Winsol Engineers Ltd Management Discussions

The discussion hereunder covers Companys performance and its business outlook for the future. This outlook is based on assessment of the current business environment and Government policies. The change in future economic and other developments are likely to cause variation in this outlook.

The Managements views on the Companys Performance and outlook are discussed below:

ECONOMIC OVERVIEW:

Global Economy:

The baseline forecast is for the world economy to continue growing at 3.2 percent during 2024 and 2025, at the same pace as in 2023. A slight acceleration for advanced economies where growth is expected to rise from 1.6 percent in 2023 to 1.7 percent in 2024 and 1.8 percent in 2025 will be offset by a modest slowdown in emerging market and developing economies from 4.3 percent in 2023 to 4.2 percent in both 2024 and 2025.

The global macro-economic scenario during the financial year 2023-24 was another period of subdued growth marked by high inflation and interest rates, geo-political tensions, concerns of recession and supply chain constraints. In spite of these challenges and risks, the global economic growth expectations can be viewed with cautious optimism with a growth rate of 2.7 percent in financial year 2023-2024 as compared to 3 percent in financial year 2022-2023. Inflation is falling faster than expected in most regions, in the midst of unwinding supply-side issues and restrictive monetary policy. Global headline inflation is expected to fall to 5.8 percent in 2024 and to 4.4 percent in 2025, with the 2025 forecast revised down.

Indian Economy Outlook:

In April, we commenced a new financial year. In May, we learnt that the Indian economy is estimated to have grown 8.2% in real terms in FY24. In June, a new government took office. The National Democratic Alliance government led by Prime Minister Narendra Modi has returned to power with a historic mandate for a third term. His unprecedented third popular mandate signals political and policy continuity. The Indian economy is on a strong wicket and stable footing, demonstrating resilience in the face of geopolitical challenges. The Indian economy has consolidated its post-Covid recovery with policymakers fiscal and monetary ensuring economic and financial stability. Nonetheless, change is the only constant for a country with high growth aspirations. For the recovery to be sustained, there has to be heavy lifting on the domestic front because the environment has become extraordinarily difficult to reach agreements on key global issues such as trade, investment and climate.

The Indian economy is anticipated to show a recovery in GDP growth after a period of slower growth. Projections suggest growth rates in line with broader global economic trends, albeit influenced by domestic factors such as fiscal policies, inflation rates, and industrial performance.

INDUSTRY STRUCTURE AND DEVELOPMENTS:

WIND & SOLAR ENERGY:

Indias energy demand is expected to increase more than that of any other country in the coming decades due to its sheer size and enormous potential for growth and development. Therefore, most of this new energy demand must be met by low-carbon, renewable sources. Indias announcement that it intends to achieve net zero carbon emissions by 2070 and to meet 50% of its electricity needs from renewable sources by 2030 marks a historic point in the global effort to combat climate change.

With the increased support of the Government and improved economics, the sector has become attractive from an investors perspective. As India looks to meet its energy demand on its own, which is expected to reach 15,820 TWh by 2040, renewable energy is set to play an important role.

POWER SECTOR:

Power is one of the most important infrastructure elements, essential to national wellbeing and economic development. For the Indian economy to grow steadily, enough electrical infrastructure must exist and be developed. Indias power generation sources range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste.

Electrification in the country is increasing with support from schemes like Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).

India has also launched the Mission Innovation CleanTech Exchange, a global initiative that will create a whole network of incubators across member countries to accelerate clean energy innovation.

India is set to become a global manufacturing hub with investment across the value chain. The Central Electricity

Authority (CEA) estimates Indias power requirement to grow to reach 817 GW by 2030. The government plans to establish renewable energy capacity of 500 GW by 2030.

OUR BUSINESS:

Our Company was incorporated as ‘Winsol Engineers Private Limited at Jamnagar, Gujarat as a private limited company under the Companies Act, 2013, pursuant to a certificate of incorporation dated December 30, 2015, issued by the Registrar of Companies, Gujarat. Thereafter, our Company was converted into a public limited company pursuant to a special resolution passed in the extraordinary general meeting of the Shareholders held on December 09, 2023, and consequently the name of our Company was changed to ‘Winsol Engineers Limited, pursuant to a fresh certificate of incorporation issued by the Registrar of Companies, Gujarat, on December 21, 2023.

Our company is benefited from the extensive experience of our Promoters Mr. Ramesh Jivabhai Pindariya and Mr. Kishor Jivabhai Pindariya, who are associated with our company since its incorporation and having experience of more than 35 (Thirty-Five) years in the Engineering Industry. Our Board of Directors, Key Managerial Personnel and Senior Management Personnel has also provided significant contribution in the growth of our company. Located at Jamnagar, Winsol Engineers Limited is an integrated engineering, procurement, construction and commissioning company providing Balance of Plant (BoP) Solutions for both Wind and Solar power generation companies. Our core services for BoP Solutions includes Foundation work, Substation Civil and Electrical work, Right of Way services, cabling to substation and Grid, and Miscellaneous work.

