Photoquip India Ltd Management Discussions.

• FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realized. The Companys actual results, performance or achievements can thus differ from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, based on any subsequent developments, information or events.

• INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company manufactures, exports and trades in Digital Studio Flash Lights and Photographic Accessories and similar products. It is an OEM for Elinchrom SA, a Company based in Switzerland and a renowned name in the global photographic industry. It is an Authorised Distributor of Elinchrom products in India since 1986. The Company continues to be driven by the mission of equipping every photo studio with the best photography experience. In consultation with Elinchrom SA, the Company has discontinued production of some of the end-of-life products, as intimated by Elinchorm SA, effective January 2020. This has impacted the export turnover of the last quarter of the financial year. The Company will be functioning with reduced manpower in the manufacturing process and the organization structure is recast accordingly.

The projected GDP outlook for 2020-21 is 7.4% without factoring the global COVID-19 impact. Continued thrust on industry initiatives such as Make in India, Invest India, Start-up India, Atmanirbhar Bharat and Vocal for Local are expected to improve the ease of doing business and provide a boost to the manufacturing sector in the country.

At Company level, going forward, it is our conviction that the transparent policies along with the stringent statutory compliances will propel the organized sector towards growth. The traditionally fundamentally strong character of the Indian economy would continue to operate in the future.

• BUSINESS OVERVIEW

The financial highlights are given below: -

Particulars FY 2019-20 FY 2018-19
Revenue from sale of products (Exports) 1,508.52 2,333.90
Revenue from sale of stock in trade (Domestic sale) 1,192.43 1,415.15
Other operating revenue 38.26 47.09
Total Revenue from Operations 2,739.21 3,796.14
Add: Other Income 92.42 32.93
Total Income from Operations 2,831.63 3,829.07
Provision for Taxation Nil Nil
Deferred Tax Liability/(Asset) 47.24 74.80
Profit/(Loss) after tax (271.07) (134.36)
Paid-up Equity Share Capital as on 31st March, 2020 480.08 480.08

• MARKETING

The Company has a well-established pan-India dealer network catering to the Indian photography market. It continues to maintain a strong presence in various industry-related exhibitions to reach out to mass target audiences. It has strategic tie-ups with industry-renowned photographers/training institutes to conduct imaging/photography workshops pan-India. It also conducts service camps across India at strategic locations to cater to the after-sales segment. The Company is active on social media platforms including Facebook and Instagram.

• SWOT ANALYSIS

a) STRENGTHS

Our core strength continues to be our pioneering presence in this field of still photography over the last 6 decades. Add to it, adoption and seamless integration of technological advancements in the field through a competent and committed workforce with extensive industry experience, which give us the required edge over competition.

b) OPPORTUNITIES

The photographic market is rapidly maturing in India and therein lies an opportunity for the Company to capitalize. The Company has strong Research and Development base and uses cutting edge technology in developing digital studio flash lights and other products.

The Company is making forays into the motion/video photography market with the introduction of industry-specific products.

c) THREATS/WEAKNESSES

Catering to a single export buyer continues to be a perceived weakness. Constant fluctuations in foreign exchange and global recession pose a continued threat to the Companys operations.

• INTERNAL CONTROL

The Company has adequate internal control system commensurate with the size of its operations. Adequate records and documents are maintained as required by applicable laws. The Companys Audit Committee reviews the internal control system. During the year such controls were tested and no reportable material weaknesses in the design or operations were observed.

• SEGMENTWISE REPORTING

During the year under review, Company has only one primary segment i.e. Digital Studio Flash Lights and Photographic Accessories. Two secondary segments have been identified based on the geographical locations of customers i.e. domestic and exports.

• OUTLOOK

The Company maintains a positive outlook for the future. It also aims to make a mark in the market of motion/video photography.

• MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED

Discontinuation of manufacturing of end-of-life products has led to a complete overhaul of the manufacturing/supply chain process for exports. Production manpower is downsized and restructured in line with the reduced line processes.

• RISKS AND CONCERNS

Risk is an integral part of any business. As a responsible management, the Companys principal endeavor is to minimize risks.

• CAUTIONARY STATEMENT

Statement in this Managements Discussion and Analysis detailing the Companys objectives, projections, estimates, estimates, expectations or predictions are "forward-looking statements" within the meaning of applicable laws and regulations. Actual results could differ materially from what has been envisaged. Important factors that could make a difference to the Companys operations include overall global and Indian demand-supply conditions across industries, cyclical demand in the Companys principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries with which the Company conducts business and other factors such as the COVID-19 pandemic and ongoing challenges and uncertainties posed by the COVID-19 pandemic for businesses and governments around the world, changes in regulation, government actions or intellectual property protection, actions by our competitors, and other risks inherent to the industries in which we operate.