Viviana Power Tech Ltd Management Discussions

FOR THE FINANCIAL YEAR ENDED MARCH 31, 2025

01. Overview of Indian Power Sector Landscape

India has emerged as one of the fastest-growing major economies globally, achieving an average GDP growth rate of over 7% over the past three years. This momentum has been driven by the governments focused push on infrastructure development, strategic advancement of the manufacturing and services sectors, rapid urbanization, enhanced rural electrification, and improving agricultural incomes. These structural drivers are expected to underpin a sustained and long-term increase in power demand.

The countrys energy consumption continues to rise in tandem with its economic trajectory. Power demand is now projected to outpace GDP growth in the near future, placing the sector on a firm expansionary path. Between FY2018 and FY2025, Indias peak electricity demand grew from 164 GW to 250 GW, reflecting a compound annual growth rate (CAGR) of 6.21%. Remarkably, despite this significant increase, the national energy deficit remained negligible at just 0.1%, a testament to the resilience and robustness of Indias power infrastructure. Timely capacity additions - particularly in renewable energy - have played a critical role in maintaining supply stability, with peak demand increasingly aligning with renewable energy generation.

Although Indias per capita electricity consumption remains below the global average, it is expected to rise significantly in the coming years, presenting vast opportunities for stakeholders across the value chain. Viviana is strategically positioned to capitalize on this growth. Backed by a strong track record in power transmission and substation infrastructure development, we remain committed to supporting Indias clean energy transition and contributing meaningfully to the nations long-term energy security and sustainability goals.

02. Industry Overview and Company Operations Key Sector Developments and Dynamics

The Indian power sector continues to evolve rapidly, driven by an accelerated push for renewable energy and a corresponding need for infrastructure upgrades. However, structural imbalances and execution challenges persist across the value chain. Key developments during the year include:

• Lag in Grid Modernization: While the country added 22 GW of solar and wind capacity in the first half of 2025, the transmission infrastructure has not kept pace. This mismatch has led to instances of renewable energy curtailment, underscoring the urgent need for synchronized planning between generation and transmission expansion.

• Shift to Dynamic Energy Planning: The Central Electricity Authority (CEA) has transitioned from a five-year to an annual planning cycle for energy infrastructure, enabling more agile and responsive decision-making.

• Reforms in Power Distribution: To address the financial distress faced by several state-run Distribution Companies (DISCOMs), the government is evaluating bailout packages. These efforts are complemented by broader structural reforms, including fiscal discipline mechanisms.

• Smart Infrastructure Investments: Implementation of the Revamped Distribution Sector Scheme (RDSS) continues across both urban and rural regions, focusing on modernizing distribution systems, improving operational performance, and reducing technical losses.

Government of India: Strategic Vision for 2025-2032

The Government of India has laid out an ambitious roadmap for the power sector aimed at achieving long-term energy security, grid resilience, and decarbonization goals.

A. Transmission Network Expansion

• Network Growth Targets: The total transmission line length is projected to grow from 4.85 lakh circuit kilometers (ckm) in 2024 to 6.48 lakh ckm by 2032. Transformation capacity is set to increase from 1,251 GVA to 2,342 GVA.

• Capital Investment: An estimated ^4.91 lakh crore will be required between 2027 and 2032 to support the proposed transmission infrastructure build-out.

B. Distribution Sector Reforms and Investment Initiatives

• RDSS and Urban Grid Enhancements: The RDSS aims to reduce Aggregate Technical & Commercial (AT&C) losses to 12-15% and close the gap between the average cost of supply and revenue realization by FY 2025-26.

• Performance-Based Incentives: DISCOMs are being assessed through Integrated Ratings to monitor improvements in operational performance. States implementing power sector reforms are eligible for an additional 0.5% borrowing limit over their standard Gross State Domestic Product (GSDP) ceiling, incentivizing deeper reforms.

C. Sectoral Resilience, Innovation, and Growth

• Renewable Energy Momentum: In FY 2024-25, India achieved a record 30 GW addition in renewable energy capacity. The renewable energy pipeline now stands at approximately 170 GW, reinforcing the nations trajectory toward its 500 GW clean energy target by 2030.

• Institutional Expansion: Over 30 new transmission-focused entities, including several state-sponsored companies, were established in early 2025 to accelerate grid expansion and support Indias decarbonization objectives.

