Global economic overview
Global economy is largely on the road to gradual recovery although downside risks such
as sticky inflation, continued geopolitical tension in Europe and fall out from higher
interest rates in USA remain. Muted consumer demand, coupled with high commodity prices
continue to weigh on future growth prospects in most economies.
According to the IMF (July 2023 Outlook), the global economy is likely to register a
growth rate of 3% in both CY23 and CY24. Emerging markets and developing economies,
including India are witnessing encouraging growth despite several headwinds emanating from
the advanced economies of the world.
Outlook
Going forward, expectation of improvements in the supply side bottlenecks is likely to
facilitate fiscal consolidation and a smoother reduction in inflation towards target
levels in the developed world. However, if globally growth slows down, the inflation could
decline faster than anticipated, eliminating the need for tighter monetary policy, and
allowing domestic demand to normalise.
Indian economic overview
India emerged as one of the fastest-growing major economies in the world in FY 2023.
The domestic economy continues to demonstrate sheer resilience to external shocks and its
real GDP is estimated to have clocked a growth of 7.2% in FY 2023 (Source- the NSOs final
estimates).
A recent SBI study estimates that Indias per capita income at current prices is
estimated to reach H 14.9 lakh annually
by FY 2047, up from the current H 2 lakh in FY 2023.1 While the
post-pandemic private investment recovery is still in its early stages, there are
tentative signs that suggest India is well-positioned to record an upswing in its
investment cycle in both the manufacturing and services sectors. The number of private
investment projects under implementation in the manufacturing sector has also been
gradually increasing over the years.
During FY 2023, the governments fiscal policy exhibited a strong commitment to
consolidation. It effectively directed public expenditure towards a substantial increase
in growth-supportive capital expenditure. Capital formation emerged as a key growth driver
in FY 2023. Also, the index of industrial production (IIP) indicated a growth of 5.1% in
the industrial output.
[Source- the Reserve Bank of India]
India GDP forecast for FY 2024 (%)
Outlook
In the years ahead, on the backdrop of strong credit growth, stable financial markets
and the Governments deep focus on infrastructure and capex are projected to crowd in
substantial investments. Although the outlook for the global economy appeared challenging,
the fact that the Government of India and RBI have been able to steer the Indian economy
to higher growth from a global uncertainty reflects Indias robust economic fundamentals.
Indian economy depicted signs of recovery and pent-up demand over the last two years and
it offers hope for new growth cycle in the coming years driven by Investment in
manufacturing sector and Private sector capex cycle.
Industry overview
Indias EMS and contract manufacturing industry
The electronics manufacturing sector in India is experiencing rapid growth, attracting
global attention and emerging as a hub for contract manufacturing. The governments
ambitious goal of the domestic electronics sector reaching a output of USD 300 billion by
2025-2026 presents an opportunity for international enterprises to consider India as a
reliable manufacturing hub.2
The electronics system design and manufacturing (ESDM) sector, driven by the silicon
age paradigm and globally prevalent digital lifestyle, has emerged as one of the fastest
growing industries worldwide. The Global EMS market is expected to reach USD 1,145 billion
by 2026, with a compound annual growth rate (CAGR) of 5.4%. Indias internal demand for
consumer electronics is also increasing and is expected to reach USD 21.18 billion by
2025.3
The governments emphasis on promoting domestic manufacturing, coupled with the
adoption of the China +1 strategy by Global OEMs seeking to establish their manufacturing
bases in India, has been instrumental in driving the growth of this sector. This focus on
positioning India as a hub for electronics manufacturing is likely to encompass a wider
spectrum beyond mobile devices and consumer-oriented segments. Moreover, the increase in
domestic consumption has emerged as noteworthy catalyst driving the demand in this sector.
In the total EMS market, contract manufacturing (CM) accounts for approximately 80%,
while original design manufacturing (ODM) accounts for the remaining 20%. As reference
designs and specifications are provided primarily by the OEMs to EMS providers, there is
not much scope for product differentiation. In the Indian industry landscape, ODMs are
currently being depended on primarily to manufacture the entry-level products. These
products have low differentiation, and the main features for ODMs ends up being their
quality, cost and delivery.
