Euro Multivision Ltd Management Discussions.

Executive Summary

The total revenue (net) of the Company for the year ended 31st March, 2020, decreased by 90.89% and stood at Rs. 79.25 Lakhs as against Rs. 869.77 Lakhs in the previous year. The year under review was adversely affected due to stressed working capital and liquidity crunch thereby affecting the earning capacity of the Company. During the year, the Company has incurred loss of Rs. 1,516.88 lakhs as against loss of Rs.1,698.14 Lakhs in the previous year. The Company has not provided for interest on financing facilities from secured lenders-banks which is yet subject to confirmation and / or settlement, amounting to Rs. 7,584.30 lakhs, for the year ended 31st March 2020. Had the same been accounted for; the net loss (after tax), would have been increased by Rs. 7,584.30 lakhs for the year ended 31st March 2020. Hence, the resultant turnover and income for the year under review was lower than that expected by the management.

The performance during the year was not satisfactory due to various reasons beyond the control of the Management. The products in which the Company is dealing, is facing cut throat competition. At the same time, the costs have increased due to inflation in the economy and devaluation of Rupee against the foreign currencies. Due to this, the Company is currently facing liquidity mismatch wherein it is not generating enough cash flows to meet its debt obligations on time. Further there is huge dumping of the products from China and other countries which has resulted in the stiff competition and price reduction which has resulted in lower capacity utilization.

Reductions in the subsidies and withdrawal of Government incentive programmes in major European markets have generated a negative sentiment for Photovoltaic (PV) installations. At the same time huge dumping of Chinese Solar Products manufacturers resulted in the fall in prices. As a result, the Company has been unable to utilize its capacity and the cost of production of solar cells continues to be higher than the prevailing market prices.

Further the COVID-19s impact on our lives and economy has been earth shattering. The lockdowns and restrictions have sent the global supply chain in disarray and have halted industrial growth and have brought to the fore the importance of building domestic manufacturing facilities.

India has achieved only 35% of the set target for 2022. Total solar installations in India have crossed the 35 GW mark, according to Mercoms India Solar Project Tracker. The country has a goal of reaching 100 GW of solar capacity by the end of 2022. Out of the 35 GW, 31 Gw of large-scale solar projects were in operation as of November 2019, while 4.1 GW of rooftop solar installations were recorded as of September 2019. India needs to install at a rate of over 20 GW a year to reach 65 GW of solar capacity in the next three years.

There is a continuous need to innovate to increase efficiencies and bring down costs. As the industry being such that the technology and product efficiency upgradation is at the faster pace, the Company needs to be at par with international standards for product quality in order to remain competitive in the Market.

Year in Review: 2019

The year largely failed to live up to the expectations with solar installations expected to cross 7 GW for the year. Inconsistent policy implementation, trade policies, a slowing economy, and liquidity crisis, all played a role in the decline of installations by at least 2 GW from the initially estimated ~ 9 GW for the year. The liquidity crisis took hold among Indias Non-Banking Financial Companies (NBFC) as companies admitted to defaulting on several payments to its creditors. Financial institutions became reluctant to lend to solar projects. Payment delays started cropping up in Andhra Pradesh, Tamil Nadu, Telangana, Madhya Pradesh, and Karnataka increasing project risks and slowing participation in tenders in affected states. Tariff caps became a contentious issue as government agencies began canceling auctions after they were conducted and winners announced. This created a lack of interest in many of the auctions. As already established by now, the solar industry didnt fare as expected in 2019. Overall, there were more downs than ups throughout the year, and it is evident from the scores of tender extensions, cancelations, reissues, and under-subscription of bids seen through the months. Overall 2019 was a year full of challenges and a year lost for the solar sector. Based on our forecast, installations in 2020 are expected to be a lot stronger.

Import of Solar Cells and Modules

In the first nine months (9M) of 2019, India imported solar cells and modules worth $1.6 billion (Rs.115.7 billion), a drop of around 22% compared to 9M 2018. However, exports in 9M 2019 amounted to approximately $135 million (Rs. $9.5 billion), an increase of about 46%.

Indias solar imports and exports witnessed a significant increase in the third quarter of 2019 (Q3). According to government data, India imported solar cells and modules worth $598.1 million (Rs. 42.2 billion), accounting for a quarter on quarter (QoQ) increase of around 50%. However, comparing the numbers to the same quarter of last year (Q3 2018), imports have declined slightly by about 1%.

