G G Dandekar Machine Works Ltd Management Discussions.

1. This section includes discussion on the following matters within the limits set by the Companys Competitive position:

(A) INDIAN ECONOMY

India is still the fastest growing major economy in 2018-19.Indias ranking improved by 23 to 77 position in 2018 among 190 countries assessed by the World Bank Doing Business (DB) Report, 2019. The Growth of GDP moderated to 6.8 per cent in 2018-19 from 7.2 per cent in 2017-18.Inflation contained at 3.4 per cent in 2018-19.Prospects of pickup in growth in 2019-20 subject to further increase in private investment and acceleration in consumption.

Agriculture sector in India typically goes through cyclical movement in terms of its growth. Gross Value Added (GVA) in agriculture improved from a negative 0.2 per cent in 2014-15 to 6.3 per cent in 2016-17 but decelerated to 2.9 per cent in 2018-19. 89% of groundwater extracted is used for irrigation. Hence, focus should shift from land productivity to irrigation water productivity. Thrust should be on micro-irrigation to improve water use efficiency.

The Indian food industry, the food and grocery market, is the 6th largest market in the world and it contributes to 70% of the total sales. Talking about the contribution within the country, the food processing industry has a share of 32% in the nations total market. In terms of production, consumption, and exports, it is ranked as the 5th largest industry in India. The Indian gourmet food market is valued at USD 1.3 billion and is growing at CAGR of 20%.The Government of India has allowed 100 per cent FDI in marketing of food products and in food product e-commerce under the automatic route.The food industry in India has, in the last few years, seen a lot of foreign investment. The CII has predicted that the food processing sector has the potential to attract around USD 33 billion FDI in the next ten years. It has brought in many overseas players as rice milling machinery suppliers which has drastically increased competition in the industry.

The Government has set a target of doubling of farmers income by the year 2022. The Government has constituted an Inter-Ministerial Committee. Parallely, the Government is aiming to reorient agriculture sector by focusing on income centeredness. In order to realise net positive returns for the farmer, schemes are being promoted and implemented in a major way through the States/UTs. A Minimum Support Price (MSP) is notified for both Kharif& Rabi crops based on the recommendations of the Commission on Agriculture Costs & Prices (CACP). The Government has increased the Minimum Support Prices (MSPs) of all kharif crops for 2018-19 Season with the pre-determined principle of fixing the MSPs at a level of at least 150 percent of the cost of production announced by the Union Budget for 2018-19.The price rise in raw material paddy puts extra pressure on rice millers as market price for rice remains steady.

For an agri based industry, rainfall prediction is a key factor and any deviation to normal rainfall affects it adversely. Last year Rains were 91 percent of the long-term average at the end of the July-September monsoon season, compared with a forecast of 97 percent. Overall normal rainfall will be useful for rice production and in turn will maintain demand for Rice Milling Machinery.

(B) INDUSTRY STRUCTURE AND DEVELOPMENT

The Companys main business is to manufacture Food Processing Machineries especially for Rice Milling. A rice milling machine should ensure consistency in quality of the end product and hence enhance the economic value of the raw material. With over a century of experience, the Company products are benchmark for the Rice Milling industry. The Company also offers consolidated solutions for Rice Milling projects from conceptualization of turnkey mill to improving and modifying existing mills and enriched with the experience of successful business and installation of machineries in all regions and globally.

(C) OPPORTUNITIES AND THREATS

The rice mill machinery business has seen lot of changes during last few years which is likely to change the way traditionally business is done. Every year new overseas players are entering Indian rice milling machinery market with their latest technology through various routes like buying out existing companies, direct marketing through own subsidiary company, by appointing local agents etc. The rice milling machinery market is shifting from Traditional machines to newly introduced machinery mainly by overseas players. The growth in competition and technology has compelled existing players to shift from traditional machines to new technology machines.

Sensing the shift in the market, the company has consolidated its business in traditional machinery and is working on development of machinery with latest technology. The Company alway shad a focus on Research & Development activities and has successfully upgraded traditional products.The company is in process of developing several new products.

To tap government funded projects, the Company is working in tune with the government initiative to promote farmers consortium for rice milling activity. It has developed small capacity mills to cater to these requirements. This activity has opened up a new market for small capacity full mill business.

The company is also working on joining hands with experienced manpower having knowledge of latest technology, manufacturing techniques and process technology required by the market. The company has experienced good demand for latest products from its loyal customers and will be able to tap it with the present on going activities as mentioned above.

