Management Discussion and Analysis Management Discussion and Analysis report is attached herewith forms part of this report. Summary of performance and various businesses and functions of the Company is as follows: 1. Economy and Markets The after effects of the global financial crisis of 2008 have continued to cast their shadow on the economies around the world even now. The crisis brought to fore the vulnerabilities of the systems of regulation and operation of the financial and fiscal processes. The unbrcedented scale of fiscal stimulus that was required to manage this crisis has meant that bringing the fiscal deficit back to acceptable levels is an equally daunting challenge. The Indian economy rebounded strongly in fiscal 2011 from the moderation induced by the global downturn. India registered real GDP growth of, 12.25% in 2012-13, 11.94% in fiscal 2013-14 and an estimated 7.33% in fiscal 2014-15. 2. Market Overview Our Company is a mid-sized recognized manufacturer in Rajasthan, India in the segment which we operate. Our products are mainly targeted to the households and business groups. Our products are marketed in both domestic and international markets. The manufacturing of wires & cables and electrical accessories & other allied products in India has been growing at a steady rate and is expected to increase further due to affordability and changing life styles of the people. As such, demand for our products has been increasing and therefore we have proposed to expand our manufacturing capacity so as to meet the increased demand both in domestic and foreign markets. 3. Competition Our Company operates in competitive environment and has a number of organized players and very few unorganized players. Our peers who are engaged in the similar activity like that of ours are namely, M/s. Havells India Limited, M/s Anchor Electricals Private Limited, M/s V-Guard Industries Limited, etc. Our Company's major emphasis is on manufacturing of superior designed quality product at affordable price. Thus, due to consistent emphasis on quality and delivery, our Company has been receiving repeated orders from its dealer network. 4. Marketing Setup Our Promoters have vast experience of marketing of wires and cables and electrical accessories & other allied products. They have been manufacturing and marketing these products for past over 35 years. We have a good reputation among our dealer network which consists of more than 2,000 in number. The sale price of the components to be manufactured is decided based on design complexities, material, process, quantity, period of supply, etc 5. Export obligation As on the date, we do not have any export obligations. 6. Strength • Established brand in North West India; • Experienced management team; • Organized and combrhensive product offering; • Established reputation for quality products; • Driving growth through innovation and marketing; • Our relationship with customers; • Our relationship with more than 2,000 dealers; • Dedicated team of technical manpower; 7. Weakness • Player in regional market. • Any avoidance of rules of Govt, caused under unavoidable circumstances may have an adverse impact on the project. 8. Opportunity • The location of the unit is the hub of industry of the multiproduct category. This will cause a competition and that will help the customer to differentiate between the average and the best product. The importers will get variety of the products, which will be a healthy situation for the Industry ultimately. • The Company has many opportunities in view of the increasing demand for wires & cables and electrical accessories. 9. Threats • In the event there is any delay in the completion of the objects of this Issue it would in turn affect our revenues and results of operations. The funds that we receive would be utilized for the objects of the Issue. The proposed schedule of implementation of the objects of the Issue is based on our management's estimates. If the schedule of implementation is delayed for any other reason whatsoever, including any delay in the completion of the Issue, we may face time and cost overruns and this may affect our revenues and results of operations. • Our contingent liabilities, not provided for, if crystallized, could adversely affect our financial condition. We have not provided for certain contingent liabilities which if materialized could adversely affect our financial position. The details of the same areas under: • The loss of or shutdown of operations at our production facilities may have a material adverse effect on our business, financial condition and results of operations. The breakdown or failure of our equipments and/ or civil structure can disrupt our production schedules, resulting in performance being below expected levels. In addition, the development or operation of our facilities may be disrupted for reasons that are beyond our control, including explosions, fires, earthquakes and other natural disasters, breakdown, failure or sub-standard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks, and labour disputes. Our production facilities are also subject to mechanical failure and equipment shutdowns. Our machineries may be susceptible to malfunction. If such events occur, the ability of our facilities to meet production targets may be adversely affected which may affect our business, financial condition and results of operations. Acknowledgement We thank our customers, vendors, investors and bankers for their intense support throughout the year. We place on record our apbrciation of the contribution made by our employees at all levels. We thank the Government of India, particularly the Ministry of Commerce, Ministry of Finance, Ministry of Corporate Affairs, the Custom and Excise Departments, Income Tax Department, the Reserve Bank of India, the State Governments and other government agencies for their support, and look forward to their continued support in the future. for and on behalf of the Board Akshay Kumar Gurnani Director (06888193) Dinesh Gurnani Director4 (00218635) Place: Jaipur Date: 23/07/2015 |