• Addressing Overcapacity and Integration Risks: The sector is increasingly focused on improving coordination between project developers and grid planners to prevent stranded assets and ensure optimal utilization of renewable energy.

* https://www.financialexpress.com/business/industry-explainer-bridging-the-electricity-demand-supply-gap-3822552/

* https: //www.pib.gov.in/PressReleasePage.aspx?PRID=2057980

* https://www.ipds.gov.in/webappdocs/RDSS Docs/Letter FAQ RDSS 17082021.pdf

* https://www.pib.gov.in/PressReleasePage.aspx?PRID=2120729&utm

Concluding Remarks - Strategic Implications for Viviana Power Tech Limited

Viviana Power Tech Limited continues to strengthen its position in the power infrastructure sector by delivering end-to-end Engineering, Procurement, and Construction (EPC) services across PAN-India. Our core expertise lies in the supply, erection, testing, and commissioning of Extra High Voltage (EHV) transmission lines, substations, underground cabling systems, modern power distribution networks and renewable energy.

Our client base includes state electricity boards, private power utilities, and renewable energy developers. Projects are predominantly awarded through competitive bidding processes that ensure fairness and transparency. In the private sector, we leverage both open tender opportunities and preferential contract allotments, backed by our proven execution capabilities, strong technical acumen, and consistent delivery performance.

Operationally, our business is anchored around two strategic pillars: Material Supply and Project Execution. This dual approach enables streamlined coordination of highly skilled human resources, efficient resource deployment, and responsive logistics. While we retain a fleet of critical machinery to support core activities, project-specific equipment needs are met through rental partnerships, ensuring cost-effectiveness and operational flexibility.

Each project site is equipped with dedicated operational and storage facilities, enabling smooth execution and effective site management. Resource deployment is closely aligned with project timelines and deliverables, allowing us to maintain agility and responsiveness in a dynamic market environment.

As we look ahead, Viviana Power Tech Limited is well-positioned to capitalise on emerging opportunities in the evolving power infrastructure landscape. Our strategic focus on operational excellence, customer-centric delivery, and adoption of technological advancement to drive sustainable growth and long-term stakeholder value.

a. Growth Opportunities: As the government ambitiously expands Transmission and Distribution infrastructure and energy storage, Viviana Power Tech is well-positioned to participate in transmission projects, smart grid deployments, and energy storage solutions.

b. Enhanced Coordination: Insights from government emphasis on better planning coordination and forecasting can guide Vivianas internal strategy to align project timelines with grid readiness.

c. Distribution Modernization: RDSS offer market entry opportunities, particularly in urban and rural distribution upgrades and IoT-enabled systems.

d. Sustainability Alignment: Renewable integration and grid decarbonization align with Vivianas potential positioning as a green-tech partner.

Key Strengths

1. Organizational Stability and Experienced Leadership

With a track record spanning over ten years, our company has demonstrated resilience across market cycles. Our leadership, comprising experienced promoters and a qualified management team, brings deep industry insight, enabling us to respond swiftly to changing market dynamics and navigate operational challenges effectively.

2. Strong Client Relationships

We have built and sustained long-term relationships with our key clients, resulting in repeat business and a high customer retention rate. These associations serve as a strategic asset, enhancing our credibility and improving our chances of securing new contracts.

3. Skilled Workforce

Our success is driven by a team of highly skilled professionals proficient in delivering engineering, design, and execution solutions. Their expertise ensures timely, efficient, and cost-effective project delivery, even at large scale and complex situations.

4. Expansion of Existing Relationships

Our strategy includes broadening the scope of services offered to existing clients while continuously enhancing in-house capabilities. This customer-focused approach is designed to boost satisfaction, engagement, and longterm stability and revenue generation.

5. Optimal Resource Utilization

We continuously assess and refine internal processes to ensure efficient use of resources. Investment in customized systems and internal control mechanisms enables timely identification and rectification of bottlenecks, thereby optimising productivity.

6. Enhanced Operational Controls

We emphasize best management practices to ensure quality and timely delivery. By deploying qualified, experienced professionals and adopting industry best practices, we continually enhance operational efficiency.

7. Building a Professional and Transparent Organization

Our operations are guided by principles of transparency, commitment, and coordination. Our team is well supported by consultants on technical and financial matters as needed, helping to foster a strong, resilient organizational foundation.

