mysore electrical industries ltd Management discussions

THE MYSORE ELECTRICAL INDUSTRIES LIMITED ANNUAL REPORT 2005-2006 MANAGEMENT DISCUSSION AND ANALYSIS Performance of the Company: Your Board has the privilege of reporting sustained improvement in the performance of the Company. The Company has earned profit continuously for the third year. The performance of the Company for the last 10 years is as under (Rs. in lakhs) Year Production Sales Profit(+)/Loss(-) 1996-97 2011.44 2168.85 436.31 (-) 1997-98 1952.52 1979.96 298.91 (-) 1998-99 2123.55 1854.57 447.34 (-) 1999-00 2313.51 3084.91 204.29 (-) 2000-01 3474.85 3563.65 150.80 (-) 2001-02 3604.15 3084.94 258.87 (-) 2002-03 2187.33 2312.26 499.54 (-) 2003-04 3845.00 4078.91 12.71 (+) 2004-05 4111.37 4369.58 75.26 (+) 2005-06 4752.43 5169.68 76.72 (+) Your Directors are pleased to report that the Company achieved its highest revenue to the extent of Rs.5169.68 lakhs as compared to Rs.4369.58 for the previous year. The production achieved was stood at Rs.4752.43 lakhs as compared to Rs. 4111.37 lakhs for the previous year. The modest profit of Rs.76.72 lakhs was possible as against Rs.75.26 lakhs for the previous year. Whilst the Company continues to cater to the needs of other Electricity Boards, KPTCL has been a major customer for the Company. More business is expected from KPTCL and ESCOMs in the days to come. The employee strength stands at 275 as on the date of this report. Production The value of production for the year 2005-06 was Rs.4752.43 lakhs as against Rs.4111.37 lakhs for the year 2004-05 Sales The Sales for the year 2005-06 was Rs.5169.68 lakhs as against Rs.4369.58 lakhs for the year 2004-05. Forecast of the operations for the year 2006-07 As at the beginning of 2006-07 the Company had pending orders valued at around Rs. 22.S2 crores. The inflow of orders from April 2006 to July 2006 is valued at about Rs.8.9 crores. Your Directors are quite concerned about majority of the Electricity Boards elsewhere in the country have been decided to offer preference to their respective local vendors. With this, the trend of inflow of orders from other Electricity Boards of your Company has been less enthusiastic and this may pose hurdles to your Company in achieving the targets. Consequently, your Company will have to procure more orders from KPTCL and ESCOMs, who have to follow - the Government of Karnataka Transparency Act. The Company has approached Government of Karnataka seeking exemption from the Transparency Act for procurement by KPTCL and ESCOMs of products of the Company against all tenders. The Company has geared up to execute and deliver target levels with the inflow of sufficient orders. Technology Absorption: a) The new products envisaged in the year 2005-06 are completed. Further the Company has taken up development of the following products during the current financial year 2006-07. (1) Compact Ring Main units. (2) VCBs type VB5-25 KA/2000A (3) VCBs type VB5 - 31.5 KA / 2000A. (4) VCBs 40 KA b) Adoption & Innovation : Following new product is contemplated for development during the current financial year 2006-07. 1) Retrofit VCBs for M/s. Jyothi MOCBs and VCBs. Labour: The labour relations during the year under review continued to be cordial.