EXECUTIVE SUMMARY
The total revenue (net) of the Company for the year ended 31st March, 2022,
decreased by 61.22% and stood at INR 38.27 Lakhs as against INR 98.69 Lakhs in the
previous year. During the year, the Company has incurred loss of INR 1,226.12 Lakhs as
against loss of INR 1,408.84 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 INR 2,547.97 Lakhs, for the year ended 31st
March 2022. Had the same been accounted for; the net loss (after tax), would have been
increased by INR 9,767.65 Lakhs for the year ended 31st March, 2022.
Further the COVID-19s impact on lives and economy has been earth shattering. The
lockdowns and restrictions had sent the global supply chain in disarray and had halted
industrial growth and have brought to the fore the importance of building domestic
manufacturing facilities.
MARKET OVERVIEW
India has made significant strides in generating capacity for solar energy in the last
few years. The unit costs of solar power have fallen and solar energy has become
increasingly competitive with alternative sources of energy.
The Indian solar energy market is expected to witness a CAGR of more than 8% up to the
year up to 2030. The COVID-19 impact was mainly witnessed on the supply of solar panels
and the delays in solar projects. The country was hit hard by the COVID-19 outbreak, which
forced the government to employ either complete or partial lockdown, resulting in
disruption of the solar panels manufacturing industry. Major factors driving the market
are the declining cost of the solar modules and the government policies, like allowing
100% FDI under automatic route for renewable power generation and distribution projects,
which is expected to increase the participation from global players into the Indian
market. Moreover, the sharp decline in prices of solar technologies in recent years by
more than 52% between 2010 and 2019 has been one of the biggest drivers in the adoption of
solar PV in the country. However, the cost of modules produced in China is 8-10% cheaper
than the one manufactured in India, and about 80-85% of the solar modules used in India
are manufactured in China. Therefore, the huge dependency on imports has affected domestic
manufacturing in the country, which is further expected to hinder the growth of the
market.
• The solar PV segment dominated the market share in 2019, and it is expected
to be the largest segment up to the year 2030, owing to supportive government policies to
develop clean energy generation in the countrys energy mix.
• India has an abundance of solar irradiance and receives solar energy
throughout the year. This has created enormous opportunities to exploit solar energy from
the sunniest sites in the country, especially Rajasthan, Gujarat, and Andhra Pradesh. The
factor mentioned above, clubbed with foreign investment and extensive R&D projects,
provides an opportunity for the growth of the solar energy market in India.
• The government of India has taken several initiatives with the Ministry of
New and Renewable Energy (MNRE), drafting plans and putting out tenders, which, in turn,
is expected to drive the market.
The domestic manufacturing of solar PV cells/modules is behind due to reasons such as
lack of manufacturing chain and skilled workforce and higher cost of production. Data from
Ministry of New and Renewable Energy.
SUPPORTIVE GOVERNMENT POLICIES TO DRIVE THE MARKET
• The country has identified renewable energy potential, such as solar and
wind, in decarbonizing the economy and meeting targets as per the Paris Agreement.
Moreover, the Government of India has been bent toward increasing the share of renewables
in the countrys energy mix.
• The government is aiming at 25,750 MW of new power generation capacity from
solar plants under the ambitious Pradhan Mantri Kisan Urja Suraksha Evam Utthaan
Mahabhiyan (PM-KUSUM) scheme by 2022, with total financials of more than INR 32,000 crore.
• Moreover, in 2016, Indias government pledged that 40% of the countrys
installed electricity capacity is expected to come from renewable sources by 2030, as part
of its Nationally Determined Contribution (NDC) for the commitments made at the Paris
Agreement.
• As part of the Paris Agreement commitments, Indias government set an
ambitious target of achieving 175 GW of renewable energy capacity by 2022. In July 2019,
the government announced that it was planning to increase the renewable energy target to
500 GW by 2030 to clean up the air in its cities and lessen the rapidly growing economys
dependence on coal.
• The Ministry of New and Renewable Energy launched the scheme in 2019, with
three components - installation of 10,000 MW capacity through small renewable energy-based
power plants of capacity up to 2 MW each on barren or fallow land of farmers, installation
of 17.5 lakh standalone off-grid solar water pumps, and solarisation of 10 lakh existing
grid-connected agriculture pumps.
• Moreover, the government plans to add 175 GW of renewable energy by 2022,
which includes 100 GW of solar and 60 GW of wind energy. The country has spent more on
investment in solar PV than in all fossil fuel sources of electricity generation together.
