MRO-TEK Realty Ltd Management Discussions

The following Management Discussion and Analysis ("MD&A") should be read in conjunction with the financial statements and accompanying notes ("Financial Statements") of MRO-TeK REALTY LIMITED for financial year ended March 31,2024.

• Segment wise or Product wise performance

• Risk and Concerns

• Internal Control Systems and their adequacy

• Discussion on operational performance

• Material Developments in Industrial Relations front

SEGMENT WISE OR PRODUCT WISE PERFORMANCE

As the Board of Directors reported in the last AGM, the Company continued to infuse efforts on existing business segments with a focus on ensuring growth in each of the Segments. The emphasis has been on Technology innovation for development of new products, Creating a greater market footprint and higher demand for our products, ensuring efficiency in operations and nurturing the talent pool in all Business Segments.

• Real Estate

• Products

• Solutions

• EMS

SEGMENT: REAL ESTATE

The Board is pleased to report the shareholders that the property developed at Hebbal, Bengaluru is completely occupied and started generating lease rental revenue from April 2024. A substantial portion of the building is let out to HDFC Bank Limited and Tata Group Company, prestigious and reliable tenants assuring the long-term reliable rentals of Rs 15.36 Crores per annum from the year 2024-25.

Further, the company has taken up real estate development projects at Goa during the year 202324 to increase the revenues in the ensuing years.

The revenue from operations from Real Estate business has been increased to Rs. 1146.16 Lakhs during the financial year 2023-24 as against Rs. 534.20 Lakhs for the previous financial year 2022-23.

SEGMENT: PRODUCTS

Products BU continues to be one the focus areas for growth. Over the past few years we have been focusing on introducing New Products to strengthen our Products portfolio. Our New products like Routers and Switches have seen a significant uptake both in the Telecom/Broad Band Markets as well as in Government sectors and the Indian Railways. As an Indian OEM, We have successfully leveraged the opportunities of Government policies of Make in India and DoT Trusted Portal. We remain committed to Local sourcing and Indigenous Development to the extent possible. Our Company is a DoT Trusted Source for Telecom Products. As per DoT Policy for Mandatory Testing and Certification of Telecom Equipment, Our Flagship Routing and Switching products have cleared the testing and are TEC Certified. Today we have Annual Contracts with Tier 1 ISPs/TSPs like Tata Tele-Services and Vodafone Idea as well as established Broad Band Service Providers for our Switches and Routers.

As part of our Product Development. We informed last year about our plan to introduce Network Security Products like Unified Threat manager (UTM). Our Product Development team has done a Stellar job in this area and introduced three variants of UTMs. Post Testing and Qualification, we introduced the Products to the Market in Q3 of 2023-24. Despite the barriers to entry like New product, Provenness, Established Tier 1 competition etc, we have managed to breakthrough and happy to inform that we have won a Tender for Pondicherry State Wide Area Network (P- SWAN) in which our UTMs are deployed across 300 Locations of the Union Territory. The deployment was completed in July 2024. Our UTM has also been purchased by BSNL and deployed in one of the Subsidiaries of Coal India Limited. We now intend to target this Market more aggressively in this FY and expect to see greater growth augmentation from this Network Security Vertical.

Railways has been an important market for our Products. We have been constantly upgrading the product line up for Railways sector with improvements and additional features as per user requirements. We have also found greater acceptance for our Switches and Routers in various Signaling and Surveillance applications across the Railways.

We have also Developed a TDMoIP Device for a Large Defence System Integrator. The Device Prototype has cleared all User trials and minor changes are being carried out based on User/SI inputs. The device will serve as a Network Interface Unit of a part of the Main System which will be fielded in an upcoming Defence Tender. The Product development in itself shows the Product development capabilities of your company. A winning bid will mean a significant order Value and a foray into the Defence Market.

The Products team continue to work closely with the Marketing teams and the industry to introduce new products into the portfolio based on Technology and Market demand and also ensure that necessary compliances are being met. In keeping with the Government initiatives of Make in India, your Company remains focused on high Local content led development/upgrade of Products. As a Trusted Source on the DoT trusted Portal, Our Products have gained greater acceptance in the Market especially in the Switching and Routing Domain. All our flagship products have obtained TEC Certification.

The Companys Product Development Roadmap is as follows:

Product	Application/Sector
IP based Carrier Routers	Railways Telecom SI Enterprise
TDMoIP	Defence
Unified Threat Manager (UTM)	Telecom SI Enterprise
Software Defined WAN Products	Telecom SI Enterprise

The Service Business Unit continues to be the operations arm for maintenance / operations / repair of all OEM products sold by the Company.