EMS companies are steadily shifting towards ODM models, giving full turnkey solutions
for items from design, product development to reverse logistics. Also, due to increased
competition, EMS companies are striving to diversify their product offerings. EMS
providers have the expertise to procure and manufacture at faster turnaround times. In the
ODM industry, innovation is critical to success. While cost reduction remains the major
driver of EMS outsourcing, other factors such as improved design skills have contributed
to ODM capabilities.
Indias consumer durables market
India is poised to become the fifth largest market for consumer durables in the world,
fortifying its position as one of the rapidly expanding consumer durable markets globally.
This surge in demand can be attributed to the increasing incomes in both urban and rural
regions, a surge in urbanisation and evolving consumer trends. The Indian appliances and
consumer electronics industry is set to achieve a size of approximately USD 21.18 billion
by 2025. 4
The consumer durables sector is currently undergoing significant transformation, with
large set of consumers spending on home automation and exploring new, time-saving
solutions. Todays fast-paced lifestyle, especially for employed women who juggle
responsibilities between their home and professional commitments, drives the demand for
appliances that are convenient and easy to use. Consequently, a fiercely competitive
landscape has emerged, with various domestic and international businesses striving for the
market share in this segment.
Consumer Electronics & Appliances (CEA) (includes room air conditioners, washing
machines, television, air cooler, refrigerator and others): In India, CEA has the
largest market share after mobile phones. Sales are driven by rising income levels and
technological innovation, since users tend to adapt to new technologies through early
replacement. Untapped markets have been brought to the attention of consumer electronics
companies due to digital technology and enabling connectivity infrastructure. Small and
kitchen appliances account for a significant portion of the market size. With rise in
demand of components, it is very likely that EMS and Tier-1 players would take steps to
build a component base within the country.
Automotive: Automotive electronics sales are expected to go up, driven by rising
income levels, and an increasing level of in-vehicle digital experience. Rising awareness
among people about advanced safety and communication services, coupled with more embedded
connectivity service offerings by automakers, is also one of the drivers for this market.
Industrial: Industrial electronics play a vital role in improving the efficiency
and productivity of industries and are anticipated to grow in industries like energy,
transportation, petroleum, chemical, semiconductor, mining, agriculture, and others.
Current emphasis is also placed on a branch of power conditioning dealing with power
electronic switches, sensors, actuators, meters, intelligent electronic devices (IEDs),
automation equipment, semiconductors, nanotechnology, etc., using power semiconductor
devices in modernizing industry technology.
The Bureau of Energy Efficiency (BEE) has implemented star rating system across
appliances and consumer durables in the sector,. The Star Labelling Programme has led to
significant improvements in energy efficiency for split air conditioners, with a 43%
increase for one-star ACs and 61% for five-star ACs. Window ACs also saw improvements,
with 17% increase for one-star-rated models and 13% for five-star-rated counterparts.
The Bureau of Energy Efficiency (BEE) has implemented star rating system across
appliances and consumer durables in the sector,. The Star Labelling Programme has led to
significant improvements in energy efficiency for split air conditioners, with a 43%
increase for one-star ACs and 61% for five-star ACs. Window ACs also saw improvements,
with 17% increase for one-star-rated models and 13% for five-star-rated counterparts.5
Improvement in 1 star and 5 star for Window and Split ACs
With the new star rating norms, Products in Indias AC market are today having higher
energy efficiencies and are more advanced in comparison to many other countries.
Key growth drivers for the industry
Strong push towards Make in India: India is witnessing a major drive by the
government of India to push for the domestic manufacturing of Electronics especially in
segments such as Mobile Phones, Televisions, and Medical & Strategic Electronics. The
Government of Indias "Aatmanirbhar Bharat Abhiyaan" or Self-Reliant India
campaign provides an increasing range of incentives to attract and localize manufacturing
and production in India. These incentives promote manufacturing and exporting products in
various industries.
