Sibar Auto Parts Ltd Management Discussions

[Pursuant to Regulation 34 (2) (e) of Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015] (A) Business Overview: Review of Operations:

Your directors wish to present the details of Business operations done during the year under review: During the year under review your company reported growth in revenue from operations of 11.23% over the previous year. The Revenue from operations stood at Rs. 2211.68 lakhs compared with Rs. 1988.39 lakhs in the previous year. However the operations resulted in Net Loss of Rs. 67.92 lakhs against previous year net loss of Rs. 139.03 lakhs. The main contributing factors are increase in Financing cost and Depreciation. Effective steps are being taken to reduce financing cost by adding new machines and modifications to existing manufacturing facility so as to improve profitability Your directors are hopeful of better results with increase turnover in the coming years.

INDUSTRY STRUCTURE AND DEVELOPMENTS

AUTO COMPONENTS INDUSTRY IN INDIA IN THE YEAR 2024-25

The GDP growth estimate for FY24 has been revised upwards from 7.3% to 7.6% as per the estimates, highlighting the enduring strength of the Indian economy. India grew above 8% for three consecutive quarters, reaffirming as a standout performer amidst sluggish global growth trends. Asian economies such as China, Japan, India, and South Korea are among the largest net oil importers globally. Hence continued shipping disruptions could hit Asia. A rise in oil prices may pose upside risks to inflation and, consequently, to growth. Global growth, estimated at 3.1% in 2023, is projected to remain at 3.1% in 2024 before rising modestly to 3.2% in 2025. Compared with that in the October 2023 WEO, the forecast for 2024 is about 0.2% higher, reflecting upgrades for China, the United States, and large emerging market and developing economies. Nevertheless, the projection for global growth in 2024 and 2025 is below the historical (2000 19) annual average of 3.8%, reflecting restrictive monetary policies and withdrawal of fiscal support, as well as low underlying productivity growth. Advanced economies are expected to see growth decline slightly in 2024 before rising in 2025, with a recovery in the euro area from low growth in 2023 and a moderation of growth in the United States. Emerging market and developing economies are expected to experience stable growth through 2024 and 2025, with regional differences.

Risks and Concerns: RISKS:

Financial Risk Management:

The Companys activities expose to a variety of financial risks viz., market risk, credit risk and liquidity risk. The Companys focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk.

Management of Market Risk:

Market risks comprise of Price risk and Interest rate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interest rate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising currency exposure primarily with respect to the US Dollars (USD) for exports being made by the company and the details of the same have been given in notes forming part of financial statements.

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company operations are with parent companies and hence no issues credit worthiness. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy.

RISK MITIGATION:

The Company has appropriate risk management system in place for identification and assessment of risks, measures to mitigate them, and mechanisms for their proper and timely monitoring and reporting.

(B) Opportunities And Threats:

Opportunities:

The Company is carrying on the business of manufacturing of auto components such as Cylinder Heads, Crankcases for Three Wheelers, Aluminium parts for CAC tanks, Aluminium Parts in Electrical Segments such as Connectors, Core boxes etc. As reported earlier we have given Nickel Silicon Coated Electro Plated Cylinder blocks for trails for two-wheeler manufacturer

In todays parlance Auto component industry has growth potential as the population is increasing, demand of vehicle in all segment is increasing so the future of the Company seems bright.

THREATS:

Your Company regularly monitors the various risk associated with its business. The company is identifying, minimizing and mitigating the risks and the same are reviewed periodically. There are various risk factors such as changes in Government Policies and Regulations, Fluctuation in Foreign Exchange Rates, Prices of Raw Materials, Competition, Volatile in Automobile Industry, Manpower. The company is trying to Overcome/Minimize it by taking certain steps, which are in hands of company. Besides this, Companies Internal Risk, Credit Risk, Liquidity Risk, Maturity of Financial Liabilities, Interest Rate Risk

(C) Internal Control Systems:

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

(D) Outlook:

Indias economic outlook remains positive, supported by strong consumer demand, increased capital expenditure, improving prospects of rural consumption due to easing inflation, and proactive government policy measures. The Interim Budget 2024-25 lays the foundation for achieving the vision of a developed and self-reliant India by 2047. It outlines a comprehensive economic management strategy, including infrastructure development, digital public infrastructure, taxation reforms, and proactive inflation management.

Cautionary Statement:

Statements in the management discussion analysis describing the Companys objectives, projections, estimates, expectations are forward looking within the meaning of applicable security-laws and regulations. Forward-looking statements are based on certain assumptions and expectations of future events. The Company cannot guarantee that these assumptions and expectations are accurate or will be realised. Actual results may differ materially from these expressed in the statement. Important factors that could make difference to Companys operations include economic conditions, changes in the Government priorities/policies/ regulations, tax laws and other statutes and other incidental factors affecting the business environment. The Company assumes no responsibility to publicly amend, modify or revise forward-looking statements on the basis of any subsequent developments, information or events.