Therefore, the government schemes and plans to increase the renewables share in the energy
mix are expected to drive the solar energy market in India.
INDIAS SOLAR POWER SECTOR IS HEAVILY RELIANT ON IMPORTS
In March 2021, Indias Ministry of New and Renewable Energy had noted that
"Indias solar sector, just like in any other country of the world, is heavily
reliant on imports of solar equipment." Government have also noted instances of
certain countries dumping solar cells and modules to kill the nascent domestic industry,
because of which government had to impose safeguard duties. Covid-19 pandemic brought
disruptions in international trade including imports of solar modules and solar cells
affecting solar capacity additions in the country. Considering Indias huge solar targets
and that electricity is a strategic sector of the economy, India needs to develop domestic
solar manufacturing capacities and reduce its dependence on imports to avoid disruption in
future.
In the first quarter (Q1) of the calendar year (CY) 2021, India imported solar cells
and modules amounting to $259 million (~ 18.93 billion), a 132% increase compared to Q4 CY
2020. The numbers are 72% higher than $150.57 million (~ 10.83 billion) during the same
period last year. The increase in imports was a result of improved demand due to the
waning impact of the Covid-19 pandemic in Q1 2021. However, commercial activities had
again slowed down because of the second wave of the pandemic that was ravaging the
country. Solar exports also registered a significant growth of 293% and stood at $28.5
million (~ 2.08 billion) compared to $7.25 million (~ 528.4 million) in Q4 2020. The
figures showed a marginal decline of 19% compared to $35.09 million (~ 2.51 billion)
during the same period last year.
China was the largest exporter of solar modules and cells to India in Q1 CY 2021,
followed by Thailand, Vietnam, Malaysia, and Taiwan.
SOLAR EXPORTS IN Q1 2021
The United States continued to be the largest market for solar exports from India,
followed by Nigeria, South Africa, Congo, and Saudi Arabia.
It had emphasized that the focus on achieving self-reliance has taken India toward the
decision of "scaling up domestic manufacturing" which would also enable India to
"export solar modules". This would also provide other countries an alternative
avenue for procuring solar modules. The government thus announced a basic custom duty
(BCD) of 25 percent on solar cells and 40 percent on solar modules from April 1, 2022.
CONCLUSION
The solar industry is constantly evolving, characterized by rapid technological
changes, upgrades and innovation. Adoption of these novel technologies will further bring
down costs and soon enough, solar power will be the mainstream power source for most of
the worlds population. This will, in turn have a positive impact on the environment and
climate change as well. The same is true for solar plant components like PV panels, which
are steadily moving towards higher-efficiencies, mainly due to improvement in solar cell
technology.
The future of solar industry in India and world-over appears to be extremely positive
and exciting. While there have been incremental advancements in the existing solar
technologies, researchers around the world are working on multiple projects like bio-solar
cells, solar paints, wireless solar power transmission, solar energy harvesting trees,
etc. Though a few years away, these cutting edge technologies, some of which are being
field tested currently, not only have the potential to revolutionize the solar industry,
but also to change our perspective about harnessing solar energy.
RISKS, OPPORTUNITIES AND THREATS
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.
TECHNOLOGY RISKS
The Company has manufacturing facilities of Solar PV cells and 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.
FOREX RISKS
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.
RISKS PERTAINING TO LEGAL ACTIONS BY THE BANKS
On 27-Nov-19, 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 received a letter
dated 25-Feb-2022, for e-auction of movable and immovable properties on 19-Apr-22. No
communication has been received from Debt Recovery Tribunal or any other authority with
respect to the same.
Application has been filed against the Company by one of the secured financial creditor
with The Honble National
Company Law Tribunal (NCLT), Mumbai Bench on June 18, 2020, to initiate Corporate
Insolvency and Resolution Process (CIRP). The proceeding of the same are ongoing.
THREATS
• 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.
INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
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 the 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.
DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
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.
HUMAN RESOURCE DEVELOPMENT
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 2022.
DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS
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
Return on Net worth during the previous and current financial year is negative due to
losses.
CAUTIONARY STATEMENT
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.
|
For and on behalf of the Board of Directors |
|
For Euro Multivision Limited |
|
Hitesh Shah |
| Place: Mumbai |
Chairman and Whole-Time Director |
| Date: 10th August, 2022 |
DIN: 00043059 |
+91-9892691696
