PG ELECTROPLAST LTD.

A pioneer and leader in the Electronic Manufacturing Services and Plastic Molding industry, PG
Electroplast Limited (PGEL) has emerged as a one-stop solution for leading Indian and global
brands. To capitalize on growing opportunities and fulfill robust demand from downstream
industries, we have prioritized and identified key focus areas that will enable us to take the
company to newer heights. We believe, we are uniquely positioned in the consumer durable and
plastics space in India, and the right strategies and actions can enable us to increase our market
share, grow our revenue and create sustainable value for stakeholders.
Vision:- To emerge as a global one-stop solution partner in the field of Plastic Moulding and
Electronic Manufacturing Services by maximizing efficiency and technological innovation
MISSION:- To provide the highest quality products - competitively priced, along with services
exceeding our customers’ expectations. We are committed to maximising value for all
stakeholders and building an environment that encourages continual improvement to address a
dynamic business environment.

Management Discussion and Analysis

GLOBAL ECONOMY
The Economic Uncertainty globally is at its peak. Almost all nations are facing record inflation,
and, to counter that, most central banks have started withdrawing the ultra-easy monetary
policies rolled out during the Covid pandemic. Additionally, the ongoing war between Ukraine
and Russia has led to higher food and energy prices, leading to sticky inflation and hurting the
overall consumer sentiment across the globe. According to the latest IMF forecast, the growth of
the global economy is likely to slow down from 6.1% in CY2021 to 3.2% in CY2022[1], which
is 0.4% lower than the forecast for April 2022. These downward revisions are being driven by
cuts in GDP forecasts for the USA, China and Europe. And on top of this, global inflation
estimates have been revised upwards due to food and energy prices and lingering supply-demand
imbalances. Therefore, the IMF anticipates growth to reach 6.6 percent in advanced economies
and 9.5 per cent in emerging and developing economies this year—upward revisions of 0.9 and
0.8 percentage points, respectively.

INDIAN ECONOMY
Despite the severe second Covid wave in May-June 2021, the Indian economy grew 8.7% in
FY2022 after contracting 6.6% during FY2021. Barring contact-intensive sectors like Trade,
Hotels and Transport, despite the second and third COVID waves, all sectors of the economy
clocked higher growth compared to FY2020, and FY2022 GDP was 1.5% higher than FY2020
GDP. For FY2023, the Indian economy faces a mix of tailwinds and headwinds as global growth
is likely to slow down due to the withdrawal of easy monetary policy and high inflation, thus
impacting the sectors dependent on exports. In addition, tighter monetary policy domestically
can also impede growth further. We believe that as both consumption and investment sectors are
firing simultaneously, the nation’s fiscal position is becoming stronger. Tax collections have
jumped significantly and have been now almost for six consecutive months. GST collection has
been over INR 1.4 trillion, the corporate sector’s profitability remains strong, and India is
probably the best large economy for FY2023.

Company Overview And Operational Highlights

PG Electroplast is actively pursuing opportunities in the EMS sector and contract manufacturing
across consumer durables and electronics. The Company today has four operational segments -
1) Products
a) Room Air conditioners
b) Washing Machines
c) Air Coolers
2) Plastic Moulding
3) Electronics
4) Tool Making