In addition to our core BoP Solutions, our company also provides Operation and Maintenance services for Plant handling and monitoring. We are ISO-9001-2015, ISO-14001-2015 & ISO-45001-2018 certified company demonstrating our execution capabilities in quality.

Our scope of service includes support site operations for minimizing the down time of turbines, SCADA Monitoring, Inspection and reporting on abnormalities, Supervisor Scheduled maintenance and periodical replacements and participates in all audits, preparation for the reports including manpower supply for the mentioned services.

SEGMENT WISE OR PRODUCT-WISE PERFORMANCE:

The Companys operation predominantly comprises of only one segment. In view of the same, separate segmental information is not required to be disclosed as per the requirement of Indian Accounting Standard 108 Operating Segment.

We derive our revenue from 2 (Two) major business verticals:

BOP (BALANCE OF PLANT) SOLUTIONS:

Under this vertical our company provides Balance of Plant (BoP) for both wind and solar power projects encompass a range of essential components and services that are critical for the overall functionality and efficiency of the renewable energy facilities. We also undertake such EPC work on Trunkey basis for renewable power generating companies. Our

Companys scope of work in BoP includes Foundation work, Substation Civil and Electrical work, Right of Way services, Cabling to substation and Grid, and Miscellaneous work.

O&M (OPERATION AND MAINTENANCE) SERVICES:

Under this vertical our company undertakes supervision of wind and solar parks, support site operations for minimizing the down time of turbines, Inspection and reporting on abnormalities, SCADA Monitoring, Supervisor Scheduled maintenance and periodical replacements and participate in all audits, preparation for the reports including manpower supply for the mentioned services. O&M services ensure that BoP components operate at their optimal performance levels, maximizing energy production and revenue generation. As BoP components such as electrical systems, transformers, and substations are critical for the overall functioning of renewable energy facilities, O&M services include preventive maintenance measures to identify and address potential issues before they escalate into major problems, minimizing the risk of unplanned downtime.

OPPORTUNITIES AND THREATS:

The engineering industry faces a dynamic landscape with various opportunities and threats influenced by technological advancements, economic factors, and societal shifts. Heres a breakdown:

Opportunities:

1. Large untapped potential: India has an estimated potential of more than 200 GW of wind power, out of which only around 40 GW has been tapped so far. This indicates that there is a significant untapped potential for wind energy in the country.

2. Cost competitiveness: The cost of wind energy in India is declining steadily over the years. As the cost declines, it becomes more cost-competitive than fossil fuel-based power. The role of technological advancements and government push towards renewable energy is also playing a role in cost reduction.

3. Government Initiatives: The significant steps taken by the government to improve the power sector such as Pradhan Mantri Sahaj Bijli Har Ghar Yojana "Saubhagya" , Ujwal Discom Assurance Yojna (UDAY), Green

Energy Corridors etc.

4. Policy Support for Domestic Manufacturing: The governments focus on promoting domestic solar manufacturing through policies such as the Production Linked Incentive (PLI) scheme creates opportunities for local production.

5. Renewable Energy Targets: India has set ambitious renewable energy targets, including a large capacity for solar energy. These targets drive market growth and attract investment.

6. Increasing Investments: By the year 2028, India can expect an investment to the tune of US $500 billion to help the growth of the renewable sector.

Threats:

1. Policy uncertainty: India is notorious for policy changes and red tape. Though there have been significant changes in the last decades, a lot still needs to be done. The wind energy sector in India still faces policy uncertainty. This uncertainty deter investors and developers from investing in wind energy projects.

2. Technological challenges: The development of wind energy projects in India is also facing technological challenges. There is non-availability of suitable wind turbines and components, the need for specialized skills and expertise, and the availability of financing for new and innovative technologies.

3. Unavoidable Circumstances : An outbreak of other infectious or virulent diseases, if uncontrolled, may have an adverse effect on our business, results of operations and financial condition

4. Supply Chains: Disruptions in global supply chains can impact the availability and cost of materials and components, affecting project timelines and budgets.

5. Climatically Challenges: The need for sustainable practices and the impacts of climate change can create challenges in project design, implementation, and compliance with new environmental standards.

OUTLOOK:

Winsol Engineers Limited established with the aim to use the power of science to deliver unmatched performance of natural resources and build the future of the next generation with energy sustenance. Winsol Engineers Limited technology driven organization, it differentiates through its talented and passionate people and unique combination of capabilities. Our promoters have more than 40 years of experience in engineering industry. Our Promoters lead the company with their vision. Our management team includes young and experience professionals. We believe that a motivated and experienced employee base is essential for maintaining a competitive advantage. Our motivated team of management and key managerial personnel complement each other to enable us to deliver high levels of client satisfaction.

We place significant emphasis on cost management and rigorously monitor our projects to ensure that they are completed within committed timelines and budgeted amounts. Our company constantly endeavours to improve our execution process, capabilities, skill up gradation of employees, modernization of plant and machineries to optimize the utilization of resources. We regularly analyse our material procurement policy and project execution process to de-bottle neck the grey areas and take corrective measures for smooth and efficient working thereby putting resources to optimal use.

