MANAGEMENT DISCUSSION AND ANALYSIS In view of diversification of business, constant monitoring regarding quality control of all products of the company is maintained every moment. In competition with other global players, our company proceeded with reasonable price and genuine items. As a result the turnover of the company increased substantially as compared to earlier years. The export demand was also steady throughout the year. In tea, domestic consumption is increasing year by year. The new extension work became a continuous activity at our Iringmara Tea Estate. The production at our tea estate is increasing gradually from our own greenleaf together with the purchased leaf from other gardens. In future years our tea estate will be one of the giant producer garden in that area of Assam. We have started packet tea brand "CHEERS" and are getting fair response in the market. We have also started Government Organisation supplies namely Central Police Canteen of our packet tea as dry ration item. SEGMENTWISE REPORT Soap segment has shown growth of 97%. Further, cosmetic segment has shown a growth of 67%. In other segments also, there are growth where various new products are added to the basket. Total sales stood at Rs.15,769.26 lakhs, wherein Domestic sales stood at Rs. 627.42 lakhs and export sales stood out to Rs.15,141.84 lakhs respectively. Export Sales: Dollar sales increased by 12.46% as compared to last year i.e. from $21,666,838.57 in 2013-14 to $24,775,022 in 2014-15. For international segment, we have exported our products in more than 22 countries as on date. The company is striving hard to expand its geographical base by exporting to many more courtries in future. OUTLOOK There are some trends which are emerging in the markets. Especially in the developed markets, due to the continuing recessionary trends, the consumer spending is cautious with higher value demands which are giving rise to high competitive intensity in those markets. There is also a continual shift of consumers towards health, wellness and convenience segments. There is also a growing trend for more brmiumised products in some markets. We expect these challenges and trends to remain for some time to come also. We expect the retail environment to be very competitive with aggressive promotions to sustain growth. We also expect the significance of modern trade to increase over traditional trade in the developing markets exacerbating the competitive environment. The Company continues to constantly strive to meet these challenges with a continuous support to brands, category expansion, innovation and cost rationalization. INTERNAL CONTROL SYSTEM AND ADEQUACY The company has proper and adequate system of Internal Controls which is commensurate with the size and the nature of business, to ensure that all assets are safeguarded and protected against loss from unauthorised use or disposal and commercial transactions are authorised, recorded and reported correctly. The internal control is supplemented by an extensive program ofinternal and external audits. The company accords greatest importance to the security of its information assets and has the requisite security controls and checks. Adequate storage and back-up system is maintained to ensure security and availability of data at all times. STRENGTHS Lykis is an existing brand, experienced in operations and management of FMCG products. Operations are handled by a strong experienced management and professional team and also there is a strong technical and development team for support. Moreover, the company launched packet tea brand "CHEERS" and is getting fair response in the normal domestic market, malls and departmental stores. RISK AND CONCERN Fast expansion in various geographical locations may require more exposure in management and control. THREATS Since it is a growing industry, there is a threat of competition from the other players who might try to create an unhealthy practice of competition by compromising on the quality and pricing. We have an established team of professionals to handle the operations and are in the process of hiring more such kinds of professionals. OPPORTUNITIES FMCG industry is a growing industry in India. FMCG is indigenous to India and because of its breminence as a foreign exchange earner. Indian FMCG industry rebrsents nearly 2.5% of the country's GDP. CAUTIONARY STATEMENT Statement in the Management Discussion and Analysis Report describing the estimates, expectations or brdictions may be "forward looking statements" within the meaning of applicable securities takes and regulation. Actual results could differ materially from those exbrssed or implied. Important factors that would make a difference to the company's operations include demand-supply conditions, raw material prices, tax regimes, economic developments within the country and abroad, other factors such as labour negotiations and litigation |