Power & Instrumentation (Gujarat) Ltd Management Discussions.



Global growth is projected at 6% in 2021, moderating to 4.4% in 2022. The projections for 2021 and 2022 are stronger than in the October 2020 WEO. High uncertainty still surrounds this outlook, related to the path of the pandemic, the effectiveness of policy support to provide a bridge to vaccine-powered normalization, and the evolution of financial conditions.

The vaccines rollout in many of the advanced economies has been driving the improvement, as has the massive fiscal stimulus by the United States. World GDP growth is expected to be 4.4% next year but global income will still be some USD 3 trillion less by end 2022 than was expected before the crisis hit. USD 3 trillion is about the size of the entire French economy.

Countries that have been quick to vaccinate their population against COVID-19 and those are managing to control infections through effective public health strategies are seeing their economies recover more quickly. Job vacancy postings in the United States are picking up, including sectors such as tourism. But while vaccination rates are progressing well in many advanced economies, poorer and emerging-market countries are being left behind. Unless everyone is protected, no one is protected.

Differences in the strength of economic recovery across countries are being driven by the extent of government support to vulnerable workers and businesses, by a countrys dependency on particular sectors such as tourism (Rebuilding tourism for the future), as well as by public health and vaccination policies. Trade is also playing a role. Consumers have been spending less on services and more on goods since the pandemic began. The pickup in merchandise trade has benefitted countries heavily involved in supply chains, particularly pharmaceuticals, medical supplies and IT material.

The global economy is climbing out from the depths to which it had plummeted during the major Lockdown in April. But, with the COVID-19 pandemic continuing to spread, many countries have slowed down reopening and some are reinstating partial lockdowns to protect vulnerable populations. While recovery in China has been faster than expected, the global economys long ascent back to pre-pandemic levels of activity remains predisposed to setbacks.


After the huge GDP contraction in 2020, economic growth is projected to bounce back in 2021, driven by pent up demand for consumer and investment goods, before declining in 2022. The dramatic infections upsurge since February has weakened the nascent recovery and may compound financial woes of corporates and banks. As public anxiety over the virus spreads and lockdowns multiply, high-frequency indicators suggest that a marked slowdown may have taken place in the April-June quarter, although the overall annual impact is likely to be muted. Wholesale and retail inflation rates remain elevated, but within the target range of the central bank. Indias real gross domestic product (GDP) at current prices stood at Rs. 135.13 lakh crore (US$ 1.82 trillion) in FY21, as per the provisional estimates of annual national income for 2020-21.

India is the fourth-largest unicorn base in the world with over 21 unicorns collectively valued at US$ 73.2 billion, as per the Hurun Global Unicorn List. By 2025, India is expected to have ~100 unicorns and will create ~1.1 million direct jobs according to the Nasscom-Zinnov report Indian Tech Start-up

The first Union Budget of the third decade of 21st century was presented by Minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman on February 1, 2020. The budget aimed at energising the Indian economy through a combination of short-term, medium-term and long-term measures.

In the Union Budget 2021-22, capital expenditure for FY22 is likely to increase by 34.5% at Rs. 5.5 lakh crore (US$ 75.81 billion) over FY21 (BE) to boost the economy.

Increased government expenditure is expected to attract private investments, with production-linked incentive scheme providing excellent opportunities. Consistently proactive, graded and measured policy support is anticipated to boost the Indian economy.

As indicated by provisional estimates released by the National Statistical Office (NSO), India posted a V-shaped recovery in the second half of FY21. As per these estimates, India registered an increase of 1.1% in the second half of FY21. This was driven by the gradual and phased unlocking of industrial activities, increased investments and growth in government expenditure.

As per the estimates of Reserve Bank of India (RBI), Indias real GDP growth is projected at 9.5% in FY22; this includes 18.5% increase in the first quarter of FY22; 7.9% growth in the second quarter of FY22; 7.2% rise in the third quarter of FY22 and 6.6% growth in the fourth quarter of FY22.

India is focusing on renewable sources to generate energy. It is planning to achieve 40% of its energy from non-fossil sources by 2030, which is currently 30% and has plans to increase its renewable energy capacity from to 175 Gigawatt (GW) by 2022. In line with this, in May 2021, India, along with the UK, jointly launched a Roadmap 2030 to collaborate and combat climate change by 2030.