RISK AND CONCERNS:

A well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potential impact and risk mitigation process is in place. The objective of the mechanism is to minimize the impact of risks identified and taking advance actions to mitigate it. The mechanism works on the principles of probability of occurrence and impact, if triggered. A detailed exercise is being carried out to identify, evaluate, monitor and manage both business and non-business risks.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The Company has adequate internal control procedures commensurate with its size and nature of business in India. The Company has clearly laid down policies, guidelines and procedures that form a part of the internal control systems. The adequacy of Internal Control Systems, which encompasses the Companys business processes and financial reporting systems, is examined by the management as well as by its internal auditors at regular intervals.

The internal auditors carry out audits at regular intervals in order to identify weaknesses and suggest improvements for better functioning. The observations and recommendations of the Internal Auditors are discussed by the Audit Committee to ensure effective corrective action.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

(Rs. in Lakhs)

	Standalone-Year Ended		Consolidated-Year Ended
Particulars	31/03/2024	31/03/2023	31/03/2024	31/03/2023
Revenue From Operations	7516.49	6538.66	7804.91	-
Other Income	7.26	5.86	7.36	-
Total Income	7523.75	6544.53	7812.27	-
Less: Total Expenses before Depreciation, Finance Cost and Tax	6238.85	5759.51	6470.7	-
Profit before Depreciation, Finance Cost and Tax	1284.90	785.01	1341.57	-
Less: Depreciation	37.33	32.47	37.33	-
Less: Finance Cost	78.72	59.77	80.64	-
Profit Before Tax	1168.84	692.77	1223.60	-
Less: Current Tax	298.06	173.59	312.33	-
Less: Deferred tax Liability (Asset)	(0.89)	2.19	(0.89)	-
Profit after Tax	868.09	516.98	908.58	-

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS:

Human resource is an asset to any industry. We believe that our employees are the key to the success of the business. Our manpower is a mix of experienced and young personal which gives us the dual advantage of stability and growth.

The Companys relations with the employees continued to be cordial and harmonious with its employees. It considers manpower as its assets and that people had been driving force for growth and expansion of the Company. The Company acknowledge that its principal assets is it employees. The Company has continued its efforts in building a diverse and inclusive workforce.

As on March 31, 2024, the Company had total 78 Permanent employees on roll in the company.

KEY FINANCIAL RATIOS:

Ratio	Figures As At 31.03.2024	Figures As At 31.03.2023	% Change From Last Year	Explanation for Change in Ratio (for more than 25% in comparison with last year)
Current Ratio	1.83	1.55	17.77	Not applicable
Debt-Equity Ratio	0.55	1.33	(58.86)	DE ratio of the company has improved on account of reduction in debt due to payment of term loan, pay off of other liability resulting in decrease in debt.
Debt Service Coverage Ratio	1.24	0.63	96.64	Debt service coverage ratio has improved from 0.63 in previous year to 1.24 in the current period on account of increase in fund available for repayment of Term Loan because of increase in Net Profit as well as Cash profit.
Interest Coverage Ratio	15.97	12.59	26.82	Not applicable
Return on Equity Ratio	0.67	0.84	(20.23)	Not applicable
Inventory turnover ratio	-	-	-	Inventory turnover ratios is not applicable to company
Trade Receivables turnover ratio	3.19	3.35	(4.90)	Not applicable
Trade payables turnover ratio	8.62	4.65	85.15	The sales turnover of the company has increased significantly during the year that enabled the company generating enough revenue to pay off its suppliers which resulted in ideal trade payables turnover ratio.
Net capital turnover ratio	4.95	7.19	(31.17)	The Net capital turnover ratio has decreased. Though the turnover has increased during the year, the capital employed has also increased due to increase in Profit resulting in decrease in Net capital turnover ratio.
Net profit ratio	11.55	7.91	46.07	There in Increase in Turnover which result to increase in Profit hence, ratio increase.
Operating Profit Margin	15.55	10.59	46.77	As in the current year companys revenue has increased with increase in turnover, hence ratio varies as compared to previous year.
Return on Capital employed	0.82	0.83	(0.78)	Not applicable
Return on investment	-	-	-	-

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis report may be ‘forward looking statements within the meaning of the applicable laws and regulations. Actual results may differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include among other, climatic conditions, economic conditions affecting demand, supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental.

Registered office:		For and on behalf of Board of Directors
Shop No. 301, Madhav Commercial Complex,		Winsol Engineers Limited
Near Crystal Mall, Khodiyar Colony,		CIN: U40100GJ2015PLC085516
Jamnagar, Gujarat, India, 361006.
	Ramesh Jivabhai Pindariya	Amri Ramesh Pindariya
Place: Jamnagar	Chairman Cum Managing Director	Whole Time Director
Date: September 02, 2024	DIN: 07322863	DIN: 07322896