Opportunities and Threats Opportunities

• Infrastructure Growth: Indias ongoing and significant investment in power and energy infrastructure continues to create robust growth avenues. The increasing focus on capacity enhancement and modernization presents a strong demand outlook for Engineering, Procurement, and Construction (EPC) services.

• Government Initiatives: Flagship government programs such as Saubhagya, Ujjwal Bharat, Kisan Suryodaya Yojana, RDSS and a series of policy-driven reforms driven by the Central Government are transforming Indias power landscape. These initiatives aim to strengthen the national grid, ensure universal access to electricity, and upgraded energy infrastructure. They create large-scale opportunities for EPC contractors, electrical infrastructure providers, and technology partners to contribute meaningfully to national development.

• Industrial Expansion: The sustained expansion of core industrial sectors - including oil & gas, manufacturing, utilities, and urban infrastructure - is fuelling demand for integrated EPC solutions. This trend is expected to support long-term order book visibility and revenue stability.

Threats

• Economic Volatility: Inflation, interest rate fluctuations, and exchange rate instability can impact project funding and profitability.

• Regulatory Uncertainty: Frequent regulatory changes may lead to higher compliance costs and project delays.

• Intense Competition: The EPC and infrastructure space is becoming competitive, may impact upon market share and margins.</p>

• Supply Chain Risks: Material shortages and logistical disruptions can delay project timelines and escalate costs.

• Technology Disruption: Rapid technological changes necessitate continuous investment in innovation. Risks and Concerns

The Company faces a range of strategic, operational, and external risks that may affect business performance. Our risk management framework helps in proactively identifying, assessing, and mitigating these challenges to ensure long-term sustainability and resilience.

Risk / Concern	Risk Description	Mitigating Strategy
1. Economic Fluctuations	Economic downturns or macroeconomic instability may result in reduced infrastructure investments, impacting project funding, revenues, and margins.	Flexible Contract Terms: Contractual provisions are designed to accommodate price fluctuations and market changes.
		Cost Monitoring: Close monitoring of cost structures and project viability.
2. Project Execution Risks	Delays, cost overruns, or technical complexities during execution can adversely impact delivery schedules and profitability.	Project Planning & Risk Mitigation: Detailed planning, phased execution, and robust monitoring systems are deployed.
		Contingency Planning: Backup strategies are implemented at project level.
3. Supply Chain Disruptions	Material shortages, logistics issues, or vendor failures can lead to delays and higher costs.	Supplier Diversification: Partnering with multiple suppliers to reduce dependency.
		Inventory Management: Implementing buffer stocks and just-in-time strategies.
4. Competitive Pressure	High competition in the EPC and power transmission sectors may impact pricing, margins, and customer acquisition.	Market Intelligence: Regular benchmarking and market research to stay competitive.
		Value Differentiation: Actively pursue the creation of new customer relationships and long-term client engagements.
		Building New Customer Base: Focus on acquiring new customers and building long-term partnerships.
		Segment Penetration: Explore and enter new industry segments to tap into additional business opportunities and reduce reliance on existing alliance.
5. Regulatory and Compliance	Frequent changes in government regulations, taxes, or environmental norms may increase operational costs or cause project delays.	Regulatory Monitoring: Dedicated team monitors regulatory developments for minimise consequences.
		Compliance Systems: Robust internal compliance systems ensure timely adherence to legal and statutory norms.
6. Labour and Workforce Issues	Availability of skilled labour, labour unrest, or high attrition can disrupt project execution.	Training & Retention Programs: Investing in workforce training and welfare.
		Local Hiring: Engaging local labour to reduce dependency and maintain site continuity.
7. Technological Disruption	Rapid advancements in technology may render current practices obsolete and require continuous investment in tools and skills.	Technology Upgradation: Continuous investment in modern tools, software, and machineries.
		Skill Development: Deployment of new qualified and experienced team. Regular employee training and upskilling to match industry evolution.

Internal Control Systems and Their Adequacy

The Company has established a robust internal control system that is appropriate for the size, nature, and complexity of its operations. These internal controls are designed to ensure:

• Integrity and transparency in business conduct

• Safeguarding of assets

• Timely and accurate financial reporting

• Reliability and completeness in accounting records

• Prevention and detection of frauds and errors

Policies and procedures are periodically reviewed and advancing to ensure effectiveness and aligned with evolving business needs and regulatory requirements. The internal control framework also supports compliance with applicable laws and ensures the efficient functioning of the Companys operations.

