Uni Abex Alloy Products Ltd Management Discussions.

Your Directors have the pleasure to submit the Management Discussions and Analysis report for your consideration. This year witnessed positive sentiments across all our buniness segments leading to improved demands. In this year we had some good project orders from OEM and MRO business segments resulting in significant improvements in performance of second half of the year. Your Company reported highest ever casting sales of Rs. 85.25 Crs. and order booking crossed a milestone of Rs. 1 billion in the history of the Company during this fiscal. Favourable product and segment mix coupled with various cost reduction innitiatives helped your Company to grow its bottomline. Prior years marketing efforts also helped your Company to broaden its market base in the domestic segment overtaking the export market share.

Your Company has acquired few overseas key accounts and has also significantlyimproved its performance in the OEM segment as compared to previous fiscal. Your Companys strategic approach to focus aggressively on the MRO requirements in different industry segments like Petro and Steel industry as also special projects took the capacity utilsation to much higher levels.

The new fiscal has started with strong Order book and your Company expects to maiantain the growth momentum going forward and enhance capacity utilization and profitability.

THREATS AND OPPORTUNITIES

Rising trend of oil and material prices, global trade conflicts and slowdown in domestic economy coupled with uncertainties in economic polices of new government may pose significant challenges to our business. Our teams are however, countering these with a sharp focus on costs, innovative strategies including bold decisions which stretch on the technological boundriesd hitherto not carried out.

Your Company is continuing with its long term strategy of identifying opportunities by (i) developing new key accounts in OEM segment (ii) pursuing orders for high alloy high integrity sand castings (iii) new orders for large size assemblies.

OUTLOOK

Your Company has a positive outlook for the next fiscal and is industry and identification of new opportunities for exports. The outlook for the year 2019-20 is positive. The new Governments likely focus on the development of Infrastructure and Manufacturing industry will help in giving an impetuos to certain sectors which in turn, is expected to have a positive effect on our target segments.

RISK & CONCERNS

Your companys Board of Directors has put in place adequate risk assessment and risk mitigating measures. Executive Management has an adequately defined framework and therefore your Company is confident of foreseeing and mitigating the risks which are normal hazards to the industry arising from factors like fluctuations in the availability and pricing of fuel, energy and raw materials.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company continues to augment the Standard Operating Procedures covering the business operations with inbuilt system of internal checks and balances duly supported by a robust ERP software. These procedures ensure that the transactions are properly authorized, validated and reported, apart from safeguarding the assets of the Company. The Companys operating procedures are supplemented by well-documented policies and records which are reviewed regularly. Internal Auditors conduct audit of all the aspects of the business to assess effectiveness of existing control systems. Statutory Auditors also verify the Internal Financial Controls, adherence to management instructions and policies and compliance with laws and regulations of the Country.

Audit Committee headed by a Chairman, who is an Independent Director, meets quarterly with the Management, Internal and Statutory Auditors to review the internal audit reports and address exceptions, if any.

FINANCIAL PERFORMANCE

During the year your Companys Total Income (gross sales and other income) for the year at Rs. 90.64 Crs as opposed to Rs. 83.20 Crs of the previous year is higher by 9%. It is a matter of satisfaction to your Directors to report that the your Company has made a turnaround and ventured into new geographies coupled with identifying new opportunities in OEM, MRO and Project segments which helped to report a PAT of Rs. 9.38 Crs.

HUMAN RESOURCES:

The HRD policies are continuously being upgraded to keep pace with development. Organizational Development initiatives with facilitation from Corporate HR team are ongoing in your company and help it to upgrade its human resources. Learning & Development also is an integral part of this initiative and appropriate training programs, workshops and seminars are conducted to facilitate individual growth. This is complemented by efforts to provide a conducive work culture and ambience. As at 31st March, 2019, the total number of employees on the role of the Company stood at 100.

CAUTIONARY STATEMENT

Statements in the Management Discussion and Analysis Report are forward looking statements and are based upon the data available with the Company, certain assumptions on the economic outlook of the country, government policies, and political developments within and outside the Country. Management is not in a position to guarantee the accuracy of the assumptions and the projected performance of the Company in future. It is, therefore cautioned that the actual results may differ from those expressed or implied herein.