Future growth strategy

With several milestones achieved in FY2022, including crossing INR 1000 crore sales for the
financial year, the Company has decided to further accelerate the growth trajectory by continuing
to invest in the Capacities and Capabilities of the product business. In addition, the management
is also very focused on improving asset sweating and, thus, the fixed asset turns and RoCE. In
the coming years Company aims to become a significant ODM player in the Room AC and
Washing machine segments and is further investing in capacities and backward integration in its
Manufacturing Units in Greater Noida & Supa, Ahmednagar. The idea is to go up the value chain
by forwards-integrating and to become a solution provider to the Brands and Private labels of
Modern retail and E-commerce players. With this strategy in mind, the Company has been
continuously investing in new Capabilities and Capacities to increase its offerings. In FY2022,
the Company purchased, through its 100% subsidiary, a 10-acre plot in the vicinity of the
existing facility at Supa, Ahmednagar. The new facility is one of the most Integrated AC
manufacturing Units in the Annual Report 2021-22 Corporate Overview Statutory Reports
Financial Statements Notice country.
Financial review
All our business segments have performed well in FY22, particularly the Company's current
focus area - the products business that achieved 146% growth over FY2021, despite the sales
losses in the second covid wave due to the lockdown and its aftereffects. On a full-year basis,
despite a slow H1, the Company managed 58% topline growth this year, closing FY22 with a
Revenue of INR 1116 crores compared to INR 706 crores last year. EBITDA grew 77%, from
INR 52.4 crores to INR 92.7 crores. The net profits for the year stood at INR 37.4crores, which
is a 222% improvement over last year's profits of INR 11.6 crores. Depreciation increased by
23% to INR 22.1 crores in FY22 compared to INR 18.0 crores in FY21. Finance & Interest
expenses increased by 22% to INR 22.5 crores in FY22 from INR 18.4 crores in FY21, mainly
due to increases in average borrowings during the year. Profit before Tax and exceptional items
(PBT) stood at INR 48.1 crores in FY22 compared to INR 15.9 crores in FY21, representing a
growth of 202% YoY. The Company recorded its highest-ever revenue, operating profit and net
profits this year. The Company also registered its highest-ever quarterly sales of INR 500 crores
in Q4 of FY22, a 52% increase from its next best performance, INR 330 crores, which it had
achieved in Q4 of FY2021.
 Inventory Turnover has declined as company was carrying high Inventory for the AC
season and the production was impacted due to minor fire accident in Month of January
2021 in the new plant, which led to production loss of almost 20 days in the AC business.
 Debt to Equity ratio has changed as company commissioned its new AC manufacturing
plant in Month of January and 4QFY2022 had a big ramp up leading to high working
capital at the end of the financial year, which was largely funded by short term debt.
Also, during the year company undertook big capex part of which was funded by the
New Debt, this led to Debt/Equity ratio increasing to 1.33x.
 Operating Profit margin improved as company received an amount of Rs 13.92 crores on
account of subsidy for Industrial Promotion Policy of Government of Maharashtra for
MIDC SUPA, Ahmednagar Unit of PG Electroplast Limited, which boosted the
Operating profit for the year. • Return on Net worth has improved as company’s profit
growth was much higher at 222%, while Net worth Improved by only 62%.

