MANAGEMENT DISCUSSION AND ANALYSIS REPORT > INDUSTRIAL STRUCTURE AND DEVELOPMENT: The Company is engaged in the business of Oil & Gas exploration and production, and currently the company is carrying on these activities through its 100% step down subsidiaries. The company through its subsidiary GNRL Oil & Gas Limited (formerly Heramec Limited), has participating interests in 6 producing blocks in Cambay basin and is operator in four of these blocks.. The Company plans to acquire new units producing small & medium sized Oil and Gas fields in India & abroad to increase production levels. > OPPORTUNITY & THREATS: Business conditions continue to be challenging. The industry has pushed technological boundaries but is under keener scrutiny and the frontiers are becoming even more remote. Rising costs are being driven both by cyclical factors and the end of "easy oil." > COMPETITION: Competition in the domestic as well as international market has intensified and forced the players to adopt aggressive marketing strategy and promotional campaigns to capture and protect their market shares, The Company has the plans to penetrate better in to world market, especially through the customer retention and business development in the regions which have not been tapped. Sharp fluctuations in value of the Indian Rupee and the rising inventory prices have put brssure on the profitability of the Company. > SEGMENT WISE AND PRODUCT WISE PERFORMANCE: The Company is carrying out its operations in only one segment namely, oil and gas exploration. > RISK AND CONCERN: The risk management function is integral to the company and its objectives includes ensuring that critical risk are identified continuously, monitored and managed effectively in order to protect the company's business. However, the changes in the tax laws, Government policies and regulatory requirement might affect the company's business. The management has already taken initiatives in advance for mitigating the above mentioned risk and concerns/challenges. > INITIATIVES BY THE COMPANY: The Company has taken the following initiatives: 1. Concentration on reduction of costs by undertaking specific exercise in different fields. 2. Focusing on modernization of manufacturing process to improvise quality and reduction of costs. 3. The Company is quite confident that the overall productivity, profitability would improve in a sustainable manner, as a result of this strategy. > OUTLOOK: The profit margins in the industry are under brssure. However, the Company has taken remedial measures. The Company is confident to meet the challenges with its strength in marketing network, its strategic planning, Research & Development productivity improvement and cost reduction exercise. > INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: Your Company places significant emphasis and efforts on the internal control systems. The Company has appointed an independent firm of Chartered Accountant for the same with such powers and responsibilities that are required to ensure the adequacy of the internal Control System. > HUMAN RESOURCE: Your Company firmly believes that employees are the most valuable assets and key players of business success and sustained growth. Various employee benefits, recreational and team building efforts are made to enhance employee skills, motivation as also to foster team spirit. Industrial relations were cordial throughout the year. > HEALTH, SAFETY AND ENVIRONMENTAL PROTECTION Your Company has complied with all the applicable environmental laws and labour laws. The Company has been complying with the relevant laws and has been taking all necessary measures to protect the environment and maximize worker protection and safety. > CEO AND CFO CERTIFICATION Mr. Shalin A. Shah, Managing Director, have given certificate to the board as contemplated in sub-clause (V) of clause 49 of the Listing Agreement. > CAUTIONARY STATEMENT The statements in the "Management Discussion and Analysis Report" section describes the Company's objectives, projections, estimates, expectations and brdictions, which may be "forward looking statements" within the meaning of the applicable laws and regulations. The annual results can differ materially from those exbrssed or implied, depending upon the economic and climatic conditions, Government policies and other incidental factors. For and on behalf of the Board SD/- Shalin Shah Managing Director DIN: 00297447 Place: Ahmedabad Date: August 14, 2015 |