Veto Switchgears & Cables Ltd Management Discussions.

Management Discussion and Analysis report is attached herewith forms part of this report. Summary of performance and various businesses and functions of the Company is as follows:

i. Economy and Markets

Wires and cables play an indispensable role in todays digitally-enriched life and find extensive usage across a number of applications in several industries. The continuously rising set of applications of wires and cables across the burgeoning power, automotive, telecommunication, and construction industries are expected to bode well for the global consumption of wire and cable materials in the next few years. The market for wire and cable materials, thus, is projected to tread along a healthy growth path over the period between 2016 and 2024. Over the years, the global cables and wires market has been exhibiting strong growth momentum, supported by demand from power supply companies, telecom operators and other end-user industries such as building & construction and industrial segments.

The main customers for the wire and cable industry are the automotive, telecommunication and construction industries. In the past few years, these three have witnessed a rapid expansion and have led to an annual growth of about 25% in India.

The electronics market of India is one of the largest in the world and is anticipated to is projected to grow at a compound annual growth rate (CAGR) of 24.4 per cent during 2012-2020. Separately, forecasts say that the electric wire and cable market in India is to grow at a CAGR of 16.18 percent over the period 2015-19 as power cables led the revenues of the wires and cables market with more than 50 percent contribution to the total market in fiscal year 2014. One of the major tax reforms, The Goods and Services Tax (GST) Amendment Bill passed during the year, aims at streamlining the countrys complex tax system, reduce fragmentation in markets, lower business costs, and widen the tax base. Robust implementation of these legislative changes will be key to boost prospects of the organised market. Increase in Urban Population and Per-Capita Income has been growing at a steady rate and is expected to increase further due to affordability and changing life styles of the people. The demand of manufacturing of wires & cables and electrical accessories & other allied products in India is also hence likely to increase. We have proposed to expand our manufacturing capacity so as to meet the increased demand both in domestic and foreign markets. De-licensing and Removal of Tariffs for the Industry , Low Entry Barriers, Increased Demand for Housing, Increased Growth in the Emerging Markets and in the Production of Renewable Energy and Increased Growth in the Emerging Markets and in the Production of Renewable Energy are also our basic growth drivers of the market. We are also looking forward to housing projects of Government and semi-government agencies. Source:, http://www.openpr.com/ , http://ieema.org/ , wire & cable India .

ii. Market Overview

The Indian wire and cable industry is growing satisfactorily and getting more and more consolidated and becoming largely organized now. However, slowdown in construction activity has been one of the major factors for a sluggish growth. Construction is also one of the core sectors of Indian economy and future of the industry is important for commodities. Construction cables and wire sector anticipated to see steep growth in demands in coming days owing to huge governments spending in infrastructure, smart cities, real estate boom, and housing explosion. Initiatives such as excise duty exemption for Ferro-silicon-magnesium and pig iron used for manufacturing components for wind-operated electric power generators and the target set by the Jawaharlal Nehru National Solar Mission to generate more than 1,00,000 MW of solar power by the end of 2022, will boost the demand for electrical wires and cables in this region. The Central Governments ‘Housing for All by 2022 (20mn houses for urban poor and 30mn for rural poor) and Smart Cities (development of 100 cities) missions promise to trigger fast-paced rollout of new homes. This should usher in multi-year growth for electrical products and appliances. Increasing consumer focus on aesthetics and energy efficiency has also resulted in notable shift towards branded products. With its ability to offer competitive pricing, superior product range & quality, upgraded technology and innovations, more safety features, and increased brand awareness, VETO is well placed to offer an enriching consumer experience.

iii. Competition

The market consists of a number of international and regional or local vendors who face intense competition from the unorganized vendors. The regional and unorganized players in the market are offering products at a comparative price which induces the well-established international electric wire and cable manufacturers to focus on differentiating their products to sustain their market shares. In addition to innovative product offerings, cable and wire manufacturers are also following strategies such as mergers and acquisitions to acquire new technologies and expand their customer reach.

