MANAGEMENT DISCUSSION AND ANALYSIS Industry Structure and Development The products and solutions offered by your Company for unitized material handling can be categorized into the following groups: mechanical material handling equipment, electric chain hoists, electric wire rope hoists and winches, cranes and overhead material handling equipment, storage and retrieval solutions and ergonomic handling solutions. These are used across the industry spectrum: by large corporate customers, public sector organisations, customers in the SME sector and also by project or EPC organisations. The industry verticals where they are used include the automotive or auto-component sectors, engineering (both heavy and light) sector, in metals and metal processing, in the oil / gas / petro-chemical sector, power generation sector, cement and infrastructure sector, food processing sector amongst others. It is a source of pride that the customers associated with your Company are industry leaders in their own right, whether big or small. Your Company's facilities in Khopoli and Pune produce the products required by its customers nationwide and internationally. The quality system of your Company's Khopoli facility is certified to ISO:9001-2008 standards by TUV Nord. The Chain Pulley Blocks made by your Company are "CE" certified as they meet the relevant European Machinery Directives. The operations are supported by an array of dedicated suppliers / vendors for the various components required. The Company's products are distributed by a pan-India network of over 45 Authorised Marketing Associates (distributors) and a further network of dealers associated with these AMAs. This is further supported by the Company's own Regional Offices in Pune, Delhi, Kolkata and Chennai, from where dedicated personnel support the channel partners and also work on increasing the market penetration for the solutions business requiring significant engineering inputs or project business. Service continues to be an area for focussed development. Your Company is also taking initiatives to ramp up its exports business, including appointment of distributors for key export markets. Your Company has installed 4 wind turbines of 1.25 MW generation capacity each in Dhule District, Maharashtra between 2005 and 2006. Opportunities and Threats Product and technology development and engineering is a core strength of your Company. The focus on design and development has enabled the Company to strongly meet the competition emanating from various local and international players in the market. Your Company has taken the challenge head on and has developed a new series of electrical chain hoists incorporating contemporary technologies and proven components that will enable it to face the brsent market scenario. Furthermore, your Company has introduced a technologically updated series of Chain Pulley Blocks and Ratchet Lever Hoists in association with Planeta Hebetechnik GmbH, Germany. These products bring a significant differentiation from the products and technologies brsently available in the market. Your Company has also met success in supplying / commissioning manipulators with leading automotive companies in India. The competition from the unorganised sector and cheap imports impacts a certain portion of the market which is extreme price conscious and not technology or quality conscious. The steps taken by your Company to improve its products and the inherent technologies and improve its market reach will enable your Company to consolidate and strengthen its position. Furthermore, in relation to export markets, these improvements will make the products far more technically acceptable. The efforts in terms of development and improvement activities in the technology and operational front in addition to aggressive marketing and promotion activities have enabled your Company to effectively face the competition. Financial Review / Segment wise Performance The revenue from operations of the Company at Rs. 91.14 Crores is 6.50% lesser compared to last year's revenue from operations at Rs. 97.48 Crores. The net profit of Rs. 13.29 Crores is 5.14% higher, as compared to last year's net profit of Rs. 12.64 Crores Internal Control Systems and their adequacy The Company has adequate internal control systems commensurate with its size and nature of business. The Company has engaged the services of a reputed Internal Audit firm. The report of the Internal Auditor is reviewed regularly by the Audit Committee of the Board of Directors and corrective actions are taken by the Management. Risks and Concerns Every business has inherent element of uncertainties owing to uncertain factors and managing risk is very critical for success of the enterprise. The Company has a Risk Assessment and Management Policy, wherein the Company has identified key risks, such as, Market Information (increasing market share), Competition Risk (strengthening marketing set-up), New Products Development (strengthening R & D activities), Employee Risk (reducing attrition rates and retaining employees) and Credit Risk (recovery of outstandings) etc. Risk minimization mitigation steps are regularly undertaken and reports are placed before the Audit Committee Meetings and Board Meetings. Business Out-look The Company's business is directly linked to investments in new projects, expansion of existing capacities and positive sentiments in industrial production activities. Although there has been some shift in expectations, we have to wait and would be ready to encash the opportunities as they arise. Development in Human Resources / Industrial Relations front Your Company recognizes the employees as critical asset of the organization and lays due emphasis on all round development of its human resources. At brsent, the Company has 122 employees comprising of engineers, marketing staff, commercial staff and workmen. Cautionary Statement Statements in the Management Discussion and Analysis, describing the Company's growth prospects, are forward-looking statements. The actual results may vary, depending upon economic conditions, raw-material prices, government policies, regulations, tax laws and other incidental factors. For and On behalf of the Board of Directors Shekhar Bajaj Chairman (DIN No. 00089358) Dated : June 14, 2016 Place : Mumbai |