Human Resources and Industrial Relations

The Company firmly believes that human capital is a cornerstone of sustained business success and long-term value creation. Our people strategy is deeply aligned with our organizational goals, fostering a high-performance culture that supports innovation, operational excellence, and strategic execution.

As of March 31, 2025, the Company had a total of 65 full-time employees on its payroll. Our workforce represents a thoughtful blend of experience and emerging talent·enabling the organization to leverage institutional expertise while embracing new ideas and agile thinking.

Key Highlights

• Talent Management

We place strong emphasis on acquiring individuals with a balanced combination of technical acumen, domain- specific expertise, and behavioural competencies critical to our operations. Our structured learning and development programs, coupled with continuous performance evaluation systems, ensure that employees are equipped with evolving skills and remain future-ready.

• Contractual Workforce Deployment

To support project-specific and time-sensitive operational requirements, the Company engages a contractual workforce across various project sites. We maintain long-standing partnerships with reliable manpower suppliers across key states such as West Bengal, Rajasthan, Jharkhand, and Gujarat, while also utilizing local labour where feasible. This hybrid sourcing strategy ensures workforce flexibility, timely mobilization, and regional inclusivity.

• Employee Engagement and Industrial Relations

We are committed to fostering a collaborative, inclusive, and respectful work environment. The Company continues to maintain cordial industrial relations across all project locations. There were no instances of labour unrest

reported during the financial year, reflecting our consistent engagement with workers and adherence to fair labour practices.

By aligning our human resources initiatives with our long-term business strategy, we continue to cultivate a results- oriented, values-driven organizational culture. This strategic focus on people enables us to enhance productivity, ensure operational continuity, and drive organizational resilience in a dynamic business landscape.

Standalone Financial Performance

No	Name of the Ratio	Numerator	Denominator	FY 2024-25	FY 2023-24	% Variance
1	Debt - Equity Ratio (in times)	Total Debt (represents lease liabilities)	Shareholders Equity	0.4894	0.6816	-28%
2	Debt Service Coverage Ratio (in times)	Earnings available for debt service	Debt Service	10.4444	5.8417	79%
3	Return on Equity (in %)	Net Profits after taxes	Average Shareholders Equity	39.96%	30.85%	30%
4	Inventory Turnover Ratio (in times)	Revenue	Average Inventory	41.2470	18.5958	122%
5	Net Capital Turnover Ratio (in times)	Revenue	Working Capital	22.4606	5.7126	293%
6	Net Profit Ratio (in %)	Net Profit	Revenue	0.0903	0.0999	-10%
7	Return on Capital Employed (in %)	Earnings before interest and taxes	Capital Employed	0.2797	0.2583	8%

Capital Structure & Solvency

• Debt-Equity Ratio: 0.49x vs 0.68x ^ 28% improvement

o Lower leverage due to equity growth.

o Reflects a stronger capital structure and scope for future borrowings if expansion is pursued.

• Debt Service Coverage Ratio (DSCR): 10.44x vs 5.84x ^ 79% improvement

o Very comfortable coverage; ability to meet debt obligations is robust. o Driven by higher revenues and operating profit.

Profitability Indicators

• Return on Equity (ROE): 39.96% vs 30.85% ^ 30% rise

o Demonstrates strong value creation for shareholders, powered by higher net profits.

• Net Profit Margin: 9.03% vs 9.99% ^ 10% decline

o Margins slightly compressed, possibly due to higher material/service costs or competitive pricing. o Despite decline, net profitability remains healthy relative to EPC peers.

• Return on Capital Employed (ROCE): 27.97% vs 25.83% ^ 8% rise

o Indicates improved efficiency in capital deployment.

Efficiency & Working Capital Management

• Inventory Turnover: 41.25x vs 18.60x ^ 122% improvement

o Suggests faster project execution and leaner inventory practices. o Revenue grew significantly without proportionate inventory buildup.

• Net Capital Turnover: 22.46x vs 5.71x ^ 293% surge

o Highly efficient utilization of working capital in generating revenues.

o Largely due to stronger sales and increased current liabilities.

	By order of the Board of Directors
	For Viviana Power Tech Limited
	Sd/-
	Nikesh Kishorchandra Choksi
Place: Vadodara	Managing Director
Date: 01.09.2025	DIN 07762121