S & S Power Switchgear Ltd Management Discussions

Group Overview

The Companies (S&S and Acrastyle) are a part of Power and T&D Equipment industry; focused on HV Switch-gear, Protection & Control Systems, and associated products and services. UK and India are the two main Segments, supported by other export markets in SAARC, SE Asia and a few countries in Africa. The third company (HART) is a provider of Industrial Automation and is keenly focused on continuous process industries, mainly Aluminium, in India and looking to expand to other geographies.

T&D sector is a focus area for India and UK, and largely in most markets we operate in. There are three key factors driving the rapid growth and modernisation of this sector, for S&S and Acrastyle businesses.

• Population growth and ever-growing consumption of power in our homes, offices and commercial establishments, and of our transport systems (EVs, Trains).

• Large-scale integration of renewable energy into our grids is calling for new / strengthened transmission corridors, and smart-grid technologies needing significant investments.

• Digitalisation of our economy and even in our personal lives viz. banking, shopping, travel is driving the creation of large Data Centers, which have large requirements of power in urban clusters. With our decades of experience in customised engineering and our reputation as a reliable partner for customers, we are well placed to grow in the T&D sector.

Aluminium: The sector is seeing an increase in usage across diverse industries. Being infinitely recyclable, focus is on sustainable production of the metal, making it more environmental-friendly and reducing energy consumption during its production. Intelligent Automation that helps increase the throughput while reducing the energy consumption, and associated processes related to Green Aluminium production, gives the HART business a strong market with a competitive business advantage.

Therefore, in both our core sectors, we expect market demand to remain steady in the foreseeable future.

Indian markets: The economic growth in India remains stable. Strong consumption is keeping the Aluminium demand high, and consequently the demand for HART products and services.is also robust. The Transmission sector continues to be extremely robust with addition of capacity both directly (PGCIL, State Transmission companies) and indirectly (Tariff Based Competitive Bidding through private sector players). The core reasons for such sustained growth remain electrification of urban infrastructure, strengthening and extending state transmission grids to facilitate flow of new renewable energy sources, and addition of new data centres in urban clusters to support the digitalisation of nearly all services. We are therefore seeing a strong pipeline for our HV Disconnectors over the next 3 – 5 years. We are keeping a watch on geo-political developments that may impact our customers and markets, as a precautionary measure.

The UK Market : In the UK, we are present mainly in the Transmission and Distribution segments through our business of Control and Relay panels. Here too, the consistent focus on renewable energy, and the related mod-ernisation and augmentation of older networks continue to drive a robust demand for our products across the UK. We are seeing strong tailwinds in order finalisation continuing for the near future e as well. However, there is a general sluggishness in industrial mfg. sectors in the UK, and we are keeping track of the same to anticipate or avoid any disruptions to our business in the UK.

Export Markets: IN FY 24-25, we saw a shrinking of export markets, notably Africa market due to funding and associated issues. Our primary route was through EPCs, many of whom had scaled down or exited their Africa operations. Going forward, we are cautiously optimistic about a slight recovery in this market, as well as others like Bangladesh and Vietnam. We are also looking to expand into one or two select regions in the MENA (Middle

East & North Africa) markets, for T&D as well as Automation businesses. We are looking for partners to enhance our reach, and mitigate our risks of expanding abroad.

As a company committed to excellence, we recognize that managing risk is essential to our continued success and long-term sustainability. In todays fast-paced and dynamic business environment, we face a multitude of risks — from market volatility to cyber threats and regulatory changes. However, with proactive planning and a robust internal control framework, we can not only mitigate these risks but also turn them into opportunities for growth.

Internal controls are the foundation of our risk management strategy. A strong internal control system ensures that we have the necessary checks and balances in place to prevent fraud, ensure compliance, and maintain the integrity of our financial and operational processes. These controls also promote accountability and transparency at all levels of the organization, fostering a culture of trust and responsibility.

Risk management and internal control are not just the responsibility of the leadership team; they are a shared responsibility across the organization. Every employee plays a critical role in identifying potential risks and adhering to our internal control procedures. By cultivating a culture of risk awareness and compliance, we collectively contribute to the health and success of the organization.

Our internal control environment is not static. We are constantly evaluating and improving our processes to adapt to emerging risks and changing business conditions. Through regular audits, employee training, and collaboration with external experts, we strengthen our internal controls and ensure they are aligned with best practices. Adequate internal control systems are maintained commensurate with the nature of its business and size and complexity of its operations. The internal control systems have been designed to provide reasonable assurance about recording and providing reliable financial and operational information. The Internal Control process of the Company has been robust and provides reasonable assurance on the reliability of financial information, compliances with laws and regulations in force and realization and optimization of operations.

As we continue to grow and evolve, our focus will remain on balancing risk with opportunity, while maintaining a strong and resilient internal control framework. I am confident that with your dedication and commitment, we will continue to thrive in the face of challenges and continue delivering value to our stakeholders.

While we have been cautious in looking ahead, please note many of the forward-looking statements have been made based on the available information and insight we have as on date. They are naturally subject to emergent risks and uncertainties that are difficult to foresee, and actual outcome might differ.