Surya Chakra Power Corporation Ltd Management Discussions

A. Industry structure and developments

India has different models for sale and purchase of bulk power - integrated utility [State Electricity Board (SEB)], single buyer (MoU based/regulated generation), competitive bidding, captive power generation and sale to captive users. At the consumer end, India has models such as monopoly where the incumbent state distribution company is the sole provider of electricity, franchisee model, retail competition, etc. Migration to a more mature market structure is expected to occur gradually. With the proposed amendment to the Electricity Act, 2003 (EA, 2003) on the anvil, the market structure may alter significantly in the long-term.

B. Opportunities and Threats

The growth in domestic market has in the last few years been constrained given the uncertainties around fuel supply, financial condition of discoms, challenges of land acquisition, water linkages and various statutory clearances. As the power sector is seen as a key driver supporting the growth of the nation at large, the new Government at the Centre has been pursuing reforms which is expected to ease some of the known constraints.

C. Segment wise or product wise performance

The requisite information is already furnished in the financial review under Directors Report. Hence the review of companys business is not reproduced once again here.

D. Outlook

Outlook for the Company appears to be promising.

E. Risks and concerns

The Company is exposed to certain financial risks, principally interest rate risk, liquidity risk and credit risk, risks associated with the economy, regulations, competition etc. These risks are managed through risk management policies that are designed to minimize the potential adverse effects of these risks on financial performance of the Company. The Risk Management framework of the Company ensures, that the compliance with the requirements of SEBI LODR regulations. The framework establishes risk management across all service areas and functions of the Company, and has in place, the procedures to inform the Board Members about the risk assessment and minimization process. These processes are periodically reviewed to ensure that the management of the Company controls risks through a defined framework.

F. Internal control systems and their adequacy:

The Company has adequate Internal Controls systems commensurate with the size and nature of business of the company. The Internal Controls system is constantly assessed and strengthened with tighter control procedures. The Internal Controls systems ensure effectively of operations compliance with internal policies and applicable laws and regulations, protection of resources and assets, and accurate reporting of financial transactions.

G. Discussion on financial performance with respect to operational performance.

The requisite information is already furnished in the financial review under Directors Report. Hence the review of companys business is not reproduced once again here.

H. Material developments in Human Resources / Industrial Relations front, including number of people employed.

The company currently has adequate man power and personal to conduct the business without any complication or hindrances. The company recognizes the importance and contribution of the employees. Human resource is viewed to be as one of the most important factor in the growth process with a view to cross further frontiers in business performance, the Company strives to organize training modules for understanding and improving the core skills of the employees. The overall human and industrial relations have remained peaceful and composed during the year. The Company is currently working on providing much better and comfortable working environment and training regimes to the employed personnel.

The total number of people employed in the Company as on 31st March, 2017 is 25.

CAUTIONARY STATEMENT

Readers are advised to kindly note that the above discussion contains statements about risks, concerns, opportunities, etc., which are valid only at the time of making the statements. A variety of factors known/unknown expected or otherwise may influence the financial results. These statements are not expected to be updated or revised to take care of any changes in the underlying presumptions.

Readers may therefore appreciate the context in which these statements are made before making use of the same.