United Van Der Horst Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Your Company involved in the reconditioning and manufacturing of Hydraulic Cylinders, Pneumatic Cylinders, Hydraulic seals, Pneumatic seals, Telescopic Cylinder, coil Buggy Cylinder, AGC Cylinder (Automated Gauge controlled), Rock Breaker Cylinder, Jacking Cylinder, Buffer cylinder, Thruster jacking Cylinder, Rotary Seals, Powerpacks, Control waves and Accumulators also offering additional other services at customer factory premises, such as in-situ machining, reconditioning to the Marine Components in Marine Industry and oilfield equipments overall and spare part supply.

The Company also provides facilities for Grinding, Honing, Groove Grinding, Boring, Chrome Plating, Demineralizing, Welding, In Situ Machining, Vertical Turret Lathe etc. Gradually and in contemplating manner Company is trying to gain trust of its customers and stakeholders and entity is in the process for setting up of edifice. For the Industry growth and developing relation with consumer and their retainers they are using well equipped, high precision machine shop with horizontal boring machines, center lathe machines, vertical turret lathes, crank-shaft grinding machine, universal milling machine, radial drilling machine, etc.

UVDHL has over the years mastered specialized welding process such as Manual Metal Arc, Open Arc and Submerged Arc and patented chrome plating techniques.

OPPORTUNITIES AND THREATS:

Opportunities:

Considering the exponential growth of the sector in which the Company is operating and continues promotional efforts and better marketing and brand building initiatives to cease the prospective business opportunities and the consumers by the management and workforce of the Company is likely to benefit in upcoming years to the Company. The company also trying to yield all available opportunities as operating in the emerging sector in the fastest growing economy which accelerates the growth of the Company. The company will strive its best to have words and solve the problems faced by the stakeholders to create a smooth flow of work.

To cease the business avenues the company indeed installs machinery that have productions more than the current capacity that will create a cost of production and fixed cost to be divided into a large number of quantities. Hence, this will create low-cost production and that will help to create market leadership, and better pricing and will increase the stakeholders value.

These efforts will not only strengthen our position in the market but also contribute to sustained growth and increased shareholder value.

Threats:

Threats faced by the company in todays world are huge competition in the market due to the ease of doing business. The more numbers of participants result in stiff competition in the industry, The Company is not an exception to the same. This creates a market where there is a large number of suppliers who manufacture and supply low-cost products which are not so quality based affecting the companies in the market in generating revenue as well as competing with them.

The Globe is suffering from various Natural Calamities there is intensive pressure on the manufacturing industry in terms of reduction in carbon footprints, waste materials which limits the potential ability of performance.

Additional challenge such as lack of cash-flow liquidity and many more have affected the market during the pandemic. Nevertheless, these challenges have not been converted into restraints for the lack of Inventory and Supplier Quality Management, However, the manufacturing sector as a whole continues to experience significant distress and hardship.

SEGMENT-WISE PERFORMANCE:

The Company is engaged in the business which are organized and managed separately by the virtue to nature of products and services provided with each segment representing a strategic business unit that offers different product and serves different markets to cater the existing and targeted consumer base. The Analysis of geographical segments is based on the areas in which major operating divisions of the Company operates.

The Company understands that the needs and requirements of its customers and to effectively address this the Company is continually evolving and works closely with them to develop customized solutions that precisely meet their specific needs.

Income & expenses which relate to the Company as a whole and not allocable to segments are included in "Un-allocable Income / Expense".

