Devhari Exports (India) Ltd Management Discussions.
As our Company was doing well in the financial Year 2016-17 in newly started its business of investment holding. Company have found many good opportunities for newly startup companies like Jash Dealmark Limited & Shiva Granito Exports Limited that Companies strives for fund for future expansion of their own projects & business and they were came up with the their IPO on BSE SME Platform in which our company invest more than 10 Crore Rupees.
In upcoming year of business cycle company will plan to start new lines of business of telecom sector through alliance with some good market player. Companies highly skilled professional in search of good alliance partner for the same activity.
As our Company is Export oriented hence our company has found first visionary on exports oriented companies only hence if we see the financials of both investee company both were having major export income in the books of accounts of the company as on year ended on March 2017.
Brief about JASH DEALMARK LIMITED:
As we are the holding of that Company our company having 50.01% post issue shareholding in the company. Our company has acquired 25,00,001 shares of Rs. 10/- each at the price of Rs. 40/- each.
Jash Dealmark Limited is leading import export solution provider. Their company started the business of trading of exim licences. Since July 2014 onwards company were also started to import the various goods. During the financial year 2014-15, They have started trading and supply of industrial and engineering plastic Components as per customer requirement. And during the financial year 2015-16, JDL has started trading of various FMCG products within the country. Their products mainly cater to three business segments viz.
trading of exim licences;
trading and import of industrial and engineering plastic Components;
Plastic Products &
Overview of the Companies Financial
The Company has increase its top line like rocket which we can oversee from the financial reported by the company i.e. From 2013 to 2016 company reported its revenue from Operation was 770.74 Lakh to 25,766 Lakh and in target to achieve its to 35,000 Lakh in 2017, & in closure of financial of 2017 the company has reported 40,553 Lakh & in upcoming year i.e. 2018 the Company has target to get it touch at 50,000 Lakh top line of the Profit & Loss Account.
INDUSTRY STRUCTURE AND DEVELOPMENTS IN SECTOR OF TELECOM:
With the introduction of high speed 4G LTE (Long Term Evolution) data centric telecom networks under rapid implementation by various telecom operators in both public and private sectors, the use of optical fibre Cables in the entire network construction for backbone, metro and access portions has become an imperative choice. This is mainly due to the reason that optical fibres are having unlimited bandwidth capacity and can transport all our voice, video and data at the speed of light. Certain Sectors are still challenging like next generation optical fibre consuming technologies like cloud computing, machine-to- machine communications, Internet-of-Things (loT), Artificial Intelligence (Al), the cable industry is definitely poised to witness exponential growth in the coming years.
Despite the growth in Indian Telecom sector in terms of consumption of optical fibre cables, the price pressures are definitely a factor which is hindering the healthy growth. This is mainly due to increase in the price of optical fibres coupled with non-availability of optical fibre with longer delivery periods used in the manufacture of optical fibre cables. Further, the enthusiasm in the cable industry is dampened by not so encouraging price increase of cables in proportion to optical fibre price increase. By keeping the cable price at past levels, the industry is not getting required support to sustain on a long term basis.
OPPORTUNITIES AND THREATS:
There is a huge demand for data consumption, as the masses are looking for high speed bandwidth requirements predominantly based on various Social Media applications, e-governance needs, high definition TV, video streaming applications, on-line high dense data transfer applications, cloud computing, machine-to-machine communications, artificial intelligence, robotics, smart network applications, gaming applications, Internet of Things (loT), etc., driving the requirement of optical fibre cables in backhaul, metro access and final home reach portions of the telecom networks.
As per the latest market survey reports, the expected Data consumption is set to grow leaps and bounds in India to the tune of 7 GB per user per month in 2020 from a modest 0.7 GB per user per month in 2016 year end. As the country is set at point of data inflexion, the eco-system is expected to witness the creation of next generation data networks with optical fibre as the main carrying medium of signal transmission systems.
This should definitely auger well for the cable industry despite peaks and valleys in the business cycle on a yearly basis. The advent of increased smartphone penetration among the users in the country and at the global level will exponentially catapult the data consumption levels to new heights and thereby benefit the cable industry in a big way.
The price pressures on cable continue to trouble the industry jeopardizing the margin levels despite general increased consumption trends of optical fibre cables. The Right-of-Way (RoW) continues to remain as the show-stopper in the way of faster telecommunication network infrastructure creation in the country. From the recent announcement from the Government of India about the impending release of nationwide uniform RoW policy, should abolish various concerns of all stakeholders in the telecom sector, thereby faster creation of robust telecom infrastructure in the country.
As in all other industrial segments, telecom industry is also prone to undergo stress, as the sector in principle depends on policies and regulatory environment prevailing based on Governments directives. Recently, Government has announced about the drafting of improved guidelines for the award of tenders which will streamline the process of procurement in some of the prestigious Government projects like Digital India, which are expected to ease the long delays in deploying quality telecom infrastructure in the country.
RISKS AND CONCERNS:
In any industry, risks are always there and telecom industry is also subjected to various bottlenecks from time to time, in terms of non-availability of cheaper finances, logistics issues, policy concerns, taxation perils, availability of skilled workforce, foreign exchange fluctuations and high turn-over of workforce. However, your Company has systems and robust policies in place which should weather the storm of risks and concerns.
(a) Negligible quantum of procurement in JFTC requirements is the continuing trend, as all telecom operators are installing the next generation optical fibre cables network.
(b) Competition is always there in the cable industry as integrated players are offering price levels based on large scale, multi-location operational advantages.
(c) Below par quality players affecting technologically superior product manufacturers, thereby taking the network quality to poor levels.
Financial risks would include, interalia, low capacity utilization, un-remunerative prices, highly concentrated customers base, shorter delivery schedule and liquidated damages, foreign exchange exposure and related exchange rates fluctuation, commodity price including adverse movements in prices of raw-materials, warranty and security, current or future litigations, working capital management and interest rate, contingent liabilities, etc. In addition, the credit risks could increase, if the financial condition of Companys customers decline. The Company regularly identifies and monitors the financial risks as well as potential business threats and develops appropriate risk mitigation plans. The Companys crisis management capability is also reasonably honed to protect its reputation with its stakeholders.
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:
The Companys system of financial, operational and compliance control and risk management is embedded in the business process by which the Company pursues its objectives. The established system also provides a reasonable assurance on the efficiencies of operations, safety of assets besides orderly and legitimate conduct of Companys business in the circumstances which may reasonably be foreseen. The Company has a defined organization structure; authority levels, delegated powers, internal procedures, rules and guidelines for conducting business transactions.
DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT:
The Company sees its relationship with its employees as critical to the future and believes that every employee needs to possess apart from competence, capacity and capabilities, sustainable values, current and contemporary which would make them useful, relevant and competitive in managing the change constructively for overall growth of the organisation. To this end, the Companys approach and efforts are directed towards creating a congenial work atmosphere for individual growth, creativity and greater dedicated participation in organisational development. In-house and external training and instructions are also provided to employees at all levels, which help in attaining professional and productive culture by a blend of technology and highly skilled manpower.
Statements in the Managements Discussion & Analysis Report which seek to describe the Companys objectives, projections, estimates, expectations and predictions may be considered to be forwardlooking statements as of the date of this report and are stated as required by applicable laws and regulations. Actual performance and results could differ materially from those expressed or implied and the Company owes no obligation to publicly update these forward looking statements to reflect subsequent events or circumstances. Market data and product analysis contained in this Report has been obtained from internal Company reports and industry publications, but their accuracy and completeness are not guaranteed and their reliability cannot be assured.