China was the largest exporter of solar modules and cells to India in Q3 2019. China was followed by Vietnam, Thailand, Hong Kong, Singapore, and Taiwan accounted respectively. Comparing Q3 2018 to Q3 2019, it is evident that there has been an exponential growth in imports from Thailand (680%), Vietnam (393%), and Hong Kong (125%). Imports from China and Malaysia saw degrowth of about 13% and 83%, after a year, since the imposition of safeguard duties on imports from these countries in July 2018.

On 30th July 2018, going by the recommendations of the Director General of Trade Remedies, the Union Ministry of Finance imposed a 25 per cent Safeguard Duty (SGD) on the imports of solar cells/modules for two years from China and Malaysia. Moreover, this was lowered in a phased manner. While the duty was 25 per cent for a year, it was 20 per cent for the next six months and for the remaining tenure ending July 2020 it stands at 15 per cent. The import levy was meant to protect local manufacturers from the losses inflicted by cheap, substandard imports.

India needs a Solar Manufacturing Policy

India has made significant progress in creating capacity for solar energy generation in the last few years. The Prime Ministers emphasis since 2014 has given a new fillip to solar power installation. The unit costs of solar power have fallen, and solar energy has become increasingly competitive with alternative sources of energy. India expanded its solar generation capacity eight times from 2,650 Mw on May 26, 2014 to over 20 GW on January 31,2018, and 28.18 GW on March 31,2019. The government had an initial target of 20 GW of solar capacity by 2022, which was achieved four years ahead of schedule. In 2015, the target was raised to 100 GW of solar capacity by 2022.

Relying on Imports

India is energy deficient, yet blessed with plenty of sunlight for most of the year. It should have taken a lead in solar panel manufacture to generate solar energy long ago. Despite the new policy focus on solar plant installation, India is still not a solar panel manufacturer. Just as India has had no overall industrial policy since economic reforms began, there is no real plan in place to ensure solar panel manufacture. The share of all manufacturing in GDP was 16% in 1991; it remained the same in 2017. The solar power potential offers a manufacturing opportunity. India is regarded by the global solar industry as one of the most promising markets, but low-cost Chinese imports have undercut its ambitions to develop its own solar technology suppliers. Imports, mostly from China, accounted for 90% of 2017 sales, up from 86% in 2014.

Substituting for imports requires human capabilities, technological capabilities and capital in the form of finance. On the first two capabilities, the supply chain of solar photovoltaic panel manufacturing is as follows: silicon production from silicates (sand); production of solar grade silicon ingots; solar wafer manufacturing; and PV module assembly. The capital expenditure and technical know-how needed for these processes decreases from the first item to the last, i.e. silicon production is more capital-intensive than module assembly. Most Indian companies are engaged in only module assembly or wafer manufacturing and module assembly. No Indian company is involved in silicon production, although a few are making strides towards it. According to the Ministry of New and Renewable Energy (2018), India has an annual solar cell manufacturing capacity of about 3 GW while the average annual demand is 20 GW. The shortfall is met by imports of solar panels.

So we may not see domestic players, in the short term at least, replacing imported ones. While the safeguard duty now puts locally made panels on par with imported ones in terms of cost, the domestic sector needs to do a lot more to be effective. For instance, it will have to go down the supply chain and make the input components locally instead of importing them and putting the modules together here. Public procurement is the way forward. The government is still free to call out bids for solar power plants with the requirement that these be made fully in India. This will not violate any World Trade Organization commitment. However, no bids will be received as manufacturing facilities for these do not exist in the country.

Lessons from China

Chinas cost advantage derives from capabilities on three fronts. The first is core competence. The six largest Chinese manufacturers had core technical competence in semiconductors before they turned to manufacturing solar cells at the turn of the century. It takes time for companies to learn and put in action new technologies. When the solar industry in China began to grow, Chinese companies already possessed the know-how. Experts suggest that the human and technical learning curve could be five to 10 years. Indian companies had no learning background in semiconductors when the solar industry in India began to grow from 2011. State governments need to support semiconductor production as part of a determined industrial policy to develop this capacity for the future.

The second source of cost advantage for China comes from government policy. The Chinese government has subsidized land acquisition, raw material, labour and export, among others. None of this is matched by the Indian government. Perhaps even more important is commitment by the government to procure over the long run — without that the investment in building up the design and manufacturing for each of the four stages of production of solar power equipment would come to nought.