To increase footprint, the Company has supplied and commissioned several full mills across India which are good reference to attract new buyers. It addresses business in new growing markets and helps to reduce dependency on traditional markets.I t will help the company to maintain business equilibrium averaging business coming in from many regions.

(D) SEGMENT-WISE PERFORMANCE OR PRODUCT-WISE PERFORMANCE

The Company has maintained its customer base and leadership in traditional flagship products like Dandekar Cone Polishers and Table type Paddy Separator. In current market scenario, New Product Development is an ongoing continuous activity and the Company has progressed well with addressing more than 21% business through new products. The Company has done major business in Polishing and Grading section.

(E) OUTLOOK

India is the second largest producer of rice after China and the largest exporter in the world. It supplies almost 20% of the total rice exports. The country did suffer from financial stress due to weak international demand and excess of paddy supply but it is been expected that it would rebound in coming years.

In the last one decade, the rice industry in India has seen a major transformation, due to the growth of branded businesses in that of the domestic market and a strong impetus to export. The prominence of this industry has attracted a significant number of traders and buyers from all over the world. In the near future, the demand for export of rice is been expected to improve further, with China and Iran increasing their imports of Indian rice. Along with that, the steady domestic demand growth would add to the overall improvement for the industry.

In India, rice sales are largely unbranded in nature. The unbranded unorganised sector accounts for around 60% market share. However, the rising penetration of organised retail as well as customer awareness have forced players to turn their attention towards establishing brands. These brands and overseas buyers look for branded rice milling machineries to process the rice with better hygiene and quality increasing demand for machinery with latest technology.

Also in last few years there has been an increase in the number of foreign players in the rice milling market in the country. The reason lies in the supportive policies and regulations, which promote new rice mills and the government offers various facilities to the new entrants in the market. This has offered flourishing market for the international rice milling machinery manufacturers in India or overseas.

(F) RISK AND CONCERNS

Risks of critical importance have been identified over a period of time. These risks are ranked on the basis of their impact on companys business and likelihood of their occurrence. A cross functional team takes stock of these risks and calls for necessary measures to mitigate the risks from the concerned risk owners. The risk owners then produce action plans for risk mitigation which is then evaluated by the team. New risks are added with the changes in economic and market scenarios and undergo the same process.

Identified risks include:

• Latest technology superseding traditional products: Overseas entrants and theirs subsidiaries has brought in new technology and it is picking up eating market share of traditional machines.

• Reduction in rice millers margin reducing their investment budgets: Steady market prices, Minimum support price for paddy from government, rising labour cost etc. has reduced Rice millers margin which has affected the requirement of new rice mills and machineries.

• Rise in low cost local machinery manufacturers, dividing existing business amongst many smaller suppliers.

(G) INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has adequate internal control systems to ensure operational efficiency, accuracy and promptness in financial reporting and compliance of various laws and regulations.

The internal control system is supported by the internal audit process. An Internal Auditor has been appointed for this purpose. The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically.

(H) COMPANYS FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

During the financial year under review, your company has achieved turnover of Rs. 476.84 Lakhs (previous year Rs. 880.07 Lakhs). The Loss before exceptional items and tax for the period is Rs. 307.49 Lakhs (as against Loss of Rs. 381.81 Lakhs during FY 2017-18). The net loss for the period is Rs. 495.77 Lakhs (as against net profit after taxes Rs. 221.82 Lakhs during FY 2017-18).

(I) MATERIAL DEVELOPMENT IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FORMAT, INCLUDING NUMBER OF PEOPLE EMPLOYED

The Company seeks to recruit and retain quality industry professionals and provide them with a high performance environment.

During the financial year, total workforce of the Company stands at 73.

(J) ENVIRONMENT

The Company takes due care in the selection and usage of appropriate material and methods in order to avoid violationof norms formulated to safeguard the environment.

(K) CAUTIONARY STATEMENT

Statements in this Report, particularly those which relate to Management Discussion and Analysis, describing the Companys objectives, projections, estimates and expectations may constitute "forward looking statements" within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied.

(L) LISTING FEES

The annual listing fees for the year under review have been paid to BSE Limited, where your Companys shares are listed.

(M) COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

As on 31 March 2019, the Company has no subsidiary company.

The Board presents Audited standalone Financial Statements as prepared in compliance with the Indian Accounting Standards and the Listing Regulations.