United Van Der Horst Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Incorporated in 1987, United Vander Horst Limited ("UVDHL or the Company") is engaged in the reconditioning, Re-standardizing, Reverse Engineering, manufacturing services to to a wide range of core industries , including Marine, Oil & Gas, Power Plants, Petrochemicals, Mining, and other major processing sectors.

The Company manufactures and services a diverse portfolio of hydraulic and pneumatic components including Hydraulic Cylinders, Pneumatic Cylinders, Hydraulic and Pneumatic Seals, Telescopic Cylinders, Coil Buggy Cylinders, AGC (Automated Gauge Control) Cylinders, Rock Breaker Cylinders, Jacking Cylinders, Buffer Cylinders, Thruster Jacking Cylinders, Rotary Seals, Powerpacks, Control Valves, and Accumulators. Alongside its core manufacturing capabilities, the Company also offers specialized on-site engineering services at customer premises, including in- situ machining and reconditioning of marine components for the marine industry, as well as oilfield equipment refurbishment and spare part supply for oilfield equipment - minimizing equipment downtime and enhancing operational efficiency.

UVDHL operates advanced engineering facilities equipped with wide array of machinery and tools to support complex operations such as Grinding, Honing, Groove Grinding, Boring, Chrome Plating, Demineralization, Welding, In-Situ Machining, and Vertical Turret Lathe operations.

UVDHL has steadily built customer trust and stakeholder confidence through consistent service delivery and technological advancement. The Company continues to strengthen its foundation by leveraging a well-equipped, high-precision machine shop featuring horizontal boring machines, center lathes, vertical turret lathes, crankshaft grinding machines, universal milling machines, radial drilling machines, and other sophisticated equipment.

Over the years, UVDHL has developed specialized expertise in welding techniques such as Manual Metal Arc, Open Arc, and Submerged Arc Welding, enhancing its ability to serve critical industrial applications. The Company has also pioneered and patented advanced chrome plating processes, further enhancing its technical capabilities and industry standing.

Looking ahead, UVDHL remains focused on leveraging its technical strengths, expanding its service offerings, and enhancing operational efficiencies to meet the evolving needs of its clients across core and adjacent industries.

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 is also trying to yield all available opportunities like 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 more production 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 challenges 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 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 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 2024-2025 as evaluated are as follows:

(Amount in Lakhs)

A Revenue	Manufacturing	Reconditioning	Unallocated	Total
Sales	1,142.59	1,861.60	Nil	3,004.19
	1,005.00	1,283.31	Nil	2,288.32
Other Income	Nil	Nil	62.08	62.08
	Nil	Nil	46.73	46.73
Total Revenue	1,142.59	1,861.60	62.08	3,066.27
	1,005.00	1,283.31	46.73	2,335.04
B Segment Results (PBIT)	Nil	Nil	856.40	856.40
	Nil	Nil	550.31	550.31
Interest Expenses	Nil	Nil	280.49	280.49
	Nil	Nil	296.91	296.91
C Segment Results before tax	Nil	Nil	575.91	575.91
	Nil	Nil	253.39	253.39
1 Provision for current tax	Nil	Nil	Nil Nil	Nil Nil
	Nil	Nil
2 Tax Expenses	Nil	Nil	(140.15)	(140.15)
	Nil	Nil	(69.68)	(69.68)
D Profit after tax	Nil	Nil	435.76	435.76
	Nil	Nil	183.71	183.71

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 objective of the Company is to remain agile and responsive to evolving market demands while strategically leveraging emerging trends to its advantage. The ongoing liberalization and expansion of the Indian economy continue to present significant opportunities for domestic enterprises to expand beyond national boundaries and contribute to the creation of productive assets.

The Company is confident in its ability to capitalize on future opportunities and effectively navigate forthcoming challenges with agility and resilience. This approach aligns with the Companys commitment to delivering sustainable growth and long-term value to its stakeholders.

Looking ahead, the Company anticipates substantial growth in its business operations, which is

expected to positively impact both profitability and stakeholder expectations in the near future.

RISK AND CONCERNS:

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.

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.

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.

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.

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.

