risk management a vital part of the industry.

In addition to the risks mentioned above and given the nature of its business, the Company faces intense competition from large-scale manufacturers who benefit from economies of scale and cost advantages. It also encounters challenges from low-cost imports and competition from the unorganized sector, particularly in the marketing of air-conditioning and refrigeration components within the state and neighboring regions. Despite these pressures, the Company remains confident due to its strong focus on quality, superior product offerings, and prompt after-sales service.

QUALITY CONTROL

The Company features its achievements to adherence to strict quality standards. This has been achieved through our efforts to strike the balance between resources and technology to develop products at same level in excellence with international standards. The quality standard is taken care from the initial stage of production to ensure high end product quality.

INTERNAL CONTROL SYSTEM

The Company has established an adequate and effective Internal Control System (ICS), commensurate with the size and nature of its business, to ensure operational efficiency and safeguard the Companys assets. The Board of Directors is responsible for overseeing the implementation and maintenance of the ICS. The control framework is designed to ensure timely recording of all business transactions, optimal utilization of resources, protection of assets against unauthorized use, and adherence to applicable laws and regulations. The ICS is developed in compliance with the provisions of the Companies Act, 2013.

In addition, the Company has implemented a robust Whistleblower/Vigil Mechanism, which enables employees and business partners to report unethical or illegal activities, misconduct, or fraud. This mechanism ensures that concerns can be raised in a secure and confidential manner, free from the risk of retaliation, thereby fostering a culture of transparency, accountability, and integrity.

The internal control framework is further supported by well-documented policies, guidelines, and procedures that. monitor business and operational performance with the objective of ensuring business integrity and promoting operational efficiency.

Internal audits are conducted by experienced Chartered Accountants in coordination with the Accounts and other departments of the Company. The Audit Committee, constituted by the Board, periodically reviews compliance with internal policies, procedures, and applicable legal requirements.

INDUSTRIAL RELATION & HUMAN RESOURCES

The manpower is internal customer of the Company. If they are not happy, survival would be difficult. No employee union has ever been formed in the Company since inception which is a testament of how we keep each employee and their family member happy in the Company.

The Company believes that the Company future will grow when its employees and works are grows. Human Capital is true assets for smooth functioning of business activities and greatest tool for shaping the future growth of Company. To praise the sophisticated production process, we have a team of experienced workers who are skilled and trained to get best out of it. Regular orientation programs are being conducted by the Company wherein workers are directly exposed to the experts, which keep them with the latest technology and development.

The Companys philosophy is to provide to its employees friendly working environment and a performance oriented work culture. To enrich the skills of employees and enrich their experience, the Company arranges, Practical Training Courses by Internal and External Faculties. The Company organizes regular medical camps, awareness sessions, and life skills workshops for employees and works. These initiatives are aimed at fostering a healthy work life balance and nurturing an open and caring culture within the organization. The Company extending best possible medical facilities like health check-ups for employees and workers, regular Health Camps, Awareness Talks, Immunization camps at units.

Due to the employees friendly working environment, performance oriented work and performance appraisal on yearly basses, it attract and retain the best employees in the Company. As on 31st March, 2025, the Company has total 206 employees and workers on the roll of the Company.

HEALTH, SAFETY & ENVIRONMENT

We at Patels Airtemp (India) Limited (the Company) are fully committed to provide Quality services with safe working place and clean environment to our employees, subcontractors, suppliers, and any other stakeholder involved as an integral part of our business philosophy and value system. We recognize that providing and integrating a sound environmental, health and safety program into our business is the key to our success.

The well - experienced members of our HSE segment are constantly and tirelessly working towards making our organization Accident - free. Some of the HSE protocols and procedures that are included in the system;

0 Comply with all pertinent environmental and safety laws, rules and regulations, not just because it is legally required, but also because we believe it is the responsible way to conduct our business.

0 Set HSE targets and goals annually to measure our performance and identify areas for improvement. 0 Conducting regular audits to identify potential workplace risks and hazards and its preventive measures.

0 Employees and workers working at shop floor are provided with Personal Protective Equipments (PPEs) to protect themselves from potential hazards.

0 Provide education and training to our employees and contractors to enhance their knowledge, skills and understanding to perform their responsibilities and duties safely.

0 Prevent environmental pollution and impact by conserving natural resources, improving efficiency and reducing wastages in our processes.

0 Conducting regular meetings with workers across the organization to ensure their consultation and participation is effectively done.

0 Ensure continual improvement of business processes through motivation and empowerment of employees.

CAUTIONARY STATEMENT

The statement given in this report, describing the Companys objectives, estimates and expectations and future plans may contribute towards forward looking statement within the meaning of applicable laws and / or regulations. Actual performance may differ materially from those either expressed or implied. Some statements in this discussion describing the projections, estimates, expectations or outlook may be forward looking. Actual results may, however, differ materially from those stated on account of various factors such as changes in government regulations, tax regimes, economic developments, exchange rates and interest rates fluctuations, impact of competition, demand and supply constraints.

	On behalf of the Board of Directors
	Sanjivkumar N. Patel
Date : 2 nd August, 2025	Chairman & Managing Director
Place : Rakanpur, Dist. Gandhinagar	(DIN: 02794095)