MANAGEMENT DISCUSSION AND ANALYSIS REPORT 1. Industry Structure and development: The chocolate market is on a growth path. The growth is robust. Increasing population and multiple earners in a family has led to higher disposable income levels. Confectionary is slowly but steadily being replaced by Chocolate and its variants. The overall market size is increasing and the new entrants are helping expand the market further, both domestic and multinational players. There is a major surge in Cocoa and Chocolate related activity in our country. 2. Opportunities and threats: With the booming organized Greenfield industries, software, malls, the income of households have become steady and growing in both the urban and semi urban areas. Rural areas with high repatriation income is also in the consumption race. The demand for chocolate and confectionary products owing to this is finding great acceptance. Competition is very intense and also the opportunities arising out of new markets and new entrants is very promising. We service large manufacturers for their requirement of intermediaries like cocoa powder, cocoa butter, cocoa mass, chocolate etc. 3. Segment-wise or product-wise performance: The Company caters to both industrial and consumer demand. The industrial segment includes large chocolate consumers like bakeries, ice cream manufacturers besides some multinational companies. For the retail consumers, the company offers a wide range of products to suit every pocket. We serve the consumers through a network of distributors and retailers. 4. Outlook: The company is one of India's select manufacturers of the finest chocolates, cocoa product and cocoa derivatives. Currently, the company's products are supplied to chocolate makers and chocolate users in India and also abroad, from local bakeries to multi-national companies. Incorporated in 1989 and having commenced operations in 1992, the company has acquired reputation as a reliable business partner for the supply of cocoa and chocolate products. The company's outlook : Lotus brand has become synonymous with uncompromising quality, consistency, reliability and hygiene which vitally important in food products business. We are a TUV Nord certified company, affirms our commitment to very high quality standards. The company visualizes bright prospects in current financial year 15-16 and also into the future. Exports will be a thrust area with falling rupee, the company will have a strong recovery with exports. 5. Internal control systems and their adequacy: The company has adequate and internal control system to ensure the safeguarding of the company's assets against loss and to verify that all the transactions are authorized, recorded and reported correctly. An extensive exercise of internal audit, periodical review by the management strengthen the above procedures. 6. Financial and Operational Performance: Detailed financial information is available in the Director's report and attached accounts statements. 7. Material Developments in Human Resources / Industrial relations : The Company recognizes the importance and contribution of its human resources for its growth and development and in turn is committed to the development of its employees. The employee's relations have been cordial and satisfactory during the year under review. The company has about 145 employees in its various departments. 8. Cautionary statement: Statements made in this report describing the company's projections, estimates, expectations or brdictions may be "forward looking' within meaning of applicable securities laws and regulations. Actual results may differ from such estimates whether exbrssed or implied. Factors which would make a significant difference to the company's operations include availability of quality cocoa beans, market prices of other important raw materials like milk powder, vegetable fat etc., changes in Government regulations and tax laws economic conditions affecting demand/supplies and other environmental factors over which the company does not have control |