MANAGEMENTS DISCUSSION AND ANALYSIS REPORT
> ECONOMIC OVERVIEW: -
GLOBAL ECONOMIC SCENARIO & OUTLOOK
The global electrical and electronics market grew from $3454.94 billion in 2022 to
$3739.37 billion in 2023 at a compound annual growth rate (CAGR) of 8.2%. The rapid pace
of innovations in electronics technology is stimulating consistent demand for newer and
faster electrical and electronics products. Technological development is a key to
attracting both consumers and business users for either replacing or upgrading the older
products with advanced versions. Over the course of the past year, the global economy has
experienced numeruous challenges in the form of geopolitical tension, rising interest
rates, high inflation levels. Alongside, the consequences of a sudden surge in COVID-19
cases in China also impacted growth projections.
The consumer durables market is undergoing a significant transformation, with more and
more consumers investing in their homes and seeking innovative and time-saving solutions.
The pandemic has altered consumer behavior, with people becoming more house-proud and
investing more in their homes and appliances. While there are immense opportunities for
the consumer durables markets, there are some inherent challenges that the industry faces,
which needs to be addressed, in order to ensure the uninterrupted growth of the sector.
Chinese manufacturers create strong competition for Indian manufacturers, the cost of
production is significantly lower in China as compared to India. Changing efficient
manufacturing norms also requires significant investments to be made in the sectors. Raw
materials needed to manufacture goods also are largely procured from China, making them
less cost-effective. However, Government of India is also taking leaps and strides to
support the growth of the sector, with PLI schemes being announced for IT hardware.
Companies which have been selected for being a part of the PLI schemes are expected to
fuel total production of US$ 21.64 billion.
The global economic output is expected to grow gradually, driven by stabilising
inflationary scenario, reviving consumer sentiment and investor confidence. The employment
scenario in the US and other advanced economies have recovered from the pandemic levels,
and growing disposable income is also likely to support growth in the coming years.
> INDIAN ECONOMIC SCENARIO & OUTLOOK
Major economies around the world have shown signs of economic slowdown, However Indias
economy remained the fastest growing major economy in the world while demonstrating strong
resilience to the global headwinds during FY2023 and is projected to have a real growth
rate of 66.8% in FY24 as per the Indian Economic Survey 2022-23. According to the Ministry
of Statistics and Programme Implementation (MOSPI) it is estimated to have grown by 7.2%
for the year FY23. The India consumer electronics market size is expected to reach USD
124.94 billion by 2030. The foreign direct investment in the ACE industry has also almost
doubled to USD 481 million till June in 2022 as against USD 198 million in 2021. The India
consumer electronics market size is expected to reach USD 124.94 billion by 2030. This
sector plays a crucial role in the Indian economy as it is expected to fuel Indias US$ 5
Trillion economy growth. There is a huge scope of untapped rural markets for the new
industry players who are trying to set their foot in the industry. This gives immense
opportunities for the existing and new players to tap into this untapped market to
increase sales in India.
> COMPANY OVERVIEW
Mystic Electronics Limited is engaged in the business of trading of electronic products
such as mobile handsets, computer hardware and software etc. Owing to the ongoing pandemic
crisis the company continued to face financial difficulties, however the Company is in the
process of diversifying and expanding the existing business activities into newer areas to
attain profits during the years which shall be beneficial for the growth of the Company
and its members.
> INDUSTRY STRUCTURE AND DEVELOPMENTS
Electronics and computer technology is transforming businesses in every industry around
the world in a profound and fundamental way. The continued reduction in the unit cost of
hardware, the explosion of network bandwidth, advanced software technologies and
technology-enabled services are fueling the rapid digitization of business processes and
information. The digital revolution is cascading across industries, redefining customer
expectations, automating core processes and enabling software-based disruptive market
offerings and business models. This disruption is characterized by personalized user
experiences, innovative products and services, increased business agility, extreme cost
performance and a disintermediation of the supply chain.
Indias electronics market is growing at 26% annually and is expected to become 5th
largest in the world and reach an astounding $400 billion in value by 2025. By then, the
industry will also create more than 400,000 jobs. At present, the industry is going
through an evolution due to advancement in technology, launch of innovative products and
challenge of global competition.
One of the common trends in the industry is miniaturization of products. The demand for
products to be made so has come from the consumers as they intend to reduce the size of
the products to make them easy to manage. The greater density of components required to
make the product small comes from a technology called VLSI designs. The traditional
components in electronics products will also be soon replaced by integrated circuits to
make them more efficient and small in size. Consumers are also demanding for products that
are in-built with AI abilities. This has led to development of electronics and consumer
durable products that come with intelligent functions. For instance, washing machines are
able to sense the load and decide the appropriate washing cycle. The AI will soon move
beyond consumer durable segments and will be available in several medical, industrial and
automotive electronic products.
> OPPORTUNITIES & THREATS
Opportunities:
Changing consumer preferences:
With more and more customers investing in their homes and seeking innovative and
time-saving solutions, the consumer products segment is undergoing a major transformation.
The fast-paced lifestyles of consumers today are driving the demand for consumer durables
that are convenient and make daily chores easier. Household penetration levels for most
product categories are well below countries with comparable economic standing, thereby
providing a long runway for growth.
Energy-efficiency:
The preference for energy-efficient appliances with a lower carbon footprint, which
also helps lower electricity bills, has significantly increased. In the years ahead,
growing awareness of climate change concerns will increase the demand for energy-efficient
appliances.
Threats:
Supply chain disruptions:
Global economic uncertainty and political tensions have caused supply chain
disruptions, leading to higher manufacturing costs and reduced profitability for the
consumer appliances industry in India.
