MANAGEMENT DISCUSSION AND ANALYSIS Pursuant to Clause 49 of the Listing Agreement, a Management Discussion & Analysis Report covering performance and outlook is given below: 1. Economy and Industry Overview The Indian Economy has turned around dramatically with the real GDP growth rate of 7.4%, making India the fastest growing large economy in the world. The growth in the next financial year is expected to be between 8 to 8.5% and aiming for a double digit rate seems feasible very soon. Despite a stagnant industry and constrained demand environment, optimism about the mid and long-term growth prospects, remains. Global sentiment towards the Indian market has seen substantial improvement following the reforms initiated by the Indian government. Recent government measures aimed at structural reforms in the Indian economy are in the right direction. Further, with inflation and other financial indicators such as monitoring of fiscal deficit and current account deficit, there are positive signs of higher growth numbers in the year ahead. Positive policies and lower global prices of various commodities have contributed to the marked decline in inflation and the comfortable external position in the country. Given the increased government focus and policy initiatives to boost the infrastructure and construction segments, the growth rate is expected to pick up, moving forward. Overall, the Indian economy is expected to further strengthen through higher infrastructure spending, increased fiscal devolution to states and continued reforms in financial and monetary policy. The industrial segment, in particular, is likely to see a demand uptick, to trigger an all-round impact which could lead to greater revival in the sluggish consumer sentiment. With the growth of infrastructure and construction segments, the bimetal business in India is poised for a good growth. 2. Opportunities & Threats Additional capacities and the commitment to have zero defect quality products have provided substantial growth opportunities to your company in the global bimetal market. Your company has been closely working with various MNC's for the development of various products which will grow your company at a faster rate. Capability to produce disc grade bimetal is another weapon in the archery of your company. All out efforts for automation of the existing capabilities are being made to navigate through the changing technology and customer expectations. The companies into export and import business do face a risk of loss due to exchange fluctuations in foreign currency. To mitigate this loss, your company has made a forex policy which is reviewed periodically more particularly w.r.t Natural hedging, increasing exports, need-based hedging of exposed portions. Other business threats are being handled as per the risk management policies of the company. Biggest challenge your company faces is stiff competition across the global markets. 3. Future Outlook Your Directors are optimistic that with additional capacities and capabilities, your company can be a leader in global bimetal market. Your company is continuously taking various steps to face the challenging environment and customer expectations which are as under: • Achieving customer satisfaction by providing zero defect quality product and services; • Automation of existing capabilities; • To provide safe working environment to workers; • Skill Development; • Continuous efforts for cost reductions and optimal utilization of available resources of the company; • Effective management of foreign exchange policy; • In-house R & D facility for the purpose of product improvement & Development, product diversification, to explore new avenues for its product applications and new product development using same technology; • To become a leader in global bimetal market. 4. Financial Performance Equity Share Capital : The Equity Share Capital of the Company as on 31st March, 2015 stood at Rs.384.03 Lacs. There was no fresh issue of capital during the year. Finance Cost : Finance Cost for the financial year 2014-15 is Rs.319.84 Lacs as compared to Rs.317.04 Lacs in the brvious year, as such there is an increase by 0.87 % in the current financial year. Turnover: The Company's sales and other income has increased from ^8,550.27 Lacs to ^10,162.22 Lacs, an increase of 18.85% over the brvious year. Net Profit : Net profit available for appropriation for the year 2014-15 stood at Rs.494.19 Lacs as compared to Rs.352.92 Lacs in the brvious year. Earnings Per Share (EPS) : The Company's Earnings Per Share (EPS) during the current year is T2.51 (Rs.1.84 in the brvious year). 5. Risks & Concerns The Company has a Risk Management Policy in force to review and mitigate risks relevant to environmental, operational and business risks to safeguard its interest. Risk Management Committee of the company is regularly monitoring the environmental, operational and business risks. In addition to this the company has internal audit systems which assesses the effectiveness of internal controls, risk identification and mitigation processes brvailing in the company. Audit Committee of the Board of Directors also reviews the internal audit reports and takes appropriate actions w.r.t deviations, if any. The various heads of operations are having continuing interactions and communications at periodical intervals with the marketing head, employees and other stakeholders. They keep themselves abreast with the developments in the market, products, competition and other relevant areas. 6. Internal Control System and their Adequacy Your Company has appropriate internal control systems for business processes, efficiency in its operations, and compliance with all the applicable laws and regulations. Regular internal checks and audits ensure that the responsibilities are being effectively executed. In-depth review of internal controls, accounting procedures and policies of Company is conducted. Your Company has adopted adequate internal control and audit system commensurate with its size and nature of business. Internal audit is carried on a quarterly basis. Internal auditors work with all levels of management and the report is placed before the Audit Committee. The Audit Committee after reviewing the findings and suggestions directs the respective departments to implement the same. 7. Occupational Health & Safety The Company gives great importance to all the matters related to Health, Safety and Environment and ensures compliances of all statutory regulations. Training of employees on emergency response, firefighting, rescue and first aid are some of the regular features at manufacturing sites. Occupational Health & Safety is an area concerned with protecting the safety, health and welfare of employees engaged in the company. The goals of occupational safety and health programs include to foster a safe and healthy work environment. Occupational Health & Safety has been recognized as an integral and key part of the Company's Business Process. The management believes that people working with the organization are of key resource for the success of the Organization. The sincere efforts put in by the employees have translated in to Quality improvements, Productivity improvements and Cost reduction etc. Management firmly believes in developing and nurturing its human resources and improving their talents which subsequently help in the growth of the Company. Proper care is taken for safety, health and welfare of the employees. The Company ensured employee safety through investments in pollution mitigating equipment, the selection of safe processes, adequate safety training and provision of safety equipment. Our aim is to remove unsafe situations and practices by any/all br-emptive steps required. For the safe return of the employees to their homes all brcautions are taken to avoid accidents. 8. Human resource and industrial Relations Employees are the valuable assets and the strength of an organization in its growth, prosperity and development. Your Company has a team of qualified and dedicated personnel who have contributed to the growth and progress of the Company. Necessary training is being imparted to the employees and various seminars and workshops are being conducted to continuously hone their skills. Your Company is continuously striving to create appropriate environment, opportunities and systems to facilitate identification, development, and utilization of their full potential and inculcating a sense of belongingness. Your Company's industrial relations continued to be harmonious during the year under review. 9. Cautionary Statement Statements in the "Management Discussion and Analysis" describing the Company's objectives, projections, estimates and expectations or brdictions may be' forward looking statement' within the meaning of applicable securities laws and regulations. Actual results could differ substantially and materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations include economic conditions effecting 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 other incidental factors. |