Southern Gas Ltd Management Discussions

The Board of Directors is pleased to present the Management Discussion and Analysis Report based on the current Government Policies and the Market Conditions.

GLOBAL OUTLOOK

The global outlook provides an assessment of the expected trajectory of the world economy, considering current trends, risks, and opportunities. As of 2025, the global outlook is shaped by several key factors, including inflationary pressures, geopolitical tensions, economic recovery from the COVID-19 pandemic and the ongoing digital and green transitions. Heres a detailed overview:

GLOBAL ECONOMY

The global economy navigated FY 2024 25 with moderate growth and demonstrated resilience amidst a complex macroeconomic landscape marked by continued monetary tightening, geopolitical tensions, and supply chain realignments. According to the IMF, global GDP growth held steady at 3.1% in 2023 and is forecasted to remain at 3.2% in 2024, followed by a modest increase to 3.3% in 2025, driven by robust domestic demand in select emerging markets and a modest recovery in global trade.

Overall, the global economic environment in FY 2024 25 was characterized by cautious optimism due to renewed geopolitical tensions (notably in the Middle East and Eastern Europe), financial sector vulnerabilities, high debt levels in low-income countries, and climate-related disruptions. Businesses worldwide continued to adapt to a "new normal" shaped by supply chain diversification, digital transformation, demographic shifts, green investments and evolving sustainability expectations.

INDIAN ECONOMY OVERVIEW

India continued to shine as the fastest-growing major economy in FY25, with GDP growth estimated at 6.8%, a slight moderation from 8.2% in FY24.

The expansion was driven by healthy domestic consumption, a revival in private capital expenditure, and sustainedgovernment focus on infrastructure and digitalization.

Economic Outlook

For FY26, Indias GDP growth is projected to range between 6.3% and 6.8%, with services and infrastructure remaining the key drivers. However, challenges such as global trade restrictions, commodity price volatility, and the need for sustained job creation (90 million non-farm jobs by 2030) require strategic focus. Investments in education and healthcare, projected to rise to 6.5% and 3.8% of GDP by FY2048, respectively, will be critical to harnessing Indias demographic dividend and achieving the Viksit Bharat 2047 vision. Continued emphasis on clean energy, supply chain localization, and digital innovation positions India favourably for sustained medium-term growth.

INDUSTRY OVERVIEW

Medical Gases: Medical gases, including oxygen, nitrogen, nitrous oxide, and medical air, are critical for patient care in hospitals, clinics, and home healthcare settings. They are used in anesthesia, respiratory therapy, diagnostic procedures, and life support.

Industrial Gases: Industrial gases, such as oxygen, nitrogen, hydrogen, carbon dioxide, and argon, are used across various sectors, including manufacturing, chemicals, energy, electronics, and food processing. These gases play a crucial role in processes like welding, cutting, refining, and refrigeration.

OPPORTUNITIES

The Companys plant situated at various places in South India such as in Bangalore, Mysore, Bhadravati, Harihar, Hubli, Trivandrum, Calicut and Cochin (Udyogamandal) and all are equipped with latest technology and offers high quality products. The plant has all infrastructure facilities and is well connected with State highway. The Company manufactures (a) Industrial gases viz. Oxygen, Nitrogen, Dissolved Acetylene and Argon and its related grades and (b) Medical Oxygen. The Company caters to various industries and hospitals in entire Southern India in order to provide better service to its customers.

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE

The Company operates in only one segment, i.e., the manufacture of Industrial & Medical Gases, and the primary products manufactured by the Company are Medical Oxygen and Industrial Gases such as Oxygen, Nitrogen, Dissolved Acetylene, Argon, Hydrogen, Carbonic Acid, Medical Gases, Fuel Gases and all other kindred substances, or any compound preparation thereof. The performance of the Company in this segment has been found to be satisfactory.

OUTLOOK

The Company has an optimistic outlook for the future performance of the company due to increasing government incentives for the industry. The Company aspires to provide quality products at fair prices to have a steady and sustainable rate of growth over the years.

RISKS AND CONCERNS

The Company faces risks in the market due to competitive prices and increase in competition from other entities in its market segment. Although the Company has put in its best efforts to combat such risks this remains a major concern for the Company. The Company also faces risks which are common in the industry like high costs for transportation, safety in the production process and transportation of products and timely recovery of dues from its customers.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Companys internal control system over its operation has found to be adequate for the scale and size of its operations. The management, in consultation with the audit committee of its board of directors regularly reviews the adequacy and effectiveness of the internal control systems and undertakes improvements, wherever necessary.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The operational revenue of the company during the year was of Rs. 3571.20 which is less in comparison to the previous year.

The Operational Highlights of the Company are given below, it is recommended that the same is read with the Financial Statements, the schedules and the notes thereto.

Particulars	FY 2024-25	FY 2023-24
Revenue from Operations	3,571.20	3,559.62
Expenses:	1,654.20	1,494.77
Cost of material consumed Gross Profit	1,917.00	2,064.85

Material developments in Human Resources / Industrial Relations front, including number of people employed.

The Companys relations with its employees across all the Companys units were cordial during the year under review.

Safety, Health and Environment

The Company gives utmost importance to safety, health, and environment related issues. The employees are continuously educated and trained to improve their awareness and skills. All safety statutory requirements are being complied with Requirements of environmental acts and regulations are also complied with.

Cautionary Statement

Statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward-looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make the difference to the Companys operations include raw material availability and its prices, cyclical, demand and pricing in the Companys principle markets, changes in Government regulations, Tax regimes, economic developments within India and the countries in which the Company conducts business and other ancillary factors.

By Order of the Board
For The Southern Gas Limited
Sd/-	Sd/-
Gautam Pai Kakode	Motilal Sanvlo Keny
Managing Director	Director
DIN:02395512	DIN: 06813111
Dated: 13th August, 2025
Place: Margao-Goa