noesis industries ltd Management discussions

The management is presenting this Report as a part of Directors Report in compliance to the Corporate Governance Code of Securities and exchange Board of India under Regulation 34(3) Schedule V Part B of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

1. Industrial Structure

The consumer electronics industry is going through tough times due to rapid technological changes. The margins on the products are declining and the companies are facing cut throat competition. The products are being sold at hefty discounts resulting into erosion in bottom line, and business losses also. The slowdown in the economy has also added fuel to the problem. Companies are cutting corners to stay afloat as rising input cost and costlier borrowing have forced them to defer investment plans, thus offering fewer jobs. The industrial and agricultural growth index is also declining; and the disposable income in the hands of the consumer is not increasing due to high inflation. There is shift in demand patterns and the consumer is inclined to defer its purchase decision unless it becomes a necessity; thus reducing demand for goods.

2. Business Outlook

The Company has incurred business losses arising out of product obsolescence, under cutting from unorganized sector, high interest rates and write off of pending claims. Over the past few years, the consumer electronic sector has faced changes in the consumer preferences as well as the demand patterns. The company was trying to diversify to add new products to mitigate these risks, but due to general slow down in the economy; lack of capital and high interest costs, these plans could not get materialized. The company had to write off/revalue some of its obsolete/ irrecoverable current assets resulting into business losses. The Company‘s activities and operations stand discontinued since middle of Financial Year 2012-13.

3. SWOT Analysis

Strengths

• More than two decades old, professionally managed Company.

• Experienced, committed and forward-looking Management Team.

• Reputed "MEDIA" Brand in general masses.

Weaknesses

• Dependence on single product line.

• Low margins on products because of severe competition.

• High debts and their servicing costs.

• Higher working capital cycle.

Opportunities

• Continued growth in the consumer electronics market.

• Rising disposable income.

• Availability of financing Scheme.

Threats

• Risk of technical obsolescence.

• Competition in consumer electronic industry and also from unorganized/grey market.

• Government policy on Taxation has significant impact on the price and thus demand for the Companys products.

• Slowdown in economy.

• High interest costs.

• Cheaper imports from the overseas market.

• Threat of substitute products

• Threat of new entrants

4. Financial and Operational Performance

During the period under Review, the company has suffered losses due to closure of business line. The debtors have adjusted their dues towards the company against their past claims and future liabilities towards the customers. The realizable value of stocks has become negligible because of their non saleability. Due to these reasons, the debtors and stocks are written off resulting into business loss from operational activities.

5. Adequacy of Internal Control Systems

The Company has set up internal control procedures commensurate with its size and nature of the business and periodically reviews the internal control system and procedures leading to the orderly and efficient conduct of its business. These business procedures ensure optimum use and protection of the resources and compliance with the policies, procedures and statues. The internal control systems provide for well defined policies, guidelines, authorization and approval procedures. The prime objective of such audits is to test the adequacy and effectiveness of the internal controls laid down by management and to suggest improvements.

The Audit Committee of the Board, Statutory Auditors and the Management are regularly apprised of internal audit findings.

The Audit Committee of the Company consisting of Non-Executive and Independent Directors.

6. Material Development in Human Resources

The company lays lot of importance on manpower rationalization and efficiency improvement. The company believes that human resources are vital resources for giving the company a competitive edge in the current business environment. The Company strictly follows the philosophy of congenial work environment, performance oriented work culture, knowledge, skill building, creativity and responsibility and performance based compensation. Action has been taken to develop and enhance the skills of human resource.

7. Risks and Concerns

The company was reeling under the pressure of negative cash flows from operating activities since the last 7-8 years. It tried to diversify into new product lines to mitigate the losses but economic slowdown, inadequate capital and high cost of capital acted as deterrent for such diversification plans. Presently, the major concern for the company is to revive its business activity and to repay the borrowings. The Company is exploring all avenues to come out of these bad times which it will be able to do with the help of its business associates and lending institutions.

8. Cautionary Statement

The statements in the Directors and Management Discussion and Analysis Report describing the Companys projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied since the companys operations are influenced by many external and internal factors beyond the control of the Company.

	By Order of the Board of Directors
	For Noesis Industries Limited
	Sd/-
Place: New Delhi	(Prem Adip Rishi)
Date : 25th August, 2017	Chairman & Managing Director
Registered Office:
1201B, 12th Floor, Hemkunt Chamber,
89 Nehru Place,
New Delhi-110019
Tel: +91-11-41662674
E-mail: coporates@yahoo.com, cs@mvl.in
Website: www.mvlindustries.in
CIN: L32109DL1986PLC026273