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 remained a key area of focus for the Company during the year. The internal control framework is designed to safeguard the interests of all stakeholders by fostering a well-regulated operational environment, while ensuring the presence of appropriate checks and balances. The Board of Directors have formulated and implemented a range of policies and procedures to establish a robust system of internal financial controls. These controls are intended to ensure the orderly and efficient conduct of operations; the generation of reliable financial and operational information; the safeguarding of assets against unauthorised use or loss; the prevention and detection of frauds and errors; the accuracy and completeness of accounting records; the timely preparation of financial reports; and compliance with applicable laws and internal corporate policies.

The Audit Committee periodically evaluates the adequacy and effectiveness of the internal control systems. To support this, the Company has implemented a comprehensive internal audit mechanism and appointed an independent firm of Chartered Accountants to undertake the internal audit function. The Audit Committee actively monitors and reviews the internal audit process, including the observations and recommendations made by the internal auditors.

The Company has also developed robust financial and management reporting systems and continues to enhance its processes and controls to align with evolving business needs and regulatory expectations.

During the year under review, no instances of fraud were reported by the auditors. The Company has, in all material respects, maintained adequate internal financial controls over financial reporting, which were operating effectively as of 31st March 2025. These controls have been evaluated based on the essential components of internal control as established by the Company.

The internal financial control system is commensurate with the size, scale, and complexity of the Companys operations, ensuring proper recording of financial and operational information and adherence to statutory and regulatory requirements. No material or significant observations were received from the internal auditors during the year regarding inefficiencies or inadequacies in the control environment.

Key features of the Companys internal control system include:

A well-structured Financial and Commercial function that ensures effective oversight and operational support;

Implementation of a comprehensive Risk Management Policy;

A structured Internal Audit System carried out by an independent internal auditor;

Regular review and updating of Standard Operating Procedures (SOPs) and guidelines to ensure continued relevance and control effectiveness;

Ongoing monitoring by management to assess the continued adequacy of controls, recognising that controls initially effective may require adaptation in response to changes in the operational environment.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

To enhance its operational performance, the Company has undertaken several strategic growth initiatives including capacity expansion, a growing and diversified order book, strategic partnerships, new product introductions, and the development of comprehensive service platforms. These operational improvements have directly contributed to financial performance, as reflected in increased revenues, improved gross margins, and enhanced cost efficiencies.

Investments in building a robust product portfolio and expanding service offerings are designed to cater to evolving market demands, leading to higher customer retention and recurring revenue streams. Simultaneously, the Companys ongoing focus on improving operational efficiency?€” through process optimization, workforce training, and quality enhancement?€”has resulted in better resource utilization and reduced turnaround times, positively impacting profitability.

Additionally, the Company is actively pursuing technological upgrades and modernization of its manufacturing and engineering facilities. These efforts are expected to further strengthen its competitive positioning, support long-term financial sustainability, and drive future earnings growth

During the Financial Year under review, the Company reported a total Revenue from Operations and Other Income amounting to Rs. 3066.27 Lakhs, as compared to Rs. 2335.04 Lakhs in the previous Financial Year. After accounting for operating expenses and exceptional items, the Company posted a profit of Rs. 586.45 Lakhs, as against Rs. 253.40 Lakhs in the previous year. Following tax provisions and other necessary adjustments, the net profit for the year stood at Rs. 435.75 Lakhs, reflecting a significant increase from the net profit of Rs. 183.72 Lakhs reported in the previous year.

This improvement underscores the Companys continued emphasis on operational efficiency, cost control, and strategic execution, translating into stronger financial outcomes.

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

The Company has 30 employees on roll. The Company firmly believes that its employees are the key to driving sustainable performance and developing long-term competitive advantage. To support this vision, the Companys Human Resources (HR) policies and procedures of your Company are meticulously designed towards nurturing and development of Human Capital. The Company is dedicated to providing a conducive and safe environment for 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	31 st March, 2025 Ratio	31 st March 2024 Ratio	Details of significant changes (i.e. change of 25% or more compared to previous year, 2024) and reason thereof
Debtors Turnover Ratio	2.57	2.44
Inventory Turnover Ratio	1.34	1.32
Interest Coverage Ratio	3.23	1.96	Increased due to increase in earning before interest and tax.
Current Ratio	1.70	1.30	Improved due to increment in Current Assets.
Debt Equity Ratio	0.42	0.70	Improved mainly as a result of the addition of new equity and repayment of loan.
Operating Margin	28.86	24.05
Net Profit Margin	0.15	0.08	Increased due to increase in net profit after tax
Return on Net Worth	0.11	0.07	Increased due to increase in earnings before interest and tax