As per the terms of Regulation 34(2)(e) of the Listing Regulations, the
Management Discussion and Analysis Report forms part of this Annual Report.
The Company tends to grow its environment in several aspects such as
financial, human resource level, capital resource, technological, controlling and etc.
keeping in mind its competitors and others threats in the market.
(a) Industry structure and developments
The Russia-Ukraine war disrupted the chances of global economic
recovery from the COVID-19 pandemic, at least in the short term. The war between these two
countries has led to economic sanctions on multiple countries, a surge in commodity
prices, and supply chain disruptions, causing in lation across goods and services and
affecting many markets across the globe. The electrical and electronics market is expected
to grow to $4986.91 billion in 2027 at a CAGR of 7.5%. The renewable generation sector is
a promoting and advancing alternative for green power generation. The main challenge with
these resources is their uncertain power output, which can be compensated with storage
systems and strong uncertainty management decision-making tools.
The escalating rate of global power consumption generates huge carbon
emissions. Thankfully, electrical energy pollution is on the decrease in 2023 thanks to
the widespread adoption of new, People greener lighting solutions with lower energy pro
iles and higher illumination quality. today want their lights to be part of a super
convenient and personally expressive domestic experience, and manufacturers are stepping
up to the challenge. LED lighting in residential settings will continue to grow in
popularity due to their several advantages. These include using up to 75% less energy
while boasting a life expectancy that is 25 times longer than incandescent lights.
(Source: https://yourpowerpro.com )
The Government of India have also taken e icient measures for the
growth of industry such as the "Go Green" program the new ‘jeevan
mantra: Make in India 2.0 seeking to protect the domestic manufacturers
and pushing them up the value chain.
Company Overview
Veto Switchgears and Cables Limited is a diversifiied manufacturer of
wires & cables, electrical accessories, industrial cables, fans, CFL lamps, pumps,
modular switches, LED lights, immersion heater, MCB and distribution board, keeping in
view the market demands and customer needs it tends to give satisfactory products to its
customers. Having a diversified vision in every aspect of electrical manufacturing it
believes in innovation and manages with dynamic changes in the market. Along with that
Veto is Indias irst company to produce ISI mark electrical accessories
The company has a strong team of highly quali ied professionals who
strive to innovate the best products with the use of advanced high tech machinery. A
strong distribution network of 2500 dealers across the country to provide our quality
products to our valued customers. The company is manufacturing all types of housing wires
under the brand name VIMAL POWER which is a renowned brand in the western region of
India. Company strives to set new benchmarks in providing high quality products at
competitive rates.
(b) Opportunities and threats
O Opportunities:
Dynamical: The company has made immense efforts to sustain in
the ever changing dynamic market, having unique style, variants and being satisfactory to
consumer needs, it has evolved in maintaining such position.
Adaptable: The nature being unstable and having variations
according to demands and needs of the hour, the company is adaptable to frequent changes
and balancing its position for adapting changes entering in the market. It also focuses on
getting informed prior to its competitors so that it can take advantage of the same.
Prosperity and living standards: Consumer preferences keeps on
changing with respect to their income and it encourages consumers to shift their
preferences to high quality appliances, modern solutions matching with their living
standards.
Power saving products: Consumers have known the importance of
environment and they are also concern about it, they prefer products which are energy
efficient so that it can help in saving environment as well as bills.
O Threats:
Competitive intensity: For having a competition balance the
industry is growing well, with this, new players come to the market which leads to greater
competitive intensity.
In lation rate: High in lation rate results in slowdown of the
economy which triggers a challenge to the business.
Demand: In this ever changing and developing environment, demand
for the products keeps on changing affecting the production cycle of the product.
(c) Segment wise Performance
Veto brand is established in electrical industry since 1967 by
delivering wide range of Wires & Cables, Electrical Accessories, Industrial Cables,
Fans, etc. With each opportunity we intend to make best out of it, having view of customer
satisfaction we encourage our team for betterment of the industry as a whole. Our segments
are: -
WIRES AND CABLES
The global wires and cables market is projected to grow from $200.23
billion in 2022 to $294.73 billion in 2029, at a CAGR of 5.7% in forecast period.
