Management Discussion and Analysis Report Format as per Companies Act

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                                                                                                      ANNEXURE ‘II’

a)      Industry Structure and Development

Demand of Particle Board, during the year under review, was far in excess of Indian production.  As the Particle Board market in India is recording robust growth during the past two years, and since the Indian production is not enough to meet the demand, large imports of Particle Boards have taken place from countries like Sri Lanka, Thailand, China, Malaysia, New Zealand, Australia and some European countries. During the year, two new manufacturing units commenced production and sales of Particle Board in India. Another two new plants are being set up which are likely to commence production during the Financial Year 2017-18. The Government of India vide notification no: ……. Dated ……. have imposed anti dumping duties on imported Particle Board of thickness 6mm and higher . Anti Dumping duty was not imposed on lower thickness boards as no Indian manufacturer is manufacturing such boards in India.

b)      Opportunities and Threats

Growth in the Indian economy is expected to result in increase in demand of Particle Boards.  The year under review has given indications regarding future demand for this industry especially considering the financial meltdown worldwide and the negative growth recorded by the Real Estate sector, a major consumer of Particle Boards, during the second half of the year under review.  Even with the slowdown  in the construction sector,  as witnessed in the second half of FY 2015-16 demand for Particle Board products grew marginally as consumers are slowly switching over from other panel boards like plywood boards mainly for easy availability, affordable prices and superior product quality.  The extended product range of your Company’s products, especially in value added segments, provides an excellent opportunity to your Company.

Import of Particle Boards will continue especially in lower thicknesses and your company has entered into a Memorandum of Understanding with Jono Jojoli Corporation for importing Particle Boards to cater to the demand of its customers.  .

c)      Outlook

The Company looks forward to increased demand of Particle Boards products in the future but is apprehensive about the present economic scenario and the downturn in the Real Estate market.  Depending on the turnaround of the Real Estate market, the demand for the company’s products is likely to improve further.

d)      Internal Control Systems and their adequacy

The Company has adequate Internal Control Systems in all its areas of operation which is commensurate with its size.  A reputed outside Firm of Chartered Accountants has been appointed as the Internal Auditors to carry out thorough audit of the Company’s functions.  The adequacy of the system has also been examined by the Statutory Auditors of the Company and no adverse remark on the adequacy of internal control system has been made.

e)      Discussion on Financial Performance and Operational Performance

During the year under review your Company’s Net Profit after Tax is Rs. 1551.10 Lacs as compared to the previous year’s figure of Rs. 1352.55 Lacs.  This has been made possible by adopting better production planning and scheduling alongwith developing a market for selling value added products in larger volumes by creating a new product mix.

Your directors are continuously putting in efforts for realizing higher value for products sold under the SHAKTI brand name.

f)       Developments in Human Resources and Industrial Relations

The agreements with the Permanent Workers’ Union and the Casual Workers’ Union are expiring on 30.09.2016 and on 21.01.2017 respectively. Negotiations for Fresh agreements are expected to begin soon.

The Management recognizes the positive role played by the Unions in improving quality and increasing productivity of the factory and is hopeful that fresh agreements will be negotiated amicably.

g)      Cautionary Statement of the Company

Statements in this report on Management Discussion and Analysis describing the Company’s objectives, projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable security laws or regulations.  These statements are based on certain assumptions and expectation of future events.  Actual results could, however, differ materially from those expressed or implied.  Important factors that could make a difference to the company’s operations include global and domestic demand-supply conditions, finished goods prices, raw material costs and availability, changes in Government regulations and tax structure and other factors such as litigation and industrial relations.

The Company assumes no responsibility in respect of forward looking statements herein which may undergo changes in future on the basis of subsequent developments, information or events.

                                                                   Sri K P Singh, Director        

Sri Amit Sana, Director


Sri Kapil Sharma, Director              

The 19th April, 2016    

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