In compliance with Ind AS - 108 on Operating Segments, we provide the following information for the financial year 2023-2024 as evaluated are as follows:

(Amount in Lakhs)

A Revenue	Manufacturing	Reconditioning	Unallocated	Total
Sales	1,005.00	1283.31	Nil	2288.32
	673.28	1,002.19	Nil	1,675.47
Other Income	Nil	Nil	46.73	46.73
	Nil	Nil	51.47	51.47
Total Revenue	1,005.00	1,283.31	46.73	2,335.04
	673. 28	1,002.19	51.47	1,726.94
B Segment Results (PBIT)	Nil	Nil	550.31	550.31
	Nil	Nil	493.08	493.08
Interest Expenses	Nil	Nil	296.91	296.91
	Nil	Nil	185.37	185.37
C Segment Results before	Nil	Nil	253.40	253.40
tax	Nil	Nil	307.71	307.71
1 Provision for current tax	Nil	Nil	Nil	Nil
	Nil	Nil	Nil	Nil
2 Tax Expenses	Nil	Nil	(69.68)	(69.68)
	Nil	Nil	(73.83)	(73.83)
D Profit after tax	Nil	Nil	183.72	183.72
	Nil	Nil	233.88	233.88

Note: Previous Year figures are in italics

Expense, Assets and liabilities used in the Companys business are not identified to any of the reportable segments, as these are used interchangeably between segments. The Management believes that it is not practicable to provide segment disclosures relating to total expenses, assets and liabilities since a meaningful segregation of the available data is onerous.

OUTLOOK:

The core target of the Company is adroit to produce as per market requirements and leverage market trends to its advantage. "Opportunities abound in growing economies and opening of economy in India has created opportunities for Indian enterprise to move beyond national boundaries as well to create productive assets".

The Company is presumptuous that it can utilize future opportunities and face future challenges with agility in order to meet the stakeholders expectation of sustainable growth and profitability.

Looking ahead the Company is anticipates a prodigious growth in the business in near future which will enhance the profitability and growth expectation.

RISK AND CONCERNS:

1. Change in Government Laws:

Our ability to operate and compete may be adversely affected by any change in government legislation. In particular, price control, taxes, and other laws and changes in laws and regulations or the introduction of new laws and regulations relating to such matters may affect our operations.

2. We face significant competition in our business from other companies:

There are a number of competitors who have actualize greater market penetration than us. As a result, we may need to accept lower contract margins in order for us to compete against competitors that have the ability to accept the orders at lower prices. If we are unable to compete successfully in such markets, our relative market share and profits could be reduced.

3. Supply Chain Interruption:

The Organization will have an austere effect on the Manufacturing capacity of the company. The Company cant meet delivery targets due to an interruption in its supply chain are at a greater risk of losing millions of rupees in revenue and profits, threatening the business and its reputation.

4. We require certain regulatory approvals in the ordinary course of our business, and the failure to obtain them in a timely manner may adversely affect our operations:

We require certain regulatory approvals, sanctions, licenses, registrations, and permissions for operating our businesses. In connection with our business, we may require such approvals or their renewal from time to time. We may not receive such approvals or renewals in the time frames anticipated by us, which could adversely affect our business.

5. Environmental Impacts:

India has experienced natural calamities in recent years, including earthquakes, floods, a drought epidemic and tsunami. The severity and duration of these natural disasters or abnormal weather conditions determine their impact on the Indian economy. Such natural calamities may have an ornery impact on the Indian economy, which could in turn adversely affect our Companys overall business.

6. Equipment Failures:

Essential machinery along the production line can stop working at any time, posing a considerable cost to repair or replace it. Its important to interpret that mechanical breakdown may not be covered by commercial property insurance which will have a sudden impact on the productions of company and its manufacturing capacity.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Internal Controls have been a key focus area of the company during the year. Internal Controls in the Company have been designed to further the interest of all its stakeholders by providing an environment, which is conducive to conducting its operations and at the same time putting in the appropriate checks & balances. The Board of Directors has designed and implemented various policies and procedures for internal financial controls to ensure orderly and efficient recording and generation of reliable financial and operational information, safeguarding of assets from unauthorised use or losses, prevention, and detection of frauds and errors, accuracy and completeness of the accounting records, timely preparation of reliable financial information and ensuring compliance with corporate policies and applicable laws. The audit committee evaluates the internal control system periodically further Company has implemented a comprehensive internal audit system and has appointed an Independent firm of Chartered Accountants as Auditors to conduct the Internal Audit function. The Audit Committee regularly monitors and reviews the internal audit process. The observations and recommendations made by the Internal Auditors are also reviewed by the Audit Committee. The Company has additionally developed robust financial and management reporting systems. It constantly works on improving the systems and processes.