New regulations like BS VI for Auto, Digital India program, Digital payments and Smart
Cities program is going to drive more usage of electronics in India and therefore will
lead to a far greater thrust on Make in India than it was seen before.
Influx of new electronic applications going forward: New emerging opportunities
like Electric Vehicles, IoT, and Electronic Security system (Cameras or Storage) are
opening up new electronic market for India and these industries will also be driven by the
Make in India thrust.
Increased electrification through various initiatives:
Electricity consumption is one of the most important indices that determines the
development level of a particular nation. The Indian government is committed to enhancing
the quality of life of its citizens by increasing electricity consumption. The objective
of the government is to provide each household with access to round-the-clock electricity.
The "Power for All" program is a significant step in this direction, which is a
joint initiative of the Government of India and state governments with the primary goal of
making 24x7 power available to all households, industries, commercial businesses, public
needs, and any other entity that consumes electricity.
Importance of the Digital India initiative: "Digital India" is a
government initiative aimed at preparing India for a knowledge-based future. The primary
objective of the launch of the "Digital India Mission" is to transform India
into a digitally empowered society and knowledge-based economy. The Digital India Mission
has the vision to provide each resident of the country with a digital identity card. In
the case of electronics manufacturing, the Digital India initiative is offering tax
incentives in focus areas like FABS, fabless design, set-top boxes, VSATs, mobiles,
consumer and medical electronics, smart energy meters, smart cards, and micro-ATMs.
Changing geopolitical situation post COVID: Post Covid, alignments in the global
markets has shown that there is a far greater resistance to rely on China as their key
manufacturing source. There are discussions in numerous forums to diversify their
manufacturing operations to counties other than China. India is seen as one of the
possible diversification areas along with Vietnam and other South East Asian nations.
Increasing financing options and no-cost EMI schemes: The growth of Indian
electronics market is driven by technological advancements and rising disposable income.
The Indian consumer market has been cautious, with a mix in purchase of small and large
consumer appliances. In recent years, due to the availability of no-cost EMI as a payment
method, the purchase behaviour of Indian consumers has shifted significantly. In addition,
trends such as digitalization and new business models have enabled Indias financial
institutions to reach consumers in rural and semi-urban areas and meet their growing
demand. Various brands are also partnering with consumer finance firms, which not only
benefits consumers but also increases brand visibility in smaller markets.
Company overview
PG Electroplast Limited (PGEL) serves as the flagship entity within the PG Group, an
enterprise that commenced its operations in 1977. PG Electroplast was officially
established in 2003 and offers electronic manufacturing services in India. Specialising in
original design manufacturing (ODM), original equipment manufacturing (OEM) and plastic
injection moulding, PGEL caters to a distinguished clientele comprising over 50 Indian and
global brands.
The Company has a wholly owned subsidiary, PG Technoplast Private Limited (PGTL), that
is engaged in the manufacturing of air conditioners and various components for the
consumer durables and consumer electronics sectors.
With an extensive presence, PGEL has eight manufacturing units situated across Greater
Noida in Uttar Pradesh, Roorkee in Uttarakhand and Ahmednagar in Maharashtra. The
Companys growth strategy entails enhancing its existing capacity and core competencies
across its diverse product verticals. These efforts are aimed at achieving increased value
addition and improved economies of scale, while maintaining a focus on backward
integration.
Overview of our operational segments
Products
PGELs products business has exceeded H 1,300 crore in FY 2023. The order book for the
product business remains strong with the Company poised to substantially expand its
products business in FY 2024.
Room air conditioners (RAC)
During FY 2023, the Room air conditioning (RAC) business made a notable contribution of
H 1041 crore, achieving a substantial 255% year-on-year growth. The Company has strategic
plans for augmenting its room AC capacity through the establishment of an integrated unit
in Rajasthan, dedicated to the production of room ACs. Simultaneously, the Company is also
in the process of constructing a new building within a Supa factory. The Company is also
planning on doubling its printed circuit board (PCB) assembly capacities for AC controls
in the Supa factory.