Rapid technological advancements:
Businesses that fail to adapt to the rapid evolution of technology risk losing market
share to more technologically advanced competitors.
Environmental concerns:
Companies that are unable to meet the recently introduced BEE norms and consumer
preferences for eco-friendly appliances may experience reduced sales, potential backlash
and loss of consumer trust.
Increased competitive intensity:
The increased competitive intensity has led to price wars, reduced margins and the need
for aggressive marketing strategies, thereby posing a challenge for the players.
> RISKS & CONCERNS
The Board of Directors has adopted and approved a Risk Management Policy for the
Company to ensure the ongoing identification, evaluation, and mitigation of business
risks, safeguarding the interests of its stakeholders. The Risk Management framework is
designed to adapt to the evolving business environment and promptly address any emerging
risks.
>OUTLOOK
For FY 2024, the Companys plan is rooted in continuing its journey of brand
transformation, enhancing its product offerings, strengthening distribution, and improving
customer service. The Company will focus on implementing innovative technology to enhance
product features based on deep consumer insights and need gap analysis and will continue
to leverage advanced technological tools to improve the efficiency and performance of its
sales team. Revamped digitalization processes and artificial intelligence will play a
pivotal role in driving the business forward.
> SEGMENT-WISE PERFORMANCE:
The Company is operating on only one segment. Hence separate segmental reporting is not
applicable. The Company has no activity outside India.
> INTERNAL CONTROLS SYSTEMS AND ADEQUACY
The Company has established a matured internal audit process for the Company as a whole
covering the corporate office and the branches all over India. Agenda for the audit/scope
is finalized and approved by the Audit Committee. The Company has standardized SOPs in
place in form of various manuals, policies and procedures for all critical and important
activities as recommended by the management. Audit finding are placed in the audit
committee and directions of the committee are followed to improve internal control and
avoid recurrence of events.
There are certain policies adopted by the Company for maintaining internal control
within the organization, which are as follows: -
a) Risk Management Policy:
This policy sets out Companys risk, oversees management of material business risks
and internal control. The purpose of this policy is to encourage an appropriate level of
risk tolerance throughout the Company; establish procedures to analyze risks within agreed
parameters across the Company; establish appropriate risk delegations and corresponding
risk management framework across the Company and ensure the Company has a risk management
framework that can noticeably respond the risk profile of the Company.
b) Whistle Blower Policy: This policy is formulated to provide opportunity to
all employees to have access to the Management or the Chairman of the Audit Committee, in
case they observe any unethical and improper practice or behaviour or wrongful conduct in
the Company and to prohibit any person from taking adverse personal action against such
employee.
c) Policy on Related Party Transactions:
This policy is framed to ensure compliance of the applicable provisions of the
Companies Act, 2013 and the rules made thereunder and SEBI (LODR) Regulation, 2015 as
amended from time to time and intended to ensure the proper approval and reporting of
transactions between the Company and related parties. Such transactions are appropriate
only if they are in the best interest of the Company and the shareholders
> FINANCIAL PERFORMANCE
The financial performance is covered in the Directors Report and the same can be
referred to by the shareholders.
> MATERIAL DEVELOPMENT IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT
The Company takes pride in the commitment, competence and dedication exhibited by its
employees in all business areas. The Company continually strives to strengthen its people
in alignment with the business needs and continue to engage them through various
ingenuities in the realm of learning & development opportunities, employee engagement
activities and career growth. The redesign in organization structure created a clear focus
and perspective on branded business and new emerging businesses. Teams collaborated at
various levels to meet the overall business objective.
> RATIOS WHERE THERE HAS BEEN A SIGNIFICANT CHANGE FROM FINANCIAL YEAR 2022 TO
FINANCIAL YEAR 2023
During the year under review, the detail of changes made in the following key financial
ratios as compare to the immediately previous financial year. The details of the same in a
form of comparison is provided as: -
| S. No. |
Particulars of Ratio |
Financial Year 2022-23 |
Financial Year 202122 |
| 1 |
Debtors Turnover Ratio |
NA |
NA |
| 2 |
Inventory Turnover Ratio |
NA |
NA |
| 3 |
Interest Coverage Ratio |
NA |
(0.49) |
| 4 |
Current Ratio |
1980.97 |
504.22 |
| 5 |
Debt Equity Ratio |
0.04 |
0.04 |
| 6 |
Operating Profit Margin |
NA |
NA |
| 7 |
Net Profit Margin |
(0.82) |
0.09 |
| 8 |
Return on Net worth |
(0.119) |
(0.001) |
CAUTIONARY STATEMENT:
Statements in foregoing paragraphs of this report describing the current industry
structure, outlook, opportunities, etc., may be construed as "forward looking
statements", based on certain assumptions of future events over which the Company
exercises no control. Therefore, there can be no guarantee as to their accuracy. These
statements involve a number of risks, uncertainties and other factors that could cause
actual results to differ materially from those that may be implied by these forward
looking statements. Such risks and uncertainties include, but are not limited to: growth,
competition, domestic & international economic conditions affecting demand, supply
& price conditions, changes in Government regulations, tax regimes and other statutes.
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By and on behalf of the Board |
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For Mystic Electronics Limited |
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Sd/- |
Sd/- |
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Krishan Khadaria |
Mohit Khadaria |
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Director |
Managing Director |
| Registered Office: |
DIN: 00219096 |
DIN: 05142395 |
| 401/A, Pearl Arcade, Opp. P. K. Jewellers, |
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| Dawood Baug Lane, Off J. P. Road, |
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| Andheri (West), Mumbai - 400 058 |
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| Place: Mumbai |
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| Dated: 1st September, 2023 |
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+91-9892691696