The third is the cost of capital. The cost of debt in India (11%) is highest in the Asia-Pacific region, while in China it is about 5%.

Fifteen years ago, the Chinese could also have remained dependent upon imports from Korea or Germany; they did not. Remaining dependent on imports only leads to short-term benefits for India. A continuation of the current approach means Indias energy sector will be in the same condition as its defence industry, where enormous amounts of money have been spent procuring weaponry — so much so that India has been the worlds second largest importer of defence equipment for years.

In the solar panel manufacturing sector, the Indian government allows 100% foreign investment as equity and it qualifies for automatic approval. The government is also encouraging foreign investors to set up renewable energy- based power generation projects on build-own-operate basis. But the Chinese government is clearly adopting an aggressive stance while the demand for solar power in India continues to grow, as does the governments commitment to renewables. In 2018, China cut financial support to developers and halted approval for new solar projects. As a result, Chinese producers will cut prices to sustain their manufacturing plant capacity utilization by sustaining exports to India. In other words, the Chinese strategy is to undercut any planned effort by India to develop the entire supply chain capacity within India so that dependence on imports from China continues. As a counter, India needs a solar manufacturing strategy, perhaps like the Automotive Mission Plan (2006-2016), which is credited with making India one of the largest manufacturers of two-wheelers, three-wheelers, four-wheelers and Lorries in the world. This would also be a jobs-generating strategy for an increasingly better educated youth, both rural and urban.

India plans solar wafer, ingot manufacturing tenders to cut Chinese imports

Recently in FY 2020-2021, to check imports from China, India has imposed a basic customs duty on all imported solar cells, modules and inverters. This has created traction for firms to set up domestic manufacturing of solar cells and modules. To set up the much-needed solar wafer and ingot capacity in the country, India plans to come out with tenders that may provide viability gap funding (VGF) to attract domestic manufacturers. Wafers and ingots are the building blocks for manufacturing solar cells and modules, and are essential to Indias clean energy plans. Globally, solar wafer and ingot manufacturing is dominated by China.

Going forward, India plans to impose more tariff and non-tariff barriers to check imports from China in the backdrop of tensions along the India-China border. The proposed solar wafer and ingot manufacturing tenders comes in the backdrop of Prime Minister Narendra Modi stating that as part of Atma Nirbhar Bharat or self-reliant India campaign, the countrys aim is to end its import dependence on all equipment including solar panels. India has a domestic manufacturing capacity of only 3 GW for solar cells. India is evolving a strategy of not using Chinese equipment and technology in the power sector, and subsidising finance for promoting local power equipment usage and prior- permission requirements for imports from countries with which it has a conflict.

Regional highlights - IHS Markit 2020 Global Photovoltaic Demand Forecast:

China - Solar demand in 2020 will be lower than historic installation peaks of 50 GW in 2017. Demand in China is in a transitional phase as the market moves towards solar being unsubsidized and competing with other forms of generation and there is some lingering uncertainty while awaiting the release of the new 14th Five-Year Plan to be announced next year.

United States - Installations are expected to grow 20% in 2020, consolidating the United States position as the worlds second largest market. California, Texas, Florida, North Carolina and New York will be key drivers of U.S. demand growth over the next five years.

Europe - After nearly doubling installations in 2019, Europe is expected yet to continue growing in 2020, adding more than 24 GW—a 5% increase over 2019. Spain, Germany, Netherlands, France, Italy and Ukraine will be leading sources of demand, accounting for 63% of total EU installations in the coming year.

India - Following a flat year in 2019, due to policy uncertainties and the impact of import duties on solar cells and modules, installations are expected to grow again and surpass 14 GW in 2020. Lower module prices and a large pipeline of projects are expected to spur the return to growth.

Year in Review: 2020

COVID-19s impact on our lives and economy has been earth shattering. The lockdowns and restrictions have sent the global supply chain in disarray and have halted industrial growth and have brought to the fore the importance of building domestic manufacturing facilities.

The present scenario perfectly reflects the Government of Indias bold and decisive initiatives to make India a manufacturing hub and claim the export market, while satisfying the in-house requirements. Initiatives like Make in India, the introduction of SEZs, increasing export incentives, launching phased manufacturing programme (PMP) and Modified Special Incentive Package Scheme have helped India grow into a lucrative market for investment and progress. Indias best chance for a phenomenal revival is also within one of these initiatives.