Increasing investments in transmission and distribution of electric power and growth in
demand from data centres and the telecom industry will drive the wires and cables market
growth during the projected period. High cash in low in smart grid projects and up-grading
power transmission systems are also expected to boost the demand for wire and
cables.
(Source: www.fortunebusinessinsights.com)
Construction cables and wire sector anticipated to see steep growth in
demands in coming days owing to huge governments spending in infrastructure, smart
cities, and real estate boom. The growing trend of upgrading and replacing existing
electric infrastructure has created a positive growth scenario for the wire and cable
market. Increasing electricity demand due to population increase and fast
industrialisation would propel market growth.
Companys wires and cables division registered revenues of Rs.
6319.16 Lakhs during FY 2022-23 as compared to revenues of Rs. 6779.70 Lakhs in FY
2021-22.
ACCESSORIES & OTHERS
The global switchgear market size is projected to reach $170.40 billion
by 2027, exhibiting a CAGR of 6.6% during forecast period. The rapidly growing electri
ication need in remote areas coupled with the increasing electricity generation has
positively affected the growth of various electrical equipment. The increasing targets by
regional government for delivering electricity in rural areas and rising investments in
this industry are the key switchgear market trends that are projected to cater the market
growth. (Source: www.fortunebusinessinsights.com)
Electrical switchgear is a combination of electrical components
designed to regulate, control, and protect the electricity generation, transmission, and
distribution equipment. The global electrical switchgear market is anticipated to grow in
the coming years owing to the rise in demand for medium and high voltage electrical
switchgear. Also, the increasing demand for transformers is expected to fuel the growth of
this market segment, as revenue in the electrical switchgear market is directly
proportional to demand transformers.
Distribution of electricity in the real estate, construction, and
industrial infrastructure sector requires several electrical components. Therefore, the
growth in these sectors is expected increase the safety measures in electrical
transmissions, fueling the demand for high demand for integrating renewable energy sources
in the electrical switchgear. The power and energy sector will continue to drive the
demand for electrical switchgear to ensure safety and protection of electricity
transmission and distribution networks. (Source: www.in initiresearch.com)
Companys accessories & others division registered revenue of
Rs. 4551.50 Lakhs during FY 2022-23 as compared to revenues of Rs. 3948.48 Lakhs in FY
2021-22.
LIGHTINGS AND FITTINGS
The global lighting size is projected to reach USD 163.72 billion by
2027, exhibiting a CAGR of 4.3% during forecast period. Light play an important role in
every sector. The applications of light in activities such as interior designing,
photography and other uses are rising with the increase in population and fascinating
demands of such population. Numerous scientists have indicated the usage of LEDs in
growing plants through practical evidence. Demand for LED plays an important role in plant
growth and development, as its converts electricity into light by using the properties of
metal, thereby delivering white light.
Government in several countries across the world are focusing on
implementing regulations on energy efficient products. In our country Government is
focused on developing new houses for homeless people, which in turn is driving the
lighting market growth in the region. Furthermore, over the past few decades, the industry
has witnessed the integration of concepts such as artificial intelligence and the Internet
of things (IoT). The use of these concepts has allowed light manufacturing companies to
develop innovative products. (Source: www.fortunebusinessinsights.com)
Veto is well placed in the smart lighting, LED, fan, CFL and other
fancy lighting segment with a strong product pro ile, well-entrenched trade network along
with supportive consultants and contractors. It is more inclined towards producing and
selling lights at minimum rates, so that people can a ord and use it for a long duration
of time.
Companys lightings and fittings division registered revenues of
Rs. 8752.16 Lakhs during FY 2022-23 as compared to revenues of Rs. 6637.65 Lakhs in FY
2021-22.
(d) Outlook
The company has a diversified product portfolio and well maintained
distribution network. The management of the company is quite experienced and
understanding, coping with all the changes in the industry. Teamwork is a core of the
company as work is done with less time yet efficiently. The rapid pace of innovations in
the field is stimulating consistent demand for newer and faster equipment. Technological
development is a key to attracting both consumers and business users for either replacing
or upgrading the older products with advanced version. The level of competitive intensity
has increased signifiicantly in recent times. However, the strength of the Companys
product portfolio, its distribution network and its brands will enable it to successfully
deal with competitive pressures. The company intends to provide maximum satisfaction to
its customers, employees and the environment. It plans to grow its sectors with innovative
ideas relating to consumer preferences, keeping in mind substantial and biodegradable
products having a motive of optimum utilization of resources.