HUMAN RESOURCES
Human resources remain the most valuable asset of the Company. The Company's Human
Resources are commensurate with the size, nature and operations of the Company. PGEL
follows a policy of building strong team of talented professionals, motivate people for higher
performance and build a competitive working environment for continuous growth for the
Company.. In a bid to alleviate some of the mental pressures brought upon by the pandemic, the
company also announced a new scheme called “PG Cares”. As per the scheme, should any
employee have an untimely death, the company shall ensure that the family of the employee will
continue receiving the former employee’s salary for two years. All education expenses for their
children until graduation from high school will also be borne by the company. The Company has
an effective and reliable internal control system. In line with the business operations, PGEL has a
well-planned internal control framework that covers various aspects of governance, compliance,
audit, control and reporting. It ensured adherence to local statutory requirements for the orderly
and efficient conduct of business, safeguarding of assets, the detection and prevention of frauds
and errors, adequacy and completeness of accounting records and timely preparation of reliable
financial information. The efficacy of the internal checks and control systems is validated by and
internal auditors and re-examined by the management. Audit Committee monitors and provides
effective supervision of the financial reporting process of the Company to ensure accurate and
timely disclosures with the highest level of transparency, integrity and quality.
Risks and mitigation strategies
Risk management is an inherent part of the Company’s business and management is proactive in
terms of managing risks in an organised manner. The Company’s risk management strategy is
governed and monitored by the Risk Management Committee. The executive Management Team
regularly reviews the key risks and monitors the mitigating measures adopted by the Company.
The Risk Management Committee is evaluating initiatives to further strengthen the risk
management framework of the Company considering our growth strategy and the dynamic
business environment in which we operate.
• Client Business Model Risk
The Company's primary clients are OEM players, who outsource some of the products
manufacturing or process to the Company to reduce their costs and achieve scale. The
Company's business model would be impacted, in case of any change in their location of
business or change in business model of OEMs.
Mitigation Measures: The Company's marketing team always stay connected with clients to
understand their requirements and business activities. The Company keeps itself up-to-date with
clients' business plans and accordingly realigns its capex and opex plans.
• Client Concentration Risk
The Company is dependent on a limited number of clients for a majority share of the revenue.
This poses a risk to the Company as it may lose any of its key customers or any disruption in the
customer's business may affect the company as well.
Mitigation Measures: PGEL has successfully maintained a strong relationship with its key
customers. The Company is strategically acquiring new clients and expanding its client base to
decrease the risk of client concentration.
• Operational Risk
Operational efficiency forms the key factor for the profitability and sustainable growth for the
Company and it also determines the Company's competitiveness against other players in the
region.
Mitigation Measures: The Company has put together an apt combination of people, processes
and technology to optimize the business performance that leads to higher sustainable growth.
The management team supervises the internal processes and ensures optimisation in energy
conservation, technology absorption and capital efficiencies. The Company's internal control
systems are well designed to abide by any size and nature of business complexity.
• Peer Risk
PGEL operates in a highly competitive market. The Company might receive high competition
from its peers. Mitigation Measures: The Company is strategically developing in the operational
front in terms of expanding capacities, shifting towards ODM business model, completing
backward integration, acquiring new customers and strengthening relationship with the existing
ones across all the segments. Through all these factors, PGEL has been able to strengthen its
market share and differentiate itself from peers.
• Technology Risk
The electronic business of the Company may get affected with rapid change in technology. Any
change in end user's preferences, behaviour or usage pattern could adversely impact the growth
prospects of the Company.
Mitigation Measures: The Company has always moved ahead in line with the varying market
dynamics and rapidly changing technologies. Moreover, PGEL has expanded its product
portfolio along with a change in technology in the market. For example, the company is planning
to launch fully automatic washing machines in ODM category in line with the change in
technology.

Environment, Health and Safety (EHS)

Environment, Health and Safety (EHS) forms a vital part of the business and PGEL is strictly
adhered to EHS standards and policies at all the processes. Protecting the environment, providing
the right working ambience and safeguarding health and safety of employees, contract workers
and visitors are top priority of the Company. To attain sustainable growth, the Company is
undertaking various initiatives; few of them are listed below:
• CO2 Flooding systems installed at high risk areas
• Daily/Weekly/Monthly/Quarterly Safety audits
• Disaster Management Organization
• Fire Control Room with zone-wise control panels
• Work permit issue system for heavy duty machine operators
• Accident monitoring management
• Management review system for EHS activities
CAUTIONARY STATEMENT
Statements in this report on Management Discussion and Analysis, describing the Company’s
objectives, projections, estimates, expectations or predictions may be “forward-looking
statements” within the meaning of applicable laws and regulations. These statements are based
on certain assumptions and expectations of future events. Actual results could differ materially
from those expressed or implied since the Company’s operations are influenced by many
external and internal factors beyond its control. The Company assumes no responsibility to
publicly amend, modify or revise any forward-looking statements, based on any subsequent
developments, information or events. Readers are cautioned that the risks outlined here are not
exhaustive. Readers are requested to exercise their judgment in assessing the risks associated
with the Company.

FINANCIAL RATIOS

Liquidity ratios

Current ratio = current assets/current liabilities

= 6,080.74/5,482.28 
= 1.11

Quick ratio = (current assets – inventories)/current liabilities

= 2602.82/5482.28
= 0.47

Absolute liquid ratio = Absolute liquid assets / Current liabilities

= 794.30/5482.28
= 0.14

Turnover/Activity ratios

Debtor turnover ratio = Net Credit Sales / Average Accounts Receivable. 

