MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

1. ECONOMIC OVERVIEW

During financial year 2014-15 India's GDP increased by 7.30%. It is expected that in the years to come. India's growth rate will overtake that of china. Though very encouraging in itself, this growth rate has to be much higher to achieve parity with China, considering that the size of china GDP, at brsent is about five times that of India..

With the world economy gaining momentum demand for automobile is increasing. The rising cost of manufacturing in other parts of the world is driving the big automobile giants to India as the hub of their manufacturing facility to meet their export demand.

India's shares of worldwide footwear market is only about 7% as compared to China which caters to 72% of total world footwear market. There is scope for significant growth of this industry in India. The scope of creating additional employment opportunity in this industry is also greater than even the automotive industry. All that is required is proper thrust in this direction by the government.

Prime Minister's focus on "Make in India" is a significant step, which should give a boost to the Indian economy in the coming years. However, much depends on the actions at the ground level.The problem of land reform, labour reforms, and improved infrastructure, uninterrupted power supply are enormous and would require inter-ministerial co-ordination, change of mind set of the government servants and active involvement of the private sector.

In India the population, particularly young middle class population, is large and growing. This is expected to drive demand and ensure continued economic growth. This augurs well for the long term prospectus of the synthetic leather industry, in which Mayur is the leader. There is potential of 20% annual growth in this economy, to achieve the one trillion dollar mark in just seven years.

2. OPERATIONAL REVIEW

The domestic market was subdued in financial year 2014-15. On the other hand, falling crude prices reduced the prices of the raw materials like P.V.C. Resin plasticizer and synthetic yarn used in manufactures of synthetic leather which has benefited the synthetic leather industry. The benefit of this reduction was passed on to the customers resulting in less realization. Yet the company was able to achieve a revenue growth of 8.68% and PAT Growth of 16.03%.

To overcome the current market situation and to keep the growth momentum moving, your company intend to mark its brsence in the new areas, new segments to explore the new customers & new markets.

Mayur has made this significant investments in setting up large capacity with 6th coating line already in operation company is poised for using the full capacity of 3.05 million linear meter per month in next one year time, and looking at demand with orders in hand the company plans to increase its capacity to 3.6 million linear meters per month.

Mayur proposes to establish a PU plant. The proposal has been made to the government of Rajasthan to use the recycled waste water of Reengus.The Company is hopeful of getting the confirmation from the State Government very soon.

Despite the uncertain global market, Mayur has increased its export from Rs 10824.60 lacs in the brceding year to Rs. 12834.34 lacs in current financial year 2014-15. The share of exports in the total turnover of the company increased consistently from 23.76% in the last financial year 2013-14 to 26.07% in the current financial year 2014-15 and expected to continue with the growth of 20-25% in coming years.

Auto companies are exploring India as an hub for setting up the manufacturing facility to meet their demand for export. These product have to comply with highest international standards.With the existing exports to US automotive industry the products manufactured by Mayur are well accepted by the  automotive industry across the globe. Recently Ford & GM in India stopped using synthetic leather imported from China and started buying from Mayur. Besides Ford and Chrysler, the company is also on the verge of making breakthrough in G.M. and Volkswagen. With more and more models approving Mayur products the company expects to achieve good growth in future.

Domestic Automobile industry is also moving towards brmium models and brferring Mayur in their vendor list. Mayur is expected to achieve at least 35% growth in revenue from domestic automotive market in the financial year 2015-16 and maintain this growth in the years to follow.

3. RESEARCH AND DEVELOPMENT

Research and development, often called R&D, is a phrase that means different things in different applications. In the world of business, it's the phase in a product's life that might be considered the product's "conception." That is, basic science must exist to support the product's viability, and if the science is lacking, it must be discovered; this is considered the research phase.

Your company has a past history of strong foundation of Research & Development (R&D), and as a result of that the company is able to achieve sustainable benefit by introducing new products and processes. Company always strive to improve its business through high quality research and development (R&D) activities. Your company is spending 10% to 15% of net profit on R&D activities.

During the year, your company introduced several innovations and has developed some special and unique products for the automotive and footwear industry.