Room Air Conditioners
Indoor Units Outdoor Units
The RAC business continues to see increased traction for the company and in FY2023,
company serviced over 14 brands. With addition of new clients and increasing share of
business in the existing clients, company remains confident of posting strong growth in
the FY2024.
Washing machines (WM)
The Company is the second-largest contract manufacturer for washing machines in the
country. The washing machine business has also demonstrated a substantial growth rate of
approximately 56% year-on-year, with over 4.58 lakh units sold.
Washing Machines
Semi-Automatic Top-Load Fully-Automatic Top-Load
With Increased capacity in FY2024, company is on a strong footing. In FY2023, company
serviced 22 brands and with increasing market share in the existing clients and addition
of new brands, company expects to post strong growth in FY2024.
Air coolers
During FY 2023 the air coolers business grew by an impressive 157%. In FY2022, sharp
increases in plastic raw materials prices impacted the Air Cooler business significantly
and therefore on low base sales growth looks exaggerated. However, the outlook remains
good for next season as we continue to see improved interest from existing and new
customers.
Air Coolers
Window Desert Personal
Plastic moulding
The Plastic moulding component segment had a YoY sales growth of about 17% and
contributed H 654 crores to the topline in FY2023. There are specific segments like
specialised plastic components in Sanitaryware and Fans, which are growing at a higher
rate and driving sales growth in this segment. The outlook for this segment remains in
line with consumer durable industry growth. However, due to slightly inferior financial
metrics (return ratios) in this business, management wants to allocate relatively low
capital to this, and therefore growth rates will be muted in comparison to the product
business of the Company.
Plastic Moulding
Consumer Durables Sanitaryware Automotive Consumer Electronics Others
Electronics
In the Electronics division, the Company assembles printed circuit board assemblies for
a wide range of applications on a turnkey basis (including procurement, assembly, testing,
packing & shipping) for leading TV manufacturers and also assembles LED TVs. This
business contributed 7% to the FY2023 Sales and grew 126% over last year. This business
segment on a smaller base is likely to post strong growth as TV business is witnessing
good client addition and also increased share of business in existing clients.
Electronics
Televisions PCB Assemblies
Tool manufacturing
During FY2023, the tooling business contributed ~0.5% to the Companys total turnover.
This business also acts as an enabler for some of the companys speciality plastic
moulding businesses. In last few years, company has upgraded some of the capabilities of
its toolroom and can now manufacture bigger tools. This has, in turn, helped the companys
ODM Projects turn around faster as it can manufacture critical tools internally.
The Company is planning further investments to augment capabilities and capacities in
this area. The outlook for the business remains sound, given that as more product
development happens locally, opportunities for tool manufacturing should grow
exponentially.
Tool Manufacturing
Consumer Durables Sanitaryware Automotive Others
Future growth strategy
The Companys future growth strategy is focused on capitalising on the emerging
opportunities in the fields of plastic moulding and consumer durables. Notably, the
Company envisions a promising trajectory for various appliances, including washing
machines, room air conditioners, refrigerators, ceiling fans and sanitaryware products.
These areas present the Company with significant scope for expansion.
Key focus areas for the Company include R&D, new product development and capacity
expansion across the product businesses. The Company intends to bolster its product
offerings in both the air conditioning and washing machine segments. Strong interest from
both new and existing clients further instils confidence in the Companys future growth
prospects.
The Company also foresees significant potential in the Original Design Manufacturer
(ODM) space. With an eye on air coolers, washing machines and room air conditioners, the
Company is poised to leverage its expertise to cater to broader consumer demands, further
fortifying its position in the consumer durables sector.
Central to this strategy is the commitment to enhancing the Companys operational
efficiency. This multifaceted approach not only promises improved profitability and cash
flows, but also lays the foundation for strategic reinvestment. By honing its
capabilities, the Company is positioning itself to capture future opportunities and
ensuring a sustained competitive advantage in a dynamic operating environment.
