MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW The Global Economy in FY-2014-15 witnessed divergent trends among major economies. According to IMF world Economic out-look, overall, global growth is projected to reach 3.5% and 3.8% in 2015 and 2016 respectively. GDP growth is projected to be stronger 2015 as compared to 2014. A sustained lower oil price environment will benefit commodity importing countries, such as India. Falling energy prices have significantly improved India's overall fiscal landscape, and augur well for growth in domestic consumption. According to the advanced estimate of CSO (Central Statistical Organisation), the growth rate of GDP at constant 2011-12 price is estimated to be 7.4% in 2014-15. India's economy is poised to return to its high-growth path, thanks to lower fiscal and current account deficits, falling inflation, benign commodity prices, and structural reforms to boost investments. Monetary policy is also likely to be supportive with the Reserve Bank of India (RBI) having moved to flexible inflation targeting. The manufacturing sector is likely to benefit from lower interest rates. OVERVIEW OF THE COMPANY The Company has not carried out any manufacturing activities in the last couple of years. A new management has taken over the Company and they are embarking on a definite plan to start new line of business for the company in agro based industries i.e. agro processing, exports and its storage. The Income which appears in the financial results has mainly come from Interest on Fixed Deposit and other activities. FINANCIAL PERFORMANCE Your Company could not declare any dividend to the shareholders of the Company due to inadequacy of the profits. However, the management is confident that in coming years the company would be in a position to declare strong financials. BUSINESS STRATEGY Your Company's business strategy is captured in the jute products and agro processing. Agro processing expected to be the driving force for the company in coming years. RISK AND CONCERN The Company has not faced any financial or operational risk, as there were no manufacturing activities during the last year. The Company is also not exposed to any financial risk or interest rate risk, as the company does not have any substantial borrowings in its books. OPPORTUNITIES & THREATHS The major Opportunities are: 1) Commencement of new line of business. 2) Leveraging the benefit of its locational advantage. 3) Consolidation in the Industry. 4) Entry into new markets. The major threats are: 1) The new pricing policy implemented by the Government will put a brssure on the margins of the Company going forward. The regulatory environment all over the world is becoming more and more stringent. This will make the entry strategy into various geographies more challenging. 2) Tender based supplies offering wafer-thin margins. 3) Volatility in the jute industry leading to unstable product pricing. 4) Challenges pertaining to availability of jute at times. 5) The brsence of excess manufacturing capacity in the Industry leading to debrssed pricing / margins. INTERNAL CONTROL SYSTEM The Company has set up internal control procedures commensurate with its nature of the business. These business procedures ensure optimum use and protection of the resources and compliance with the policies, procedures and statutes. The internal control systems provide for well-defined policies, guidelines and authorizations and approval procedures. The prime objective of such audits is to test the adequacy and effectiveness of the internal controls laid down by management and to suggest improvements. FUTURE OUTLOOK The future outlook for the business appears very promising and challenging. The business proposes to combat the challenges through continuous evolvement of business opportunities. CODE OF CUNDUCT The Code of Conduct for the Board of Directors and the Senior Management shall be disclosed on the website of the Company. For and Behalf of Board of Directors Bhavya Ram Iyengar Managing Director Srinivasan Ramakrishna Iyengar Director Place : Kolkata Date : May 25th, 2015 |