Samkrg Pistons & Rings Ltd Management Discussions.

The automobile industry growth is dependent on overall growth of economy. Indian Industry is now growing as potential Global automotive supplier with very good export potential as the developing Countries comes out of recession.

With the introduction of GST your company engaged in auto part industry has regained its status and experience healthy growth over last few years. And your company is also grown along with the overall growth.

Later the government extended great support for hybrid electric vehicle from September, 2018 to march, 2019 and at the same time government announced to ban IC engine 3 wheeler vehicles by the year 2023 and below 150CC scooter and motor cycles by 2025.

OPPORTUNITIES AND THREATS

With the introduction of Electric Vehicles opportunities have increased and with the ban of IC engines the threat is also equally effected your company. To meet with this situation our company has to become very very cost effective by introducing sophisticated technology at high expense.

The Company has very good opportunities because of long term business relationship with valued customers both in Domestic OEMs and Replacement Market & Exports and also in time supplies, superior quality products and our technical expertise both from Japanese & German Consultants.

The Company has got a diverse product portfolio across all market segments i.e OEMs , After Market and Export Market and all vehicle segments and a very strong distribution network at aftermarket sales.

Outlook:

The company continues its drive for sustainable growth in this growing Domestic automotive industry. In view of strong support of OEMs and because of establishing good distribution network, company is poised for good growth.

Several cost effective and time- bound steps have been taken with technical support from Japan to meet the changing expectations of customers, challenges of price competition and also zero defect quality and delivery. Your company has now fully developed and revalidated the products complying BS-VI norms of all major OEM suppliers and received orders for supply from October/November 2019.

This established and poised for moderate demand growth with all OEMs during the year 2019-20 and there on

The company is targeting to achieve moderate growth rate in 2019-20 based on new business acquired from key OEMs and increased focus on After Market both Domestic and Export Markets.

INTERNAL CONTROL SYSTEM:

Your company maintains and adequate and effective internal control system to commensurate with its size and complexity. An independent internal audit function is an important element of your companys internal control system. The internal control system is supplemented through an extensive internal audit program and periodic review by management and audit committee.

INDUSTRIAL RELATIONS:

Industrial relations during the year in all the plants are very cordial and co-operative. The Company encourages good talent and introduced skill development program in the rapidly challenging business and competitive environment. Adequate safety measures, training and development of the employees, continue to receive top priority.

FINANCIAL PERFORMANCE:

The Company earned total gross revenue of Rs. 35616.53 lakhs compared with Rs. 32397.15 lakhs in the previous year and the operational expenses Rs.32686.33 lakhs compared with Rs. 29660.56 lakhs incurred last year.

Profit Before Depreciation, interest and tax (PBDIT) at Rs. 4521.92 lakhs. The Profit Before Tax was at Rs. 3175.20 lakhs before Exceptional item of Rs.42.50 Lakhs as compared to Rs. 2928.30 Lakhs in 2017-18 an increase of 8.43%. Company has no long term loans.

HUMAN RESOURCES

The Company maintains cordial industrial relations environment and the Company continues to establish its training facilities at all levels of employees.

CAUTIONARY STATEMENT

Statements in this Management Discussion and Analysis describing the Companys objective, projections, estimates and expectations may constitute forward looking statements within the meaning of applicable laws and regulations. Actual results might differ marginally or materially from those either expressed or implied.

10 YEARS RECORD

A chart showing 10 Years performance is appended forming part of this report is attached at Performance Highlights.

EXPORTS

The Company is focusing exports to developed Countries like Europe, U.K, France, Germany, Spain Brazil and Russia. The Company has plans to reach 20% of the Turnover during the next 2 years.

POLLUTION CONTROL SAFETY & ENVIRONMENTAL PROTECTION:

We are complying all the norms prescribed by the statutory authorities i. e. Telangana State & A. P. Pollution Control Board.

The Company is very much concerned for safety of men and machines through safety awareness training programs.

DISCLOSURE OF PARTICULARS

The information required under section 134(3)(m) of the Companies Act, 2013 is given in Annexure-2.