Mewar Hi-Tech Engineering Ltd Management Discussions.

BUSINESS OVERVIEW:

Your Company is a reputed and well known Udaipur based Company having its presence in construction services industry, since many years.

Your Company is committed to excellence in quality of its equipment and dedicated to customers and associates. We are committed to provide the best quality crushers, screens & customized size reduction equipment and satisfactory after sales services at competitive prices. We timely deliver out highly quality equipment to meet customer requirement. We provide professional advice to our customer, find innovative solutions to their specific requirements and treat them us our business partners, out professional approach, after sales service and timely supply of spare parts at most reasonable prices make us ideal choice as business partners.

OPPORTUNITIES:

The management believes that Government of Indias efforts to improve economic growth in the Country by providing opportunities for start-ups and infrastructure development is giving hopes to entrepreneurs for exploring new opportunities. The Company is also looking to tap such opportunity at the right moment.

The ‘Make in India is another initiative of the present government that will have a far-reaching impact on the crushing industry. To reap the resulting benefits, industry leaders are currently drawing up strategies involving quick plant deliveries, easy scalability, and mobile crushing solutions that promise minimum relocation costs.

THREATS:

Any growing economy offers a host of opportunities. The challenge comes from the fact that competition also keeps increasing alongside and this is becoming all the more prominent with the continuous arrival of newer entrepreneurs in the market. While this is good for the larger population and the economy, it does put pressure on profitability of business. Not only newer entrepreneurs, technological advancement and the onset of on-line services have made it much easier to conduct businesses without too much need for supporting brick and mortar infrastructure. Not to mention that there is support from conducive government policies to anybody wanting to start a new business.

The rising cost of raw materials is a major hurdle facing the crushing and screening industry. Setting up a crushing unit involves high cost and unavailability of raw material on time only adds to the cost. Another challenge facing this industry involves strict government regulations. Ban on mining activities in the past had dealt a severe blow to the industry. Since environmental issues involving quarries in various states are yet to be entirely resolved, overall demand will continue to suffer.

SEGMENT REPORTINGS:

The Company is exclusively engaged in manufacturing of construction equipments and revenues are mainly derived from this activity. Accounting Standard 17 regarding Segment-wise Reporting issued by the Institute of Chartered Accountants of India and notified under the Companies (Accounting Standards) Rules, 2006 does not apply to your Company since revenues are derived from only one segment.

OUTLOOK:

This industrial sector is on the cusp of a recovery supported by an improvement in macroeconomic fundamentals and policy environment. The combination of strong sales, weak market conditions that support rapid business development and a strengthening commercial market provide us with a great opportunity to generate strong free cash flows and disproportionately scale our business in Financial Year 2018-19. Our performance for the year underlines the effectiveness of our resilient and differentiated business model that is anchored by the strength of the Mewar Hi-Tech Engineering Limited brand and the ability that gives us to attract partners and customers across. Our presence in Udaipur is strong brand equity and large numbers of new projects are handled by us which leads us to a good position in market.

RISKS AND CONCERNS:

Your Company is exposed to internal and external risks. The internal risks relates to the risks within the Company due to change in management, personnel and policies, lapses / inadequacy in existing infrastructure facilities, delinquencies on the part of employees, staff attrition, misfeasance etc. The external risks can be associated to those factors which are not within the control of the Company like change in interest rates, government regulations, competition from others operating in similar business etc.

RISK MANAGEMENT:

Comprehensive risk management practices form an integral part of the operations of Company. With ups and downs, volatility and fluctuations in the business in which Company operates, is exposed to a slew of complex, variable risks and uncertainties in the normal course of business.

Since such variations can cause deviations in the results from operations and affect our financial state, the focus on risk management is high. The rapid and continuous changes in the business environment have ensured that the organization becomes increasingly risk focused to achieve its strategic objectives. Company policies ensure timely identification, management and mitigation of relevant risks, such as credit risk, liquidity risk, interest rate risk, operational risk, reputational and regulatory risks etc., which help the Company move forward with vigor.

INTERNAL CONTROL SYSTEMS & ADEQUACY:

Company has always focused on maintain a strong internal control system which is commensurate with our size and nature of business. The Companys internal controls are structure in a manner that ensure reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, executing transactions with proper authorization and ensuring compliance of corporate policies, laws, accounting standards for ensuring reliability of financial reporting

Company has documented procedures covering all financial and operating functions. Company has robust internal audit program, where the Internal Auditors, an independent firm of chartered accountants, conduct a risk-based audit with a view to not only test adherence to laid down policies and procedures but also to suggest improvements in processes and systems. Internal audit observations and recommendations are reported to the Audit Committee, which monitors the implementation of such recommendations. Suggestions for improvements are considered and the Audit Committee follows up on implementation of corrective actions. The Company also meets the Companys Statutory Auditors to ascertain, inter alia, their views on the adequacy of internal control systems and keeps the Board of Directors posted with its observations.

DISCUSSION ON FINANCIAL PERFORMANCE AND OPERATIONAL HIGHLIGHTS:

The financial and other operational performance of the Company for the year under review has been discussed in detail in the Directors Report. The Cash-Flow Statement and the Balance Sheet are annexed to this Annual Report.

HUMAN RESOURCES:

Human resource development is considered vital for effective implementation of business plans. The Company aims to align HR practices with business goals, motivate people for higher performance and build a competitive working environment. Productive high performing employees are vital to the companys success. The Board values and appreciates the contribution and commitment of the employees towards performance of your Company during the year. In pursuance of the Companys commitment to develop and retain the best available

Talent, the Company continued to offer in house training program to staff members in executive development, leadership and management skills.

The Company had organized various training programs for upgrading the skill and knowledge of its employees in different operational areas. The Company also sponsored its employees at various levels to attend various seminars and programs conducted by various organizations and institutions so as to update their knowledge and to keep them abreast of all the developments in their respective fields. Employee relations remained cordial and the work atmosphere remained congenial during the year.

CAUTIONARY STATEMENT:

Statements in this report on Management Discussion and Analysis describing the companys objectives, projections, estimates, expectations or predictions may be "forward looking statements" within the meaning of applicable laws or regulations. These statements are based on certain assumptions and expectations of future events. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the

Companys operations include economic conditions affecting global and domestic demand supply, finished goods price in the domestic and overseas markets in which the Company operates, raw-materials cost and availability, changes in Government regulations, tax regimes, economic developments within or outside India and other factors such as litigation and industrial relations, natural calamities, etc. over which the company does not have any direct control. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis of any subsequent developments, information or events or due to change in internal or external factors.