(e) Risks and concerns
1. Common risks such as accidents in the workplace, ires, etc.
2. Natural disasters such as earthquake, tornadoes, etc.
3. Uncertainties in inancial market
4. Credit risk
5. Interest rate risk
6. Security and storage of data and records
7. Disruption in supply chain
8. Financial instruments affected by market risk including loans,
borrowings, trade payables and deposits.
The Company has a risk identification and management framework
appropriate to it and to the business environment under which it operates. Risks are being
identi ied at regular intervals by the Board.
The Company has a Risk Management Policy, which provides an overall
framework of Risk Management in the Company. The Board of Directors are responsible for
the assessment, formulation and implementation of guidelines, managing key risks, risk
minimization procedures and periodicals review.
(f) Internal control systems and their adequacy
The company has adequate systems of internal control commensurate with
its size and the nature of its operations. These have been designed according to the
requirements of the Companies Act, 2013 and the globally accepted framework issued by the
Committee of Sponsoring Organizations (COSO) of the Treadway Commission, to provide
reasonable assurance with regard to recording and providing reliable financial and
operational information, safeguarding assets from unauthorized use or losses, executing
transactions with proper authorization and ensuring compliance with corporate policies.
The company has a well-defined manual for delegation of authority, approving revenue and
expenditure. The company uses an updated system to record data for accounting,
consolidation and management information, connecting to different locations for the
exchange of information. The Audit Committee of the board periodically reviews Internal
Audit reports, progress in implementation of Committees recommendations and the
adequacy of internal control systems.
Vigil Mechanism and Whistle Blower Policy
The Policy provides a framework to promote responsible and secure
reporting of undesirable activities ("whistle blowing"). Through this Policy,
the Company seeks to provide a mechanism to the whistleblower to disclose any misconduct,
malpractice, unethical and improper practice taking place in the Company for appropriate
action and reporting, without fear of any kind of discrimination, harassment,
victimisation or any other unfair treatment or employment practice being adopted against
the whistleblower.
The Audit committee of the company oversees vigil mechanism process of
the company pursuant to the provisions of the Act. Employees may also report to the
chairman of the Audit committee. A report on the functioning of the mechanism, including
the complaints received and actions taken, is presented to the Audit committee on a
quarterly basis.
No complaints were received during the financial year 2022-23.
(g) Financial Performance with respect to operational performance
This has been mentioned in Directors Report.
(h)Human Resources / Industrial Relations
Veto encourages a culture of trust and mutual respect, it strongly
believes that its employees are the key pillar of your Companys success in the
market. The talent pool of the company has steadily evolved with changing times with fresh
talent being infused to meet demanding situations. Apart from continued investment in
skill and leadership development of its people, the Company has also focused on employee
engagement initiatives and drives aimed at increasing the culture of innovation and
collaboration across all division of the workforce. Your Companys people strategy is
aligned with its overall vision to be the pioneer in shaping the future of sustainable
energy and your Company is committed to nurturing a cordial and diversified work
environment in a growing market.
We humbly acknowledge the contribution with competitive compensation
and bene its that appropriately reward performance. Inspired by the commitment to quality
and core values of honesty and transparency, the directors and employees look forward to
the future with con idence and stand committed for creating a brighter future for all our
stakeholders.
The company have strength of 331employees as on 31st March, 2023.
