MANAGEMENT DISCUSSION AND ANALYSIS REPORT
Industry Structure and Developments:
India is one of the major producers of cement. The demand is largely based oninfrastructure projects, Private construction sectors, Roads and Buildings, Ports etc., ofthe Government of India and the State Government, besides the growing Housing Sector.Cement, hitherto a controlled product, is presently decontrolled. However, the cost of theraw material and fuel namely Limestone, Coal, Power and Freight charges are all controlled(directly or indirectly) by the Government and any increase in the price of the abovementioned items affects the cost of the production on which the company does not have anycontrol. Thus, industry has been in ups and downs. During the current year the trend isvery positive and this inturn being lead for expansions in capacity.
Opportunities and Threats:
Consolidations by way of mergers, entry of global cement players and strategicinvestments by one company in another to retain/improve its market share continuescatching-up with the encouraging infrastructure and construction industry is anopportunity for the time being. The cement players in order to meet the competitive markethave been taking all-round efforts including expansion (for economy of scale) and costmanagement techniques.
Segment or product-wise performance:
Segment-wise or product-wise performance has already been furnished elsewhere in thisreport.
This has been discussed elsewhere in this Report.
Internal control systems and their adequacy:
The company is following a proper and adequate system of internal controls in respectof all its activities including safeguarding and protecting its assets against loss fromunauthorised use of disposition. Further all transactions entered into by the company areduly authorized and recorded correctly. M/s. G.P. Associates, Chartered Accountants,Hyderabad have been working as the Internal Auditors of the company. The Internal Auditorsare submitting their reports to the company on a quarterly basis.
This has been already discussed elsewhere in this Report.
Human Resources/Industrial Relations:
The company enjoys very cordial industrial relations, due to which there is very lowemployee/ labour turnover in the company. You will be happy to note that ever since theinception of the Company, there were no strikes, lockouts, lay-offs, retrenchments, etc.