potis power projects ltd Management discussions

1. INDUSTRY STRUCTURE & DEVELOPMENTS:

The power Industry is one of the oldest Industry in the country and plays a important role in the countrys economy in terms of Industrial Production, Employment. The power Industry has achieved a good growth in last one decade in terms of installed capacity and power production and Indias installed power were being expanded . This could happen due to buoyant domestic demand, conducive Government Policies.

2. STRENGTHS, OPPORTUNITIES, WEAKNESS AND THREATS: STRENGTH:

- Continuous raw material availability that help industry to control costs and reduce the lead times across the operation

- Availability of Skilled Manpower provides competitive advantage to industry.

OPPORTUNITIES:

- Natural demand drivers including rising income levels, increasing urbanisation and growth of the purchasing population drive domestic demand.

WEAKNESSES:

- Large domestic market, enabling manufacturers to spread out risks.

- Lack of desirable levels of Technological Development affect the productivity and other activities in whole value chain.

- Continuous Quality Improvement is need of the hour as there are different demand patterns all over the world.

THREATS:

- Change in Government policies may affect the industry.

3. SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

The company is mainly engaged in the business of manufacturer of POWER and accordingly this is the only Single Reportable Segment.

4. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Management has put in place effective Internal Control Systems to provide reasonable assurance for:

• Safeguarding Assets and their usage.

• Maintenance of Proper Accounting Records and

• Adequacy and Reliability of the information used for carrying on Business Operations.

Key elements of the Internal Control Systems are as follows:

(i) Existence of Authority Manuals and periodical updating of the same for all Functions.

(ii) Existence of clearly defined organisational structure and authority

(iii) Existence of corporate policies for Financial Reporting and Accounting.

(iv) Existence of Management information system updated from time to time as may be required.

(v) Existence of Annual Budgets and Long Term Business Plans.

(vi) Existence of Internal Audit System.

(vii) Periodical review of opportunities and risk factors depending on the Global / Domestic Scenario and to undertake measures as may be necessary.

Nominal foreseeable risks of the Companys assets are adequately covered by comprehensive insurance.

Risk assessments, inspections and safety audits are carried out periodically.

5. FINANCIAL AND OPERATIONAL PERFORMANCE:

Please refer Directors Report on performance review.

6. CAUTIONARY STATEMENT

Statements made in this report describing the Companys projections, estimates, expectations or predictions may be ‘forward looking predictions within the meaning of applicable securities laws and regulations. Actual results may differ from such estimates, projections, etc. whether expressed or implied. F actors which would make a significant difference to the Companys operations include availability of quality raw materials, market prices in the domestic and overseas markets, changes in Govt. Regulations and tax laws, economic conditions affecting demand/ supplies and other environmental factors over which the Company does not have any control.