Talbros Engineering Ltd Management Discussions.
Your Directors have pleasure in presenting the management discussion and analysis report for the year ended 31st March, 2019.
(A) INDUSTRY STRUCTURE AND DEVELOPMENT
Talbros Engineering is engaged in manufacturing of Rear Axle Shafts for the leading automobile companies in India and foreign markets. The Companys goal is to be a leader in supply of automotive rear axle shafts in the Indian & Overseas market to benefit from the growth and to profit from the opportunities that exist in this sector. During Financial Year 2018-19, the Company has acquired a new land located at Sector 4, Faridabad to set up a forging unit wherein the construction has already started. In Financial year 2019-20, the Company expects to continue this growth with continued focus on exports.
(B) OPPORTUNITIES AND THREATS
The Company has a world class manufacturing facility located at Faridabad and Hathin in Haryana and is equipped with latest technology and highly qualified engineering team. The Company is continuously striving on better and automated technology adoption for effective and efficient working. The 1st robot has been installed during the year. The Company is planning to diversify its product portfolio and entering into new international markets. Power Steering Pully Samples have been developed for international market. For the purpose, the Company started expanding its hands in manufacturing of torsion bars, spindles and front axles. In international business, our largest market is North America and we also serve some small customers scattered across various Central and south American countries.
Besides opportunities, the Company is also facing some threats which includes shifts in the tastes of customers from SUV segment cars to small eco friendly cars due to continuous increase in fuel prices and heavy traffic on roads. The competition is also rising day by day but installation of excess capacity can lead to risk of price war.
(C) SEGMENT-WISE OR PRODUCT WISE PERFORMANCE
The Company is operating with mainly one product i.e. Rear Axle Shafts and continues to undertake steps for improvement measures.
The Company does not foresee any major threats to its growth and market share in the coming years. The infrastructure need of the company is also completed by catering a new area for production. The company does not foresee any technological obsolescence for its products.
(E) RISKS AND CONCERNS
The Company has its step wise risk management system which includes identification of risk at different levels including internal and external business risks. The risks so identified have been properly assessed and analysed at each level. After that, the corrective and preventive measures are taken by the Company to overcome the identified risks. The management review the risks every half year.
(F) INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY
The Company has an adequate internal control procedures commensurate with the size and structure of the Company. The company has also engaged the services of independent Chartered Accountant to carry out the internal audit and to identify the proper and adequate internal control system and sufficient measures are taken to update the internal control system. The implementation of SAP has resulted in better management and system development. The system also ensures that all transactions are appropriately authorised, recorded and reported.
(G) DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE
Your Company has achieved a sales turnover of र 26,925 Lakhs in this financial year ended on 31st March, 2019 as against र 20,833 Lakhs in the previous financial year. Net profit after tax for this year stands at र 731 Lakhs as against र 908 Lakhs in previous year. Exports turnover (F.O.B. Value) for the year ended on 31st March, 2019 is र 5,207 Lakhs as compared to र 4,212 Lakhs in the previous financial year.
(H) MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL REALATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED
As on March 31, 2019, the Company had 241 number of permanent employees at its manufacturing plants and administrative office located at Faridabad and Hathin.
The company considers the employee values and ensures proper encouragement both morally and financially to motivate them. The relationship between the management and employees is remarkable. Regular trainings and workshops have been conducted to motivate the employees for better understanding of upgraded technologies.
(I) KEY FINANCIAL RATIOS
|S. No. Ratios||31st March, 2019||31st March, 2018||Change in %|
|1 Debtors Turnover||7.50||8.86||(1.36)|
|2 Inventory Turnover||6.08||7.34||(0.17)|
|3 Interest Coverage Ratio||3.73||6.28||(0.41)|
|4 Current Ratio||1.89||2.07||(0.09)|
|5 Debt Equity Ratio||0.71||0.57||0.25|
|6 Operating Profit Margin (%)||9.43%||10.25%||(0.08)|
|7 Net Profit Margin (%)||4.48%||6.27%||(0.29)|
During the year, no change of 25% or more has been observed in any ratio.
(J) RETURN ON NET WORTH
The return on net worth for the current year ended on March 31, 2019 is 14.86% as compared to 17.71% during the fiscal year ended on March 31, 2018.
|For and on behalf of the Board|
|Vijay Kumar Sharma||Sanjay Sharma|
|Executive Director||Executive Director|
|DIN: 06394784||DIN: 06394774|
|R/o H. No. 309, Sector 3,||R/o H. No. 1002, Sector 8|
|Faridabad, Haryana||Faridabad, Haryana|
|Date : 5th August, 2019|