= 6.09

Inventory turnover = cost of goods sold/average inventory

= 8,842.16/1893.22
= 2.0
Receivables turnover= revenue/ average accounts receivable
= 10977.18/1802.91
= 6.08

Total assets turnover= revenue/average total assets

= 10977.18/8239.55
= 1.33

Leverage ratios

Debt equity ratio = Total liabilities/total owner’s equity

= 7,562.28/3,122.98
= 2.42

Debt ratio = Total liability/Total assets

= 7,562.28/10685.26
= 70.77

Time interest earned ratio = EBIT/Interest expense

= 541.75/145.37
= 3.73

Debt coverage ratio = Net income/net debt

= 374.16/3708.78
= 0.10

Profitability ratios

Return on equity=Net income/average owner’s equity

= 374.16/2523.83
= 14.82%

Return on capital employed = Net profit/capital employee

= 13.23%

Price earning ratio=Market price of common stock/earning per share

= 1042/40.55
= 25.69%

Return on assets = Net income/total assets

= 374.16/8239.55
= 4.11%
Dividend pay-out ratio = annual dividend per share/earnings per share
=00/00
=00.00

Gross profit Margin = Gross profit/ Sales

=2135.02/10977.18
=19.45%

Operating profit Margin = EBIT/ total income

=541.75/104,154.05
=8.54%

Net profit Margin = PAT/ total income

= 3,296.79/104,154.05
=3.41%
 TVS ELECTRONICS LTD.
TVS Electronics Limited is a listed public company incorporated on 15 September, 1995. It is
classified as a public limited company and is located in Chennai, Tamil Nadu. It's authorized
share capital is INR 25.00 cr and the total paid-up capital is INR 18.65 cr. The company designs,
manufactures and distributes IT products, dot matrix printers, point of sale terminals, printer
supplies, keyboards, mobiles, mouses.
Products & Services: DOT MATRIX PRINTERS, ELECTRONIC CASH REGISTERS, LABEL
PRINTERS, BARCODE SCANNERS, SPECIALITY PRINTERS, THERMAL RECEIPT
PRINTERS, POS DMP, TOUCH POS SYSTEMS, OEM

Management Discussion and Analysis

Global Economic Review
 
The global economy has recovered in 2021 following the disruption caused by COVID-19 in
2020. On the back of international collaboration in adapting functional health policies and
efficient fiscal and monetary policies coupled with vaccinations across the globe, the global
economy is estimated to grow by 6.1% in 2021, compared to a contraction of 3.1% in 2020, as
stated by International Monetary Fund (IMF). The global recovery has largely spearheaded by
the emerging markets and developing economies growing its gross domestic product (GDP) at
an average of 6.8% and the advanced economies growing at an average of 5.2%. The biggest
contributor to the growth in advanced economies were France, Italy and UK growing at 7%,
6.6% and 7.4% respectively. Similarly, the biggest contributor to the growth of developing
economies were its neighbouring countries and India estimated to be growing at 8.1% and
8.9% respectively.
 
The crude prices saw a sharp increase of 36% between August 2021 and February 2022 owing
to a strong demand, short-lived effects of the Omicron variant of the COVID-19 pandemic
followed by the Ukraine and Russia war. The average oil price stood at US$ 69.07 a barrel
compared to US$ 41.29 a barrel.

Indian Economic Overview

Following the second wave of the COVID-19 pandemic, India’s economy was well on its path to
recovery, with both industry and services showing steady progress. Outbreak of new variants,
supply chain disruptions, and the recent rise in inflation, have been some challenges faced by the
country during the recent past. To address these difficulties, the Government increased
infrastructure expenditure to not only restore medium-term demand but also enact significant
supply-side reforms to position the economy for long-term growth. As per the second advance
estimates of the National Statistics Organisation (NSO), Indian economy is estimated to grow at
8.9% in 2021-22 compared to a contraction of 6.6% in 2020-21. Moreover, for nine months
ended 2021-22, the aggregate Index of Eight Core Industries was recorded at 12.6%
(provisional) over the same period last year. Further, the impact of the third wave of the
pandemic on recovery was minimal compared to the previous waves.

