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, 2023.
• 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
.• Impact of COVID -19 Pandemic on the Business operation of the Company
SEGMENT WISE OR PRODUCT WISE PERFORMANCE
As the Board of Directors reported in the last AGM, the Company continued efforts on
existing business segments with a focus on ensuring growth in each of the Segments while
mitigating new risks and challenges posed by the pandemic. The emphasis was on creating
higher demand for the products, ensuring frugality in operations and multi-tasking
existing resources.
• Products
•Solutions
•EMS
•Real Estate
SEGMENT : PRODUCTS
Products BU remains the major focus area for growth. Following on our thrust of
improving and expanding the Products Line up our Router and Switching Portfolio which we
developed the previous year was successfully introduced into the Market. The products have
been received very well. Tier 1 ISPs/TSPs like Tata Tele-Services and Vodafone Idea placed
significant regular orders for our Switches and Routers. Further we also introduced High
end Aggregation routers which have been supplied to few Tier-1 ISPs. Our Industrial
Switches saw good demand with a good Orders from various industrial users. With these
additional products, the Products BU has seen a growth of nearly 30% over last FY.
The products for Railways sector was improved upon with improvements and additional
features as per user requirements. From the switching family, our 10 G PoE Switch Lavender
244X met full RDSO compliance and successfully cleared the RITES inspection. These
switches are now deployed in Southern Railways for Surveillance applications and being
proposed for other Divisions as well. Our RDSO approved switch Cynara was supplied to key
MSIs of RailTel who are executing the VSS Project. Our flagship Maple TDM Mux was also
introduced in new variant which is being supplied now in good numbers.
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 standards and compliances are being met. In keeping with the
Government initiatives on "Atmanirbhar", your Company remains focused on high
Local content led development/upgrade of Products. While we have got enlisted last year as
a Trusted Source on the DoT trusted Portal, more of our products are also now listed on
the Portal thus lending more market trust and confidence to our Products.
On the Product Development front, the roadmap includes 40-100 G switches and Unmanaged
switches. The Development team is also working on introducing Network Security Products
like Unified Threat manager (UTM). With the increasing attack vectors seen in the
Enterprise and SOHO networks, the need to secure the networks is much greater now. Network
Security has a good technology and business overlap with our core Products line and we see
it as a good market diversification prospect.
The Companys Product Development team made breakthroughs in the following products:
Product |
Application/Sector |
Enterprise Aggregation Routers |
Telecom Enterprise / ISPs/ SI Projects |
40 G to 100 G Switches |
Telecom Enterprise / ISPs/ SI Projects |
Unified Threat Manager (UTM) |
Telecom/SI |
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 1049.22 lacs (FY 2021-22) to lacs. 1347.39 (FY 2022-23) The segment result from
this segment before allocation of Plant and Corporate office expenditure is Rs 482.87 lacs
during the year 2022-23 as compared to corresponding previous year 2021-22 segment result
of Rs 213.58 lacs.
SEGMENT : SOLUTIONS
Your Company is now a well-recognized player in the System Integration (SI). During the
financial year 2022-23, the Company has successfully executed the Project with BSNL,
Jharkhand for Implementation of Multi-Protocol Label Switching (MPLS) managed network
services for connectivity of 304 Sites of Bharat Coking Coal Limited (BCCL) a subsidiary
of Coal India Limited (CIL). The project Operations and maintenance is spread over 5 years
and your company is delivering Services as per specified Project Service Level Agreements
(SLAs). Phase wise Billing has commenced since March 2022.
Including this order, currently your Company is Managing, Operating and Maintaining 4
projects across the country which has ensured a robust regular cash flow for your Company.
The Companys Solution Line continues to focus on turnkey projects business in Network
specific
Technology / Solution |
Segment |
Turnkey Net- working Solu- tions/System In- tegration |
Complete end to end Design and implementation of large network
projects, Operations and Maintenance contracts |
Managed Net- work Services |
Managed network Services (Over Cloud or on Premise So- lution) for
Service Providers, Medium and Large Networks, retail, BFSI |
areas. Our efforts are on to secure new projects and business in System Integration
which will ensure regular cash flows with good bottom line.
The turnover of the Company under this segment for the year 2022-23 is Rs 1211.11 lacs
as compared to Rs 713.92 lacs and the segment result during the year 2022-23 is Rs 563.80
lacs as compared to Rs 207.88 lacs during the corresponding previous year 2021-22.
SEGMENT : ELECTRONIC MANUFACTURING SERVICES (EMS)
The revenue from operations from EMS business has been decreased to Rs. 242.11 Lakhs
during the financial year 2022-23 as against Rs. 1,315.38 Lakhs for the previous financial
year 2021-22 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:
STRENGTHS |
1. Trusted brand name |
WEAKNESSES |
1. Product portfolio requires some more strengthening and
diversification |
|
2. High quality engineering skills |
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2. Ability to scale up quickly |
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3. Major Tier-1 customer confidence |
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3. High skill manpower bench is limited |
|
4. Products with High Local content and confirming to Government
Policies of Make in India. |
|
4. High Cost of Capital |
OPPURTUNITIES |
1. Favorable trends in Government |
THREATS |
1. Liquidity crisis with most customers |
|
policies |
|
2. Dependence on government customers |
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2. Make in India initiatives |
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3. Regular disruption of business due to COVID -19 |
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3. System Integration |
|
|
OPERATIONAL PERFORMANCE
The Overall Business in all the BUs continued to experience disruption and Challenges
due to the Pandemic.
Despite increased market competition and various challenges, your company ensured
steady product sales and ensured a reasonable revenue growth of 30% over the last FY in
the Products BU. As envisaged last year our efforts to develop and introduce our Routers
and switches into the market has produced good results for the Products BU. Moreover,
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.
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. Our upgraded Products portfolio which
includes Routers, Switches and the soon to be introduced UTM provides an edge in
competitive bidding and we are confident on bagging more Value Based projects in future.
Key financial ratios comparison:
PARTICULARS |
2022-23 |
2021-22 |
Debtors Turnover |
1.5 |
5.01 |
Inventory Turnover |
4.67 |
11.16 |
Interest Coverage Ratio |
0.30 |
14.25 |
Current Ratio |
2.34 |
0.54 |
Debt Equity Ratio |
1.22 |
1.03 |
Operating Profit Margin (%), |
2.16% |
70.08% |
Net Profit Margin (%) |
(11.14%) |
64.13% |
Return on Net Worth |
(0.06) |
1.13 |
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
generation of 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.
Your Company has taken care of employees and ensured healthy environment during the
pandemic situation by implementing safety protocols like Covid Appropriate Behavior (CAB)
in the factory premises, by allowing staff to carryout work from home during Covid-19 1st
& 2nd Wave.
IMPACT OF COVID -19 PANDEMIC ON THE BUSINESS OPERATION OF THE COMPANY
COVID-19 has already had a significant impact on the global financial markets,
including India and it may have accounting and reporting implications for the Company.
The Company hopes at this point of time there is no major impact of COVID-19 on the
operations in the long run. However, probability of higher defaults in payment from
customers or lower market demand of products cannot be ruled out.
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For and on behalf of |
|
MRO-TEK Realty Limited |
|
Aniruddha Bhanuprasad Mehta |
Place: Bengaluru |
Chairman & Managing Director |
Date: 09-05-2023 |
DIN: 00720504 |
|
Address : No-29, 2nd Main, |
|
3rd Cross, RMV 2nd STage, |
|
1st Phase, Aswathnagar, |
|
Bengaluru-560 054 |
+91-9892691696