During the year under review, no fraud was detected by the auditors. The Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls with reference to financial statements were operating effectively as at 31^st March, 2024, based on the essential components of internal controls over financial reporting criteria established by the Company.

The Company has in place Internal Financial Control system commensurate with size, scale and complexity of its operations to ensure proper recording of financial and operational information & compliance of various internal controls, statutory compliances and other regulatory compliances. During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

Some of the significant features of internal control system are:

• Financial and Commercial functions have been structured to provide adequate support and control of the business;

• Risk Management policy has been adopted by the Company;

• The Company has an Internal Audit System conducted by the internal auditor of the Company;

• Standard operating procedures and guidelines are reviewed periodically to ensure adequate control.

• Management regularly monitors the effectiveness of the controls, as a control that was initially effective can become ineffective due to changes in the operating environment

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

To improve its operational performance, the Company relies on the expansion plans, an increasing order book, strategic tie ups, product launches and the development of larger service platforms. The Company continues to strengthen and to build a strong product line for the future and invested in bringing operational efficiencies to improve the quality of products. The Company is exploring various avenues to upgrade and modernize the technology to enhance its performance. During the year under review, your company has achieved Revenue from Operations and including other Income of Rs. 2,335.04 Lakhs as compared to Rs. 1,726.94 Lakhs in the previous year. After deducting Expenses and Exceptional Items the profits of Company were standing at Rs. 253.40

Lakhs as compared to Profit of Rs. 307.71 Lakhs during the previous year. After providing for taxes and other adjustments, the current year earned profit at Rs. 183.72 Lakhs as compared to Profit of Rs. 233.88 Lakhs during the previous year.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company has 25 employees on roll. The Company believes that its employees are the key to driving sustainable performance and developing competitive advantage. The Human Resources (‘HR) policies and procedures of your Company are meticulously designed towards nurturing and development of Human Capital. The Company is dedicated for providing a conducive and safe environment to its employees, enabling inclusive growth and career opportunities. In addition, the diverse talent pool is nurtured through competitive pay, merit-based career advancement, and best- in-class people policies which underscores the companys commitment to recognize and value employees contributions. Your Company has transparent processes for rewarding performance and retaining talent. Your Companys industrial relations continued to be cordial & harmonious during the year under review.

FINANCIAL RATIOS ARE AS FOLLOWS:

Particulars	31st March, 2024 Ratio	31st March 2023 Ratio	Details of significant changes (i.e. change of 25% or more compared to previous year, 2023) and reason thereof
Debtors Turnover Ratio	3.82	2.82	Due to increase in trade receivables
Inventory Turnover Ratio	0.94	1.10	-
Interest Coverage Ratio	1.85	2.66	On account of increase in interest expenses
Current Ratio	1.30	2.36	Improvement due to increase in Currents Assets
Debt Equity Ratio	0.70	0.76	-
Operating Margin	1.85	1.56	Improved on account reduction in operating expenses
Net Profit Margin	0.08	0.14	Reduce on account of increase in other expenses
Return on Net Worth	0.13	0.14	Due to decrease in profit in current year

 

	For and on behalf of the Board of Directors
	United Van Der Horst Limited
	Sd/-
	Jagmeet Singh Sabharwal
	Chairman and Managing Director
	DIN : 00270607
	Add : C/o E 29/30, MIDC, Taloja
Place: Navi Mumbai	Navi Mumbai - 410208
Date: August 13, 2024	Raigad, Maharashtra, India.