Growth drivers
 
• Favourable demographics: India is the second-most populous country in the world with a
population of 1.4 billion in 2021 with a median age of 26.7 years. With a majority of the
population of the country being young, India is expected to grow faster across various sectors,
especially IT and IT peripherals market
 
• Retail Growth: India has ~12 million retail outlets, of which only 10 to 15% are digitised.
Such outlets are expected to grow by more than 35% in the next 5 to 7 years. The growth is
expected to be driven by specific categories such as consumer durables and electronics, food
and groceries and quick service restaurants (QSRs), which are forecasted to grow at 28%,
19% and 16% y-o-y, respectively. Further, the apparels and footwear category is also
expected to record double-digit growth
 
• Urbanisation: India has seen an incremental growth in its urban population over the past
decade. The country?s urbanisation rate is expected to reach 37-38% by 2025, thereby,
driving the demand of IT and IT peripherals
 
• Digital India Initiative: The IT spending by the Indian government is estimated to reach US$
8.3 billion in 2022, recording a y-o-y growth of 8.6%. This growth is likely to happen on the
back of the fact that digitalisation has been gaining increasing traction, and has taken a giant
leap in 2020 owing to the pandemic. Migrating from legacy systems to digital would be a
major reason for IT spending growth in 2022
 
• Per capita income: The per capita net national income in India is estimated to increase from
 
Rs 1,26,855 in 2020-21 to Rs 1,49,848 in 2021-22, at current prices, thereby, indicating the
increasing ability to spend
 
• Investment destination: The huge IT workforce of the country coupled with IT infrastructure
has helped India emerge as a global investment hub. The data annotation market in India
stood at US$ 250 million in 2019-20, which is expected to grow to a substantial US$ 7 billion
by 2030 on the back of increasing domestic demand for artificial intelligence. Further, the
Indian software industry is also expected to reach US$ 100 billion by 2025. These factors are
expected to drive the IT and IT peripherals market in India in the foreseeable future
 
• FDI: As stated by the Department for Promotion of Industry and Internal Trade (DPIIT), the
computer software and hardware sector in India attracted cumulative foreign direct investment
(FDI) worth US$ 81.31 billion between April 2000 and December 2021, thereby, driving the
sectoral growth
 
• Increasing spending: According to Gartner, IT spending in India is estimated to increase to
US$ 101.8 billion in 2022 from US$ 81.89 billion in 2021, thereby, driving the IT and IT
peripherals market
 
• Government impetus:
 
- In September 2021, the Government issued Goods and Services Tax (GST) Council?s
clarification on intermediaries for the IT & BPM industry, simplifying the refund process
 
- In Union Budget 2022-23, the Government allocated Rs 88,567.57 crores (US$ 11.58
billion) for the IT and telecom sector

Risk Management
Risk Management is an integral part of the Company?s strategy and planning process. Based on
proactive identification of risks, action plans are devised to mitigate the risks that could
materially impact the Company?s long-term sustainability. The Risk Management Committee of
the Company is tasked with the identifying and mitigating risks. The Committee reports to the
Board of Directors who sit at the apex of the corporate governance framework.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR) activities have been embedded in the value system of the
Company for many decades. We continue to focus on area like "Kids of Future (Education
support for Children), health & hygiene, culture & heritage and actively participate to support
our communities whenever there are specific needs.