Looking ahead, the Company is poised to remain one of the leading players in Indias
consumer durable and plastics sectors. The pursuit of amplified revenue growth through an
expanded market share in the customer outsourcing domain underscores the Companys
determination to carve out a more substantial footprint. With enhanced operational
efficiency, the Company is expected to achieve a healthy balance sheet, strengthening its
resilience and capacity for long-term growth.
With a forward-looking approach, the Company anticipates a gradual improvement in
margins, facilitated by both refined operational efficiencies and heightened operating
leverage. This optimism is further underscored by the Companys keen focus on diversifying
its product portfolio. As the Company gears up to introduce new, innovative offerings, the
upcoming quarters hold promise for the realisation of these ventures, offering an exciting
trajectory for all business segments of PGEL.
Financial review
FY 2023 has been marked by robust growth, evident in the Companys consolidated
Revenues which surged by 94.3% and exceeded H 2,159 crore. The product business
constituted 62.0% of the total revenues in FY 2023.
A notable accomplishment is PGELs subsidiary, PG Technoplast, which attained H 1,000
crore in revenue within its second year of operations. Operational margins improved
year-on-year, led by effective cost control, favourable commodity prices and operational
leverage. Despite a rise of approximately H 158 crore in net debt during FY 2023 due to
capital expenditure and increased working capital, the Company has improved its financial
metrices in terms of return ratios and will further prioritise capital efficiency and
working capital optimisation for FY 2024.
Key ratios
Ratios |
FY 2023 |
FY 2022 |
Change (%) |
| Debtors Turnover (x) |
6.63 |
6.17 |
0.46 |
| Inventory Turnover (x) |
5.52 |
4.67 |
0.85 |
| Interest Coverage |
3.04 |
3.12 |
-0.08 |
| Ratio (x) |
|
|
|
| Current Ratio (x) |
1.12 |
1.11 |
0.01 |
| Debt Equity Ratio (x) |
1.37 |
1.23 |
0.14 |
| Operating Profit |
8.35% |
8.48% |
-0.13% |
| Margin (%) |
|
|
|
| Net Profit Margin (%) |
3.59% |
3.37% |
-0.17% |
| Return on Networth – |
21.88% |
14.82% |
7.06% |
| RoNW (x) |
|
|
|
• Inventory Turnover has improved as the Company optimised on the inventory and
business scaled up significantly.
• Debt to Equity ratio has changed as company expanded its AC and Washing Machine
capacities during the financial year and the revenue grew over 94% leading to higher
working capital requirements.
• Operating Profit Margin decline due to higher growth in low margin electronics
and TV business and lower growth in state incentives income.
• Return on Net worth has improved as companys profit growth was much higher at
107%, while Net worth Improved by only 26.7%.
Human resources
The Company acknowledges its people as the true contributors to its success. It has
implemented people-friendly policies and procedures to foster a diverse and inclusive work
culture. Employee engagement is yet another focus area for PGEL. Through comprehensive
measures such as regular feedback sessions, team-building activities and professional
development opportunities, PGEL aims to ensure that employees feel valued and motivated to
contribute their best. Additionally, the company promotes open communication channels and
encourages a healthy work-life balance to further enhance employee engagement and
satisfaction.
At PGEL, talent acquisition is aimed at sourcing skilled individuals who align with the
Companys values and goals. The HR department employs rigorous screening and selection
procedures to ensure that the right candidates are hired for various positions within the
organisation. This meticulous approach contributes to building a competent workforce.
Once onboard, employees are provided with opportunities for consistent learning and
growth. The Company prudently invests in training programmes that enhance employees
technical skills as well as their soft skills, enabling them to excel in their roles and
contribute effectively to the organisational objectives. Career development plans and
mentorship opportunities are also offered, encouraging employees to advance professionally
within the organisation.
PGEL believes in giving back to its employees by offering competitive compensation and
benefits packages. These packages not only acknowledge employees contributions but also
demonstrate the Companys commitment to their financial stability and overall well-being.