India is the third largest producer and second largest consumer of electricity in the world and had an installed power capacity of 382.73 GW as of April 2021. Electricity production reached 1,252.61 billion units (BU) in FY20. India was ranked fifth in wind power, fifth in solar power and fourth in renewable power installed capacity, as of 2019. Indias rank jumped to 22 in 2019 from 137 in 2014 on World Banks Ease of Doing Business - "Getting Electricity" rankings.

For 2020-21, electricity generation target from conventional sources was fixed at 1,330 BU, comprising 1138.533 BU of thermal energy; hydro energy (140.357 BU) and nuclear (43.880 BU); and 7.230 BU was imported from Bhutan.

According to the Ministry of Power, Indias power consumption grew by 41% at 119.27 billion units (BU) in April 2021, compared to 84.55 BU in April 2020.

In FY21, the total thermal installed capacity in the country stood at 234.72 GW. Installed capacity of renewable, hydro and nuclear energy totalled 94.43 GW, 46.21 GW and 6.78 GW, respectively. The Government plans to double the share of installed electricity generation capacity of renewable energy to 40% by 2030. India has also raised the solar power generation capacity addition target by five times to 114 GW by 2022. The Government is preparing a rent a roof policy for supporting its target of generating 40 GW of power through solar rooftop projects by 2022. The peak power demand in the country stood at 170.83 GW in FY20.

Under the Union Budget 2021-22, the government has allocated Rs. 15,322 crore (US$ 2.11 billion) for the Ministry of Power and Rs. 5,753 crore (US$ 794.53 million) for the Ministry of New and Renewable Energy. Under the Union Budget 2021-22, the government has allocated Rs. 300 crore (US$ 41.42 million) to increase capacity of the Green Energy Corridor Project, along with Rs. 1,100 crore (US$ 151.90 million) for wind and Rs. 2,369.13 crore (US$ 327.15 million) for solar power projects. The Union Budget 2021-22 has allocated Rs. 5,300 crore (US$ 731.75 million) to the Integrated Power Development Scheme (IDPS) and Rs. 3,600 crore (US$ 497.03 million) towards the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY).

The Cabinet Committee on Economic Affairs (CCEA) has approved commercial coal mining for private sector and the methodology of allocating coal mines via auction and allotment, thereby prioritising transparency, ease of doing business and ensuring the use of natural resources for national development.



We believe that our growth in other states in the country can fetch us new business expansion and opportunities. Presently, our presence is in the state of Gujarat and neighbouring states. Going forward we intend to establish our presence in more locations in the country. Our emphasis is on scaling up of our operations in other markets which will provide us with attractive opportunities to grow our client base and revenue.


• Rise in cost of material and cost of transportation may affect the margin

• Changes in Government Policies

• Intense competition may reduce profitability

• Act of God

• Client Dissatisfaction

• Customers inability to pay


The Companys main business activity is Electric Contractor and Manufacturer.


The Company continues to explore the possibilities of expansion and will make the necessary investments when attractive opportunities arise.


The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Key business risks and mitigation strategy are highlighted below.

Business Risk

To mitigate the risk of high dependence on any one business for revenues, the Company has adopted a strategy of launching new products/services, globalising its operations and diversifying into different business segments. The strategy has yielded good results and the Company therefore has a diversified stream of revenues. To address the risk of dependence on a few large clients, the Company has also actively sought to diversify its client base.

The Company strives to add value to its clients by providing services of a superior quality and maintaining a robust franchise with investors and end-users, to mitigate the risk arising from price competition.

Legal & Statutory Risk

The Company has no material litigation in relation to contractual obligations pending against it in any court in India or abroad. The Company Secretary, compliance and legal functions advise the Company on issues relating to compliance with law and to pre-empt violations of the same. The Company Secretary submits a quarterly report to the Board on the Companys initiatives to comply with the laws of various jurisdictions. The Company also seeks independent legal advice wherever necessary.

