Salzer Electronics Ltd. — Management Reports 2020

Jul 18, 2020

SALZER ELECTRONICS LTD. Salzer

CIN : L03210TZ1985PLC001535

July 18, 2020

To

THE CORPORATE RELATIONSHIP DEPT M/s. National Stock Exchange of India Ltd., BSE Limited Exchange Plaza, C-1, Block G, | Floor, New Trading Ring, BandraKurla Complex, Rotunda Building, Bandra (E), Mumbai — 400 051 P.J. Towers, Dalal Street, Tel :+91 22 26598235/36, 26598346 Fort, Mumbai - 400 001. Fax : +91 22 26598237/38

SCRIP CODE: 517059 Symbol: SALZERELEC

Dear Sirs,

Sub: Impact on the performance of the company under COVID-19 pandemic conditions prevailing.

GENESIS:

Our country is passing through a COVID-19 pandemic conditions right from March 2020. In fact this pandemic has also been spread across the globe almost in all the countries affecting the economic activities and normal life of the people.

In order to contain the spread of the COVID*19 the Government had imposed a lock down and notified 144 restricting the movements of people and other activities including transport - by road, rail and air, which made the economic activities in the country to a standstill position and the corporate / companies in all the sectors - manufacturing, services, retail businesses, etc., to a standstill since 24° March 2020. The lockdown under order 144 has been initially imposed for three weeks i.e., from 24" March 2020 to 14" April 2020, which has been subsequently extended for a further tenure of two weeks on two occasions and the current lockdown is expiring on 31° July 2020. This has affected to a greater extent the industrial hub states viz., Maharashtra, Gujrat, Delhi, Tamil Nadu, Karnataka, etc., and the industrial and other economic activities are to become standstill.

IMPACT OF THE COVID 19 ON THE BUSINES:

This has impacted the business operations of our Company viz., Salzer Electronics Ltd to a condition of being non-operational since 24 March 2020 in compliance with the regulations imposed by the Government of India and the State Governments to contain the spread of COVID-19 pandemic.

ABILITY TO MAINTAIN OPERATIONS INCLUDING THE FACTORIES/UNITS/ OFFICE SPACES FUNCTONING AND CLOSED DOWN:

24 March 2020 - 3 May 2020 - All the units of our Company were under lock gown and there were no operations. "

Samichettipalayam, Coimbatore - 641 047, India. Phone : + + 91 422 4233600 Fax: + +91 422 2692170 E-mail : salzer@salzergroup.com Website : www.salzergroup.com Iso 9001] Bt Registered

SALZER ELECTRONICS LTD. CIN : L03210TZ1985PLC001535 Salzer

Meanwhile, the Government has extended the lock-in period from 3° May to 17" May ²⁰²⁰ and also further extended in two spells and the currency of the present lock-down expires on 31% July 2020.

SCHEDULE FOR RESTARTING THE OPERATIONS:

From 4'" May 2020, based on the relaxation and guidelines by the concerned authorities, all the units of our Company started the operations partially with 50% strength.

STEPS TAKEN TO ENSURE SMOOTH FUNCTIONING OF OPERATIONS:

The Company has also taken all precautionary measures to combat the COVID-19 as under:

• Temperature screening of the employees
• Face Masks mandatory
• Hand wash before entering the work place
• Sanitizing of work places twice daily
• Staggered Lunch Timings to adhere and follow the social distancing.
• Provision of additional assembly space to maintain social distancing
• Ensure continuous monitoring for lapses if any and correct them as we move forward ' VVVVVVV
• Similarly all Saturdays until further notice will be holiday for the staff members.
• On full working we hope the company would be able to garner the opportunity to bring the turnover subject to market challenges and global conditions. Vv

We would like to state that we do not have any migrant workers.

We hope that we would be able to work in full capacity based on the lifting of lock-down and also depending upon the guidelines issued by the government in this respect.

