MANAGEMENT DISCUSSION AND ANALYSIS REPORT 1, Industry Structure and Development The Company is engaged in the business of imports, export, trading and distribution of chemicals and metals. The Company is also engaged in the generation of wind energy. Due to several factors, the Indian economy witnessed sluggish growth in. first half of 2014. The second half of 2014 showed better sign of improvement as the election result came out and brought a stable government into the power at a centre. As per International Monetary Fund, Global growth in 2015-16 is projected at 3.5 and 3.7 percent. Chemical Industry The Chemical Industry has a vital role to play for the development of any Economy. Indian Chemical Industry is the 6th largest in the world and the 3rd largest in Asia. Product from the Chemical Industry have improved the quality of life world over and contributed significantly to everyone's day-to-day requirements. Industries are cautiously optimistic about future growth prospects. Chemical Industry in India has graduated from manufacturing principal chemicals in a highly regulated market to being a mature industry in a liberalized economy. In India the chemical industry is among the fastest growing Industry. The bulk of chemicals produced in India comprise either upstream products or intermediates, which go into a variety of manufacturing applications including fertilizers, pharmaceuticals, textiles and plastics, agrochemicais, paints and dyes. With Asia's growing contribution to the global chemical industry, India has emerged as one of the focus destinations for chemical companies worldwide. Your Company also has a well developed and robust logistic and marketing network which affords the buyers in the multiple choices of chemical products at reasonably competitive rates. Wind Energy The growing consumption and steady increase in price of non renewable sources has forced the industries to look for alternative fuels that are available cheaply and can meet their growing demand for wind energy. New and renewable energy technologies are considered to be one of the viable options to meet the challenge of achieving sustainable development while conserving natural resources that have been depleted due to the rapid growth in population, urbanization and fossil fuel consumption. The largest component of renewable generation capacity is wind power, Wind energy not only offers both a power source that completely avoids the emission of carbon dioxide, the main Green House Gas (GHG), but also produces none of the other pollutants associated with either fossil fuel or nuclear generation. The Government's fiscal incentives for wind power generation will provide sufficient boost for wind power project. 2. Opportunities & Threats Opportunities: India's chemical industry is expected to grow at 15 per cent per annum to reach US$ 290 billion by 2017. India's growing per capita consumption and demand for agriculture-related chemicals offers huge scope of growth for the sector in future. Given the substantial growth of chemical industry and in particular the Petro- chemical industry the Management feels the Company is in good stead to further develop and enter into various global markets. Threats; The Global inflation effect on costs especially the cost attributed to the logistic and supply chain management, cheaper substitutes by mass producing countries like China on account of low labour costs and forex fluctuations are likely threats having the effect of eroding the margins to some extent. 3. Outlook The management is quite positive on its outlook in terms of revenue in the coming period as economies all over the world are slowly recovering and it is expected that the global markets will respond well to the products traded by the Company. With beginning of the reemergence of healthy economic environment, barring unforeseen circumstances, your Company is optimistic and confident to receive large demands and given the current financial performance of the Company; the Board is confident in its outlook for future that the Company shall grow substantially over and above its demonstrated growth in terms of turnover and profits. The Company's business of power generation through wind mills, being a non- conventional source of energy, has generated revenue of Rs. 24.13 lakhs for the period ended 31st March, 2015. The management is confident of steady growth over the coming period. 4. Risk and Concerns • The margins could come under brssure due to increase in logistic costs and other expenses. • Competition from mass exporting countries like China and Taiwan where manufacturing and labour costs are quite low. • Adverse fluctuation in forex rates. The Company evaluates and monitors all risks associated with various areas of operations such as sales, marketing, inventory management, debtor's management, insurance, supply chain management, legal and other issues having a material impact on the financial health of the Company on a regular basis with a view to mitigate the adverse impact of the risk factors. 5. Internal Control Systems The Company has an internal control system in place which is commensurate with its size and nature of its business. The internal control system ensures that all the assets of the Company are safeguarded from loss, damage or unauthorized disposition. Checks and controls are in place to ensure that transactions are adequately authorised and recorded and reported correctly to the concerned personnel. 6. Financial Performance with respect to Operational Performance: During the year consolidated revenue have grown by approximately 25.01% and consolidated Net Profit after Tax has increased by around 54.76 % in comparison with the brvious year. Your Company has a low debt equity ratio and is well placed to take care of its borrowings availed by way of credit facilities and Term Loan. 7. Human Resource Management The Company provides suitable environment for development of leadership skills which enables it to recruit and retain quality professionals in all fields. The employer- employee relationship is cordial and mutually supporting at all levels. 8. Cautionary Statement Certain statements in the Management Discussion and Analysis Report describing the Company's objectives, projections, estimates, expectations or brdictions may be for wardlooking statements within the meaning of applicable laws and regulations. Actual results could differ from those exbrssed or implied. For and on Behalf of the Board Sd/- Nitin Kumar Didwania Chairman PLACE: Mumbai DATE: 13/08/2015 |