oxides specialities ltd Management discussions

INDUSTRIAL STRUCTURE AND DEVELOPMENT:

The main product of the company is Magnetic Iron Oxide (MIO) also known as Gamma Ferric Oxides (GFO) used for coating polyester films to make Magnetic Tapes for use in audio, video, data in computer applications including for swipe cards and toners. However, the production of MIO remains suspended, as there is no demand for this product.

The company had also diversified into the manufacture of Ferrous Fumarate and Iron Oxides yellow pigments and dyes. However, the production remained suspended during the year.

OPPORTUNITIESAND THREAT:

Products like Ferrous Fumarate are getting replaced by cheaper ferrous sulphate globally, as iron supplement leading to erosion in growth of Ferrous Fumatate business. Iron Oxides Pigment manufactured by the Company is a high end product with limited application in high cost paint.

In view of the unviable situation with the existing product portfolio and current financial situation, an alternative arrangement has been worked out with M/s Sunciti Financial Services Private Limited, and the later has agreed to infuse fresh funds in the company to fund the startup expenses and the working capital to restart operations.

SEGMENTATION OR PRODUCT WISE PERFORMANCE:

Yellow pigment trial runs and batches for Yellow Pigment were taken up, but due to product quality and financial constraints the operations could not be restarted.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The internal control system is well structured to safeguard the assets of the company. The Company follows pre-defined rules and procedures.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE:

Presently all production related activities remained suspended and consequently, the financial performance of the Company has been adverse.

DEVELOPMENT IN HUMAN RESOURCE / INDUSTRIAL RELATIONS FONT:

The industrial relations were cordial considering the present circumstances.