KEY FINANCIAL RATIOS:
| Ratio |
FY 2022-23 |
FY 2021-22 |
Change |
Remarks |
| Current Ratio (times) |
4.58 |
2.98 |
53.56 |
Due to decrease in current borrowings. |
| Debt- Equity Ratio (times) |
0.13 |
0.20 |
-33.69 |
Due to decrease in current borrowings. |
| Debt Service Coverage Ratio |
6.49 |
7.54 |
-14.01 |
Variance not more than 25% |
| Return on Equity (ROE) |
11.42% |
12.62% |
-1.20% |
Variance not more than 25% |
| Inventory turnover ratio |
2.11 |
1.82 |
28.71% |
Due to decrease in average inventory |
| Trade Receivables Turnover Ratio |
2.41 |
2.55 |
-5.21 |
Variance not more than 25% |
| Trade Payable Turnover Ratio |
8.53 |
12.35 |
-30.93 |
Due to increase in Trade Payables |
| Net Capital Turnover Ratio |
1.51 |
1.71 |
-11.61 |
Variance not more than 25% |
| Net Profit Ratio |
11.65% |
13.03% |
-1.37% |
Variance not more than 25% |
| Return on Capital Employed (ROCE) |
14.67% |
15% |
-0.33% |
Variance not more than 25% |
| Return on Investment (ROI) |
21.04% |
18.55% |
2.49% |
Variance not more than 25% |
COMPETITION
The market comprises of international and regional / local vendors who
faces intense competition from the unorganized vendors. The regional and unorganized
players in the market offer 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 have also entered into various business
strategies such as mergers and acquisitions to acquire new technologies and have expanded
their customer reach.
The leading vendors in the market are
| Finolex Cables |
| Havells India |
| KEI Industries |
| Polycab Wires |
The other prominent vendors in the markets 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, Orient Electric Ltd,
Crompton Greaves Consumer Electrical Ltd, ABB India Ltd, and Siemens Ltd.
Your company has strong and efficient team of marketing professionals,
dealers and distributors and is very well prepared to face the competition and to cater
the consumer needs by enhancing its own brand in the industry.
MARKETING SETUP
Veto holds a major part of market share of electrical accessories in
India. The company has a strong and efficient team of marketing professionals, dealers and
distributors. Our Promoters carry and share their vast experiences in the marketing
segment of wires and cables, electrical accessories & other allied products. They have
been indulging into manufacturing and marketing segments for Veto Brand products for the
past over 55 years. Veto holds a recognized reputation among its dealer network consisting
of more than 3000 in numbers. The selling price of the components to be manufactured is
decided on the basis of design complexities, material used, process gone through,
quantity, period of supply, etc.
Your Company had major earnings from the state of and now Madhya
Rajasthan and Karnataka also forms the part of the major earnings due to our
continuous focus on Pradesh and Uttar Pradesh widening and covering more and more
states of India. Almost 15 states have become a major part of our distribution network,
including Gujarat, NCR, Haryana, Punjab, Himachal Pradesh, J&K, Uttarakhand, Assam,
Andhra Pradesh, Telangana, Kerala, Maharashtra and Tamilnadu.
The company has broadened its network and distribution channels. Our
products are marketed in both domestic and international markets. We have also entered
into International Market by distributing our dynamic varieties of electrical products in
cities of UAE and got a major success over there. The company and its Board is
continuously putting efforts toward making Veto a globally established brand.
STRENGTH & WEAKNESS
O Strength
Established brand in North West India, South 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 3000 dealers
Dedicated team of technical manpower
Union Budget allocated high expenditure in IFRA Sector
"Pradhan Mantri Awas Yojana" in Remote Area
O WEAKNESS
Players in regional market.
Any avoidance of rules of Government caused under unavoidable
circumstances may have an adverse impact on the project.
Dependency on suppliers of raw materials.
DISCLAIMER CLAUSE
Statements in Management Discussion and Analysis describing the
Companys objectives, projections, estimates, expectations or predictions are 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.
OTHER DISCLOSURES
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions/events on these items during
the year under review: -
March 2023, none of the Directors of the company hold instruments
convertible into As on 31st equity shares of the Company.
Company has not granted any stock option or issue sweat equity shares
during the year.
The Business Responsibility Reporting as required by Regulation 34(2)
of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, is not
applicable to your Company for the inancial year ending March 31st, 2023.
No application was made or any proceeding is pending under the
Insolvency and Bankruptcy Code, 2016 during the year in respect of your Company.
There was no one-time settlement of loan obtained from the Banks or
Financial Institutions.
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 A airs,
the Custom and Excise Departments, Income Tax Department, the Reserve Bank of India, the
State Government(s) and other government agencies for their support, and look forward to
their continued support in the future.
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