At this juncture, India has already deployed 87 GW RE projects whereas 64 GW additional capacity lies under varying stages of bidding or installation. These figures need to be viewed against the revised target of having 175 GW installed by 2022.

This is where the situation stood when the coronavirus outbreak turned things on their head by disrupting global supply chains. The current crossroads offer an excellent opportunity for the Centre in rejigging past plans for making India self-sufficient in the manufacture of solar cells and modules, batteries and ancillary equipment. In this way, India will curb its import dependency and save tremendous foreign exchange.

In the case of renewable, this is only possible by ensuring an enabling environment for domestic manufacturers in solar power, which is presently lacking. Some elaboration is needed on specific issues hurting the solar industry.

There is an urgent need therefore, for India to devise a policy framework aimed at creating a diversified domestic manufacturing industry for solar industry as well as ancillary products that could significantly reduce its import dependence, ensure a self-sufficient, sustainable and affordable energy access and generate greater employment opportunities. The outlook for 2020 remains mostly positive. Hope remains for the government to achieve its ambitious target of 100 GW of solar capacity by 2022 as long as it works in tandem with the industry to create a more conducive and consistent policy environment. The demand going forward looks a lot stronger and we should see the solar market resume year-over-year growth again.


Euro Multivision Limited aims to address risks, opportunities and threats posed by the business environment by developing appropriate risk mitigation measures. Our responses to these elements are discussed in the following section.


We are in technological businesses whether it is manufacturing of Solar PV cells or Optical Discs, where a key challenge is to ensure that the manufacturing facilities are equipped with technologies that can produce value added products, which are competitive in the market.


Volatility in currency markets can adversely affect the outcome of commercial transactions and cause uncertainties which will be protected with the margins against rapid and significant foreign exchange movements.


The order of Debt Recovery Tribunal was passed, wherein it has been directed to the Company to clear dues amounting to Rs. 13,971.99 lakhs and interest and penalty within a period of 2 months from the date of order. The Company is yet to take action against the said order of Debt Recovery Tribunal. The Company received a demand notice dated 20-Feb-2020 to clear the dues within 15 days, failing which recovery proceedings could be initiated against the Company.

Application has been filed against the Company by one of the secured financial lender with The Honble National Company Law Tribunal (NCLT), Mumbai Bench on 18th June, 2020, to initiate Corporate Insolvency and Resolution Process (CIRP), which is pending for admission at NCLT. The Company is reviewing the same.


• Substantial decline in price of Solar Photovoltaic Cells and erosion in demand.

• Non-utilization of our available manufacturing capacity.

• Reduction in, or elimination of, subsidies and economic incentives for on-grid solar energy applications.

• The solar industry is dominated by European countries and any downturn in these markets cause impact on the industry growth.

• The solar market is growing and competition is resulting decline in market share and margins.

• 60% raw material cost is silicon wafer and its manufacturing is dominated by large / limited players.

• Continued dumping of PV Cells at cheap prices, however, Domestic Content may void the impact of dumping

• Technological Advancement and Improvement in Cell Efficiency has huge impact product marketability.

• New Optical Storage media options and their affordability is a huge threat for CDR and DVD R products.


The Company has proper and adequate system of internal control to ensure that all the assets are safeguarded from loss, damage or disposition. The Company has independent Audit system to monitor the entire operations and he Audit Committee monitors the financial statements to ensure that transactions are adequately authorized and recorded, and that they are reported correctly. The Board of Directors considers internal controls as adequate as it regularly reviews the findings and recommendations of internal audit.


The financial statements are prepared in accordance with Section 134 of the Companies Act, 2013 and accounting principles generally accepted in India, including Indian Accounting Standards. The results of the operations are discussed in the Boards Report.


Over the years, your Company has developed an environment, which fosters excellence in performance by empowering its people, who are always on continuous improvement path with an ultimate aim to add value to their intellectual and knowledge resources. The Companys success depends largely upon the quality and competence of its management team and key personnel. There are Six (6) employees in the Company as on 31st March 2020.


There were no significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in Key Financial Ratios.


Return on Net worth during the previous and current financial year is negative due to losses.


Statement in this Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied due to risk and uncertainties. Important factors that could make a difference to the Companys operations include raw material availability and prices, cyclical demand and pricing in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries in which the Company conducts business and other incidental factors.

By Order of the Board of Directors
For Euro Multivision Limited
Hitesh Shah
Place: Mumbai Chairman & Whole Time Director
Date: 18th August, 2020 DIN: 00043059