Management Discussion & Analysis Report FORWARD LOOKING STATEMENT The report contains forward looking statements, identified by words like plans, expects, will, anticipates, believes, intends, projects, estimates, so on. All statements that address expectations or projections about the future, but not limited to the Company's strategy for growth, market position, are forward looking statements. Since these are based on assumptions and expectations of future events, the Company cannot guarantee that these are accurate or will be realized. The Company's actual results, performance or achievements could thus differ from these projected in any forward looking statements. The Company assumes no responsibility to publicly amend, modify or revise any such statements on the basis of subsequent developments, information or events. Review of Economy Sanghvi Movers Limited is India's largest crane hiring Company in India. The performance of the Company is dependent on the Indian Economy, more particularly investments in infrastructure and core sector of the economy both by private as well as public sector undertakings. According to the provisional estimates released by the Ministry of Statistics, the Annual growth rate for financial year 2014-15 of Gross Domestic Product (GDP) was seen to improve to 7.3 per cent as against 4.9 per cent in the brvious year. It is projected to reach 8 per cent growth rate in the next fiscal year (2015-16), soon it is also expected that the India's growth rate will outpace that of China, Japan and Germany combined as projected by International Monetary Fund (IMF). Control on price rise continued and remarkable downfall in inflation was noted, with wholesale price index (WPI) falling at five year low of 0.11 in December 2014 in contrast to 6.40 in December 2013. Company Performance The Company operates primarily in operations of cranes. During the year under review, the business of Operations of Cranes has been satisfactory. We have been pioneered in catering to crane requirements of major industries like Power, Steel, Refinery, Cement and Wind Power. Industry Your Company is the Largest Crane Hiring Company in India and 6th Largest in the World, as per rankings from Cranes International Magazine (source: June 2015 issue). It is engaged in the business of providing hydraulic and crawler cranes to various industries in the infrastructure and core sector areas with a fleet of 375 medium to large size hydraulic truck mounted telescopic & lattice boom cranes and crawler cranes with lifting capacity 20 Tons to 800 Tons. In the next couple of years, your Company will focus more on renting cranes to Power, Steel, Cement and Aluminium Plants, Refinery, Metro and Hydro Power sectors. The increased focus on infrastructure sector will lead to higher demand in crane rental business. The Company is confident of meeting any demand spikes in the next fiscal year, based on the demand and implementation of projects currently in hand. Opportunities and Threats The Central Government's emphasis on the renewable energy more particularly on wind power generation and solar energy will bound to increase the demand for the crane rental business. In view of the increased investments in the renewable energy sector and upcoming projects in refinery and gas, cement, power and steel sector, the company expects increase in demand and rental for the cranes. Your Company has been providing heavy lift, plant erection and maintenance services to various large scale projects. Your Company has maintained a good track record in terms of effective deployment of cranes at competitive rates with due regard to time schedule as well as safety and efficiency in operations. The growth of crane rental business is constrained due to higher capital cost may result in availability of suitable cranes as per market demand. There is a concern for safety of cranes at work sites. The introduction of GST may result into simplified tax regime. The Company's operations may get affected on account of increase in competition in crane hiring business, delay in receivables. Outlook The Company has concentrated its fleet of cranes more on heavy duty cranes (cranes above 100 Tons). At brsent more than 90% of gross block of cranes is in 100 MT & above. Obviously, more than 90% of the Company's turnover is contributed by higher tonnage cranes. Risks and Concerns Economic Risk : The international economic crisis is manifestation of larger issues and the economic ills plaguing the world economies. The global economic conditions may affect the Indian economy. Competition Risk : Currently, the company faces competition threat from various domestic as well as foreign players. This results in to decrease in market share of the company and putting brssure on pricing power (yield) of the Company. Manpower Risk : Due to emerging competition, there might be shortage of Skilled Operators and Technical Staff. Also there is possibility of poaching of good manpower, as we have experienced staff. Financial Risk : Our cranes are being deployed in the infrastructure and core sector of the economy. Any slowdown in the Capex cycle more particularly in infrastructure & core sector may affect revenues of the Company. Your Company's business exposure to the normal financial and market risks continue to be monitored and managed by experienced managers at all levels duly strengthened from time to time by systems and processes commensurate with the volume of business activities and the perceived risk requirements. The Company doesn't have significant foreign exchange risk. Internal Control System and Their Adequacy The Company also has process of management reporting transactions and compliance with relevant laws and regulations commensurate with its and periodical review. The Company has adequate safeguards and controls over the use of its assets, generation of resources and meeting of various expenses and the systems are closely monitored by the management. Human Resource Development The Company believes that employees are one of its greatest assets. Considering the business challenges, management has initiated various training and development activities to upgrade skills and knowledge of the employees. Your Company has a team of professionally qualified personnel to look after technical and commercial aspects of business operations. Its technical team includes qualified engineers, skilled operators and expert maintenance staff. Employee relations have been cordial. Your Company had 1,376 employees including indirect labour as on 31st March 2015. Disclosure to the Board by the Management All disclosures relating to financial and commercial transactions where Directors may have a potential interest are provided to the Board and the interested Directors do not participate in the discussion nor do they vote on such matters. Cautionary Statement The information contained herein may not be disclosed, reproduced or used in whole or in part for any purpose or furnished to any other persons without the exbrss prior written permission of the Company. |