3,500+
Employees
Key initiatives in FY23
The Company believes its employees are an integral part of the organisation and hence
kept a sharp focus on their personal and professional development and at the same time
aligning their goals with that of the Company to create a win-win situation. In pursuance
of the Companys commitment to develop and retain the best available talent, PGEL
organises various training programmes for upgrading skill and knowledge of its employees
in different operational areas. In the endeavour to promote on the job knowledge and
training, the Company had entered into an agreement with Maruti Centre for Excellence
(MACE) for Industrial, behavioural and safety related Trainings.
In a bid to alleviate some of the mental pressures brought upon by the pandemic, the
company also continued with a scheme called "PG Cares". As per the scheme,
should any employee have an untimely death, the company shall ensure that the family of
the employee will continue receiving the former employees salary for two years. All
education expenses for their children until graduation from high school will also be borne
by the company.
Environment, Health and Safety (EHS)
PGEL prioritises Environment, Health and Safety (EHS) in all its business operations.
As a responsible corporate citizen, it promotes the adoption of sustainable practices
across its manufacturing units. The Company has implemented several targeted measures to
reduce its carbon footprint, conserve resources and ensure eco-friendly operations. In
addition, the Company employs eco-friendly technologies and waste reduction and recycling
programmes help manage its waste output, reducing pollution.
The Company also emphasises employee health and safety and strives to foster a
conducive work environment. Rigorous safety protocols and training programmes are in place
to mitigate workplace hazards and ensure the well-being of all team members. Moreover,
PGEL conducts regular safety audits and assessments to identify and address potential
risks.
The Companys commitment to health and safety extends to its products as well. It
adheres to stringent quality control processes to manufacture electronic products that
meet highest safety standards.
In addition, PGEL engages with local communities to raise awareness about environmental
conservation and safety measures. Through collaborations, workshops and educational
initiatives, the Company aims to promote sustainable practices beyond its business
operations.
Key initiatives launched in FY 2023
To attain sustainable growth, the Company is undertaking various initiatives; few of
them are listed below:
• CO2 Flooding systems installed at high risk areas
• Daily/Weekly/Monthly/Quarterly Safety audits
• Disaster Management Organization
• Fire Control Room with zone-wise control panels
• Work permit issue system for heavy duty machine operators
• Accident monitoring management
• Management review system for EHS activities
The company, in an effort towards reducing the carbon footprint, has begun sourcing
some of its required electricity from renewable sources. In FY 2022-23, your Company have
entered into a power purchase agreement with a company to obtain at least 3.1 MW of solar
energy for our manufacturing unit at Uttar Pradesh for a period of 25 years. Also have
installed a 1.4 MW rooftop grid system solar panel at our Unit 2 – Subsidiary in
Maharashtra, and a 0.65 MW solar plant at our Unit – 4 in Maharashtra.
In addition to various laws and regulations, the Company also have a health and safety
policy that it has established internally. The Company also have an emergency evacuation
plans in place for our units. The Company conduct training programs and mock drills, to
educate and prepare our employees for emergency and evacuation situation.
These initiatives are expected to help the company lower energy costs and reiterate the
companys commitment to sustainable development philosophy. The main goal behind all the
initiatives is to promote safe, healthy and green work environment by adopting efficient
technologies.
Risks and mitigation measures
Risks and liabilities might have an impact on the Companys business, financial
situation and operational results. The Executive Management Team monitors internal and
external risks that are particular to the business, such as financial, operational,
sectoral, sustainability-related risks (particularly those involving ESG), informational,
cyber security and other dangers. In addition to procedures for internal control of
identified risks, the Risk Management Committee evaluates the efficacy of risk management
processes and systems for risk reduction. The Company further ensures that the appropriate
protocols, frameworks and methodologies are in place to track and assess risks associated
with the Companys operations.
