SG Mart Ltd Management Discussions

Your Directors have pleasure in presenting the management discussion and analysis report for the year ended on March 31, 2022.

INTRODUCTION

This Management’s Discussion and Analysis ("MD&A") for Kintech Renewables limited ("KRL") discusses our financial and operating performance, business indicators and outlook from management’s viewpoint.

This document should be read in its entirety and is intended to complement and supplement KRL’s audited Financial Statements for the year ended March 31, 2022. This MD&A contains information from the Financial Statements for the years ended March 31, 2021 and 2022. The financial information that appears throughout our MD&A is consistent with the Financial Statements. This MD&A also includes certain measures such as EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin and free cash flow.

During the period under review, the Company had been engaged in the business of power generation, electric power, light and supply and to generate and accumulate electric power and renewable energy i.e. wind, solar but on December 2, 2021 the Company has been acquired by new promoters. Kintech Renewables Limited is a Public Limited Company listed with BSE Limited (Formerly known as Bombay Stock Exchange) having its Corporate Identification Number L40105GJ1985PLC013254 and incorporated in year 1985.

During the period, an Open Offer for acquisition of 2,51,980 Equity Shares from shareholders of the Company by Mr. Gaurank Singhal and Mr. Aditya Singhal which had closed on November 30, 2021 on payment of purchase consideration, the said acquirers had acquired 1,98,929 Equity Shares of the Company (Gaurank Singhal - 99431 and Aditya Singhal - 99498 shares). Further through the share purchase agreement dated August 19, 2021, the acquirers had also got the following shares transferred into their respective names on December 2, 2021:

Details of shares transferred

Sellers	No. of Shares	%	Name of the Buyers	No. of Shares	%
Mr. Jigar Jaswantlal Shah	3,74,010	37.40	Mr. Gaurank Singhal	3,74,010	37.40
Mr. Ambalal Chimanlal Patel	3,74,010	37.40	Mr. Aditya Singhal	3,74,010	37.40
Total	7,48,020	74.80		7,48,020	74.80

The total holding of the new acquirers would be:

Name	Number of shares	Percent
Mr. Gaurank Singhal	473441	47.34
Mr. Aditya Singhal	473508	47.35

OPPORTUNITIES:

The Company has witnessed in the recent term an increasing push by the Government on renewable resource development across the nation with the objective of relaxed timelines for compliance with the emission norms for thermal generating plants that fall in different categories determined by a task force constituted by the Central Pollution Control Board. Penal provision in the form of Environmental Compensation has been introduced if there is delay in completion of installation of the emission control equipment.

THREATS:

Resurgence of infections leading to fresh lockdowns, both localized as well as at regional / national levels resulting in disruption in economic activity. Land acquisition delays leading to delays in approvals and project execution Labour intensive business leading to direct impact on project sites due to labour shortages resulting in Unforeseen disruptions in raw material/ labour unavailability. Slower recovery in services, which is the backbone of Indian economy leads to Cash flow disruptions in event of economic slowdown.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Management monitors and evaluates the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies. Based on the report of management, process owners undertake corrective action(s) in their respective area(s) and thereby strengthen the controls. The Audit Committee reviews the reports submitted by the management. Also, the Audit Committee has independent sessions with the external auditor and the Management to discuss the adequacy and effectiveness of internal financial controls over financial reporting and internal financial controls respectively

The Company has standard operating procedures. The management regularly monitors and controls to address safeguarding of its assets, prevention and detection of frauds and errors, controls to monitor accuracy and completeness of the accounting records including timely preparation of reliable financial information.

RISK AND CONCERNS:

The Company has an effective risk management framework in place to primarily control business and operational risks. The major risk areas are periodically and systematically reviewed by the senior management and risk-management committee. Comprehensive policies and procedures help identify, mitigate and monitor risks at various levels. Further, the Company remains vigilant to the opportunities and will not hesitate to exploit them provided the Company can do so by eliminating any risk to our capital. By taking such proactive measures, the Company ensures that strategic business objectives are achieved seamlessly.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:-

Kintech Renewables Limited is also Engineering, Procurement and Construction (EPC) Company which is in the business of turnkey wind / solar power solutions like solar roof top development in commercial and Industrial sectors, solar power generation and maintenance services.

The Company has achieved total revenue of Rs. 61,59,980/- as against of Rs. 6,90,05,116/- in the previous year. Net profit for the year is Rs. 30,06,944/- as compared to the net profit of Rs. 30,18,953/- in the previous year.

KEY FINANCIAL RATIOS FOR FINANCIAL YEAR 2020-21 COMPARED WITH FINANCIAL YEAR 2019-20:-

Sr.No. Particulars	F.Y. 2020-2021	F.Y. 2019-2020	YoY Chanqe (In %)
1 Current Ratio (% terms)	8.64	188.98	-95.43%
2 Inventory Turnover (times)	1.97	27.02	-92.72%
3 Debt Service Coverage Ratio (times)	-	-	-
4 Debt Equity Ratio (times)	-	-	-
5 Net Profit Ratio (% terms)	803.75%	4.78%	16697.58%
6 Return on Capital Employed(% terms)	3.43%	3.71%	-7.41%

REASONS FOR SIGNIFICANT CHANGE IN KEY FINANCIAL RATIOS FOR FINANCIAL YEAR 2021 -22:-

I. Current Ratio (% terms): This ratio has decreased due to increase in current liability i.e. advance received against sale of land.

II. Inventory Turnover (times): This ratio has decreased due to decrease in sales.

III. Net Profit Ratio (% terms):- Operating profit margin of the company was 6.59% for projects undertaken during the current financial year.

IV. Net Profit Margin (% terms): - This ratio has increased due to sharp decrease in credit sales and the net profit being approximately equal when compared to last year.

HUMAN RESOURCE DEVELOPMENT:

The Company believes that the human resources are vital in giving the Company a Competitive edge in the current business environment. The Company’s philosophy is to provide congenial work environment, performance oriented work culture, knowledge acquisition / dissemination, creativity and responsibility. As in the past, the Company has enjoyed cordial relations with the employees at all levels. As the job market continues to be challenging, regular workforce planning is the key in our talent acquisition plan. The Company continues to run an in-house training program held at regular intervals and aimed at updating their knowledge about issues. Organization’s competitive advantage is generated from the human resources and the performance of the organization is influenced by a set of effective HR practices.

CAUTIONERY STATEMENT:

Readers are cautioned that this discussion and analysis contains forward-looking statements that involve risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Actual results, performances or achievements could differ materially from those expressed or implied in such forward-looking statements. The details and information used in this report have been taken from publicly available sources. Any discrepancies in the details or information are incidental and unintentional. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of their date. The above discussion and analysis should be read in conjunction with the Company’s financial statements included herein and the notes thereto.