Concord Control Systems Ltd Management Discussions

A. INDUSTRY STRUCTURE & DEVELOPMENTS

Indias railway network is recognised as one of the largest railway systems in the world under single management. The railway network is also ideal for long-distance travel and movement of bulk commodities, apart from being an energy efficient and economic mode of conveyance and transport. Indian Railways is the preferred carrier of automobiles in the country.

Government of India has focused on investing in railway infrastructure by making investor-friendly policies.

It has moved quickly 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 the years.

Ministry of Railways (MoR) has taken initiatives in various areas viz. network expansion, setting up of locomotive factories, induction of railway wagons, Station ReDevelopment 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 potential of "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, delay of existing or anticipated programmes or any adverse change in the GoIs policies or initiatives towards Indian Railways will 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 of operations 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 from achieving 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 its customers and with differentiated services and marketing strategies mitigates this risk to a greater extent.

Technology Risk

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

Mitigation: The Company emphasizes on the analysis of security threats and their impact using 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 in understanding the movements and market situations.

Workforce Risk

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

Mitigation: The Company trains its employees and ensures best HR practices, while carrying out 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 sovereign capacity amend policy environments in ways that adversely impacts the financial stability of the Company.

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

Supply chain risk

Supply chain risks include logistical, economic, political, cultural, competitive and infrastructural concerns.

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

Compliance Risk

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

Mitigation: The Company is aware of the legal, financial, reputational, and business impact due to non-compliance risk. The Company has a system to ensure regular compliance and monitoring 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 OPERATIONAL PERFORMANCE

Financial Year 2024-25 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 to Rs. 7,783.99 Lakhs in FY 2024-25 compared to Rs. 6660.57 lakhs in FY 2023-24 representing a remarkable increase of approximately 16.87%. while Net Profit of Rs.1507.08 Lakhs in FY 2024-25 compared to Rs. 1304.25 Lakhs in FY 2023-24 thereby recording an increase of 15.56%.

The Reserve and Surplus of Company has increased from Rs. 4,044.16 Lakhs for financial year ended 31st March, 2024 to Rs. 10,519.41 Lakhs for financial year ended 31st March, 2025.

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 through subsequent preferential allotment in [.] and [.] 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 THEREFOF, INCLUDING:

Sr. No. Particulars	2025	2024	Explanation
1 Debtors Turnover Inventory Turnover	4.14	5.48	increased primarily on account of better collection from Debtors increased primarily on account of better
2 Ratio Interest Coverage	15.52	22.51	management of inventory Increased profit margin and less finance
3 Ratio	215.93	121.9	cost increased primarily on account of increase
4 Current Ratio	3.76	3.58	in current assets mainly trade receivables/ inventory/cash and cash equivalents. decreased primarily on account of
5 Debt Equity Ratio Operating Profit	0.31	5.89	repayment of borrowings during the year/ issue of new share capital.
6 Margin (%)	27.11%	27.07%	increased primarily on account of reduction of operating expenses.
7 Net Profit Margin (%)	0.20%	0.20%	"Net Profit Ratio decreased primarily on account of decrease in operating profits OR
			Net Profit Ratio increased primarily on account of increase in operating profits" increased primarily on account of increase
8 Debt Service Coverage Ratio	136.37	58.51	in operating profits / lo33wer outstanding loan balance due to repayment of borrowings during the year.

 

9 Return on Equity Net Capital	0.19	0.39	increased primarily on account of increase in operating profit during the year. increased primarily on account of increase in sales/decrease in working capital due to
10 turnover ratio Return on Capital	2.41	2.56	(increase/decrease in inventory/trade receivable/trade payable/cash and cash equivalents). increased primarily on account of increase
11 employed	0.18	0.36	in operating profits/repayment of borrowings during the year.
12 Return on Net Worth	0.14	0.28	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 and information 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.

	For & on behalf of the Board
	Concord Control Systems Limited
	Sd/-
Date: September 07, 2025
	Govind Prasad Lath
Place: Lucknow
	Chairman & Non-Executive Director
	DIN: 00272007