The turnover of the company under the Segment Products is increased during the year from Rs 1,347.39 lacs (FY 2022-23) to 1,429.98 Lacs (FY 2023-24). The segment result from this segment before allocation of Plant and Corporate office expenditure is Rs 636.95 lacs during the year 202324 as compared to corresponding previous year 2022-23 segment result of Rs. 482.87 lacs.

SEGMENT : SOLUTIONS

Your Company is now a well-recognized player in the System Integration (SI). Your Company is Managing, Operating and Maintaining 4 projects across the country which has ensured a robust regular cashflow for your Company.

In FY 2023-24 we have got a renewal order from BSNL for Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL) Project involving Maintenance and Operations of 212 Links including Primary and Secondary. The Project Value is around 2Cr including overhaul of the Power Supply System. BSNL and Customer has accepted to replace Cisco routers with MRO-TEK Falcon for the extended project. This goes to show the confidence our customers have in your companys Products and SI capabilities.

With this your Company will be Operating nearly 1200 Links across the Country with three Network Operations Centers.

We will continue to focus on turnkey projects business in Network specific areas. Our efforts are on to secure new projects and business in System Integration which will ensure regular cash flows with good bottom line.

Technology / Solution	Segment
Turnkey Networking Solu- tions/System Integration	Complete end to end Design and implementation of large network projects, Operations and Maintenance contracts
Managed Network Services	Managed network Services (Over Cloud or on Premise Solution) for Service Providers, Medium and Large Networks, retail, BFSI

The turnover of the Company under this segment for the year 2023-24 is Rs 927.02 lacs as compared to Rs 1211.11 lacs during the corresponding previous year 2022-23 and the segment result during the year 2023-24 is Rs 757.02 lacs as compared to Rs 563.80 lacs during the corresponding previous year 2022-23.

SEGMENT: ELECTRONIC MANUFACTURING SERVICES (EMS)

The revenue from operations from EMS business has been decreased to Rs. 10.27 Lakhs during the financial year 2023-24 as against Rs. 242.11 Lakhs for the previous financial year 2022-23 due to acute shortage and disruption in the supply chain of electronic components. The manufacturing line caters for in house products production currently.

RISKS AND CONCERNS

The Company has consolidated its business focus into specific dedicated opportunities.

a) Products for Telecom and Railways;

b) Turnkey Projects/System Integration

c) Services

d) Real Estate.

These will continue to be the four pillars of the company for the next few years. The updated SWOT Analysis of the Company is as follows:

OPERATIONAL PERFORMANCE

The Business has improved and shown growth in all the verticals. Product Development was carried out as planned and New products as well as existing Products with upgrades were introduced to the markets. The marketing teams have been able to achieve increased market penetration for our products, improved market visibility, created brand awareness and brough about a great deal of confidence among the customers for your Companys Products. Securing TEC Certification for our Switches and Routers also went a long way to improve our grip on the market. Having self-sufficiency in Routing and Switching Products had also provided the capability to provide more cost- efficient solutions. This has proven extremely valuable for the Company to bid Competitively for SI tenders.

Despite increased market competition and various challenges, your company ensured steady product sales and ensured a reasonable revenue growth of 6.1% over the last FY in the Products BU.

On the Solutions front, your company has ensured successful Operations and Maintenance of current projects with BSNL-wCl, BSNL-BCCL, RailTel-WCL and APePdCL. The stipulated SLAs are being achieved and progressively improved. Besides these Projects we will be executing the P- SWAN Project and expect to complete it by July 2024.

Key financial ratios comparison:

PARTICULARS	2023-24	2022-23
Debtors Turnover	5.14	3.93
Inventory Turnover	2.36	2.33
Interest Coverage Ratio	1.43	0.69
Current Ratio	4.28	2.34
Debt Equity Ratio	1.68	1.22
Net Profit Margin (%)	0.12	-0.11
Return on Net Worth	0.07	0.01

MATERIAL DEVELOPMENTS IN INDUSTRIAL RELATIONS FRONT

During the financial year under review, your Management had recruited new employees. The Management is also focusing on the Electronic/Contract Manufacturing Services (EMS/CMS) which required significant workforce. Your Company had employed and is planning to employ good number of skilled /unskilled labour in near future. This will lead to generate an Employment Opportunities within the industry. Your Company is focusing on Good Governance Policy. The Management was able to have cordial relationship with employees at all levels and there was no industrial dispute case observed during the financial year under review.

	For and on behalf of Board of Directors of MRO-TEK Realty Limited
	Aniruddha Bhanuprasad Mehta
	Chairman & Managing Director
	DIN:00720504
	Address: # 06, New BEL Road,
Place: Bengaluru	Chikkamaranahalli,
Date: 16-05-2024	Bangalore 560054