Human Resource Attrition Risk

Power And Instrumentation (Gujarat) Limiteds key assets are its employees. In a highly competitive market, it is a challenge to address the attrition. Power And Instrumentation (Gujarat) Limited continues to accord top priority to manage employee attrition by talent retention efforts and offering a competitive salary and growth path for talented individuals.

Macroeconomic Risks

Companys business may be affected by changes in Government policy, taxation, intensifying competition and uncertainty around economic developments in Indian and overseas market in which the Company operates.

Mitigation Strategy

The Company has well defined conservative internal norms for its Business. The Company ensures a favourable debt/equity ratio, moderate liquidity, strong clientele with timely payment track record, appropriate due diligence before bidding and focus on expanding presence in newer markets to minimize the impact in adverse conditions. The Company has geographically and operationally diversified into multiple countries and business segments thereby reducing its dependency on one country or market.

Operational Risks

The Companys operations and financial condition could be adversely affected if it is unable to successfully implement its growth strategies. Competition from others, or changes in the products or processes of the Companys customers, should reduce market prices and demanding for the Companys products, thereby reducing its cash flow and profitability. Product liabilities claims may adversely affect the Companys operations and finance.

Mitigation Strategy

The Company does strict monitoring of prices and adopts appropriate strategies to tackle such adverse situations. The Company also adopts technological innovations to bring about operational efficiency in continuous basis to remain competitive.


The Company is exposed to risks & fluctuations of foreign exchange rates, raw-material prices and overseas investments exposures.


One of the key requirements of the Companies Act, 2013 is that companies should have adequate Internal Financial Controls (IFC) and that such controls should operate effectively. Internal Financial Controls means the policies and procedures adopted by the Company for ensuring orderly and efficient conduct of its business, including adherence to Companys policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information. Your Company process of assessment ensures that not only does adequate controls exist, but it can also be evidenced by unambiguous documentation. The process involves scoping and planning to identify and map significant accounts and processes based on materiality. Thereafter, risk is identified and their associated controls are mapped, else remediation is implemented. These controls are tested to assess operating effectiveness. The auditor performs independent testing of controls. The Auditors Report is required to comment on whether the Company has adequate IFC system in place and such controls are operating effectively. Your Companys Internal Control System is robust and well established. It includes documented rules and guidelines for conducting business. The environment and controls are periodically monitored through procedures/ processes set by the management, covering critical and important areas. These controls are periodically reviewed and updated to reflect the changes in the business and environment.

The audit committee met 5 (five) times during the year. The committee reviewed the adequacy and results of the testing of Internal Financial Controls and Internal Audit actions.


The prices of basic major raw materials used in our manufacturing process viz. stainless steel scrap /flats of various grades doesnt affect much, as we are working in open market scenario.


During the year under review, the Company has generated total revenue of Rs. 8625.22 lakh (Previous Year Rs. 9015.97 lakh). The net profit before exceptional items and taxes is Rs. 464.78 lakh (Previous Year Rs. 520.21 lakh). The net profit after taxes resulted into the profit for the year at Rs. 345.83 lakh (Previous Year Rs. 300.21 lakh).


Our Company believes that the human capital is key to bring in progress. The Company believes in maintaining cordial relation with its employees, which is one of the key pillars of the Companys business. The Companys HR policies and practices are built on core values of Integrity, Passion, Speed, and Commitment. The Companys focus is on recruitment of good talent and retention of the talent pool. The Company is hopeful and confident of achieving the same to be able to deliver results and value for our shareholders. As on 31st March, 2021, the total employees on the Companys rolls stood at 38.


The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The financial statements have been prepared under the historical cost convention on an accrual basis. The management accepts responsibility for the integrity and objectivity of the financial statements, as well as for the various estimates and judgment used therein.


The Company has followed all relevant Accounting Standards laid down by the Institute of Chartered Accountants of India (ICAI) while preparing Financial Statements.


Statements in the management Discussion and Analysis describing the Companys expectations or predictions may be forward looking within the meaning of applicable securities, law and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Companys operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws economic developments within the country and other factors such as litigation and industrial relations.



DATE: 28th August, 2021 Padmaraj Padmnabhan Pillai Sriram Nair
PLACE: Ahmedabad Managing Director Director
DIN: 00647590 DIN: 06491273