ESTIMATION OF FUTURE IMPACT OF COVID-19 ON ITS OPERATION:

At this stage, the company is unable to assess the definitive impact of the COVID 19 over the operations of the company. Since the company is operating in the manufacture of electrical installation products and also marketing the same both in domestic and international markets, under the prevailing market conditions with due lock-down, both in domestic and international markets, our customers are slowly started contacting us and placing orders it is difficult at this stage to exactly estimate the future impact. However, the company is confident to ensure to garner the opportunities as it comes with the gradual return of the position from COVID-19.

DETAILS OF IMPACT OF COVID19:

Performance during FY20

uring FY20 was affected due to the lockdown in the last 8 days in March The performance d ly a turnover of Rs 15 cr was lost during this lockdown. 2020. Approximate!

Impact of COVID-19 during FY21

ted under the Disaster Management Act to contain and our Company has been under lock down kdown the performance has been Due to the lock down promulga manage the COVID 19 spread in our country, Ov from 24.03.2020 until 4 May 2020. During this loc

SALZER ELECTRONICS LTD. Salzer

impacted without any revenues to the company. Since 4 May 2020, we have been operational at 50% capacity and the performance has been impacted to that extent.

ELECTRONICS SALZER CIN : L03210TZ1985PLC001535	Salzer LTD.
revenues impacted without any operational	company. May 2020, we have been Since the to 4 at 50% capacity and the performance has been impacted to that extent.
and Capital i. resources	financial The Equity capital of the company remains unchanged. company necessary ensure The taking steps to is adequate resources carrying financial out the for its bankers and operations from not anticipate any do
ii. Profitability	impact on this account. Company's profitability will have a major impact due to stoppage of production and reduction in turnover of the company. The details of the impact will be known only after lifting of lock-down, for the respective quarters of complete 2020-21. view position standstill FY In of 2020 working May during and from partial an April onwards, impact have quarter on the will first of its performance FY21 extent and that the profitability to will also get impacted which not quantifiable at this is However, the company is confident and taking stage.
	performance ensure the out efforts the to of all company during FY21 to the extent possible as that of It.is expected that the profitability will improve FY20. gradually once sales improves and stabilise.
iii. Liquidity position	The company is doing its best under the circumstances whatever steps ensure to take possible liquidity to to meet its commitments and also to ensure its on-going status.
iv. Ability to service debit and As other financing arrangements	measure conservative ensure and also the to a liquidity resource the company has availed Moratorium with a couple of its bankers based on the RBI directives. The company is in a position to meet its obligations in this respect.
v. Assets Internal financial	There is no impact over the assets of the company. reporting There is no change and impact of the internal financial
vi. and control vii. Supply chain	controls. During the lock down period, the supply chain has been impacted as most of suppliers hare in the containment However down. zones and have been locked since middle of May 2020, things have been improving.
Demand products/ Since for viii. its services	customers most OEM's domestically and of the COVID19 regions where internationally are and the in effect has been there, there has been an impact in sales The impact was to the tune of 50%. of our products. However since company's products used the are in a work we have been variety of sectors, able to 50- at 60% in the First Quarter of FY21.
	Going forward, at this stage, the company is unable to impact of the CoVID assess the definitive 19 over the demand for its products.
ISO 9001 Registered	64 Coimbatore - Samichettipalayam, 422 2692170 ++ 91 Fax: : + + 91 422 4233600 Phone Website : www.salzergroup. com E-mail : salzer@salzergroup.com

EXISTING CONTACTS/AGREEMENTS WHERE NON FULFILLMENT OF THE OBLIGATION BY ANY PARTY WILL HAVE SIGNIFICANT IMPACT ON THE LISTED ENTITY'S BUSINESS:

The company does not foresee any significant impact, due to non-fulfilment of the obligations.

Other relevant material updates about the listed entity's business.

In view of the prevailing Global and domestic market and economic conditions, FY 21 would be very challenging, which will have its impact on the performance of the Company also.

The Company is planning to take all efforts to combat the situation in all possible manners.

Kindly take this on record

Thanking you

Yours faithfully For SALZER ELECTRONICS LTD ' __

S.BASKARASUBRAMANIAN DIRECTOR (CORPORATE AFFAIRS) & COMPANY SECRETARY (DIN :00003152 & FCS:4605)