Munoth Communication Ltd Management Discussions

ANNEXURE 2

1. Industry Structure and Development:

The global smartphone market size was valued at USD 457.18 billion in 2021 and is projected to grow from USD 484.81 billion in 2022 to USD 792.51 billion by 2029, exhibiting a CAGR of 7.3% during the forecast period. Based on our analysis, the global market had exhibited a decline of - 7.8% in 2020 as compared to 2019. The global COVID- 19 pandemic has been unprecedented and staggering, with smartphones experiencing lower-than- anticipated demand across all regions compared to pre-pandemic levels.

A smartphone is a mobile handset that empowers advanced access to "internet-based facilities and other digital functions. Platforms including, iOS, Android, Windows Phone and others, support a broad range of applications created by third-party originators. Factors such as the governmental support to develop telecom infrastructure, budget-centric product launch, growing 5G technology, Artificial Intelligence (AI) and other technologies and importantly, the increasing disposable income are contributing to the market growth.

In the current era, 5G is a trending feature in mobile phones, specifically" "across the U.S., India, China, South Korea, U.K., Japan and others. The 5G- compatibility is anticipated to replace the existing handset within the next five years. This trend is due to their ease of shift towards embedded services such as cloud storage, content subscription and access to the high-speed network.

For instance, Global System for Mobile Communications (GSMA) stated that, by 2025, 20% of global connections would have 5G connections with strong development across North America, Asia Pacific and Europe. Internet of Things (IoT) would be an integral part of the 5G era.

The amplified demand for virtual and augmented reality is also improving the market presence of 5G-compatible mobile handsets. In addition, the availability of low-cost, low- power consumption with fast charging capability is creating top spot across the globe.

It is therefore, brightening the smartphone market growth across developing and developed countries.

2. Segment Wise Performance:

The company is currently operating in a single segment i.e selling and distribution of mobile phonesand accessories.

3. Future Plans and Outlook:

The Company will establish unit to assemble power bank and battery pack as the overall sale of power bank has substantially gone up after covid -19 slowdown.

4. Business operations

Your Company has made no sales for the year ending 31st March 2024 and 31st March 2023. Further the Company has made loss of Rs. 24,18,100 for the year ending 31st March 2024 as against Rs. 11,48,640 for the year ending 31st March 2023.

5. Strength and Weakness

The demand for handset market is huge and the government support to domestic manufacturing industry will strengthen the industry. Mobile device adoption amongst youth population in the country and continual decline of prices of mobile phones, smart phones and tablets are impetus to the growth of mobile accessory market in India. Online retailing also plays a big part. It offers the convenience of cash on delivery payment option and cheaper offers for various products as compared to physical stores.

The mobile handset industry is facing problems relating to high service cost, expensive infrastructure and government regulations. There is a huge disparity in the mobile accessory market with several players competing for market share owing to Chinese manufacturing infrastructure.

6. Opportunities and Threats:

Mobile accessories are also considered a style statement today and brands are focusing on making them trendy and attractive and there is no single brand available in India which manufactures all mobile phone accessories.

Low cost manufacturing and parallel imports have led to the advent of a huge unorganized market, the size of which is estimated at about 60 percent.

7. Outlook, Risks and Concern:

Rise in disposable income has revolutionized customers buying and spending trend, especially in the urban areas. Mobile device adoption amongst youth population in the country and their spending patterns provide strong stimulus for growth in adoption. The following are the Key trends shaping up the outlook of the global mobile phone accessories market:

Key Trends in Indias Mobile Phone Accessories Market

> Irregular electricity & power distribution infrastructure in India serves as a catalyst for consumption of power banks. In some cases, mobile phone users in India lack proximity to suitable power source, which further necessitates use of accessories such as power banks. Buying power banks that could charge multiple devices in a go, is trending in mobile phone accessories market in India. In the span of next ten years, sales of power banks in India will account for over $350 million in terms of revenues.

> Demand for modular smart phones and mobile phones are likely to increase in India, providing an opportune scope for mobile phone accessories that are limited to compatibility with specific device connectors. Furthermore, various products sold as mobile phone accessories in India have been able to attain compatibility with computers and laptops and vice-a-versa, broadening scope of end-use among consumers.

> Technological advancements are openhandedly welcomed by Indian consumers, triggering an opportunity for sales of other mobile phone accessories such as keyboard attachments, cameras, dongles, selfie sticks, thermal imaging cameras, VR headsets, protective screens and wireless ear buds, among others. With surge in sales of other related products, the mobile phone accessories market in India is likely to generate over $150 million revenues.

> Multi-brand stores are trending as the most-preferred distribution channel for buying mobile phone accessories in India. States in North India will continue to dominate by accounting for over 30% of the market revenues, while states in South and West India will collectively account for half of Indias mobile phone accessories revenues in the span of next ten years.

8. Human Resources/Industrial Relations:

Your Company considers its Human Resources as its most valuable asset among all their assets of the Company. It has been the policy of the company to promote the talent by providing opportunities to develop themselves within the organisation. The Company continued to maintain a cordial and harmonious relation with its employees.

9. Internal Control System and Adequacy:

Your Company lays emphasis on integrated control systems and accountability and has been maintaining adequate system in place commensurate with its size and nature of business.

10. Cautionary statement:

Statements in the Management Discussion and Analysis regarding the Companys "objectives, estimates and expectations are within the scope of applicable laws and regulations, Actual performance may differ from those either expressed or implied.

By Order of the Board for MUNOTH COMMUNICATION LIMITED

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Place : Chennai	Jaswant Munoth	Bharat Munoth
Date : 29-05-2024	Managing Director (DIN: 00769545)	Director (DIN : 00769588)