HUMAN RESOURCES
 The Company believes that its employees are its biggest assets, and strives to foster a culture of
inclusive growth for its employees. It manages its broad talent pool by providing a nurturing
atmosphere, benchmarked compensation, rapid merit-based career growth, and best-in-class
people policies. The Companys employee value offer is based on a long-standing culture of high-
performance, efficiency, safety, and integrity. The Company prioritised staff health and well-
being during the COVID-19 pandemic. Simultaneously, it also took swift measures to enable an
efficient work-from-home model, which saw the rapid adoption of systems and tools, in keeping
with its main cultural pillars of flexibility and adaptability. Continual training in order to acquire
new skills and competencies as well as regular engagement is a part of the human capital focus
of the Company.
In order to train its employees, the Company undertakes the following measures:
 • New joinees undergo Induction and POSH eLearning module on the Learning Management
System (LMS)
• The learning and development team shares the Training Needs Identification (TNI) form for all
existing employees with their respective managers at the start of the year. On the basis of the
TNI form, the Company conducts various training methods on a blended module which includes
LMS eLearning, virtual trainings, Kindle books, coaching, mentoring, and leadership speak,
among others
 • Apart from TNI, the employees are also assigned with functional and behavioural skills
training through a blended module comprising virtual trainings, Kindle Udemy courses,
coaching, and mentoring, among others
 • Leadership team will have a dedicated coaching programme with external consultants and
MDP programmes on the basis of their 360 degree feedback
 • The agents of the Company (partner agents and TBA) are trained through induction, refresher,
cross-skill and multi-skill training across the country. Further, the Company also has a LMS for
its agents, namely ‘Ekalavya? where agents are indulged in technical-based video training
 • Further, the Company also provides safety training to its employees which include:
 - Hazard identification and handling training
 - Firefighting equipment training
 - Emergency SOP training
 
Key employee engagement measures undertaken by the Company are as follows:
 • Health awareness sessions, wherein the Company inculcates the importance of various health
and hygiene in its employees across the country on a monthly basis
 • Minimum of 2 fun activities for its employees on a quarterly basis
 • Skip level meeting on a monthly basis
 • Women?s forum meet on a quarterly basis
 • Townhall across various business units on a quarterly basis Further, the Company also
conducts regular health checkups in-house or through Hospitals as appropriate for its employees.
 
CAUTIONARY STATEMENT
Certain statements in the management discussion and analysis may be forward-looking in nature
within the meaning of applicable securities law and regulations. Actual results may differ
materially from those projected or implied. These statements refer to TVS Electronics Limiteds
growth strategy, financial results, product potential and development programmes based on
certain assumptions and expectation of future event. The Company assumes no responsibility to
publicly amend, modify or revise any forward-looking statements based on subsequent
developments, or information of events.

FINANCIAL RATIOS

Liquidity ratios

Current ratio = current assets/current liabilities

= 1,465.800/1,053.200 
= 1.39

Quick ratio = (current assets – inventories)/current liabilities

= 2602.82/1,053.200
= 0.83

Absolute liquid ratio = Absolute liquid assets / Current liabilities

=262.300/1,053.200
=0.24

Turnover/Activity ratios
Debtor turnover ratio = Net Credit Sales / Average Accounts Receivable. 
= 3,079.200/139.35
= 22.09

Inventory turnover = cost of goods sold/average inventory

= 1,599.30/419.4
= 3.8

Receivables turnover= revenue/ average accounts receivable

= 3,079.200/384.10
= 8.01

Total assets turnover= revenue/average total assets

= 3,079.200/1860.85
= 1.65
Leverage ratios

Debt equity ratio = Total liabilities/total owner’s equity

= 10,981/9,261
= 1.18

Debt ratio = Total liability/Total assets

=10,981/20,242
=0.54

Time interest earned ratio = EBIT/Interest expense

= 202.800 /9.600
= 21.12

Debt coverage ratio = Net income/net debt

= 151.00/358.800
= 0.42

Profitability ratios

Return on equity=Net income/average owner’s equity

= 151/872
= 17.31%

Return on capital employed = Net profit/capital employee

= 28,978/9,637
= 22.6%

Price earning ratio=Market price of common stock/earning per share

=277/10.39
=26.67

Return on assets = Net income/total assets

=202/1860.85
= 6.811%

Dividend pay-out ratio = annual dividend per share/earnings per share

=0

Gross profit Margin = Gross profit/ Sales

=1,479.900/3,079.200
=48.06%

Operating profit Margin = EBIT/ total income

=202.80/30,915
=6.91%

Net profit Margin = PAT/ total income

=4.90%