MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS OVERVIEW: The main business of the Company is manufacturing and sale of Chemicals, Dyes and Bulk Drugs used in Industrial and Domestic purposes. OPPORTUNITIES, THREATS, RISKS, CONCERNS AND OUTLOOK: The roller coaster ride of Indian economy turned on downward slope in FY 13. Factors like unmanageable inflation, higher cost of commodities, unbrcedented debrciation of Indian rupee against US dollar, reined in liquidity and inflated cost of borrowing tested the much talked about strong fundamentals of Indian economy. The lack of policy assertiveness towards economic reforms coupled with rising fiscal deficit aided to the woes. Thanks to the resilience shown by Indian enterprises and demography, the severity of all these challenges could have been arrested to a greater extent. Risks and concerns: a. Global economic environment: The global economic environment though coming out of the worst possible times, is still faced with the crisis in certain European Countries and the uncertainty continues to remain. The Indian consumer durable industry remains stable in terms of the growth but is facing stiff competition on account of entries of new players. We will need to engage more in diversifying our business model and extending our reach. We will need to offer value proposition to the new customers to develop and growth in business further. b. Pricing Risks The pricing across our business is under risk due to competition. We have been providing and offering value added services and benefits to the customers to retain them. We are also investing towards brand building and awareness programme across our businesses to ensure adequate product differentiation. c. Hiring and Retention Risk We have been working on retaining the best talent in the industry to work with us but it is a constant challenge to retain the good talent. There is imminent short term risk from new entrants and existing domestic players to hire talent from our Company. We have implemented a number of employee initiatives like job rotations etc. to retain and grow talent. EXPORTS: The main thrust of the Company is on export which constitutes around 43% of total sales of the Company. The Company is fast consolidating its resources to build a market brsence in the international arena. The results are reflected in an exponential growth rate in the last two years as also continuing in the current year. PERFORMANCE OF THE COMPANY: The challenges described above did restrict the sales growth to a modest rate, however, your Company managed to achieve a substantial growth in Net Profit. During the current financial year the Company is working towards further improvement in its profitability. The Focus of the Company for the next financial year is: Market Leadership To provide quality, reliability and good value in the products we sell and services we offer. To be sensitive and responsive to changing customer needs right from product development stage to after-sales-service. To aim to become market leaders in whatever we take up- whether in restricted areas for certain products or on an All-India basis for others. Price Competitiveness To improve our competitiveness by constantly enhancing the performance of our manufacturing, development, marketing and administrative functions. We would like to improve our profits by higher market share rather than by higher margin. Consumer Satisfaction To develop the right relationship between the Company and all its customers, so that the customer's needs are met simply and effectively. Services should not just be a slogan; it should be our 'Dharma'. We have already established a consumer cell to take care of consumer complaints as also desired by the council for FAIR Business Practices HUMAN RESOURCES: The Company continuously evaluates it's HR polices and practices to attract and develop talent. It is the policy of Auro to create a working environment in which there is no discrimination and all employment decisions are based entirely on merit and the ability of people to perform their intended roles. Auro aims to continue to build a workforce which is recruited from the widest possible talent pool. Leadership: Good leadership is extremely important to Auro and a number of models of leadership are incorporated in the development and training programmes. These are designed to help develop leadership skills for employees already in leadership positions or about to move into such a role. Leadership applies at all levels of management for team leaders, supervisors, managers - in fact for anyone who is responsible for others. The Company has, under its employment 60 officers and workmen. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: Internal Control Systems are designed to ensure the reliability of financial and other record and accountability of executive action to the management's authorisation. The Statutory Auditors have evaluated the system of internal controls of the Company and have reported that the same are adequate and commensurate with the size of the Company and nature of its business. The internal control systems are reviewed by the top Management and by the Audit Committee of the Board and proper follow up action is ensured wherever required. FINANCIAL PERFORMANCE: The highlights of the financial performance of the Company for the year under review are as under: a. The Sales & other Income was Rs. 3380.64 lacs as against Rs. 4434.30 lacs during the brvious year. b. The Net Profit was Rs. 57.90 lacs as against Rs. 76.65 lacs during the brvious year. Outlook For the Indian economy, this was a year of unfulfilled expectations owing to both domestic With agriculture and services continuing to perform well, the slowdown can be attributed mostly to weak industrial growth. Rising cost of credit prompted by an activist monetary policy to check inflation added to the decline in the investment climate arising out of governance issues. The Company will continue its focus on better cost management, reducing inefficiency, improving supply chain and improving productivity so that it can continue to gain market share, improve its operating performance. The Company has a balanced business portfolio, which is both consumer centric and infrastructure oriented, strong distribution network, wide product portfolio, large service infrastructure, excellent vendor base and dedicated employees along with excellent channel partners continue to be the major areas of strength for the Company. CAUTIONARY STATEMENT: Statement in the Management Discussion and Analysis describing the Company's objectives, expectations, estimates or brdictions may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those exbrssed in the statement. Important factors that could influence the Company's operations include global and domestic supply and demand conditions affecting selling prices of finished goods, input availability and prices, changes in Government regulations, tax laws, economic developments within the country and other incidental factors. The Company assumes no responsibility to publicly amend, modify or revise any forward-looking statements, on the basis, of any subsequent developments, events or information. For and on behalf of the Board KFor AURO LABORATORIES LIMITED SHARAT DEORAH CHAIRMAN & MANAGING DIRECTOR Dated: 7th August, 2014Registered Office: -56, M.I.D.C. Industrial Area, Tarapur, Boisar, Thane - 401 506. |