The leading vendors in the market are -

• Finolex Cables

• Havells India

• KEI Industries

• Polycab Wires

The other prominent vendors in the market are Cable Corporation of India, Apar Industries Limited, Cords Cable Industries, KEC International, LS Cable India, Shilpi Cable Technologies, Universal Cable, and V-Guard Industries.

iv. Marketing Setup

Veto holds a major part of market share of electrical accessories in India. The company has a strong and hardworking team of marketing professionals, dealers and distributors. Our Promoters have vast experience of marketing of wires and cables and electrical accessories & other allied products. They have been manufacturing and marketing these products for past over 35 years. We have a good reputation among our dealer network which consists of more than 2,000 in number. The sale price of the components to be manufactured is decided based on design complexities, material, process, quantity, period of supply, etc.

Your Company has major earning in the state of Rajasthan and Gujarat. But this year our focus is to widen and cover more and more states of India. Almost 10 stated have become a major part of our distribution Network stating Maharashtra, Punjab, Madhya Pradesh, Haryana, Uttar Pradesh, Jharkhand, Kerela, New Delhi and Assam . The company has broadened its network and distribution. We have also had major success in some of the biggest cities of UAE. The company and its Board have started working towards making Veto a globally established brand. Our products are marketed in both domestic and international markets.

v. Export obligation

As on the date, we do not have any export obligations.

vi. Strength

• Established brand in North West India and central;

• Experienced management team;

• Organized and comprehensive product offering;

• Established reputation for quality products;

• Driving growth through innovation and marketing;

• Our relationship with customers;

• Our relationship with more than 2,000 dealers;

• Dedicated team of technical manpower;

vii. Weakness

Player in regional market.

Any avoidance of rules of Govt. caused under unavoidable circumstances may have an adverse impact on the project.

viii. Opportunity

The location of the unit is the hub of industry of the multiproduct category. This will cause a competition and that will help the customer to differentiate between the average and the best product. The importers will get variety of the products, which will be a healthy situation for the Industry ultimately.

The Company has many opportunities in view of the increasing demand for wires & cables and electrical accessories.

Decrease in copper prices.

ix. Threats

Our contingent liabilities, not provided for, if crystallized, could adversely affect our financial condition.

We have not provided for certain contingent liabilities which if materialized could adversely affect our financial position. The details of the same areas under:

In Lacs
Particulars Year ended 31st March, 2017 Year ended 31st March, 2016
Gaurantee given by bank on behalf of the Company 2,097,000 9,497,000
Disputed Sales Tax Liability - 660,367
Estimated amount of contracts remaining to be executed on Capital Account (Net of Advance) 9,931,310 30,714,526
Total 12,028,310 40,871,893

* If these liabilities materialize, it could have an adverse effect on our results of operations. l The loss of or shutdown of operations at our production facilities may have a material adverse effect on our business, financial condition and results of operations.

The breakdown or failure of our equipments and/ or civil structure can disrupt our production schedules, resulting in performance being below expected levels. In addition, the development or operation of our facilities may be disrupted for reasons that are beyond our control, including explosions, fires, earthquakes and other natural disasters, breakdown, failure or sub-standard performance of equipment, improper installation or operation of equipment, accidents, operational problems, transportation interruptions, other environmental risks, and labour disputes. Our production facilities are also subject to mechanical failure and equipment shutdowns. Our machineries may be susceptible to malfunction. If such events occur, the ability of our facilities to meet production targets may be adversely affected which may affect our business, financial condition and results of operations. l Low cost end-to-end business model being adopted by existing or new competitors. l Heightened competitive intensity with externally-funded players looking to drive aggressive strategies in the market.

Disclaimer Clause

Statements in Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those either expressed or implied. Important factors that could make a difference to the Companys operation include among others, economic conditions affecting demand/supply and price conditions, variation in prices of raw materials, changes in Government regulations, tax regimes, economic developments and other incidental factors.

Acknowledgement

We thank our customers, vendors, investors and bankers for their intense support throughout the year. We place on record our appreciation of the contribution made by our employees at all levels. We thank the Government of India, particularly the Ministry of Commerce, Ministry of Finance, Ministry of Corporate Affairs, the Custom and Excise Departments, Income Tax Department, the Reserve Bank of India, the State Governments and other government agencies for their support, and look forward to their continued support in the future.

Date: 06/09/2017 for and on behalf of the Board of Directors
Sd/- Sd/-
Akshay Kumar Gurnani Narain Das Gurnani
Place: Jaipur Managing Director & CEO Whole-time Director & CFO
DIN: 06888193 DIN: 01970599