MANAGEMENT DISCUSSION & ANALYSIS I. Industry structure and development: India is the world's largest producer of rice bran oil producing about 9,00,000 tons of rice bran oil annually, accounting for about 7.5% of total global production of about 1.2 million tons. India, world's second largest producer of rice, produces around 9 million tons of rice bran every year, but only 5 million tons of it is used to extract edible oil and the remaining is used by the vanaspati segment or as cattle feed. The edible oil sector usually imports rice bran from neighboring Bangladesh, Myanmar and Sri Lanka and the import duty of 15% discouraged from importing huge quantities of rice bran oil.* Rice bran oil, which is rich in mono-unsaturated fatty acids and has a higher cholesterol reducing power, is gaining significance in India recently, which infact helps the industry as such and Company in particular to grow by leaps and bounds. II. Opportunities, Threats, Risks and Concerns: a) Opportunities i. Continuous growing domestic demand ii. Short supply from domestic market iii. Wide market b) Threats, Risks and & Concerns i. Cheaper Imports ii. Government Regulations iii. Short supply of raw-materials III. Risk assessment and Control: Risk assessment and control practices are well managed with the supervision of the executive management, in consultation with the middle level management personnel. These practices are applied for every project undertaken as well as for regular operations. IV. Internal Control systems and their adequacy: The company has an adequate internal control system commensurate with its size and nature of business. The system is designed to cover optimal utilization of the company's resources. It also ensures proper compliance of all relevant rules and regulations while taking care of correctness in recording of transactions, adherence to applicable accounting standards and management policies. V. Financial Performance: During the year under review, the management concentrated on the optimum utilization of working capital resources and better financial management along with debtors as it could save interest costs. However, non-availability of raw-materials timely and frequent power cuts affected the margins severely. The Company continues to concentrate on better working capital management as other overheads could not be controlled. VI. Human Resources Development: The Company has good relations with its employees and has the policy to comply with all the statutory requirements from time to time. VII. Cautionary Statement: Some of the statements contained in this report may be forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those exbrssed or implied. Factors that could make significant difference to the company's operations include economic conditions, government regulations etc. on which the company does not have any direct For and on behalf of the board Sd/- Vankineni Bhanu Prakash Place: Denduluru Date: 14-08- 2015 |