Calcom Vision Ltd Management Discussions.

Company Overview

The Company is engaged in the business of Electronic products. The Electronics Manufacturing sector (EMS) continues to witness robust growth due to factors like increasing affordability of ever-growing middle class and increasing consumers disposable income. Industry growth is expected to accelerate further with increasing electrification of rural areas, wide usability of online sales and increasing working population. Sector is undergoing an evolution from being primarily a consumption-driven market to the one with manufacturing capability to cater to local and overseas demand.

The Company has participated in the Light India Exhibition at Pragati Maidan, New Delhi organized by Messe Frankfurt Trade Fair India Pvt Ltd. The Company received good response in the exhibition.

The Key Initiatives and Decision taken by the Management of the Company are as under.

The Company is focusing to increase efficiency and performing effectively in the dynamic business environment. We have implemented Annual Review Workshop Program with Extended Management Team to review past years performance, do regular SWOT analysis and finalize the Key Focus Areas for future.

Key Decisions taken in the last year workshop are:-

• Started formal "Monthly Performance Review (MPRs)" with Core Management - Review of past month performance and next month plan.

• Defined Key Result Areas (KRAs) and measurable Key Performance Indicators (KPIs) for each function - Sales &Marketing, Purchase/Procurement, Production, Finance & Accounts, Quality, R&D and HR.

• Daily Cross Functional Review meetings for monitoring of sales, production and purchasing progress, to review and expedite resolution of operational issues.

• Deployed SAP B1 ERP in July, went live after 3 months Parallel Run in SAP and legacy systems.

• Launched a comprehensive Revamping of Production Floor Layout to achieve Increased Capacity, Improved process flow and optimized equipment usage.

• Extended existing production lines to enhance capacity, and achieve seamless process flow and elimination of non-value add efforts & time.

• Developed companywide 5S and Kaizen Improvement Framework. Defined physical zones & designated leads for effective monitoring and compliance.

• Imparted multi-level trainings on 5S and Kaizen across functions.

• Instituted a Governance model involving daily and monthly audits to track the progress & improvements made.

• Identified and started 6 Cross Functional Projects, developed project data sheets with clear timelines & scope, assigned Leads and teams.

OPPORTUNITIES AND THREATS

Opportunities

1. With the Victory of the MODI Government the Country has got a stable government. A positive atmosphere created from initiatives such as Make in India, Start-Up India, GST implementation, Skill India, Digital India has increased the confidence of major world players and investors step up for investment and operates within the country. Government Policy has provided complete aid for the growth and liberalization of the consumer electronic manufacturing industry. The Indian consumer electronic manufacturing industry is steadfast on its growth route and following government policies have made an impact on the sector.

2. The US-China trade war is likely to have a positive impact on Indian economy. US have threatened to impose higher duties to Chinese imports, with this US Companies would look into India for sourcing their requirements.

3. After Specialty Lighting products "Wedding PAR" Osram confirmed another high value product "Linear Bar" for development. Osram not only re-enforce the faith in Calcom by giving the development of Linear Bar but also gives the responsibility to design the power supply of the "Linear Bar".

Threat s

1. The major sales are from OEM Business which can affect the performance of the company eventuality. For this the Company has decided to diversify its customer base.

2. There is huge price erosion in LED products coupled with fierce competition, the Company has to continue developing newer products and continuously looking for cost reduction opportunities.

PRODUCT WISE PERFORMANCE

The Company sold Lighting Products valued at approx. Rs. 5232.28 Lacs in the year 2018-19 as compared to Rs. 2564.10 Lacs in the year 2017-18.

OUTLOOK

The company continues to focus on following two Product Segments & Services

1. Electronics Manufacturing Services (EMS): Take up EMS Services for any electronic product from existing as well as new Customers.

2. Original Design & Manufacturing (ODM): Carry out End to End Manufacturing (including the product design) in the Lighting Sector. Your Company strives to provide more ODM solutions to its customers.

In view of the above Strategic Decisions, the Company is expecting doubling up of revenues in next year or so.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an appropriate system of internal control. Fixed Assets of the Company are inspected once a year & Stocks are counted cyclically on perpetual basis. All the financial transactions are duly authorized as per the delegation of Authority.

An Audit Committee comprising of 4 non-executive Independent Directors, one non-executive director and one Executive Director is in place to further strengthen the internal controls. The Audit Committee meets regularly to review the Audit and Accounts reports.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The sales of your Company for the year 2018-19 were Rs.5232.28 lacs as against Rs.2564.10 lacs for the previous year. The Company has sold Lighting Products 4755626 nos. as against 1785007 nos. for previous year and provided EMS Jobwork Service Rs.445.32 Lacs as against Rs. 369.07 Lacs in Last Year.

HUMAN CAPITAL

Human resources form the most significant element responsible for an uninterrupted growth for the Company. The Company makes all efforts in attracting, retaining, and developing the best talent required for the business to grow. The employee skills are regularly updated with training and development programmes. The Company enjoys high Employee satisfaction and motivation Levels leading to higher retention and low attrition rates. The Companys human resource and industrial relation policies focuses on working together with the employees for their personal and professional development and at the same time aligning their goals with that of the Company to create a win-win situation.