MANAGEMENT DISCUSSION AND ANALYSIS INDUSTRY OUTLOOK OVERVIEW: In Financial year 2014-15, changing market dynamic requires that we design our organization for Growth & Technology is the core of our business. The financial year 2013-2014 saw continued sluggishness in the investment and capex cycles, high inflationary brssures with significant supply side gaps, a consequent decline in savings rates, sluggish real fixed capital formation and very low market confidence. Whereas, the last financial year 2014-2015, the trend has got changed on the prosperous aspects of fresh foreign funds, revival economy and promising government initiatives. GLOBAL MARKET The world has learnt its lessons from recession and is actively taking steps to sustain. India's advantage and make India's Economy & Industry more resilient to global economic conditions. This optimism is being reflected in all parts of the world. The niche products and delivery model is important and Indian Industrial Rubber providers will need to adapt themselves in this brvailing situation in all over world. From a growth perspective, the future is still bright and has been impacted by the after effects of recession, witnessed by everyone. BUSINESS OVERVIEW A significant proportion of all Indian businesses fall under the small and medium enterprise segment. So, a broad-based, sustainable growth in the Indian economy can emerge only if the country's SMB enterprises record a healthy growth as they attempt to improve productivity, adopt best practices and bring innovative products to market. Again Indian SMBs are undergoing rapid transformation and are looking for greater flexibility to meet market changes. The need to grow revenues and reach their full potential in the shortest possible time span is going to increase their dependence on technology and managed by automation in production. OPERATIONS OVERVIEW: During the year under review, your company had made a turnover of Rs.83.15 lakhs and resulting Net profit of Rs.11.21 lakhs as compared with the brvious year as Rs.122.68 lakhs and Rs.3.13 lakhs respectively. The Company is planning to venture into new business opportunities and diversify its operations in future. The Company is looking for a strong future ahead and targeting the growth in upcoming year. Accordingly the financial position would also improve considerably. • Competition As the industry is poised for considerable growth, a lot of Companies are entering this arena and the cost efficient competitors are increasing. Also in the global scenario, there is a huge advent of companies in similar kind of businesses in China, Korea, Philippines and Singapore. These Countries also have a huge cost advantage like India. Over and above that, the Government in such countries is actively supporting the growth of the concerned Industry. However, due to global economic meltdown, companies may reduce or postpone their technology spending & expansion. Reduction in spending may result in lower demand and negatively affect our revenues and profitability. For the past several years, India has achieved healthy economic growth rates. The growth has been contributed by robust service sector performance as well as strong manufacturing output. India is being viewed as a key market among the emerging economies. This could affect our growth and profitability. • Capital Intensive and technology obsolescences This Industry is very capital intensive and typically requires high-end systems and storage equipment and proper infrastructure planning. Also the methods, technical know-how & new formula used in this field are dynamically changing and the advent of new technology, techniques and upgrades seem to be very fast. It poses a continuing challenge to companies in this Industry to adapt to newer technologies and also for the personnel to get trained and use these effectively. INTERNAL CONTROL SYSTEMS: The Company has an adequate systems and internal controls to safeguard the assets of the company; and to ensure maintenance of proper accounting records. Audit Committee periodically reviews the functioning of the entire system. HUMAN RESOURCES AND INDUSTRIAL RELATIONS: The Company makes efforts to ensure that employees are provided with a congenial work atmosphere. Facilities are equipped with state-of-the-art machineries, automation software and communication equipment apart from periodic recreational facilities to motivate the team. Continuously improving the quality of people through training in skill development as well as personality development. Management places great emphasis on continuously improving the work environment and ambience to nurture innovation and creativity. For SOUTHERN LATEX LIMITED N. Neelakanda Pillai Managing Director Place: Chennai Date: 27.11.2015 |