MANAGEMENT DISCUSSION AND ANALYSIS REPORT ? Industry Overview Of Indian Economy And Company Outlook India continues to witness a very challenging economic environment. The global economy began its modest recovery in FY 2014-15. While the trend is expected to accelerate in the current year, the positive outlook is subdued by the potential consequences of 'tapering' of some of the US Federal Reserve's Quantitative Easing (QE) policies which were undertaken in the aftermath of global financial crises. Emerging markets like India faced multiple challenges: capital outflows, intense exchange rate brssures and volatile current account movement. A combination of persistent inflation, fiscal imbalances, external sector vulnerabilities and low investments resulted in sluggish domestic demand growth. Fiscal and monetary initiatives taken by the Indian government and the Reserve Bank of India (RBI) helped stabilize financial market conditions, but the domestic macro-economic environment still remains challenging. With increasing global integration, the Indian economy was impacted by global uncertainties, while at the same time faced significant domestic challenges of persistent and high inflation, tight monetary conditions, low investment and delays in policy making. ? Forward-Looking Statements This report contains forward-looking statements based on certain assumptions and expectations of future events. The Company, therefore, cannot guarantee that these assumptions and expectations are accurate or will be realised. The Company's actual results, performance or achievements can thus differ materially from those projected in any such forward-looking statements. The Company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events. ? Business Overview The Sales during the year 2014-15 are 5,799 Lacs as compared to 8,002 Lacs in the brvious year on account of economic recession resulting in award of lesser number of contracts. ? Opportunities Your Company is engaged in the manufacturing of High Quality Polished Granite Slabs and Tiles. Your Company makes sustainable efforts to provide beautiful and durable varieties of Granite to the whole world and in the process nurtures long-term relations with customers. All this taken together heralds a bright future for your Company. Your company has also invested in plant and machinery and mining equipments to increase its production capacity for extraction of natural stone blocks and planned for making investment to increase the production capacity of finished granite slabs and tiles to grab the opportunity in the emerging global markets. ? Threats Indian Granite industries are being forced to invest not only in (increasingly expensive) modern equipment, but also in extraction for access to the raw materials and moreover, also in expensive commercial investments such as opening their own warehouses etc. This strategy has its own risks. It places huge demands on management skills in an industry where, brsently, all decisions were made by the owners at the top of the hierarchy. In other words, the granite industry is evolving into a highly capital intensive and complicated industry. The market share of China in the international trade in granite has been steadily increasing in recent years. If that ever happens the threat to the survival of the elaboration of this industry in other countries will be real. This is the age of technology. Resist it and you are dead. Invest in it and there is still no guarantee of success. Your Company has developed a strong and persistent work culture to operate successfully in diverse business environments by adapting to new technologies and complexities in different spheres of work. Adjustability and adaptability thus have become a part of day-to-day work. Cost effectiveness is directly and ultimately linked up with our Economies of Scale and total Integration. This is what keeps your Company moving forward with agility and dynamism. ? Internal Control An effective system of internal control is necessary for building, maintaining and improving shareholder confidence as well as enhances the overall quality of the enterprises. The Company has well-defined mechanisms in place to establish and maintain adequate internal controls over all operational and financial functions considering the nature, size and complexity of its business. The Company intends to undertake further measures as necessary in line with its intent to adhere to procedures, guidelines and regulations as applicable in a transparent manner. The Company maintains adequate internal control systems that provide, among other things, reasonable assurance of recording the transactions of its operations in all material respects and of providing protection against significant misuse or loss of Company assets. Mr. Ravi Kumar Sharma, Chartered Accountants, acts as Internal Auditors of the Company. The Internal Auditors independently evaluate adequacy of internal controls and audit the majority of the transactions undertaken by the Company.. The Audit Committee of the Board of Directors which comprises a majority of Independent Directors, inter alia, reviews the adequacy and effectiveness of the internal controls and monitors implementation of internal audit observations. ? Segment Wise Reporting The company manufactures and deals in Marble and Granites and allied products. There is no reportable segment in the company. ? Outlook The company is alert and in touch with the ground realities of the changing business environment and is confident of increasing the Indian share in the world market with its vast area of granite deposits sbrading over more than 15 states and with wide variety of colours and skilled work force. The overall business outlook for the company is promising with improvement in overall economic environment. The company continues to examine the possibilities of expansion and shall make the necessary investments when attractive opportunities arise. ? MATERIAL DEVELOPMENTS ON HUMAN RESOURCES/INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED The Company aims to develop the potential of every individual associated with the Company as part of its business goals. The human resources strategy has enabled the Company attract, integrate, develop and retain the best talent to deliver business growth. We strengthened our talent pool by providing employees with growth and career enhancement opportunities. In line with the Human Resource Strategy, the Company has implemented numerous initiatives that will enable it to sustain competitiveness in the global marketplace. The focus is to attract and retain the best talent. Some of these initiatives are: i) Performance-based incentive plan ii) Suggestion-based reward program iii) Succession planning through identification of second level of managers of all units, locations and functions iv) Identifying potential talent and offering growth opportunities within the organization v) Reward program for employees who have obtained qualification while working in the Company ? DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE. Due to the challenges of the environment and the strategic drive to integrate and transform, the organization financial performance was become weak as compared to brvious year. During the year turnover of the Company declined to Rs. 6929.93 lakh as against Rs. 8332.18 lakh in the immediate brceding year. The Company was under expansion and made capital investment of Rs. 2749.04 Lacs to increase the production capacity. The Company had also taken Term Loan from HDFC Bank Limited to meet the fund requirement. The Profit after tax in FY 2014-15 was Rs. 314.54 Lacs in comparison to brvious FY 2013-14 Rs. 746.76 Lacs. The profit of the Financial Year 2014-15 was declined due to Finance Charges of Term Loan and Debrciation on new Capital Investment. ? RISKS AND CONCERNS The current economic environment, in combination with significant growth ambitions of the Company, carries with it an evolving set of risks. Your Company recognizes that these risks need to be managed to protect customers, employees, shareholders and other stakeholders to achieve our business objectives. In line with this, your Company has put in place a detailed Risk Management Policy which identifies the various types of risks at all levels of the Company. Early risk identification along with appropriate measures has enabled the Company to mitigate all threats which may arise from time to time. Also, the possibility of occurrence of the risk event and the magnitude of their consequences on the organization is determined and used to prioritize risk management. ? CAUTIONARY STATEMENT Statement in this Management's Discussion and Analysis detailing the Company's objectives, projections, estimates, estimates, expectations or brdictions are "forward-looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those exbrssed or implied. Important factors that could make a difference to the Company's operations include global and Indian demand-supply conditions, finished goods prices, feedstock availability and prices, cyclical demand and pricing in the Company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the Company conducts business and other factors such as litigation and labour negotiations. For and on behalf of the Board of Directors Sd/-J. P AGARWAL Chiaman & Managing Director DIN: 00386183 Date: 29.05.2015 Place: Udaipur |