Risk Management Committee
| Mr. Vishal Gupta |
Mr. Sharad Jain |
Ms. Mitali Chitre |
| (Chairman) |
(Member) |
(Member) |
Risks |
Description |
Mitigation |
Supply chain disruptions |
The Companys operations rely on a complex supply chain for sourcing raw
materials, components and parts. Any disruptions in the supply chain, whether due to
transportation issues, geopolitical factors, or natural disasters, could impact production
and delivery timelines. |
In line with our focus to develop better control on our supply chain and
improve our margins, The Company consistently strive to strategically backward integrate
our manufacturing processes and localization. |
Intense competition |
The electronics manufacturing industry is highly competitive, with both
domestic and international players. PGEL may face challenges in maintaining its market
share and pricing competitiveness, especially if new entrants or existing competitors
offer more innovative products or cost-effective solutions. |
The Company believe that its ability to offer end- to-end solutions to
our customers, to meet our customers varying requirements,differentiate us from our
competition. The Company believe that maintaining a high standard of quality of our
products is critical for our business, adhering to customer specifications and continued
growth. |
Regulatory compliance |
The electronics industry is subject to various regulations regarding
safety, quality and environmental concerns. PGEL must ensure compliance with these
regulations, failure of which could lead to legal issues, fines, or reputational damage. |
The Company has established a comprehensive internal control structure
encompassing governance, compliance, auditing, oversight and reporting. This framework
ensures adherence to local regulatory obligations, promotes orderly and efficient business
conduct, safeguards assets, detects and prevents fraud and errors, ensures the sufficiency
and completeness of records and facilitates the prompt generation of reliable data. |
Technological changes |
Rapid advancements in technology could render existing products or
manufacturing processes obsolete. PGEL needs to continually invest in R&D to stay
abreast of the latest technological trends and offer advanced solutions to its clients. |
The Company invest in R&D to sustain or enhance our existing products
and to develop new technologies and processes that would better allow us to customize
products for our clients. The Company allocated higher capital expenditure towards our
R&D to meet our customer requirements which enables the Company to offer end to end
product development services across the lifecycle of product. |
Currency fluctuations |
As a Company that caters to both Indian and global clients, PGEL might be
exposed in to currency exchange rate fluctuations. These fluctuations could impact the
cost of imported materials, affect export revenues and potentially cause financial
uncertainty. |
The company has in place a policy to manage the prices of the key
exposure to fluctuation raw materials used in operations. The Company evaluates exchange
rate exposure arising from foreign currency transactions and follows an established risk
management policy. |
Labour concerns |
The manufacturing industry often faces challenges related to labour
availability, skill gaps and labour disputes. Maintaining a skilled workforce and managing
labour-related issues is crucial for PGELs operational efficiency. |
The Company engaged third- party independent contractors through whom we
engage contract labour for performance of certain functions as per the requirements at our
manufacturing units. The number of contract labourers varies from time to time based on
the nature and extent of work. |
Internal control systems and their adequacy
The Company maintains a robust and reliable internal control framework. Aligned with
its operational scope, PGEL has established a comprehensive internal control structure
encompassing governance, compliance, auditing, oversight and reporting. This framework
ensures adherence to local regulatory obligations, promotes orderly and efficient business
conduct, safeguards assets, detects and prevents fraud and errors, ensures the sufficiency
and completeness of accounting records and facilitates the prompt generation of reliable
financial data. The effectiveness of internal checks and control mechanisms is endorsed by
internal auditors and subjected to managerial reassessment. The Audit Committee oversees
the Companys financial reporting process, ensuring accurate and punctual disclosures
marked by the utmost transparency, integrity and quality. Moreover, the Committee verifies
the adequacy and efficiency of internal control systems while proposing enhancements as
needed.
Cautionary statement
The contents of this reports Management Discussion and Analysis section, detailing the
Companys objectives, forecasts, estimations and anticipations, might qualify as
‘forward-looking statements as defined by applicable laws and regulations. These
statements rely on specific presumptions and anticipations regarding future occurrences.
The actual outcomes could substantially deviate from those expressed or implied due to
numerous external and internal factors beyond the Companys direct control. The Company
disclaims any obligation to publicly modify, amend, or revise such forward-looking
statements in light of subsequent developments, information, or events. Readers are
advised that the risks mentioned here are not exhaustive and are urged to exercise their
judgement when evaluating the risks associated with the Company.
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