Vardhman Concrete Ltd Management Discussions.

The key issues of the Management Discussion and Analysis are given below.

Industry Structure and Developments

With various initiatives under Union Budget 2020-21 by the Government of India to promote affordable housing in India, the Management is expecting a boost in the overall development of Industry. Due to the increasing demand in various sectors such as housing, commercial construction and industrial construction, cement industry is expected to reach 550-600 million tonnes per annum (MTPA) by the year 2025. The Management is determined to take benefits of the growing demand in the industry.

Opportunities and Threats

Continuing increase in demand of housing, commercial and industrial construction, and slum rehabilitation projects are opportunity of growth to the Company. The major barrier to the growth of the Company is the cost of procurement of input materials and labour.

Risk and Concerns

As per the Management of the Company, the major risk and concerns that might affect the overall Growth and Development of the Company is the inflation and interest rates. With a gradual stoppage of operations at all major cement plants and construction sites since the end of the third week of March due to COVID 19 pandemic, growth in the housing segment, that forms 60%-65% of cement demand, is likely to be affected given the impact of the slowdown in economic growth on discretionary spending over the next year.

Segment wise performance

The Company is operating in only one segment.

Business Outlook

The Word Crisis is composed of two characters - Danger and Opportunity. The COVID-19 pandemic presents Company with both. However, the Management of the Company is optimistic towards working on capitalizing the opportunities while side-stepping the dangers.

Risk Mitigation

The Covid-19 pandemic is causing unprecedented upheaval to economies and business, exposing them to uncertainties which make it difficult to assess the extent of eventual impact or the timeline for normalcy. However, what is clear is that the risks that businesses face are wide ranging, affecting all aspects ranging from day-to-day operations to longer term planning and strategy.

Although the Company has been following the principle of risk minimization as is the norm in every industry, it has now become a compulsion. Therefore, in accordance of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the Company through Audit Committee. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structured and disciplined approach to Risk Management, in order to guide decisions on risk related issues.

Management Perception and Initiatives

The Year 2020 will be both challenging and opportunistic and the ones likely to succeed are those who embrace the changing market dynamics. Apart from elections, credit growth and improvements in infrastructure will set the tone for economic growth in the future. The Management of the Company is optimistic towards the growth and future of the Company by trying to pursue the business of building, bridges and manufacturing of precast concrete girders, slabs, beams and Bed Blocks.

Internal control systems and their adequacy

Considering the size of the Company, the Management of Company is of the opinion that the internal control systems are adequate. However the Management of the Company is always striving to improve and develop the Internal Control Systems.

Discussion on financial performance with respect to operational performance

During the year under review the Company earned revenue from its operations and the management is of the opinion that the Company will be able to sustain and be able to increase the same in future years.

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

The Company has in place a policy for Human Resource Management and the Board of Directors is assigned with the responsibility to maintain Industrial relationship.

The Company currently has single employee/KMP.

There are no changes of more than 25% in any of the significant key financial ratios.

By Order of the Board

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Vishal Vardhan Rajesh Vardhan
Date : 25th November, 2020 Managing Director Director
Place: Mumbai DIN: 03043125 DIN: 00199986