Your company endeavors to make striving efforts to improve the environmental sustainability by using the environment friendly products.

R&D plays a major role and Mayur has always laid emphasis to establish the strong R&D team. With the zeal and dedication Mayur R&D team laid significant emphasis on various areas such as:

a) Development of the new products according the specifications of the customers, introduction of the new products in the market, replacement of the old products and more over the prime focus is on the reduction in the cost of the product.

b) Continually refine the processes in such a manner so as to reduce the change over time, reduction in breakdowns, reduction in rejections improvement in quality, energy conservation etc.

c) Regular training programs both on the job and off the job are being conducted to improve and enhance the skills of the employees to keep pace with the recent technology.

d) Promoting the in house research and development facilities.

e) Environment change is one of the major issue the world is facing today and Mayur want to the part of this solution Our R&D Division concentrates to:-

i) reduce emissions in the short to medium term, in line with current technology;

ii) Invest in the research and development of long term breakthrough technologies;

iii) Develop new products and services that reduce CO2 emissions through the life cycle;

iv) Actively engage the work force in this challenge; and

v) Lead by example within the global synthetic leather industry

These efforts of R&D division have enabled us to sustain and increase the dominance of Mayur as a brand in the synthetic leather market, supported by buoyancy in sales both in domestic and export market.

4. BUSINESS OUTLOOK:

The Leather Industry holds a prominent place in the Indian economy. This sector is known for its consistency in high export earnings and it is among the top ten foreign exchange earners for the country's.

The artificial leather industry in India has grown over significantly in the last few years. Mayur, being the leader in the industry is bound to ride this tide. 

Mayur puts emphasis on all the segments in the industry such as footwear, furnishing, automotive, automotive replacement globally. By this Mayur always hold a better position over its competitors. Mayur's key customers are recession resilient, and the company caters marquee players like Ford (USA), Chrysler (USA), Ford (India), General Motors (India), Mahindra, Maruti, Honda Motorcycles and Scooters Pvt. Limited, Tata Motors, Eicher Motors among automotives, Bata, Action, Lancer, Relaxo, Paragon, VKC Group, among footwear as its clients. This has enabled the Mayur to enjoy the dominant position in the industry.

In the past few years the quality has improved tremendously - in design, texture, colour matching, tensile strength, abrasion tolerance, etc. The 40 bn domestic synthetic leather industry is currently dominated by unorganized players who account for more than 50% of the same. The balance comprises of organized players and Mayur is the largest of them with a capacity of 3.05 million linear meters per month.

As the rise in the living standard is taking place, the demand for the brmium and value added products will continue to rise. Mayur being a prominent player in leather industry capitalize the same and deriving 50% revenue from the footwear segment.

After the footwear segment the automotive segment including the replacement Market generates the revenue after footwear. This segment derives almost 35% of the revenue of Mayur.

The auto replacement market in India is a very big market and had tremendous growth opportunities. The strong auto sales performance will also act as a catalyst for Mayur's growth

Synthetic leather is used in furnishings, sports goods, ladies' bags, and a number of fashion accessories and this being fashion industry is very fast changing and will continue to grow with the rise in the per captain come and urbanization. This segments demands the brmium product with the high value addition and here Mayur strong R&D team gives an edge on its competitors.

5. HUMAN RESOURCES:

Mayur puts great emphasis on human resource by personnel developmental initiatives including training, both technical and managerial, are regularly conducted to enhance human potential. An integrated talent management process becomes the

Foundation of how we manage and develop talent to ensure a strong leadership pipeline.

The management has always carried out systematic appraisal of performance and imparted training at periodic intervals. The company has always recognized talent and has judiciously followed the principle of rewarding performance.

We value our employees therefore a structured process to analyses feedbacks, brain storm action plans and implement them through dedicated teams was setup. The objective was to create a cohesive work culture.

6. CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis and Directors Report describing the Company's strengths, strategies, projections and estimates, are forward-looking statements and progressive within the meaning of applicable laws and regulations. Actual results may vary from those exbrssed or implied, depending upon economic conditions, Government Policies and other incidental factors. Mayur will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements, to reflect subsequent events or circumstances.