Mukat Pipes Ltd Management Discussions

(a) Industry Structure and Developments:

The market segment for the products of the company is supply of M.S. Pipes,Longitudinal & Spiral Pipes to mini hydro projects,thermal plants and other water circulatory projects. The Central & State Govts. are promoting the said projects. The private Entrepreneurs are the major investors in such projects. The monetary policy of the RBI is supporting through easy credit to such projects. The scale of projects by the private entrepreneurs is not large and thus generate a separate segment for the products of the company and facilitate cost competitiveness.

(b) Opportunities and Threats:

The Solar,thermal and nuclear energy are substitutes for minor hydro energy. There is a great threat of cost Competitiveness from the said substitute to the Hydro Energy. The Central & State Governments are promoting under various development schemes to promote solar energy sources for environmental safety. However,the company has a potential for demand of its products from new mini hydro projects to be installed in hilly states of this region. The global and domestic increase in prices of the H.R. Coils & M.S. Plates,the raw materials is a big challenge to face cost competitiveness. The cost and output ratio is not favourable to generate profits.

(c) Segment-wiseor product wise Performance:

The company has business activity within a single primary business segment viz "Longitudinal & Helical Pipes" and is a single geographical segment.

(d) Outlook:

The Company is hopeful to get orders from the existing customers and the new customers going to emerge from the infrastructure growth of the country. The infrastructure development is the engine of the economic growth of the Indian economy. The war between Ukrain & Russia is a matter of concern in domestic & global markets.

(e) Risk and Concerns:

The company is not having any credit facility from banks & financial institutions. The risk management for the repayment obligations is minimum.

(f) Internal Control Systems and their adequacy:

The Standard Operating Policy,Procedures and Guidelines are issued from time to time to achieve best Practices for adequate control in regard to operations of the Company. Comprehensive internal audit is also carried out by an independent internal auditor to ensure Compliance and identify weaknesses in the system.

(g) Discussion on financial performance with respect to operational performance:

The company is still performing at below breakeven point. The demand for the products of the company is inadequate to operationalize the production to the level of installed capacity. The company is doing job work due to shortage of working capital.

(h) Material developments in Human Resources / Industrial Relations front,including number of people employed. :

The industrial relations continued to be harmonious and cordial providing an atmosphere conducive to sustenance the present trajectory of the production. Adequate safety measures have been taken at all the Places of Businesses. Highest standard of hygiene is maintained. Our permanent employees as on 1^st April,2021,were 46and as on 31^st March,2022were 44.

(i) Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios,

There were no significant changes in key financial ratios except cost output ratio has deteriorated.

(j) Details of any change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof:

The company has been under losses due to below breakeven production due to sluggish demand and high input cost.

(k) Cautionary Statement:

Some of the statements contained within this report may be forward looking in nature and may involve risks and uncertainties. Actual Result and Outcomes in future may vary materially from those discussed herein. Factors that may cause such variances include,but are not limited to management of growth,market acceptance of Companys product and services,risk associated with new product version,dependence on third party relationship and the activities of competitors.