Concord Control Management Discussions


Management Discussion & Analysis Report

A. INDUSTRY STRUCTURE &DEVELOPMENTS

Indias railway network is recognised as one of the largest railway systems in the world undersingle management. The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from beingan energy efficient and economic mode of conveyance and transport. Indian Railways is the preferred carrier of automobiles in thecountry. Government of India has focused on investing in railway infrastructure by making investor-friendly policies. It has movedquickly to enable Foreign Direct Investment (FDI) in railways to improve infrastructure for freight and high-speed trains. At present,several domestic and foreign companies are also looking to invest in Indian rail projects. Revenue growth has been strong over theyears.

Ministry of Railways (MoR) has taken initiatives in various areas viz. network expansion, setting up of locomotive factories, inductionof railway wagons, Station Re-Development etc. to attract private investment and participation.

Being the Lifeline of nation, Indian Railways has been continually making innovations in its Technology, Service, Operations and Overall System to lead the nation on path to a modern and ever progressing future.

The Company is optimistic about its future and has only begun to unleash the full potentialof "Concord".

B. OPPORTUNITIES AND THREATS:

Strength:

• We offer a diversified range of products.
• Quality Assurance
• Long Standing Relationship with our customers
• Experienced and Qualified Management and Employee base
Opportunities:
• Vast Industrial Presence in both Public and Private Sectors
• Huge demand for Domestic services
• Avail of Low-cost, Skilled Human Resources.
• Proactive government continued thrust on reforms- Further liberalization under process.

Threats:

A decline or reprioritisation of the Indian Railways, reduction in orders, termination of existing government policies, delayof existing or anticipated

programmes or any adverse change in the GoIs policies or initiatives towards Indian Railwayswill have a material adverse impact on our business. We are exposed to risks associated with fluctuation in metal prices or shortages in supply of electric components.A slowdown in economic growth in India may adversely affect our business, financial condition, cash flows, results ofoperations and prospects.

C. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

Our business activity primarily falls within a single business and geographical segment, i.e. manufacturing of railway components,we do not follow any other segment reporting.

D. OUTLOOK

The Continual growth in India sector is necessary to give necessary support to the industry. The company is making all effort to accelerate the growth of its business. It Expect to improve its position in the market by focusing in the technologically advanced and more profitable Product and market segment and working aggressively in the area of productivity, efficiency and cost reduction.

E. RISKS AND CONCERNS

The industry is exposed to the following risk and concerns:

Competition Risk

Competitive risk is the chance that competitive forces could prevent the Company fromachieving its goal on account of declining revenues or margins.

Mitigation: The Company focuses on superior quality service and affordability. The Company knows its competitors and itscustomers and with differentiated services and marketing strategies mitigates this risk to agreater extent.

Technology Risk

This risk includes a disruption of Companys business due to operational inefficiencies inexisting technologies and IT processes.

Mitigation: The Company emphasizes on the analysis of security threats and their impactusing the latest technologies which are periodically upgraded.

Market Risk

Market risk is the risk of losses in positions arising from movements in market prices.

Mitigation: The Director of the Company are vigilant on roles and responsibilities inunderstanding the

movements and market situations.

Workforce Risk

Workforce risks can arise from issues such as critical skill shortages, increasing staff attritionor significant workforce retirement.

Mitigation: The Company trains its employees and ensures best HR practices, while carryingout improvements and rewards to attract and retain the best talent in the industry.

Policy Risk

Policy risk concerns the possibility that national governments — acting in their sovereigncapacity — amend policy environments in ways that adversely impacts the financial stabilityof the Company.

Mitigation: The Company is proactive in monitoring and abiding by policies in a timelymanner.

Supply chain risk

Supply chain risks include logistical, economic, political, cultural, competitive

andinfrastructural concerns.

Mitigation: The Company is continuously working on a comprehensive managementstrategy to counter supply chain disruptions through a holistic approach. By diversifying itssuppliers the Company expects to moderate risk factor.

Compliance Risk

Compliance risk captures the legal and financial penalties for failing to act under internaland external regulations and legislature.

Mitigation: The Company is aware of the legal, financial, reputational, and business impactdue to non-compliance risk.The Company has a system to ensure regular compliance andmonitoring thereof.

F. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an effective and reliable internal control system commensurate with the size of its operations. At the same time, it adheres to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. The efficacy of the internal checks and control systems is validated by self-audits and internal as well as statutory auditors.

G. DISCUSSION ON FINANCIAL

PERFORMANCE WITH RESPECT TO OPERATIONALPERFORMANCE

Financial Year 2022-23 was marked by a strong performance across all geographies and product categories, with market share gains and improvement

in operating margins, as compared to the previous Financial Year.The Revenue from operations has increased fromRs. 3169.02 Lakhs for financial year ended 31stMarch, 2022 to Rs. 4933.95 Lakhs for financialyear ended 31stMarch, 2023 while net profit has increased fromRs. 264.19 Lakhs for financial year ended 31stMarch, 2022 to Rs. 544.61 Lakhs for financialyear ended 31stMarch, 2023 thereby recording an increase of around 55.69%and 106.14% respectively.

The Reserve and Surplus of Company has increased fromRs. 726.91 Lakhs for financial year ended 31stMarch, 2022 to Rs. 1551.92 Lakhs for financialyear ended 31stMarch, 2023.

Further, our focus remains on strengthening our balance sheet as we fund our expansions through our internal accruals. The equity raised through IPO in October, 2022 along with the strong cash flow generation has led to an improvement in overall financial ratios.

H. MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Your Company follows a policy of building strong teams of talented professionals. People remain the most valuable asset of your Company. The Company recognizes people as its most valuable asset and the Company has kept a sharp focus on Employee Engagement. The Companys Human Resources is commensurate with the size, nature and operations of the Company.

I. DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS(I.E. CHANGE OF 25% OR MORE AS COMPARED TO THE IMMEDIATELY PREVIOUS FINANCIAL YEAR) IN KEY FINANCIAL RATIOS, ALONG WITH DETAILED EXPLANATIONS THEREFOR, INCLUDING:

Sr. No. Particulars 2023 2022 Explanation
1 Debtors Turnover 8.26 5.01 increased primarily on account of better collection from Debtors.
2 Inventory Turnover Ratio 12.74 7.18 increased primarily on account ofbetter management of inventory.
3 Interest Coverage Ratio 115.17 31.86 Increased profit margin and less finance cost
4 Current Ratio 3.10 1.69 increased primarily on account of increase in current assets mainly trade receivables/ inventory/cash and cash equivalents.
5 Debt Equity Ratio 0.12 0.42 decreased primarily on account of repayment of borrowings during the year/ issue of new share capital.
6 Operatin Profit Margin (%) 30.39% 26.62% increased primarily on account of reduction of operating expenses.
7 Net Profit Margin (%) 0.11 0.10 increased primarily on account of increase in operating profit during the year.
8 Debt Service Coverage Ratio 123.01 35.16 increased primarily on account of increase in operating profits / lower outstanding loan balance due to repayment of borrowings during the year.
9 Return on Equity 0.38 0.43 increased primarily on account of increase in operating profit during the year.
10 Net Capital turnover ratio 2.99 3.19 increased primarily on account of increase in sales/ decrease in working capital due to (increase/decrease in inventory/trade receivable/ trade payable/cash and cash equivalents).
11 Return on Capital employed 0.20 0.70 increased primarily on account of increase in operating profits/repayment of borrowings during the year.
12 Return on Net Worth 0.26 0.35 Primarily due to increase in Share Capital

J. DISCLOSURE OF ACCOUNTING TREATMENT

The financial statements have been prepared to comply in all material respects with the mandatory Accounting Standards applicable under Rule 2 of Companies (Accounting Standards) Rules, 2021 to the extent applicable and the relevant provisions of the Companies Act, 2013. The Ind AS are not applicable to the company in terms of SEBI guidelines. The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company.

K. CAUTIONARY STATEMENT

This report contains forward- looking statements based on the perceptions of the Company and the data andinformation available with the company. The company does not and cannot guarantee the accuracy of various assumptions underlying such statements and they reflect Companys current views of the future events and are subject to risks and uncertainties. Many factors like change in general economic conditions, amongst others, could cause actual results to be materially different.