Management's discussion and analysis

Management's discussion and analysis of the financial condition and results of operations include forward-looking statements based on certain assumptions and expectations of future events. The Company cannot assure that these assumptions and expectations are accurate. Although the Management has considered future risks as part of the discussions, future uncertainties are not limited to Management perceptions.

1. INDUSTRY

Presently, the Company is into following two segments:

A). Financial Service Sector

The importance of financial sector is known to everyone today. This sector highly contributes to the GDP of the Company. There are ample of opportunities in this sector. Company is not into big way under this industry.

B). Air Charter Service Sector

With the opening of the Air sector by the Government of India for private sector players, good scope has emerged in this sector but this sector is wreathing with the teething problems and yet to get maturity. Various private airlines have to face the worse because of the lack of understanding of the nitty-gritties of this sector. However, that doesn't means there is no future in this sector. All that is required is an integrated and organized approach supported by accreted and experienced staff.

2. Opportunities and Threats

2.1 Opportunities Financial Services Sector:

Financial Sector is an ever green market. The following are the growth drivers for the sector which shows the brighter prospects for the segment:

¦ Financial Inclusion

Increase in incomes with potentially high penetration of both banking and Share Market products to increase the market size

Regulatory Reforms 

 Air Charter Services Sector:

Air charter services in India have seen a fast track growth in the last few years though it is not a much explored area for business in India but It has a lot of potential in India, which has not so far been tapped by big corporate, big hospitals and tourism. The following are the growth drivers for the sector which brsents big potential for growth of the business:

• Government

• VIP movements

• Tourism 

• Medical Insurance Companies 

 • Corporate Travel

• Pilgrimage

2.2 Threats

Regulatory decisions and changes: On the regulatory front, changes in policies by the regulatory authority may impact on the profitability of the Company. The Company may face competitive brssure from other players in the market, which may emerge due to the lucrative market in future.

Since the Air Charter industry is comparatively new in India, most people are unaware of its services and benefits. People might be uncertain of using this service due to high costs, and the very affluent are naturally of a limited number. Frequent changes in policies by regulatory authorities come as a hurdle for the Air Chartered Industry. Since a large number of Airways companies have come into the business, your company may face competitive brssures from existing and new players in the market.

So the Government must promote Air Chartered Services and thus help in the growth of this convenient and reliable mode of transportation. Government support is necessary if the Airways industry is to grow at an incredible rate. Rising fuel prices is another threat to the air charter industry. This along with a limited number of passengers will cause companies to increase their fare and service charges, thus negatively impacting the industry. So, government participation is important to take Indian air charter industry to a world-class level. 

However, In spite of all the challenges the Air Chartered industry is facing, the future still looks very bright.

 4. Outlook

The Indian services sector is at a stage that provides significant opportunities for growth and investment. With scheduled airlines going through a turbulent period, it is time to turn to a more reliable source of flying air charters. There has indeed been a slowdown and the Euro zone crisis has affected not only charter operators but also scheduled airlines. India has also not been isolated from this. However, the scope of the charter market in India is poised to expand as big infrastructure projects are being undertaken by the Indian government and private companies, both domestically and internationally. The key drivers for the growth of air charter services in India are primarily government, VIP movements, tourism, medical insurance companies, corporate travel, pilgrimage, and others. Taking into account this factor, the Air Charter Business is also moving with pace simultaneously and we plan to expand our business in coming years.

Going forward, the year 2015-16 seems to augur well for the services sector with expansion in business activity in India as also indicated by some indices. There are also signs of revival in growth of the aviation sector with the coming of new players like Air Asia and Tata-SIA Airline after a turbulent period of withdrawals and losses by some airlines. Indications of revival in world GDP and trade growth in general and of developed countries in particular, could help in revival of the tourism and shipping sectors. With a stable government in place and growing optimism which could translate into investment and growth, some quick reforms and removal of some barriers and obsolete regulations in the services sector could help. The downside risk however is the fragile global situation.

5. Risks and Concern

For a company to grow, necessary risks are always involved. Risks indicate progress, but they are never fixed. They may vary from the industry type to planning strategies and various other factors. Some of the threats concerning this company are:

• Changes in Government policies may affect the company significantly;

• Any crises in Gulf countries may pose a major problem for fuel;

• Natural Calamities;

• inflation, particularly in India, which could increase our costs and decrease our operating margins;

• Business of Air Chartered service is substantially dependent on foreign tourist;

• Though it is an organized sector, it still faces stiff competition from other service providers.

6. Control systems and their adequacy

Effective governance consists of competent management; implementation of standard policies and processes; maintenance of an appropriate audit programme and internal control environment and effective risk monitoring and management information systems.

Mega Corporation Limited (MCL) has both external and internal audit systems in place. Auditors have access to all records and information of the company. The Board and the management periodically review the findings and recommendations of the Auditors and take necessary corrective actions wherever necessary. The Board recognizes the work of Auditors as an independent check on the information received from the management on the operations and performance of the Company.

The company maintains a system of internal controls designed to provide reasonable assurance regarding the achievement of objectives in following categories:

• Effectiveness and efficiency of operations;

• Adequacy of safeguarding of assets;

• Reliability of financial controls and

• Compliance with applicable laws and regulations. 

  The internal control system provides for well documented policies/guidelines, authorizations and approval procedures. The Company has effective internal audit system, which reviews internal controls periodically to ensure their adequacy and effectiveness

7. Financial Outlook

Complete financial performance of the company has been reviewed. With the expansion plan in place the coming year is expected to be better.

8. Human Resources

During the period under review, the Company has been under various constraints. The aircraft was leased out and not much practical activity(ies) took place in the financial segment. Therefore, in order to cut cost, your Company tried to work with minimum resources. As at 31st March, 2015, there were only two regular employees in the Company. However, in future whenever the requirement occurs, the Company shall deploy more resource(s).

9. Risks Management

The Risks Management policies of the Company ensure that all the moveable and immoveable assets of the Company are adequately covered. Strategic plans for the company's businesses take into account likely risks in the industrial environment from competition, changing customer needs, obsolescence and technological changes. The annual plans that are drawn up consider the risks that are likely to impact the company's objectives in that year, and the counter -measures put in place. To manage operational risks, MCL has well documented policies and procedures, which are followed in its day-to-day working. Besides, the Company is prone to usual risks of the business like change in demand, any change in policy of the Government, International agreements on trade and tariffs etc.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing the Company's objectives, expectations 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 change in Government regulations, tax laws, economic & political developments within and outside the country and such other factors.